Riggs officials say they've initiated a program to more vigorously monitor financial accounts. And the bank late last year filed more than two-dozen reports involving Saudi Embassy transactions, including large overseas wire transfers and cash deposits made by Saudi Ambassador Prince Bandar bin Sultan; his executive assistant, Ahmed A. Kattan; his chief military aide, Gen. Abdual Rahman Al-Noah, and other embassy officials.

Most of these transactions have no apparent links to terrorism and may simply reflect the Saudis' longstanding habit of mixing government and personal accounts. In one case, Kattan, who carries the rank of ambassador, deposited $6 million in embassy funds into his personal account at Riggs, wired $5.5 million to the agents of a school in Egypt and the remaining $500,000 to his own account in Saudi Arabia. Al-Noah, the military officer, made a total of $1.6 million in cash deposits--most in cash, one of them for $210,000--and then wired the money to pay for the purchase of furniture for a new palace in Saudi Arabia. Bandar himself wired $17 million last year to his construction manager for a new palace in Saudi Arabia. Just last December, one of Bandar's personal aides deposited $3 million in international drafts, converted them to dollars, and then wired substantial sums back overseas--including about $200,000 to a luxury-car dealer in Great Britain. (A Saudi spokesman said that Bandar has substantial business interests overseas, so it is not surprising that he would conduct such transactions.)

But other transactions raised eyebrows at the FBI. The Riggs accounts showed a number of checks to flight schools and flight-school students in the United States as well as 50 separate $1,000 American Express travelers checks issued by Bandar to Saudi employees between July 9, 2001 and Aug. 28, 2001--including seven that were deposited that summer at the MGM Grand Hotel in Las Vegas. Riggs also reported $19,200 in payments from the Saudi Embassy to Gulshair al-Shukrijumah, a Florida-based imam who once served as an interpreter for the "blind Sheik" Omar Abdul Rahman, who was convicted in 1996 of a plot to blow up New York City landmarks. Gulshair al-Shukrijumah's son, Adnan al-Shukrijumah, also known as "Jaffar the Pilot," is a suspected Al Qaeda operative who is the subject of a worldwide FBI manhunt. (In response to U.S. demands to impose tighter controls, the Saudis have since terminated the payments to Gulshair al-Shukrijumah, along with a number of other clerics who were being supported by the embassy.)

A Saudi Embassy spokesman stressed that the Saudis have been actively cooperating with U.S. officials on all aspects of the war on terrorism and that the embassy has recently been assured by top FBI officials that the bureau "has no concerns" about any of the embassy accounts. But senior law-enforcement officials told NEWSWEEK that Saudi Embassy accounts--including the wire transfers related to Siddiqui--remain under active investigation. Told that the Saudis have been assured the FBI "has no concerns," a law-enforcement official made additional checks and reported back to NEWSWEEK: "That is not the case."

Terror Watch, written by Michael Isikoff and Mark Hosenball appears online weekly

© 2004