Lawsuit casts light on Saudi 9/11 financing

17 July 2015

Several insurers that paid out losses emanating from the September 11 terrorist attacks have filed a lawsuit against Saudi Arabia alleging that elements within the Kingdom knew of and aided the orchestration of the atrocity, writes Sam Kerr.

Insurers could be in line to recoup their losses from the September 11 terrorist attacks and help cast light on shadowy forces behind the worst terrorist attack in the history of the US if judges rule in their favour in a landmark legal case.

Who is to blame for the September 11 attacks has long been seen as an open and shut case with authorities quickly identifying Osama bin Laden and his terror network Al-Qaeda as the orchestrators of the atrocity.

However, while the burden of blame was targeted on Bin Laden and his associates, the economic cost of the attack was largely shouldered by re/insurers. In fact, the cost was so great that it led to market capacity for terrorism risk falling to such an extent that it the US government had to create a federal backstop through The Terrorism Risk Insurance Act [Tria] in order to stabilise the market.

However, while re/insurers have little recourse in natural disasters to claim back some of the money that is lost, the September 11 attacks were a man-made occurrence and a deliberate attack on the US.

Elliot Feldman and Sean Carter, two attorneys in the Philadelphia office of law firm Cozen O’Connor, are representing a number of US based insurers on such a case.

The lawsuit is being led by Federal Insurance Company - a subsidiary of Chubb - and a group of other insurers and is part of multi-district litigation brought by carriers and 9/11 victims’ families.

The case centres on the potential involvement of individuals and institutions in the Kingdom of Saudi Arabia, including charities, in the funding of Al- Qaeda prior to the attacks.

Saudi Arabia is the country that has most been linked to Al-Qaeda throughout its history, given the fact that the majority of the 9/11 hijackers were from the country and that there were long-standing links between Osama Bin Laden and the Saudi royal family.

Feldman and Carter started their litigation efforts on a provision which allowed the Office of Foreign Asset Control (OFAC) to seize foreign assets linked to terrorism. However, they soon realised that this was merely the tip of the potential iceberg.

"We looked at that [obtaining foreign assets frozen by OFAC] and had a team of attorneys researching broader avenues and relatively quickly the frozen assets became the tail rather than the dog," Feldman, co-chair of Cozen’s Litigation Section, told Reactions. "It became more of an issue of pursuing claims directly against those sovereign and private and commercial individuals who had sponsored terrorism, rather than doing it indirectly through the frozen asset approach. And two years to the day after 9/11 we filed our initial complaint.

"It was relatively ground-breaking in many respects."

The most important tool which lawyers can use to recover damages for victims of terrorism, like insurers, is the Anti-Terrorism Act (ATA) which was passed by Congress in 2002 with the potential damages being substantial.

Under the act claimants can gain "threefold the damages he or she sustains and the cost of the suit, including attorney’s fees."

Following the attacks Cozen’s lawyers proceeded to identify any potential supporter of Al-Qaeda that had been named by the US government in the period following the attack which led them initially to Saudi Arabia.

"The suit included any individual organisation or entity that had been named by the US as a designated supporter of Al-Qaeda in the years before the attacks," Cozen partner Sean Carter told Reactions. "The gravity of the suit was against 100 or so defendants who appeared, including the government of Saudi Arabia.

"There was some senior Saudi officials named as well, in addition to a number of Saudi charities, banks and members of the wealthy Saudi merchant class.

"The unifying theme of all the claims was that we alleged that the defendants had in some way or another provided some form of material support or assistance to Al-Qaeda in the years leading up to the 9/11 attacks and therefore were responsible for the resulting injuries under aiding and abetting and conspiracy theories."

An immediate obstacle to the case against Saudi Arabia though was the inherent secrecy of the Al-Qaeda organisation and the potential uncooperative nature of Saudi Arabia in assisting in a case that would not only expose it to possibly paying billions of dollars’ worth of damages, but would also link several high profile Saudi figures, and perhaps even the kingdom itself, to the 9/11 attacks.

However, the case managed to pull off a substantial coup when Zacarias Moussaoui, the Al-Qaeda operative who stood trial and was imprisoned for his role in 9/11, agreed to testify in the case.

"The one development [that got us a lot of attention were] the interviews we [did with] Zacarias Moussaoui at the federal Super-max prison in Colorado," said Carter. "It was a very significant event from our perspective in terms of being able to have access to someone that knew Bin Laden personally and knew Khalid Sheikh Mohammed personally. He was also physically present in Kandahar in the years immediately before 9/11, engaging with senior Al-Qaeda officials, and had an intimate feel for what was happening in the organisation at that time.

"He then was obviously deployed to the US as part of the efforts that were ongoing at that time to carry out attacks here."

The transcript of Carter’s interviews with Moussaoui contain several claims from the former Al-Qaeda operative that Saudi officials were intimately connected to the Al-Qaeda leadership, including claims that he delivered letters from Bin Laden to the Saudi royal family, including to Saudi Arabia’s current monarch King Salman, who succeeded to the throne this year.

Moussaoui also named other high profile Saudis as supporters of Al-Qaeda including former Saudi intelligence head Prince Turki bin-Faisal and Prince Bandar bin Sultan, the former Saudi Ambassador to the US.

Alongside Moussaoui’s testimony, the case against the Kingdom was accentuated when a raid on the offices of the Saudi High Commission for Relief of Bosnia & Herzegovina, a charity organisation providing relief to Muslims in Bosnia, found papers relating to the 9/11 attacks.

Despite the evidence presented by Moussaoui and the evidence collected by various security services, the case against the Kingdom has been fraught with difficulty from the beginning. Saudi Arabia has maintained that it cannot be sued on the grounds that as an independent state it possesses sovereign immunity and also alleges that Moussaoui is mentally ill, as his own lawyers at his trial asserted, and that the other evidence against it is unsubstantiated.

The suit was dismissed on these grounds in 2003 when the first district court of New York dismissed the claims against Saudi Arabia on sovereign immunity grounds in January of 2005.

Cozen subsequently saw an opportunity to move forward with an appeal against the decision dismissing Saudi Arabia as well as some senior Saudi officials.

That appeal took place during the period between 2007 and 2008 and there was a decision by the Second Court of Appeals affirming the dismissal but on different grounds in August 2008.

The case was then referred to the US Supreme Court for a potential review.

"At that point we then sought review by the Supreme Court and filed for a writ of certiorari [a demand that a lower court send the record of a proceeding for review]," recounts Carter. "The Supreme Court referred our petition in early 2009 to the Solicitor General for the views of the United States, so essentially asked for the views of the executive branch as to whether or not the Supreme Court should review the case.

"That was in the very nascent stages of the Obama administration and as matter of fact at that time the Solicitor General was Elena Kagen, who is now a justice on the Supreme Court.

"When they refer a case to the Solicitor General you have these meetings and counsel comes in and speaks with attorneys representing the relevant agencies and it was one of the first meetings that she had taken as Solicitor General.

"In any case, the Solicitor General on behalf of the United States agreed with us that the second circuit had committed error in relation to the legal basis for its decision but nonetheless urged that the Supreme Court not review the case."

Carter reveals that in most cases that would be the end of the matter given the Supreme Court’s historic role in the US as the final court of appeal.

However, the case was brought back to life following a decision by a New York court in a separate case against Afghanistan in which it ruled that the sovereign immunity ruling in favour of Saudi Arabia had misinterpreted the law as sovereign immunity did not apply in cases of terrorism.

The decision revived the case and once more there will be a ruling on Saudi Arabia’s motion to dismiss the case on the grounds of sovereign immunity.

If the case does go to trial, it will cast light on Saudi Arabia’s potential involvement in financing 9/11 and would possibly open the door to re/insurers recouping their losses.

By Sam Kerr -