Stephen Flatow: The Amazing Story of What One Person Can Accomplish

Stephen Flatow: The Amazing Story of What One Person Can Accomplish

This is the true story of a seemingly inconsequential man who, driven by passion and determination, has accomplished the extraordinary. It is a David and Goliath story of our times, and it continues to unfold. When you hear this story, I think you will agree that someone needs to write a book about this man. I can’t believe that no one has yet.

 

Our hero’s name is Stephen Flatow. He is a real-estate attorney in northern New Jersey. He does title work, mostly, out of a small, cluttered office. He is well-regarded in his field, but not especially well known. He makes a living. He is famous, however, in other circles, as an activist. His courage and determination are unmatched. This lone man has stood up to the greatest powers and has not blinked. He has challenged the State Department, the Justice Department, the courts, and the largest banks in the world. He has failed and prevailed, stumbled and triumphed, over and over again. He does not quit. He is driven by the love of his daughter, a daughter who was killed by a suicide bomber twenty years ago. This is his story.

 

Alisa Flatow was a student at Brandeis University. She chose to spend a semester studying abroad in Jerusalem. After a few months in Israel, she and her roommates decided to spend a weekend at a beach resort in Gaza. This was 1995, soon after the Oslo accords, and Gaza was still under Israeli control. It seems unfathomable now, but people used to vacation in Gaza at the beach resorts. On the way to the beach, their bus was struck by a van filled with explosives. The terrorist group Palestinian Islamic Jihad claimed responsibility for the killing. Seven Israeli soldiers riding on the bus were killed. Alisa was severely wounded, but she did not die right away. The terrorist van was filled with shrapnel that exploded through the windows of the bus and struck her head. She was unconscious, but her body was unharmed.

 

The doctors called her father in America, and told him to come right away. When he landed in Ben Gurion airport, government agents met him on the runway, and escorted him straight from the plane to the hospital. By the time he arrived, Alisa was brain-dead. The doctors offered their condolences, and asked the father if he would be willing to donate her organs.

 

This was not a simple question. The Flatow family was Orthodox and observant. It was not customary for Orthodox Jews to donate organs, and they were not sure it was allowed by Jewish law. So the parents called their rabbi and asked what to do. He told them to donate the organs, and so they did.

 

That single act became a sensation in Israel. To understand its significance, I need to give a little background information. There is much in Jewish law and custom that would discourage organ donation. It has been our longstanding tradition to treat a dead body as sacred. Our custom is to watch over it, cleanse it, and prepare it carefully for burial. The body is buried whole and unaltered. That is why rabbinic authorities have generally discouraged autopsies.

 

But organ donation is special. It presents the opportunity to save a life. In Jewish law, the saving of a human life takes special precedence. You can violate just about all the other commandments if you can save a life. Therefore, Jewish law does not just allow organ donation, it requires it. Reform and Conservative rabbis immediately encouraged organ donation, and by the 1970s, Orthodox rabbis did as well.

 

The problem was that most Jews in Israel were not aware of this. The rates of organ donation were extraordinarily low. Israel was part of a European consortium of organ sharing nations, but was suspended because too few Israelis were registered donors. It was a stunning irony for a nation famous as an innovator of advanced medical technologies. The problem was that Israelis knew about the tradition of burying a body whole; they were not so aware that their rabbis allowed organ donation.

 

Throughout the 1970s and 80s, various medical groups and the government in Israel tried to educate the public, but nothing worked. Organ donation rates were terribly low. People were desperate for organs, but few were donating. It just wasn’t what people did.

 

And then the Flatows offered their daughter’s organs to the people of Israel. The news made headlines in every newspaper throughout the nation. Her heart, lungs, liver, kidneys, pancreas, and corneas were able to save six lives in Israel. Notably, at least one of the recipients was Arab Palestinian. The people of Israel were amazed, and grateful. They had felt so alone in suffering against terrorism, and here this family from America made such a gesture. They felt that the world Jewish community was with them. We were one.

 

Days later, Prime Minister Yitzchak Rabin came to Washington DC and spoke before a gathering of 12,000 American Jews. What he told them would be printed in newspapers throughout America. He spoke about what Alisa’s gift meant to the Israeli people. “Today,” he said, “her heart beats in Jerusalem.” There is more. After Alisa’s death, the Flatows lives were shattered. Alisa’s mother withdrew into herself and her home. But the father, Stephen, decided to take action. He wanted justice. It was widely reported that the State of Iran was the sponsor and financial backer of the Palestinian Islamic Jihad. It angered him that there were no consequences for Iran. They had funded his daughter’s murderers, and no one was doing anything about it. The bomber himself was killed. The terrorist ring was being pursued by Israel. Stephen Flatow decided to take it upon himself to go after Iran.

 

A lawyer by training, he sought justice through the courts. He had a brilliant idea. If he and other victims of terror could file suit against Iran, they could exact punishment on the regime. They would make it costly for states to sponsor terror, and then maybe Iran would think twice about doing it again.

 

But there was a problem. United States law did not allow private citizens to sue foreign governments. It was expressly forbidden. So Stephen Flatow went to Washington to change the law. His senator, the Jewish Frank Lautenberg, happened to be in Israel at the time of Alyssa’s death. He took a special interest in her family and drafted legislation. Flatow testified before congress, and even gained the backing of President Clinton. Congress passed the Anti-Terrorism Act of 1996 to make an exception to the longstanding rule. In cases of state-sponsored terror, individual US citizens could sue foreign nations for damages in US courts. It was the first victory.

 

It did not last. The courts threw it out. So back to Washington he went for a new law, one written specifically to override the objections of the court. Once again he sued the state of Iran in a US court. But his time, one of his allies became an adversary. The Clinton administration began to see Flatow as interfering in national diplomacy. The White House was against Iran, but they did not want Flatow dictating the terms. So the U.S. Department of Justice intervened in the case, and actually filed a brief in support of Iran and against the victims of terror. Once more, Flatow returned to Congress and this time he got a third law that gave citizens even more strength to sue foreign governments, this time with teeth.

 

Finally, in 1997, he received his judgment. A court ruled in favor of the Flatows and against Iran. The family was awarded $26 million in compensatory damages, and over $200 million in punitive damages.

 

But the issue was hardly over. How do you collect money from a rogue state? They weren’t paying. Stephen Flatow devised a plan. Since the United States had ended diplomatic ties with Iran following the rise of the Ayatollah, the Iranian embassy in Washington and the residence of the Iranian ambassador have been in control of the United States Government. The State Department holds them in trust with the goal of returning them to Iran someday when relations resume. Stephen Flatow now had a ruling that said the Iranian government owed him $247 million. He sought possession of the embassy and the residence, property owned by Iran. The State Department refused. They feared that if the United States confiscated sovereign property here, our embassies and properties abroad would become threatened. So instead, they paid Flatow $20 million from US funds with the understanding that the United States would collect that money from Iran someday.

 

Stephen Flatow was furious. His goal was not to get money. His goal was to make Iran pay so they would stop sponsoring terror. He had won in court and he had received money, but Iran had still not paid one cent.

 

And this leads to the third chapter of this amazing saga. Stephen Flatow did not give up. He began to look for other assets in the United States that were owned by the government of Iran. Officially, there were none. United States sanctions prohibited Iran from doing any business in the United States, or for anyone to do business with Iran in the United States. But Flatow had suspicions that a charitable foundation in New York was actually a front, laundering money for the Iranian regime.

 

Why would the Iranians funnel their money through New York? Because the financial exchanges are there, and you can’t get anything done internationally without going through New York’s markets. Iran’s economy, its nuclear weapons development, its sponsorship of Hezbollah and other jihadists groups – all required moving money across currencies. They needed a secret foothold in New York. The Alavi Foundation was established decades ago by the Shah to promote Iranian culture abroad. It owned a gleaming skyscraper on 5th Avenue in Manhattan, between Rockefeller Center and the Museum of Modern Art. Ivan Boesky used to office there. Stephen Flatow did a lot of digging, and then filed papers in court demonstrating that the foundation and the building were secretly operated by the Iranian government. And if they belonged to the state of Iran, they were subject to his financial ruling.

 

Stephen Flatow’s case was a civil matter, but it came to the attention of a young analyst sitting in a cubicle at the Manhattan District Attorney’s office. If what Flatow was saying was true, there was some serious criminal wrongdoing going on. That young analyst’s name was Eitan Arusy. Before he starting working for the District Attorney, he served in the Israel Defense Force as a spokesman. He was one of the first responders to the scene of the carnage on the day that Alisa Flatow’s bus was bombed. He had a special interest in the case. The district attorney’s office did their own digging, and came to the same conclusion as Flatow – the Alavi Foundation was actually a front for Bank Melli, the State of Iran’s government-owned national bank. But how did the Iranians do it? How did they get their money in and out of the United States? The district attorney’s office soon discovered that two European Banks, Credit Suisse and Lloyds of London, were moving money and falsifying documents for the Iranians. When the FBI raided the records of the charity, they found vast deposits from Credit Suisse and Lloyds. The banks cooperated with investigators. They provided emails and memos detailing how they took Iranian money and sent it to the United States in their own names. Without admitting guilt, Lloyds agreed to pay a fine of $350 million, and Credit Suisse $536 million.

 

They were not alone. It was soon discovered that most of the major European banks were laundering money for the Iranians into the United States, in direct violation of US law. Barclays Bank settled in 2010, paying the United States $298 million. In 2012, ING, Standard Chartered, and HSBC also settled. HSBC agreed to pay $1.9 billion.

 

Then came the big one. While all these banks were making deals with the US government, two employees of BNP Paribas became whistleblowers. They shared with investigators that their bank had laundered tens of billions of dollars of Iranian money. They had also laundered money for Sudan while its regime was committing genocide.

 

BNP is the largest bank in France. This summer you may have seen the news. BNP became the first bank to admit guilt in laundering money for the Iranian government. They agreed to pay $8.9 billion in fines to the United States. It was far and away the largest penalty ever paid by a bank in history. The New York Times headline said it best: “A Grieving Father Pulls a Thread that Unravels BNP’s Illegal Deals.” A dad lost his girl. The hole in his life will never be filled. He thinks about her every day. He never gives up. He is a small-time attorney doing title work in New Jersey. But his tenacity and his grit and his smarts were beyond anyone’s estimation. This one man in New Jersey uncovered an international conspiracy of bank fraud.

 

The story is not over. Stephen Flatow is not done. The man who instantly changed the culture of organ donation is Israel is trying to do the same here in America. He takes every opportunity to speak to Orthodox congregations to encourage organ donation. Though the rate of donation consent in America is strong at 60%, the rate among Flatow’s fellow Orthodox Jews is only 5%. He is on a mission to change that.

 

He and his wife have also established a foundation in Alisa’s name. They sponsor young Jewish women from around the world to take a semester of study in Jerusalem. The money they have received in their fight against Iran is now sponsoring women’s Torah study and the vitality of the State of Israel.

 

And, in the months ahead, he may finally achieve his goal of making Iran actually pay. A federal judge has the ruled that the assets of the Alavi Foundation be liquidated. The gleaming office tower in New York and other properties around America will be sold and the proceeds will go to the victims of Iranian-sponsored terrorism. That will be Iranian money. Finally, Iran will pay a price.

 

All of this because of one man in Northern New Jersey. One man who never quit.