    [Senate Hearing 111-858]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-858

       EVALUATING THE JUSTICE AGAINST SPONSORS OF TERRORISM ACT, S. 2930
    =======================================================================

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON CRIME AND DRUGS

                                     of the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 14, 2010

                                   __________

                              Serial No. J-111-100

                                   __________

             Printed for the use of the Committee on the Judiciary

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                      PATRICK J. LEAHY, Vermont, Chairman
    HERB KOHL, Wisconsin                 JEFF SESSIONS, Alabama
    DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
    RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
    CHARLES E. SCHUMER, New York         JON KYL, Arizona
    RICHARD J. DURBIN, Illinois          LINDSEY GRAHAM, South Carolina
    BENJAMIN L. CARDIN, Maryland         JOHN CORNYN, Texas
    SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
    AMY KLOBUCHAR, Minnesota
    EDWARD E. KAUFMAN, Delaware
    ARLEN SPECTER, Pennsylvania
    AL FRANKEN, Minnesota
                Bruce A. Cohen, Chief Counsel and Staff Director
                      Matt Miner, Republican Chief Counsel
                                     ------

                        Subcommittee on Crime and Drugs

                     ARLEN SPECTER, Pennsylvania, Chairman
    HERB KOHL, Wisconsin                 LINDSEY GRAHAM, South Carolina
    DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
    RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
    CHARLES E. SCHUMER, New York         JEFF SESSIONS, Alabama
    RICHARD J. DURBIN, Illinois          TOM COBURN, Oklahoma
    BENJAMIN L. CARDIN, Maryland
    AMY KLOBUCHAR, Minnesota
    EDWARD E. KAUFMAN, Delaware
                   Hannibal Kemerer, Democratic Chief Counsel
                      Walt Kuhn, Republican Chief Counsel
                                C O N T E N T S

                                  ----------

                        STATEMENTS OF COMMITTEE MEMBERS

                                                                       Page

    Specter, Hon. Arlen, a U.S. Senator from the State of
      Pennsylvania...................................................     1

                                   WITNESSES

    Bellinger, John B., III, Partner, Arnold & Porter LLP,
      Washington, DC.................................................     8
    Klingler, Richard D., Partner, Sidley Austin LLP, Washington, DC.     6
    Kohlman, Evan F., Senior Partner, Flashpoint Global Partners, New
      York, New York, and International Terrorism Consultant/Senior
      Investigator, The NEFA Foundation..............................    17
    Sofaer, Abraham D., George P. Shultz Senior Fellow, The Hoover
      Institution, Stanford University, Stanford, California.........     2
    Wolosky, Lee S., Partner, Boies, Schiller & Flexner LLP, New
      York, New York.................................................    20

                           SUBMISSIONS FOR THE RECORD

    Bill S. 2930.....................................................    25
    Bellinger, John B., III, Partner, Arnold & Porter LLP,
      Washington, DC, statement......................................    36
    Burlingame, Debra, Washington, DC, letter........................    42
    Klingler, Richard D., Partner, Sidley Austin LLP, Washington, DC,
      statement......................................................    46
    Kohlman, Evan F., Senior Partner, Flashpoint Global Partners, New
      York, New York, and International Terrorism Consultant/Senior
      Investigator, The NEFA Foundation, statement...................    65
    Levitt, Matthew, Director, Stein Program on Counterterrorism and
      Intelligence, Washington Institute for Near East Policy,
      statement......................................................    76
    Molinaro, Joan, Board Member of 9/11 Families for a Secure
      America and Mother of New York City Firefighter Carl E.
      Molinaro, New York, New York, statement........................    91
    9/11 Families United to Bankrupt Terrorism, Washington, DC, joint
      letter.........................................................    94
        Index of Exhibits 1-35.......................................    99
        Exhibits 1-35................................................   104
    Sofaer, Abraham D., George P. Shultz Senior Fellow, The Hoover
      Institution, Stanford University, Stanford, California,
      statement......................................................   318
    Voices of September 11th, New Canaan, Connecticut, letter........   336
    Washington Post, Stuart Tayler Jr., July 14, 2010, article.......   338
    Wolosky, Lee S., Partner, Boies, Schiller & Flexner LLP, New
      York, New York.................................................   340

       EVALUATING THE JUSTICE AGAINST SPONSORS OF TERRORISM ACT, S. 2930

                                  ----------

                       WEDNESDAY, JULY 14, 2010
                                           U.S. Senate,
                               Subcommittee on Crime and Drugs,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:02 a.m., in
    room SD-226, Dirksen Senate Office Building, Hon. Arlen
    Specter, Chairman of the Subcommittee, presiding.
        Present: Senator Specter.

     OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM
                       THE STATE OF PENNSYLVANIA

        Chairman Specter. Good morning, ladies and gentlemen. The
    Judiciary Committee hearing will now proceed on the Justice
    Against Sponsors of Terrorism proposed legislation. This is, I
    think, an unusual bill because it involves so many big issues.
    The first issue is the justice for victims and survivors of
    what is, arguably, the most barbaric act in human history. Hard
    to find something more astounding than the incident of 9/11. It
    has left the country scarred and really the world scarred,
    changed the face of America in many ways. One is the void in
    the Trade Towers, a historic site now; scarred my own State,
    Pennsylvania, in rural Somerset County; and has made this city
    into a virtual barricade and really much of the world.
        The second big issue which this legislation implicates is
    the use of a critical weapon to prevent a recurrence. The
    evidence is very, very forceful about the involvement of Saudi
    money in promoting terrorism. The 9/11 Commission Staff
    Monograph on Terrorist Financing said, ``Al Qaeda was funded to
    the tune of approximately $300 million per year by diversion of
    money from Islamic charities, confirmed that many of al Qaeda-
    sponsored charities enjoyed significant Saudi Government
    sponsorship.'' So in a world where we are constantly threatened
    by al Qaeda and we have recurrent television appearances by bin
    Laden, we have really not taken a stand to stop that financing.
        A third very important issue--important in my mind--is to
    restore the balance on separation of powers. We have seen the
    Congress legislate on the Foreign Sovereign Immunities Act, and
    we have seen our legislation disregarded by the executive
    branch and then by the judicial branch. The Court of Appeals
    for the Second Circuit says that the act does not apply because
    the Saudis are not on the State Department list of state
    sponsors of terrorism. Well, as we all know, those of us who
    studied the bill, there are two ways: torts are excluded from
    sovereign immunity as well as those under state--on the list of
    those states who sponsor terrorism.
        The Solicitor General then opposes the grant of certiorari,
    disagreeing with the Second Circuit, but finding another
    reason, saying, well, the acts occurred--the alleged Saudi acts
    occurred outside the United States. Well, that is a curious
    rationale when you have the consequences in the United States.
        This is one of a long line of matters where the Supreme
    Court has refused to take up issues on the executive-
    Congressional balance. Another notable one is the conflict
    between the President's assertion of Article II powers as
    commander in chief with the Terrorist Surveillance Program and
    the Foreign Intelligence Surveillance Act, which specifies the
    only way you can invade privacy on wiretaps is with a court
    order. That has come up in the Kagan hearings and is a matter
    of considerable concern as to what the Court will decide.
        I filed legislation to compel the Court to take the
    Terrorist Surveillance Program, and it is an issue in the
    confirmation proceedings as to the standards on taking those
    matters. Congress has the authority to mandate that the Court
    take certain cases, as we did with flag burning and McCain-
    Feingold, and we can do that here as well.
        Well, that brings us to a very, very distinguished group of
    witnesses: Judge Abe Sofaer, Mr. Richard Klingler, Mr. John
    Bellinger. And I would ask you gentlemen at this time to stand
    for the traditional administration of the oath. Do you affirm
    that the testimony you are about to give before this Committee
    will be the truth, the whole truth, and nothing but the truth,
    so help you God?
        Judge Sofaer. I do.
        Mr. Klingler. I do.
        Mr. Bellinger. I do.
        Chairman Specter. Thank you.
        Our first witness is former Federal Judge Abraham D.
    Sofaer, now a fellow in foreign policy and national security
    affairs at the Hoover Institution on War, Revolution, and Peace
    at Stanford University; served as the distinguished legal
    adviser to the U.S. Department of State from 1985 until 1990 in
    the administrations of President Reagan and George H.W. Bush;
    for 6 years, from 1979 to 1985, he was a federal judge,
    Southern District of New York; author of a book, ``War, Foreign
    Affairs and Government''; bachelor's degree from Yeshiva
    University and law degree from New York University School of
    Law; clerked for Justice Skelly Wright on the D.C. Circuit and
    later Supreme Court Justice William Brennan.
        Thank you for coming in today, Judge Sofaer. We know you
    have a plane to catch, and we look forward to your testimony.

     STATEMENT OF HON. ABRAHAM D. SOFAER, GEORGE P. SHULTZ SENIOR
    FELLOW, THE HOOVER INSTITUTION, STANFORD UNIVERSITY, STANFORD,
                               CALIFORNIA

        Judge Sofaer. Chairman Specter, it is a particular pleasure
    to be here with you. It has been a privilege to work with you
    on many issues over the years, and this is no less important
    than any of the others we have looked at together. And if I can
    be of any help, I am glad to do so.
        Chairman Specter. Thank you.
        Judge Sofaer. I will go through my testimony very quickly
    so that I meet your time limit, and it can be read later on.
    This is a really important issue, and I commend you and the
    Committee for looking at it. Sponsoring killings of Americans
    on American soil should be taken extremely seriously, and we
    should do the best we can at holding people responsible who do
    that knowingly or recklessly.
        I agree with the premise of S. 2930 that civil actions for
    damages may deter some sponsors of acts of terrorism. But no
    one knows better than you, Senator, and the members of this
    Committee, that the effort to create viable, civil penalties
    against terrorists and their sponsors in the U.S. courts has
    been frustrating and largely ineffectual. The executive branch
    of our own Government, regardless of party, has opposed the
    effort and has sought largely successfully in the U.S. courts
    to limit the effectiveness of the laws Congress has adopted for
    this purpose.
        This difficulty in fashioning effective remedies that both
    compensate victims and deter people who support these acts
    stems not from any lack of ingenuity or resolve on the part of
    this Committee or the U.S. Congress--and, incidentally, I do
    not think it stems either from any sense of perversity or lack
    of sympathy by executive officials--but, rather, from the
    inherent difficulties and dangers that arise when one state
    unilaterally attempts to modify important aspects of the law
    relating to sovereign immunity.
        So with your permission, I will touch on some of the key
    aspects of the bill, but I would like to go on and suggest an
    alternative mechanism that might be a more satisfactory way to
    achieve these important objectives.
        The proposed bill deals with at least four major issues,
    and I think in large part very effectively. The Samantar
    decision has at least potentially taken care of the issue of
    whether the FSIA applies to officials, and it says no.
        Now, you, I am sure, will modify the legislation to
    accommodate that ruling of the Supreme Court, but there is a
    fundamental issue to be decided, and that is, do you want to
    have the State Department make all these decisions? I
    personally think they will fall victim to the same kind of
    political pressure that they fell victim to when they were
    making decisions about the immunity of states. And so Congress
    might consider creating special rules and laying out the
    standards that it thinks that the courts or, if you want the
    State Department to do it, the State Department should apply in
    deciding those very difficult questions. So I think there is
    really important work to do about what to do in dealing with
    claims by officials.
        Since I only have a minute here, Senator, let me say that
    in addition to my specific comments about the bill, I would
    recommend that this Committee consider creating a compensation
    program that does not turn on the type of terrorist action, the
    evidence of state involvement, and issues of that kind, and
    compensates all Americans injured in a certain set of actions,
    and then allows the Government to pay those claims, first of
    all, and then to take those claims and to seek that money from
    other governments. And, Senator, you will see at the end of my
    statement my plea for a strong diplomacy as opposed to the kind
    of diplomacy we so often see when it comes to dealing with
    people who sponsor terrorist acts in America.
        Once it is established that certain groups--or princes, for
    that matter--have knowingly funded the killing of Americans on
    American soil, we need to do more than just let people pursue
    them in the courts. That is what we did with Osama bin Laden,
    and he killed Americans five times over before we finally got
    around to going after him.
        We need to go after these people. We need to use preventive
    force. And in my paper I recommend, Senator, that any bill, in
    setting up this funding requirement, should include an
    authorization for the President under appropriate circumstances
    to use force against the sponsors of terrorism of this kind.
    And I refer you to Security Council Resolution 1373 that lays
    out the criteria which the Security Council has said justifies
    a criminalization of assistance to terrorist groups and those
    criteria would justify far more serious actions than simply
    civil actions against people who sponsor these acts.
        Senator, just for your information, I will send you a copy
    of a book on preventive force I published about a month ago. I
    will be happy to send that if it helps with the Committee's
    deliberations about actually fashioning something more muscular
    and more effective to deal with this unacceptable attitude that
    people who may happen to be princes, or whatever, can actually
    give money knowingly to a group that is devoted to the killing
    of Americans.
        Thank you.
        [The prepared statement of Judge Sofaer appears as a
    submission for the record.]
        Chairman Specter. Well, you raise some fascinating
    alternatives. When you mention criminalization after talking
    about using force, and you talk about the Saudi princes, are
    you suggesting that the United States ought to pursue
    criminally against those who are identifiable and seek their
    extradition?
        Judge Sofaer. Yes, I certainly am, Senator, because if you
    look at Resolution 1373, it says that state has the duty to
    prevent and repress the financing of terrorist acts. Section
    1(b) says that every state must criminalize the willful
    provision of collection by any means, directly or indirectly,
    of funds by their nationals or in their territories with the
    intention that the funds should be used, or in the knowledge
    that they are to be used in order to carry out terrorist acts.
    And this is just one of several provisions that I think would
    justify that.
        Chairman Specter. And when you talk about the use of force,
    are you suggesting that the United States take military action
    against the Saudi Government?
        Judge Sofaer. I do not think that would be necessary,
    Senator, for us to take action against the Saudi Government.
    But I think as a matter of principle it is perfectly
    appropriate for the Congress to indicate to the President that
    a government that either refuses to abide by the requirements
    of Resolution 1373 or just simply cannot do so, forfeits its
    right to maintain complete sovereign integrity of their
    territory.
        Chairman Specter. And if they do not extradite these Saudi
    princes, then what with respect to your suggestion of U.S.
    force?
        Judge Sofaer. Well, I mentioned, Mr. Chairman, in my
    written testimony that we should not be having more
    Afghanistans as a price for our self-defense. I do feel that we
    have the capacity now to go after individuals in countries that
    are killing Americans and to stop them.
        I am not talking about guessing about people that might
    kill Americans. As you know, Senator, there are people out
    there who have very deliberately killed Americans over and over
    again. And what the administration is doing today through the
    CIA by targeting individuals in various countries of the world
    is lawful and just, as far as I am concerned.
        Chairman Specter. Well, you have moved quite far afield on
    your testimony.
        Judge Sofaer. I am just trying to achieve the objectives of
    the Committee.
        Chairman Specter. When you talk about the executions which
    the United States has ordered, having identified terrorists who
    they conclude have killed Americans, it is extrajudicial, but
    depending upon the circumstances, I would agree with you that
    it is warranted. But that is pretty far afield. I do not think
    we are going to use drones against Saudi princes. Are you?
        Judge Sofaer. Well, I think it is a matter of principle,
    and if the Committee were to pass a comprehensive bill that, in
    addition to fixing these aspects of civil suits, set up a
    compensation fund and at the same time encourages the President
    to do something effective about deterring these attacks on
    Americans, and the funding of these attacks, I think that
    people around the world would take more seriously the fact that
    finally officials of the Government of the United States are
    fulfilling their oath, Senator, to protect and defend the
    people of the United States.
        Chairman Specter. Well, when you talk about the fund, that
    is really quite different from what you are suggesting with
    respect to criminalization and force. This reminds me of the
    debates we had when you were counsel to the State Department.
    It is surprising to note that we did not have extraterritorial
    jurisdiction when I was elected in the Senate, and it was only
    in 1984 as to kidnapping and hostage taking that we legislated
    extraterritorial jurisdiction, then the Terrorist Prosecution
    Act in 1986, following the strafing of the Rome and Vienna
    airports. Then at that time, the United States could not get
    other countries to turn over terrorist suspects. And we talked
    about a case in about 1870 where the Supreme Court upheld the
    prosecution of an Illinois matter where they had kidnapped
    somebody in Peru. The Supreme Court said it was okay. And we
    talked about using that as authority for taking people into
    custody.
        Your thinking has gone quite a bit farther in the
    intervening 25 years, Judge Sofaer.
        Judge Sofaer. I think you have been a leader, Mr. Chairman,
    at sensing that the world is moving in the direction of
    civilized order, and I think that your sense of it has been
    correct. And if we even live in a civilized world, it would be
    one in which no Saudi prince or any other prince could safely
    fund the killing of innocent civilians in any other country. I
    think you agree with that.
        Chairman Specter. Well, your testimony, Judge Sofaer, has
    gone quite a bit farther than the structure of this bill. You
    make this bill look very, very modest, perhaps even
    ineffective, the grand scope that you are proposing. But we
    will settle for a little less, at least so far as this hearing
    today is concerned.
        Judge Sofaer. Thank you.
        Chairman Specter. I have deviated from regular order in
    questioning Judge Sofaer beyond his time before the panel is
    finished because he has a plane to catch, as I mentioned
    earlier, and this is a very busy day with many, many hearings,
    so I do not know how many people will be present. We have two
    members of the Committee who are cosponsors--Senator Lindsey
    Graham and Senator Charles Schumer--and I know they want to be
    present. But until they arrive and we have more participants,
    we have the luxury of being a little more flexible than we
    customarily do.
        I will now turn to the testimony of Mr. Richard Klingler,
    partner at Sidley & Austin; from 2006 to 2007 was general
    counsel and legal adviser on the National Security Council
    staff. Two years earlier, he had been in the Office of Counsel
    to the President. A.B. from Stanford, a B.A. from Oxford, a law
    degree from Stanford, and clerked for Justice O'Connor.
        Thank you for joining us, Mr. Klingler, and the floor is
    yours.

     STATEMENT OF RICHARD D. KLINGLER, PARTNER, SIDLEY AUSTIN LLP,
                             WASHINGTON, DC

        Mr. Klingler. Thank you, Mr. Chairman, and thank you for
    inviting me to present my views regarding the Justice Against
    Sponsors of Terrorism Act. My written testimony elaborates
    these comments.
        The Act is an important counterterrorism initiative and
    focuses on redressing injuries arising within our borders. The
    Act is required in large part due to the Second Circuit's
    unfortunate and clearly erroneous construction of the Foreign
    Sovereign Immunities Act and application of the Due Process
    Clause. The Act is also required by the administration's recent
    narrow construction of the Immunity Act's exception for suits
    addressing tortious acts, including acts of terrorism.
        The administration put forward its position in a brief
    filed by the Solicitor General that advised the U.S. Supreme
    Court not to review the Second Circuit's decision or consider
    the September 11th victims' arguments, even as the Government
    disagreed with each of the key aspects of the Second Circuit's
    reasoning.
        The Second Circuit's approach would bar suits against
    foreign sovereigns for acts of terrorism unless the sovereign
    was among the handful of formally designated state sponsors of
    terror, and it would require courts to decline jurisdiction
    over claims against non-state actors abroad who support
    terrorist organizations hostile to the United States. The
    administration's interpretation of the current statute would
    bar suits against nearly all foreign states for supporting an
    act of terror against and within the United States whenever a
    portion of that state support took place outside our borders.
    Both approaches would bar suits against foreign governments
    related to attacks such as those completed by the September
    11th hijackers or attempted by the Christmas Day bomber or the
    Times Square bomber.
        The Second Circuit's approach would also bar a range of
    claims by terrorism victims against nongovernmental supporters
    of terrorist organizations.
        The principal provisions of the Act are designed to remedy
    these gaps in our counterterrorism capabilities. The Act would
    ensure that suits could proceed against a foreign state when it
    acted abroad to support acts of terrorism directed toward the
    United States and causing injury within our borders. It would
    express Congress' understanding that supporters of terrorist
    organizations directing their actions against the United States
    should expect to be pursued in U.S. courts, and it would
    confirm that civil suits can be pursued against those who
    support terrorist organizations as well as those who commit the
    terrorist act.
        The enhancements of our counterterrorism capabilities in
    the Act would advance a range of interests. The Act would
    increase the ability of victims of acts of terrorism committed
    on U.S. soil to secure redress and hold terrorist supporters
    accountable. There is value in permitting the victims of such
    acts to have their day in court, to prove the facts of the
    violence done to them and us, and to bring public scrutiny upon
    those who harmed them. This applies not only to the victims of
    past acts of terror, but also those who are, unfortunately,
    likely to join their ranks. It applies to those who would
    foster and support terrorist organizations, even if they are
    associated with a foreign government, as well as those who more
    directly commit acts of terror. To the victims of terrorism
    harmed in the United States, it does not matter whether the
    person who writes the check that funds the attack does so in
    Miami or in the Middle East, and it should not matter to our
    courts.
        The Act would also increase the Nation's ability to deter
    and prevent further attacks of terrorism. Although civil
    litigation plays a relative small part in countering terrorism,
    its role is not unimportant. The Act would increase the scope
    of civil litigation directed against those who support
    terrorism. This may prove especially effective when directed
    against financiers of terror, conscious of their reputations,
    and by providing incentives to foreign states to ensure that
    those closely affiliated with them neither seek to harm
    expatriate communities within the United States nor further the
    effort of terrorist organizations.
        There are always risks to our Nation's foreign relations
    and potential conflict with international legal principles when
    civil liability is expanded against foreign sovereigns and for
    acts undertaken abroad. But those risks must be set against the
    benefits of the Act and set in context. Here those risks are
    lessened because the Act is focused on injury occurring within
    this Nation's borders where our sovereign interests are
    greatest and the tension with international legal principles
    reduced. Indeed, Section 1605(a)(5) supported certain
    terrorism-based claims against sovereigns in the decades prior
    to the Second Circuit's narrow construction without undue
    harmful effects. Those risks are further reduced by additional
    provisions of the Act, by legal principles available to the
    judiciary to accommodate the interests of sovereigns, and by
    measures the executive branch may take to manage risks to
    foreign relations in particular cases.
        There are, in addition, clarifications of the Act's
    sovereign immunity exception that may further reduce these
    risks, especially in relation to limiting recovery for injuries
    unrelated to acts of violence and terrorism occurring directly
    in the United States. Permitting recovery for that unrelated
    injury could indeed bring unintended consequences or increased
    risks to foreign relations. Even so, that concern presents
    little difficulty for the important provisions of the Act
    addressing Federal courts' jurisdiction over non-state actors
    or for the provisions confirming that suits can be predicated
    on allegations of secondary liability. And even for the Act's
    revisions of sovereign immunity, that concern should not cause
    hesitancy but, rather, prompt clarification and confirmation of
    the Act's core, important purpose of extending the scope of
    remedies for victims of international terrorism directed
    against and causing injury in the United States.
        Thank you for the opportunity to present the views.
        [The prepared statement of Mr. Klingler appears as a
    submission for the record.]
        Chairman Specter. Thank you, Mr. Klingler.
        Our third witness, the final witness on this panel, is John
    Bellinger, a partner in Arnold & Porter; served as legal
    adviser to the Department of State from 2005 to 2009; had also
    served as legal adviser to the National Security Council 2001
    to 2005; and represented the White House in dealings with the
    9/11 Commission. He served as counsel for national security
    matters in the Criminal Division of the Department of Justice,
    was counsel to the Select Committee on Intelligence in 1996,
    the year that I chaired that Committee; and was special
    assistant to CIA Director William Webster; AB from Princeton, a
    law degree from Harvard, and a master's in foreign affairs from
    UVA.
        Thank you for coming in, Mr. Bellinger, and we look forward
    to your testimony.

     STATEMENT OF JOHN B. BELLINGER III, PARTNER, ARNOLD & PORTER
                          LLP, WASHINGTON, DC

        Mr. Bellinger. Mr. Chairman, thank you very much for having
    me today. I had the privilege, as you mentioned, of serving as
    counsel to the Senate Intelligence Committee in 1996 when you
    were the Chairman, so it is a particular honor for me to appear
    before you after the year of having served behind you. It is
    nice to be back.
        As you noted, I have served in the Justice Department, at
    the National Security Council, and most recently as the Legal
    Adviser at the State Department. It is nice to be here with my
    distinguished predecessor Abe Sofaer and my successor at the
    White House, Richard Klingler.
        I have spent a considerable amount of time working on the
    issues that today's hearing is considering. I agree
    wholeheartedly with the goal of the proposed legislation, which
    is to hold accountable countries and certain individuals and
    entities who sponsor acts of terrorism. I was in the Situation
    Room on 9/11, and I spent much of my time at the White House
    and the State Department after 9/11 on issues relating to the
    9/11 attacks. I have met with many of the families of the 9/11
    attacks as well as of other terrorist attacks, so I share your
    goal of seeking justice for these atrocities.
        I have a longer statement for the record. I am just going
    to make a few comments right now. I am not going to take a
    position for or against the amendments, but what I would like
    to do is highlight a few factors for the Committee's
    consideration, focusing in particular on the amendments to the
    Foreign Sovereign Immunities Act.
        In general, I would urge Congress to be very careful in
    proposing new exceptions to the Foreign Sovereign Immunities
    Act. The FSIA codifies very important principles of
    international law that protect not only foreign governments
    but, more importantly, the United States itself. Long before
    the FSIA was enacted, our courts recognized that under
    international law, sovereign governments are immune from suit
    in each other's courts. When the terrorism exception was added
    to the FSIA in 1996, it reflected a very delicate compromise
    between the Congress and the executive branch limiting suits
    against foreign governments only to the seven, now four, state
    sponsors of terrorism designated by the executive branch. And
    even the terrorism exception is not consistent with generally
    accepted principles of international law. Because it is
    included in U.S. law, the U.S. is unable to become party to an
    important multilateral treaty, the U.N. Convention on State
    Immunities, which the U.S. itself was instrumental in having
    adopted and which protects the United States from suits around
    the world.
        The Committee needs to be very careful about unintended
    consequences of this legislation. In particular, the provision
    expanding the tort exception, drafted with specific countries
    in mind--and we have mentioned Saudi Arabia--could potentially
    be used against other nations, including U.S. allies, like
    Israel, if the tort results in personal injury or loss of
    property in the United States. Lawsuits have already been
    brought against Israeli officials in U.S. courts for alleged
    extrajudicial killings in Gaza, and this bill could potentially
    remove the immunity of the state of Israel itself, as well as
    of all other nations. Expanding the tort exception could open a
    Pandora's box of litigation against foreign governments in U.S.
    courts. But even if some of these frivolous lawsuits are
    dismissed, allowing them to be brought in the first place could
    result in protracted litigation against our allies.
        Congress should also consider the possible reciprocal
    consequences for the United States itself. When the terrorism
    exception was added to the FSIA in 1996, Iran and Cuba removed
    U.S. sovereign immunity and allowed the U.S. to be sued in
    their courts for terrorism resulting in billions of dollars in
    default judgments against the United States. And U.S. officials
    have already been subject to legal actions in other countries
    for their official actions to combat terrorism. At a time that
    the United States is necessarily taking important but
    controversial actions around the world to fight terrorism--and
    Judge Sofaer has mentioned some of those earlier--Congress
    should be extremely cautious about lifting the immunity of
    foreign governments lest foreign governments remove the
    immunity of the United States in their own courts.
        Finally, Congress should also consider the possible foreign
    policy friction that would result from allowing more foreign
    governments to be sued in the United States. This might require
    the executive branch to intervene to prevent our Federal courts
    from becoming embroiled in delicate foreign policy and
    political questions. These kinds of interventions by the
    executive branch are exactly the kinds of actions that the FSIA
    was enacted to avoid.
        Mr. Chairman, I appreciate the chance to appear to discuss
    these concerns. I commend the Committee for its efforts to seek
    justice for victims of international terrorism. I look forward
    to discussing some of the alternative proposals that Judge
    Sofaer has suggested and that I have worked on when I was The
    Legal Adviser sitting in his chair, as well as the Committee's
    efforts to consider these important principles of international
    law and foreign policy.
        Thank you.
        [The prepared statement of Mr. Bellinger appears as a
    submission for the record.]
        Chairman Specter. Well, thank you, Mr. Bellinger. There
    certainly are a great many issues on the floor. I begin with
    the proposition that this legislation does not seek to add any
    additional exceptions. We are simply dealing with the ones at
    hand.
        And, Mr. Klingler, you testified at some length in your
    written statement--and all the written statements will be made
    a part of the record, without objection--about specifying that
    there are alternative remedies. The countries listed on the
    nations which sponsor terrorism is separate from the tortious
    conduct. And you believe, as I understand it, that the
    legislation is correct in seeking to overturn both the Second
    Circuit decision and the position taken by the State Department
    and urging the denial of cert.?
        Mr. Klingler. Yes on both points. The Second Circuit was
    clearly wrong in indicating that the existing statutory
    provision for suits and torts against sovereign was incapable
    of supporting a terrorism-related suit, and the proposed
    legislation would confirm and clarify that that position is
    wrong and would confirm that terrorism-related suits can be
    brought within the tort exception to the Foreign Sovereign
    Immunities Act. Even the administration disagreed with the
    Second Circuit's reasoning on that point.
        Chairman Specter. Mr. Bellinger, you raise a concern about
    having litigation like allegations of criminal conduct against
    the Israeli Army in Gaza. We do not really get anywhere near
    that kind of a problem with what we are proposing to do in this
    legislation, do we?
        Mr. Bellinger. I am not saying, Senator, that such a suit
    would have merit, but I am afraid that by expanding the tort
    exception to apply it clearly to extraterritorial acts outside
    the United States, contrary to what the Second Circuit had
    said, and specifically stating that it applies to something
    like extrajudicial killings, that would allow at least a suit
    to be brought against Israeli, or other countries like
    Afghanistan or even Britain. Admittedly, the effect has to be
    felt inside the United States, but there are a lot of creative
    lawyers who I think could plead that sort of effect.
        Right now, Israel and other countries are immune from those
    kinds of suits as sovereign governments in the United States.
    There has been litigation against Israel and against its
    intelligence services for directing, in fact, air attacks in
    Gaza because it had effects inside the United States. Those
    officials were ultimately held to be immune under principles of
    common law immunity.
        Chairman Specter. Isn't it pretty far-fetched to analogize
    an attack in Gaza as having an effect in the United States
    contrasted with what we are dealing with here?
        Mr. Bellinger. Ultimately, that case was dismissed in the
    U.S. courts against Israeli officials, but it took Israel a
    very long time to have to defend it, many, many years up
    through the circuit courts. Israel had to defend its officials
    previously for actions taken solely in Gaza that were alleged
    to have effects here in the United States. So I would be very
    concerned about lifting the immunity not only of officials but
    of whole states potentially to be sued here in the United
    States for their extraterritorial actions.
        Chairman Specter. When you talk about foreign policy
    functions and the Government would have to intervene in a lot
    of lawsuits, that is exactly what the Government has done here
    in a way which is really not known to the public. There is very
    little awareness as to what goes on in a case like this or most
    of the cases in the Supreme Court of the United States. It has
    to be a case like Bush v. Gore or a case like Citizens United
    before there is any public understanding.
        One of the collateral issues that I have been working on
    for a couple of decades has been the issue of televising the
    Supreme Court so that people will understand the far-reaching
    impact, but what you warn against is Government intervening in
    litigation. That is exactly what happened in this case. And how
    do you effectively deal with that?
        Mr. Bellinger. Well, I think it depends on what side of the
    issue you are, whether you think it is a proper or improper
    intervention. For example, in the Israeli case that I mentioned
    against the Israeli intelligence chief. The Legal Adviser--and
    the United States, in fact, intervened in that case. We filed a
    brief, which I signed, stating that the case should not be
    heard in the United States because it was an improper political
    question to be heard inside the United States. And certainly
    the victims in that case felt that the United States was
    improperly intervening against them. So it depends what side of
    the issue you are on to determine whether it is an improper
    intervention.
        In something like this, if more cases were allowed to be
    brought against foreign governments in the United States, there
    would be pressure from both sides--both the victims,
    understandably, but also the representatives of the foreign
    government--saying that whatever the case happens to be is a
    delicate political question that should not be left to the
    judiciary to consider. And I am not saying that any future
    government would file a brief, but there would be tremendous
    pressure upon them----
        Chairman Specter. What happened in that case? The court
    made a decision?
        Mr. Bellinger. This was called the Dichter case, which was
    brought against the Israeli intelligence chief----
        Chairman Specter. The one you are describing. Which court
    were you in?
        Mr. Bellinger. This was in New York, the New York district
    and then the court of appeals, and there was another case, I
    think, that was also in D.C.
        Chairman Specter. And the court decided those cases. Was
    there----
        Mr. Bellinger. The court decided those cases and found that
    the officials were not immune under the Foreign Sovereign
    Immunities Act because the courts held that officials are not
    protected under the Foreign Sovereign Immunities Act which they
    said protects governments.
        Chairman Specter. Was there a cert. application?
        Mr. Bellinger. I believe there was. I would have to check
    on that. The courts, though, held that the officials were
    immune under common law principles of immunity that protect
    officials in their official acts, which is just what the United
    States would expect overseas. If the Secretary of Defense right
    now were sued in a foreign country for a drone attack that
    killed civilians, we would assert very strongly that our
    Secretary of Defense was absolutely immune from those actions
    because he took them in his official capacity, even though the
    civilians in, for example, Afghanistan or Pakistan or Yemen
    would believe that that was actually an illegal extrajudicial
    killing.
        Chairman Specter. Well, coming back to this legislation and
    the case which has provided the basis for the legislation, the
    cases you cite are interesting, but the serious question as to
    whether they are really relevant here on the facts being so
    vastly different and what might be postulated with a lot of
    imagination could be handled in some other court at some other
    time. But it is different to say the court is going to decide
    whether the Foreign Sovereign Immunities Act applies in this
    case or the Court saying, ``We will not take the case.''
        You have not taken a position on the legislation. Would you
    take a position that at least the Supreme Court should have
    granted cert. and decided whether the Second Circuit was right,
    whether the Solicitor General was right, and reached an
    interpretation of the statute?
        Mr. Bellinger. I would have liked to have seen the Supreme
    Court take the case. It was an important case involving the
    interpretation of the Foreign Sovereign Immunities Act, and I
    would have liked to have seen the Supreme Court's views on the
    subject. I do not know how they would have come out.
        Chairman Specter. Well, nobody knows how they would come
    out, but if we at least take Mr. Klingler's recommendation to
    take care of the loose ends on the Second Circuit decision and
    on the Solicitor General's argument, then we would know.
        Judge Sofaer, how do we deal with this issue of lack of
    public understanding as to what is involved here and the
    extraordinary weight given to the Solicitor General's view? The
    Supreme Court always asks for it, and the way that
    Congressional power has been so drastically curtailed by the
    Court, there are many other issues which are raised on fact
    finding and on other cases where the Court declines to
    intervene or overrules the Congressional action for what
    Justice Scalia called ``the flabby test'' on congruence and
    proportionality, giving up the rational basis standard. But all
    of this is so far removed from the public view. How would you
    deal with that?
        Judge Sofaer. I think you are doing an admirable job,
    Senator. I was stunned when I saw what the Second Circuit held
    and what the Solicitor General said about the standard of proof
    that would be required to find that a tort had occurred in the
    United States that satisfied the requirement of the statute.
    The notion that you can have a separate tort that occurs, let
    us say, in Saudi Arabia of knowingly funding an attack in the
    United States and thereby evade the statute that governs the--
    --
        Chairman Specter. Come to the core, Judge Sofaer. In your
    judgment, is there any conceivable basis for that conclusion?
        Judge Sofaer. No, sir. I think it is a completely naive----
        Chairman Specter. Mr. Klingler and Mr. Bellinger, I am
    going to ask you the same question. Any conceivable
    justification for that?
        Judge Sofaer. I think it is a completely naive view and a
    terrible thing to attribute to the Senate and the Congress. The
    notion that our Congress would support a law that would allow
    people to sue for killings in the United States but that would
    not include allowing them to sue for paying for those
    killings----
        Chairman Specter. Well, Judge Sofaer, aside----
        Judge Sofaer.--in Saudi Arabia----
        Chairman Specter. Aside from what the Congress would
    intend, what does the statute say? Is there any basis for
    taking the language of that statute and saying it does not
    apply when some acts are outside the United States?
        Judge Sofaer. Well, I think they were both wrong, the
    Second Circuit and the Solicitor General. I think the Supreme
    Court would have corrected them. And I applaud the fact that
    your bill would correct that by making it clear that if it
    happened, if the planning happened in Saudi Arabia, there would
    still be jurisdiction to deal with it in the United States.
        Chairman Specter. Mr. Klingler, any basis for that
    conclusion, aside from providing cover for asking the Supreme
    Court not to grant cert.?
        Mr. Klingler. I do not think it was a reasonable view in
    the context of this case. You could imagine certain
    circumstances where there are extremely indirect effects in the
    United States, where it may be relevant that the acts took
    place abroad and the harm was abroad. But that was not this
    case, and that was not the type of injury that your bill
    focuses on.
        Chairman Specter. What do you think, Mr. Bellinger?
        Mr. Bellinger. Well, I am afraid I am going to have to
    disagree with my distinguished colleagues. I think the Second
    Circuit did have a reasonable interpretation of the law here.
    It was, in fact, what others----
        Chairman Specter. I am not asking about the Second Circuit
    on asking that they be on the terrorist list. I am asking about
    the Solicitor General's conclusion that when acts occur outside
    the United States and have a direct impact, causality in the
    United States, if there is any basis for saying that that is
    not what the statute covers as an exception.
        Mr. Bellinger. Senator, I think the longstanding view of
    the U.S. Government--I know you would like to have witnesses
    from them and they will tell you--is that the tort exception
    was intended to be limited to torts inside the United States
    like traffic accidents and so forth. The concept of the Foreign
    Sovereign Immunities Act was to provide very limited
    jurisdiction against foreign sovereigns, just as we ourselves
    do not want to allow the United States to be opened to suits
    all around the United States.
        Chairman Specter. Any legislative history to support what
    you just said?
        Mr. Bellinger. I believe there is, Senator. I think that
    the suggestion was that the tort exception was intended really
    to cover traffic accidents and other minor torts by a foreign
    government that occur inside the United States. I agree that it
    is not crystal clear. That is why I say I think the Second
    Circuit's decision, which joined a number of other circuit
    courts, was a reasonable interpretation that the tort exception
    was limited to acts inside the United States.
        Judge Sofaer. But if I might intervene, Senator, the
    Solicitor General did not rest her position on that rationale.
    The Government disagreed with the Second Circuit that the tort
    provision was limited to minor torts, and they agreed with the
    plaintiffs that terrorist actions were included in the tort
    provision.
        So the issue is, where a terrorist action which is included
    in the tort provision occurs within the United States, can you
    rationally say that paying for that terrorist action in a
    separate tort in Saudi Arabia is something that Congress would
    not have intended to include? And I think you cannot.
        Chairman Specter. Well, Mr. Klingler, are you prepared to
    go as far as Judge Sofaer in criminalizing this conduct and
    using force against Federal Government nations?
        Mr. Klingler. I am not sure quite what the proposal on the
    table is, but I would certainly----
        Chairman Specter. Well, the proposal on the table is to go
    after those Saudi princes and bring them back for criminal
    prosecution.
        Mr. Klingler. As to the Saudi princes, the proceedings
    before the Supreme Court and the state of the litigation is a
    set of allegations at this point. So I do not think anything
    has been established by a court regarding what the nexus is,
    and I am not familiar with the factual record enough to have
    confidence that the allegations are true or false.
        Chairman Specter. Enough to support an investigation by the
    Department of Justice?
        Mr. Klingler. I do think, though----
        Chairman Specter. With a view to a criminal prosecution if
    those facts are found?
        Mr. Klingler. I do think that the powers that Judge Sofaer
    addressed are important and legitimate and largely encompassed
    today in statutes that do criminalize a range of terrorism-
    related and support of terrorism measures. I also think that
    there is a range of use of force that both this administration
    and the prior administration have directed that are important
    and grounded in law.
        Chairman Specter. Mr. Bellinger, would you go along with
    any of Judge Sofaer's suggestions about criminalizing this
    conduct?
        Mr. Bellinger. Well, there are two questions. I think it is
    a good idea to have a broader reach of U.S. criminal laws. One
    of the things that we found after 9/11 when many of our critics
    said, ``Why don't you criminally prosecute these people who did
    these things instead of putting them in military commissions?
    '' was that our criminal laws had very limited reach and did
    not actually cover a lot of activities that occur solely
    outside the United States.
        And so, on the one hand, I agree wholeheartedly that we
    should expand the reach of our criminal laws to cover certain
    terrorist acts that occur wholly outside the United States. But
    that is a different question from the immunities of either the
    governments or of the officials, and so I would not necessarily
    suggest that we should strip senior officials in foreign
    governments of immunities. Those immunities protect the United
    States itself. It is a difficult two-edged sword with which I
    sympathize completely that we would like to hold senior
    officials accountable in foreign governments. But if we strip
    them of their immunities, then we will be risking stripping the
    immunities of our own senior officials, of our Secretary of
    Defense, of our Director of Central Intelligence. It would be
    very easy to accuse Leon Panetta or Bob Gates of directing an
    extrajudicial killing, and if we strip their immunities, I
    think that would be a dangerous thing for all of us.
        I agree that the force that the United States has been
    using is lawful around the world, but I would be worried about
    stripping the immunities of our officials to allow them to be
    sued in other countries.
        Chairman Specter. Well, you have made that clear. You would
    say there is an appropriate role for criminalization or use of
    force, but not something lesser like limiting immunity, which
    might boomerang.
        Mr. Bellinger. You have summarized my position very well.
    Thank you.
        Chairman Specter. Another comment, Judge Sofaer?
        Judge Sofaer. I just wanted to add, Senator, that this is
    not just about our criminalizing the conduct of foreign
    officials for sponsoring or paying for terrorist acts. The
    resolution of the Security Council, 1373--incidentally passed
    under Chapter 7, which relates to the use of force--calls on
    all states themselves to criminalize this conduct. So the Saudi
    Government has a duty under this resolution to criminalize the
    willful provision of funds, and also as subsection (d) says, to
    prohibit their nationals from engaging in the financial support
    of terrorist groups, directly or indirectly. The language is
    very comprehensive.
        So, you see, the system is there. The rules are there. And
    I would urge the Senate, Mr. Chairman, to take those
    international rules that are authoritative and make them a
    reality by putting them into U.S. law and reminding the world
    of their duties, duly adopted in the Security Council of the
    United Nations, to criminalize this conduct. That would be a
    step in the right direction to give us the justification, if
    they do not do it, for following up appropriately.
        Chairman Specter. Well, that would take a lot more far-
    reaching action than this legislation urges.
        I want to come back for just a minute, before moving on to
    the next panel, to the issue which I had raised, and I have
    just sent for the article which I read in the Post this
    morning, and it touches on this issue directly and on many
    others. It is Stuart Taylor's commentary about judicial
    usurpation contrasted with judicial review. And he says that
    the Court would be wise to leave decision to the elected
    branches as opposed to giving their own views. And why does the
    Court get away with it? Because they stop short of infuriating
    the public.
        And I think, if the public understood what was happening
    with the Saudi princes and with the various charitable fronts,
    that the public would be infuriated. I think if the public
    understood what happened with the warrantless wiretapping
    contrasted with the statute, the Foreign Intelligence
    Surveillance Act, infuriated; that the Court declared
    unconstitutional the Americans With Disabilities Act or the law
    protecting women against violence, infuriated; or understood
    the campaign finance--they do understand a little of that. The
    polls are very strong there. Eighty-five percent of the public
    dislikes that.
        So the answer might be a lot simpler than legislation or
    Judge Sofaer's fancy international law postulates, but find a
    way to infuriate the public or let the public decide whether
    they are infuriated or not.
        Any ideas of how to do that besides taking at least a
    modest step of televising Supreme Court open arguments?
        Judge Sofaer. I try not to infuriate anyone, Senator.
        Chairman Specter. I should have taken your advice.
        Any comment, Mr. Klingler or Mr. Bellinger.
        Mr. Klingler. My only comment would go back to the prior
    discussion about the value or not of the executive branch
    expressing its views to the courts. I do not want to leave the
    impression that the fact that the Solicitor General filed a
    brief with the U.S. Supreme Court in the 9/11 case was
    improper. I do not think it was. The Court invited the views of
    the Solicitor General. That is a very traditional practice. It
    is a very valuable role that the Solicitor General's office
    serves in advising the Court. I think in general they have done
    an exceptionally good job of that. I think they did not do an
    exceptionally good job in this particular brief.
        I also think that the role of the executive branch in
    intervening in suits where there may be a foreign sovereign
    interest or a terrorism-related interest is also very valuable,
    that it can dissuade the Court from adopting erroneous views--
    or at least present to the Court a set of executive branch
    issues and interests related to the potential effects on
    foreign affairs or the construction of the statutes before the
    Court. It can characterize the record, and the Department of
    Justice and the Department of State have often served
    incredibly valuable roles in buttressing our counterterrorism
    capabilities by intervening and filing briefs in just that
    fashion.
        Chairman Specter. Thank you very much, gentlemen. I
    appreciate your being here.
        Chairman Specter. We will turn now to panel two, so if our
    witnesses will step forward: Mr. Evan Kohlmann, Mr. Matthew
    Levitt--OK, so how many witnesses do we have? And Mr. Wolosky.
    Would you gentlemen stand, please, for the administration of
    the oath? Do you solemnly swear that the testimony you are
    about to give before this Committee will be the truth, the
    whole truth, and nothing but the truth, so help you God?
        Mr. Kohlmann. I do.
        Mr. Wolosky. I do.
        Chairman Specter. Thank you.
        Our first witness on this panel is Mr. Evan Kohlmann,
    terrorism consultant to NEFA Foundation, a nonprofit
    organization to help expose those who plan, fund, and execute
    terrorism, particularly Islamic militant organizations. The
    research has produced one of the world's largest and most
    extensive open-source databases of original documents,
    communiques, and multimedia information concerning terrorism.
    Mr. Kohlmann is a graduate of the Georgetown University Edmund
    Walsh School of Foreign Service and the University of
    Pennsylvania Law School. Thank you for joining us, Mr.
    Kohlmann, and the floor is yours.

       STATEMENT OF EVAN F. KOHLMANN, SENIOR PARTNER, FLASHPOINT
        GLOBAL PARTNERS, NEW YORK, NEW YORK, AND INTERNATIONAL
     TERRORISM CONSULTANT/SENIOR INVESTIGATOR, THE NEFA FOUNDATION

        Mr. Kohlmann. Thank you very much, Senator. Thank you to
    you and your staff for extending me the invitation to testify
    today.
        So far today we have talked about legal approaches with
    regards to foreign sovereign immunity, and I would like to
    address the factual side of this issue, particularly the role
    of state-sponsored or really state-directed Saudi Arabian
    charitable organizations in funding paramilitary and terrorist
    organizations. And I take your point that we need to get the
    public infuriated about this, and I think one of the ways to
    get the public infuriated about this is to present the facts to
    them.
        Last October, in the midst of a business trip to Bosnia, I
    passed the imposing King Fahd mosque in central Sarajevo. The
    mosque is, arguably, the major center of pro-Wahabi activism in
    the region, and it also serves as the headquarters for the
    official state-sponsored Saudi High Commission for Relief in
    Bosnia-Herzegovina. In fact, the impact of the Saudi High
    Commission can be felt within only steps of its front door.
        In October of 2009, when I was there, the items for sale at
    the vendor stall outside the mosque entrance included a crudely
    made DVD labeled on one side, ``Microsoft Flight Simulator:
    World Trade Center Edition,'' and on the other, emblazoned with
    images of Osama bin Laden and the World Trade Center, along
    with the title (in Bosnian), ``The Truth about September 11.''
    This is right outside the front door of the Saudi High
    Commission.
        Indeed, though it was apparently established for
    humanitarian purposes, the Saudi High Commission and its staff
    in the Balkans have routinely engaged in behavior which goes
    far beyond any definition of religious missionary or relief
    work. This is particularly vexing because the Kingdom of Saudi
    Arabia has freely acknowledged that the Saudi High Commission
    is ``an arm of the Saudi Government.'' The evidence of Saudi
    High Commission complicity in providing financing, weapons, and
    other forms of logistical support to paramilitary and terrorist
    groups is quite literally overwhelming.
        An internal classified memorandum for the Muslim Army of
    Bosnia-Herzegovina Security Service in September 1994
    acknowledged that, ``What is interesting regarding the
    humanitarian organization, the Saudi High Commission, in Zenica
    is that they actually employ members of the El-Mujahideen Unit,
    the holy warriors, foreign fighters sent to Bosnia.
        The ARBiH report added that, ``the director of the High
    Saudi Commission has well-established cooperation with El-
    Mujahidin units in Middle Bosnia.'' Upon arresting a Saudi High
    Commission staff member in January 1994 in connection with the
    brutal murder of a British aid worker, Asim Fazlic, the then-
    chief of police in Zenica, commented, ``One of the strangest
    elements is that we still do not know the exact identity of
    [those] we hold in Zenica. They are very uncooperative and so
    far still insist, in spite of their car, their uniforms, and
    their weapons, that they are humanitarian aid workers.''
        The U.S. Department of Defense, the Pentagon, has concluded
    that ``The Saudi High Commission for Relief has provided
    financial support to former Arab mujahidin in Bosnia, the types
    of financial support included travel to Chechnya and to
    Afghanistan. At least one high-profile Saudi High Commission
    staff member in Bosnia-Herzegovina, an Algerian national by the
    name of Saber Lahmar, has been convicted in Bosnia-Herzegovina
    for the armed robbery of an American national for bombings
    there, was rearrested in October of 2001, and was sent to U.S.
    military custody in Guantanamo Bay, Cuba.
        Much as the Saudi High Commission was formed by the kingdom
    in order to organize NGO and humanitarian fundraising efforts
    for Bosnia, the Saudi royal family adopted a similar approach
    when confronted with the crisis in Kosovo in 1999. Under the
    chairmanship of Saudi Interior Minister Prince Naif bin
    Abdulaziz al-Saud, the kingdom formed the Saudi Joint Relief
    Committee for Kosovo and Chechnya.
        One of the first decisions by the Kingdom of Saudi Arabia
    that drew international scrutiny to the activities of the SJRC
    was the curious appointment of its initial director, Saudi
    national Wael Jalaidan. Jalaidan, also known as Abul-Hassan al-
    Madani, was one of the first Arab mujahideen to join the anti-
    Soviet jihad in Afghanistan during the 1980's. In an interview
    aired on the Al-Jazeerah satellite television network in June
    1999, bin Laden reminisced about the early days of the jihad in
    Afghanistan, recalling, ``We and the shaykh [Abdullah Azzam]
    were in one boat, as is known to you, together with our brother
    Wa'il Jalidan.''
        In the spring of 2000, U.S. officials sent a confidential
    memorandum to U.N. police forces in Southeastern Europe titled
    ``Secret: U.S. office only Release to [the U.N. administration
    in Kosovo].'' According to that report, Wael Jalaidan is an
    associate of Osama Bin Laden and had directly assisted bin
    Laden ``moving money and men to and from the Balkans.'' As a
    result, on September 6, 2002, the U.S. and Saudi Governments
    announced an unprecedented joint action to freeze Jalaidan's
    assets and to specially designate him as a supporter of
    international terrorism. In other words, even the Saudi
    Government recognized that the director of their own state-
    sponsored charity is an international terrorist.
        One of the biggest problems with this is that there are
    actual terrorists now, accused terrorists who are attempting to
    use the state sovereign immunity exception that appears to
    apply to Saudi High Commission and the SJRC in order to serve
    as a legal shelter for their own involvement in terrorist
    activities. One Algerian national in Guantanamo Bay told the
    U.S. military interrogators that ``the Saudi High Commission
    could not be bad because it was run by the Saudi Royal
    Family.''
        Even former staff members of quasi-private NGO's operating
    under the umbrella of the SJRC in Kosovo--such as the Al-
    Haramain Islamic Foundation--have attempted to use the SJRC's
    official status with the Saudi Government to provide sovereign
    immunity.
        Guantanamo Bay detainee Yemeni national Jamal Mohammed
    Alawi Mar'i complained during a Pentagon ARB hearing, ``The Al
    Haramayn organization is a governmental agency. How [can] it
    [be] classified as nongovernmental and the person in charge is
    the Minister of the [Islamic Affairs]? ''
        Another Guantanamo detainee--an unnamed Jordanian who has
    lived in Pakistan since 1985--was also indignant when it came
    to charges that the Al-Haramain Foundation was involved in
    supporting terrorist activities: ``If you consider al-Haramayn
    as a terrorist organization you should talk to Saudi Arabia,
    because Saudi Arabia was the country that established al-
    Haramayn. Its president is the royal prince there. Why don't
    you go over there and ask him? This is something you need to
    take up with Saudi Arabia.''
        These are the words of a Guantanamo Bay detainee, and these
    statements raise serious questions about the wisdom of allowing
    any form of sovereign legal immunity for employees or officials
    representing the Saudi High Commission, the Saudi Joint Relief
    Committee, or the various charitable organizations working
    under their diplomatic umbrella. This is especially the case
    when said class of employees and officials is known to include
    a variety of accused international terrorists, uncontested
    paramilitary combatants, Guantanamo Bay detainees, and, in the
    case of Wael Jalaidan, even a close friend of Osama bin Laden.
        Thank you very much, Senator.
        [The prepared statement of Mr. Kohlmann appears as a
    submission for the record.]
        Chairman Specter. Thank you, Mr. Kohlmann.
        We had planned to have Mr. Matthew Levitt present today. He
    is a senior fellow at the Washington Institute for Near East
    Policy, and he is testifying in New York. The trial started on
    Monday and had been expected to conclude so that he could have
    been here, but it has been carried over. But his full testimony
    will be made a part of the record.
        [The prepared statement of Mr. Levitt appears as a
    submission for the record.]
        Chairman Specter. We turn now to Mr. Lee Wolosky, partner
    in the law firm of Boies, Schiller & Flexner; had been director
    for transnational threats on the National Security Council
    staff during the administration of both President Clinton and
    President George W. Bush; served as co-director of the Council
    on Foreign Relations Task Force on Terrorism Financing; a
    bachelor and law degree from Harvard.
        Thank you for joining us, Mr. Wolosky, and we look forward
    to your testimony.

    STATEMENT OF LEE S. WOLOSKY, PARTNER, BOIES, SCHILLER & FLEXNER
                        LLP, NEW YORK, NEW YORK

        Mr. Wolosky. Mr. Chairman, thank you for inviting me to
    testify today before you and also for your leadership on an
    issue of significant importance to our country: deterring
    financial to international terrorist organizations. I have had
    the opportunity to consider these issues both as a National
    Security Council official and now as a lawyer in private
    practice.
        Along with the threat of governmental fines and sanctions,
    the prospect of substantial civil damages can deter deep-
    pocketed corporations or individuals from doing business with
    terrorist organizations. In this way, civil litigation against
    financiers of terrorism can advance important public policy
    interests of the United States.
        As discussed by other panel members, S. 2930 expands
    exceptions available to private plaintiffs under the Foreign
    Sovereign Immunities Act. It also amends the Antiterrorism Act
    of 1991 by, among other things, expressly imposing liability on
    those who aid and abet acts of international terrorism and by
    making defendants in such suits subject to the personal
    jurisdiction of Federal district courts to the maximum extent
    permitted by the Constitution. In these ways, it expands the
    remedies available to victims of international terrorism
    seeking redress in U.S. courts.
        To illustrate why and how civil litigation can supplement
    the tools available to U.S. policymakers and governmental
    enforcement efforts in particular in deterring the financing of
    terrorism, I will focus my remarks, at the staff's request, on
    two cases concerning with which I have had personal
    responsibility as a lawyer in private practice. The first cases
    involved Arab Bank, PLC, and the second involves Chiquita
    Brands International.
        Arab Bank is a large, international financial institution
    based in Amman, Jordan. In 2004, six families of Americans
    injured or killed in Palestinian terrorist attacks in the
    territories filed a lawsuit against Arab Bank in Federal court
    in New York, where Arab Bank has offices, seeking $875 million
    in damages. The suit alleged that Arab Bank had served as
    paymaster for a dedicated program providing financial support
    originating from a Saudi Arabian entity called the Saudi
    Committee in Support of the Intifadeh Al Quds to the families
    of Palestinian suicide bombers and other terrorists who
    committed or attempted to commit terrorist acts that killed
    American citizens (and others). Other lawsuits making similar
    allegations followed.
        According to these lawsuits, the funds were disbursed to
    Arab Bank accounts opened in the name of beneficiaries and
    available at local Arab Bank branches in the Palestinian
    territories. Such payments are alleged to have served as
    incentives to would-be terrorists who could take comfort in
    knowing that their families would receive financial support if
    they attempted to commit a terrorist act. Beneficiary families
    are alleged to have received over $5,000 each.
        The ongoing civil litigation against Arab Bank supplements
    actions taken by U.S. regulatory and enforcement authorities.
    In 2005, Federal agencies levied a $24 million fine against
    Arab Bank. This amount pales in comparison to the $32 billion
    in assets that Arab Bank possessed at the time.
        The $24 million U.S. Government fine against Arab Bank has
    proven to be inadequate, in my judgment. Just this week, on
    Monday, a Federal judge sanctioned Arab Bank for refusing to
    turn over relevant bank records. Significantly, Arab Bank
    continues to do lucrative business in New York through
    correspondent banking relationships with major U.S. financial
    institutions, while refusing to provide compensation to those
    harmed by its conduct and while continuing to defy U.S. courts.
        A trial date in the civil cases against Arab Bank will
    likely be set for 2011. The bank faces the prospect of civil
    damages that could be a large multiple of the amount of U.S.
    Government fines levied against it to date.
        The Chiquita case provides another example of how civil
    litigation may complement U.S. Government enforcement actions.
    Chiquita has admitted to providing financial support to the
    United Self-Defense Forces of Colombia, the AUC, which the
    State Department designated a foreign terrorist organization in
    2001. It specifically admitted to making payments of $1.7
    million from 1997 to 2004. Chiquita has also admitted providing
    payments to the Revolutionary Armed Forces of Colombia, the
    FARC, which, like the AUC, is on the State Department's list of
    foreign terrorist organizations.
        In 2007, Chiquita pleaded guilty to engaging in
    transactions with a specially designated global terrorist and
    agreed to pay $25 million in fines to the U.S. Government. That
    year, Chiquita had annual revenues of $4.5 billion. Soon after
    the guilty plea, families of hundreds of Colombian and American
    victims killed by the AUC and the FARC filed lawsuits against
    Chiquita in U.S. courts. These suits demonstrate the deterrent
    role that civil litigation can play against the financing of
    terrorism: Chiquita faces potentially significant civil damages
    as a result of the civil litigation--far in excess of the $25
    million it agreed to pay as the result of U.S. Government
    enforcement actions.
        In sum, financial institutions, corporations, charitable
    organizations, and other large entities may continue to provide
    material support for terrorist organizations until it is
    financially unpalatable for them to do so. Although Government
    fines and sanctions are clearly an integral part of the effort
    to stem the flow of funds to terrorist groups, civil litigation
    can substantially enhance the financial consequences that such
    entities face. This proposed bill will make it easier for
    litigants to sue those who provide support to terrorists who
    kill or injure Americans. It will thereby help to deter future
    such conduct.
        Thank you very much.
        [The prepared statement of Mr. Wolosky appears as a
    submission for the record.]
        Chairman Specter. Thank you, Mr. Wolosky.
        You say the litigation against Chiquita was an effective
    deterrent. Why do you think that?
        Mr. Wolosky. Mr. Chairman, we do not yet know whether the
    litigation against Chiquita will prove to be an additional
    deterrent to the Government fines imposed against Chiquita
    for----
        Chairman Specter. Well, is Chiquita in a situation where
    they were likely to repeat that conduct?
        Mr. Wolosky. I do not believe so.
        Chairman Specter. Very different from al Qaeda rummaging
    out there, threatening to do more and doing more.
        Mr. Wolosky. I think that is a fair statement. Mr.
    Chairman, if I may, I think that the deterrent effects relates
    not only to specific conduct in specific countries around the
    world with respect to specific terrorists, but also to the
    system of internal controls that a corporation does or does not
    put in place.
        Chairman Specter. Mr. Kohlmann, you commented about a $24
    million fine, and you talk about other litigation pending
    against Arab Bank. How many fines or judgments have there been,
    to your knowledge, against terrorists linked with al Qaeda?
        Mr. Kohlmann. Excuse me, Senator. I think that was actually
    Mr. Wolosky who said that. Am I correct?
        Mr. Wolosky. Yes, I described the AB, both enforcement
    actions and the civil litigation against Arab Bank. Arab Bank
    is alleged to have provided support principally to Palestinian
    terrorist organizations, specifically Hamas.
        Chairman Specter. Well, how about as to al Qaeda? Any
    litigation, fines, or judgments as to al Qaeda?
        Mr. Wolosky. If you are asking with respect to the formal
    financial system, of which Arab Bank obviously is a part, al
    Qaeda presents a very different case. Unlike Palestinian groups
    which have raised money openly and notoriously in certain parts
    of the Muslim world, the financing for al Qaeda has been more
    indirect, and it frequently has not involved, or at least
    clearly involved, the flow of funds through the formal
    financial system in a way that funds would be clearly
    designated or earmarked for al Qaeda or, to draw a parallel to
    the Arab Bank case, to the beneficiaries, to family members of
    terrorist operatives.
        Chairman Specter. The 9/11 Commission Staff Monograph on
    Terrorist Financing found al Qaeda was funded to the tune of
    approximately $30 million per year by divisions of money from
    Islamic charities. What can be done to communicate that import
    with the imprimatur of the 9/11 Commission to the American
    public to understand what is happening? Mr. Kohlmann, any
    ideas?
        Mr. Kohlmann. Senator, I think one of the ways is showing
    what this money is actually paying for. At my company up in New
    York, we have been doing research recently about how the
    banking system continues to be used by al Qaeda to fund
    training camps, and, unfortunately, the evidence is out there.
    We have the actual bank accounts in Pakistan that are being
    used by al Qaeda and its allies to fund the training camps. And
    if you show people the bank account numbers and you show video
    of the training camps, where you have people literally shooting
    at targets marked ``USA,'' you have little kids under the age
    of 5 years old getting dressed up in uniforms and being made
    into warriors, that has a tremendous impact on people.
        I think the point is when it is dollars and cents----
        Chairman Specter. Can you tell me how it is having a
    tremendous impact on people?
        Mr. Kohlmann. Well, if you can actually see the images of
    the people getting trained----
        Chairman Specter. Who can see the images?
        Mr. Kohlmann. Well, the evidence is out there,
    unfortunately. I just do not think that----
        Chairman Specter. Out there, but has it been displayed by
    the news media, which is the way people get information?
        Mr. Kohlmann. That is one way, Senator, but I think that
    the State Department and other branches of the U.S. Government
    also have a role here in terms of making sure that this
    information is not only available to the news media but it is
    directly available to the public. Unfortunately, this is not
    secret evidence.
        Chairman Specter. Well, directly available does not mean
    they get it.
        Mr. Kohlmann. No. But I think if you can present it to
    their--a lot of people do not believe this because they cannot
    see it, and a lot of this evidence that is out there is
    actually open-source information. It is not secret. It is not
    classified. There is no reason why the U.S. Government should
    not be putting money and effort into broadcasting those kind of
    facts to the public.
        I think ultimately if you are talking about bank account
    numbers alone, you are not going to get a lot of excitement
    from the U.S. public. You are not going to get a great degree
    of understanding. If you show people what this money is paying
    for, the murder of innocent people, training little kids to
    fight in combat, then all of a sudden I think it becomes much
    more clear, No. 1, why it is so important to crack down on
    charities or other institutions that misuse humanitarian
    fundraising.
        Chairman Specter. Let me move to some other factual
    findings here. The Saudi High Commission, according to U.S.
    Government sources, was involved in financing al Qaeda members
    to attack the U.S. embassies in Bosnia in 1997. To what extent
    was that publicized?
        Mr. Kohlmann. As far as I know, Senator, it has not been
    publicized at all, nor has the fact that the SJRC was raided in
    1999 and 2000 for its role in attempting to assassinate--or the
    role of its staff attempting to assassinate Western diplomats.
        Chairman Specter. Well, you took my question and added
    another illustration. Has that been publicized?
        Mr. Kohlmann. To my knowledge, Senator, it has not been
    publicized--not well publicized, certainly. It is available if
    you know where to look, but, you know, that would take some
    digging.
        Chairman Specter. It is available if you know where to go
    to look. People do not go to look.
        Mr. Kohlmann. I agree, Senator.
        Chairman Specter. Unless it is spoon-fed on MSNBC.
        Mr. Kohlmann. I agree, Senator. That is one of the issues
    and that is one of the reasons why I think the U.S. Government
    in its own interests should be out there publicizing this
    information. If we simply say that an organization is a
    terrorist group or if we simply say it is a front for
    terrorism, that is not the same thing as saying this group
    provided the money and means for individuals to attempt to blow
    up the U.S. embassy in Sarajevo.
        Chairman Specter. OK. Let me move to another factual matter
    which is of concern. Wiretap summaries obtained from the
    International Criminal Tribunal for Former Yugoslavia revealed
    that members of al Qaeda mujahideen in Bosnia were directed to
    pick up funds for the Saudi High Commission. A UN-sponsored
    resolution further determined that the Saudi High Commission
    transferred in excess of $120 million to the Third World Relief
    Agency between 1992 and 1995.
        Any publicity on that, Mr. Wolosky, that you know about?
        Mr. Wolosky. Not that I am aware of, Mr. Chairman. I would
    point out that the sort of framework of financing that you have
    described and that Mr. Kohlmann has described with respect to
    so-called Saudi charities is one that has been employed in many
    parts of the world to provide support to Islamic extremist
    movements. And, in fact, as I described in my testimony, there
    was and may still be a similar Saudi entity that provided
    support to Palestinian terrorist organizations such as Hamas.
    In that case, unlike perhaps in some of these other cases, they
    used a bank that happened to have had offices in New York City
    and was, therefore, subject to the personal jurisdiction of
    Federal courts by civil litigants who chose to sue it in New
    York.
        One of the points that I would make about the proposed
    legislation is that it expands personal jurisdiction over
    individuals or organizations that are accused of financing
    terrorism to the maximum extent allowed by the Due Process
    Clause. So in that respect, it is doing a great service to the
    victims who in the future may not be so lucky as to find an
    entity doing business in New York.
        Chairman Specter. What publicity has been given, to your
    knowledge, to the International Islamic Relief Organization
    which has financed terrorist activities?
        Mr. Wolosky. In a narrow circle of people who follow these
    things closely, which includes me and Evan and a few others, a
    fair degree. But to your point, in the broader American public,
    not enough.
        Chairman Specter. So Evan and I are pretty much convinced.
        Mr. Wolosky. Yes. It is the rest of us that we need to----
        Chairman Specter. What is that?
        Mr. Wolosky. To your point, it is the rest of the country
    that needs to get educated.
        Chairman Specter. Well, that is a big part of the jobs that
    all of us have, and I think if the public was aware of what is
    going on, that would pass the infuriating test which I referred
    to earlier, adopting Stuart Taylor's approach to getting
    something done, getting judicial restraint, permit a case like
    this to go forward, and at least be heard extensively in a
    courtroom.
        Anything either of you gentlemen would like to add at this
    point?
        [No response.]
        Chairman Specter. Thank you very much. That concludes the
    hearing.
        Mr. Kohlmann. Thank you, Senator.
        Mr. Wolosky. Thank you.
        [Whereupon, at 11:31 a.m., the Subcommittee was adjourned.]
        [Submissions for the record follow.]

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