In bed with terrorists

July 28th, 2007

The Dubby sent the US public a very specific signal when he penned his most recent Executive Order, inviting the Treasury Department to throw citizens out on the street if they “undermine the Baghdad government.” When his pals the Saudis send in Arab insurgents to help the Sunni and finance terror, the Dub responds by offering them 20 billion bucks worth of advanced weaponry.

See — American policy all depends on who the little Decider snuggles with in the dark; and, dearhearts, it ain’t US.

Jude

‘US angry over Saudi role in Iraq’
AFP

* Report accuses Saudi Arabia of trying to undermine the Baghdad government

WASHINGTON: The US administration is deeply frustrated with Saudi Arabia over its role in Iraq, accusing the Saudis of trying to undermine the Baghdad government and failing to stem the flow of volunteers joining the insurgency there, the New York Times reported on Friday.

The Saudis view Iraq’s Shiite prime minister, Nuri al-Maliki, as an agent of Iran and appear to have stepped up efforts to weaken his government, providing funding for Sunni groups, the Times wrote, citing senior US officials who spoke on condition of anonymity.

One official told the paper that there was evidence Saudi Arabia was supplying money to Maliki’s opponents but declined to say if that funding was going to Sunni insurgents.

“That would get into disagreements over who is an insurgent and who is not,” the official said.

Officials in President George W Bush’s administration also say that of an estimated 60 to 80 foreign fighters who enter Iraq every month, nearly half come from Saudi Arabia and the Saudi leadership has not done enough to counter the influx.

Secretary of State Condoleezza Rice and Defence Secretary Robert Gates planned to raise Washington’s concerns in a visit next week to Saudi Arabia, the paper said. The Bush administration has refrained from publicly criticizing its long-time ally over Iraq and has instead blamed Iran and Syria for fomenting violence and sectarian divisions.

But the officials spoke to the Times with the clear intention of sending a signal to the Saudis after previous private appeals failed to produce results, the newspaper said.

US-Saudi relations have been increasingly strained since the US-led invasion of Iraq in 2003. In March, King Abdullah slammed the “illegitimate foreign occupation” of Iraq.

U.S. Set to Offer Huge Arms Deal to Saudi Arabia
DAVID S. CLOUD, New York Times
July 28, 2007

WASHINGTON, July 27 — The Bush administration is preparing to ask Congress to approve an arms sale package for Saudi Arabia and its neighbors that is expected to eventually total $20 billion at a time when some United States officials contend that the Saudis are playing a counterproductive role in Iraq.

The proposed package of advanced weaponry for Saudi Arabia, which includes advanced satellite-guided bombs, upgrades to its fighters and new naval vessels, has made Israel and some of its supporters in Congress nervous. Senior officials who described the package on Friday said they believed that the administration had resolved those concerns, in part by promising Israel $30.4 billion in military aid over the next decade, a significant increase over what Israel has received in the past 10 years.

But administration officials remained concerned that the size of the package and the advanced weaponry it contains, as well as broader concerns about Saudi Arabia’s role in Iraq, could prompt Saudi critics in Congress to oppose the package when Congress is formally notified about the deal this fall.

In talks about the package, the administration has not sought specific assurances from Saudi Arabia that it would be more supportive of the American effort in Iraq as a condition of receiving the arms package, the officials said.

The officials said the plan to bolster the militaries of Persian Gulf countries is part of an American strategy to contain the growing power of Iran in the region and to demonstrate that, no matter what happens in Iraq, Washington remains committed to its longtime Arab allies. Officials from the State Department and the Pentagon agreed to outline the terms of the deal after some details emerged from closed briefings this week on Capitol Hill.

The officials said Secretary of State Condoleezza Rice and Defense Secretary Robert M. Gates, who are to make a joint visit to Saudi Arabia next week, still intended to use the trip to press the Saudis to do more to help Iraq’s Shiite-dominated government.

“The role of the Sunni Arab neighbors is to send a positive, affirmative message to moderates in Iraq in government that the neighbors are with you,” a senior State Department official told reporters in a conference call on Friday. More specifically, the official said, the United States wants the gulf states to make clear to Sunnis engaged in violence in Iraq that such actions are “killing your future.”

In addition to promising an increase in American military aid to Israel, the Pentagon is seeking to ease Israel’s concerns over the proposed weapons sales to Saudi Arabia by asking the Saudis to accept restrictions on the range, size and location of the satellite-guided bombs, including a commitment not to store the weapons at air bases close to Israeli territory, the officials said.

The package and the possible steps to allay Israel’s concerns were described to Congress this week, in an effort by the administration to test the reaction on Capitol Hill before entering into final negotiations on the package with Saudi officials. The Saudis had requested that Congress be told about the planned sale, the officials said, in an effort to avoid the kind of bruising fight on Capitol Hill that occurred in the 1980s over proposed arms sales to the kingdom.

In his visit with King Abdullah and other Saudi officials next week, Mr. Gates plans to describe “what the administration is willing to go forward with” in the arms package and “what we would recommend to the Hill and others,” according to a senior Pentagon official, who conducted a background briefing on the upcoming trip with reporters on Friday.

The official added that Mr. Gates would also reassure the Saudis that “regardless of what happens in the near term in Iraq that our commitment in the region remains firm, remains steadfast and that, in fact, we are looking to enhance and develop it.”

The $20 billion price tag on the package is more than double what officials originally estimated when details became public this spring. Even the higher figure is a rough estimate that could fluctuate depending on the final package, which would be carried out over a number of years, officials said.

Worried about the impression that the United States was starting an arms race in the region, State and Defense Department officials stressed that the arms deal was being proposed largely in response to improvements in Iran’s military capabilities and to counter the threat posed by its nuclear program, which the Bush administration contends is aimed at building nuclear weapons.

Along with Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are likely to receive equipment and weaponry from the arms sales under consideration, officials said. In general, the United States is interested in upgrading the countries’ air and missile defense systems, improving their navies and making modest improvements in their air forces, administration officials said, though not all the packages would be the same.

Ms. Rice is expected to announce Monday that the administration will open formal discussions with each country about the proposed packages, in hopes of reaching agreements by the fall.

Along with the announcement of formal talks with Persian Gulf allies on the arms package, Ms. Rice is planning to outline the new agreement to provide military aid to Israel, as well as a similar accord with Egypt.

The $30.4 billion being promised to Israel is $9.1 billion more than Israel has received over the past decade, an increase of nearly 43 percent.

A senior administration official said the sizable increase was a result of Israel’s need to replace equipment expended in its war against Hezbollah in Lebanon last summer, as well as to maintain its advantage in advanced weaponry as other countries in the region modernize their forces.

In defending the proposed sale to Saudi Arabia and other gulf states, the officials noted that the Saudis and several of the other countries were in talks with suppliers other than the United States. If the packages offered to them by the United States are blocked or come with too many conditions, the officials said, the Persian Gulf countries could turn elsewhere for similar equipment, reducing American influence in the region.

The United States has made few, if any, sales of satellite-guided munitions to Arab countries in the past, though Israel has received them since the mid-1990s as part of a United States policy of ensuring that Israel has a military edge over its regional rivals.
Israeli officials have made specific requests aimed at eliminating concerns that satellite-guided bombs sold to the Saudis could be used against its territory, administration officials said.

Their major concern is not a full-scale Saudi attack, but the possibility that a rogue pilot armed with one of the bombs could attack on his own or that the Saudi government could one day be overthrown and the weapons could fall into the hands of a more radical regime, officials said.

U.S. Tracks Saudi Bank Favored by Extremists
Officials Debated What To Do About Al Rajhi, Intelligence Files Show
GLENN R. SIMPSON, Wall Street Journal
July 26, 2007

The News: U.S. intelligence reports say Islamic extremists often use Saudi Arabia’s Al Rajhi Bank to move money. The bank has denounced terrorism and denies any role in financing extremists.

The Issue: A confrontation with Al Rajhi would be politically difficult for Saudi monarchy, and U.S. isn’t satisfied with its efforts to curb the financial infrastructure essential to terrorism.

Result: U.S. has periodically debated taking action on its own against the bank, but chosen instead to lobby the Saudis quietly about its concerns.Today, Mr. Al Rajhi is a reclusive octogenarian whose fortune is estimated at $12 billion. And Al Rajhi Bank grew into the kingdom’s largest Islamic bank, with 500 branches in Saudi Arabia and more spread across the Muslim world.

JIDDA, Saudi Arabia — In the 1940s, two Bedouin farm boys from the desert began changing money for the trickle of traders and religious pilgrims in this then-remote and barren kingdom. It was a business built on faith and trust, Sulaiman Al Rajhi once told an interviewer, and for many years he would hand gold bars to strangers boarding flights in Jidda and ask them to give the gold to his brother on their arrival in Riyadh.

EXTREMISTS’ ACCOUNTS

Following the Sept. 11, 2001, attacks, the bank also set off an intense debate within the U.S. government over whether to take strong action against its alleged role in extremist finance. Confidential reports by the Central Intelligence Agency and other U.S. agencies, reviewed by The Wall Street Journal, detail for the first time how much the U.S. learned about the use of Al Rajhi Bank by alleged extremists, and how U.S. officials agonized over what to do about it.

After 9/11, the Saudi monarchy pledged its full support in the fight against global terrorism. And following violent attacks inside the kingdom in the next two years, the Saudis did launch major strikes against militants operating on their soil. But the Saudi government has been far been less willing to tackle the financial infrastructure essential to terrorism. U.S. intelligence reports state that Islamic banks, while mostly doing ordinary commerce, also are institutions that extremism relies upon in its global spread.

As a result, the Bush administration repeatedly debated proposals for taking strong action itself against Al Rajhi Bank, in particular, according to former U.S. officials and previously undisclosed government documents. Ultimately, the U.S. always chose instead to lobby Saudi officialdom quietly about its concerns.

The U.S. intelligence reports, heretofore secret, describe how Al Rajhi Bank has maintained accounts and accepted donations for Saudi charities that the U.S. and other nations have formally designated as fronts for al Qaeda or other terrorist groups.

In addition, Mr. Al Rajhi and family members have been major donors to Islamic charities that are suspected by Western intelligence agencies of funding terrorism, according to CIA reports and federal-court filings by the Justice Department.

A 2003 CIA report claims that a year after Sept. 11, with a spotlight on Islamic charities, Mr. Al Rajhi ordered Al Rajhi Bank’s board “to explore financial instruments that would allow the bank’s charitable contributions to avoid official Saudi scrutiny.”

A few weeks earlier, the report says, Mr. Al Rajhi “transferred $1.1 billion to offshore accounts — using commodity swaps and two Lebanese banks — citing a concern that U.S. and Saudi authorities might freeze his assets.” The report was titled “Al Rajhi Bank: Conduit for Extremist Finance.”

Al Rajhi Bank and the Al Rajhi family deny any role in financing extremists. They have denounced terrorist acts as un-Islamic. The bank declined to address specific allegations made in American intelligence and law-enforcement records, citing client confidentiality.

Also in 2005, a U.S. judge dismissed Al Rajhi Bank from a lawsuit filed by relatives of Sept. 11 victims. The ruling said banks couldn’t be held liable for providing routine services to people who turned out to be terrorists. In a statement in response to questions about suspected terrorists among its clients, the bank noted that “Al Rajhi Bank has a very large branch network, and a very large retail customer base.”

U.S. law-enforcement and intelligence agencies acknowledge it is possible that extremists use the bank’s far-flung branches and money-transfer services without bank officials’ knowledge. The U.S. has never obtained proof that the bank or its owners knowingly facilitate terrorism, according to documents and former officials, despite what they describe as extensive circumstantial evidence that some executives are aware the bank is used by extremists. The 2003 CIA report concluded: “Senior Al Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank.”

Most major banks around the world are bound by a patchwork of treaties and agreements that, in effect, require them to know their customers and report any suspicious activities to regulators. The rules are designed to fight terrorism, money laundering and narcotics trafficking. It’s generally acknowledged that Saudi banks are bound by these rules, although experts differ on when compliance became mandatory.

The top counterterrorism official at the U.S. Treasury Department, while declining to comment on Al Rajhi Bank specifically, says Saudi officials haven’t met a promise to create a commission to oversee Saudi charities, many of which bank with Al Rajhi. “They are also not holding people responsible for sending money abroad for jihad,” says the Treasury official, Stuart Levey. “It just doesn’t happen.”

The Saudi government maintains it has been working diligently with the U.S. and others to counter terrorism. It cites its arrests of several alleged terrorist fund-raisers in recent years. The Saudis didn’t respond to specific questions about their efforts to counter terrorist finance or oversee banks.

A White House statement said that “the Saudis continue to be a strong partner in the War on Terror….We have made significant progress on numerous fronts — including the freezing of assets and the shutdown of known conduits of [terrorist] funding.” A CIA spokesman said “publishing details of how our government seeks to track extremist financing” could undermine those efforts.

For the ruling Saud family, any confrontation with the Al Rajhis could be politically treacherous. To stay in power, the Sauds rely on the tolerance of clerical and business elites, many of whom view the royal family as corrupt. The wealthy Al Rajhis are a clan long at odds with the royal family. And U.S. intelligence files show the Al Rajhis also have close ties to another group critical of the royals: Saudi Arabia’s conservative clerics.

The Al Rajhi empire includes hotels, housing developments, commodities trading, shipping, aviation leasing and poultry. Its core is the bank, with more than 500 branches in Saudi Arabia and other offices abroad, from Pakistan to Malaysia. For 2006, the publicly held institution reported $1.9 billion in profit and $28 billion in assets.

Sulaiman Al Rajhi grew up in the Nejd desert, the birthplace of a severe form of Islam, called Wahhabism, that forbids birthday parties, musical instruments and photographing people. In the 1940s, he and a brother, Saleh, went to the Saudi capital city. “From literally nothing — making change on what were then the dirt streets of Riyadh — Sulaiman and Saleh al Rajhi built the Al Rajhi Bank,” Sulaiman’s lawyers told a U.S. court in New York in 2005.

Sulaiman described the business in a rare interview with Euromoney magazine in 1983. With two other brothers, he and Saleh began changing money for pilgrims taking camel caravans across the desert to the holy cities of Mecca and Medina. When throngs of migrant workers came to Saudi Arabia during the 1970s oil boom, the Al Rajhis helped them send their earnings home to places like Indonesia and Pakistan.

In 1983, the brothers won permission to open Saudi Arabia’s first Islamic bank, one that would observe religious tenets such as a ban on interest.

But relations with the ruling family frayed. The government-controlled press in 1992 publicized Al Rajhi Bank’s tangential role in an international scandal of that era, that of the bank called BCCI, U.S. diplomats reported. Then in 1994, an infant relative of the Al Rajhis died in a kidnapping. Official press accounts said the kidnappers slit the child’s throat, but Saudi dissidents claimed police shot the child. Mr. Al Rajhi blamed the royal family, the CIA report says.

Although Al Rajhi Bank continued to make a show of support for the Sauds — annual reports had flowery tributes to the royal family — the bank began refusing to make loans to the Sauds or to finance their projects, U.S. diplomats said at the time.

With its Islamic procedures, the bank was a magnet for the clerical establishment, which grew rich from alms amid the oil boom. As the clerics’ charities spread, they became entwined with Al Rajhi Bank and the conservative Al Rajhi family’s own extensive financial support for Islamic causes.

There is no reliable estimate of how much the Al Rajhis have given to promote Islam over the years, but an endowment holding much of Saleh Al Rajhi’s wealth gives an indication of the scale. Its Web site details nearly $50 million in direct donations within the kingdom to Islamic causes and at least $12 million in donations abroad. The overseas money went to aid embattled Muslims in Kosovo, Chechnya and the Palestinian territories and to finance Islamic instruction.

There are indications not all the giving was for such purposes. The Al Rajhi name appeared on a list of regular financial contributors to al Qaeda that was discovered in Sarajevo, Bosnia, in 2002. The list was authenticated for the Federal Bureau of Investigation that year by America’s top judicial witness against al Qaeda, a onetime al Qaeda business manager named Jamal Al Fadl, who is in the federal witness-protection program. He called the contributor list the “golden chain.”

A 2003 German police report said Sulaiman Al Rajhi and other family members had contributed more than $200,000 in 1993 to a charity that financed weapons for Islamic militants in Bosnia, in addition to providing humanitarian aid.

The 2003 CIA report tells of efforts by two Al Rajhi brothers to keep some giving secret. It says that Sulaiman and Saleh transferred $4 million to parties in Germany and Pakistan in December 1998 using “a unique computer code to send funds at regular intervals to unspecified recipients, suggesting they were trying to conceal the transactions and that the money may have been intended for illegitimate ends.”

The report says extremists “ordered operatives in Afghanistan, Indonesia, Pakistan, Saudi Arabia, Turkey, and Yemen” to use Al Rajhi Bank. Mamduh Mahmud Salim, convicted mastermind of the 1998 embassy bombings in Kenya and Tanzania, was carrying records of an Al Rajhi account (number 001424/4) when arrested in Germany in 1998, German police found.

In 2000, the CIA report says, Al Rajhi Bank couriers “delivered money to the Indonesian insurgent group Kompak to fund weapons purchases and bomb-making activities.”

A U.S. intelligence memo dated Nov. 16, 2001, says a money courier for Osama bin Laden’s second-in-command, Ayman al-Zawahri, traveled on a visa that the bank had obtained for him. The memo adds, however: “Reporting does not indicate whether bank management was witting” of the courier’s terrorist connections.

Al Rajhi Bank maintained at least 24 accounts and handled unusual transactions for Al-Haramain foundation — a charity that Treasury officials say has acted as a front for al Qaeda in 13 countries — until the Saudi government ordered the charity shut down in late 2004, according to intelligence and law-enforcement reports. The United Nations has designated top officials of Al-Haramain foundation as terrorists, and most of its offices now are closed.

According to a federal indictment in Oregon, a top Al-Haramain official in 2000 carried $130,000 in $1,000 traveler’s checks from Portland to Riyadh and deposited them with Al Rajhi — funds the indictment says were for the ultimate benefit of al Qaeda fighters in Chechnya. The indicted official, Soliman Al-Buthe, now works for the city of Riyadh. In an interview, he confirmed carrying the checks and depositing them with Al Rajhi Bank but said that they weren’t for al Qaeda and that he did nothing wrong.

A Jidda-based charity called the International Islamic Relief Organization, or IIRO, arranges for donors to send their donations directly to the Al Rajhi Bank. The IIRO’s chairman, Adnan Khalil Basha, says the charity is “absolutely apolitical” and has elaborate spending controls to prevent illicit diversions. The charity says it works with Al Rajhi Bank simply because its fees are low and its service is best.

However, the U.N. has labeled two of the IIRO’s branches and some of its officials as al Qaeda supporters. In 2004, the IIRO solicited donations through Al Rajhi Bank for the Iraqi city of Fallujah, then largely under the control of insurgents and the base of the late Abu Musab al Zarqawi, who led al Qaeda in Mesopotamia. The IIRO’s workers oversaw construction of a trauma clinic in an insurgent-controlled area of Fallujah. The U.S. saw the clinic as a haven for insurgent fighters, and Marines destroyed it in November 2004. That was “a big tragedy for us,” says the IIRO’s chairman, Mr. Basha.

He denies the charity had any involvement with the Iraqi insurgency. Charity officials complain that the U.S. has produced no evidence of their alleged ties to terrorism.

Two years earlier, federal agents raided the Virginia offices of a network of charities funded by Sulaiman Al Rajhi that worked closely with the IIRO and that — according to Justice Department court filings — provided funds to Palestinian terrorists. No charges have been filed.

A year after the 9/11 attacks, U.S. authorities began to lament the lack of Saudi action in taking down terrorists’ financial infrastructure. A November 2002 CIA report said the Saudi government “has made little independent effort to uncover terrorist financiers, investigate individual donors, and tighten the regulation of Islamic charities,” largely because of “domestic political considerations.”

The report advised against a noisy confrontation: “A key factor for continued successful counterterrorism initiatives with the Saudis, whose society is by tradition private, closed, and conservative, will be to ensure that their cooperation with the United States is handled discreetly and kept as much as possible out of the public eye.”

The U.S. began to rethink that approach after an al Qaeda attack in Riyadh in May 2003 that killed 26 people, including nine Americans. Deputies from the National Security Council, CIA, Treasury and State departments debated a proposal for legal and political action against Al Rajhi Bank, including the possibility of covert operations such as interfering with the bank’s internal operations, according to Bush administration documents and former U.S. officials.

One idea kicked around was “listing or threatening to list” Al Rajhi Bank as a supporter of terrorism. Such a listing can be done if recommended by a committee representing the Treasury, State and Defense departments and the CIA and NSC, and signed by the president. The designation bars U.S. companies from doing business with the named entity. A U.S. designation also normally is forwarded to the U.N., and if that body puts the name on its own terrorist-supporter list, all member states are obliged to freeze the entity’s assets.

Other ideas U.S. officials discussed included enlisting friendly countries to step up scrutiny and regulatory action against the Al Rajhis. The CIA report said that “a successful effort against the Al Rajhis would encourage efforts against other donors, or at a minimum, would discourage private funding of Al Qaeda.”

Ultimately, the Bush administration again chose merely to continue privately exerting pressure on the Saudis to stiffen their oversight.

“So keep fightin’ for freedom and justice, beloveds, but don’t you forget to have fun doin’ it. Lord, let your laughter ring forth. Be outrageous, ridicule the fraidy-cats, rejoice in all the oddities that freedom can produce. And when you get through kickin’ ass and celebratin’ the sheer joy of a good fight, be sure to tell those who come after how much fun it was.”
~ Molly Ivins, 1944 - 2007

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

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