Israel backing away from Bank of China terror financing case, roiling U.S.

WASHINGTON (JTA) — Israel reportedly has backed away from involvement in a terrorism financing lawsuit against the Bank of China brought by the parents of a suicide bombing victim after pushing the family to file the suit.

Prime Minister Benjamin Netanyahu’s decision to keep an Israeli intelligence official from testifying in the case reportedly is roiling relations between his government and the Obama administration. It also has angered one of Israel’s staunchest congressional defenders, Rep. Ileana Ros-Lehtinen (R-Fla.).

Yedioth Achronot reported Monday that U.S.-Israel tensions over the matter brought Israeli U.S. Ambassador Michael Oren to Jerusalem over the weekend, where he briefed Netanyahu and Oren’s slated successor, Ron Dermer.

According to a June 21 account in The Wall Street Journal, which reported  that Netanyahu was considering pulling back from the case, it was the Israeli government that in 2007 urged Yekutiel and Sheryl Wultz to file suit because of tough U.S. anti-terrorist financing laws.

The Wultzes’ 16-year-old son, Daniel, had been killed the previous year in an Islamic Jihad terrorist attack in Tel Aviv.

Israeli government officials told the Wultzes in 2007 that Israel would provide intelligence in the lawsuit showing that Israel warned China in 2005 that the Bank of China was laundering money for Palestinian terrorist groups and asked it to stop. China paid no heed.

China pressed Netanyahu to keep the intelligence official from testifying in exchange for Netanyahu’s high-profile May visit to China promoting trade between the two nations.

Ros-Lehtinen wrote Netanyahu in June urging him not to succumb to the Chinese pressure, The Wall Street Journal reported.

Notably, The Wultzes are cousins of Rep. Eric Cantor (R-Va.), the Republican majority leader in the U.S. House of Representatives. Cantor in speeches has cited Daniel’s killing and its effect on his extended family.

Oren, Yedioth Achronot reported, told Netanyahu over the weekend that the Obama administration is ready to subpoena the intelligence official if Netanyahu does not make him available, as well as top Israeli officials, including Dermer and Oren.

The embassy declined comment on the case. Ros-Lehtinen’s office did not return requests for comment.

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