Al-Qaida and the gold trail that leads through Dubai to September 11
The Guardian - United Kingdom; Feb 19, 2002
BY DOUGLAS FARAH IN DUBAI
Just as the United States and its allies swept towards Afghanistan's main cities last autumn, the Taliban and Osama bin Laden's al- Qaida network sent waves of couriers with bars of gold and bundles of dollars into Pakistan.
In shops and businesses along the border the money and gold, taken from Afghan banks and national coffers, were collected and moved by Taliban and al-Qaida operatives to Karachi, sources say. Then, using couriers and the hawala money transfer system, they sent millions of dollars to Dubai, where the assets were converted to gold bullion.
This account is based on interviews in Pakistan, the United Arab Emirates, Europe and the US. The trail was described by intelligence officers, law enforcement officials, gold brokers, and sources with direct knowledge of some of al-Qaida's financial movements.
The interviews offered a glimpse into the role played by gold in the finances of al-Qaida, before and after September 11. Gold has allowed the Taliban and Bin Laden to largely preserve their financial resources despite the military attack on them, sources said.
Al-Qaida also used diamonds and other commodities to make money and hide assets. But gold played a uniquely important role.
"Gold is a huge factor in the moving of terrorist money because you can melt it, smelt it or deposit it on account with no questions asked," a senior US law enforcement official said. "Why move it through Dubai? Because there is a wilful blindness there."
Dubai is one of the region's most open banking centres and the commercial capital of the United Arab Emirates, one of the three countries to maintain diplomatic relations with the Taliban until shortly after September 11. It has long been a financial hub for Islamists, and much of the $500,000 used to fund the September 11 attacks came through Dubai, investigators believe.
When US bombs began pounding Taliban and al-Qaida targets last autumn, the rush of gold and money out of Afghanistan intensified.
Pakistani financial authorities said that $2m to $3m a day is usually carried by couriers from Karachi to Dubai, mostly to buy gold. Late last year that amount increased significantly, they said.
Pakistani and US officials estimate that about $10m from Afghanistan was taken out by courier in late November and early December. The Taliban fled Kabul, the capital, late on November 12 and abandoned Kandahar on December 7.
One of the couriers was the Taliban consul-general in Karachi, Kaka Zada, who took at least one shipment of $600,000 to Dubai in late November, according to two Pakistani witnesses.
In addition, US and other officials said, millions more were sent through hawalas, where brokers take a client's money, then call or email a counterpart in the area where the money is to be delivered. The counterpart pays out the sum. After the transaction, the records are destroyed.
Gold is often used by hawala brokers to balance their books.
US investigators have begun poring over transactions of some of Dubai's top gold brokerages for possible links to the movement of al-Qaida or Taliban money, and have found unusual gold shipments into the US after September 11.
A customs official said the agency was "scrutinising movements of gold by several companies, including ARY Gold", one of Dubai's largest and most prestigious gold bullion and jewellery dealers.
Abdul Razzak, ARY's Pakistani owner, denied know ingly doing business with the Taliban or al-Qaida. "I am a God-fearing person, but all my life I have been afraid of religious people like the Taliban," he said. "I wouldn't like to deal with Taliban people, and we don't like Taliban people.
"If you say you want 100kg [220lb] of gold, I can give you that wherever you want in 12 hours. What you do with it is your business," he said.
In addition to using gold to hide assets, there is evidence that al-Qaida smuggled gold into Pakistan and India for profit. An al-Qaida manual found in Afghanistan included chapters on smuggling gold, British and US officials said.
The officials said the Taliban and al-Qaida moved large quantities of gold into Afghanistan after the Taliban rose to power in the mid-90s. Donations to al-Qaida and the Taliban were often made in gold, the officials said, and taxes on opium production were also paid in gold.
For al-Qaida to operate, the gold must be available worldwide and easily convertible to cash. For that, the organisation is believed to rely on a hidden financial network across the Middle East, Pakistan and Europe, investigators said.
William Wechsler, who monitored Bin Laden's finances in the last two years of the Clinton administration, told Congress in September that Bin Laden rose to prominence for building "a financial architecture that supported the mojahedin in Afghanistan against the Russians".
"It's this financial architecture that continued with him when he turned to terrorism, and it's this financial architecture that is at the heart of how al-Qaida today gets its finances," he said.
Much of that architecture, according to investigators, is modelled on the Bank of Credit and Commerce International. BCCI was founded by Pakistanis and bankrolled largely by leaders of the UAE. In the 1980s it was used to launder drug money, harbour terrorist funds and buy illegal weapons. It collapsed in 1991.
The CIA used BCCI to funnel millions of dollars to anti-Soviet fighters in Afghanistan. Bin Laden had accounts in the bank, US officials said. A French intelligence report outlined details of this network.
"The financial network of Bin Laden, as well as his network of investments, is similar to the network put in place in the 1980s by BCCI for its fraudulent operations, often with the same people (former directors and cadres of the bank and its affiliates, arms merchants, oil merchants, Saudi in vestors)," the report said. "The dominant trait of Bin Laden's operations is that of a terrorist network backed up by a vast financial structure."
A senior US investigator said US agencies were looking into these ties because "they just make so much sense, and so few people from BCCI ever went to jail. BCCI was the mother and father of terrorist financing operations."
The report identifies dozens of companies and individuals involved with BCCI who were found to be dealing with Bin Laden after the bank collapsed. Many went on to work in banks and charities identified as supporting al-Qaida.
The French report highlighted the role of the Saudi banker Khalid bin Mahfouz, a former director of BCCI, whose sister is married to Bin Laden. In 1995 he paid a $225m fine for his role in the BCCI scandal and went on to serve as director of the National Commercial Bank in Saudi Arabia.
But in April 1999 he was placed under house arrest in Taif when Saudi officials, at the urging of the US, audited his bank and found that millions of dollars were being funnelled to charities controlled by Bin Laden, US officials and the French document said.
Saudi officials "weren't willing to let us talk to him", said one US source with direct knowledge of events, "and we asked at a very senior level".
______________________
Researcher Robert Thomason in Washington and special correspondent Kamran Khan in Karachi contributed to this report. |
