From the Boston Globe, with thanks to Hugh Fitzgerald.
WASHINGTON -- A Rhode Island lawyer trying to collect a $116 million terrorism judgment against the Palestinian Authority has obtained a court-ordered freeze on all its US-based assets, severely limiting most Palestinian economic and diplomatic activities in the United States at a critical moment for the fledgling government.
The frozen assets include US holdings in a $1.3 billion Palestinian investment fund meant to finance economic development as well as bank accounts used to pay Palestinian representatives in Washington, according to lawyers and court documents filed in Rhode Island, Washington, D.C., and New York. Also frozen are about $30 million in assets from the Palestinian Monetary Authority, the Palestinian equivalent of the US Federal Reserve.
Providence attorney David Strachman, who is representing the orphaned children of a couple killed in Israel by Palestinian militants, has also initiated a court action to seize and sell the Palestinian-owned building in New York that serves as the Palestine Liberation Organization observer mission to the United Nations.
The aggressive collection effort comes as the Palestinian Authority is struggling to create economic opportunity and set up a viable government. Now, Palestinian officials say, the unpaid claim in the Rhode Island court, resulting from a 2004 ruling, threatens to complicate their efforts to become a credible emerging state.
But Strachman said if the Palestinian government wants to show the world that it is turning over a new leaf, it must obey the court's judgment.
''If you are a responsible party or entity or political organization, at the end of the day, you pay your judgment," Strachman said in a telephone interview from Israel, where he was on vacation. ''They have very brazenly refused to pay."
The case puts the Bush administration in the delicate position of giving financial aid and political support to an entity that has refused to obey a US federal court order to pay terrorism victims...
''For the administration, it's difficult," said one Palestinian official speaking from Gaza, who asked not to be identified because of the sensitivity of the case. ''Right now, they are trying to figure out a creative way to deal with it without embarrassing anyone."
Palestinian officials have refused to pay the claim, arguing that doing so would be a politically dangerous admission of responsibility for terrorist acts by militants that the Palestinian Authority contends it does not control. Three officials interviewed by telephone from Gaza and the West Bank say they fear setting a precedent that would spur an avalanche of lawsuits that could bankrupt the new government. At least four other lawsuits involving deaths of US citizens in Palestinian attacks are pending in US courts...