On Friday, President Obama vetoed the Justice Against State Sponsors of Terrorism bill, known as JASTA. Congress promised to override a presidential veto for the first time since Obama took office. It is a dreadful promise.
Fueled by the belief among 9/11 families that Saudi Arabia was behind the the attacks, even though the 9/11 Commission said otherwise, JASTA was promoted in congress as a way to make the Saudi government and its citizens pay for what was al-Qaeda terrorism. That was unlike the treatment congress gave Iran, a designated state sponsor of terrorism, in allowing the nuclear deal to be signed. Senators and congressmen now want to appear tough on terrorism in an election year, so they rushed the JASTA bill to completion without debate and careful consideration of its effects. And just like that agreement with Iran, JASTA will be very dangerous and very expensive for America and the rest of the world.
Supporters of JASTA say it is narrowly drawn and will only target the Saudis. Does anyone doubt that American courts and tort lawyers are able to widen any narrowly drawn law? But worse, the law also targets the United States. In order to allow our citizens to sue a foreign country in an American civil court, JASTA abrogates the principle of sovereign immunity. Other nations are alarmed. The Dutch parliament, for example, said JASTA is a “gross and unwarranted breach of Dutch sovereignty.” Many countries will soon retaliate with their own versions of JASTA and force the U.S. into their courts for sponsoring terrorism in Afghanistan, Syria, Iraq and other battlefields. Sheikh Jamal Al-Shari, president of the Iraqi National Project, has already promised to sue the U.S. government for terrorism in Iraq should JASTA become law, and is gathering “top Iraqi lawyers and judges along with numerous international legal advisors.”
The U.S. benefits from sovereign immunity more than any other nation because we influence and act in more countries than anyone else, and JASTA means that American diplomats and soldiers will be sued in Iraq and other foreign courts, crippling our ability to carry out foreign policies and defend our national security. Courts and lawyers of a multitude of nations will influence what we do everywhere in the world, and then sue us for doing it. Senators and congressmen who opened Pandora’s Box surely realize that the U.S. has far more foreign assets than Saudi Arabia, and those public and private assets will be seized in foreign courts that offer far less protection against irresponsible lawsuits than do American courts.
American tort lawyers represent the bereaved families of victims of 9/11 on a contingency basis. That means they work for free — but they get as much as 30 percent of whatever is recovered for their clients. Those lawyers have their eyes on the money they think is in Aladdin’s cave, and if U.S. assets around the world are ultimately seized because of JASTA, they reckon it’s simply someone else’s problem. So the question remains, will the Saudis stand still for such treatment or will they act like Iran, and sell or move as many of their assets as quickly as possible out of the U.S.? Will they take other economic measures? If congress had properly debated JASTA they, and the public, would have learned just what the Saudis can do to our economy and the value of the dollar.
The first thing the new generation of Saudi leaders might consider is unpegging the dollar from the riyal. The kingdom’s foreign currency reserves have dwindled and Saudis have suffered higher costs of critical food imports as a result of that link. They may now decide to end it, and no longer denominate the price of oil in dollars. These prudent actions would, of course, impact on the dollar’s position as the world’s reserve currency.
More immediate is the warning that Saudi foreign minister Adel al-Jubeir delivered in March. He said that if JASTA becomes law, the kingdom would be forced to sell $750 billion dollars of U.S. Treasuries and other assets to keep them from being frozen by U.S. courts. Bloomberg recently made a FOIA request and the U.S. Treasury revealed that the Saudis hold $117 billion in Treasuries, a figure probably half of what is in offshore accounts and that appears only in data of other countries. Saudi Arabia is one of America’s largest foreign creditors. How did that happen?
Saudi Arabia became a major holder of U.S. debt because of a meeting between president Franklin Delano Roosevelt and then king Faisal ibn Abdulaziz Al Saud in February 1945. Kept secret until Bloomberg’s FOIA request, the deal they made was simple. The U.S. would buy Saudi oil and provide the kingdom military aid and equipment. In return, the Saudis agreed to plow billions from their petrodollar income into Treasuries in order to finance America’s spending. King Abdulaziz insisted that the arrangement be kept “strictly secret.” He did not want others to know of his close alliance with the United States.
That alliance is now in jeopardy because of JASTA, a law the 9/11 families don’t need. Under existing law, our courts have already been able to indict Iran as the sponsor of acts of terror, like the Khobar Towers bombing, and have awarded some $2 billion to victims and their families. Unfortunately, and despite a Supreme Court ruling supported those judgements, Tehran has the Obama administration’s support and the White House will not allow payments to be made from Iran’s accounts still frozen here.
Those same courts could not find Saudi Arabia guilty of sponsoring terror. Nevertheless, senators and congressmen concerned about their image in an election year have targeted a staunch ally, instead of Iran, and by doing so have put our economy and national security in danger.
Let us hope congress does not override the president’s veto and force the Saudis to join Iran in shouting, “Death to America.”
Chet Nagle is a graduate of the Georgetown University Law Center, a former CIA agent, and a commentator on Middle East affairs.