U.S. and Israeli intelligence officials have assembled fresh data showing that Saudi government-sponsored charities have actually stepped up their financial support of the Palestinian terrorist group Hamas–even while the Saudis insist they have dramatically intensified their own internal crackdown of Islamic extremists, according to sources familiar with evidence that is to be presented at a Senate Governmental Affairs Committee hearing on terrorism financing.
“Unfortunately, while the Saudis appear to be taking their own domestic threat seriously, there is no indication that they have scaled back their support for Hamas,” according to an internal 11-page Senate staff memo obtained by NEWSWEEK. “The Israeli national assessment is that Saudi Arabia today funds more than 50 percent of the needs of Hamas and the Saudi percentage in the total foreign aid to Hamas is actually growing. U.S. assessments [of Saudi funding of Hamas] are even higher.”
The intelligence estimates on the level of Saudi support for Hamas–which is on the official State Department terror list–are based in part on recent documents seized by the Israeli military, sources said. At least some of the documents will be presented at the hearing by Dore Gold, the former Israeli ambassador to the United Nations, and could prove highly embarrassing for the Saudis. One shows that, as recently as Oct. 29, 2002, Khaled Mishal, a top leader of Hamas, was the guest of a Saudi government-backed charity, the World Assembly of Muslim Youth, at a convention in Riyadh that was sponsored by Crown Prince Abdullah, the de facto ruler of the country. The captured Palestinian document shows that Saudi officials reassured Hamas of continued funding, according to the Senate memo.
Saudi officials have given various and sometimes contradictory accounts of their dealings with Hamas. Adel Al-Jubeir, Crown Prince Abdullah’s foreign-policy adviser and the Saudi government’s chief spokesman inside the United States, last year insisted in one television interview that “we do not allow funding to go from Saudi Arabia to Hamas.” In a Washington news conference last June, Al-Jubeir gave a slightly different account, acknowledging that the Saudi government did provide some funding for the “political wing of Hamas” (a distinction U.S. officials don’t recognize).
Reconciling those statements are among a range of issues on terrorist financing that the committee, overseen by Republican chairman Sen. Susan M. Collins of Maine and Democratic vice chairman Sen. Joseph Lieberman, sought to explore with Al-Jubeir. But Al-Jubeir last week rebuffed a panel invitation to testify at the hearing, telling Collins in a July 25 letter that “it is the policy of my government not to have Saudi officials formally testify before foreign legislative bodies.” Al-Jubeir did offer to provide a private briefing for senators only just before the hearing began, but members rejected the idea.
Sources tell NEWSWEEK that the hearing is intended to provide a broader and more historical context for the allegations over Saudi Arabian terror links. That issue hit the front pages again in recent days after the release last week of the 900-page congressional report on the September 11 attacks in which a section presumably on Saudi Arabia had been withheld for security reasons. Another key witness scheduled to testify is R. Richard Newcomb, director of the Treasury Department Office of Foreign Assets Control. According to the Senate memo, he will describe two high-level meetings with Saudi officials in 1999 and again in January 2000 in which Vice President Al Gore threatened the Saudis with economic sanctions if they did not cease their “blind eye” to Saudi financial support for terrorism.
But according to the staff memo, Newcomb has apparently told staffers that virtually every attempt by the Treasury Department to impose sanctions on wealthy Saudi businessmen or entities that have been linked to terror financing has been “blocked” on foreign-policy and national-security grounds–usually invoked by the State Department but on some occasions by the FBI and CIA. In other words, other agencies of the government were worried sanctions would upset Saudi-American relations or disrupt ongoing investigations in other areas.
Just how sensitive the issue has become was underscored last week when FBI officials contacted the Governmental Affairs Committee to say that Larry Mefford, the bureau’s new top counterterrorism chief, wanted a meeting with senior members of the panel to argue that the hearing should be canceled. But the FBI apparently backed down. Mefford chose not to pursue the matter and the bureau is now sending his chief deputy, John Pistole, to testify instead.
Ironically, the FBI and other U.S. agencies have been increasingly insistent that Saudi officials are stepping up their cooperation in the war on terror–in large part because of the backlash inside the kingdom after the May bombing of a housing complex in Riyadh was linked to Al Qaeda. Ever since, U.S. officials say, the Saudis have “gotten religion” on the terror issue. Among other steps, they have recently begun to impose new policies that will require that all charitable funds sent out of the country be first vetted by Saudi government officials to make sure that none are likely to wind up in the hands of terrorists. One senior administration official told NEWSWEEK that if the Saudis carry through on their promises, the kingdom will soon be operating one of the tightest control systems in the world governing the export of charitable funds.
But even these internal administration boosters concede that whether these and other steps initiated by the Saudis prove genuine in the long run remains to be seen.
FOLLOWING THE MONEY
Evidence is now emerging that some key post-9/11 efforts launched by the Bush administration against terrorism financiers elsewhere in the world may not be as effective as Washington had hoped.
At a congressional hearing several weeks ago, David Aufhauser–who as general counsel of the U.S. Treasury has played a key role in directing American efforts to shut down terrorism finance channels–touted U.S. Treasury antiterrorist sanction orders against the operators of the Al-Taqwa financial network, based in Switzerland, as a major blow against Al Qaeda financial backers.
But NEWSWEEK has learned that investigators in the United States and Europe have raised serious questions about whether the Al-Taqwa financial network really has been shut down.
The most pointed inquiries about the effectiveness of U.S.–and corresponding United Nations–sanctions against Al-Taqwa and its principal operators have come from the U.N. Security Council. According to a little-noticed U.N. report published in early July, the head of the al-Taqwa network, Egyptian banker Youssef Nada, has continued to own or control financial resources in European tax havens, even though his name and many of his companies are prominently listed on terrorist-financier-sanctions lists maintained by both the U.N. and the United States.
According to the U.N. document, among the assets that Nada continues to control are “investment funds and real estate in Liechtenstein and Campione d’Italia, Switzerland.” The reports also says the Swiss government is “looking into the situation.” But U.N. experts recommend “such assets should be frozen without delay.”
NEWSWEEK has learned that Nada apparently has renamed two of his Liechtenstein-based companies, both of which had Al-Taqwa in their original registration papers, to less incendiary names. One Al-Taqwa company had its name change to Hochburg and the other to Waldenberg. Investigators say that while both companies are officially in liquidation, they continue to hold assets and, apparently, engage in some financial activity.
Investigators say that in order to conduct what they believe are business activities, Nada has traveled from his residence in Campione d’Italia, an Italian enclave inside the boundaries of the Swiss canton of Ticino, to both Switzerland and Liechtenstein. But according to U.S. and U.N. officials, U.N. sanctions prohibit officially designated terrorist financiers like Nada from traveling outside their country of residence.
Nada told NEWSWEEK that he had asked the Swiss to unfreeze assets and property taxes for humanitarian reasons on several occasions and that they had refused. He said Waldenberg and Hochburg used to be his companies but aren’t anymore.
U.S. officials have alleged that Al-Taqwa handled money for both Al Qaeda and other terrorist groups, such as Hamas, and that Nada himself allegedly provided finance to the bin Laden terror organization both before and after 9/11–a claim that Nada has denied.
A senior official involved in the operation of the U.S. campaign against terrorist financiers insisted that while Al-Taqwa figures may still be active and continue to have access to assets, the remnants of Al-Taqwa are “in a box” because they are being carefully watched and subject to a criminal investigation by Swiss authorities. The U.S. official conceded that both the U.S. and foreign governments sometimes have trouble keeping up when terrorist financial operators “morph” their operations into new forms using name changes or other legal strategies.
