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Terror's Cash Flow

Is Al Taqwa, A Shadowy Financial Network, A Secret Money Machine For Osama Bin Laden?

by Mark Hosenball
NEWSWEEK

In neo-Nazi circles, 74-year-old Albert Huber is something of a celebrity. The retired Swiss journalist gives talks to far-right groups around the world, condemning Zionists and arguing that the Holocaust was exaggerated. Over the past two decades he made regular trips to the United States, lecturing at Aryan youth and Nation of Islam meetings. Huber’s rants are especially popular among radical Muslims. Born a Christian, the blue-eyed, silver-haired Huber converted to Islam in the 1960s. He now calls himself Ahmad, and preaches that neo-Nazis and Muslims should join ranks to defeat Israel. “The United States is now controlled by a small Jewish faction,” he says. “We are making a link between Islamic movements and the New Right in Europe.” The late Iranian dictator Ayatollah Khomeini was so impressed with his theories that Huber was once invited to sit at his feet at a gathering in Tehran. More recently, Huber says he has been approached at Islamic conferences by people introduced as representatives of Osama bin Laden.

Garrulous and surprisingly friendly, Huber is unapologetic about the attention bin Laden’s supporters give him. But despite his extreme beliefs–he described the September 11 attacks as “counterterror against American-Israeli terror”–he claims he has no personal ties to terrorists. International investigators think otherwise. Late last year the United States put him on a list of people suspected of financing terrorism. Huber served on the board of Al Taqwa, a shadowy financial network that, they say, hid money for bin Laden and other international terrorists and helped to fund their operations.

Investigators on bin Laden’s trail had known of Al Taqwa’s existence for years. But the group’s mazelike structure made it hard to track, and the Feds considered it a low priority. Not anymore. Within hours of the September 11 attacks, a senior official told NEWSWEEK, President George W. Bush ordered his national-security team to seize bin Laden’s cash. “I want their money,” the president demanded. “I want it now. I want to hurt them.” In November the Treasury Department froze the assets of Al Taqwa, Huber and most of the network’s other leaders. Shortly thereafter, it went into liquidation.

Taqwa officials strongly deny that they have any connection with terrorists. But after months of probing, the Feds say they have evidence that Al Taqwa provided support to bin Laden both before and after September 11. A NEWSWEEK investigation–including interviews with U.S. and European law-enforcement agents and top Taqwa officials–reveals how bin Laden’s suspected bankers kept the cash flowing, and how they managed to stay for so long beneath the radar.

Al Taqwa, which means “Fear of God,” was launched in the late 1980s by leaders of the Muslim Brotherhood, a secret society devoted to the creation of a worldwide Islamic government. The Brotherhood wanted to create a financial institution in which devout Muslims could invest their money. It would operate under strict Islamic law, which prohibits banks from charging interest. But investigators believe the convoluted structure of Al Taqwa made it easy to use as a money-laundering mechanism. Al Taqwa had no offices. The entire operation consisted of four men working at computers in a small apartment in Lugano, Switzerland. Lugano, which sits near the Italian border, is a kind of Alpine Tijuana, well known as a haven for tax evaders and money launderers.

Al Taqwa’s founders made other suspicious moves–registering the network as an offshore bank in the Bahamas, where secrecy laws would protect transactions from prying investi-gators. Back in Switzerland, the Bahamian license allowed Taqwa bosses to open commercial “correspondent” accounts with established European banks–paying the larger institutions fees to make cash transfers around the world for them, without calling attention to themselves. All are classic money-laundering techniques, investigators say.

Intelligence sources say they weren’t aware of Al Taqwa’s activities until the mid-’90s, when the Egyptians began investigating possible terrorist links to one of Taqwa’s founders and shareholders, a wealthy Swiss resident named Ahmed Idris Nasreddin. Born in Eritrea, the 73-year-old Nasreddin claims to be a descendant of African royalty. In the early ’90s he helped create and finance the Islamic Cultural Institute of Milan, a mosque located just over the Italian border from Lugano. European intelligence agencies had begun to suspect that the Cultural Institute was a recruiting and supply center for Al Qaeda and other terrorist groups. The center’s late imam Anwar Shaban was a follower of Omar Abdel Rahman, the blind Egyptian cleric now in a U.S. prison for his role in plotting to blow up New York landmarks.

Qaeda terrorists involved in both the 1998 U.S. Embassy bombings in Africa and the failed millennium bombing plot hung out at the Milan center, law-enforcement officials say. The U.S. Treasury Department describes the mosque as “the main Al Qaeda station house in Europe. It is used to facilitate the movement of weapons, men and money across the world.” Nasreddin could not be reached. His lawyer, P. F. Barchi, says that Egyptian Secret Service agents warned Nasreddin in the mid-’90s about possible terrorist “problems” with the center. Al Taqwa’s longtime chairman, an Egyptian expat and Muslim Brotherhood member named Youssef Nada, told NEWSWEEK that Nasreddin would never get involved with terrorists. Still, he says he warned Nasreddin to “be more cautious.” Barchi says his client only made “charity” donations to support the center’s worshipers–paying rent and utilities–and has nothing to do with terrorism.

Nasreddin’s links to the Milan center made investigators curious about the network’s other potential ties to terrorists. By the late ’90s, intelligence agencies on both sides of the Atlantic were probing Al Taqwa. When Swiss regulators began questioning its leaders, Al Taqwa unsuccessfully attempted to placate them by appointing Huber, a Swiss native, to its Swiss board of directors.

Investigators began to take a harder look at Al Taqwa after the embassy bombings. Sources say U.S. intelligence tracked telephone contacts between Al Taqwa and members of bin Laden’s inner circle. Qaeda operatives would call Taqwa representatives in the Bahamas as they moved around the world. Still, the network’s complex structure made it difficult to prove how money changed hands, and the investigation stalled. Under U.S. pressure, the Bahamian government revoked Al Taqwa’s license last spring. Treasury officials say the network continued to do business anyway.

But after Bush’s order to roll up bin Laden’s money network, European investigators swept in on Al Taqwa, searching Huber’s and Nada’s homes and freezing their assets. (Nasreddin’s money was not frozen.) The Swiss, ever protective of their renowned status as an anonymous banking haven, at first seemed reluctant to go after Al Taqwa. But after a private meeting with Attorney General John Ashcroft in Washington earlier this month, Switzerland’s chief prosecutor, Valentin Rohrshacher, told NEWSWEEK his government is now conducting a vigorous criminal investigation.

U.S. officials have been much more blunt about their suspicions. Testifying before Congress in February, Jaime Zarate, a senior Treasury official, said Al Taqwa’s connections to terrorists go back at least five years. Zarate told lawmakers that the United States learned in 1997 that the Palestinian terrorist group Hamas had transferred $60 million into Al Taqwa accounts. Zarate also testified that intelligence agencies now have evidence that “as of late September 2001”–after the attacks–“bin Laden and his Al Qaeda organization received financial assi
stance from [Al Taqwa’s] chairman”–though he gave no details about what that money might have been used for.

Nasreddin, Huber and Nada all deny laundering money and any involvement of any kind with terrorists–and prosecutors don’t have enough evidence to make a criminal case against them. At least not yet. Prosecutors say they are now piecing together thousands of pages of documents seized in raids on the bank and its leaders, searching for a paper trail between the bankers and bin Laden. Prosecutors concede that Al Taqwa may have been just one of Al Qaeda’s many sources of clandestine funds. If so, closing its doors could be an important step in slowing bin Laden’s river of cash to a trickle.

WITH KEVIN PERAINO AND CATHARINE SKIPP

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