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When Charity Goes Awry: Islamic groups say they may lose control of money they send overseas
Christopher H. Schmitt and Joshua Kurlantzick
US News & World Report Monday, October 29, 2001
In his fifth-floor conference room at the U.S. Department of Justice last week, Attorney General John Ashcroft gathered a handful of American Muslim and Arab leaders for a photo-op and relationship-building session. Seated two places to his left was a man named Abdulwahab Alkebsi, the executive director of the Islamic Institute, a Washington, D.C., group that works to build Muslim political influence. While the Islamic Institute plays a key role in the Republican Party's outreach to Muslims, Alkebsi's presence raises an instructive point: There are also huge difficulties in sorting out the various linkages of Muslim organizations in the United States and abroad “including ones under federal scrutiny and the large amounts of money that flow between them.
To date, the U.S. Treasury Department has frozen the assets of 66 people and organizations believed linked to al Qaeda and the list is expected to grow. A number of them, such as the foreign charities Wafa Humanitarian Organization and the Al Rashid Trust, actually do relief work, but are also suspected here and abroad of funneling money to al Qaeda or other terrorist organizations. "These terrorists don't operate in a vacuum–they need a support network," says Ilan Berman, a counterterrorism expert and fellow at the American Foreign Policy Council.
Aliases. Some charities make it difficult to identify the true nature of their operations. The Wafa Humanitarian Organization, for example, has used at least four aliases and operated from offices in Saudi Arabia, Pakistan, Jordan, Kuwait, and the United Arab Emirates. Partly because it was so hard to pin down Wafa's location and function, U.S. and foreign intelligence spent little time investigating the group before September 11. Meanwhile, members of Al Rashid, which delivers food to hungry Afghans and refugees, do not disguise their political leanings. "We have 800,000 [people] signed up with us to fight the jihad against the Americans," bragged one clerk at an Al Rashid office in Peshawar, Pakistan.
In the United States, the Islamic Institute whose executive director attended the attorney general's meeting seems not to have done anything to attract law enforcement attention. Yet in recent years, the institute has gotten advice and an $11,007 grant from another organization called the International Institute of Islamic Thought, which has attracted government scrutiny. The organization, based in a plain brick building in Herndon, Va., is part of a network of at least 11 Muslim nonprofit groups. The entities are tightly tied, through common officers there and transfers of money. Executives acknowledge they operate the groups in concert but say that's to gain tax benefits for a raft of related for-profit ventures, or to provide Muslim investors a way to satisfy their religion's requirements for charitable giving.
The members of this network “which don't appear on the Treasury's list" have raised at least $21.2 million in the last four years, shuffling funds among themselves and disbursing money around the globe, according to federal tax records. Their recipients include organizations in Somalia, Kuwait, Nigeria, Malaysia, and the Isle of Man, a self-governing crown dependency off the British coast with a reputation for money laundering. In 1997, a top-level scholar at the International Institute of Islamic Thought was deported on a visa violation after he was linked to the Palestinian Islamic Jihad and the Islamic militant group Hamas.
The scholar also had ties to a now defunct Florida group called World and Islam Studies Enterprise, which was named in federal affidavits as a conduit for the Palestinian Islamic Jihad. "It was clear that [he] had ties to terrorist organizations," said an Immigration and Naturalization Service official who was present at his arrest. Meanwhile, three of the groups may have links to questionable Middle Eastern organizations, government officials and counterterrorism experts say. The Virginia groups also advise and helped establish a local chapter of the Muslim World League, which, together with its closely affiliated group, the International Islamic Relief Organization, has been probed a number of times over the years for links to terrorism.
Raising flags. Those involved with the Herndon, Va., organizations strongly deny involvement in shady activities. "In a time of national concern about terrorist activity, our community of loyal Muslims has acted vigilantly to ensure that our activities are appropriate," says Richard A. Gross, a longtime attorney for the groups. "We've taken all the steps we can think of." Indeed, there is no evidence the groups are the target of current government probes, but their structure has the classic earmarks that draw investigators' attention, and even the groups' executives acknowledge their setup could arouse suspicion.
Company officers acknowledge they've twice been interviewed by FBI agents in the past, but say they've cooperated “even volunteered assistance“ and that nothing has come of the inquiries. ... But if knowing where charity money goes can be tricky, tracking the origins of such money can be even more difficult. Islamic charities obtain much of their money in the Persian Gulf states from wealthy individuals, experts say. Once charities collect money, they move it to countries such as Afghanistan and Pakistan by sending small amounts of cash “often under $5,000“ via wire transfers or using banks with branches throughout the Muslim world.
In recent years, the Saudi royal family realized that some charities were using money collected in the kingdom to fund terrorists, including Osama bin Laden, who were committed to overthrowing Saudi royalty. Saudi leaders created an organization to crack down, called the Islamic Council. But while its auditing mechanisms are in place, the group does little because "it doesn't want to discover top people giving to the charities," the Saudi source says. Still, there are signs of hope. Saudi Arabia has ordered stricter monitoring of financial transactions. Pakistan has deported 89 staffers of Islamic charities suspected of links to terrorism and ordered closed some 76 nongovernmental organizations it said were involved in undesirable activities.
Clearly, the aim of investigators on the money trail is to shut down terrorism by choking the flow to those who commit the acts. But even that's more complicated than it sounds. Take the Al Rashid Trust, which appeared on President Bush's initial frozen-asset list. It proclaims having "aided widows and orphans of martyrs," which many take to mean giving money to families of suicide bombers and other terrorists killed in action. "Without the money that terrorists know will go to their families when they die, it would be harder for organizations to recruit," says Yehudit Barsky, an Islamic charities expert. "Cut off that support system of money funneled to families, and you'll be left with very few young men willing to die for terror and destroy their family as well."
With Philip Smucker in Pakistan
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© 1997-2005, Islamic Supreme Council of America
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