US State Department’s growing expediency in dealing with Khartoum’s terrorist connections, 5 November 2001

Eric Reeves, 5 November 5, 2001       •

State Department expediency in dealing with Sudan’s ongoing financial connections to Osama bin Laden and al-Qaeda has become all too obvious. The continuing refusal by the State Department to designate Al Shamal Islamic Bank in Khartoum as supporting terrorism is a clear sign that unsavory deals are being cut with the National Islamic Front for terrorist “intelligence.” A recent report by the Chicago Tribune reveals that despite a month of questioning on the subject, the State Department is apparently content with the view that there are “‘multiple ways to deal with problem banks,’ and that formally designating a bank as supporting terrorism ‘is not the only one, and often not the most effective one.'” This is outrageous expediency, and sends exactly the wrong message to Khartoum.

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In one part of the State Department, where the April 2001 “Overview of State-sponsored Terrorism” is produced, the findings are clear: “[In 2000] Sudan continued to be used as a safe haven by members of various groups, including associates of Usama Bin Ladin’s al-Qaida organization, Egyptian al-Gama’a al- Islamiyya, Egyptian Islamic Jihad, the Palestine Islamic Jihad, and HAMAS. Most groups used Sudan primarily as a secure base for assisting compatriots elsewhere.” [from the State Department’s April 2001 “Overview of State-sponsored Terrorism”].

But in an evidently—-but by no means certainly—different part of the State Department, a decision is made every day not to list Al Shamal Islamic Bank in Khartoum as a financial linchpin in the terrorist efforts of Osama bin Laden, despite overwhelming evidence that this has been precisely the bank’s role. As the Chicago Tribune reports (November 3, 2001).

“So far the list [of organizations and institutions supporting bin Laden and al-Qaeda] does not include an obscure bank in the Sudanese capital of Khartoum, identified by Al Qaeda defectors as a fundamental ingredient in bin Laden’s financial equation.”

And as previous reports from this source have demonstrated, the evidence for a connection between Al Shamal Islamic Bank and bin Laden comes in many other forms.

What explains this bizarre disconnection in our “war on terrorism”? The National Islamic Front regime that brutally tyrannizes Sudan from Khartoum certainly knows that Al Shamal Islamic Bank has been providing very substantial support to bin Laden and al-Qaeda. And so does a State Department official cited by the Chicago Tribune report. Told that Al Shamal management was denying that it had received any support from Osama bin Laden, “the State Department official replied that ‘we stand by’ the assertion that bin Laden put $50 million into the bank” (Chicago Tribune, November 3, 2001).

The Tribune report (attached) also notes that:

Though small, the Al Shamal Islamic Bank enabled bin Laden to move money quickly from one country to another through its correspondent relationships with some of the world’s major banks, several of which have been suspended since Sept. 11.

So the inevitable question becomes, why isn’t this bank being listed by the Bush administration in its “financial war on terrorism”? Part of the answer is that Washington’s unseemly lust for intelligence has allowed it to forget a great deal about what Khartoum and the National Islamic Front represent. Moreover, the Tribune account offers another dismayingly compelling answer:

In the case of Al Shamal, such a designation could well have diplomatic repercussions that the White House, having this week apparently won the reluctant cooperation of the Saudi government in helping stem the flow of terrorist funds from that country, would rather avoid. According to public records, among the investors in the Al Shamal Islamic Bank is a Geneva-based financial services conglomerate headed by Prince Mohamed al-Faisal al-Saud, son of the late King Saud and a cousin of the current Saudi monarch, King Fahd.

What sort of expedient calculations are at play here? How is the US advancing the cause of a “financial war on terrorism” by refusing to designate an obviously key banking institution in Khartoum for fear of embarrassing the Saudis, who have themselves clearly been funding Osama bin Laden and al-Qaeda in a wide variety of ways?

Further, the State Department continues to make publicly approving noises about Khartoum’s “cooperation” in a war on terrorism, still willing to ignore the obviously self-interested motives for this “cooperation”—and the clear limits on its value, given the complicity of senior National Islamic Front leaders in supporting international terrorism.

This accelerating slide down the slippery slope of raw expediency is all too revealing of Washington’s new attitude toward Khartoum and its massive campaign of state-sponsored, state-conducted terrorism against civilians in southern Sudan. From the bombing of hospitals and schools, to the military assault on humanitarian relief efforts, to the scorched-earth warfare in the oil regions, Khartoum’s reign of terror in the south shows no sign of abating.

Indeed, the National Islamic Front has certainly been much encouraged in its larger military ambitions by the recent American expression of support for the Libyan-Egyptian Initiative (“very positive,” according to Robert Oakley, top advisor to Special Envoy for Sudan John Danforth). But only a just peace can halt Khartoum’s military ambition to subdue the south, impose shari’a, and take full control of the rich oil fields. And peace is precisely what is foreclosed by the Libyan-Egyptian Initiative, with its transparent effort to remove the right of southern self-determination from the negotiating table. And absent this key requirement—key for all the southern constituencies, both within and outside of the Sudan People’s Liberation Movement/Army—peace will not come.

Expediency, the unprincipled grab for near-term apparent advantage without considering long-term costs, will soon begin to haunt the US in its war on terrorism. Just as significantly, by refusing to use all our resources to halt the holocaust in southern Sudan, the US will find itself allied with those who have simply ceased to care about the death, displacement, and famine that make Sudan’s civil war the most destructive conflict in the world today. It is an alliance with infamy.

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Swiss Officials Freeze Bank Accounts Linked to Supporters of Terrorist Groups

Chicago Tribune – Illinois – KRTBN, Nov 3, 2001

BY JOHN CREWDSON

GENEVA–Osama bin Laden’s global financial network continued to come under scrutiny this week, after Swiss authorities froze two dozen bank accounts totaling $12 million linked to individuals on the Bush administration’s list of supporters of bin Laden’s Al Qaeda organization and affiliated terrorist groups.

The names on the U.S. list–which was expanded again Friday–range from that of Mustafa Muhammad Ahmad, the purported paymaster of the Sept. 11 operation, to the Al-Nur Honey Press Shops of Sanaa, Yemen.

So far, however, the list does not include an obscure bank in the Sudanese capital of Khartoum, identified by Al Qaeda defectors as a fundamental ingredient in bin Laden’s financial equation.

The Al Shamal Islamic Bank does not appear to be just another of the many worldwide financial institutions, large and small, bin Laden has used to move money to and from his terrorist cells. According to a 1996 State Department report on bin Laden’s finances, bin Laden co-founded the Al Shamal bank with a group of wealthy Sudanese and capitalized it with $50 million of his inherited fortune.

As for why Al Shamal had not been added to the administration’s list of terrorist supporters, presidential spokesman Ari Fleischer told reporters that “the Department of the Treasury is reviewing that as we speak, and there can be additional announcements at any time.”

That was last month. A State Department official who asked not to be identified later told the Tribune that there were “multiple ways to deal with problem banks,” and that formally designating a bank as supporting terrorism “is not the only one, and often not the most effective one.”

In the case of Al Shamal, such a designation could well have diplomatic repercussions that the White House, having this week apparently won the reluctant cooperation of the Saudi government in helping stem the flow of terrorist funds from that country, would rather avoid.

According to public records, among the investors in the Al Shamal Islamic Bank is a Geneva-based financial services conglomerate headed by Prince Mohamed al-Faisal al-Saud, son of the late King Saud and a cousin of the current Saudi monarch, King Fahd.

The Al Shamal bank, which opened for business in 1990, admits that Osama bin Laden held three accounts there between 1992 and 1997, when he used Sudan as his base of operations before fleeing to Afghanistan. But the bank insists in a written statement that bin Laden “was never a founder or a shareholder of Al Shamal Islamic Bank.”

Told of the bank’s statement, the State Department official replied that “we stand by” the assertion that bin Laden put $50 million into the bank.

The Al Shamal bank does acknowledge that among its five “main founders” and principal shareholders is another Khartoum bank, the Faisal Islamic Bank of Sudan. According to public records, 19 percent of the Faisal Islamic Bank is owned by the Dar Al-Maal Al-Islami Trust, headed by Saudi Prince al-Saud.

The $3.5 billion DMI Trust, whose slogan is “Allah is the purveyor of success,” was founded 20 years ago to foster the spread of Islamic banking across the Muslim world. Its 12-member board of directors includes Haydar Mohamed Binladen, according to a DMI spokesman, a half-brother of Osama bin Laden.

According to Ziad Keilaney, a former executive vice president and chief economist for DMI, “the dominant money” behind DMI comes from Saudi Arabia, “not only from the royal family but other wealthy individuals.” In addition to controlling and investing in Islamic banks in Bahrain, Pakistan, Sudan and other countries, DMI provides Islamic investment banking and financial management services.

Among other things, Islamic banking principles forbid earning money from interest. Instead, bank depositors share the pooled profits–and losses–from enterprises that borrow their money, in theory giving poor and rich equal access to financing. “It’s got noble ideas behind it,” says Frank Vogle, who directs the Islamic Legal Studies Program at Harvard Law School. “It’s just that they haven’t figured out how to implement it.”

Though small, the Al Shamal Islamic Bank enabled bin Laden to move money quickly from one country to another through its correspondent relationships with some of the world’s major banks, several of which have been suspended since Sept. 11.

The Al Shamal bank was identified as one of bin Laden’s principal financial entities during the trial earlier this year of four Al Qaeda operatives convicted in the 1998 bombings of two U.S. embassies in Africa.

An Al Qaeda defector, Jamal Ahmed Mohamed al-Fadl, testified that he and several other Al Qaeda operatives who worked for bin Laden in Sudan had accounts at the Al Shamal Bank that were used to finance terrorist activities. “Also we got [an] account in Bank Faisal Islami,” Fadl said, an apparent reference to the bank partly owned by the DMI Trust.

DMI said in a statement last week that it “categorically refutes” any “insinuations, allegations or erroneous statements associating the group to financial networks of terrorist organizations.”

Another Al Qaeda defector, Essam al Ridi, testified that bin Laden wired him $230,000 from the Al Shamal bank to purchase a used jet trainer in Arizona. He said bin Laden wanted the plane to ship stinger anti-aircraft missiles from Pakistan to Sudan.

A DMI spokesman, Mouaouia Mokhtari, said he had “no information” on whether any of the accounts frozen last week by the Saudis or the Swiss were in banks controlled by DMI or in which it has an interest.