Follow the money
The Bosnian Connection
NEWS ARTICLE from The Plain Dealer, 11-2-01, By Douglas Farah, Washington Post
``African rebels trade diamonds to aid al-Qaida
[Hacked off arms of children are the bloody symbol of this business.]
FREETOWN, SIERRA LEONE -- The terrorist network led by Osama bin Laden has reaped millions of dollars in the last three years from the illicit sale of diamonds mined by rebels in Sierra Leone, according to U.S. and European intelligence officials and two sources with direct knowledge of events.
Diamond dealers working directly with key operatives in bin Laden's al-Qaida network bought gems from the rebels at below-market prices and sold them for large profits in Europe. Investigators in the United States and Europe estimated al-Qaida derived millions from its dealings with the Revolutionary United Front (RUF).
Since July, the sources said, the diamond dealers have changed their tactics, buying far more diamonds and paying premium prices for them.
Investigators say that indicates that al-Qaida, perhaps anticipating its accounts would be frozen after the Sept. 11 terrorist attacks, sought to protect its money by sinking it into gemstones, a commodity that is easy to hide, holds its value and is almost untraceable.
"When prices go up and supply goes up, it means someone is seeking to launder or hide cash, and we believe that is the case here," a U.S. official said. "Diamonds don't set off alarms at airports. They can't be sniffed by dogs. They are easy to hide, and are highly convertible to cash. It makes perfect sense."
U.S. and European intelligence officials, overwhelmed after Sept. 11 and with very few agents in West Africa, said they realized only recently how important the diamond flow was to al-Qaida and other terrorist organizations.
"I now believe that to cut off al-Qaida funds and laundering activities, you have to cut off the diamond pipeline," a European investigator said. "We are talking about millions and maybe tens of millions of dollars in profits and laundering."
The diamonds are mined by RUF rebels, who became infamous during the civil war for hacking off the arms and legs of civilians and abducting thousands of children and forcing them to fight. Sierra Leone's alluvial diamond fields, some of the richest in the world, were the principal prize in the country's civil war, and they have been under RUF control for the last four years.
Small packets of diamonds, often wrapped in rags or plastic sheets, are taken by senior RUF commanders across the Liberian border to Monrovia, according to sources. There, at a safe house protected by the Liberian government, the diamonds are exchanged for briefcases of cash brought by diamond dealers who fly several times a month from Belgium to Monrovia, where they are escorted by special state security through customs and immigration control.
The diamond dealers are selected by Ibrahim Bah, a Libyan-trained former Senegalese rebel and the RUF's principal diamond dealer, the sources said. The buyers' identities are known only to Bah and a few others ...
A U.N. panel of experts estimated the market value of RUF "blood diamonds" sold in 1999 to be about $75 million. But since the government of Sierra Leone and the RUF agreed to a cease-fire last year, diamond mining has greatly accelerated.
Sources in the diamond trade estimate that the RUF actually receives less than 10 percent of market value for the diamonds it sells, paid mostly in the form of weapons, food and medicine.
Charles Taylor, Liberia's president, receives a commission on each transaction in Monrovia, and Bah and the other brokers share the rest, according to sources involved in the dealings. Taylor repeatedly has denied involvement in illicit diamond dealings.
"Even if only 10 percent went to terrorist organizations, you are talking about millions of dollars in virtually untraceable funds, every year," a European investigator said. ''
NEWS ARTICLE from The Plain Dealer, 9-24-01, By Robert O'Harrow Jr., David S. Hilzenrath and Karen DeYoung, Washington Post
``Bin Laden's cash takes no clear path to terror
The legend of Saudi fugitive Osama bin Laden is that of the world's richest terrorist, a business-savvy nomad who has used a vast inheritance and a constellation of companies to finance a global network of violence.
But the details of his finances, as gleaned from court records and government reports in the United States and elsewhere, tell a more complex tale. Although bin Laden commands a personal fortune, his agents have often carried out their most violent attacks on a paltry budget.
In the terrorist attacks of the 1990s, bin Laden's men took rooms in cheap hotels, often used cash, and sometimes turned to petty crimes to raise money for living expenses. They lived frugally in nondescript neighborhoods. Some of his cadres supported themselves with criminal activity, such as identity theft and credit-card fraud.
The Sept. 11 attacks may have involved more money than some earlier actions. U.S. officials said the terrorists maintained middle-class lifestyles, took airline flights around the country and paid thousands of dollars for flight instruction.
But the bin Laden agents covered their tracks. They often distributed cash by hand, or transferred it through underground banking systems that have long eluded regulators and law enforcement authorities. This use of concealed channels will undoubtedly pose a major challenge for investigators scrambling to trace bin Laden's money and find ways to destroy his organization, al-Qaida.
The al-Qaida financial network remains hidden, but some details of bin Laden's business ventures have come to light in recent years in testimony during trials of those charged with carrying out terrorist attacks.
In Sudan in the 1990s, bin Laden engaged in construction and agriculture. In recent years, he has helped bankroll the ruling Taliban militia in Afghanistan.
A State Department report in 1996 called him "one of the most significant financial sponsors of Islamic extremist activities in the world today." The estimates of his personal fortune vary widely, from a few million dollars to $300 million.
To track bin Laden's money in President Bush's new war on terrorism, U.S. investigators are expected to examine electronic banking systems and known offshore banking havens, while also seeking help from officials in Malaysia, Singapore and other Asian countries bin Laden is believed to use as banking bases.
Investigators also will be examining the ties between al-Qaida and Islamic charities and wealthy individuals in the United States, Saudi Arabia, United Arab Emirates and elsewhere. These private donors are believed to give millions of dollars to bin Laden's group every year.
Ever since his days as a student of economics and finance at King Abdul Aziz University in Jeddah, Saudi Arabia, bin Laden has shown a special affinity for raising and managing money.
Following the Soviet invasion of Afghanistan in 1979, bin Laden, son of a construction magnate, spent a decade marshaling funds and other support for the CIA-backed Afghan resistance, organizing a vast network of Islamic donors. Bin Laden has built upon those sources and methods to finance his terrorism.
After the Soviet pullout from Afghanistan, bin Laden moved his activities to Sudan, but also spent time in Saudi Arabia, working for the family construction business. Though the firm has been a major contractor for the kingdom, bin Laden supported a militant Islamic opposition, and the Saudi government expelled him in 1991, according to U.S. government accounts. He went to Sudan ...
In Sudan, bin Laden invested in a variety of businesses - including construction, farming and banking. He built bridges, an international airport and a major roadway. He harvested peanuts, fruit, sesame, white corn, sunflowers and wheat. He dealt in imports and exports.
He paid $50 million for part ownership of a Khartoum bank, and he ran Taba Investment Co., which invested in global stock markets. He formed ventures with members of Sudan's ruling National Islamic Front, using his wealth to win favor and protection. Under pressure from the United States and Egypt, Sudan expelled bin Laden in 1996.
Bin Laden moved to Afghanistan, where he has been financing the Taliban's war against opposition forces in the northern part of the country.
His organization draws large amounts of money from wealthy Islamic donors and charitable groups, according to current and former U.S. officials, Pakistani intelligence sources, Muslim clerics close to bin Laden and others who have studied his organization ...
Beyond individual donations, some of the $10 billion each year that the Saudi leadership showers on Islamic organizations through the ministry of religious works - largess designed to appease fundamentalists - is said to find its way into bin Laden's coffers.
Bin Laden's group is said to have an archipelago of bank accounts stretching from Barclay's Bank in London, where a suspect account was shut down by the British government this week, to Girocredit in Vienna to several banks in the trading port of Dubai of the United Arab Emirates.
Some U.S. officials liken al-Qaida to "a large holding company," with bin Laden at the top and independent operators at the bottom. "Nairobi was conducted on a shoestring," said another former U.S. official of the embassy bombing there. "In fact, the local mastermind was constantly complaining . . . about money - about the fact that he did not have enough."
Instead of wiring money directly to terrorist cells, al-Qaida often provided seed money and then urged them to raise money on their own. It appears they often did that through identity theft and credit-card fraud.
"It is very clear that cells live off the land," said Jonathan Winer, a former deputy assistant secretary for enforcement at the State Department. "Once they've gotten seed money, they have to be self-sufficient."
Al-Qaida operations often bypass traditional money-laundering techniques - such as the use of electronic transfers and offshore accounts - that might provide clues to sources and methods. Instead, agents deliver cash in suitcases. "Mostly they move it through couriers," just like drug cartels or smugglers, Simon said.
Another way to move money is an underground system known as hawala. Part of the universal Arabic banking terminology, the word refers to a money transfer, regardless of how it is made. The unregulated system, based on trust and relationships, "allows funds to be transferred in secrecy without any electronic trail" and "virtually no paper trail," said William Wechsler, who was director for transnational threats at the National Security Council during the Clinton administration.
"For many people in remote areas of the world, the hawala system is faster, cheaper and more reliable than Citibank," Wechsler said. Organized through a series of informal chits and promises, such a system can move huge amounts of cash. None of it crosses borders, and apart from personal notes, there's no record of the transactions.
"A good way to look at the financial life support for bin Laden is not just to look at his financial assets," said Ranstorp, "but to realize the fact that the compartmentalized networks . . . generate their own financial support through vast amounts of financial fraud."
NEWS ARTICLE from The Plain Dealer, 10-7-01, By Craig Pyes, Josh Meyer and William C. Rempel, Los Angeles Times
``Trail of terrorism often leads to Bosnia, report shows
ZENICA, BOSNIA-HERZEGOVINA -- Hundreds of foreign Islamic extremists who became Bosnian citizens after battling Serbian and Croatian forces present a potential terrorist threat to Europe and the United States, according to a classified U.S. State Department report and interviews with international military and intelligence sources.
The extremists include hard-core terrorists, some with ties to Osama bin Laden, protected by militant elements of the former Sarajevo government. Bosnia-Herzegovina is "a staging area and safe haven" for terrorists, said one former senior State Department official ...
In several instances, terrorists with links to Bosnia have launched actions against Western targets:
An Algerian with Bosnian citizenship, described by one U.S. official as "a junior Osama bin Laden," tried to help smuggle explosives in 1998 to an Egyptian terrorist group plotting to destroy U.S. military installations in Germany.
The shipment included military C-4 plastic explosives and blasting caps, the former U.S. official said. The CIA intercepted the shipment, foiling the attack.
Another North African with Bosnian citizenship belonged to a terrorist cell in Montreal that conspired in the failed millennium plot to bomb Los Angeles International Airport.
One of bin Laden's top lieutenants - a Palestinian linked to major terrorist plots in Jordan, France and the United States - had operatives in Bosnia and was issued a Bosnian passport, according to U.S. officials ...
Last week, Bosnia's new interior minister, citing "trustworthy intelligence sources," said scores of bin Laden associates might be attempting to flee Afghanistan ahead of anticipated U.S. military reprisals for the Sept. 11 attacks, seeking refuge among militant sympathizers in Bosnia ...''
BACKGROUND ARTICLE from The Plain Dealer, 9-23-01,
``The Taliban, or "students," are unlikely rulers. In another time and place, they might have been conservative religious scholars or village clerics.
But in Afghanistan, these religious militias have filled a vacuum after warfare wiped out the nation's traditional village rulers.
The Taliban marched under the banner of Muslim fundamentalism, and in 1996, seized the capital, Kabul. In a city accustomed to Western dress and culture, their imposition of harsh Islamic law hit like a power saw on soft wood.
Women who once wore tailored suits and had professional careers were barred from jobs, college and appearing in public in anything but the stifling head-to-toe covering known as a burqa.
Muslims could be whipped for failing to pray five times a day, while Hindus had to wear pieces of yellow cloth, ostensibly to protect them from such whippings.
Most Taliban are Pashtuns from the wild mountains of the south, around the city of Kandahar, their unofficial capital. This area also was home to Afghanistan's traditional tribal aristocracy.
When these longtime elders were massacred by Soviet troops in the 1980s, the "mullahs" or village religious leaders seized the helm, says Peter Tomsen, former U.S. special envoy to Afghanistan ...
During the 1980s, ... [the Taliban] also got U.S. weaponry, training and funds when they fought with the CIA-backed mujahedeen against Soviet troops. Some of these weapons, including heat-seeking Stinger missiles, may still be in Taliban hands.
Who else lives there?
Tomsen divides Afghanistan's population as follows:
Pashtuns - 45 percent
Tajiks - 25 percent
Hazaras (descendants of Genghis Khan) - 12 to 15 percent
Uzbeks - 6 percent
Turkmens, Aimaks and Nuristanis are among a host of smaller groups. The nation's chief languages are Pashtu and Farsi.
Who opposes the Taliban?
Armed opposition comes from the Tajiks, Hazaras and Uzbeks, banded together in the Northern Alliance that is aided by Russia and Iran but prey to factionalism. Its chief strategist, Ahmed Shah Massood, was assassinated earlier this month [as part of the preparation for 9-11-01] ... ''
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