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Whitehouse denies funding { August 30 2002 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2002/08/30/international/30MONE.htmlhttp://www.nytimes.com/2002/08/30/international/30MONE.html
August 30, 2002
White House Denies Report Qaeda Funds Are Flowing
By EDMUND L. ANDREWS
WASHINGTON, Aug. 29 — The Bush administration became locked in a dispute today with critics at the United Nations who argue that efforts to shut down Al Qaeda's financial network have hit a dead end.
A draft report prepared for the United Nations Sanctions Committee contends that Al Qaeda's network of raising and distributing money for terrorist operations is "fit and well" and that American-led efforts to freeze terrorists assets have slowed to a crawl.
The Treasury Department, which is responsible for freezing the money, quickly denounced the report as flawed and "incomplete."
As if to highlight its progress, the Treasury Department announced an agreement with Italy to freeze money linked to 25 people and organizations whose activities are scattered from Milan to Istanbul to tax havens like Liechtenstein and the Bahamas. "We are clearly sharpening our focus, expanding our efforts to other regions of the world," said Jimmy Gurulé, Treasury under secretary in charge of enforcement.
The draft report, first disclosed by The Washington Post, contends that efforts to freeze assets have been hampered by Al Qaeda's increased reliance on gold and gems, by the informal networks known as hawalas that work outside regulated banking systems and by the ability of financial operatives who have been shut down to reopen under new names and in new locations.
American officials have openly acknowledged those problems for many months, especially the ease with which financial supporters change form as soon as they come under scrutiny. They also acknowledged that the amount of money frozen has dropped sharply since the first months after Sept. 11.
But they argued that the United Nations numbers tell only part of the story. They do not include money seized in American law enforcement raids, like $16 million captured last October.
More importantly, they say, the report fails to acknowledge the "chilling effect" that the program has had on many donors, who now worry about losing all their money if their links become identified.
Yet the Treasury Department's own announcement highlighted the difficulties. Most of the individuals named today have been linked to terrorism for months and many are already under arrest.
While the new list shows progress in identifying reborn organizations, it remains unclear whether any of them hold money.
The Italian government played a major role in today's announcement because many of the individuals are tied to an Algerian militant group active in Italy. Some are also tied to a failed attempt to bomb the American Embassy in Rome this year.
It will take at least 10 more days for the United States and Italy to scour institutions for money linked to the groups. Other governments are expected to join the hunt.
The draft United Nations report cites unidentified experts and government sources in asserting financial operatives are still managing at least $30 million on behalf of Osama bin Laden and his organization.
Though many experts agree that Al Qaeda may still have access to large sums of money, they also questioned the United Nations staff's ability to have firsthand knowledge of the intelligence operations of different governments.
The report is also somewhat dated. It complained that Sweden had moved to unfreeze assets of three Somali-born Swedish citizens who worked for Al Barakaat, the international Muslim financial network.
As it happens, however, the Treasury Department took the same three men off its own list last Tuesday because the men had formally resigned from Al Barakaat.
Eleven of the new names are people who American and Italian officials said were tied to the Salafist Group for Call and Combat, a militant Algerian separatist group. All have been charged and some have been convicted.
The more intriguing names on the list are 14 groups that the Treasury Department said were part of a financial network controlled by Youssef Nada and Ahmed Idris Nasreddin. Both men were directors of Bahamas-based banks, Bank Al Taqwa and Akida Bank, also listed as parts of a terrorist-financing network.
The new list covers 11 other institutions that officials believe are also controlled by the two. Many are mirrors of the banks that were already targets: Akida Investment Company in Nassau, BA Taqwa for Commerce and Real Estate Company in Liechtenstein, and Nasreddin Group International in Milan.
Mr. Nada, an Italian citizen born in Egypt, told Reuters today that he has no terrorism ties. "I have never been part of Akida Bank," he said.
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