Terror Watch: Whose War On Terror?

While the U.S. military wages war in Iraq, the FBI and the new Department of Homeland Security are fighting their own fierce battle--against each other. THE CASUS BELLI of this conflict is Operation Greenquest--the high-profile federal task force set up to target the financiers of Al Qaeda and other international terrorist groups. Ever since Greenquest was created by former U.S. Customs chief Robert Bonner just after the September 11 terror attacks, Greenquest agents have conducted some of the Bush administration's best-publicized and most controversial terrorist-finance cases--including a series of raids against the offices of Islamic charities in the Washington area last year that drew strong protests from American Muslim and civil-rights groups.

But as the Greenquest team made headlines, its investigations triggered a bitter dispute within the government. Internally, FBI officials have derided Greenquest agents as a bunch of "cowboys" whose actions have undermined more important, long-range FBI investigations into terrorist financing. Greenquest sources in turn accuse the FBI of jealousy.

Now that the Customs-led Greenquest operation has been folded into the new Homeland Security Department, NEWSWEEK has learned, the FBI and its parent agency, the Justice Department, have demanded that the White House instead give the FBI total control over Greenquest.

One senior law-enforcement official called the lack of coordination between the FBI and Greenquest "an intolerable situation" and noted that the bureau--not Homeland Security--has been formally designated by President Bush as the "lead agency" for terrorism investigations. "You can't have two lead agencies" conducting terror cases, the official said.

The FBI-Justice move, pushed by DOJ Criminal Division chief Michael Chertoff and Deputy Attorney General Larry Thompson, has enraged Homeland Security officials, however. They accuse the bureau of sabotaging Greenquest investigations--by failing to turn over critical information to their agents--and trying to obscure a decadelong record of lethargy in which FBI offices failed to aggressively pursue terror-finance cases.

"They [the FBI] won't share anything with us," said a Homeland Security official. "Then they go to the White House and they accuse us of not sharing ... If they can't take it over, they want to kill it."

If nothing else, the battle over Greenquest illustrates the bureaucratic tensions that still plague the war on terror. The creation of the Homeland Security Department was supposed to put an end to such turf fights. The new department took over a diverse assortment of federal agencies that had various responsibilities for combating terrorism, including the Customs Service, the Immigration and Naturalization Service and the U.S. Border Patrol.

But even while the White House was preaching cooperation, the various agencies that were being folded into Homeland Security were squabbling with the FBI--the behemoth in the domestic war on terror. One prime example of the tension is the investigation into Ptech, the Boston-area computer software firm that had millions of dollars in sensitive government contracts with the Air Force, the Energy Department and, ironically enough, the FBI. In what turned into a minor embarrassment for the bureau, the firm's main investors included Yasin Al-Qadi, a wealthy Saudi businessman whom the Bush administration had formally designated a terrorist financier under the International Emergency Economic Powers Act. Al-Qadi has vigorously denied any connection to terrorism.

The Ptech case turned into an ugly dispute last year when company whistleblowers told Greenquest agents about their own suspicions about the firm's owners. Sources close to the case say those same whistleblowers had first approached FBI agents, but the bureau apparently did little or nothing in response. With backing from the National Security Council, Greenquest agents then mounted a full-scale investigation that culminated in a raid on the company's office last December. After getting wind of the Greenquest probe, the FBI stepped in and unsuccessfully tried to take control of the case.

The result, sources say, has been something of a train wreck. Privately, FBI officials say Greenquest agents botched the probe and jeopardized other more promising inquiries into Al-Qadi. Greenquest agents dismiss the charges and say the problem is that the bureau was slow to respond to legitimate allegations that an outside contractor with terrorist ties may have infiltrated government computers.

Whatever the truth, there is no dispute that the case has so far produced no charges and indictments against Al-Qadi or anyone else connected with Ptech. The company has denied wrongdoing.

The same goes for Greenquest's most highly publicized case--its raids on the offices of a large network of Islamic charities and foundations in northern Virginia in March 2002. Customs agents, armed with federal search warrants, hauled away truckloads of documents and computer files. But so far the investigation, which created a ruckus within the American Muslim community, has yet to yield any criminal charges. Greenquest investigations have resulted in a number of indictments of alleged Iraqi and Yemni hawala money-laundering rings (in Seattle and New York City) although it is still unclear whether these connect to the financing of terror groups or simply involve networks of Middle Eastern immigrants attempting to send money home to relatives.

In any case, Homeland Security officials say they have no intention of giving up control of Greenquest, which a Homeland spokesman said was a natural "fit" for the new department.

And as if to retaliate against what they perceive as a FBI power grab, NEWSWEEK has learned, Homeland Security officials have questioned whether FBI agents have the power to arrest terror suspects under immigration laws. In an effort to bolster the FBI's antiterrorism powers late last year, Attorney General John Ashcroft signed a special order giving FBI agents the power to arrest suspects under federal immigration statutes. But Homeland Security lawyers now argue that Ashcroft's order became invalid when the INS, formerly part of Justice, moved to Homeland. Under Homeland's interpretation of the law, unless Homeland Security Secretary Tom Ridge issues a new order giving the FBI immigration arrest powers, any immigration busts made by the FBI today could later be deemed illegal.

So far, Ridge hasn't done so. AN 'ISLAMOPHOBE' AND THE FUTURE OF IRAQ

Will a controversial neoconservative author who critics charge harbors anti-Muslim sympathies play a role in the reconstruction of Iraq?

That is the question behind the looming battle over President Bush's nomination of Daniel Pipes to serve on the board of the U.S. Institute of Peace, an obscure federal agency that may become much better known now that Saddam Hussein's regime has apparently collapsed.

Pipes is a prolific author and scholar whose views have generated a storm of controversy within the American Muslim community. Pipes strongly opposes Arab-Israeli peace talks. He has also vigorously advocated subjecting all Muslims to higher degree of scrutiny by U.S. law enforcement in order to help root out terrorist groups. U.S. Muslim groups are up in arms. The Council of American Islamic Relations (CAIR) has launched a campaign to block his nomination, branding him "an Islamophobe" with "bigoted" views.

Pipes dismisses the criticism, saying that the groups like CAIR are far too tolerant of extremists in their midst. "I'm against militant Islam," he says, not "moderate Muslims." Pipes, however, make no apologies for his advocacy of what amounts to law-enforcement profiling of Muslims in general, calling it "common sense" in the current environment. "If you're looking for rapists, you don't look at women," he said in an interview. "If you're looking for terrorists, you look at Muslims."

But the fight over Pipes may be about more than symbolism. Although it started out as little more than a government-funded think tank, the Peace Institute has taken on an ever larger "operational" role in Bosnia and other countries that have been rife with conflict. White House aides--led by National Security Council staffer Elliot Abrams (a big Pipes booster)--have tapped the Peace Institute for a key role in the reconstruction of Iraq. This includes having Peace Institute officials serving as advisors to an Iraqi war-crimes tribunal and a proposed "Truth and Reconciliation Commission"-patterned after the one in South Africa--that will seek to expose the atrocities of Saddam's regime.

Pipes's critics say his service on the Peace Institute board won't help the credibility of that mission--especially in the Arab world. Said a CAIR spokesman: "If you paid somebody to come up with bad publicity, you couldn't do any worse than this."