Bin Laden at money network's roots
By Scott Bernard Nelson and Stephen Kurkjian, Globe Staff, 11/9/2001
<<The Somalia-based international financial network that was raided by federal authorities in Boston and four other cities on Wednesday was cofounded by Osama bin Laden in 1989, according to government intelligence reports. In recent years, the company reportedly turned over at least
$25 million a year to bin Laden's Al Qaeda terrorist network.
The Al Barakaat network is managed by Ahmed Nur Ali Jim'Ale, who a senior Treasury Department official yesterday said fought alongside bin Laden in Afghanistan during the 1980s. The official said intelligence reports show that bin Laden, Jim'Ale, and leaders of a Somalia-based radical Islamist
group, Al-Itihaad al-Islamiya, together founded the company that has become one of the largest conglomerates in Somalia.
Federal officials moved to freeze the assets of Barakaat and another Arab financial network, Al Taqwa Management Organization AG, on Wednesday. They also raided Barakaat offices in Dorchester, Minneapolis, Seattle, Virginia,
and Columbus, Ohio.
The Treasury Department said last night that it has frozen $971,000 worth of Barakaat's assets in the United States, and seized land and buildings belonging to the company.
Barakaat officials continued to maintain their innocence yesterday, and Dorchester brothers Liban and Mohamed Hussein have said through their lawyer that the Barakaat operation they ran here over the past four years did nothing more than provide a much-needed service for Somali immigrants in the
Boston area. Both are charged with running a money-exchange business without a Massachusetts license. Liban Hussein remained in Canada yesterday.
The Treasury Department yesterday said that while some of the US operators may have been unwitting participants, others knew where the money was going.
''The belief by the government is that some of the people in the United States were aware they were funding terrorists and some were probably not,'' the senior official said. Barakaat's US headquarters was in Dorchester.
Barakaat's operations wired at least $500 million in annual worldwide profits to the company's central money-exchange office in the United Arab Emirates, according to US intelligence reports. Al Qaeda received a flat 5 percent cut of that money, the reports say, or at least $25 million per
year.
''That doesn't mean the rest of the money was used for good,'' said the Treasury official. ''Our intelligence suggests that Barakaat is involved in all sorts of other criminal activity.''
Investigators wouldn't provide as much information about the connection between Al Taqwa and bin Laden. Al Taqwa is a system of banks based in Lugano, Switzerland, that investigators have said acts as a financial adviser to Al Qaeda. It also operates in Liechtenstein, Italy, and the
Bahamas, and, the Treasury official said yesterday, helped bin Laden move money around the world.
The Treasury Department did say, though, that Al Taqwa chairman Youssef Nada ''has acted with Al Qaeda and is involved with Al Qaeda.'' Nada could not be reached for comment.
Bin Laden has reportedly used Somalia as a safe haven and staging area for terrorist activities. In 1993, according to the Washington Post, he sent several top lieutenants there to provide assistance to Mohamed Farah Aideed, a local warlord. Aideed's forces killed 18 US Army soldiers serving in a UN peacekeeping mission in a firefight in October 1993.
After US troops withdrew from Somalia, Al Qaeda members continued to use Somalia as a base of operations, including preparations for the 1998 bombings of US embassies in Kenya and Tanzania, according to intelligence officials and court records. Bin Laden reportedly visited a Somali camp
where preparation had taken place for the bombings to congratulate the plotters.
The United States maintains no embassy in Somalia and portions of the East African country are said to be off limits for travel by non-Muslims. Al Itihaad, the radical Muslim group, controls much of the country, having achieved cross-clan support in the ethnically divided country. Little
is known about AlItihaad, but it was placed on a US list of terrorist organizations in late September and it was said to have an ongoing ownership interest in Barakaat.
Government officials said yesterday that investigators have more evidence than shown in the court documents released Wednesday about Barakaat's financing of Al Qaeda. ''I acknowledge to you that there is nothing in what we filed to show those connections,'' said a Justice Department official, who asked not to be identified. ''But it would be very premature to say that information will not come out in the end.''
Jonathan M. Winer, formerly in charge of money-laundering
investigations at the State Department during the Clinton administration, said while he was unaware of the specifics of the case, he was certain that the government had ample evidence to prove a financial link between Barakaat and Al Qaeda.
''There can be any number of reasons why the government does not wish to detail what it knows right now,'' Winer said. ''There can be confidential sources involved or methods of gathering intelligence they don't want to reveal. But if Treasury says they have the evidence, they've got the
evidence.''
The government, meanwhile, continued to emphasize yesterday that Barakaat's customers would have had no way of knowing they were patronizing a business that supported terrorist groups.
Both Barakaat and Al Taqwa participate in the informal money-transfer system known as ''hawala'' or ''hundi,'' an informal network that allows anyone to walk in to an exchange, hand over cash, and ask that it be transferred
to another person almost anywhere else in the world.
The exchange takes a commission, calls an associate in the destination city, and asks that the same amount be given to the named recipient. After the transaction is completed, records of the individuals involved is typically destroyed. The business owners settle up later.
Although it did not have the needed license from the state to transfer money, Barakaat's Dorchester branch moved funds to Somalia through accounts it maintained at Citizens Bank and Key Bank in Portland, Maine. It had maintained an account at BankBoston but the bank shut it down in 1999
because of what it termed ''illegal activities'' by Barakaat. A spokesman for FleetBoston Financial Corp., which acquired BankBoston two years ago, said Tuesday the account aroused suspicion because a large number of wire transfers were just below $10,000, the amount at which a report has to
be filed with federal authorities.
According to a lawsuit filed by Barakaat, BankBoston closed the account ''on the flimsy allegations that it was involved in money-laundering.''
Although Barakaat denied the charge, its lawsuit against the bank was later dismissed.>>
This story ran on page A1 of the Boston Globe on 11/9/2001.
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