Author: Jeff Gerth and Judith Miller
Publication: The New York Times
Date: October 17, 2002
Report Says Saudis Fail to Crack
Down on Charities That Finance Terrorists
Al Qaedas terror network derives
most of its financing from charities and individuals in Saudi Arabia, but
the kingdom has "turned a blind eye to this problem," according to a new
report by experts on terrorist finances.
The report faults the United States
for failing to confront the Saudis, saying American government officials
have asserted that Saudi Arabia is cooperating on stopping terrorist financing
"when they know very well all the ways in which it is not."
The report released today was prepared
by a committee sponsored by the Council on Foreign Relations in New York.
Although examples of the misuse of Saudi donations by terrorists have been
previously reported, the councils study goes further by concluding for
the first time that Saudi Arabia is the single largest source of terrorist
financing.
Moreover, the studys authors warn
that the relationship between the United States and Saudi Arabia needs
to be changed after the attacks of Sept. 11 last year. Previous criticism
of Saudi ties to Al Qaeda stemmed largely from the fact that 15 of the
19 hijackers came from the kingdom.
"Theres always been a tendency to
treat the kingdom with kid gloves because of its economic and strategic
importance," said one member of the panel, Stuart E. Eizenstat, a former
deputy treasury secretary.
But he said the report aimed to
emphasize that "you have to make a fundamental judgment that dealing with
terrorist financing is important enough to break with the mold in our relationship."
In one of its starkest conclusions,
the report said, "It is worth stating clearly and unambiguously, if only
because official U.S. government spokespersons have not: for years, individuals
and charities based in Saudi Arabia have been the most important source
of funds for Al Qaeda, and for years Saudi officials have turned a blind
eye to this problem."
Rob Nichols, a spokesman for the
Treasury Department, said the report was helpful but flawed because it
focused too much on the Clinton administrations efforts and did not reflect
the "exponential increase in people, agencies and money dedicated to terrorist
financing" by the Bush administration.
Mr. Nichols said the administration
was "pleased with the cooperation with the Saudis," including their efforts
to regulate charities and the designation of two Saudis as supporters of
terrorists.
Saudi officials declined to comment
on the reports findings. Last month, Saudi Arabia released a list of actions
they said had been taken to combat misuse by terrorists of charitable donations
and legitimate transactions.
Those included establishing financial
control mechanisms meant to "ensure that terrorist organizations cannot
take advantage of these charitable groups in the future."
While praising the Bush administration
for blocking assets of some charitable organizations since the Sept. 11
attacks, the report from the Council on Foreign Relations concluded that
there was much work to be done in shutting down the financing of terror
groups.
The report contains dozens of organizational
and policy recommendations for the United States and other countries.
The first strategic recommendation
calls on the United States to "speak out bluntly, forcefully and openly"
about failures by foreign countries to combat terrorism. Past lack of candor,
the report said, is a crucial part of the problem.
The chairman of the nonpartisan
committee is Maurice R. Greenberg, chairman and chief executive of the
American International Group, a leading financial conglomerate.
Other members include former and
current government officials like William H. Webster, former director of
the Federal Bureau of Investigation and the Central Intelligence Agency;
David Cohen, deputy commissioner for intelligence of the New York City
Police Department; and William F. Wechsler, former director for transnational
threats at the National Security Council.
The report said tracing terrorist
financing was complicated by a basic tenet of Islam known as zakat, which
requires every Muslim to give a small percentage of his wealth each year
to charitable causes like hospitals, mosques and schools. Because it is
the worlds richest Muslim nation, Saudi Arabia is the largest backer of
Islamic charities.
But the report maintains that the
"widely unregulated, seldom audited and generally undocumented practices
have allowed unscrupulous actors such as Al Qaeda to access huge sums of
money over the years."
In 1999 and 2000, officials of the
Clinton administration, including some who worked on the councils report,
went to Saudi Arabia to raise the subject of charitable donations. But
the issue never became a priority at the top levels of government, according
to Mr. Eizenstat and other former officials.
In 1999, Saudi Arabia tightened
its money laundering laws to bring it into compliance with international
standards, but according to the report, the changes "have not been implemented."
