Taliban and 9/11 Families Fight for Billions in Frozen Afghan Funds

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WASHINGTON — Nearly 20 years ago, about 150 relatives of the September 11 victims sought justice for their losses by suing a list of targets such as Al Qaeda and the Taliban. A decade later, a court found the defendants liable in absentia and ordered them to pay damages worth now about $7 billion.

But because there was no way to collect it, the judgment seemed symbolic.

Today, however, the Taliban have regained control of Afghanistan. The group’s leaders say their country’s central bank account at the Federal Reserve in New York, on which the former government has collected about $7 billion from foreign aid and other sources, rightly belongs to them. And that, in turn, has raised a question: If the money belongs to the Taliban, wouldn’t the plaintiffs in the September 11 lawsuit have the right to seize it?

Senior officials in the Biden administration are now debating the answer to that question, which presents a complex knot of national security, legal, diplomatic and political problems – the latest example of how thorny issues left unsolved by the terrorist attacks over more than a decade. two decades later.

One of the details to be worked out is whether and how the United States can circumvent any legal requirement to recognize the Taliban as the legitimate Afghan government to use the money in the central bank account to fund the September 11 families’ claim. to solve. .

The administration is expected to tell a court Friday what outcome would be in the national interest, even as the United States grapples with wider issues arising from the end of the US military presence in Afghanistan. In addition to recognition, they also include how to deliver humanitarian aid that can prevent a mass exodus of migrants.

The Justice Department has negotiated with attorneys for the Sept. 11 plaintiffs a potential deal to distribute the money if the government supports their attempt to seize it, and the White House National Security Council has consulted with agencies across the country. government collaborated to weigh up the proposal, said people who described the deliberations on condition of anonymity.

In a statement, two of the plaintiffs in the lawsuit — Fiona Havlish, whose husband worked on the 101st floor of the South Tower, and Ellen Saracini, whose husband was a pilot on one of the hijacked planes that flew into the World Trade Center — said that the administration should help their cause.

“After the deaths of our husbands in the terrorist attacks of September 11, 2001, we fought for many years to bring justice for them,” they said. “Along with the others in our case, we obtained an enforceable monetary ruling against the Taliban and now call on President Biden to ensure that the funds we have secured go to us and not to the terrorists who played a role in taking the lives of our loved ones.”

Any transfer of Afghan central bank reserves is sure to infuriate the Taliban at a time when the West is trying to pressure the organization into acting differently from when it last ruled that country, on matters ranging from respecting women’s rights to refuse to receive international terrorist groups. The Taliban demand access to the funds.

The National Security Council declined to issue a statement for this article, and much remains unclear about the parameters of what the US government can do — let alone what decision it will make, several people familiar with the matter said.

After the Taliban abruptly took military control of the country in August, the New York Federal Reserve blocked access to the Afghan central bank’s account. Under lengthy anti-terrorism sanctions imposed by the US on the Taliban, it is illegal to engage in financial transactions with them.

Shortly afterwards, lawyers for the families in the old default judgment case persuaded a judge to issue an injunction that began the process of transferring the money to them to pay off the debt. On September 13, a US marshal served the New York Federal Reserve’s legal department with an “execution order” to seize the money.

Complicating matters further, a second group of plaintiffs in a smaller case — brought into the Northern District of Texas by seven State Department contractors injured in a 2016 terrorist attack in Afghanistan — also seeks to seize some of the money to pay off a $138 million default judgment against a list of defendants, including the Taliban.

The Justice Department has intervened in both cases, invoking the power to inject the government into pending lawsuits and inform the court of how the United States views its interests. The trial has been frozen pending his statement, court documents show.

Behind the scenes, plaintiffs’ lawyers began negotiations with the Justice Department. They have proposed a deal to split the $7 billion among three categories of recipients if the Biden government backs them in court, people familiar with the matter said.

Under the proposal, the plaintiffs, as holders of the default judgment, would keep some of that money, while the rest would be funneled toward two other purposes.

Some of the remaining money would go to several thousand spouses and children of the victims of the September 11 attacks who were not part of the trial and who, for technical reasons, have not received certain payments from a terrorist victims’ compensation fund that was established by Congress.

The other part would be donated to various organizations that perform humanitarian work – such as providing life-saving food and medicine – to people in Afghanistan.

It’s not clear how much money would go into each of those three pots; those familiar with the discussions said the numbers are still to be negotiated. The proposed deal would not provide any benefits to other family members of victims of the September 11 attacks.

A person familiar with the matter said the Biden team has four priorities in its internal deliberations.

First, the person said, the government is determined that no money from the Afghan government’s reserves goes directly to the Taliban.

Second, the person said, the Biden administration recognizes that Afghanistan has acute humanitarian needs and therefore some of its reserves should be used to address that problem.

Third, the person said, the government considers the claims made by the victims of the terrorist attacks to be legitimate and believes they should also be addressed through those funds.

And fourth, the person said, the Biden administration will not recognize the Taliban as the legitimate government of Afghanistan — a move that would have countless other legal and diplomatic ramifications — to resolve the issue of Afghan central bank funds. Instead, it will address that question when circumstances warrant and according to its own timetable.

Several people familiar with the case said it may not be legally necessary to recognize the Taliban as the government of Afghanistan in order to seize central bank funds to pay the court verdict. Instead, they said, a judge could find that the organization only has a sufficient interest in the funds to make its seizure legal.

The negotiations come as the Taliban have lobbied separately for access to Afghan central bank funds in the United States, along with smaller deposits in Europe. On November 17, the Acting Taliban Foreign Minister issued a public letter to the United States Congress begged to release the funds, saying there was no justification for blocking them now that the war is over and they were needed to avert a humanitarian crisis this winter.

“We believe that freezing Afghan assets cannot solve the problem, nor will it solve the demand of the American people, so your administration must thaw our capital,” he said. “We are concerned that if the current situation continues, the Afghan government and people will face difficulties and become a cause of mass migration in the region and the world, consequently leading to further humanitarian and economic problems for the world .”

But the US government rejected the Taliban’s message in a statement by Thomas West, the Special Representative for Afghanistan, even though he said the United States would continue to provide humanitarian aid to the Afghan people.

“We have provided $474 million this year, applaud the strong efforts of Allies and partners in this space, and are committed to helping the UN and humanitarian actors scale to meet needs this winter,” wrote Mr. West on Twitter.

The issue of how to give more humanitarian aid to Afghanistan would pose a particular problem in light of the political sensitivities of asking Congress for more money and the strong political opposition within the Biden administration to any transfer of funds to the Taliban itself.

Another person familiar with the case said the Biden administration is considering another option, especially if a judge rules it would be illegal to use Afghan government funds to comply with the plaintiffs’ rulings against the Taliban.

Under this second option, the Treasury Department’s Office of Foreign Assets Control could grant a license to transfer some of the funds directly to non-governmental organizations providing humanitarian aid in Afghanistan, if someone is considered to be an authorized representative of the Afghan Central Bank. step. However, determining who that person would be presents additional difficulties.

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