When the legitimate and recognized government of Afghanistan, unable to stand without the U.S. military, fled a year ago as the Taliban swarmed into Kabul, $7 billion held by the Afghan central bank in the vaults of the Federal Reserve Bank of New York was orphaned.
The Treasury Department rightly froze the assets to deny the Taliban access to money that had largely come from international donors or the savings of Afghan citizens. Then, long-dormant lawsuits filed by a small number of 9/11 families put a claim on the funds. These were 9/11 victims who sued the Taliban for hosting al-Qaida and Osama Bin Laden. The Taliban, as lawless gangs tend to do, never answered the suits and the families won default judgments in American courts.
There was never any way to collect, but when the Taliban seized Kabul and control of the central bank, the billions sitting downtown came to the fore.
Six months ago, President Joe Biden, trying to play King Solomon, got it half wrong in proclaiming that $3.5 billion should go for humanitarian relief for the suffering people of Afghanistan, who lack access to food, clean water and medicine. The other half, ruled the not-so-wise King Joe, would go to the legal claimants against the Taliban, even though this never was the Taliban’s money.
Thankfully a wiser head has prevailed in the person of Manhattan Federal Magistrate Judge Sarah Netburn, who on Friday issued a report and recommendation that none of the $7 billion should go to settle the Taliban’s outstanding legal judgments. She writes that the money in question belongs to the good guys who fled Kabul, not the Taliban, who she likens to bank robbers who took control of a vault. Netburn also has cogent points that Washington has not recognized Taliban as the legitimate Afghan government, hence why the money here was blocked and furthermore that U.S. courts have no say over the Afghan central bank.
Either put all $7 billion towards humanitarian causes or keep half on ice until the non-Taliban, rightful Afghan owners emerge.