IE 11 is not supported. For an optimal experience visit our site on another browser.

Al Qaeda’s finances are ample, probers say

Governments are not enforcing global sanctions designed to stem the flow of money to al Qaeda and impede the business activity of the organization's financiers, allowing the terrorist network to retain formidable financial resources, investigators say.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

Governments around the world are not enforcing global sanctions designed to stem the flow of money to al Qaeda and impede the business activity of the organization's financiers, allowing the terrorist network to retain formidable financial resources, according to U.S., European and U.N. investigators.

Several businessmen designated by the United Nations as terrorist financiers, whose assets were supposed to have been frozen more than two years ago, continue to run vast business empires and to travel freely because most nations are unaware of the sanctions and others do not enforce them, the investigators said. Several charities based in Saudi Arabia and Pakistan that were reportedly shut down by the governments there because of the groups' alleged financial ties to Osama bin Laden also continue to operate freely, they said.

As a result, al Qaeda continues to receive ample funding not only to carry out its own plots but also to finance affiliated terrorist groups and to seek new weapons, the investigators and terrorism experts said.

A report released this month by a U.N. panel of experts documented the continued flow of money — including drug money — to terrorist organizations and warned that al Qaeda "has already taken the decision to use chemical and biological weapons in their forthcoming attacks. The only constraint they are facing is the technical complexity to operate them properly and effectively" — rather than a lack of means to acquire them.

"We desperately need to revitalize our effort to choke off terrorist financing, because until we cut that off, we have not crippled al Qaeda's ability to attack us," said one senior U.S. official who monitors terrorist finances. "We started out well, picked all the low-hanging fruit, and then, as we have squeezed, they have simply moved on to different methods."

A separate report released last week by the General Accounting Office, the investigative arm of Congress, noted that U.S. law enforcement still has no clear idea of how terrorists move their money and that the FBI, which is the lead agency in tracking terrorist assets, still does not "systematically collect or analyze" such information. It concluded that the Justice and Treasury departments have fallen more than a year behind in developing plans to attack terrorist financial mechanisms, such as the use of diamonds and gold to hide assets.

Under the sanctions policy adopted by the United Nations immediately after the Sept. 11, 2001, attacks, individuals designated by the world body as terrorists or terrorist supporters were to have their assets frozen and be banned from international travel.

So far, the world body has publicly named 272 people as sponsors of terrorism.

But U.N. and U.S. officials said they do not know where more than a handful of those people are, and only 83 of 191 countries have submitted the required U.N. reports on attacking terrorist financing and implementing the travel ban. Only a third of those have given the list to their border guards.

The investigators said some developing nations lack the resources to comply with the sanctions, while some wealthier countries do not know of the sanctions or are hampered by bureaucratic inertia.

U.S.: $138 million frozen so far
U.S. officials said that about $138 million in terrorist assets have been frozen since the attacks, and that some steps have been taken to clamp down on charities and other known terrorist funding mechanisms. Officials noted the closure of three large Islamic charities in the United States and an ongoing investigation of a group of charities and organizations in Northern Virginia. Numerous alleged sponsors of terrorism, in the United States and abroad, have been publicly named.

But the officials acknowledged that al Qaeda, now more decentralized, needs less money to operate than it did when bin Laden was supporting training camps and propping up the Taliban government in Afghanistan.

The U.N. report said $75 million of the $138 million in frozen assets claimed by the United States belonged to al Qaeda or the Taliban. The Taliban money, which was a "substantial" portion, has been turned over to the new Afghan government.

Illustrating the ineffectiveness of the sanctions regime, U.S. and U.N. officials said, are the joint business empires of Yousef Nada and Idris Nasreddin, which sprawl across Europe and Africa and are worth hundreds of millions of dollars.

Two mens' stories
Nada, an Egyptian national who lives in Switzerland, was designated a terrorist financier by the United Nations on Nov. 9, 2001, and was publicly accused by U.S. and U.N. officials of providing direct aid to al Qaeda. Nasreddin, an Eritrean who lives in Italy, was designated a terrorist supporter on April 24, 2002. At that time, the assets of more than a dozen of their joint enterprises were supposed to have been frozen, and a travel ban was imposed on the pair.

Both men have strongly denied any involvement in terrorist activities.

But U.S. officials and the U.N. report said that many of the pair's businesses, including a luxury hotel in Milan, continue to operate and that both men violate the travel ban with impunity.

The U.N. panel found that on Jan. 28, Nada traveled from his home in Campione d'Italia, in Switzerland, to Vaduz, Liechtenstein, to change the names of two of the companies that were targets of the asset freeze.

Despite his designated status, he traveled under his own name and even applied for and received a new passport shortly before leaving.

In Liechtenstein, Nada sought to liquidate both renamed companies and listed himself as the liquidator, a move that would have allowed him to pocket the proceeds. When U.N. officials discovered the move and protested, the liquidation was halted.

Lawyers for the two men did not return telephone calls seeking comment.

'Those assets are still around'
Victor Comras, a former State Department official who helped write the U.N. report, said that, in the immediate aftermath of the terrorist strikes, the United States and other countries effectively froze some terrorist assets, but that the success was largely limited to halting money in the banking system.

Once al Qaeda understood the weaknesses and loopholes in the sanctions regime, Comras said, "money was quickly moved out of harm's way" by taking it out of banks and putting it into commodities, such as diamonds and gold, or into front companies.

"Al Qaeda had assets, and those assets are still around," Comras said. "They had a number of different ways to handle the problem, and they are using all of them."

U.S. and U.N. officials said the lack of enforcement is especially acute in Europe and Saudi Arabia, and they expressed dismay that, 27 months after the terrorist attacks, many countries have done little to install a legal framework that would make the sanctions effective. Most lacking in Europe are laws that would allow the seizure or shutdown of shell companies, businesses and properties — not just bank accounts — if there is evidence linking them to terrorism.

Legal issues, including how to confiscate properties when one owner is a designated terrorist sponsor but others are not, present another obstacle, officials said.

"The question is, how do you go after real properties and not just bank accounts," said Juan C. Zarate, the Treasury Department's deputy assistant secretary for terrorist finance. "These are men of resources, men of high finance who know how to reformulate their businesses and how to move money."

Bureaucracy blamed in part
U.S. and U.N. officials said that some failures to effectively implement the sanctions stem in part from ignorance of the sanctions regime, and that others are the result of bureaucratic inertia.

"The European Union has very strong regulations covering money and travel issues in compliance with the United Nations," one U.N. official said. "One has to question how some of these governments can justify not being in compliance with EU regulations."

In addition, the body set up by the European Union to monitor compliance with the U.N. regulations has only two people assigned to the enforcement office and has no real authority.

U.N. and U.S. officials also said another problem is the ongoing activity of charities that were supposed to have been shut down.

Several branches of the al Haramain Charitable Foundation, a Saudi Arabia-based organization that in the past raised as much as $30 million a year, remain active, they said. Several offices of the organization were directly implicated in the financing of al Qaeda, and in May the Saudi government announced that the charity had been required to suspend all activities outside Saudi Arabia.

"Al Haramain is still active in a number of countries and has just opened a new Islamic school in Jakarta, Indonesia," the U.N. report said.

The al Haramain office in Saudi Arabia did not respond to telephone calls, but in the past its leaders denied any links to terrorism.

U.S. officials said that shutting down al Haramain and ensuring that other suspected terrorist financiers are put out of business by Saudi Arabia is at the top of the two nations' agenda.

Similarly, the U.N. report noted that the al Rashid Trust, a designated Pakistani charity, "continues its operation in Pakistan under various names and partnerships ... it has continued to be active in funding al Qaeda related activities as well as other social and humanitarian projects."

The investigators also expressed concern about the alleged activities of Wael Julaidan, a businessman who helped found al Qaeda and who was designated by the U.N. on Sept. 6, 2002, as a terrorist financier.

Until last year, Julaidan was the Saudi chairman of the Rabita Trust, a Pakistani charity also found by the United Nations to have funded al Qaeda activities. U.N. and U.S. officials said Julaidan continues to work in charities and to handle large sums of money.

A source with direct knowledge of U.S. actions said the "highest priority of the U.S. government is to get the Saudis to do what they said [they] would do and close down what they were supposed to close down." The source noted that, after agreeing to put him on the U.N. list, senior Saudi officials publicly denounced Julaidan's designation.

"Then the Saudis said he was questioned but wouldn't tell us what he said," the source said. "They said his assets are frozen, but won't say where. It's like Humphrey Bogart in 'Casablanca.' They round him up when the pressure builds and are shocked to find anything going on."

A senior Saudi official disputed the U.S. and U.N. accounts of the ongoing activities of al Haramain and Julaidan.

"Julaidan is not operating," the official said. "His assets are frozen. Al Haramain cannot spend a penny outside Saudi Arabia. We are doing what we can."

He added: "If they think al Haramain is doing something in Indonesia, then it is up to the government of Indonesia to take action, not Saudi Arabia."