Judge: 9/11 families can’t claim Afghan bank funds
Taking frozen $3.5B means recognizing Taliban, she reasons
WASHINGTON — A federal magistrate judge has recommended rejecting the effort by relatives of victims of 9/11 to seize $3.5 billion in frozen Afghan central bank funds to pay off judgment debts owed by the Taliban — in part because doing so, she said, would effectively recognize the Taliban as the legitimate government of Afghanistan.
“The Taliban’s victims have fought for years for justice, accountability and compensation,” Judge Sarah Netburn wrote. “They are entitled to no less. But the law limits what compensation the court may authorize.”
The 43-page report and recommendation issued Friday is the latest twist in a case arising from the extraordinary circumstance of a country seized by a terrorist organization that is not recognized as its legitimate government. The case has raised novel legal issues that touch on matters of foreign policy, international finance, counterterrorism and domestic politics.
The $3.5 billion is part of about $7 billion in Afghan central bank funds deposited at the Federal Reserve Bank of New York before the Taliban took control of the country last year. In February, President Joe Biden froze the funds, reserving about half for helping the Afghan people while leaving the remaining $3.5 billion for the 9/11 victims’ families to go after in court.
Netburn’s recommendation is not a final decision. A U.S. District Court judge for the Southern District of New York, George Daniels, is supervising the litigation and has the authority to issue a ruling that disagrees with Netburn’s legal analysis. And if he instead rules in accordance with her recommendation, the victims’ families could file an appeal.
Fiona Havlish, the named plaintiff in the lead group of 9/11 victims’ relatives trying to seize the funds, said she disagreed with Netburn’s conclusion that they were not entitled to the funds belonging to the Afghan central bank, known as Da Afghanistan Bank or DAB.
“It is clear that the president wished to make these funds available to victims of terrorist attacks for which the Taliban was found liable, that the court has jurisdiction and that the Taliban controls DAB,” she said in a statement.
But Leila Murphy, a steering committee member for Sept. 11 Families for Peaceful Tomorrows, a group of victims’ relatives who oppose trying to seize the Afghan bank funds, praised Netburn’s analysis.
“As the daughter of a 9/11 victim, it makes me sick to think that Afghan victims of atrocity are being deprived of necessary resources during a time of great need,” Murphy said in a statement. “I am relieved that the judge has taken a step toward the only legally and morally correct approach — making the entire $7 billion available to Afghans to deal with the economic crisis we helped to cause.”
It is not clear what would happen to the $3.5 billion if the effort by the 9/11 victims’ relatives to seize it fails. The American government does not want to send money to Afghanistan if there is a risk it will fall into Taliban hands. So it is possible that some or all of the funds could remain frozen for years, awaiting a change of circumstances in Afghanistan.
The saga traces back to lawsuits filed years ago by family members of victims of 9/11 seeking billions of dollars from a range of defendants they held responsible for their losses, including al-Qaida and the Taliban. When such defendants failed to show up in court, judges declared them liable by default.
But with no way to collect damages, the rulings seemed like symbolic gestures until last year, when the Taliban took control of Afghanistan. As part of the fallout, the New York Fed blocked access to an account for the Afghan central bank holding about $7 billion.
The Havlish plaintiffs — about 150 people, linked to 47 estates of the nearly 3,000 people killed — moved to seize some of that money to pay off the Taliban’s judgment debt to them.
Eventually, the Havlish plaintiffs struck a deal to divide up recovered funds with several other groups of 9/11 plaintiffs and with insurance companies that had losses from the attacks. That deal would give the Havlish plaintiffs, first in line under New York law, a greater share than the plaintiffs in other groups.
That arrangement has been a matter of dispute among victims’ relatives. Some opposed the deal as unfair, on the argument that everyone should get the same amount. Others joined outside voices — including exiled Afghans — who urged the court to reject giving any of the money to 9/11 families, saying it belonged to the Afghan people.