Part 2:

Operation Greenquest in Action

Just two weeks after the formation of Operation Greenquest was formed The first big raids were underway. Let’s take a look a closer look at these raids with this excellent November 2001 article in the New York Times:

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November 8, 2001

MONEY TRAIL

U.S. Moves to Cut 2 Financial Links for Terror Group

By DAVID E. SANGER and KURT EICHENWALD

WASHINGTON, Nov. 7 President Bush announced an international effort today to destroy two financial networks that American officials said had long been suspected of having ties to the Qaeda terrorist organization.

The announcement came as law enforcement officials in the United States and Europe carried out raids to disrupt their operations.

Announcing the action at the Treasury Department's financial intelligence center in Virginia, Mr. Bush said that the initiative "blocks an important source of funds" for Al Qaeda and "sends a clear message to global financial institutions: You are with us, or you're with the terrorists. And if you're with the terrorists, you will face the consequences."

The financial networks are called Al Barakaat and Al Taqwa, and President Bush said they did far more than move cash. The groups, with a presence in more than 40 countries, also financed the movement of arms, provided secure communications and served as a network for Osama bin Laden to transmit intelligence and instructions to terrorist cells in the loosely linked Al Qaeda organization, government officials said.

"Al Taqwa and Al Barakaat raise funds for Al Qaeda," the president said. "They manage, invest and distribute those funds."

Treasury Secretary Paul H. O'Neill later described a complex mechanism that he said Al Barakaat used to provide secret financing to Al Qaeda. According to the secretary and other officials, the company "skimmed" a part of the fees charged on each financial transaction it conducted and paid that to Al Qaeda. These transactions, officials said, provide the terrorist network with tens of millions of dollars each year. Al Taqwa then aided Al Qaeda by providing investment advice and cash transfer abilities, they added.

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So it sounds like Al-Barakaat helped raise the funds, and al-Taqwa helped move the money and make them grow. And yes, this is the same Bank al-Taqwa that was later probed for its ties to Swiss neo-Nazis.

Continuing…

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While the officials described in general terms the connections between the financial networks and Al Qaeda, government officials did not provide specific evidence linking the organizations to the terrorists.

Youseff Nada, a principal of Al Taqwa, was interviewed by The New York Times early this week, when word of the administration's action became known, and he denied any involvement in terrorist activities. At the Barakaat headquarters in Mogadishu, officials defended their money-transfer operation as legitimate.

"How could we ever think to use our channels to help bin Laden?" said Abas Abdi Ali, Al Barakaat's deputy general manager. "If Al Qaeda gave us the opportunity, we wouldn't accept it."

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Youseff Nada is a central character in the history of militant Islamism and fascism. We’ll have much more to say about him later.

Note too that the, given the Military Commissions Act of 2006, a the lack of evidence isn’t really an issue. And to complicate matters even more, the evidence that we have in public documentation seems to indicated that figures like Mr. Nada know how to conduct their business in a manner that will not leave a paper trail. It’s just messy all around.

Continuing …

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Today's announcement came amid a flurry of raids and other actions by law enforcement officials around the world, in what the Bush administration portrayed as an example of the close cooperation the United States was receiving from foreign governments in the fight against terrorism.

In Switzerland, Mr. Nada and another man believed to be a principal of Al Taqwa were detained by the police but later released.

In the United Arab Emirates, officials today seized assets and records of Al Barakaat, which is based in Dubai. A number of European allies, including Liechtenstein and Italy, took enforcement actions against Al Taqwa. Still other nations, including several in the Middle East and Africa, helped with coordinated enforcement actions and by blocking assets of the organizations.

Whatever the financial effect, the announcement today may have reflected a significant diplomatic breakthrough for the Bush administration. It won the help of an array of countries in a coordinated crackdown on the financial networks. These include the Bahamas, Liechtenstein and the United Arab Emirates, which in years past have been known as centers for international money laundering.

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If by “in years past” they mean “removed from the international money-laundering black-list as of June of 2001”, than yeah, one might describe the Bahamas and Liechtenstein as past centers for international money laundering (recall that this article is from November of 2001).

Continuing…

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Twice today Secretary of State Colin L. Powell praised Saudi Arabia for signing a United Nations convention against terrorist financing, a clear effort to signal that the Bush administration believes that the kingdom is on board in the fight against terrorism — despite evidence that the country, which was home to 15 of the 19 hijackers in the Sept. 11 terror attacks, has dragged its feet.

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Yeah, you could pretty much describe our attitude towards the Saudis and terror financing as a “faith-based” initiative: our faith in the Saudis’ good will, and their faith in our ability to keep looking the other way as long as they keep selling us oil.

Continuing…

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To date, Mr. O'Neill said today, 112 countries have put blocking orders in place. Other officials noted that even Saudi Arabia had reported to the administration that it had blocked accounts, and the world's largest Islamic country, Indonesia, reversed course several days ago and said it would also block specific accounts.

While the number of countries that say they are cooperating is surprisingly large, even Bush administration officials say they are uncertain how aggressively those governments are seeking out designated accounts and looking for suspicious activity.

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Ooo…Indonesia is willing to block specific accounts. Well, that’s progress.

Continuing…

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The announcement today was the second in a series of four public statements Mr. Bush is making this week in an effort to show that the coalition he has been piecing together is beginning to win some major battles.

On Tuesday the administration agreed to have Germany, Italy and other European countries contribute militarily to the war in Afghanistan. Today he used the announcement that 62 more individuals and businesses are being added to the list of those providing financial support to Al Qaeda to reinforce his message that the war is taking place on many fronts, not just the battlefield in Afghanistan.

On Thursday Mr. Bush travels to Atlanta to visit the Centers for Disease Control and address the country about the challenges of homeland defense. And on Saturday he is speaking to the United Nations.

Current and former government officials described Al Taqwa and Al Barakaat as having long been associated with Al Qaeda, according to reports from intelligence services in America and overseas, including France and Switzerland.

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When the Swiss charge you with financial shenanigans, you know you messed up.

Continuing…

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The intelligence, these officials said, was varied, involving information both from people and from electronic intercepts. Moreover, officials said, the types of records used in traditional financial investigations came into play, including wire transfers and other banking documents, and suspicious activity reports filed with the government by financial institutions.

Both financial networks came together in the late 1980's. The Barakaat Group was founded around 1989 by a former banker in Somalia, Ahmed Nur Ali Jumale.

American officials say Mr. Jumale befriended Mr. bin Laden during the Afghanistan war against the Soviet Union. A government fact sheet says that Mr. bin Laden "reportedly provided" capital to Mr. Jumale's group, which in turn allowed Mr. bin Laden to use the financial network to support extremist causes.

The legitimate side of the business grew as well, branching out to at least 40 countries, including the United States, tapping into the network of Somalis who live abroad but want to send cash back home. Those transfers amount to about $500 million a year. The Barakaat network expanded to provide telecommunication services to its customers, including Mr. bin laden and a related Somali terrorist organization.

The group's main bank is in the United Arab Emirates, a small Persian Gulf nation whose 47 banks play an important role in global financial transfers. Money makes its way to Dubai — and eventually to Somalia — through a series of "correspondent" relationships that Barakaat has with major international banks.

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In December of 2001, a month after these raids, US government officials acknowledged that they had evidence that Al-Barakaat’s was funneling money to al-Qaeda back in 1999 but did nothing to stop it.

Also, given recent issues involving the United Arab Emirates management and ownership of sensitive US assets, it’s worth noting that it was the UAE's informal network of hawalas that came under particular scrutiny after 9/11.

And finishing off the New York Times article…

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Around the United States, immigrants who have used the storefront money centers as their financial connection to family members overseas reacted with surprise and anger at the raids.

In Columbus, Ohio, agents raided Barakaat Enterprise at about 10 a.m., witnesses said. The business, in a small strip mall, was cleaned to the bare walls by federal agents. Only trash was left behind.

"They confiscated everything: the machines, the cash, the records," said Shaykh Amin Abdur-Rahim, registered agent for the Columbus store. "We are innocent people. We are in total opposition to the terrorists and their methods."

Yassin Hammeda, a local resident from Somalia, said that he believed the government must have made a mistake in raiding the Columbus storefront.

"People are only sending money to their families," he said. "Everybody uses this place. We are all Americans."

In Seattle, agents raided Barakaat Wire Transfer Company, which shares a small building with a mini- mart. By midmorning, agents had closed off the area and were removing food and office equipment from the minimart.

(New York Times)

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This is an excellent example of how the businesses that form part of the the financial backbone of militant Islamism, hawalas in particular, are often providing very real jobs, services, and charity for people around the world. In the case of Somalia, al-Barakaat was not only its largest employer, but freezing al-Barakaat’s assets literally froze the ability for Somali expatriots to send money to their relatives back home to Somalia, which, on top of lacking a stable banking system, lacks a stable government.

And that’s assuming al-Barakaat is actually affiliated with al-Qaeda, not that evidence is an issue anymore.

But the difficulties in investigating and prosecuting the hawalas don’t end there, as we’re going to see in this November 12, 2001 Washington Post article on the troubles with the Swiss probe of al-Taqwa:

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Swiss Probe Illustrates Difficulties in Tracking Al Qaeda's Cash

By Daniel Williams

Washington Post
November 12, 2001

In a town where don't ask, don't tell is the golden rule of business, police carting documents from the Al Taqwa Management Organization was an uncommon sight.

The search and seizure went against the grain of the economics of Lugano -- and all of Switzerland -- with its tradition of bank secrecy and the free flow of money. And hardly anyone here seems to think charges will be filed.

Even the Swiss prosecutors who ordered the raid Wednesday say they acted not because they were ready to make a case, but because Al Taqwa was on a list published by the Bush administration of groups and individuals suspected of having links with reputed terrorists such as Osama bin Laden and his al Qaeda network.

"I would have liked to know better the . . . various links, but the publication by the United States of a list of people and organizations linked to international terrorism in effect fixed a deadline for taking action," Claude Nicati, the deputy Swiss prosecutor, told reporters Thursday. He said it would take at least three weeks to analyze the documents collected from Al Taqwa, which is thought to be part of a traditional money-transferring system known in Arabic as hawala.

The Swiss government also froze the bank accounts of Al Taqwa and 24 other companies and individuals listed by the United States.

Al Taqwa's lawyer, Pier Felice Barchi, said in an interview that he was confident the investigation "will end in nothing."

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Make a note of al-Taqwa’s lawyer, Pier Felice Barchi. We’re going to have much more to say about him in the next essay.

Continuing…

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The probe appears to be a case study in the difficulties of tracking the money that U.S. officials believe nourished al Qaeda terrorist cells in Europe and the United States. The Sept. 11 attacks on New York and Washington are believed to have cost tens of thousands of dollars, not millions, to finance. The number of channels available for moving such funds is practically infinite, through banks and dummy companies in tax havens worldwide.

In part, the difficulty in pinning down a Swiss connection lies in a regulatory gap.

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These last two sentences are key to understanding the world that terrorist financing flows through. Yes, the Swiss have a “regulatory gap”, but there are also “practically infinite” channels to move money around the world. In other words, problems with lax banking laws extend far beyond Switzerland.

Continuing…

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Campione is the home of Youssef Mustafa Nada and Ali Ghaleb Himmat, two elderly officers of Al Taqwa who both hold Egyptian and Italian citizenship. Each appeared on the U.S. list of individuals and businesses suspected of terrorist links. They are suspected of funneling funds to militant Islamic groups in Germany and Italy.

Acting on a Swiss request, Italian police raided their homes Wednesday and seized papers and computer disks. The men were questioned by Swiss police for six hours before being released.

Nada firmly denied ever meeting bin Laden or having any deals with him or his organization. "I am not involved in financing of terrorism," he said last week. He did acknowledge belonging to the Muslim Brotherhood, an Islamic political movement that originated in Egypt.

Another Al Taqwa official, Swiss citizen Ahmed Huber, who converted to Islam and changed his first name from Albert, was also named in the U.S. list. Huber said on Swiss television that he had never met bin Laden, but had encountered "members of his entourage" at Islamic conferences in the Middle East. He said he did not know exactly who they were because they "all traveled under false names." Huber also said Al Taqwa made charitable contributions to Muslim development projects abroad.

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Yes, both Nada and Huber insist that they have no connection to Al-Qaeda, so it’s worth noting that in March of 2002 Ahmed Huber, the Swiss neo-Nazi-turned Islamist (who we will have much to say about in the next chapter), also shared his feelings that “Al Qaeda is a very honorable organization”, has admittedly close ties to the Ayatollah Khomeini, and Treasury officials claim that intelligence agencies actually have evidence that al-Taqwa funneled money to Bin Laden after the 9/11 attacks(1).

Continuing…

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Barchi, the lawyer, said Al Taqwa served as an accountant for Middle Eastern business people and conducted "feasibility studies" for potential Middle Eastern investors throughout the world. It has branch offices in several offshore banking countries, including Liechtenstein and, until recently, the Bahamas, where it operated a bank.

Barchi said police first took an interest in Al Taqwa in 1995, when a French journalist wrote an article linking the firm to the Muslim Brotherhood. Last spring, Al Taqwa changed its name to Nada Management Organization.

In Lugano, few people with knowledge about Al Taqwa will speak about it. One intelligence official would speak only hypothetically about companies that want to launder money or simply transfer it anonymously. "These are not enterprises that buy things, add value to them through manufacturing and then resell them," the official said. "Rather, they provide services that do not necessarily result in a concrete product at the end. The value of the services are arbitrary, as are the fees."

What kind of business, for instance? "Feasibility studies could be one. Someone provides $50,000 for research into a project. Does the study really cost $50,000 to produce? Is it really a study? Or is it just a way to transfer $50,000 in disguise?" he said. "Basically, money is given and the giver doesn't want a return."

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As we’re going to see in the next chapter, al-Taqwa actually does a lot more than just “feasability studies”, but the example of “feasibility studies” illustrates the important point that money-laundering isn’t just a global issue. It’s pretty easy to do if you know how.

And finishing off the Washington Post article…

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The official said Al Taqwa was only one of a dozen hawalas in Switzerland, "so closing it down will not resolve problems."

He said information in the seized documents -- names, addresses or hints of wrongdoing -- might contribute to a "map" of money transfers.

Otherwise, it would be hard to pin a crime on Al Taqwa, the official said. Switzerland would need laws to open hawalas to audits and scrutiny, he added, and, "Until September 11, nobody cared about them."

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After the investigations…

So how have the investigations of al-Taqwa and Al-Barakaat panned out? Starting with Al-Barakaat, let’s look at an excerpt a 2005 Forbes article on the difficulties of investigating and prosecuting hawalas:

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The investigation of al-Barakaat went nowhere for a long time. All that changed after Sept. 11. The new Patriot Act strengthened anti-money-laundering statutes already on the books, requiring hawaladars to comply with state laws and register with the federal government. The Department of Homeland Security, the Drug Enforcement Agency and the Treasury Department began to pour enormous resources into cleaning up the alternative remittance business.

Two months after the attack on the World Trade Center federal agents raided eight al-Barakaat offices in the U.S. from Seattle to Boston, froze at least $1 million in assets and dismantled the operation. At a press conference with then-Treasury Secretary Paul H. O'Neill, President Bush described Jumale as a "friend and supporter of Osama Bin Laden" and "a principal source of funding, intelligence and money transfers for Bin Laden." The Office of Foreign Asset Control, a Treasury Department unit, designated al-Barakaat as a supporter of terrorist organizations.

Since then, though, the investigation has crumbled. U.S. authorities traveled a couple of times to the United Arab Emirates and pored over 2 million pages of documents. They interviewed Jumale twice and 22 other al-Barakaat personnel and returned home with 17,000 pages of records, plus data from al-Barakaat and bank computers. And still there is no proven connection between al-Barakaat and al Qaeda.

Today, despite any direct evidence, the U.S. Treasury Department insists al-Barakaat supported terrorists. The group and Jumale, now reportedly in Somalia, have long denied the allegations. (One al-Barakaat affiliate successfully sued Uncle Sam to have its name removed from a list of terrorist supporters.) Intelligence sources told the 9/11 Commission, which released its monograph on terror financing last summer, that its sources for much of the reporting on al-Barakaat's connection to al Qaeda had been terminated because of concerns they had fabricated evidence. The commission grimly concludes that the investigators' "attempt to make a criminal case simply had no traction."

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Ok, so that’s not exactly the most positive result. How about al-Taqwa? Well, in June of last year the Swiss “suspended” the investigation of Youssef Nada and his web of companies, blaming the government of the Bahamas for not providing them with evidence for al-Taqwa’s Bahamas-based shell-bank. Now why would the Bahamas refuse to cooperate with an investigation that appears to be so important on its face? Well, it could have something to do with the fact that Sean Hanna, Bank al-Taqwa’s laywer for its Bahamas branch, is also a member of the prominent Hanna family of the Bahamas. Sean’s sister, Glenys Hanna-Martin, is the Cabinet Minster of Transport and Aviation. Sean’s father, Arthur D. Hanna, is a long-standing figure in Bahamian politics, and just this February became the Governor-General of the Bahamas. Sean Hanna also died unexpectedly just a month before his father took office and six months after the Swiss closed down their 3 ½ year investigation of al-Taqwa.

Keep in mind these kinds of political connections, and the lack of interest in thoroughly investigating the the Muslim Brotherhood’s international financial networks, because there’s plenty more investigative disinterest where that came from, it’s not all coming from the Bahamas, and it’s going to be what we look at in our next essay, so keep reading!!

Offline References

(1) "Terror's Cash Flow" by Mark Hosenball with Kevin Peraino and Cathrine Skipp; Newsweek; 3/25/2002; pp. 28-29