http://www.nytimes.com/2002/10/17/international/middleeast/17SAUD.html?ex=
1035518400&en=c9902de09dce1dcf&ei=5062&partner=GOOGLE
THE MONEY TRAILReport Says Saudis Fail to Crack Down on Charities That
Finance TerroristsBy JEFF GERTH and JUDITH MILLER
wASHINGTON, Oct. 16 � Al Qaeda's 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 the Council on
Foreign Relations in New York. Although examples of the misuse of Saudi
donations by terrorists have been previously reported, the council's
study goes further by concluding for the first time that Saudi Arabia is
the single largest source of terrorist financing.
Moreover, the study's 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.
"There's 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
administration's 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 report's 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 world's 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 council's 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."
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