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MUSLIM CHARITIES Islamic charity co-founder convicted on tax charge By NIGEL DUARA (AP) September 10, 2010 EUGENE, Ore. ² A federal jur y on Thursday convicted the co-founder of an Islamiccharity chapter who was accused of helping smuggle $150,000 to Muslim fighters inChechnya. Pete Seda was convicted of one count of conspiracy to defraud the government andone count of filing a false tax return. His lawyers said they would appeal. "The verdict is a devastating blow to Mr. Seda and his family," said d efense attorney Steven Wax. "We do not believe that it reflects the truth of the charges. We will bepursuing a just result of this case to the highest court in the land, if need be. Thisfight is not yet over." Judge Michael Hogan set sentencing for Nov. 23. Seda claimed the money was intended as a tithe that his accountant failed todisclose on a tax return for the U.S. chapter of the Al -Haramain Islamic Foundationin Ashland, Ore. The foundation has been declared a terrorist organization by theU.S. government. The tax-fraud conviction was the government's first significant victor y in its

prosecution of Al-Haramain, which it began investigating shortly after the Sept. 11,2001, terrorism attacks. A federal judge ruled in another case involving the charity that the government's program of wiretapping suspected terrorists without gettingpermission from a judge was illegal. Prosecutors said Seda had a more sinister purpose, arguing throughout theweeklong trial that he was a Muslim radical posing as a modera te promoting peace.They alleged he was tr ying to smuggle the money to help fighters overthrow theChechnyan government. The jur y returned the verdict after nearly 13 hours of deliberation. A groan passedthrough the courtroom as Seda's family slumped down on the benches. Seda,

wearing a purple polo shirt with his beard neatly trimmed, turned and smiled at hisfamily. Assistant U.S. attorneys Charles Gorder Jr. and Chris Cardani told the jur y that Al -Haramain distributed the Quran to U.S. prison inmates. They said non-Muslims wereissued a regular Quran while Muslim prisoners got an edition with an appendixcalling for violence against Jews and nonbelievers, a version they called the "NobleQuran."



Part of Seda's crime occurred when the charity's co -founder, Soliman Al-Buthe, leftthe countr y with a donation of about $130,000, converted to traveler's checks,without declaring the amount. Seda also failed to note the donation on the charity'stax forms. Al-Buthe, who is in Saudi Arabia, faces the same charges as Seda but cannot be

extradited. The original donation of $150,000 from an Egyptian doctor was depositedand converted at an Ashland bank. Seda's attorney reminded jurors that a rabbi and a Christian minister testified onbehalf of Seda, their neighbor, w ho has been a U.S. citizen for 16 years. Seda, 52, shortened his last name from Sedaghaty and adopted the nickname Peteinstead of his first name, Pirouz, after moving from his native Iran and attendingSouthern Oregon University in Ashland. He found wides pread support when hehelped open a branch of the now-defunct Saudi charity in Ashland to improve theunderstanding of Islam and relations with Muslims. Seda became a community fixture, working as an arborist and taking part in localevents, including walking a camel down the main street in the Fourth of July parade. A raid on his home, which served as the headquarters of the Al -Haramain chapter,led to an indictment on tax charges while he was out of the countr y and turned himinto an international fugitive. Seda returned voluntarily with the help of a friend, Portland attorney Tom Nelson,who has been involved with a related legal battle over alleged governmenteavesdropping on attorneys for Al-Haramain. Prosecutors pointed to Seda's flight as a reason to keep him in custody, while Wax

said Seda showed he could cooperate with house arrest while he wore an anklemonitor for almost three years. The judge agreed with the prosecutors and ordered Seda to be taken into custody.Plainclothes U.S. marshals stood behind he as he hugged his wife, children andattorneys. 2 Minnesota women among 14 charged in terror probe By AMY FORLITI and PETE YOST (AP) August 6, 2010 ST. PAUL, Minn. ² Amina Farah Ali had become the go-to person for Somalis in thesouthern Michigan city of Rochester wanting to donate items to refugees displacedby violence in their homeland. But she and another woman, Hawo Mohamed Hassan, were actually using thepretense of charity to send money to a violent terrorist group in the African countr y,prosecutors allege. They also claim the women made direct pleas in teleconferencecalls for others "to support violent jihad in Somalia."



The two women, both U.S. citizens living in Rochester, are among 14 people namedin indictments unsealed Thursday in Minneapolis, San Diego, and Mobile, Ala. ²accused of being part of what the government called "a deadly pipeline" that routedmoney and fighters from the U.S. to al-Shabab. The Somali insurgent factionembraces a radical form of Islam similar to the harsh, conservative brand practicedby Afghanistan's former Taliban regime. Both women said they are innocent. "We are not terrorists," Ali said after she andHassan made their first appearances Thursday in U.S. District Court in St. Paul. The indicted also include Omar Hammami, an Alabama man now known as AbuMansour al-Amriki, or "the American" ² who has become one of al-Shabab's mosthigh-profile members and appeared in a jihadist video in May 2009. The group'sfighters, numbering several thousand strong, are ba ttling Somalia's weakenedgovernment and have been branded a terrorist group with ties to al -Qaida by theU.S. and other Western countries. Of the 14 people named in indictments Thursday, at least half are U.S. citizens and

12 of them are out of the countr y, including 10 men from Minnesota who allegedly left to join al-Shabab. Seven of those 10 Minnesota men named had been charged inearlier indictments or criminal complaints. Ali, 33, and Hassan, 63, are the only two people indicted Thursday who remain in theU.S. They are both charged with conspiracy to provide material support to a foreignterrorist organization. Ali faces multiple counts of providing material support to aforeign terrorist organization, and Hassan faces three counts of lying to the FBI. Abdifatah Abdinur, a Somali community leader in Rochester, said many knew Ali asa religious speaker who preached to women, and as a person who would collect

clothes for refugees, telling many people to drop off donations at her garage.

"I know a lot of people might send money or goods, without knowing theconsequences of what they were doing," said Abdinur said. "If you have clothes, you give them to her," said Abdinur. "If you have shoes, givethem to her." Abdinur said. "I was surprised, as almost ever ybody was (to learn) thatshe was sending clothes to al-Shabab." The women and others allegedly went door to door in Minneapolis; Rochester, Minn.,and elsewhere in the U.S. and Canada to raise funds for al -Shabab's operations inSomalia. The indictment says they claimed the money would go to the poor and

needy and used phony names for recipients to conceal that it was going to al -Shabab. They also allegedly made direct appeals to people in teleconferences. During oneteleconference, the indictment says, Ali told others "to forget about the other charities" and focus on "the jihad." The indictment says Ali and others sent the funds through various hawalas, money transfer businesses that are a common source of financial transactions in the Islamic



world. Ali is accused of sending $8,608 to al -Shabab on 12 occasions fromSeptember 2008 through July 2009. The fundraising operation in Minnesota reached into Ohio, where a Columbusresident helped collect donations for al -Shabab, according to the indictment. Thedocument also says that after the FBI searched Ali's home in 2009, she contacted an

al-Shabab leader in southern Somalia and said: "I was questioned by the enemy here. ... They took all my stuff and are investigating it ... Do not accept calls fromanyone." Prosecutors didn't seek detention for Ali or Hassan, but a federal magistrate setseveral conditions for their release, including barring travel outside Minnesotawithout permission. When asked whether she understood why she was in court, Ali said thro ugh aninterpreter: "I do not know ² however, I think maybe because of my faith." Ali, who works in home health care and has lived in Rochester for 11 years, alsosaid: "Allah is my attorney." Hassan said she was self-employed, running a day care. Minneapolis has been the hub of the federal investigation into al -Shabab recruitmentover the last two years, after a U.S. citizen from Minneapolis carried out a suicidebombing in Somalia in October 2008. Roughly 20 young men ² all but one of Somali descent ² have left Minnesota for that countr y since late 2007. In Mobile, Ala., on Thursday prosecutors unsealed a September 2009 indictmentagainst Hammami. Holder said Hammami has appeared in several propaganda

videos for al-Shabab and "has assumed an operational ro le in that organization."

Hammami, 26, grew up in the middle-class town of Daphne, Ala., and attended theUniversity of South Alabama in Mobile, where he was president of the MuslimStudent Association nine years ago. School officials said they have been u naware of his whereabouts since he left the university in 2002. Hammami's father, Shafik, is an engineer with the state highway department whoalso has served as president of the Islamic Society of Mobile. Shafik Hammamiconfirmed his relationship to Omar Hammami in e-mail exchanges with The Associated Press earlier this year but declined further comment. In San Diego, prosecutors unsealed an indictment charging Jehad Serwan Mostafa,28, with conspiring to provide material support to al -Shabab. Mostafa is believed tobe in Somalia.



The Pennsylvania Lifeline to Hamas Posted by Joe Kaufman on Feb 22nd, 2010 and filed under FrontPage In 1981, future terrorist leader and spokesman Mousa Abu Marzook began building,within the United States, a network of violence supporting Palestinian -oriented

groups, which would later become the basis for a well -financed Hamasinfrastructure. Today, that network has been severely crippled. However, parts of ityet exist, all of which hail from the American propaganda wing of Hamas, the Islamic Association for Palestine (IAP), one of which is a chapter of the IAP itself . On December 8, 2004, Joyce and Stanley Boim, an American couple, were awarded$156 million by a federal court jur y for the murder of their teenage son, David, whohad been shot and killed during a May 1996 Hamas terrorist operation in Israel. Thefour defendants who were found liable for t he murder included three organizations,the Holy Land Foundation for Relief and Development (HLF), the Islamic Associationfor Palestine (IAP), and the Quranic Literacy Institute (QLI), and one individual, aChicago resident named Muhammad Salah. Of the three organizations, only the IAP was still in existence at the time of the trial.However, that would soon change, as then -Communications Director of the Chicagooffice of the Council on American -Islamic Relations (CAIR-Chicago) Ahmed Rehab,in Januar y 2006, e-mailed this author declaring that the IAP was no more . In the time that the IAP was operating, from the years 1981 to 2005, the group hadcreated a number of local chapters throughout the U.S., using aliases as names.These included the American Middle Eastern League for Palestine (AMELP) and the American Muslim Society (AMS). Like the IAP, most of these groups are gone. However, there is still one chapter thatis in operation, the American Muslim Society of the Tristate Area of Pennsylvania,New Jersey & Delaware (AMS Tri-State). AMS Tri-State was established in December 2000 and incorporated the followingmonth, in Januar y 2001. According to the Pennsylvania Department of State, thegroup¶s corporation is still active. The registered address of AMS Tri -State is 1860 Montgomer y Avenue, located inVillanova, Pennsylvania. It is the same address as the Foun dation of IslamicEducation (FIE), a satellite campus for Cairo, Egypt¶s Al -Azhar University. Since it began, AMS Tri-State has held board meetings at FIE and has held annualconferences at FIE. These conferences, which were co-sponsored by FIE, featured anumber of leaders from various radical Muslim groups, including the Islamic Society of North America (ISNA), the Islamic Circle of North America (ICNA), the Muslim American Society (MAS), the Muslim Public Affairs Council (MPAC), and theInternational Institute of Islamic Thought (IIIT). The website address of AMS Tri-State was recently renewed, as the expiration dateof it has changed from December 16, 2009 to December 16, 2010. The Registrant,



Administrative Contact and Technical Contact of the site is Iftekhar Hussain. According to the website of CAIR-Pennsylvania, of which Hussain acts as Chairmanof the Board, Hussain is ³currently serving as Secretar y General of th e AmericanMuslim Society of the Tristate Area of PA, NJ & DE.´ For Hussain to be involved with both groups is no strange coincidence, as the IAP

was the parent organization of CAIR. CAIR was founded by three leaders of the IAP:IAP National President Omar Ahmad, IAP National Public Relations Director Nihad Awad, and AMS-Chicago President Rafiq Jaber, who later became IAP NationalPresident. In fact, some can make the claim that AMS Tri-State is the parent organization of CAIR-Pennsylvania, which was established in 2004. AMS Tri-State foundingSecretar y General Iftekhar Hussain served as CAIR -Pennsylvania Chairman; AMSTri-State founding President Zaheer Chaudhr y served as a CAIR-Pennsylvaniaboard member; and AMS Tri-State founding Chairman Masood Ghaznavi served asa CAIR-Pennsylvania advisor . Remnants of Hamas, such as AMS and CAIR, exist as a cautious reminder of aviolent movement that began in the 1980s and that pers ists to this day.Unfortunately, when the IAP was shut down in 2005, its offspring were left to flourish. Unlike CAIR, though, which has grown to over 30 chapters across the United States, AMS Tri-State appears to be an oversight. The memor y of David Boim, along with allthe other innocents who have perished at the hands of Hamas, cannot be served by its continuance. Why the IAP lingers in Pennsylvania, New Jersey and Delaware is a myster y thatcan only be known to the group itself. And whatever the reason is, it cannot have

anything but a sinister motive attached to it.

J oe Kaufman is the Chairman of Americans Against Hate, the founder of CAIR Watch, and the spokesman for Young Zionists. Beila Rabinowitz, Director of Militant Islam Monitor , contributed to this report.

Hamas backers jailed in Texas BBC News May 27, 2009 Two founder members of what was once the biggest Muslim charity in the US

have each been jailed for 65 years.

Shukri Abu Baker, 50, and Ghassan Elashi, 55, were convicted of channelling funds

to the Palestinian militant group, Hamas. Three o ther members of the Holy Land



Foundation were jailed for between 15 and 20 years by a Dallas court. The charity

was found guilty last year of sending $12m (£7.4m) to fund social programmes

controlled by Hamas. The five men were convicted in November on cha rges ranging

from money laundering to supporting terrorism. Hamas was designated a terrorist

organisation by the US government 14 years ago, making it illegal to give the group

money or other support.

The defendants said they were only interested in helpi ng the needy. Their supporters

said no money had been used to fund violence, and the case was a by -product of

what it called the anti-Islamic sentiment following the 11 September attacks of 2001.

Shukri Abu Baker told the judge in Dallas on Wednesday: "I d id it because I cared,

not at the behest of Hamas." But prosecutors argued that the humanitarian aid sent

by the charity allowed Hamas to divert money to militant activities.

Orphans Jurors had reached their guilty verdict last year after eight days of de liberations

following a retrial of the Texas -based Holy Land Foundation for Relief and

Development. It was the largest terrorism financing trial since the 9/11 attacks. The

indictment against the group said it sponsored Palestinian orphans and families in

the West Bank and Gaza whose relatives had died or been imprisoned as a result of

Hamas attacks on Israel. The charity was shut down and had its assets frozen in

2001.

Alleged Terrorist Group Steers Young Men to Fight

Mumbai Suspect, Ex-Recruits Describe How Pakistan-Based Lashkar-e-Taiba GaveThem the Motivation and Skills to Kill By GEETA ANAND in Mumbai, MATTHEW ROSENBERG in Lahore, Pakistan, AND SIOBHAN GORMAN and SUSAN SCHMIDT in Washington DECEMBER 8, 2008

Captured terrorist suspect Mohammed Ajmal Kasab has repeatedly offered the sameexplanation to his interrogators for his role in the Mumbai attacks. "Islam is indanger," he says over and over, according to a senior Indian police official. It was a message pumped into the 21-year-old by his trainers from the Pakistanimilitant group Lashkar-e-Taiba, according to Indian police. To reinforce themessage, Mr. Kasab and the nine other terrorists were shown videos of Hinduviolence perpetrated on Indian Muslims, police say.



Mr. Kasab's account of his recruitment and trainin g -- along with accounts from courtpapers and interviews with former recruits -- offers a portrait of how Lashkar-e-Taibacombines indoctrination with expert combat training to turn directionless,disconnected young men into deadly Islamist terrorists. On Sunday, Pakistan security forces raided a Lashkar-e-Taiba camp where

authorities believed militants linked to last month's Mumbai attack were located, asenior Pakistani official said. Lashkar, whose teachings are often tailored specifically for attacks on thesubcontinent, highlights two atrocities in the past two decades that have riled India'sminority Muslim community and inspired acts of terrorism in India as well: A 1992Hindu fundamentalist campaign to destroy the Babri Masjid, a mosque in Uttar Pradesh state, and the 2002 anti -Muslim rioting, in the town of Godhra in the westernstate of Gujarat, in which more than 1,000 people were killed. The symbolism appears to have had the desired effect on Mr. Kasab. "He got asense of purpose right away," says A.N. Roy, director general of the Maharashtra

State Police. "He felt he was fighting for his religion." Since the attacks, Indian police say Mr. Kasab has come to regret his actions andasked police to deliver a letter to his father. In it, according to Mr. Roy, he wrote inUrdu: "I did not go on the path you told me to. I did not realize that the path I wastaking would lead me here. I went too far. I am now as good as dead. Nobody shouldgo down this path." Lashkar-e-Taiba, which started in the early 19 90s and made its name challengingIndia's claims over Kashmir, has expanded its reach to wherever it perceivesMuslims to be in danger. In the process, it has become one of the most deadly

Islamic terrorist groups, a support at times for al Qaeda, and a ro ute for Westernextremists and converts to sign up for terrorism. Foreign jihadis finding it increasingly difficult to get to al Qaeda directly have turnedto Lashkar. Among the most famous Lashkar alumni: "shoe bomber" Richard Reid,who tried to blow up a trans-Atlantic flight in late 2001, and Dhiren Barot, who wasarrested in 2004, and convicted two years later, for planning a deadly bombing plotin London and providing al Qaeda with materials to target U.S. financial buildings.Both are British citizens. Pakistan banned Lashkar-e-Taiba, which means "Army of the Pure," under U.S.pressure in 2002, by which time thousands of young men already had trained in

Lashkar camps, experts say. Despite the ban, Pakistan has allowed the group tohide in plain sight, doing little if anything to clamp down. Lashkar's parent organization, a charitable group called Jamaat -ud-Dawa, or "Party of Preachers," is increasing in influence, especially in the central Pakistani provinceof Punjab, where it even arbitrates village d isputes. At its headquarters in Muridke, afew hours' drive from Lahore, it runs a 75-acre campus with an Islamic university,two schools and a hospital. It has set up schools across Punjab and other parts of Pakistan where government schools are nonexiste nt or poorly funded.



Jamaat-ud-Dawa's educational activities, experts say, have turned it into an opendoor for young men from all over the world who are interested in exploring militantIslam and perhaps joining Lashkar-e-Taiba. Lashkar-e-Taiba's founder, Hafiz Mohammed Saeed, denies the group was involvedin the Mumbai strikes, despite what Indian and U.S. officials say is substantial

evidence. Pakistan also has cast doubt on the Indian version of events and onaccounts of Mr. Kasab's testimony. President Asif Ali Zardari said he doubts the manIndian police had identified as Mr. Kasab is Pakistani. According to police accounts, Mr. Kasab has said he is from a poor family of devoutMuslims in the small, dusty village of Faridkot in Punjab. His father worke d sellingsnacks out of a cart. One of five siblings, Mr. Kasab has said he dropped out of school when he was in fourth grade so he could help support the family, working asa casual laborer in his town of 3,000 people. Most people in the Faridkot area work in farming or as laborers in nearby cities. Theregion, with its poor and undereducated population, has proved to be a fertile

recruiting ground for militant Islamic groups, including Lashkar -e-Taiba. In 2005, Mr. Kasab says, according to the police accounts, he moved to Lahore,where his brother was employed. Mr. Kasab worked for a time as a casual laborer,but then got into petty crime, he told police. In search of a source for weapons tocommit crimes, Mr. Kasab met with some people who turned out to be recruiters for Lashkar-e-Taiba, he said. The recruiters persuaded him to attend a training camp, where they showed himvideo footage of Hindu extremists demolishing the Babri Masjid and Hindu mobskilling Muslims in the aftermath of the burning of a trai n full of Hindu pilgrims passing

through Godhra in 2002.

The two incidents are those most cited in complaints by Indian Muslims about howmajority-Hindu India has ignored and persecuted them despite India's democracy and secular constitution. Indian Mujahedeen, a terror outfit with alleged links toLashkar-e-Taiba, cited the events in emails taking responsibility for a series of terrorist attacks in India earlier this year. The grievances Lashkar-e-Taiba uses to motivate recruits var y depending on thetarget audience. One former member says he was recruited at age 16 in 1997 after aLashkar recruiter showed him pictures of Muslim women raped and killed anddumped in mass graves in Bosnia, as well as of dead insurgents in Kashmir. In an

interview, the former member said the recruiter came to his school in Gujranwala, adistrict close to Jamaat-ud-Dawa's headquarters, to tell the class to be piousMuslims. "The pictures moved a lot of us and some of us even started to cr y," he said in aninterview.



After Mr. Kasab's first few months in a Lashkar-e-Taiba camp he felt a sense of purpose for the first time in his life, he told Mumbai police. It was his job to fight tothe death to save Islam and he said he was ready to die in the jihad, police said. At several camps around Pakistan, including a major Lashkar -e-Taiba camp inMuzaffarabad in Kashmir, Mr. Kasab underwent 18 months' training in marine

warfare, weaponr y and explosive use, he told interrogators, said Mr. Roy, theMaharashtra police director general. Among the trainers were several who appeared in army and navy uniforms withnames and rank badges, Mr. Roy said. The Pakistani government denies any of itsmilitar y was involved in training the attackers. The former Lashkar member also said training was provided by Pakistani militar y officers in uniform when he attended camp in Muzaffarabad. "They were experts," hesaid. "They taught us about explosives, about urban combat, how to go intobuildings, clear rooms of people and hold off soldiers for as long as we could." Lashkar-e-Taiba's camps typically give new recruits three weeks of basic weaponstraining, according to experts and past attendees. Volunteers begin their day with acall to morning prayers before rigorous exercises and religious instruction. Foreign recruits are sometimes trained at a special camp, according to Yong KiKwon, a Lashkar-e-Taiba trainee apprehended by police in northern Virginia in 2003.Mr. Kwon became a cooperating witness for the government in its investigation of the Virginia Jihad network and pleaded guilty to weapons and conspiracy charges.He described training at several Lashkar camps in Pakistan in weapons,camouflage, reconnaissance and night maneuvers, and ambush tactics. Ghulam, a 51-year-old former Lashkar-e-Taiba member who asked that only his firstname be used, says that after his camp training in the early 1990s, he was sent tohelp the group's fighters in Kashmir. A Pakistani who now lives in Lahore, Ghulamsays he carried weapons, ammunition, clothes and food to hideouts and safe housesacross the Line of Control, the de facto border between India's and Pakistan's partsof the Himalayan region. Once, he said, his group was fired on by Indian forces asthey headed back toward the line, and Pakistani soldiers opene d fire to give themcover. Mr. Kasab said the members of his training group knew they were preparingto launch an attack, but they weren't told details, according to the police account. A few days before they left their camp, a group of 10 were chosen from a larger group about double in number, police said. They were told they were attacking

Mumbai and details on the plan. They knew they might die, but were promised their families would get about $3,000 if they became martyrs. For three months they werekept in isolation and communicated with one another using code names. On Nov. 23, the group set out from Karachi, Pakistan's major port on the ArabianSea, for a journey that three days later would deliver them to the shores of Mumbai.Mr. Kasab was the only one of the 10 Mumbai assailants captured; the rest wereeventually killed by security forces, most of them after being holed up in three hotelsand a Jewish center for three days as they eluded commandos.



Residents in the village where Mr. Kasab grew up sa id he moved out a few yearsago, according to a local journalist. His father, Amir, confirmed the gunman as hisson after seeing a photograph of him injured after the attacks, the journalist said. Hismother burst into tears and kissed the photograph. The elder Mr. Kasab said hehasn't received any money from Lashkar-e-Taiba. "I don't sell my son," he told the journalist. ²Zahid Hussain and Jay Solomon contributed to this article.

Five Convicted in Terrorism Financing Trial By GRETEL C. KOVACH New York Times Published: November 24, 2008

DALLAS ² On their second tr y, federal prosecutors won sweeping convictionsMonday against five leaders of a Muslim charity in a retrial of the largest terrorism -financing case in the United States since the attacks of Sept. 11, 2001.

The five defendants, all leaders of the Holy Land Foundation for Relief andDevelopment, based in Richardson, a Dallas suburb, were convicted on all 108criminal counts against them, including support of terrorism, money laundering andtax fraud. The group was accused of funneling millions of dollars to the Palestinian militant group Hamas, an Islamist organization the government declared to be aterrorist group in 1995. ³Money is the lifeblood of terrorism,´ Richard B. Roper, the United States attorney

whose office prosecuted the case, said Monday in a statement. ³The jur y¶s decisiondemonstrates that U.S. citizens will not tolerate those who provide financial supportto terrorist organizations.´ The defendants argued that the Holy Land Foundation, once the largest Muslimcharity in the United States, was engaged in legitimate humanitarian aid for community welfare programs and Palestinian orphans. The jur y, which deliberated for eight days, reached a starkly different result than the jur y in the first trial, which ended in a mistrial on most charges in Octobe r 2007, after nearly two months of testimony and 19 days of deliberations. The government shuttered the Holy Land Foundation in December 2001 and seizedits assets, a move President Bush heralded at the time as ³another step in the war on terrorism.´ The charity¶s leaders ² Ghassan Elashi, Shukri Abu-Baker, Mufid Abdulqader, Abdulrahman Odeh and Mohammad El-Mezain ² were not accused in the 2004indictment of directly financing suicide bombings or terrorist violence. Instead, they accused of illegally contributing to Hamas after the United States designated it aterrorist group.



The defendants could be sentenced to 15 years on each count of supporting aterrorist group, and 20 years on each count of money laundering. Leaders of thefoundation, which is now defunct, might also have to forfeit millions of dollars. Khalil Meek, a longtime spokesman for a coalition of Holy Land Foundationsupporters called Hungr y for Justice, which includes national Muslim and civil rights

groups, said supporters were ³devastated´ by the verdict. ³We respect the jur y¶s decision, but we disagree and we think the defendants arecompletely innocent,´ Mr. Meek said. ³For the last two years we¶ve watched this trialunfold, and we have yet to see any evidence of a criminal act introduced to a jur y.This jur y found that humanitarian aid is a crime.´ He added, ³We intend to appeal the verdict, and we remain convinced that we willwin.´ The prosecutor, Barr y Jonas, told jurors in closing arguments last week that they should not be deceived by the foundation¶s cover of humanitarian work, describingthe charities it financed as terrorist recruitment centers that were part of a ³womb tothe tomb´ cycle. After the mistrial last year, critics said the government had offered a weak,complicated case and had failed to recognize that juries were not as quick to convictMuslim defendants accused of supporting terrorism as they had once been.Prosecutors spent more time in the second trial explaining the complexities of thecase and painting a clearer p icture of the money trail. They also dropped many of theoriginal charges. ³Today¶s verdicts are important milestones in America¶s efforts against financiers of

terrorism,´ Patrick Rowan, assistant attorney general for national security, said in astatement. Mr. Rowan added that the prosecution ³demonstrates our resolve toensure that humanitarian relief efforts are not used as a mechanism to disguise andenable support for terrorist groups.´ Nancy Hollander, a lawyer from Albuquerque who represente d Mr. Abu-Baker, saidthe defendants would appeal based on a number of issues, including the anonymoustestimony of an expert, which she said was a first. ³Our clients were not even allowed to review their own statements because they were classified ² statements that they made over the course of many years that thegovernment wiretapped,´ Ms. Hollander said. ³They were not allowed to go back and

review them. There were statements from alleged co -conspirators that includedhandwritten notes. Nobody knew who wrote them; nobody knew when they werewritten. There are a plethora of issues.´ Noor Elashi, a 23-year-old writer who is the daughter of Ghassan Elashi, said shewas ³heartbroken´ that jurors had accepted what she called the fear -mongering of the prosecution.



³I am utterly shocked at this outcome,´ Ms. Elashi said. ³This is a truly low point for the United States of America.´ She said supporters would not rest until the verdictwas overturned. ³My dad is a law-abiding citizen who was persecuted for his humanitarian work inPalestine and his political beliefs,´ Ms. Elashi said. ³Today I did not shed a single

tear. My dad¶s smile was radiant. That¶s because he saved lives, and now he¶spaying the price.´ According to freedomtogive.com, a Web site that calls itself the voice of thedefendants¶ relatives and friends, the foundation ³simply provided food, clothes,shelter, medical supplies and education to the suffering people in Palestine andother countries.´

The Saudi ConnectionHow billions in oil money spawned a global terror network U.S. News & World Report By David E. Kaplan12/15/03 The CIA's Illicit Transactions Group isn't listed in any phone book. There are noentries for it on any news database or Internet site. The ITG is one of those tidy litt leWashington secrets, a group of unsung heroes whose job is to keep track of smugglers, terrorists, and money launderers. In late 1998, officials from the WhiteHouse's National Security Council called on the ITG to help them answer a couple of questions: How much money did Osama bin Laden have, and how did he move itaround? The queries had a certain urgency. A cadre of bin Laden's al Qaedaterrorists had just destroyed two of America's embassies in East Africa. The NSC

was determined to find a way to break the organization's back. Working with the IllicitTransactions Group, the NSC formed a task force to look at al Qaeda's finances. For months, members scoured ever y piece of data the U.S. intelligence community hadon al Qaeda's cash. The team soon reali zed that its most basic assumptions aboutthe source of bin Laden's money --his personal fortune and businesses in Sudan --were wrong. Dead wrong. Al Qaeda, says William Wechsler, the task force director,was "a constant fundraising machine." And where did i t raise most of those funds?The evidence was indisputable: Saudi Arabia. America's longtime ally and theworld's largest oil producer had somehow become, as a senior Treasur y Departmentofficial put it, "the epicenter" of terrorist financing. This didn't come entirely as asurprise to intelligence specialists. But until the attacks of Sept. 11, 2001, U.S.officials did painfully little to confront the Saudis not only on financing terror but onbacking fundamentalists and jihadists overseas. Over the past 25 years, the desertkingdom has been the single greatest force in spreading Islamic fundamentalism,while its huge, unregulated charities funneled hundreds of millions of dollars to jihadgroups and al Qaeda cells around the world. Those findings are the r esult of a five-month investigation by U.S. News. The magazine's inquir y is based on a review of thousands of pages of court records, U.S. and foreign intelligence reports, and other documents. In addition, the magazine spoke at length with more than three dozen



current and former counterterrorism officers, as well as government officials andoutside experts in Riyadh, the Saudi capital. Among the inquir y's principal findings: Starting in the late 1980s--after the dual shocks of the Iranian revolution and t heSoviet war in Afghanistan--Saudi Arabia's quasi-official charities became the primar y source of funds for the fast-growing jihad movement. In some 20 countries, the

money was used to run paramilitar y training camps, purchase weapons, and recruitnew members. The charities were part of an extraordinar y $70 billion Saudi campaign to spreadtheir fundamentalist Wahhabi sect worldwide. The money helped lay the foundationfor hundreds of radical mosques, schools, and Islamic centers that have acted assupport networks for the jihad movement, officials say. U.S. intelligence officials knew about Saudi Arabia's role in funding terrorism by 1996, yet for years Washington did almost nothing to stop it. Examining the Saudirole in terrorism, a senior intelligence analyst says, was "virtually taboo." Even after the embassy bombings in Africa, moves by counterterrorism officials to act against

the Saudis were repeatedly rebuffed by senior staff at the State Department andelsewhere who felt that other foreign policy i nterests outweighed fighting terrorism. Saudi largess encouraged U.S. officials to look the other way, some veteranintelligence officers say. Billions of dollars in contracts, grants, and salaries havegone to a broad range of former U.S. officials who ha d dealt with the Saudis:ambassadors, CIA station chiefs, even cabinet secretaries. Washington's unwillingness to confront the Saudis over terrorism was part of abroader strategic failure to sound the alarm on the rise of the global jihad movement.During the 1990s, the U.S. intelligence community issued a series of National

Intelligence Estimates--which report on America's global challenges--on ballisticmissile threats, migration, infectious diseases; yet the government never issued asingle NIE on the jihad movement or al Qaeda. Propaganda. Saudi officials argue that their charities have done enormous goodwork overseas and that the problems stem from a few renegade offices. They say,too, that Riyadh is belatedly cracking down, much as Washington did af ter 9/11."These people may have taken advantage of our charities," says Adel al -Jubeir,foreign affairs adviser to the crown prince. "We're looking into it, and we've takensteps to ensure it never happens again." To understand why the Saudis would fund a movement that now terrorizes even their

own society, some histor y is in order. The Kingdom of Saudi Arabia was born of akind of marriage of convenience between the House of Saud and the strict Wahhabsect of Islam. In the 18th centur y, Mohammed ibn Saud, a local chieftain and theforebear of today's ruling family, allied himself with fundamentalists from the Wahhabsect. Over the next 200 years, backed by the Wahhabis, Saud and his descendantsconquered much of the Arabian peninsula, including Islam's hol iest sites, in Meccaand Medina. Puritanical and ascetic, the Wahhabis were given wide sway over Saudisociety, enforcing a strict interpretation of certain Koranic beliefs. Their religiouspolice ensured that subjects prayed five times a day and that wome n were covered



head to toe. Rival religions were banned, criminals subjected to stoning, lashing, andbeheading. The Wahhabis were but one sect among a back -to-the-roots movement in Islam thathad limited attraction overseas. But that began to change, firs t with the flood of oilmoney in the 1970s, which filled Saudi coffers with billions of petrodollars. Next

came the Iranian revolution and the Soviet invasion of Afghanistan, in 1979. Mostominously for the Saudis, however, was a third shock that same year : the brief butbloody takeover by militants of the Grand Mosque in Mecca. Threatened within the kingdom, and fearful that the radicals in Tehran would asserttheir own leadership of the Muslim world, the Saudis went on a spending spree.From 1975 through last year, the kingdom spent over $70 billion on overseas aid,according to a study of official sources by the Center for Security Policy, aWashington think tank. More than two thirds of that amount went to "Islamicactivities"--building mosques, religious schools, and Wahhabi religious centers, saysthe CSP's Alex Alexiev, a former CIA consultant on ethnic and religious conflict. TheSaudi funding program, Alexiev says, is "the largest worldwide propaganda

campaign ever mounted"--dwarfing the Soviets' propaganda efforts at the height of the Cold War. The Saudi weekly Ain al -Yaqeen last year reported the cost as"astronomical" and boasted of the results: some 1,500 mosques, 210 Islamiccenters, 202 colleges, and nearly 2,000 schools in non -Islamic countries. Key to this evangelical tour de force were charities closely tied to Saudi Arabia'sruling elite and top clerics. With names like the Muslim World League and its affiliate,the International Islamic Relief Organization, the funds spent billions more to s preadWahhabism. The IIRO, for example, took credit for funding 575 mosques inIndonesia alone. Accompanying the money, invariably, was a blizzard of Wahhabistliterature. Wahhabist clerics led the charge, causing moderate imams to worr y aboutgrowing radicalism among the faithful. Critics argue that Wahhabism's more extremepreachings--mistrust of infidels, branding of rival sects as apostates, and emphasison violent jihad--laid the groundwork for terrorist groups around the world. Princely giving. If the Saudis' efforts had been limited to pushing fundamentalismabroad, their work would have been cause for controversy. But some Saudi charitiesplayed a far more troubling role. U.S. officials now say that key charities became thepipelines of cash that helped transform ragtag bands of insurgents and jihadists intoa sophisticated, interlocking movement with global ambitions. Many of thosespreading the Wahhabist doctrine abroad, it turned out, were among the most radicalbelievers in holy war, and they poured vast sums into the emerging al Qaedanetwork. Over the past decade, according to a 2002 report to the United Nations

Security Council, al Qaeda and its fellow jihadists collected between $300 millionand $500 million--most of it from Saudi charities and private donors. The origins of al Qaeda are intimately bound up with the Saudi charities, intelligenceanalysts now realize. Osama bin Laden and his followers were not exactly holy warriors; they were unholy fundraisers. In Afghanistan, Riyadh and Washing tontogether ponied up some $3.5 billion to fund the mujahideen --the Afghan fighterswho took on the Soviets. At the same time, men like bin Laden served as fundraisersfor the thousands of foreign jihadists streaming into Afghanistan. By persuading



clerics across the Muslim world to hand over money from zakat, the charitabledonations that are a cornerstone of Islam, they collected huge sums. They raisedmillions more from wealthy princes and merchants across the Middle East. Mostimportant, they joined forces with the Saudi charities, many already moving aid to thefighters. Afghanistan forged not only financial networks but important bonds among thosewho believe in violent jihad. During the Afghan war, the man who ran the MuslimWorld League office in Peshawar, Pakistan, was bin Laden's mentor, Abdullah Azzam. Another official there was Wael Julaidan, a Saudi fundraiser who would joinbin Laden in founding al Qaeda in 1988. Documents seized in raids after 9/11 reveal just how close those ties were. One record, taken from a Saudi-backed charity inBosnia, bears the handwritten minutes of a meeting between bin Laden and threemen, scrawled beneath the letterhead of the IIRO and Muslim World League. Thenotes call for the opening of "league offices . . . for the Pakistanis," so that "attacks"can be made from them. A note on letterhead of the Saudi Red Crescent --Saudi Arabia's Red Cross--in Peshawar asks that "weapons" be inventoried. It isaccompanied by a plea from bin Laden to Julaidan, citing "an extreme n eed for

weapons." After the Soviets left Afghanistan in disgrace, bin Laden moved his fledgling alQaeda to Sudan, in 1992. By then a perfect storm of Islamic radicalism wasgathering across the Muslim world. Some "Afghan Arab" veterans of Afghanistannow eyed radical change in their homelands, where secular and corrupt regimesheld sway. Others set out for lands where they saw fellow Muslims oppressed, suchas Kashmir and Bosnia. Saudis rich and poor responded with donations atthousands of zakat boxes in mosques, supermarkets, and schools, doling outsupport for besieged Muslims in Algeria, Bosnia, Kashmir, the West Bank, and Gaza.Millions poured in. The Saudi charities opened offices in hot spots around the globe, with virtually nocontrols on how the money was spent, U.S. officials say. The donors funded many worthy projects, supporting orphanages and hospitals, and providing food, clothing,and medicine to refugees. But by 1994, Riyadh was starting to get complaints --fromthe French interior minister about Saudi funds reaching Algerian terrorists and fromPresident Clinton about their funding of Hamas, whose suicide bombers werewreaking havoc on the Middle East peace process. More concerns surfaced in thePhilippines, where an investigation of an al Qae da plot to murder the pope and bomba dozen U.S. airliners led to the local IIRO office. Its director was a brother -in-law of bin Laden's, Muhammad Jamal Khalifa, who was busily funneling cash to theregion's top Islamic guerrilla groups, Abu Sayyaf and th e Moro Islamic Liberation

Front. Who's who. It was Bosnia, though, that finally caught the sustained attention of theCIA. In the early '90s, the ethnic -cleansing policies of the Serbs drew hundreds of foreign jihadists to the region to help defend Bosnian Muslims. Saudi money pouredin, too. Saudi donors sent $150 million through Islamic aid organizations to Bosnia in1994 alone, the U.S. Embassy in Riyadh reported. But large sums were winding upin the wrong hands. A CIA investigation found that a third o f the Islamic charities inthe Balkans--among them the IIRO--had "facilitated the activities of Islamic groups



that engage in terrorism," including plots to kidnap or kill U.S. personnel. The groupswere a who's who of Islamic terrorism: Hamas, Hezbollah, Algerian extremists, andEgypt's Al-Gama'a al-Islamiyya, whose spiritual head, Sheik Omar Abdel Rahman,later earned a life sentence for plotting to bomb the United Nations and other NewYork landmarks. In a classified report in 1996, CIA officials finally pulled together what they had onIslamic charities. The results were disturbing. The agency identified over 50 Islamiccharities engaged in international aid and found that, as in the Balkans, fully a thirdof them were tied to terrorist groups. "Islamic activists dominate the leadership of thelargest charities," the report noted. "Even high -ranking members of the collecting or monitoring agencies in Saudi Arabia, Kuwait, and Pakistan --such as the Saudi HighCommission--are involved in illicit activities, including support for terrorists." As front organizations, the charities were ideal. Some provided safe houses, falseidentities, travel documents. Others offered arms and materiel. Nearly all dispensedsizable amounts of cash, according to the CIA, with little or no documentation. Andthey were, it seemed, ever ywhere. By the mid-1990s, the Muslim World League

fielded some 30 branches worldwide, while the IIRO had offices in over 90 countries.The CIA found that the IIRO was funding "six militant training camps in Afghanistan,"where Riyadh was backing a then obscure sect called the Taliban, whose religiouspractices were close to Wahhabism. The head of a Muslim World League office inPakistan was supplying league documents and arms to militants in Afghanis tan andTajikistan. Another Saudi charity had begun funding rebels in Chechnya. "Chatter." Although they called themselves private foundations, these were notcharities in the sense that Americans understand the term. The Muslim WorldLeague and the IIRO, for example, are overseen by the grand mufti of Saudi Arabia,the kingdom's highest religious authority. They receive substantial funds from thegovernment and members of the royal family and make use of the Islamic affairsoffices of Saudi embassies abroad. The Muslim World League's current secretar y general, Abdullah Al-Turki, served as the kingdom's minister of Islamic affairs for sixyears. "The Muslim World League, which is the mother of IIRO, is a fully government-funded organization," the IIRO's Cana dian head testified in a 1999 courtcase. "In other words, I work for the government of Saudi Arabia." The year of the CIA report, 1996, was also when Osama bin Laden moved back to Afghanistan, after a four-year sojourn in Sudan. Protected by the Taliban, and withmoney pouring in, bin Laden, finally, went operational. He opened new trainingcamps, and sent cash to established terrorist groups and seed money to start -ups.Then he began plotting strikes against the United States, even issuing a long fatwa,

or religious edict, summoning devout Muslims to wage jihad on America. The fatwareceived little publicity, but bin Laden now had alarm bells ringing at the CIA. "Heseemed to turn up under ever y terrorist rock," remembers a senior counterterrorismofficial. At CIA headquarters, the agency set up a "virtual station" on bin Laden,pooling resources to track his operations. U.S. intelligence agencies, meanwhile, were picking up disturbing "chatter" out of Saudi Arabia. Electronic intercepts of conversations implicated members of the royalfamily in backing not only al Qaeda but also other terrorist groups, several



intelligence sources confirmed to U.S. News. None were senior officials --the royalfamily has some 7,000 members. But several intercepts implicated some of thecountr y's wealthiest businessmen. "It was not definitive but still ver y disturbing," saysa senior U.S. official. "That was the year we had to admit the Saudis were aproblem." Despite the mounting evidence, the issue of Saudi complicity with te rrorists waseffectively swept under the diplomatic rug. Counterterrorism experts offer severalreasons. For one, this was five years before the 9/11 attacks, and terrorism simply wasn't seen as the strategic threat it is today. Only a dozen or so American s werekilled each year in terrorist attacks. Moreover, in many of the jihad struggles,Washington was neutral, as in Kashmir, or even supportive, as in Bosnia. WhenSaudi money began financing jihadists headed to Chechnya, Washington respondedwith "a wink and a nod," as one analyst put it. The level and impact of all the Saudifunding were also difficult to discern. "We knew the outlines," explains Judith Yaphe,a senior Middle East analyst at the CIA until 1995. "But before 9/11, much of it had tobe intuited. It was like the blind man examining the elephant." There were other reasons. In much of official Washington, a growing movement of Third World religious zealots was just not taken seriously. For years after the fall of the Berlin Wall, those running U.S. intelligence were "Soviet people" still fighting theCold War, says Pat Lang, who served as chief Middle East analyst for the DefenseIntelligence Agency during the 1990s. "The jihadists were like men from Mars tothem." Peter Probst, then a senior counterterrorism official at the Pentagon, agrees."Any time you would raise these threats, people would laugh," he recalls. "They would say I was being totally paranoid." The fact that the movement was based on Islam made it more difficult to discuss."There was a fear that it was too sensitive, that you'd be accused of discrimination,"Probst says. "It was political correctness run amok." Others say the message wassubtle but clear. In the CIA, merely getting permission to prepare a report on asubject can require up to five levels of approval. On the subject of Saudi ties toterrorism, the word came back: There was simply no interest. The result, says a CIAveteran, was "a virtual embargo." The FBI fared little better. By 1998, a sprawling investigatio n in Chicago into terroristfundraising had led federal agents to $1.2 million looted from a local chemical firm.The money, they suspected, had been sent to Hamas. The G-men found the sourceof the cash curious: a Saudi charity, the IIRO, which had funnel ed the money through the Saudi Embassy. Senior Justice Department officials expressed concernsabout "national security," and the case, eventually, was dropped. "Did someone say

to me we can't do this because it would offend the Saudis? No," says Mark Fles sner,a prosecutor on the case. "But was that always an undertone? Yes. Was that a hugeissue? Yes." It didn't hurt that the Saudis had spread money around Washington by the millions.Vast sums from Saudi contracts have bought friends and influence here. I n hisrecent book Sleeping With the Devil: How Washington Sold Our Soul for SaudiCrude, former CIA operative Bob Baer calls it "Washington's 401(k) Plan." "TheSaudis put out the message," Baer wrote. "You play the game --keep your mouth



shut about the kingdom--and we'll take care of you." The list of beneficiaries isimpressive: former cabinet secretaries, ambassadors, and CIA station chiefs.Washington lobbyists, P.R. firms, and lawyers have also supped at the Saudi table,as have nonprofits from the Kennedy Center to presidential libraries. The high -flyingCarlyle Group has made fortunes doing deals with the Saudis. Among Carlyle's topadvisers have been former President George H.W. Bush; James Baker, his

secretar y of state; and Frank Carlucci, a former secretar y of defense. If that wasn'tenough, there was the staggering amount of Saudi investment in America --as muchas $600 billion in U.S. banks and stock markets. That kind of clout may help explain why the House of Saud could be so dismissive of American concerns on terrorism. Official inquiries about bin Laden went unansweredby Riyadh. When Hezbollah terrorists killed 19 U.S. troops with a massive truckbomb at Khobar Towers in Dhahran in 1996, Saudi officials stonewalled, then shutthe FBI out of the investigation. So sensitive were relations that the CIA instructedofficials at its Riyadh station not to collect intelligence on Islamic extremists --evenafter the bombing--for fear of upsetting their host, former officers tell U.S. News. Payoffs. The attacks on the U.S. embassies in Kenya and Tanzania in August 1998changed all that. Within weeks, the NSC formed its task force on terrorist finances,drawing in members from the Treasur y Department and the CIA's Illicit TransactionsGroup. (The ITG was later absorbed into the agency's Counterterrorism Center.) Inthe movies, U.S. intelligence often seems capable of extraordinar y feats. In the realworld, alas, Washington's reach is all too limited. Officials on the task force werequickly sobered by the handful of people they found with true expertise on the MiddleEast. Those knowledgeable about terrorist financing numbered even fewer. Solimited was the CIA's knowledge that it began using al Qaeda's real name only thatyear--10 years after bin Laden founded the organization. Even less was known aboutal Qaeda's fellow jihadists around the globe. Its top ally in Southeast Asia, JemmahIslamiya, was not targeted until after 9/11, according to an Australian intelligencereport. Other challenges loomed. The Isla mic world has always been a difficult target for Western intelligence services, and terrorist cells are among the toughest topenetrate. Following criminal money is also a tortuous task. Drawing a bead on alQaeda combined all three challenges. The NSC tas k force tried to formulate whatstaffers called "a theor y of the case." Their first questions were simple: What did itcost to be bin Laden? How much did it take to fund al Qaeda? Terrorist acts, even the so-called spectaculars like 9/11, are relatively cheap to carr y out. But the more the task force studied al Qaeda, the bigger its budget appeared.

With its training camps and operations, and payments to the Taliban and to other terror groups, the amount was surely in the millions, task -force members surmised. After finding that bin Laden's inherited wealth was largely gone and his Sudanesebusinesses failing, the question was, where did the money come from? The answer,they eventually concluded, was Saudi charities and private donors. The charities, by 1999, were integrated even further into the jihadist movement. InIndia, police detained Sayed Abu Nasir, a longtime IIRO staffer, for plotting to bombU.S. consulates. Nasir confessed that the organization was secretly supporting



dozens of jihadist training camps in Pakistan and Afghanistan. Equally striking wasthe al Haramain Foundation, one of Saudi Arabia's largest, which dispensed $50million a year through some 50 offices worldwide. U.S. officials would eventually conclude that its branches in at least 10 countries were providing arms or cash toterrorists, including those in Indonesia, Pakistan, and Somalia. In Southeast Asia, alHaramain was acting as a key source of funds for al Qaeda; in Chechnya, Russian

officials suspected it of moving $1 million to the rebels and arranging the purchase of 500 "heavy weapons" from the Taliban. There was more. In the Middle East, the CIA learned, Saudi donations were fundingas much as half of Hamas's budget and paying off the families of suicide bombers. InPakistan, so much Saudi money poured in that a mid-level Pakistani jihadist couldmake seven times the countr y's average wage. Jihad had become a global industr y,bankrolled by the Saudis. Daniel Benjamin, the NSC's counterterrorism director,knew that Palestinian terror groups had used local charities, but that was nothing likewhat the Saudis had wrought. "The structure was not astonishing," Benjamin says."The ambition and scale were." This time something would be done. The NSC staff approached Vice President AlGore, who told the Saudis that Washington wanted a meeting with their top security and banking officials. In June 1999, the NSC's William Wechsler, Treasur y's RichardNewcomb, and others on the task force flew to Riyadh. They were met by a half -dozen senior Saudi officials, all dressed in flowing white robes and checkeredkaffiyehs. "We laid ever ything out--what we knew, what we thought," said oneofficial. "We told them we'd just had two of our embassies blown up and that weneeded to deal with them in a d ifferent way." Deep freeze. Two things soon became clear. The first was that the Saudis hadvirtually no financial regulator y system and zero oversight of their charities. Thesecond was that Saudi police and bank regulators had never worked together befor eand didn't particularly want to start. Those were problems, but the Americans made itclear they meant business. If the Saudis didn't crack down, Newcomb explained,Treasur y officials had the ability to freeze assets of groups and individuals whosupported terrorists. That struck a nerve. The mention of wealthy Saudis promptedlots of nervous chatter among the Saudis. But on some points, the Saudis seemedgenuinely puzzled. Some stressed that jihad struggles in certain regions, such asIsrael and Chechnya, were legitimate. Still, the Saudis agreed they may have aproblem. Changes, they said, would be made. But none were. A second visit by a U.S. delegation, in Januar y 2000, elicited muchthe same reaction. Worse, the team was getting the same treatment bac k home.

Frustrated with Riyadh, Newcomb's Office of Foreign Assets Control at Treasur y began submitting the names of Saudi charities and businessmen for sanctions. Butimposing sanctions required approval from an interagency committee, and that never came. CIA and FBI officials were lukewarm to the idea, worried that sanctions wouldchill what little cooperation they had with their Saudi counterparts. But it was theState Department that objected most strenuously. "The State Department," recallsone official, "always thought we had much bigger fish to fr y."



Not ever yone in Foggy Bottom agreed. In the fall of 1999, Michael Sheehan, State'stough-minded coordinator for counterterrorism, had seen intelligence on the Islamiccharities and was appalled. As part of a still-classified report, he wrote a cableinstructing U.S. ambassadors to insist that host governments crack down on thegroups. But some at State argued that the charities were doing important work andfought to kill Sheehan's initiative. The cable wa s deep-sixed. Underlying the reluctance to confront the Saudis was a more fundamental failure --Washington's inability to recognize the strategic danger posed by the growing jihadmovement, of which al Qaeda is but the head. The U.S. government, in effect,largely missed the gravest ideological threat to national security since the end of theCold War. "There were people who got it at the analyst level, at the supervisor y level,but all of us were outnumbered," says Pat Lang, the former Pentagon analyst. "Yo u just couldn't get people to take seriously the world of Islam and the threat itrepresented." Consider the work of the National Intelligence Council, which is tied closely to theCIA and reports directly to its director. In 1999, the NIC brought together experts

from across America to identif y global trends--key drivers, they called them--thatwould affect the world over the next 15 years. A senior intelligence official, theanonymous author of Through Our Enemies' Eyes, which chronicles the rise of alQaeda, described to U.S. News how he perused the NIC draft report and wasshocked to see that Islamic fundamentalism was not listed among the key drivers.The analyst sent a note to the NIC chief, stressing that there were nearly a dozenIslamic insurgencies around the world, knitted together by Saudi money, al Qaeda,and thousands of Afghan veterans. The response: "I got a Christmas card back witha note hoping my family was well," the man recalls. The NIC's final report, GlobalTrends 2015, barely mentioned radicalism in the Islamic world. The NIC's vicechairman, Ellen Laipson, later wrote that their report "shied away" from the issuebecause it "might be considered insensitive and unintentionally generate ill will." The lack of vision extended to the incoming Bush adminstration, say counterterrorism officials. Early in the Bush term, they say, Treasur y Secretar y PaulO'Neill moved to kill a proposed terrorist asset -tracking center that the NSC taskforce had pushed. The 19 hijackers, of course, obliterated any lingering concerns about sensitivity andSaudi ill will. Over the next year, police raided the offices of Saudi -backed charities ina half-dozen countries. The Treasur y Department ordered the assets of many of them frozen, including those of al Haramain branches in Bosnia and Somalia. At theSaudi High Commission in Bosnia, which coordinated local aid among Saudi

charities, police found before -and-after photos of the World Trade Center, files onpesticides and crop dusters, and information on how to counterfeit State Departmentbadges. At Manila's international airport, authorities stopped Agus Dwikarna, an alHaramain representative based in Indonesia. In his suitcase were C4 explosives. Outside Washington, federal agents raided offices of the IIRO and Muslim WorldLeague, along with over a hundred other Islamic groups, nearly all based --at least onpaper--in two buildings in the Virginia suburbs. Many share directors, office space,and cash flow. For two years, investigators have followed the money to offshore



trusts and obscure charities which, according to court records, they believe are tiedto Hamas, al Qaeda, and other terrorist groups. To date, no groups have beenindicted. "You can't trace a cent to any terrorist," says attorney Nancy Luque, whoseclients include several of the firms.