Financial Hit List Targets 27

Aiming deep at the financial heart of Osama bin Laden’s terrorism network, President Bush on Monday ordered the Treasury Department to freeze the U.S. assets of any bank in the world that does business with organizations believed responsible for the deadly attacks on the World Trade Center and the Pentagon.

“Today we have launched a strike on the financial foundation of the global terror network,” the president declared from a lectern in the Rose Garden as he signed an executive order immediately freezing the U.S. assets of 27 groups and individuals tied to Bin Laden.

Such a move, however, would probably make little difference to Bin Laden, since most of his assets are overseas. But the president’s order would affect any foreign bank that continues business dealings with the suspected terrorists, since experts say that nearly all foreign banks at some point need to transfer money through the United States.

“The United States is prepared to take action against nations that don’t help in this cause,” White House Press Secretary Ari Fleischer said.

The executive order not only targets Bin Laden and his top lieutenants but also goes after groups in the Philippines, Algeria, Egypt, Pakistan, Uzbekistan and Lebanon. Among them are three purported humanitarian organizations--including one that operated in the United States--that are “fronts for terrorist financing and support,” Bush said.

Although the United States already prohibits banks from doing business with Bin Laden and his Al Qaeda organization, Bush’s order casts the net wider and--for the first time--targets foreign banks that have dealings with terrorist-tainted money.

“It’s a very big assertion of authority,” said Jonathan M. Winer, a former deputy assistant secretary of State for international enforcement. “The principle is that the United States will seize assets of banks anywhere in the world, even if we don’t regulate them, if they facilitate the movement of terrorist funds.”

But Winer said such a move can only be enforced with the support of other countries.

Bruce Zagaris, a Washington lawyer who specializes in international criminal law, said Bush’s order will do little by itself because most of the assets are likely to be hidden overseas in shell companies and barely regulated offshore tax havens.

“The big question will be whether the United States can persuade the rest of the world to participate in the tracing, freezing and seizing of assets,” he said.

Compliance would force overseas banks and financial institutions to open their books and records far more than is currently mandated in many countries and would require them to purchase and operate sophisticated software that needs to be constantly updated.

“The executive order won’t do much, but it’s the start of an initiative,” Zagaris said. “It will take an enormous amount of clever diplomacy now, especially from an administration that didn’t start off prioritizing multilateral initiatives.”

David Aufhauser, general counsel for the Treasury Department, said 5,000 U.S. banks were told Monday to freeze any accounts linked to the 27 names on the list. He said officials will try to meet with U.S. allies later this month, “particularly in the [Persian] Gulf countries, so that we can underscore personally and face to face the president’s and the country’s conviction that we need to starve terrorism networks of their financial resources.”

Aufhauser conceded that the initial sums seized might be modest because most of the organizations do not have accounts in their own names in the United States. But he added that the “information, data and intelligence” U.S. officials gathered will be “as equal in value to us in some instances as the actual freeze or seizure of assets abroad.” He said names will be added to the list as the investigation continues.

Quoting a 2000 Treasury Department report, the Congressional Research Service said during the week of the attacks that no Bin Laden assets anywhere in the world had been frozen because none had been “firmly linked” to him.

According to U.S. intelligence and other sources, Bin Laden supervises a complex, multilayered global web of companies, partnerships and other financial entities that launder money for his terrorist network.

The bulk of contributions and other transactions from the Gulf states are collected by two distinct financial networks dominated by Kuwaiti and Qatari businessmen, according to Yossef Bodansky, author of a book on Bin Laden and a specialist on terrorism and unconventional warfare. The two networks route the money through local banks, which move it to London.

From there, the money is transferred to a web of anonymously held companies in Belgium and especially Luxembourg, under a holding company registered in the names of lawyers and businessmen from Arab and Gulf states, Bodansky wrote in “Bin Laden: The Man Who Declared War on America.”

The companies have interests in Asia, Africa and Latin America, with a multitude of real estate holdings, maritime transport, trade companies, public works projects, construction and contracting companies, and agricultural companies.

Another core area for the financial dealings is the Far East, especially Malaysia and Indonesia. Money from Persian Gulf donors moves through the Kuwaiti and Qatari networks, as well as networks in Italy and Yemen. Bin Laden apparently began to scale back his investments in the Far East after the economic contraction there in the late 1990s and moved his assets and resources to Luxembourg.

He also is believed to have set up bank accounts in London, Monaco and various Caribbean islands, all under non-Arab names, according to Bodansky.

Swiss and Austrian banking authorities have become more cooperative with law enforcement in recent years and are no longer as useful for hiding illicit money.

In fact, the Swiss government already has been helping U.S. intelligence agencies by looking through records for links to Bin Laden, according to sources close to the investigation. Switzerland is a financial center for the Bin Laden family’s foreign investment arm. Bin Laden’s wealthy family has renounced him and was not included on the list. Authorities have not reported any ties between them and Bin Laden.

Treasury Secretary Paul H. O’Neill described Monday’s order as a “wake-up call” to financial institutions around the world. “If you have any involvement in the financing of the Al Qaeda organizations, you have two choices. Cooperate in this fight, or we will freeze your assets,” he said. “We will punish you for providing the resources that make these evil acts possible.”

Besides Bin Laden and Al Qaeda, Bush’s order names:

* Al Jihad, or Egyptian Islamic Jihad, which is considered a key part of the Al Qaeda organization. Formed more than 30 years ago, it was responsible for the 1981 assassination of Egyptian President Anwar Sadat. Bush administration officials believe that Al Jihad helped Al Qaeda plan the Sept. 11 attacks.

* Ayman Al-Zawahiri, Bin Laden’s right-hand man. The Egyptian surgeon and longtime militant, 50, is the leader of Al Jihad. Bin Laden and Al-Zawahiri were indicted by a federal grand jury in New York for their alleged leadership roles in the 1998 bombings of two U.S. embassies in Africa that killed 224 people.

* Muhammad Atif, a military strategist known by his nom de guerre, Abu Hafs Al Masri. Atif is commander of the Islamic Army for the Liberation of Holy Sites, which claimed responsibility for the embassy bombings.

* Shaykh Saiid, also known as Mustafa Muhammad Ahmad. A man with that name is wanted by the FBI because of two wire transfers Sept. 8 and 9 to Mohamed Atta, who is believed to be one of the masterminds of the World Trade Center attacks. Atta was aboard American Airlines Flight 11 when it crashed.

* Khalid Al-Shanqiti, a top Bin Laden aide who is known as “The Mauritanian.” He is believed to be a field commander who slips from one country to another to help execute terrorist plots.

* Abu Zubaydah, a prominent Bin Laden lieutenant. Intelligence officials say he serves as gatekeeper to the terrorism training camps. He was linked to the plot by a group of Algerian terrorists to bomb the Los Angeles International Airport in December 1999.

* The Armed Islamic Group, or GIA. Among the most brutal terrorist organizations in the world, it was launched in 1992 in response to an effort by Algeria’s military to suspend democratic elections there.

* The Islamic Army of Aden. It is believed responsible for the bombing of the U.S. destroyer Cole in the Yemeni port of Aden last year, killing 17 sailors.

* Harakat Ul-Mujahidin is based in Pakistan and operates primarily against Indian forces and civilian targets in the disputed territory of Kashmir. The group has several thousand armed supporters and its leader, Faziur Rahman Khali, has called for attacks on U.S. and Western interests. Donations come from Saudi Arabia and other Gulf and Islamic states, as well as Pakistan.

* Islamic Movement of Uzbekistan is a coalition of Islamic militants from Central Asian states opposed to the secular regime in Uzbekistan. The group has used car bombs and taken hostages.

The list also targets three charities--the Makhtab Al-Khidamat/Al Kifah, the Wafa Humanitarian Organization and the Al Rashid Trust.

The Makhtab Al-Khidamat/Al Kifah once had many offices, including one in Brooklyn run by the son of a high-profile Bin Laden operative. Testimony read Feb. 20 at the embassy bombings trial mentioned an Al Kifah office in New York, where Bin Laden’s former secretary said “link money” was handled.

Treasury officials said that group also had a branch in Massachusetts. (In Arabic, Makhtab Al-Khidamat means “office of social services,” while Al Kifah is translated as “the struggle.”) The Times found an Internet listing for the Al Kifah Refugee Center on Commonwealth Avenue in Boston, but its address turned out to be a Mailboxes Etc. The Internet site described the center as an “Islamic relief agency” that supported Bosnian orphans and widows, and it urged donors to pay $45 a month to support an orphan or $100 a month to support a widow and her family.

That same site advertised the Al Khidamat Welfare Trust in Peshawar, Pakistan. Another charity named Monday was the Al Rashid Trust. The Pakistan-based organization, described as a Muslim umbrella group, provides food for Afghan widows and orphans.

Several Islamic associations said they had never heard of any of the philanthropic groups on the president’s list.

“If I don’t know them, they are not mainstream,” said Sayyid Syeed, secretary-general of the Islamic Society of North America, based in Plainfield, Ind. “And I don’t know any of them.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Frozen Assets

President Bush ordered assets frozen for the following people and organizations with suspected links to Osama bin Laden:

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Al Qaeda: Bin Laden’s terrorism network.

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Abu Sayyaf: Islamic terrorist organization operating in the Philippines.

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Armed Islamic Group: Algerian group that hijacked an Air France plane in Algeria in 1994.

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Harakat ul-Mujahidin: Pakistan-based; accused of terrorist activities in Kashmir; leaders closely linked to Afghanistan’s ruling Taliban.

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Al-Jihad: Main partner in Bin Laden’s (Egyptian Islamic Jihad) international front; blamed for the assassination of Egyptian President Anwar Sadat.

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Islamic Movement: A Bin Laden arm accused of various of Uzbekistan criminal activities including the kidnapping of four American mountain climbers.

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Asbat al-Ansar: Anti-Israel group that operates from a Palestinian refugee camp in Lebanon.

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Salafist Group for Dissident faction of Armed Islamic Call and Combat (GSPC): Group, a radical Algerian insurgency movement

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Libyan Islamic Libyan fundamentalist group.: Fighting Group

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Al-Itihaad al-Islamiya: Group working toward independence (AIAI) and Islamic rule for part of Ethiopia.

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Islamic Army of Aden: A Bin Laden arm in Yemen; in June, nine people believed to be affiliated with the group were arrested after being found with hand grenades, small arms and documents, including a map of the U.S. Embassy in Aden.

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Osama bin Laden: Accused by U.S. authorities as the mastermind of the Sept. 11 attacks and of the 1998 bombing of U.S. embassies in Kenya and Tanzania.

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Muhammad Atif: Commander of the Islamic Army for the Liberation of Holy Sites, which claimed responsibility for the embassy bombings.

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Sayf al-Adl: Believed to be responsible for Bin Laden’s security.

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Shaykh Saiid: aka Mustafa Muhammad Ahmad; wanted by FBI for wire transfers to Mohamed Atta, a suspect in the World Trade Center attacks.

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Khalid al-Shanqiti: aka Mahfouz Ould al-Walid; known as “The Mauritanian.”

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Ibn Al-Shaykh al-Libi: Information unavailable.

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Abu Zubaydah: Senior aide to Bin Laden; a Palestinian and recruiter for Al Qaeda.

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Abd al-Hadi al-Iraqi: aka, Abu Abdallah.

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Ayman al-Zawahiri: Bin Laden’s top lieutenant, an Egyptian surgeon; leader of Al-Jihad, and blamed for assassination of Sadat.

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Thirwat Salah Shihata: Reportedly a senior Al-Jihad leader.

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Tariq Anwar Al-Sayyid: aka Fathi, Amr al-Fatih Ahmad

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Muhammad Salah: aka Nasr Fahmi Nasr Hasanayn

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Makhtab Al-Khidamat: Group started by Bin Laden to recruit Al Kifah fighters for Afghan war with the Soviets.

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Wafa Humanitarian: Saudi group whose operations include Organization food distribution in Afghanistan.

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Al Rashid Trust: Pakistani charity that espouses the same brand of Islam as the Taliban; operates bakeries and has built several mosques in Afghanistan.

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Mamoun Darkazanli: Electrical apparatus and equipment Import-Export Co. business in Hamburg, Germany.

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Sources: Staff reports; Associated Press; Dun & Bradstreet

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Times staff writers Judy Pasternak, Elizabeth Mehren and Edwin Chen and special correspondent Craig Pyes contributed to this report.

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