The excuses are stupid…
Updated at 1:10 p.m.
The U.S. Department of Justice is fighting efforts by a Jewish group to subpoena banks for information about assets owned by the Russian Federation, which owes more than $43 million in sanctions for rebuffing a U.S. judge’s order to return a collection of religious texts.
In papers filed on Wednesday night, the Justice Department warned that allowing lawyers for Agudas Chasidei Chabad of the United States to subpoena information about Russian assets from five financial institutions—JPMorgan Chase, Citigroup, Goldman Sachs, Deutsche Bank and Computershare—could harm U.S. foreign policy interests. The subpoenas seek information about accounts that belong to the Russian government and to individuals, including President Vladimir Putin.
“Such efforts are antithetical to the goal of securing the return of the collection to Chabad, open the doors to reciprocal measures being taken against the United States by Russia, and would be out of step with international practice such that they could cause considerable friction with other foreign governments,” the Justice Department wrote.
The U.S. government supports Chabad’s claim to the Schneerson Collection—more than 12,000 books and manuscripts seized in Russia in the early 20th century, and 25,000 pages of texts stolen by the Nazis and then taken as war loot by the Soviet Red Army. Chabad has fought in court for the return of the collection for more than a decade. The Russian government stopped participating in the litigation in 2009.
The Justice Department has opposed efforts by Chabad’s lawyers to pursue Russian assets to force compliance with a 2010 court ruling that ordered Russia to return the collection to Chabad.
With the judgment on record, Chabad’s lawyers ramped up their search for Russian assets in the United States. They subpoenaed the five financial institutions in December.
The Justice Department argues that even with Lamberth’s sanctions order in place, the court wouldn’t be allowed under federal law to actually enforce it. And if the court can’t enforce its order, the government said, Chabad shouldn’t be allowed to subpoena information or otherwise use the court system to investigate Russian assets that it can’t attach.
“The sanctions judgment at issue here … while resulting from Russia’s noncompliance with a default judgment ordering it to return certain property to Chabad, does not in and of itself grant any property rights to Chabad. Instead, it simply sanctions Russia for its noncompliance with the court’s specific performance order,” the Justice Department wrote.
In a Feb. 2 letter included in the government’s court papers from Katherine McManus, deputy legal adviser at the U.S. Department of State, to Justice Department Civil Division Principal Assistant Attorney General Benjamin Mizer, McManus wrote that the Chabad case had already created diplomatic problems.
“For several years, senior Russian officials have regularly raised this litigation with their U.S. counterparts. They have done so more frequently, and at higher levels, since the issuance of the district court’s sanctions order,” McManus wrote. The sanctions order and efforts to enforce it would only hurt efforts to negotiate the return of the Schneerson Collection, she added.
More broadly, the Justice Department said in its court papers that if Chabad were allowed to conduct “sweeping discovery” into Russian assets, it would create “friction” with other foreign governments and risk similar orders being entered against the United States abroad. The U.S. last year was granted immunity from contempt sanctions in a Spanish court, the Justice Department noted.
“Any constraint placed on property of the Russian entities named in the subpoenas in the context of this case would isolate the United States in the international community and raise doubts about the United States’ respect for other foreign sovereigns,” the government argued.
Updated with comment from Chabad’s lawyers.