Israelis Sue Oil For Food Companies For Alleged Ties to Palestinian Terrorists

Victims of Palestinian terrorist attacks filed suit last week against U.S. companies which allegedly paid kickbacks to Saddam Hussein during the Iraqi Oil For Food Program, alleging that by doing business with the dictator, the corporations indirectly financed terrorist organizations such as Hamas.

The majority of the suit’s 193 plaintiffs are Israeli citizens who were either severely injured by Palestinian suicide bombings, or who had family members killed in the attacks. They are seeking an unspecified award from Texan oil executives Oscar Wyatt and David Chalmers, who both pleaded guilty in 2007 to corruption charges related to their role in the Iraqi Oil For Food Program. Their companies, NuCoastal Corp. and Bayoil Inc., as well as several of their subsidiaries, are also named as defendants in the suit.

The complaint, filed Jan. 2 in the U.S. District Court for the District of Columbia, alleges that by funneling money to Hussein’s regime, Wyatt and Chalmers were in effect knowingly helping him to finance Palestinian militant groups such as Hamas and Arab Liberation Front. Citing publicly available intelligence reports, it argues that Iraq’s terrorist ties were common knowledge, and that the companies were aware that their bribe money was being used to subsidize them.

“There is strong evidence that the very reason Oil For Food was put into place to keep Saddam Hussein from giving money to terrorists,” says Michael Miller, a personal injury lawyer in Orange, Va. who is handling the case alongside Israeli lawyer Gavriel Mairone. “Mr. Wyatt helped set up oil for food. He knew what it was for. And I think it is likely he knew that some of that money was going to go to some very bad people.”

In recent years, Congress and the White House have attempted to shelter the Iraqi government and its business partners from lawsuits. In 2003, President George W. Bush issued an executive order restoring the country’s sovereign immunity, and last year, lawmakers excluded Iraq from legislation making it cases. That law allowed lawyers to put a lien on any funds businesses owed to a terror sponsoring state.

Mairone, who partnered with the Miller Firm in August to sue the Sudanese and Iranian governments for their alleged roles in bombing the U.S. embassy in Kenya, says that he believes suing Iraq’s corporate partners directly will avoid any political or legal hurdles. He adds that his firm, Mann & Mairone, has been laying the groundwork for the case for about three years.

“We’re not interested in getting bogged down in political considerations,” he says. “My goal is to go after private parties.“

The suit stakes its claims on Alien Tort Claims Act and the Anti Terrorism Act of 2001, as well as several international laws and standards. In some ways, it resembles the lawsuits brought against companies that did business in South Africa during apartheid, says Steven Perles, whose firm has handled terror related suits against Iran and Libya, among others.

“It’s not an original concept,” Perles says. “And if you want to know how suits of this sort turned out, go look at the suits against companies that did business with the apartheid government.”