The U.S. government's campaign against alleged terror financiers has won a potentially important victory with a decision by Swiss prosecutors to pursue a formal criminal case against a prominent Saudi businessman long accused of providing support to Al Qaeda and other terror groups.
The businessman, Yassin al-Kadi, was first named by the U.S. Treasury Department as a "Specially Designated Global Terrorist" in October 2001 as part of a major campaign by the Bush administration to demonstrate it was cracking down on terror financiers in the aftermath of September 11. The U.S. action prompted a number of governments, including the Swiss, to freeze millions of dollars of Kadi's assets.
But his case also has raised serious questions about the strength of the U.S. government's evidence--little of which has ever been made public--regarding the murky world of terror-finance networks. Kadi, a top target of U.S. investigators, has repeatedly denied all accusations of terror ties. And more than three and a half years after he was first designated by Treasury, no criminal charges have been brought against him--either in the United States or anywhere else throughout the world where he does business.
That now may change. Earlier this month, in a move long sought by Washington, Swiss deputy federal prosecutor Claude Nicati asked a Swiss federal criminal tribunal to assign a juge d'instruction (investigative magistrate) to prepare a possible criminal case against Kadi.
Swiss criminal investigations proceed in three stages. In the first stage, prosecutors and police work together to gather the evidence for a criminal prosecution. In the second stage, an investigating magistrate sifts through evidence gathered by prosecutors, interrogates witnesses and decides (much as an American grand jury is supposed to decide) whether there is enough evidence to send the case for trial. In the third stage, the investigating magistrate would send the case to criminal-court judges--in Kadi's case, federal judges based in the southern Swiss city of Bellinzona--who would try it and determine whether the defendants were guilty of any crime. The Kadi case is the first terrorism-finance case that Swiss prosecutors have moved to the second investigative stage since 9/11.
According to Kadi's lawyer, Nicati's four-page letter to the federal tribunal focuses in particular on a series of transactions between February and August 1998 in which one of Kadi's companies, Caravan Development, transferred $1.25 million to a firm owned by another Saudi businessman, Wael Julaidan. Julaidan, a reputed one-time associate of Osama bin Laden during the guerrilla war against Soviet occupation of Afghanistan, was placed on both the United Nations and U.S. terror financier lists in September 2002.
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.
Earlier this month, however, Swiss authorities disappointed Washington when Nicati's office confirmed that it had decided that it had insufficient evidence to refer to the criminal tribunal a long-running investigation of another allegedly major terrorism finance network called Al-Taqwa, based in the Bahamas and the southern Swiss city of Lugano. Al-Taqwa, numerous related companies, and several of the network's principals, including Al-Taqwa's elderly Egyptian founder, Youssef Nada, were all officially "designated" terrorist financers by the United States and U.N. in 2001 and 2002.
The federal criminal court had given prosecutors a deadline of May 31 to either refer the Al-Taqwa case to magistrates for further investigation or close the long-running investigation. Wiedmer said that prosecutors concluded they had insufficient evidence to send the case to the criminal court. However, while prosecutors informed Nada and his lawyers that the file had been closed, Wiedmer told NEWSWEEK the Al-Taqwa investigation had only been "suspended" and that prosecutors could reopen their investigation if new evidence surfaces.
The Swiss prosecutors' decision to press ahead for a judicial investigation--and possible eventual criminal trial--of Kadi, however, is likely to please Bush administration officials, who went out of their way to declassify intelligence information on Kadi to help the Swiss build their case against the Saudi. According to a Nov. 29, 2001, letter to Nicati from David Aufhauser, then the U.S. Treasury Department's general counsel, U.S. officials "have a reasonable basis to believe that Mr. Kadi has a long history of financing and facilitating the activities of terrorists and terrorist-related organizations, often acting through seemingly legitimate charitable enterprises and businesses." Among the specific terrorist organizations that the letter accuses Kadi of supporting are the Palestinian resistance movement Hamas. The letter also says that a now-defunct charity that Kadi admits founding, the Muwafaq ("Blessed Relief") Foundation, provided logistical and financial support for assorted Islamic militants, including a group that later became part of Al Qaeda. But, while the accusations in the Aufhauser letter have spawned multiple investigations in the United States and elsewhere, none have yet led to any criminal cases. So far, the Swiss case seems to have progressed further than any other investigations involving Kadi.