UPDATE 1-Obama administration asks U.S. top court to turn away Arab Bank case
(Adds Arab Bank's court filings, paragraph 6)
WASHINGTON May 27 (Reuters) - The Obama administration has asked the U.S. Supreme Court to turn away a case over whether bank secrecy laws protect Arab Bank Plc from supplying documents in lawsuits accusing it of providing services to groups the United States brands as terrorist organizations.
Solicitor General Donald Verrilli said in court papers filed on Friday that although lower courts made errors in handling the case, they did not merit the Supreme Court's involvement.
In April, the New York Times reported that State Department lawyers favored supporting Jordan-based Arab Bank in the case in part because Jordan is a U.S. ally, but that the Justice Department and Treasury Department were inclined to avoid taking sides.
Arab Bank is challenging a federal judge's ruling against it for failing to turn over documents in lawsuits that accuse the bank of providing banking services to Hamas and other militant groups the United States has put on its list of terrorist organizations.
Arab Bank said the judge's ruling was forcing it to choose between running afoul of the U.S. court and violating bank secrecy laws in Lebanon, Jordan and other countries.
In court filings, Arab Bank cites a U.S. district judge it says ruled on the same evidence in another case that there was no proof that anything but routine financial services were provided to charities alleged to be front organizations. That judge found that many of the same entities received grants from the U.S. government when they held accounts with Arab Bank, the filings said.
The lawsuits were brought by U.S. citizens and foreign nationals who were the victims, or the family members of victims, of attacks blamed on Hamas in Israel and the Palestinian territories between 1994 and 2005.
The 2nd U.S. Circuit Court of Appeals in January 2013 upheld the punishment imposed by U.S. District Judge Nina Gershon in saying that a jury could take into account the fact the bank had withheld certain documents when reaching a verdict.
In the new court filing, Verrilli said Gershon's sanction would allow jurors to infer, if they wished, that the bank's failure to produce those documents meant that it had knowingly provided financial services to designated terrorist organizations.
Arab Bank issued a statement on Tuesday saying that Verrilli's brief represented "a comprehensive critique of the sanctions" imposed by Gershon.
The case is Arab Bank v. Linde, U.S. Supreme Court, No. 12-1485.
In a separate case, Verrilli filed a brief on Friday urging the high court not to hear an appeal over whether the trustee seeking money for the victims of convicted Ponzi-schemer Bernard Madoff can recover damages from banks he accused of aiding in the fraud.
Verrilli's brief backed various banks, including JPMorgan Chase & Co and HSBC Holdings Plc, that had successfully argued in lower courts that trustee Irving Picard could not recover nearly $30 billion from those banks.
The case is Picard v. JPMorgan Chase, U.S. Supreme Court, No. 13-448. (Reporting by Lawrence Hurley; Editing by Howard Goller and Grant McCool)