1of85DOCUMENTS

Copyright2003U.S.News&WorldReport
U.S.News&WorldReport
ReprintedbyPermissionoftheAuthors
December15,2003
SECTION:NATION&WORLD;COVERSTORY;INVESTIGATIVEREPORT;Vol.135,No.21;
Pg.18
LENGTH:6132words
HEADLINE:TheSaudiConnection
BYLINE:ByDavidE.Kaplan;MonicaEkman;AamirLatif
DATELINE:Karachi
HIGHLIGHT:
Howbillionsinoilmoneyspawnedaglobalterrornetwork;
BODY:
TheCIA'sIllicitTransactionsGroupisn'tlistedinanyphonebook.There
arenoentriesforitonanynewsdatabaseorInternetsite.TheITGisoneof
thosetidylittleWashingtonsecrets,agroupofunsungheroeswhosejobisto
keeptrackofsmugglers,terrorists,andmoneylaunderers.Inlate1998,
officialsfromtheWhiteHouse'sNationalSecurityCouncilcalledontheITGto
helpthemansweracoupleofquestions:HowmuchmoneydidOsamabinLadenhave,
andhowdidhemoveitaround?Thequerieshadacertainurgency.Acadreofbin
Laden'salQaedaterroristshadjustdestroyedtwoofAmerica'sembassiesin
EastAfrica.TheNSCwasdeterminedtofindawaytobreaktheorganization's
back.WorkingwiththeIllicitTransactionsGroup,theNSCformedataskforce
tolookatalQaeda'sfinances.Formonths,membersscouredeverypieceofdata
theU.S.intelligencecommunityhadonalQaeda'scash.Theteamsoonrealized
thatitsmostbasicassumptionsaboutthesourceofbinLaden'smoneyhis
personalfortuneandbusinessesinSudanwerewrong.Deadwrong.AlQaeda,says
WilliamWechsler,thetaskforcedirector,was"aconstantfundraisingmachine."
Andwherediditraisemostofthosefunds?Theevidencewasindisputable:Saudi
Arabia.America'slongtimeallyandtheworld'slargestoilproducerhadsomehow
become,asaseniorTreasuryDepartmentofficialputit,"theepicenter"of
terroristfinancing.Thisdidn'tcomeentirelyasasurprisetointelligence
specialists.ButuntiltheattacksofSept.11,2001,U.S.officialsdid
painfullylittletoconfronttheSaudisnotonlyonfinancingterrorbuton
backingfundamentalistsandjihadistsoverseas.Overthepast25years,the
desertkingdomhasbeenthesinglegreatestforceinspreadingIslamic
fundamentalism,whileitshuge,unregulatedcharitiesfunneledhundredsof
millionsofdollarstojihadgroupsandalQaedacellsaroundtheworld.Those
findingsaretheresultofafivemonthinvestigationbyU.S.News.The

magazine'sinquiryisbasedonareviewofthousandsofpagesofcourtrecords,
U.S.andforeignintelligencereports,andotherdocuments.Inaddition,the
magazinespokeatlengthwithmorethanthreedozencurrentandformer
counterterrorismofficers,aswellasgovernmentofficialsandoutsideexperts
inRiyadh,theSaudicapital.Amongtheinquiry'sprincipalfindings:
Startinginthelate1980safterthedualshocksoftheIranianrevolution
andtheSovietwarinAfghanistanSaudiArabia'squasiofficialcharities
becametheprimarysourceoffundsforthefastgrowingjihadmovement.Insome
20countries,themoneywasusedtorunparamilitarytrainingcamps,purchase
weapons,andrecruitnewmembers.
Thecharitieswerepartofanextraordinary$70billionSaudicampaignto
spreadtheirfundamentalistWahhabisectworldwide.Themoneyhelpedlaythe
foundationforhundredsofradicalmosques,schools,andIslamiccentersthat
haveactedassupportnetworksforthejihadmovement,officialssay.
U.S.intelligenceofficialsknewaboutSaudiArabia'sroleinfunding
terrorismby1996,yetforyearsWashingtondidalmostnothingtostopit.
ExaminingtheSaudiroleinterrorism,aseniorintelligenceanalystsays,was
"virtuallytaboo."EvenaftertheembassybombingsinAfrica,movesby
counterterrorismofficialstoactagainsttheSaudiswererepeatedlyrebuffedby
seniorstaffattheStateDepartmentandelsewherewhofeltthatotherforeign
policyinterestsoutweighedfightingterrorism.
SaudilargessencouragedU.S.officialstolooktheotherway,someveteran
intelligenceofficerssay.Billionsofdollarsincontracts,grants,and
salarieshavegonetoabroadrangeofformerU.S.officialswhohaddealtwith
theSaudis:ambassadors,CIAstationchiefs,evencabinetsecretaries.
Washington'sunwillingnesstoconfronttheSaudisoverterrorismwaspartof
abroaderstrategicfailuretosoundthealarmontheriseoftheglobaljihad
movement.Duringthe1990s,theU.S.intelligencecommunityissuedaseriesof
NationalIntelligenceEstimateswhichreportonAmerica'sglobalchallengeson
ballisticmissilethreats,migration,infectiousdiseases;yetthegovernment
neverissuedasingleNIEonthejihadmovementoralQaeda.
Propaganda.Saudiofficialsarguethattheircharitieshavedoneenormous
goodworkoverseasandthattheproblemsstemfromafewrenegadeoffices.They
say,too,thatRiyadhisbelatedlycrackingdown,muchasWashingtondidafter
9/11."Thesepeoplemayhavetakenadvantageofourcharities,"saysAdelal
Jubeir,foreignaffairsadvisertothecrownprince."We'relookingintoit,and
we'vetakenstepstoensureitneverhappensagain."
TounderstandwhytheSaudiswouldfundamovementthatnowterrorizeseven
theirownsociety,somehistoryisinorder.TheKingdomofSaudiArabiawas
bornofakindofmarriageofconveniencebetweentheHouseofSaudandthe
strictWahhabsectofIslam.Inthe18thcentury,MohammedibnSaud,alocal
chieftainandtheforebearoftoday'srulingfamily,alliedhimselfwith
fundamentalistsfromtheWahhabsect.Overthenext200years,backedbythe
Wahhabis,SaudandhisdescendantsconqueredmuchoftheArabianpeninsula,
includingIslam'sholiestsites,inMeccaandMedina.Puritanicalandascetic,
theWahhabisweregivenwideswayoverSaudisociety,enforcingastrict
interpretationofcertainKoranicbeliefs.Theirreligiouspoliceensuredthat
subjectsprayedfivetimesadayandthatwomenwerecoveredheadtotoe.Rival
religionswerebanned,criminalssubjectedtostoning,lashing,andbeheading.

TheWahhabiswerebutonesectamongabacktotherootsmovementinIslam
thathadlimitedattractionoverseas.Butthatbegantochange,firstwiththe
floodofoilmoneyinthe1970s,whichfilledSaudicofferswithbillionsof
petrodollars.NextcametheIranianrevolutionandtheSovietinvasionof
Afghanistan,in1979.MostominouslyfortheSaudis,however,wasathirdshock
thatsameyear:thebriefbutbloodytakeoverbymilitantsoftheGrandMosque
inMecca.
Threatenedwithinthekingdom,andfearfulthattheradicalsinTehranwould
asserttheirownleadershipoftheMuslimworld,theSaudiswentonaspending
spree.From1975throughlastyear,thekingdomspentover$70billionon
overseasaid,accordingtoastudyofofficialsourcesbytheCenterfor
SecurityPolicy,aWashingtonthinktank.Morethantwothirdsofthatamount
wentto"Islamicactivities"buildingmosques,religiousschools,andWahhabi
religiouscenters,saystheCSP'sAlexAlexiev,aformerCIAconsultanton
ethnicandreligiousconflict.TheSaudifundingprogram,Alexievsays,is"the
largestworldwidepropagandacampaignevermounted"dwarfingtheSoviets'
propagandaeffortsattheheightoftheColdWar.TheSaudiweeklyAinalYaqeen
lastyearreportedthecostas"astronomical"andboastedoftheresults:some
1,500mosques,210Islamiccenters,202colleges,andnearly2,000schoolsin
nonIslamiccountries.
KeytothisevangelicaltourdeforcewerecharitiescloselytiedtoSaudi
Arabia'srulingeliteandtopclerics.WithnamesliketheMuslimWorldLeague
anditsaffiliate,theInternationalIslamicReliefOrganization,thefunds
spentbillionsmoretospreadWahhabism.TheIIRO,forexample,tookcreditfor
funding575mosquesinIndonesiaalone.Accompanyingthemoney,invariably,was
ablizzardofWahhabistliterature.Wahhabistclericsledthecharge,causing
moderateimamstoworryaboutgrowingradicalismamongthefaithful.Critics
arguethatWahhabism'smoreextremepreachingsmistrustofinfidels,branding
ofrivalsectsasapostates,andemphasisonviolentjihadlaidthegroundwork
forterroristgroupsaroundtheworld.
Princelygiving.IftheSaudis'effortshadbeenlimitedtopushing
fundamentalismabroad,theirworkwouldhavebeencauseforcontroversy.But
someSaudicharitiesplayedafarmoretroublingrole.U.S.officialsnowsay
thatkeycharitiesbecamethepipelinesofcashthathelpedtransformragtag
bandsofinsurgentsandjihadistsintoasophisticated,interlockingmovement
withglobalambitions.ManyofthosespreadingtheWahhabistdoctrineabroad,it
turnedout,wereamongthemostradicalbelieversinholywar,andtheypoured
vastsumsintotheemergingalQaedanetwork.Overthepastdecade,accordingto
a2002reporttotheUnitedNationsSecurityCouncil,alQaedaanditsfellow
jihadistscollectedbetween$300millionand$500millionmostofitfrom
Saudicharitiesandprivatedonors.
TheoriginsofalQaedaareintimatelyboundupwiththeSaudicharities,
intelligenceanalystsnowrealize.OsamabinLadenandhisfollowerswerenot
exactlyholywarriors;theywereunholyfundraisers.InAfghanistan,Riyadhand
Washingtontogetherponiedupsome$3.5billiontofundthemujahideenthe
AfghanfighterswhotookontheSoviets.Atthesametime,menlikebinLaden
servedasfundraisersforthethousandsofforeignjihadistsstreaminginto
Afghanistan.BypersuadingclericsacrosstheMuslimworldtohandovermoney
fromzakat,thecharitabledonationsthatareacornerstoneofIslam,they
collectedhugesums.Theyraisedmillionsmorefromwealthyprincesand

merchantsacrosstheMiddleEast.Mostimportant,theyjoinedforceswiththe
Saudicharities,manyalreadymovingaidtothefighters.
Afghanistanforgednotonlyfinancialnetworksbutimportantbondsamong
thosewhobelieveinviolentjihad.DuringtheAfghanwar,themanwhoranthe
MuslimWorldLeagueofficeinPeshawar,Pakistan,wasbinLaden'smentor,
AbdullahAzzam.AnotherofficialtherewasWaelJulaidan,aSaudifundraiserwho
wouldjoinbinLadeninfoundingalQaedain1988.Documentsseizedinraids
after9/11revealjusthowclosethosetieswere.Onerecord,takenfroma
SaudibackedcharityinBosnia,bearsthehandwrittenminutesofameeting
betweenbinLadenandthreemen,scrawledbeneaththeletterheadoftheIIROand
MuslimWorldLeague.Thenotescallfortheopeningof"leagueoffices...for
thePakistanis,"sothat"attacks"canbemadefromthem.Anoteonletterhead
oftheSaudiRedCrescentSaudiArabia'sRedCrossinPeshawarasksthat
"weapons"beinventoried.ItisaccompaniedbyapleafrombinLadento
Julaidan,citing"anextremeneedforweapons."
AftertheSovietsleftAfghanistanindisgrace,binLadenmovedhis
fledglingalQaedatoSudan,in1992.BythenaperfectstormofIslamic
radicalismwasgatheringacrosstheMuslimworld.Some"AfghanArab"veteransof
Afghanistannoweyedradicalchangeintheirhomelands,wheresecularand
corruptregimesheldsway.Otherssetoutforlandswheretheysawfellow
Muslimsoppressed,suchasKashmirandBosnia.Saudisrichandpoorresponded
withdonationsatthousandsofzakatboxesinmosques,supermarkets,and
schools,dolingoutsupportforbesiegedMuslimsinAlgeria,Bosnia,Kashmir,
theWestBank,andGaza.Millionspouredin.
TheSaudicharitiesopenedofficesinhotspotsaroundtheglobe,with
virtuallynocontrolsonhowthemoneywasspent,U.S.officialssay.Thedonors
fundedmanyworthyprojects,supportingorphanagesandhospitals,andproviding
food,clothing,andmedicinetorefugees.Butby1994,Riyadhwasstartingto
getcomplaintsfromtheFrenchinteriorministeraboutSaudifundsreaching
AlgerianterroristsandfromPresidentClintonabouttheirfundingofHamas,
whosesuicidebomberswerewreakinghavocontheMiddleEastpeaceprocess.More
concernssurfacedinthePhilippines,whereaninvestigationofanalQaedaplot
tomurderthepopeandbombadozenU.S.airlinersledtothelocalIIROoffice.
ItsdirectorwasabrotherinlawofbinLaden's,MuhammadJamalKhalifa,who
wasbusilyfunnelingcashtotheregion'stopIslamicguerrillagroups,Abu
SayyafandtheMoroIslamicLiberationFront.
Who'swho.ItwasBosnia,though,thatfinallycaughtthesustained
attentionoftheCIA.Intheearly'90s,theethniccleansingpoliciesofthe
SerbsdrewhundredsofforeignjihadiststotheregiontohelpdefendBosnian
Muslims.Saudimoneypouredin,too.Saudidonorssent$150millionthrough
IslamicaidorganizationstoBosniain1994alone,theU.S.EmbassyinRiyadh
reported.Butlargesumswerewindingupinthewronghands.ACIAinvestigation
foundthatathirdoftheIslamiccharitiesintheBalkansamongthemthe
IIROhad"facilitatedtheactivitiesofIslamicgroupsthatengagein
terrorism,"includingplotstokidnaporkillU.S.personnel.Thegroupswerea
who'swhoofIslamicterrorism:Hamas,Hezbollah,Algerianextremists,and
Egypt'sAlGama'aalIslamiyya,whosespiritualhead,SheikOmarAbdelRahman,
laterearnedalifesentenceforplottingtobombtheUnitedNationsandother
NewYorklandmarks.

Inaclassifiedreportin1996,CIAofficialsfinallypulledtogetherwhat
theyhadonIslamiccharities.Theresultsweredisturbing.Theagency
identifiedover50Islamiccharitiesengagedininternationalaidandfound
that,asintheBalkans,fullyathirdofthemweretiedtoterroristgroups.
"Islamicactivistsdominatetheleadershipofthelargestcharities,"thereport
noted."Evenhighrankingmembersofthecollectingormonitoringagenciesin
SaudiArabia,Kuwait,andPakistansuchastheSaudiHighCommissionare
involvedinillicitactivities,includingsupportforterrorists."
Asfrontorganizations,thecharitieswereideal.Someprovidedsafehouses,
falseidentities,traveldocuments.Othersofferedarmsandmateriel.Nearlyall
dispensedsizableamountsofcash,accordingtotheCIA,withlittleorno
documentation.Andtheywere,itseemed,everywhere.Bythemid1990s,the
MuslimWorldLeaguefieldedsome30branchesworldwide,whiletheIIROhad
officesinover90countries.TheCIAfoundthattheIIROwasfunding"six
militanttrainingcampsinAfghanistan,"whereRiyadhwasbackingathenobscure
sectcalledtheTaliban,whosereligiouspracticeswereclosetoWahhabism.The
headofaMuslimWorldLeagueofficeinPakistanwassupplyingleaguedocuments
andarmstomilitantsinAfghanistanandTajikistan.AnotherSaudicharityhad
begunfundingrebelsinChechnya.
"Chatter."Althoughtheycalledthemselvesprivatefoundations,thesewere
notcharitiesinthesensethatAmericansunderstandtheterm.TheMuslimWorld
LeagueandtheIIRO,forexample,areoverseenbythegrandmuftiofSaudi
Arabia,thekingdom'shighestreligiousauthority.Theyreceivesubstantial
fundsfromthegovernmentandmembersoftheroyalfamilyandmakeuseofthe
IslamicaffairsofficesofSaudiembassiesabroad.TheMuslimWorldLeague's
currentsecretarygeneral,AbdullahAlTurki,servedasthekingdom'sminister
ofIslamicaffairsforsixyears."TheMuslimWorldLeague,whichisthemother
ofIIRO,isafullygovernmentfundedorganization,"theIIRO'sCanadianhead
testifiedina1999courtcase."Inotherwords,Iworkforthegovernmentof
SaudiArabia."
TheyearoftheCIAreport,1996,wasalsowhenOsamabinLadenmovedback
toAfghanistan,afterafouryearsojourninSudan.ProtectedbytheTaliban,
andwithmoneypouringin,binLaden,finally,wentoperational.Heopenednew
trainingcamps,andsentcashtoestablishedterroristgroupsandseedmoneyto
startups.ThenhebeganplottingstrikesagainsttheUnitedStates,even
issuingalongfatwa,orreligiousedict,summoningdevoutMuslimstowagejihad
onAmerica.Thefatwareceivedlittlepublicity,butbinLadennowhadalarm
bellsringingattheCIA."Heseemedtoturnupundereveryterroristrock,"
remembersaseniorcounterterrorismofficial.AtCIAheadquarters,theagency
setupa"virtualstation"onbinLaden,poolingresourcestotrackhis
operations.
U.S.intelligenceagencies,meanwhile,werepickingupdisturbing"chatter"
outofSaudiArabia.Electronicinterceptsofconversationsimplicatedmembers
oftheroyalfamilyinbackingnotonlyalQaedabutalsootherterrorist
groups,severalintelligencesourcesconfirmedtoU.S.News.Noneweresenior
officialstheroyalfamilyhassome7,000members.Butseveralintercepts
implicatedsomeofthecountry'swealthiestbusinessmen."Itwasnotdefinitive
butstillverydisturbing,"saysaseniorU.S.official."Thatwastheyearwe
hadtoadmittheSaudiswereaproblem."

Despitethemountingevidence,theissueofSaudicomplicitywithterrorists
waseffectivelysweptunderthediplomaticrug.Counterterrorismexpertsoffer
severalreasons.Forone,thiswasfiveyearsbeforethe9/11attacks,and
terrorismsimplywasn'tseenasthestrategicthreatitistoday.Onlyadozen
orsoAmericanswerekilledeachyearinterroristattacks.Moreover,inmanyof
thejihadstruggles,Washingtonwasneutral,asinKashmir,orevensupportive,
asinBosnia.WhenSaudimoneybeganfinancingjihadistsheadedtoChechnya,
Washingtonrespondedwith"awinkandanod,"asoneanalystputit.Thelevel
andimpactofalltheSaudifundingwerealsodifficulttodiscern."Weknewthe
outlines,"explainsJudithYaphe,aseniorMiddleEastanalystattheCIAuntil
1995."Butbefore9/11,muchofithadtobeintuited.Itwasliketheblindman
examiningtheelephant."
Therewereotherreasons.InmuchofofficialWashington,agrowingmovement
ofThirdWorldreligiouszealotswasjustnottakenseriously.Foryearsafter
thefalloftheBerlinWall,thoserunningU.S.intelligencewere"Soviet
people"stillfightingtheColdWar,saysPatLang,whoservedaschiefMiddle
EastanalystfortheDefenseIntelligenceAgencyduringthe1990s."The
jihadistswerelikemenfromMarstothem."PeterProbst,thenasenior
counterterrorismofficialatthePentagon,agrees."Anytimeyouwouldraise
thesethreats,peoplewouldlaugh,"herecalls."TheywouldsayIwasbeing
totallyparanoid."
ThefactthatthemovementwasbasedonIslammadeitmoredifficultto
discuss."Therewasafearthatitwastoosensitive,thatyou'dbeaccusedof
discrimination,"Probstsays."Itwaspoliticalcorrectnessrunamok."Others
saythemessagewassubtlebutclear.IntheCIA,merelygettingpermissionto
prepareareportonasubjectcanrequireuptofivelevelsofapproval.Onthe
subjectofSauditiestoterrorism,thewordcameback:Therewassimplyno
interest.Theresult,saysaCIAveteran,was"avirtualembargo."
TheFBIfaredlittlebetter.By1998,asprawlinginvestigationinChicago
intoterroristfundraisinghadledfederalagentsto$1.2millionlootedfroma
localchemicalfirm.Themoney,theysuspected,hadbeensenttoHamas.TheG
menfoundthesourceofthecashcurious:aSaudicharity,theIIRO,whichhad
funneledthemoneythroughtheSaudiEmbassy.SeniorJusticeDepartment
officialsexpressedconcernsabout"nationalsecurity,"andthecase,
eventually,wasdropped."Didsomeonesaytomewecan'tdothisbecauseit
wouldoffendtheSaudis?No,"saysMarkFlessner,aprosecutoronthecase."But
wasthatalwaysanundertone?Yes.Wasthatahugeissue?Yes."
Itdidn'thurtthattheSaudishadspreadmoneyaroundWashingtonbythe
millions.VastsumsfromSaudicontractshaveboughtfriendsandinfluencehere.
InhisrecentbookSleepingWiththeDevil:HowWashingtonSoldOurSoulfor
SaudiCrude,formerCIAoperativeBobBaercallsit"Washington's401(k)Plan."
"TheSaudisputoutthemessage,"Baerwrote."Youplaythegamekeepyour
mouthshutaboutthekingdomandwe'lltakecareofyou."Thelistof
beneficiariesisimpressive:formercabinetsecretaries,ambassadors,andCIA
stationchiefs.Washingtonlobbyists,P.R.firms,andlawyershavealsosupped
attheSauditable,ashavenonprofitsfromtheKennedyCentertopresidential
libraries.ThehighflyingCarlyleGrouphasmadefortunesdoingdealswiththe
Saudis.AmongCarlyle'stopadvisershavebeenformerPresidentGeorgeH.W.
Bush;JamesBaker,hissecretaryofstate;andFrankCarlucci,aformer
secretaryofdefense.Ifthatwasn'tenough,therewasthestaggeringamountof

SaudiinvestmentinAmericaasmuchas$600billioninU.S.banksandstock
markets.
ThatkindofcloutmayhelpexplainwhytheHouseofSaudcouldbeso
dismissiveofAmericanconcernsonterrorism.OfficialinquiriesaboutbinLaden
wentunansweredbyRiyadh.WhenHezbollahterroristskilled19U.S.troopswith
amassivetruckbombatKhobarTowersinDhahranin1996,Saudiofficials
stonewalled,thenshuttheFBIoutoftheinvestigation.Sosensitivewere
relationsthattheCIAinstructedofficialsatitsRiyadhstationnottocollect
intelligenceonIslamicextremistsevenafterthebombingforfearof
upsettingtheirhost,formerofficerstellU.S.News.
Payoffs.TheattacksontheU.S.embassiesinKenyaandTanzaniainAugust
1998changedallthat.Withinweeks,theNSCformeditstaskforceonterrorist
finances,drawinginmembersfromtheTreasuryDepartmentandtheCIA'sIllicit
TransactionsGroup.(TheITGwaslaterabsorbedintotheagency's
CounterterrorismCenter.)Inthemovies,U.S.intelligenceoftenseemscapable
ofextraordinaryfeats.Intherealworld,alas,Washington'sreachisalltoo
limited.Officialsonthetaskforcewerequicklysoberedbythehandfulof
peopletheyfoundwithtrueexpertiseontheMiddleEast.Thoseknowledgeable
aboutterroristfinancingnumberedevenfewer.SolimitedwastheCIA's
knowledgethatitbeganusingalQaeda'srealnameonlythatyear10years
afterbinLadenfoundedtheorganization.EvenlesswasknownaboutalQaeda's
fellowjihadistsaroundtheglobe.ItstopallyinSoutheastAsia,Jemmah
Islamiya,wasnottargeteduntilafter9/11,accordingtoanAustralian
intelligencereport.
Otherchallengesloomed.TheIslamicworldhasalwaysbeenadifficult
targetforWesternintelligenceservices,andterroristcellsareamongthe
toughesttopenetrate.Followingcriminalmoneyisalsoatortuoustask.Drawing
abeadonalQaedacombinedallthreechallenges.TheNSCtaskforcetriedto
formulatewhatstafferscalled"atheoryofthecase."Theirfirstquestions
weresimple:WhatdiditcosttobebinLaden?Howmuchdidittaketofundal
Qaeda?
Terroristacts,eventhesocalledspectacularslike9/11,arerelatively
cheaptocarryout.ButthemorethetaskforcestudiedalQaeda,thebiggerits
budgetappeared.Withitstrainingcampsandoperations,andpaymentstothe
Talibanandtootherterrorgroups,theamountwassurelyinthemillions,task
forcememberssurmised.AfterfindingthatbinLaden'sinheritedwealthwas
largelygoneandhisSudanesebusinessesfailing,thequestionwas,wheredid
themoneycomefrom?Theanswer,theyeventuallyconcluded,wasSaudicharities
andprivatedonors.
Thecharities,by1999,wereintegratedevenfurtherintothejihadist
movement.InIndia,policedetainedSayedAbuNasir,alongtimeIIROstaffer,
forplottingtobombU.S.consulates.Nasirconfessedthattheorganizationwas
secretlysupportingdozensofjihadisttrainingcampsinPakistanand
Afghanistan.EquallystrikingwasthealHaramainFoundation,oneofSaudi
Arabia'slargest,whichdispensed$50millionayearthroughsome50offices
worldwide.U.S.officialswouldeventuallyconcludethatitsbranchesinat
least10countrieswereprovidingarmsorcashtoterrorists,includingthosein
Indonesia,Pakistan,andSomalia.InSoutheastAsia,alHaramainwasactingasa
keysourceoffundsforalQaeda;inChechnya,Russianofficialssuspecteditof

moving$1milliontotherebelsandarrangingthepurchaseof500"heavy
weapons"fromtheTaliban.
Therewasmore.IntheMiddleEast,theCIAlearned,Saudidonationswere
fundingasmuchashalfofHamas'sbudgetandpayingoffthefamiliesofsuicide
bombers.InPakistan,somuchSaudimoneypouredinthatamidlevelPakistani
jihadistcouldmakeseventimesthecountry'saveragewage.Jihadhadbecomea
globalindustry,bankrolledbytheSaudis.DanielBenjamin,theNSC's
counterterrorismdirector,knewthatPalestinianterrorgroupshadusedlocal
charities,butthatwasnothinglikewhattheSaudishadwrought."Thestructure
wasnotastonishing,"Benjaminsays."Theambitionandscalewere."
Thistimesomethingwouldbedone.TheNSCstaffapproachedVicePresident
AlGore,whotoldtheSaudisthatWashingtonwantedameetingwiththeirtop
securityandbankingofficials.InJune1999,theNSC'sWilliamWechsler,
Treasury'sRichardNewcomb,andothersonthetaskforceflewtoRiyadh.They
weremetbyahalfdozenseniorSaudiofficials,alldressedinflowingwhite
robesandcheckeredkaffiyehs."Welaideverythingoutwhatweknew,whatwe
thought,"saidoneofficial."Wetoldthemwe'djusthadtwoofourembassies
blownupandthatweneededtodealwiththeminadifferentway."
Deepfreeze.Twothingssoonbecameclear.ThefirstwasthattheSaudishad
virtuallynofinancialregulatorysystemandzerooversightoftheircharities.
ThesecondwasthatSaudipoliceandbankregulatorshadneverworkedtogether
beforeanddidn'tparticularlywanttostart.Thosewereproblems,butthe
Americansmadeitcleartheymeantbusiness.IftheSaudisdidn'tcrackdown,
Newcombexplained,Treasuryofficialshadtheabilitytofreezeassetsofgroups
andindividualswhosupportedterrorists.Thatstruckanerve.Thementionof
wealthySaudispromptedlotsofnervouschatteramongtheSaudis.Butonsome
points,theSaudisseemedgenuinelypuzzled.Somestressedthatjihadstruggles
incertainregions,suchasIsraelandChechnya,werelegitimate.Still,the
Saudisagreedtheymayhaveaproblem.Changes,theysaid,wouldbemade.
Butnonewere.AsecondvisitbyaU.S.delegation,inJanuary2000,
elicitedmuchthesamereaction.Worse,theteamwasgettingthesametreatment
backhome.FrustratedwithRiyadh,Newcomb'sOfficeofForeignAssetsControlat
TreasurybegansubmittingthenamesofSaudicharitiesandbusinessmenfor
sanctions.Butimposingsanctionsrequiredapprovalfromaninteragency
committee,andthatnevercame.CIAandFBIofficialswerelukewarmtotheidea,
worriedthatsanctionswouldchillwhatlittlecooperationtheyhadwiththeir
Saudicounterparts.ButitwastheStateDepartmentthatobjectedmost
strenuously."TheStateDepartment,"recallsoneofficial,"alwaysthoughtwe
hadmuchbiggerfishtofry."
NoteveryoneinFoggyBottomagreed.Inthefallof1999,MichaelSheehan,
State'stoughmindedcoordinatorforcounterterrorism,hadseenintelligenceon
theIslamiccharitiesandwasappalled.Aspartofastillclassifiedreport,he
wroteacableinstructingU.S.ambassadorstoinsistthathostgovernmentscrack
downonthegroups.ButsomeatStatearguedthatthecharitiesweredoing
importantworkandfoughttokillSheehan'sinitiative.Thecablewasdeep
sixed.
UnderlyingthereluctancetoconfronttheSaudiswasamorefundamental
failureWashington'sinabilitytorecognizethestrategicdangerposedbythe
growingjihadmovement,ofwhichalQaedaisbutthehead.TheU.S.government,
ineffect,largelymissedthegravestideologicalthreattonationalsecurity

sincetheendoftheColdWar."Therewerepeoplewhogotitattheanalyst
level,atthesupervisorylevel,butallofuswereoutnumbered,"saysPatLang,
theformerPentagonanalyst."Youjustcouldn'tgetpeopletotakeseriouslythe
worldofIslamandthethreatitrepresented."
ConsidertheworkoftheNationalIntelligenceCouncil,whichistied
closelytotheCIAandreportsdirectlytoitsdirector.In1999,theNIC
broughttogetherexpertsfromacrossAmericatoidentifyglobaltrendskey
drivers,theycalledthemthatwouldaffecttheworldoverthenext15years.A
seniorintelligenceofficial,theanonymousauthorofThroughOurEnemies'Eyes,
whichchroniclestheriseofalQaeda,describedtoU.S.Newshowheperusedthe
NICdraftreportandwasshockedtoseethatIslamicfundamentalismwasnot
listedamongthekeydrivers.TheanalystsentanotetotheNICchief,
stressingthattherewerenearlyadozenIslamicinsurgenciesaroundtheworld,
knittedtogetherbySaudimoney,alQaeda,andthousandsofAfghanveterans.The
response:"IgotaChristmascardbackwithanotehopingmyfamilywaswell,"
themanrecalls.TheNIC'sfinalreport,GlobalTrends2015,barelymentioned
radicalismintheIslamicworld.TheNIC'svicechairman,EllenLaipson,later
wrotethattheirreport"shiedaway"fromtheissuebecauseit"mightbe
consideredinsensitiveandunintentionallygenerateillwill."
ThelackofvisionextendedtotheincomingBushadminstration,say
counterterrorismofficials.EarlyintheBushterm,theysay,TreasurySecretary
PaulO'Neillmovedtokillaproposedterroristassettrackingcenterthatthe
NSCtaskforcehadpushed.
The19hijackers,ofcourse,obliteratedanylingeringconcernsabout
sensitivityandSaudiillwill.Overthenextyear,policeraidedtheofficesof
Saudibackedcharitiesinahalfdozencountries.TheTreasuryDepartment
orderedtheassetsofmanyofthemfrozen,includingthoseofalHaramain
branchesinBosniaandSomalia.AttheSaudiHighCommissioninBosnia,which
coordinatedlocalaidamongSaudicharities,policefoundbeforeandafter
photosoftheWorldTradeCenter,filesonpesticidesandcropdusters,and
informationonhowtocounterfeitStateDepartmentbadges.AtManila's
internationalairport,authoritiesstoppedAgusDwikarna,analHaramain
representativebasedinIndonesia.InhissuitcasewereC4explosives.
OutsideWashington,federalagentsraidedofficesoftheIIROandMuslim
WorldLeague,alongwithoverahundredotherIslamicgroups,nearlyallbased
atleastonpaperintwobuildingsintheVirginiasuburbs.Manyshare
directors,officespace,andcashflow.Fortwoyears,investigatorshave
followedthemoneytooffshoretrustsandobscurecharitieswhich,accordingto
courtrecords,theybelievearetiedtoHamas,alQaeda,andotherterrorist
groups.Todate,nogroupshavebeenindicted."Youcan'ttraceacenttoany
terrorist,"saysattorneyNancyLuque,whoseclientsincludeseveralofthe
firms.
ThebigSaudicharities,fortheirpart,alsodenywrongdoing.TheMuslim
WorldLeague,alHaramain,andtheIIROalldeclinedtoanswerquestionsfrom
U.S.News,butIIROSecretaryGeneralAdnanBashatoldtheArabpressthat
"thereisnotasingleshredofevidence"tyingthegrouptoterrorists.Saysal
HaramaindirectorSheikAqilalAqil:"Wesetupthisinstitutiontopreach
Islampeacefully.It'sverystrangethatwearedescribedasterrorist."
Butasmoreevidencehasbecomepublic,Saudiofficialshavefinally
admittedthatsomethingisindeedseriouslywrong.InJuneofthisyear,they

promisedreforms.Charitieswouldbeaudited,officialsinRiyadhvowed,their
overseasactivitiescurtailed.Theubiquitouszakatboxeshavebeenbanned.
SaudiofficialslikenthesituationtoU.S.fundingoftheIrishRepublican
Army.Duringthe1970sand'80s,IRAactivistsraisedmillionsofdollarsfrom
IrishAmericans,despiteBritishpleasthatthefundswerebackingIRA
terrorism."TheSaudisarenotdiligentdonors,"saysChas.Freeman,aformer
ambassadortoRiyadhwhoseMiddleEastPolicyCouncilreceivesSaudifunds.
"They'veneveraskeduswhatwe'redoingwiththeirmoney."TheSaudis'record,
Freemansays,isnotoneofcomplicitybutof"negligenceandincompetence."
Gettingserious.Noteveryone,obviously,agrees.A$1trillionlawsuit
namesSaudiprinces,businessmen,andcharitiesforfundingtheterrorists
behindthe9/11attacks.Broughtbymorethan900victims'familymembers,the
suitiswindingitswaythroughtheU.S.courts.Thewithholdingof27pagesin
Congress's9/11reportlastJunedetailingSaudifundingandtiestoalQaeda
hasonlyfedsuspicions.Counterterrorismofficialsalsoremainwarythatthe
Saudiswillmakegoodontheirpledgestoreform.Onlyaftertriplesuicide
bombingsstruckRiyadhonMay12didtheregimegetseriousaboutcrackingdown,
theysay.Sincethen,theSaudishavearrestedmorethan200,brokenupadozen
alQaedacells,andbegunsharingintelligenceasneverbefore."TheSaudis
didn'treallygetit,"saysWechsler,theformerNSCcoordinator."Theydidn't
getitafterthe'98embassybombings,aftertheColebombing,after9/11,after
Bali.TheygotitafterMay12."
Thatremainstobeseen.ThisyearSaudiofficialsannouncedtheclosingof
allofalHaramain'sofficesoverseas.Thatcameasnewstoitsdirector,al
Aqil,whoinJulytoldReutersthathewasstillrunningbranchesinEgypt,
Yemen,Sudan,Mauritania,Nigeria,andBangladesh.AlAqil,saySaudiofficials,
isnowunderinvestigationforfraud.InPakistan,meanwhile,PresidentPervez
MusharrafhastwiceaskedRiyadhtocurtailthemillionsofSaudidollarsthat
pourintolocalIslamicpoliticalparties,jihadgroups,andreligiousschools.
Again,theSaudishavepromisedchange,butPakistaniofficialsareskeptical.
TheypointtothevisittoMeccalastmonthbythechiefoftheJamiateUllema
Islam,oneofPakistan'stopIslamicparties.TheJUIsharespowerinPakistan's
NorthwestTerritory,whereitprovidessanctuaryforTalibanmembersstaging
attacksinAfghanistan.WhywasJUI'sbossinMecca?Forfundraising,JUI
sourcestoldU.S.News.
ThebiggertestfortheSaudiswillbereformoftheirsociety.The
hijackingoftheircharitiesbythejihadmovementoccurredbecauseofsupport
bytheSaudifundamentalistreligiousestablishment.Thatwon'tbeeasyto
change.SinceMay12,officialsinRiyadhsay,theyhavepurgedsome2,000
radicalclericsfromtheirmosquesandorderedthejihadistrhetoricturnedway
down.ButbringingWahhabismintothe21stcenturywon'tbeeasy."Weneed
time,"saysAbdullahAlotaibi,apoliticalscientistatKingSaudUniversityin
Riyadh."Youcan'tchange70yearsofhistoryovernight."

MoneyMecca
OfficesofthesethreeleadingSaudicharitiesplayedkeyrolesinmoving
millionsofdollarstojihadists,terrorists,orinsurgentsinsome20
countries.

AMUSLIMWORLDLEAGUE

Headquarters:Mecca
Est.annualbudget:$45million
Branchoffices:36
Terrorties:Early'90s,ManilabranchsendscashtoIslamicguerrillasin
Philippines;200102,MWL'sRabitaTrustaffiliatedesignatedasterrorist
groupbyU.S.foralQaedaties;2002,federalagentsraidU.S.officesofMWL
interroristfinancingcase.

BALHARAMAINFOUNDATION
Headquarters:Riyadh
Est.annualbudget:$53million
Branchoffices:50
Terrorties:1996,CIAlinksgrouptoEgyptianextremistsandBosnian
jihadists;1999,MoscowclaimsgrouptransferredmoneyandarmstoChechen
rebels;2002,staffernabbedatManilaairportwithexplosives;2003,U.S.says
branchesin10countriesprovidearmsorcashtoterrorists.

CINTERNATIONALISLAMICRELIEFORGANIZATION
Headquarters:Jeddah
Est.annualbudget:$46million
Branchoffices:80
Terrorties:Early'90s,ManilabranchfunnelscashtoAbuSayyafandMoro
IslamicLiberationFront;1996,CIAreportsfundingofjihadistsinBalkansand
Afghanistan,andtiestoAlgerianandEgyptianextremists,alQaeda,andHamas;
1998,FBItracessuspectedHamasmoneyinChicagotoIIRO;1999,staffer
suspectedinbombplotadmitsIIROfundsAfghanterrortrainingcamps.

[Maplabels]
SaudiArabia

AfghanistanA,C
AlbaniaB
AzerbaijanB
BosniaHerzegovinaB,C
ChechnyaB,C
EthiopiaB
GeorgiaB,C
IndiaC
IndonesiaB
KenyaA,B
KosovoB
MalaysiaB
PakistanA,B,C
PhilippinesA,B,C
SerbiaC
SingaporeB
SomaliaB
TanzaniaB
WestBankandGazaC
GraphicbyRodLittleUSN&WR

GRAPHIC:Picture,RepresentativesofSaudiIslamiccharities,afteraforumlast
year(BilalQabalanAFP/GettyImages);Pictures:MONEYTRAIL.Fundsfrom
Saudicharitieshavebeentracedtojihadistsinsome20countries,including
Pakistan(left),wherebinLadensupportersheldanantiAmericanrally;while
hundredsofmillionsofdollarsfundterror,Saudiofficialssaymanydonations
dogoforgoodworks,suchasschoolingforthesegirlsinSomalia.(YUNGHI
KIMCONTACT;JEANLUCMOREAUGAMMA);Map,MoneyMecca(GRAPHICBYRODLITTLE
USN&WR);Picture,AbuSayyafrebels,whooperateinthePhilippines,received
fundsfromtheSaudibackedglobaljihadistmovement.(ROMEOGACADAFP/
CORBIS);Picture,FUNDRAISING.ScenesofatrocitiesfromthewarinBosniawere
postedin1993topersuadepilgrimsonthehajjatMeccatosendmoneyto
supporttheBosnianMuslims.(ABBASMAGNUM);Picture,MembersoftheSaudi
royalfamilywalkafinelinebetweentheforcesofmodernityand
fundamentalism.(ABBASMAGNUM);Picture,VICTIMS.AlQaedaanditsallieshave
strucktargetsworldwide,includingthisattackonaTurkishsynagoguebackin
November.(GEORGEGEORGIOUPANOS)
LOADDATE:December8,2003