By Josh Meyer, Eric Lichtblau,
Los Angeles Times, USA,
1 May 2002

Charity Funded Terror, U.S. Says

Courts: Head of Islamic group is arrested after allegations that foundation funded terrorist activities

WASHINGTON -- U.S. authorities arrested the Syrian-born head of an international Islamic charity Tuesday, alleging that his group has funded terrorist activities for years and has ties to militants who have tried to acquire nuclear and chemical weapons for Osama bin Laden.

Enaam Arnaout, 39, executive director of the Benevolence International Foundation, was taken into custody at his home in the Chicago suburbs and charged with lying under oath in documents his group had filed in federal court.

Arnaout, now a U.S. citizen, appeared in court in Chicago on Tuesday afternoon and was being held without bond. He is to be arraigned next week, and the government indicated that it intends to fight any effort for his release on bail.

The arrest prompted angry denials from representatives of the Palos Hills, Ill.-based group, which is one of the largest and most prominent Muslim charities in the United States, with offices in Bosnia, Pakistan, Tajikistan, Yemen, Turkey, Georgia and China.

It also infuriated Islamic leaders in the United States, who said Arnaout`s arrest fits a pattern of Justice Department harassment against Muslims since the Sept. 11 attacks on the World Trade Center and the Pentagon.

"If you`ve got evidence of him having breakfast with Osama bin Laden, then charge him with terrorism, not perjury," said Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations. "Bring the evidence into court and let him rebut it."

Matt Piers, an attorney for Benevolence International, said the charges against his client are an unjustified effort by the U.S. government to make the public believe it is successfully cracking down on terrorists. He scoffed at the notion that Arnaout is an associate of Bin Laden, and said Arnaout`s efforts to cooperate with the FBI were rebuffed.

U.S. authorities, however, said Arnaout has been a personal friend of Bin Laden`s for more than a dozen years, and that Al Qaeda has long used Benevolence International for logistical support, including the movement of money to fund its terrorist operations.

"Various persons involved in terrorist activities--specifically including persons trying to obtain chemical and nuclear weapons on behalf of Al Qaeda--have had contacts with [Benevolence] offices and personnel," according to an affidavit filed in support of Arnaout`s arrest by a Chicago-based FBI counter-terrorism agent, Michael Walker.

The group has also "made efforts" to provide Chechen rebels and a related military group with money, an X-ray machine and "anti-mine boots, among other things," the affidavit said.

Patrick Fitzgerald, U.S. attorney for the Northern District of Illinois, announced Arnaout`s arrest at a news conference in Chicago. At Justice Department headquarters in Washington, Atty. Gen. John Ashcroft denounced the group, saying it aided and abetted terrorism.

Arnaout`s arrest, Fitzgerald said, was an attempt to "vindicate" legions of unwitting supporters who gave money to Benevolence International for what they thought were humanitarian causes, but who were allegedly funding terrorism instead.

"The donors were the victims," Fitzgerald said. "We are seeking to make sure that people do not raise money for violence."

Fitzgerald said agents recently recovered evidence in Benevolence International`s Bosnia office, including photos and correspondence "that obviously indicates a relationship between [Arnaout and Bin Laden] dating back to the 1980s." Authorities also said Arnaout traveled with Bin Laden and associated with key Al Qaeda leaders.

In 1989, Arnaout traveled to a Pakistan airport to pick up one of Bin Laden`s wives and hosted her at his nearby residence for a week until Bin Laden and his bodyguards could come get her, the affidavit added.

A cooperating government witness "explained that if Arnaout had not been a trusted associate of . . . Bin Laden, Arnaout would not have been trusted with the care of one of Bin Laden`s wives," it said.

Even Benevolence`s origins are suspect, authorities said.

The company records, seized about a month ago, indicate that Benevolence International was founded in the 1980s by a wealthy Saudi Arabian associate of Bin Laden. That sheik, Adil Abdul Galil Batargy, later transferred control to Arnaout, authorities said. The group established its headquarters in the United States in 1992.

The records also implicate Mamdouh Salim, a known Al Qaeda operative now awaiting trial in New York on terrorism-related charges, as an associate of the charity. The affidavit said Salim approved the purchase of uranium by an associate so that Al Qaeda could attempt to develop nuclear weapons.

Ashcroft and Fitzgerald said the investigation is continuing.

The documents that prompted Arnaout`s arrest were written in support of a lawsuit Benevolence International filed against the U.S. government three months ago, after it froze the group`s assets as part of a financial crackdown on alleged terrorist organizations.

Since the asset freeze, Benevolence International has said in two sworn declarations filed in federal court that it is a "faith-based humanitarian organization that engages in charitable work around the world," and that it never engaged in or funded terrorist or military activity.

Funds for the charity have been used "only to assist the poor and the needy. BIF abides strictly by those requirements," the group said. "BIF abhors terrorism and all forms of violence against human beings."

However, the criminal complaint alleges that Arnaout was purposefully lying in making those remarks, and when he wrote: "I have no idea or understanding as to why the government has taken these [asset-blocking] actions against BIF."

Arnaout acknowledges that he had "casual" contact with Bin Laden in the late 1980s when both were living in Peshawar, Pakistan, and Bin Laden was funding road construction there. Arnaout was a student at the time.

"That doesn`t make him a terrorist," Piers said. "Peshawar wasn`t that big a town. Bin Laden was a prominent guy."

Charging Arnaout with perjury for defending his group`s reputation in court "is a back-door legal technicality," said Hooper, of the Council on American-Islamic Relations. "It creates the impression there`s nothing" of substance to the government`s charges.

"This certainly won`t help" the Bush administration`s effort to mend fences with the Muslim community over the detention and interrogation of thousands of Muslim Americans after Sept. 11, Hooper said.