Terror Investigators Search Software Firm

Federal agents searched a computer software company here that has contracted with numerous government agencies, seeking to determine whether any classified material made it into the hands of one of the firm’s major investors, an alleged Al Qaeda financier, authorities said Friday.

Officials in Washington said no arrests were made and, so far, it appears no national security material was compromised. But an investigation was continuing into Yasin al Qadi’s role with the firm, Ptech Inc., which holds contracts with government agencies, including the departments of Energy, Education and Veterans Affairs.

“This was done out of an abundance of caution,” said a Justice Department official. “It was due diligence to check this firm out.”

The search is part of a widening operation by federal agents to ferret out any potential inroads that terrorists may be making into government operations. Authorities said they want to make sure that items such as nuclear power plant blueprints, school programs or Veterans Affairs hospital designs do not end up with terrorists.

Qadi, a member of one of Saudi Arabia’s wealthiest families, has been officially identified by the Treasury Department as a major bankroller of terrorism, primarily by using his Islamic charity group to funnel millions of dollars to Osama bin Laden’s Al Qaeda terrorist network.

But Ptech officials said they would be surprised to learn that anyone in the small, 9-year-old firm was involved in terrorism, and they noted that after FBI agents began searching their offices Thursday night, they eventually left without taking any material or equipment.

“I’d be shocked to find out that something like that was going on in this company,” said Joe Johnson, the firm’s executive in charge of professional services.

Soon after the Sept. 11 terrorist attacks, the Treasury Department released a list of 39 names and groups of terrorism financiers, including Qadi. According to Treasury officials, he and five other wealthy Saudis ran several Muslim charities. One of them was set up to raise money for the hungry and people displaced by war but, according to the government, sent about $3 million to Bin Laden and Al Qaeda.

Qadi has denied raising money for Al Qaeda.

Ptech’s Web site notes that it has done contract work with many government entities, including the Air Force and the House of Representatives, as well as Southern California Edison. Spokesmen for several of the agencies said they believe the company may have actually done subcontract work.

“The products that were supplied by this company to the government all fell in the nonclassified area,” said White House spokesman Ari Fleischer. “The material has been reviewed by the appropriate government agencies, and they have detected absolutely nothing in the reports to the White House that would lead to any concern about any of the products purchased from this company.”

In a statement, U.S. Atty. Michael Sullivan of the District of Massachusetts said the search and a review of the firm’s computer system was conducted by agents from the Customs Service, FBI, IRS, Secret Service and Immigration and Naturalization Service, along with Massachusetts state police.

“There is no reason to believe that the software has any secondary purpose or malicious code, or that there has been a breach of any kind,” Sullivan said. “There have been no vulnerabilities identified

The door to Ptech was locked tight Friday morning. Outside, Ptech executive Johnson said 75% of the firm’s contracts go to commercial clients, often for graphic software that maps the locations of a company’s high-tech equipment.

The company has revenue of $10 million a year, Johnson said. In the last six months, the firm has downsized by a third, leaving it with about 20 employees.

Of the company’s four executives, one has family members in Lebanon and another has relatives in Egypt, Johnson said. He said all are American citizens.

“Five or six guys” in the company are Muslims, Johnson said, adding, “They have a very different view about our role in the Mideast.” He said several support charitable organizations with Middle Eastern ties.

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Serrano reported from Washington, Mehren from Quincy.