Bruce Tefft
Thu, 23 Jun 2005 09:05:45 -0700
DHS Probes Bank Chairman's Terror Links - and Names Prove Troublesome By Justin Rood, CQ Staff http://page15.com/2005/06/dhs-probes-bank-chairmans-terror-links.html A multimillion-dollar deal between a U.S. telecommunications firm and a Middle Eastern investment bank has been held up for more than seven months while the Department of Homeland Security (DHS) investigates concerns including the background of the bank's chairman. In November 2004, Arcapita - an Atlanta-based branch of a large Bahraini investment firm, Arcapita Bank - agreed to purchase Cypress Communications for $40 million. Cypress, also based in Atlanta, provides fiber-optic communications services to 1,300 office buildings throughout the United States. The same month, the two companies asked the Federal Communications Commission (FCC) for permission to close the deal. Because Arcapita is a foreign-owned firm, FCC lawyers passed the deal to a group of officials from the Justice Department, the FBI and DHS's Directorate of Information Analysis and Infrastructure Protection (IAIP) for review. 'Team Telecom' On Dec. 3, 2004, the group, informally known as "Team Telecom," decided it had concerns and put the deal on hold. Mohammed Abdulaziz Aljomaih, which is the name of Arcapita's chairman, was on a list of financiers to Osama bin Laden. The list, known as the Golden Chain, was discovered by FBI agents in 2002 in Sarajevo, Bosnia, and is thought to identify Osama bin Laden's 20 biggest donors. On Dec. 13, 2004, DHS, on behalf of Team Telecom, asked the FCC to hold its approval of the deal. "Given the potential for foreign influence," wrote Regina Hart of the DHS general counsel's office, the team was concerned that government security agencies may not be able to detect "illegal electronic surveillance" that used Cypress' networks, nor could they tap calls or data transmissions over Cypress phone lines. The FCC delayed the merger later that month. (Such delays are rare, but not unusual: In the past 18 months, three other deals, out of more than 70, have been held up for national security concerns.) DHS expressed concerns over the director's name to Arcapita, its executive director, Charlie Ogburn, confirmed by telephone June 17. But Arcapita insisted that its chairman was not the same person whose name was on the Golden Chain. "He's not the same person; he has the same name," said Ogburn. Attempts on Monday to reach Aljomaih, Arcapita's chairman, were unsuccessful. Arcapita was represented in the matter by a team of lawyers from Kelley Drye & Warren, an international law firm with offices in Washington that includes former Republican Virginia Gov. James Gilmore. Gilmore was chairman of the eponymous commission whose findings influenced the creation of DHS. Obscure Panel Reviewed Deal According to Arcapita's Ogburn, Kelley Drye lawyers, and also the government, advised the company to ask an obscure national security panel to review the deal. On April 4, it did. A month later, the panel - known as the Committee on Foreign Investment in the United States (CFIUS) - notified Arcapita and Cypress that it would review the proposed sale. CFIUS advises the president on whether he should prevent or allow foreign investment that might threaten national security. It is composed mainly of White House Cabinet members and senior advisers. The secretaries of DHS, State, Commerce, Treasury and Defense are members, as well as the Office of Management and Budget director, the national security adviser and the assistant to the president for economic policy. Ogburn said Arcapita eventually proved "to the satisfaction of DHS" that its chairman was not the same man listed on the Golden Chain. That one, Ogburn said, "is now deceased" - and is not the firm's chairman. DHS would not comment for this article. Both Ogburn and Gilmore said they were confident that CFIUS was preparing to recommend to the White House that Arcapita's purchase of Cypress be allowed. "DHS wanted a large number of safeguards built in to the arrangement," said Gilmore by telephone on Monday - mostly disclosure of information and promises of transparency. Arcapita has acceded to many of those, he said. Tony Fratto, spokesman for the panel, declined to comment. "CFIUS cases are by definition matters of national security, so we are not permitted to comment on any particular transaction," he explained by telephone. Justin Rood can be reached at <[EMAIL PROTECTED]> [EMAIL PROTECTED] Copyright 2005 Congressional Quarterly. All Rights Reserved. Reprinted with permission. Reproduction without the express written consent of Congressional Quarterly is prohibited. FAIR USE NOTICE: All original content and/or articles and graphics in this message are copyrighted, unless specifically noted otherwise. All rights to these copyrighted items are reserved. Articles and graphics have been placed within for educational and discussion purposes only, in compliance with "Fair Use" criteria established in Section 107 of the Copyright Act of 1976. The principle of "Fair Use" was established as law by Section 107 of The Copyright Act of 1976. 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