The Clinton administration shut down a 1995
investigation of Islamic charities, concerned that a public probe would
expose Saudi Arabia's suspected ties to a global money-laundering operation
that raised millions for anti-Israel terrorists, federal officials told
The Washington Times.
Law enforcement authorities and others close
to the aborted investigation said the State Department pressed federal officials
to pull agents off the previously undisclosed probe after the charities were
targeted in the diversion of cash to groups that fund terrorism.
Former federal prosecutor John J. Loftus
said four interrelated Islamic foundations, institutes and charities in Virginia
with more than a billion dollars in assets donated by or through the Saudi
Arabian government were allowed to continue under "a veil of secrecy."
"If federal agents had been allowed to conduct
the investigation they wanted in 1995, they would have made the connection
between the Saudi government and those charities," said Mr. Loftus, now
a St. Petersburg, Fla., lawyer who filed a lawsuit last week accusing a
Florida charity of fraud.
"Had the charities been shut down, they
would have been unable to raise the millions that since have been used by
terrorists in hundreds of suicide attacks," he said.
Federal agents last week began a new investigation,
known as "Operation Green Quest," into the funding by charities of suspected
terrorists, raiding 14 Islamic businesses in Virginia. Agents from the U.S.
Customs Service, Internal Revenue Service, Immigration and Naturalization
Service and FBI, coordinated by a Treasury Department counterterrorism task
force, seized two dozen computers, along with hundreds of bank statements
and other documents.
Records in the case have been sealed and
no arrests have been announced, although the probe is continuing.
The Loftus suit, filed March 20 under the
Florida Consumer Protection Act, accuses the Saudi government in a massive
scheme involving charities in Virginia and Florida that routed cash to terrorists.
The suit's main target is Sami Al-Arian,
a former University of South Florida professor who created or was associated
with several Florida charities or think tanks, including the International
Committee for Palestine, Islamic Concern Project and the now-defunct World
and Islam Studies Enterprise.
Warrants served by agents in the Virginia
raids last week targeted, among others, the International Institute of Islamic
Thought in Herndon, a major source of funding for Mr. Al-Arian's World and
Islam Studies Institute.
The warrants sought information on Islamic
Jihad, Hamas, the Islamic Concern Project, the World and Islam Studies Enterprise,
and Mr. Al-Arian. They also sought information on the SAAR Foundation, an
educational and health charity founded by the Al-Rajihi family of Saudi
Arabia.
The Islamic Concern Project and the World
and Islam Studies Enterprise have been named by the State Department as
front organizations that raised funds for militant Islamic-Palestinian groups
such as Islamic Jihad and Hamas. They have been tied to the diversion of
millions of dollars to terrorists for weapons, safe haven, training and
equipment.
Nail Al-Jubeir, spokesman for the Saudi
information office in Washington, called the accusations "simply nonsense,"
adding that Saudi Arabia has cracked down on terrorists and those who fund
them.
"There is not one iota of evidence to support
these accusations," Mr. Al-Jubeir said. "It is nothing more than an effort
to smear our name. If there is any proof, I would suggest it be taken directly
to the U.S. government."
Mr. Al-Arian and Mazen Al-Najjar, director
of the Islamic Concern Project, have been the focus of federal investigations
since the mid-1990s. No criminal charges have been filed against the two,
although the government shut down the World and Islam Studies Enterprise.
Mr. Al-Najjar, who is Mr. Al-Arian's brother-in-law,
was detained and ordered deported by the INS on visa violations after the
September 11 attacks on America. He is being held at a federal detention
center in Florida pending appeal.
In the aborted 1995 investigation, the FBI
said in a sealed affidavit that the Islamic Concern Project and World and
Islam Studies Enterprise — working with charities in Virginia — committed
fraud and "served as a vehicle by which [Islamic Jihad] raised funds to
support terrorist activities in the occupied territories."
In that probe, investigators found that
checks drawn on a bank account of the International Committee for Palestine
had been cashed by people in the Middle East. They said the checks had been
signed by Mr. Al-Arian.
Mr. Loftus is seeking an injunction blocking
Florida charities, including those headed by Mr. Al-Arian, from transferring
"money, weapons, equipment or communications gear" to terrorists.
Mr. Al-Arian has vigorously denied any wrongdoing,
calling the Loftus lawsuit a "publicity stunt." His attorney, Robert McKee,
did not return calls to his office for comment.
Julie Payne, spokeswoman for former President
Bill Clinton, did not repond to inquiries about State Department policy
in 1995 during his administration.
Accusations that the Saudi government used
charities as front organizations to fund international terrorism are long-standing,
first surfacing 20 years ago when U.S. intelligence officials warned Congress
that the Saudis had taken over the direct funding of terrorist groups such
as Islamic Jihad and Hamas.
One former and three current federal law
enforcement officials said the new probe began after U.S. officials learned
that intelligence agents in India had wiretapped the telephone of a Pakistani
charity funded by the Saudi government and discovered the transfer of $100,000
to Mohamed Atta, one of the 19 al Qaeda hijackers in the September 11 attacks.
That information helped U.S. officials identify
the 19 hijackers, 15 of whom were from Saudi Arabia, the officials said.
After the suicide strikes on the World
Trade Center and the Pentagon, the officials said Treasury's interagency
task force was created to investigate ties between charitable organizations
in this country and international terrorist groups.
That ongoing probe, according to the officials,
has focused on accusations that several tax-exempt and nonprofit charities
operating from Virginia to Florida have contributed millions of dollars
to international groups that support terrorism, including Islamic Jihad
and Hamas.