Terror Watch: Antiterror Victory?

The money transfers were supposed to be used to build dormitory housing for an Islamic school in Yemen--the sort of religious and charitable activities that both Kadi and Julaidan have long contended they have openly supported. But the Swiss letter alleges the funds "ended up in the hands of Al Qaeda," according to an excerpt of the letter read to NEWSWEEK by one of Kadi's lawyers.

But the Kadi lawyer, Saad Djebbar, vigorously disputed the Swiss accusations and predicted his client will be fully vindicated. He called the case against Kadi a "financial Guantanamo" that was ginned up by Swiss prosecutors on the basis of notoriously spotty and inaccurate intelligence provided by American officials as part of their post-9/11 crackdown. "This is the Kafka school of jurisprudence," said Djebbar, a London-based lawyer who works with Kadi's legal team led by the well known British firm of Carter-Ruck. "The intelligence [regarding Kadi] is no better than the intelligence [the U.S. government] provided about Iraq."

Djebbar acknowledged that Kadi himself personally confirmed the money transfers to the Julaidan-connected company during an interview with Nicati, the Swiss prosecutor, in Riyadh, Saudi Arabia, in July 2003--a session he said that was arranged and facilitated by Kadi's lawyers. But, he added that Kadi adamantly denied during that same interview that he ever intended or knew that any of the funds would be diverted to Al Qaeda.

"I never gave one million--not even one cent to Al Qaeda," Kadi told the prosecutor, according to an excerpt from his questioning read to a reporter by Djebbar. "Not only Al Qaeda, not to any terrorist group. I always in my life was against any terrorist act. It is against our religion, our belief, our community. Nobody in Saudi Arabia can believe I would have ever thought about supporting such groups."

Djebbar said that the Swiss prosecutors mistakenly thought that the Julaidan company that received the money transfers from Kadi's company (which is based in Turkey) was connected to Mamdouh Mahmoud Salim, a notorious financial manager for Al Qaeda who has been indicted in the United States on charges connected to the 1998 bombings of the U.S. embassies in Kenya and Tanzania. Salim, who is being held in a federal detention center in New York, is also accused of attempting to kill a prison guard by stabbing him in the eye with a comb in 2001. But Djebbar said that Salim was no longer affiliated with the company that received the money from Kadi at the time of the money transfers. Djebbar also noted that the Swiss action comes shortly after a Turkish prosecutor dropped a separate investigation into Kadi companies in that country after concluding that there was no evidence linking his firms to terror financing.

Mark Wiedmer, a spokesman for the Swiss prosecutor's office, said that the investigation referred to the federal tribunal was one of three major terrorism investigations that Swiss federal prosecutors had recently been preparing for possible transmission to the federal criminal court, a new Swiss tribunal set up after 9/11 to handle complicated cases, including terrorism investigations. One case, which Wiedmer said that federal magistrates were already examining, involved the arrests of nine Muslim immigrants to Switzerland following sophisticated attacks on Western residential compounds in Riyadh in May 2003. According to a copy of the criminal referral in that case obtained by NEWSWEEK, Swiss police opened the case after receiving information indicating that 36 Swiss cell-phone numbers were recorded in the memory of a cell phone used by one of the members of the terrorist cell that carried out the Riyadh attacks.