April 13, 2002
5 Months After Sanctions Against Somali Company, Scant Proof of Qaeda Tie
his article was reported by Tim Golden, Bill Berkeley and Donald G. McNeil Jr. and was written by Mr. Golden.
The Bush administration's assault on Somalia's biggest money-transfer company was swift and severe.
In November, American officials announced that they had proof that the company, Al Barakaat, was providing as much as $25 million a year to Osama bin Laden's terrorists in weapons, cash and other support. With the help of dozens of countries, the Treasury Department froze nearly all the company's assets, paralyzing the biggest employer in one of the poorest countries.
Five months later, however, some United States officials now acknowledge that the evidence of Al Barakaat's backing for terrorism is more tenuous. Some European countries that assisted in shutting down Al Barakaat say proof of a terror link has not materialized.
Late last year, as Customs agents raided Al Barakaat's offices around the United States, officials predicted that the order freezing assets would be just the start of their crackdown. But only four criminal prosecutions have been filed so far, and none involve charges of aiding terrorists.
Government officials and international relief officials in Somalia have also questioned the sanctions, saying their impact on the poor has been so devastating layoffs, lack of access to funds, business disruptions that it may ultimately be a boon to Islamic radicals who drum up antipathy toward the United States.
"Thousands of Somalis had deposits in Al Barakaat," said Somalia's ambassador to the United Nations, Ahmed Abdi Hashi, whose government has close ties to the company. "Depositors cannot access their funds. Businessmen cannot do business. Many are going bankrupt.
"We don't want to be seen as defending anyone linked to terrorism. All we want is to see the evidence."
In the months since Sept. 11, the Bush administration has waged a vigorous battle to disrupt financing for terrorism, using expanded presidential powers to freeze the accounts not only of terrorists themselves, but also of any individuals or entities "that support or otherwise associate" with them.
Yet, interviews and government documents show that while the new powers give Washington greater leeway to go after companies that might be used by terrorists, they also increase the risk of affecting people not linked to terrorism.
Foreign governments have made it clear that they will not continue to support Washington's call for sanctions unquestioningly, and some allies have pressed for new ways to ensure that future sanctions are well founded.
Even some American officials have questioned the Treasury's speed in freezing the assets, saying such moves may have consequences for diplomacy or criminal investigations that must be weighed against their real impact on terrorists.
"This is not normally the way we would have done things," one senior American official said of the designation of Al Barakaat as an entity that supports terrorism. "We needed to make a splash. We needed to designate now and sort it out later."
The law does not require the government to disclose the evidence behind financial sanctions. Companies can petition to have them lifted, and a handful have done so, including Al Barakaat.
Administration officials have defended their action. They said they acted on the basis of classified information from law-enforcement and intelligence sources about the movement of funds from Al Barakaat to Al Qaeda, and have seen indications that the sanctions may have hurt Mr. bin Laden's operations.
"From what I've learned, this has had a major effect on bringing down, dismantling a major network used by Mr. bin Laden to move money and to communicate," Jimmy Gurule, undersecretary of the Treasury for enforcement, said in an interview.
But several American officials said the government has only limited evidence of a direct tie between Al Barakaat and Al Qaeda. One senior official said the information came from a single source.
Treasury officials said their most compelling intelligence centers on reports of Al Barakaat's relationship with an obscure militant Islamist group in Somalia that the United States has characterized as a terrorist group with clear ties to Al Qaeda.
But some officials said the significance of this indirect link to Mr. bin Laden may have been overstated. They said the Islamist group, Islamic Unity (Al Itihaad Al Islamiya), has operated primarily as a political movement in recent years, making it an unlikely conduit of weapons and money to Mr. bin Laden.
Al Barakaat came to Washington's attention partly because of the background of its founder and chief executive, Ahmed Nur Ali Jumale. American officials contend that he befriended Mr. bin Laden during the Afghans' war to drive out Soviet troops in the late 1980's. Documents provided to foreign governments by the United States assert that Mr. Jumale "founded Barakaat with capital reportedly provided by bin Laden" in 1989.
But Mr. Jumale, who trained as a banker in Saudi Arabia, said in an interview that he had never met Mr. bin Laden.
American officials said Mr. bin Laden's ties to Al Barakaat continued during the first half of the 1990's, when he was living in Sudan, and through the recent years he spent in Afghanistan. Over roughly the same period, Al Barakaat slowly expanded into cellular telephones, banking and other enterprises.
In announcing sanctions against the company on Nov. 7, President Bush said Al Barakaat and another company on the sanction list "raise funds for Al Qaeda."
"They manage, invest and distribute those funds," Mr. Bush continued. "They provide terrorist supporters with Internet service, secure telephone communications and other ways of sending messages and sharing information. They even arrange for the shipment of weapons."
Treasury Secretary Paul H. O'Neill said Al Barakaat "used its offices in the United States and in 40 countries to finance and support terrorists around the world."
He and other Treasury officials said that of $300 million to $400 million that Al Barakaat sent to Somalia each year, 5 percent or $15 million to $20 million was siphoned off directly for Al Qaeda.
But experts on hawala agencies like Al Barakaat, which move sums large and small around the world on handshakes and code words, said that even if Al Barakaat processed that much money, its profits would not be much more than $5 million.
By Al Barakaat's account to the Treasury Department, its money- transfer revenues in 2000 were $2.76 million, with a net profit of $1.4 million. American officials disputed those figures, but said they were continuing to study the company's accounts, with its permission.
Mike FitzGerald, an American businessman who helped Al Barakaat set up its cellphone network and has worked closely with its executives for five years, said it never made anywhere near the money described by the Treasury. "These people started a commercial cellular network with $800,000, but they didn't have the money," he said. "We had to finance it."
More recently, government officials have maintained that the support from Al Barakaat to Mr. bin Laden's group traveled a more circuitous route. The company, one official said, gave money to Al Itihaad radicals, who in turn provided Al Qaeda with weapons, trucks, cash and other support.
But two other officials familiar with intelligence information on the subject said they knew of no reporting that documented major transfers of weapons and other equipment from Al Itihaad to Al Qaeda.
A confidential Treasury document described yet another pathway for the money. Al Barakaat, the document asserts, is actually controlled by Al Itihaad, which in turn funnels money to Al Qaeda.
Al Itihaad, it said, "takes a portion of the transaction fee typically 5 percent of the overall amount being sent for itself," the document said. It then sends "a smaller share on to groups and individuals associated with bin Laden, either in the form of money or weapons."
While American officials said they are convinced of a continuing link between Al Itihaad and Al Qaeda, several foreign experts on Somalia disputed the idea that the Somali radicals could be absorbing millions of dollars or passing such amounts on to Mr. bin Laden's forces.
Al Itihaad has been linked to Al Qaeda in the past. It was one of several Islamist movements that emerged from the widespread Somali opposition to Muhammad Siad Barre, the American-backed dictator, who fell in 1991.
According to court testimony by a government witness in the United States, some Al Qaeda supporters provided military training for Al Itihaad in 1991-92 as it battled rival militias, including those that helped drive out American troops.
But since 1997, when the last of Al Itihaad's militias were decimated by Ethiopian troops, the group has abandoned its military strategy, foreign analysts said, trying instead to build support by providing social services in impoverished areas.
Al Barakaat's founder, Mr. Jumale, denied reports that he has been among those supporting Al Itihaad. He has been critical of the Sept. 11 attacks.
In the United States, agents of the Federal Bureau of Investigation and the Customs Service began to investigate Al Barakaat's operations about two years ago, uncovering several instances in which Somali immigrants who were involved in welfare fraud or drug-dealing had used the company to send money home.
One official said those cases, of themselves, "really didn't amount to anything." But when F.B.I., Customs and Treasury officials met several weeks after Sept. 11 to share information on Al Barakaat, officials said, they felt that the cases provided enough evidence for them to act.
Until now, the only criminal prosecutions to be brought against people involved with Al Barakaat do not include charges of terrorism.
Prosecutors in Boston have charged two Somali brothers with making illegal money transfers, a state misdemeanor that can be charged as a felony in federal courts.
One of the men, Liban Hussein, who was chairman of Barakaat North America, was freed on a $12,000 bond by a judge in Canada, despite a request by the United States for his extradition. The judge said he found no evidence linking him to terrorism.
Earlier this month, two Barakaat associates in northern Virginia were indicted on money-laundering charges that grew out of the November raids. The two, Abdirahman Sheikh-ali Isse and Abdillah S. Abdi, were accused of evading financial reporting laws while transferring more than $6 million to the United Arab Emirates.
In Europe, where several governments blocked Al Barakaat assets at the Bush administration's request, officials have also questioned the basis for the action.
Margarete Linderoth, a spokeswoman for the Security Police in Sweden, where the assets of three agents for Al Barakaat were frozen, said confidential information provided to the government by American officials merely asserts that the company is linked to Al Qaeda.
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