U.S. Freezes Alleged Terrorist Fund Source

The U.S. Treasury Department froze the assets of two Chicago-area Islamic charities Friday for allegedly funneling money to the Al Qaeda terrorist network.

It is the first time the Bush administration’s financial war on terrorism has linked U.S.-based charities to Osama bin Laden. Last week, the Treasury Department froze the assets of a Texas-based charity suspected of aiding Palestinian militants.

“It is part of the continued effort to crack down on the finances of organizations related to international terrorism,” said Claire Buchan, a White House spokeswoman.

Although the Global Relief Foundation and Benevolence International Foundation--which together raised $8.5 million last year--had been under scrutiny for months, the freezing of assets Friday was moved up hurriedly because authorities said they feared that key records were about to be destroyed.

“It happened very quickly,” Treasury Department spokesman Tony Fratto said. “It’s clearly related to directing funding to terrorist activity and their associates and specifically Al Qaeda.”

The action came as NATO-led peacekeepers and United Nations police raided Global Relief’s offices in Pristina, Yugoslavia, and detained several people on suspicion of being linked to international terrorism, according to a North Atlantic Treaty Organization statement.

Authorities received “credible intelligence information that individuals working for this organization may have been directly involved in supporting worldwide international terrorist activities,” the statement said. No additional information was available about those detained.

In Chicago, federal agents showed up at Global Relief’s suburban offices around 9:30 a.m., armed with a search warrant they refused to show the group’s lawyer.

An FBI official in Chicago said the bureau would release few details of the searches, in which several dozen agents arrived, combed the offices of the organizations and seized records, computers and other information.

“The search warrants are sealed,” said the FBI official, who declined to be identified. Agents searched Global Relief’s office in Bridgeview, Ill., and Benevolence International’s offices in Palos Hills, Ill., and Newark, N.J.

Global Relief’s lawyer, Roger Simmons, said the FBI spent all day examining the charity’s records. “They’re going to remove documents and computers from the office before they go home tonight,” Simmons said. “They say they’ll give me a list of what they take.”

The charity raises most of its money from donors in the United States, though it received $50,000 from donors in the United Arab Emirates last year, $65,000 from the Emirates in 1999 and $6,500 from the Emirates’ embassy in China in 1998, according to income tax returns. More than $100,000 of the money that funded the Sept. 11 hijackings came from bank accounts in the Emirates.

Global Relief has offices throughout the world, including Afghanistan. The charity said it is a legitimate humanitarian organization whose sole purpose is helping victims of poverty and war. In a statement Friday, the charity strongly denied any ties to terrorism.

The charity said it “understands and appreciates both the seriousness and urgency of identifying potential threats to the United States and of locating terrorist operatives and those who support them.” But it said that such investigations should be conducted “with precision and care.”

It blasted the U.S. for closing down its operations during the religious holidays of Ramadan, which coincide with the height of their fund-raising.

“By halting medicine, food and other humanitarian aid, we risk the slow starvation and gruesome death in parts of the Muslim world that rely on such badly needed aid,” the foundation said.

Simmons called it “one of the cleanest and most efficient” charities he knew of. “They’ve only been involved with helping people. To imply that they have been involved in any other way is vile.”

In October, one of the charity’s lawyers said he thought the group had attracted federal scrutiny because the FBI was interested in one of its founders, Hazem Ragab, who had moved to Jordan. Ragab had been a member of a mosque in Texas that has been of interest to terrorism investigators.

Ragab’s lawyer, Stanley Cohen, said Friday that his client is a “political and human rights activist” who does not want to talk to the FBI or become an informant for the agency.

“If they had anything on Ragab, they would have charged him,” Cohen said.

Benevolence International Foundation is located several miles from Global Relief. The charities have the same accountant, but he told The Times in October that the groups were not related.

No one from Benevolence International could be reached for comment Friday. In an Oct. 1 statement, the charity said it would not “dignify . . . with a response” allegations that it was linked to terrorists.

The group raised $3.3 million last year. It said it sent food, medicine and clothing for relief efforts to Chechnya, Pakistan and Bosnia-Herzegovina, among other areas.

The U.S. and its allies have frozen at least $66 million belonging to 153 groups and individuals allegedly tied to terrorists since Bush signed the executive order Sept. 23.

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Times staff writer Jonathan Peterson and Associated Press contributed to this report.