Police raids in five U.S. cities and two foreign countries today were the culmination of two long-running investigations into terrorist money-laundering operations. At the heart of the busts were a financial network based in the United States and Somalia called Al-Barakaat and a network of companies based in the Bahamas, Switzerland and the Alpine tax haven of Liechtenstein called Al Taqwa ("Fear of God).
Both financial networks have been under investigation for possible terrorist ties by law-enforcement and intelligence agencies in the United States and Europe for more than a year but have not been previously subject to such serious actions by the U.S. or foreign governments.
Federal agents raided money-changing shops located in Seattle; Minneapolis; Columbus, Ohio; suburban Boston, and Falls Church, Va. Federal search warrants were executed by Internal Revenue Service and U.S. Customs agents assigned to an anti-money-laundering task force called "Operation Greenquest" in the Boston, Columbus and Falls Church area. Federal agents also confiscated assets of alleged Al-Barakaat outposts in Minneapolis and Seattle, hoping to put together enough evidence to justify future search warrants in those locations.
U.S. intelligence and law-enforcement sources say that Al-Barakaat's U.S. operation specialized in transferring to Somalia money earned or raised by Somali expatriates living in the United States. For at least the past year, U.S. intelligence officials have been following up on leads suggesting that at least some of the money shipped out of the U.S. through the Al-Barakaat organization was ending up with a Somali-based militant Islamist organization called Al-Itihaad Al-Islamiya, which U.S. officials believe funnels some of its funds to Osama bin Laden's Al Qaeda. The Al-Itihaad group was listed on the first antiterrorist sanctions list issued by the Bush administration after Sept. 11.
Law-enforcement sources indicated that Al-Barakaat's storefront currency-exchange network--which the Bush administration says also has several outposts in the United Arab Emirates, a country that until recently had virtually no laws or agencies to counter money laundering--was targeted for U.S. sanctions as an example of how informal, often unlicensed money changing businesses can be used by terrorist networks.
The administration's decision to go after the Al Taqwa financial network could prove embarrassing to authorities in Switzerland, who only a month ago announced that a thorough investigation of Al Taqwa had come up with no evidence of a link to terrorism. Last week, the office of Switzerland's chief federal prosecutor, which gave Al Taqwa a clean bill of health in early October, announced that it had received new information about possible "links between Al Taqwa and the bin Laden network."
A NEWSWEEK investigation has established that the Al Taqwa network of companies, which included a licensed bank in the Bahamas, was set up in the 1980s by prominent members of the Muslim Brotherhood, a radical but ostensibly peaceful Islamist group that was founded in Egypt in the l920s. Taqwa's chairman, Youssef Nada, recently confirmed that he has been a member of the Brotherhood for 50 years but insisted: "We are completely against violence." Nada was personally named on the latest sanctions list (issued by the White House today) along with two other Taqwa directors, vice chairman Ali Ghaleb Himmat and Albert F.A. Huber. Huber is a former Swiss political journalist who says he became a director of a Swiss-based Taqwa company because the company needed a Swiss citizen on its board. A convert to militant Islam, Huber's outspoken speeches criticizing Israel have led some to label him one of Switzerland's most notorious anti-Semites. (He says investigations of Al Taqwa were instigated by the CIA and the Israeli secret service, Mossad.) Huber acknowledged that he had attended international Islamic conferences at which he was introduced to members of Osama Bin Laden's terrorist network, who, he said, used phony names.
Among the shareholders of the Nassau-based Al Taqwa bank, according to documents obtained by NEWSWEEK, are at least two relatives of Osama bin Laden; in 1999 one of bin Laden's brothers, Ghalib Mohammad Binladin, sued Bank Al Taqwa in the Bahamas, demanding that the bank be closed down because it had failed to pay out $2.5 million he claimed he was owed from an Islamic investment account called a mudaraba. The lawsuit was thrown out of court. Taqwa chairman Nada says that Ghalib Binladin's investment account made profits over several years but that Binladin sued after the account lost money in l998 due to an economic crisis in the Far East. A spokesman for the Binladin family said: "Nothing about the minute investments in bank shares by two family members, or the investment account of a third--who sued the bank to recover his investment in 1998--can rationally be imputed to connote any hint of support for Osama. The family has repeatedly stated that Osama was ostracized and cut off from family contact and support nearly eight years ago."
A few hours before Al Taqwa and its principals were named on the Bush administration's sanctions list today, police raids were conducted on the offices of Taqwa companies in Switzerland and Liechtenstein, as well as the homes of Nada, Huber, Himmat. Investigators are also interested in another Al Taqwa bank founder and director, Ahmed Idris Nasreddin, a wealthy Islamic businessmen of Ethiopian extraction who once served as Kuwait's honorary consul in Milan, where he has extensive business interests. In recent interviews and written correspondence with NEWSWEEK, Al Taqwa chairman Nada has confirmed that Nasreddin was a key financial backer of an Islamic Center in Milan which the U.S. government believes is the bin Laden terrorist organization's most important European base. Nasreddin's name and companies are not listed on the Bush administration's latest sanctions list.
Nada denies any connection between Al Taqwa and terrorism and says that bin Laden associates have actually criticized Nada's group, the Muslim Brotherhood, for being too moderate and peace-minded. Nada and P. F. Barchi, a lawyer for Nasreddin, both denied that Nasreddin would ever knowingly become involved with terrorism. Earlier this year, authorities in the Bahamas, citing a tough new money-laundering law, canceled Al Taqwa's bank license, and one of Al Taqwa's Swiss companies changed its name to Nada Management under pressure from local bank regulators.