Jury selection begins this morning in Dallas for the retrial of five Holy Land Foundation for Relief and Development (HLF) officials accused of conspiring to route millions of dollars to Hamas.
To win convictions, prosecutors must overcome two obstacles exposed by last October's mistrial, when jurors could not reach unanimous verdicts on most of the counts in the case.
The first is convincing jurors that charities receiving HLF money were serving Hamas at the same time they may have provided humanitarian aid or medical care. Based upon juror comments in this and similar cases, prosecutors also must make it clear that even charitable aid can violate U.S. law regardless of how jurors may feel about that.
It won't be easy. Complex white collar cases are among the most difficult to prosecute, said attorney Jonathan Winer, a former deputy assistant Secretary of State for International Law Enforcement. He pointed to the 2005 fraud and money laundering acquittal of former HealthSouth Corp. founder Richard Scrushy (later convicted of bribery), Robert Altman's acquittal on fraud charges in the BCCI trial and a series of racketeering mistrials against John Gotti, Jr. (recently indicted again in Tampa) as illustrations.
"Juries tend to have their eyes glaze over when they're asked to follow a series of financial transactions," Winer said, "rather than somebody buying a bomb, a gun, a knife and using it to kill somebody."
Even judges struggle with the issue, as shown by last week's 7th Circuit Court of Appeals hearing in Chicago on a $156 million judgment originally awarded to the parents of David Boim, killed in a 1996 Hamas shooting.
"You can never trace the critical expenditure on the weapon that kills the plaintiff's decedent to a specific donation," Judge [Richard] Posner said.
In Dallas, jurors will hear the defendants praising Hamas attacks, organizing and participating in fundraisers with Hamas officials and singling out the children of dead Hamas members for financial support. They will see bank records of HLF money going to Palestinian charities in the West Bank and Gaza and internal records assessing the depth of Hamas control over them.
And they will hear why U.S. law prohibits sending money to groups designated as terrorists such as Hamas.
In 1995, a wave of terrorist attacks in Israel prompted President Clinton to sign an executive order prohibiting transactions with Hamas and 11 other violent groups. U.S.-led peace talks led to a series of agreements creating the Palestinian Authority out of the secular Palestinian Liberation Organization.
"[G]rave acts of violence committed by foreign terrorists that disrupt the Middle East peace process constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States," Clinton said in the order.
Clinton acted after a double suicide bombing at the Beit Lid bus junction killed nearly two dozen people and wounded more than 60 others. "Once again, the enemies of peace have struck down innocent people in an evil effort to destroy the hopes of peaceful coexistence between Israelis and Arabs," Clinton said at the time.
Congress followed with legislation a year later prohibiting material support to terrorist groups. But juror William Neal, who led the charge for acquittals during the first trial, didn't agree with the designation of Hamas. In an interview with the Investigative Project on Terrorism, Neal said:
"It is marked as a terrorist organization. My personal viewpoint, I didn't know too much before. I see it as a political struggle. Our country was founded on a terrorist act. The Boston Tea Party wasn't a tea party, dude. It was a rebellion against the king's wrath. They fought back against an oppressive government."
HLF an early target
The HLF officials on trial also disagreed with the U.S. government's efforts. After the Oslo Peace Accords were signed in the fall of 1993, HLF executive director Shukri Abu Baker, Chairman Ghassan Elashi and Mufid Abdelqader joined other Hamas activists and supporters in Philadelphia to map out ways to "derail" the agreement. The meeting did not assess specific aspects of the deal. Instead, the participants, including Council on American-Islamic Relations founders Nihad Awad and Omar Ahmad, expressed their opposition to any peaceful settlement that created a Palestinian state on 1967 borders with Israel. They also were concerned that the newly created Palestinian Authority's secular rulers would marginalize the Islamist Hamas movement.
The U.S.-based supporters, who were part of a Palestine Committee created by the Muslim Brotherhood, did not discuss violence. Rather, they plotted political and public relations strategies – including the stated need to deceive Americans about their true objectives, while Hamas launched a campaign of terror attacks.
"They threatened the use of force against the Middle East peace process," remembers Mike Kraft, then a senior advisor in the U.S. Department of State Office of the Coordinator for Counterterrorism. In that job, he helped shape the anti-terror legislation. "Using terrorism to disrupt it was bad. And some American citizens had been killed by Hizballah and Hamas."
National security officials didn't think it would stop the violence, but felt they should act to reduce the support those attacks received from American sources. A day after signing the order, Clinton's national security team held a background briefing:
"We have been aware for some time that the terrorist organizations which are working to destroy the peace process thrive on funds from overseas. The majority of these funds we think come from foreign sources, but we have reason to believe that some funding has also come from donors in the United States," a senior White House official said.
HLF was already on their minds when that statement was made.
In his book, Against All Enemies, former National Coordinator for Security and Counterterrorism Richard Clarke writes that he urged Clinton to sign the order and wanted the Treasury Department to move on HLF at the time:
"We were convinced it was in violation of the Executive Order. [Office of Foreign Assets Control Director Richard] Newcomb used the Customs police to enforce his edicts, and, after CSG review, he had them set to raid the HLF, break the locks, seize the records and assets, and plaster posters on the doors and windows proclaiming the place had been raided."
Other administration officials disagreed, Clarke wrote, fearful about court challenges and political fallout. Those arguments carried the day. HLF was not designated as a terror supporter by the Treasury Department until December 2001.
Ironically, the authors of the legislation banning material support for Hamas and other terrorist groups offered an exception to the law for purely charitable donations, said Kraft. He co-edited The Evolution of U.S. Counterterrorism Policy, in which he details efforts to include a licensing provision, provided those sending money abroad prove the money was used solely for humanitarian purposes. It would have been difficult to administer, he said, but it never came to that because:
"During discussions between State and Justice Department officials and the Senate Judiciary Committee staff, one key staffer who worked for Republican Senator Spencer Abraham of Michigan, a state with a large Arab-American population rejected the provision. She said that the recipient 'charity' organizations would not stand for opening their books to inspection."
In a pre-trial brief, prosecutors argue HLF was created specifically to help Hamas in its campaign to win Palestinian hearts and minds. That work, they say, is even spelled out in the Hamas charter:
"Through social responsibility, the charter explains, 'brotherliness would deepen, cooperation, sympathy and unity will be enhanced and the ranks will be solidified to confront the enemies.'"
Some critics saw the government's first case as too complicated, with too many counts and too many exhibits for jurors to navigate. The second trial will be streamlined somewhat. Despite last year's mistrial, defendant Mohamed El-Mezain was acquitted on all but one count against him – that of participating in a conspiracy to provide material support to Hamas. Last week, prosecutors dropped all but three conspiracy counts against defendants Abdulqader and Abdulrahman Odeh.
The case, therefore, has a greater focus on the broader conspiracy rather than on individual payments that constituted previous counts of money laundering and material support. The government exhibit list for the retrial is 22 pages shorter than the original.
New expert witnesses have been added, including Bruce Hoffman, a terrorism expert at the Rand Corp. and professor in the Security Studies Program at Georgetown University's School of Foreign Service. Court filings indicate he will not testify about specific HLF activity, but rather, about how terrorist groups use social services as a means of garnering popular support.
"The witness, from a macro view, will describe the general structure of these organizations, how they operate social networks, and how the social networks support the overall goals and functioning of the terrorist organization," wrote federal prosecutor Elizabeth Shapiro in a June filing.
Jurors in the first HLF trial appeared to struggle with the notion that giving money to a charity was illegal. Government witnesses argued that a charitable wing and a military wing were parts of the same bird, and even when the money went to peaceful purposes, it still advanced Hamas' interests by winning popular support.
"One subsidizes the other," Winer said. "There is substantial integration between funds used to provide social services and funds used to blow people up. You can't distinguish between the two."
Defense attorneys cast the prosecution as an example of an over-zealous response by the Bush Administration after 9/11. Some of their arguments played to distrust of government claims. But their focus was on the charities and that likely won't change.
Defense attorney Linda Moreno blasted what she saw as the "cynicism and cruelty of this prosecution" because it sought to cut off charity to the needy.
Attorneys also hammered on the fact that none of the charity – or zakat – committees had been designated as terrorist organizations by the Treasury Department as Hamas is. Prosecutors countered that once Hamas is named, all of its appendages are included. But that argument didn't seem to carry the day. Since then, the Palestinian Authority itself shut down the committees for their Hamas connections.
In what could shape up to be one of the most important legal decisions in the case, prosecutors will again try to introduce evidence of the zakat committee connections seized by the Israeli military from Palestinian Authority offices in 2002. U.S. District Judge A. Joe Fish rejected the evidence last year as hearsay. In their pre-trial brief, prosecutors indicate they will ask U.S. District Judge Jorge A. Solis - the presiding judge over the retrial - to reconsider, saying the PA's actions validate the evidence:
"These documents include internal memoranda identifying the financial sources of Hamas, including the HLF; PA intelligence documents discussing how Hamas uses schools to recruit Palestinian youth; lists of Hamas institutions closed by the PA, including zakat committees supported by the defendants; and other similar documents," the brief said.
If admitted, jurors would see Palestinian and Israeli officials in agreement about HLF.
Editor's note: The Investigative Project on Terrorism will cover the HLF trial and offer frequent updates. Check our home page for the latest once opening statements are made.