Terror Money Hard to Block, Officials Find (Bosnia off-the-shelf model for fund-raising/recruitment)

Officials say Al Qaeda's money apparatus is so far-flung and diversified that it could survive even if Osama bin Laden is captured or killed.

In Afghanistan, the hunt for Osama bin Laden is narrowing. But on the war's financial front, the government is only now beginning to come to grips with Al Qaeda's money-raising apparatus, which officials say is so far-flung and diversified that it could survive even if Mr. bin Laden is captured or killed.

Delving into a network that generates millions of dollars a year, yet often trafficks in small amounts, the inquiry has uncovered at least $238,000 sent to the Sept. 11 hijackers in the United States through a dozen wire transfers from the United Arab Emirates. Several transfers are linked to an Al Qaeda official who used various aliases, United States government officials said in recent interviews.

Investigators have also found that the hijackers and some of their acquaintances declared about $40,000 in cash when entering the United States, the officials said, and law enforcement officials are trying to determine if that cash also aided the attacks.

Despite progress in unraveling the finances of the September attacks, government officials say dismantling the overall financing of Al Qaeda is proving more difficult, in part because it hinges far less on Mr. bin Laden's fortune than was once believed.

During the last few years, government officials have concluded that Mr. bin Laden's inheritance, once estimated at $300 million, was actually more in the range of $25 million. Instead, Al Qaeda uses an amalgam of private enterprises, corporate shells and charities that are structured like a financial archipelago with connections hidden beneath the surface.

To support Al Qaeda, some operatives work like organized crime crews. Government officials exploring Al Qaeda's operation in Bosnia found that operatives skimmed money from relief charities and linked up with Bosnian crime bosses. The success in Bosnia made it a model for Al Qaeda to use in embattled countries around the world.

The description of the expansive and self-sufficient structure of the network is based on interviews with current and former officials of many American government agencies, as well as from court records and other official documents. The Bush administration's attempt to break up this financial network is as vital as the military action in Afghanistan, experts say.

"A military success would not be sufficient without an attack on the financial infrastructure" of Al Qaeda, said Michael Zeldin, former head of the money-laundering section at the Justice Department. "If that stays in place, then you may chase them from one geography to the next, you may be disruptive, but you haven't gotten to the root of the problem."

Since Sept. 11 the Bush administration has taken three public steps to block dozens of individuals, companies, charities and other organizations with Al Qaeda connections from the international banking system.

But out of public view, the effort is far broader, government officials say, involving diplomatic and covert actions. Working with governments in the Middle East and Europe, officials have privately confronted several international charities with accusations that terrorists had infiltrated their organizations and were diverting money to Al Qaeda.

United States officials, working with foreign counterparts, have monitored back transactions trying to track down Al Qaeda supporters. So-called "jump teams" of American forensic accountants, lawyers and other experts have descended on foreign countries to review records in search of Al Qaeda connections.

Evaluating progress on the financial front is far more difficult than it is in military battles. Much of the effort is only now getting under way, and the Bush administration has made public virtually none of the evidence it says it has linking individuals and private groups to Al Qaeda.

Success in this fight will be hard-won, experts say, primarily because Mr. bin Laden has fundamentally changed the nature of terrorist financing. In effect, at a time when state sponsorship for terrorism was in decline, Mr. bin Laden undertook a privatization of terror, creating a far more diffuse network than any faced in the past.

"The decline in state-sponsored terrorism means that the private support for terrorist groups has become the most essential element in fund-raising," said Reuven Paz, former academic director with the International Policy Institute for Counterterrorism in Herzlia, Israel. "That means any attempt to cut the money flow into Al Qaeda or other similar organizations will prove far more difficult than it has been in the past."

It all began as with most things Al Qaeda with the Soviet Union's invasion of Afghanistan in 1979.

As devout Muslims trooped there to defend the Islamic nation, wealthy Saudi businessmen funneled millions of dollars to support the effort through assorted charities. Among those businessmen was Mr. bin Laden, an heir to a Saudi construction fortune.

With the Afghan war playing out on the geopolitical chessboard of the cold war, the Central Intelligence Agency was directing even larger sums of cash toward the Afghan rebels, known as the mujahedeen. As the charities gained influence, American officials watched with little concern and indeed, with approval.

"The lion's share of the money for the mujahedeen came from the United States," one former senior intelligence official said. "We knew there was money coming from Arab states, primarily Saudi Arabia, that was being funneled through charities. But as long as we were all on the same side, it was welcome. It wasn't looked on as a threat that you needed to monitor."

When the Afghan war end in 1989, officials said, Mr. bin Laden tapped those fund-raising contacts to support his idea of a wider jihad, or holy war, against the West. By 1991, he had a base in Sudan, where a militant Islamic government was in power, and Al Qaeda's financial operation took root.

Using his inheritance and donations channeled through charities, Mr. bin Laden expanded his economic base. According to records in the Manhattan trial of Al Qaeda members who were convicted of bombing American embassies in Africa, he formed a company in Sudan called Wadi al-Aqiq, which managed investments in at least nine businesses, including a furniture company, a bakery and a cattle-breeding concern.

The organization also expanded contacts with charitable front groups, and formed some of its own. Supporters of Al Qaeda approached Arab businessmen for contributions. Often, they paid, either out of conviction or concern. "A lot of people gave money as part of the cause, and a lot of people gave money so terror wasn't directed at them," said Jack Devine, former acting director of operations with the C.I.A. and now president of the Arkin Group, a New York investigations firm. "You can give honorably or you can give out of fear."

Government officials also believe that Al Qaeda used seemingly independent companies as fronts. For example, earlier this month, President Bush blocked the accounts of a financial network called Al Barakaat, which owns an international collection of hawalas, an informal remittance system that moves millions of dollars around the world with virtually no paper trail. According to law enforcement information provided to the Treasury Department, the network is controlled by Al-Ittihad Al-Islamiya, an extremist Somali militia designated by President Bush as a terrorist organization.

Officials at Al Barakaat's headquarters in Mogadishu have denied that their money- transfer operation has any connection to Al Qaeda.

However, the information suggests that the connection to the terrorist groups works like this: Somali emigrants around the world use Al Barakaat to send money back home. That money is sometimes commingled with the illicit proceeds from welfare and insurance frauds and transferred to accounts in Dubai, where terrorist operatives siphon off a portion of it for Al Qaeda and the Somali militia group. Sometimes that portion is used to buy arms. The balance makes its way to Somalis back home.

Terrorists also benefit from fees on the transaction. Law-enforcement officials have also found that a fee of about 5 percent is charged on each transfer; in Dubai, operatives pass a piece of the fee to the Somali militia group, which then gives a cut to Al Qaeda.

Great effort goes into disguising these connections. For example, government officials said, people at Al Barakaat arranged for an arms shipment to people linked to Al Qaeda. In records, the officials said, the shipment was recorded as containing only blankets.

Al Qaeda both produces and profits from mayhem. After the organization's creation in Afghanistan, Mr. bin Laden recognized that global unrest presented it with opportunities to expand its influence, as well as pump its financial machine.

Years of bloodletting in Bosnia, for example, allowed Al Qaeda to establish a beachhead in central Europe, government officials said. When the United States guided three rival Balkan states to a peace accord at a meeting in Dayton, Ohio, in 1995, the stage was set for Al Qaeda and other militant groups. "Various very militant groups who were mujahedeen-connected were involved in the Bosnia campaign and took advantage of the Dayton peace accords to set up shop" in the Balkans, one former intelligence official said. "They found a very hospitable environment" when a portion of Bosnia was placed in the hands of Muslims.

The bin Laden financial machine blossomed, according to officials who have been informed of intelligence information on the matter. Charities around the Arab world proclaimed that they were raising money for humanitarian purposes in Bosnia, but in fact portions benefited Islamic extremist groups in the area, including Al Qaeda.

Militants linked to Al Qaeda also established connections with Bosnian organized crime figures. The officials said Al Qaeda and the Taliban found a route for the trafficking of heroin from Afghanistan into Europe through the Balkans.

Their presence in Bosnia proved so successful for Al Qaeda operatives, officials said, that it became an "off-the-shelf" model for fund-raising and recruitment used by the terrorist organization again and again in Kosovo, Albania and Chechnya.

"There is a vast criminal network of these operating throughout Europe, that provides these groups with the financial revenue to buy military equipment," one former intelligence official said. "It is narco-terrorism all intertwined with organized crime."

By 1996, Mr. bin Laden was expelled from Sudan. He moved to Afghanistan and ingratiated himself with the ruling Taliban by pouring millions of dollars into the country. His group gained new financial powers; even the country's national airline, Ariana Afghan Airlines, became Al Qaeda's "Fed- Ex system" for shipping arms and personnel, officials said. This financial system transformed the nature of international terrorism. Al Qaeda offered amateurs dedicated to destruction at any cost a source of cash with no strings attached.

But that source could be stingy. While millions were available for recruitment and training, sometimes only a few thousand dollars were disbursed for particular attacks, leaving Al Qaeda cells struggling to support themselves with petty crimes, like credit card fraud.

"The organization writ large has a lot of money," said William Wechsler, who headed counterterrorism for the National Security Council in the Clinton administration. "But go to any portion of it, and it is scraping by."

After Al Qaeda's deadly bombings of embassies in Kenya and Tanzania in 1998, the Clinton administration began the first major effort to disrupt the network's financing.

President Clinton ordered the freezing of assets linked to Al Qaeda, including the funds of Ariana Afghan Airlines. His administration enlisted the support of Arab and Asian nations against Ariana, and Russia helped push through a resolution against the airline at the United Nations. Within a short time, the airline could no longer land outside Afghanistan. Other efforts to disrupt Al Qaeda's finances were less successful. Beginning in 1999, midlevel Clinton administration officials traveled to Saudi Arabia, Kuwait, Bahrain and the United Arab Emirates seeking information about charities aiding Al Qaeda.

But Saudi Arabia and the U.A.E. provided no assistance, American officials said, and with the embassy bombings receding into memory, the administration largely moved on. "These visits were not followed up by senior-level intervention by the State Department, or for that matter by Treasury, to those governments," said Stuart Eizenstadt, a former Treasury official and a participant in the trips. "I think that was interpreted by those governments as meaning this was not the highest priority."

When terrorists struck on Sept. 11, the assault on Al Qaeda's finances had largely fallen by the wayside. The American government had developed a good deal of information about Al Qaeda's finances, but it was not widely shared among agencies.

To coordinate government action, the Bush administration created a Policy Coordinating Committee, bringing together officials from Treasury, State, Justice, the National Security Council, the F.B.I. and the C.I.A. Two interagency groups, the Foreign Terrorist Asset Tracking Center and Operation Green Quest, were created to identify sources of cash for terrorists.

Presidential authority has also been expanded. Until now, a president could block assets of foreign entities if a finding was made that they threatened the Middle East peace process. President Bush's Executive Order 13224 expanded the power of the Treasury's office of foreign asset control to block the property of individuals and entities that commit, threaten to commit or support terrorism.

The executive order "put the backers of terrorism on an equal footing as those who issue the orders," said David Aufhauser, the general counsel at the Treasury Department. Officials said the new rules allowed the administration to freeze the assets of a wide array of individuals and groups by better using some information, much of which the government has had for years.

But, even with the broader powers, the government has frequently chosen not to issue blocking orders on some organizations with apparent ties to terrorism. Instead, many of them are allowed to continue running, not realizing that the administration, working with foreign governments, has begun covert efforts to disrupt their operations and to trace the activities of other individuals and groups who do business with them.

Eventually, officials said, some of those organizations have been shut down once the covert efforts were completed. "It would be easy to put 120 names on the list," Mr. Aufhauser said. "The standards are accessible, and our library is full. The question is, is that the intelligent way to proceed?"

For example, officials said, the Bahamas, which has strict bank-secrecy laws, allowed American investigators to sift through records of a closed operation there of Al Taqwa bank, a financial network suspected of providing support to Al Qaeda.

This month, Al Taqwa was cited with Al Barakaat by the United States in an order blocking their assets.

That same day, Swiss authorities detained principals of Al Taqwa, officials in Dubai seized assets and records of Al Barakaat, and coordinated enforcement actions were taken throughout Europe, the Middle East and Africa.

In the basement of F.B.I. headquarters, more than 178,000 financial documents have been stamped with identification numbers and filed away. Many are in foreign languages, with financial information in currencies other than dollars. But each potentially contains another bit of evidence on the financing of the Sept. 11 attacks.

The government believes that the attacks cost about $500,000. Just under half that $238,000 was sent to the hijackers in more than a dozen wires from the United Arab Emirates, officials said. Four wires have received particular attention. They were sent in June and July of last year under three different names Mustafa Ahmed Al-Hisawi; Almohtaram, an Arabic honorific; and Fawor Trading. But officials believe each of the transfers, totaling $110,000, came from Mr. Ahmed, whose name appears in numerous Al Qaeda records.

Government officials said additional money appeared to have been provided to the hijackers in cash. Investigators have tracked down Customs records showing that, on arriving in the United States, the hijackers and some of their acquaintances declared about $40,000 in cash. It is not clear if any of those other people had prior knowledge of the plot.

Also, the hijackers had "maxed out" all of their credit cards to help finance the operation, one official said.

While they were living in the United States, at least one of the hijackers appears to have received financial assistance from the American office of a Middle Eastern organization that helps people traveling overseas, officials said.

In addition, officials said, at least one entity cited in the President's blocking orders has turned out to have a direct financial connection with a hijacker.

As the inquiry proceeds, government officials said, the effort is as much directed at detecting financial patterns that could signal another potential attack as it is at unraveling the financing of the Sept. 11 attacks.

Despite the progress that has been made, there are some frustrations among law enforcement officials about the pace of the financial investigation, government officials said, largely resulting from the complexity of obtaining and analyzing a huge volume of foreign records.

Those difficulties have as yet prevented investigators from analyzing financial records from Germany, a focal point in the hijacking conspiracy.

Also, government officials said, until early November, the United Arab Emirates seemed to be dragging its feet on providing documentation a problem officials said has dissipated.

Foreign and American officials said the level of cooperation between law enforcement worldwide has been unusual.

"We have been going after organized crime's financial network since we put Al Capone away," said Mr. Wechsler, the former National Security Council official. "And while the Mafia is a shell of what it once was, we haven't stamped it out yet."

Guess which side the Clinton Administration sided with in (including serving as their air force) Muslim Bosnia, Kosovo/Albania, Chechnya?

Any more doubters?

And I am sure the CIA knew about terror financing. How more obvious could it be, and how many times have other intelligence services said that "charities" are aiding terrorists?

Who was is said one of the hijackers had a Bosnian Passport and then scurried off to more fertile grounds when confronted with evidence to the contrary?

We have unfinished business until you two muster the integrity to admit your previous lies.

Oh, and by the way Pericles: Hilat Koko. (That one is a classic, thanks.)

You know, if you two started playing within the confines of the area bounded by the truth, we wouldn't have so many areas of disagreement.

"Charities around the Arab world proclaimed that they were raising money for humanitarian purposes..."

.... and they sent their thank you for the donation card, air mail delivery on 9/11.

Lies? I publish the Wall Street Journal? The Boston Globe and the Nacional newspapers?

I stand by my posts and all that was said in them and I thank you for posting links to articles so everyone can see the how the Bosnian Muslims are serving the evil that is Osama Bin Laden's al-Qaeda.

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