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CLINTON LEGACY ON TERRORISM

The Clinton administration shut down a 1995 investigation of Islamic
charities, concerned that a public probe would expose Saudi Arabia's
suspected ties to a global money-laundering operation that raised millions
for anti-Israel terrorists, federal officials told The Washington Times.

Law enforcement authorities and others close to the aborted
investigation said the State Department pressed federal officials to pull
agents off the previously undisclosed probe after the charities were
targeted in the diversion of cash to groups that fund terrorism.

Former federal prosecutor John J. Loftus said four interrelated
Islamic foundations, institutes and charities in Virginia with more than a
billion dollars in assets donated by or through the Saudi Arabian

were allowed to continue under "a veil of secrecy." "If federal agents had
been allowed to conduct the investigation they wanted in 1995, they would
have made the connection between the Saudi government and those

said Mr. Loftus, now a St. Petersburg, Fla., lawyer who filed a lawsuit

week accusing a Florida charity of fraud. "Had the charities been shut

they would have been unable to raise the millions that since have been

by terrorists in hundreds of suicide attacks," he said.

Federal agents began a new investigation, known as "Operation Green
Quest," into the funding by charities of suspected terrorists, raiding 14
Islamic businesses in Virginia. Agents from the U.S. Customs Service,
Internal Revenue Service, Immigration and Naturalization Service and FBI,
coordinated by a Treasury Department counterterrorism task force, seized

dozen computers, along with hundreds of bank statements and other
documents.Records in the case have been sealed and no arrests have been
announced, although the probe is continuing.

The Loftus suit, filed March 20 under the Florida Consumer

Act, accuses the Saudi government in a massive scheme involving charities

Virginia and Florida that routed cash to terrorists. The suit's main

is Sami Al-Arian, a former University of South Florida professor who

or was associated with several Florida charities or think tanks, including
the International Committee for Palestine, Islamic Concern Project and the
now-defunct World and Islam Studies Enterprise.
Warrants served by agents in the Virginia raids last week targeted,
among others, the International Institute of Islamic Thought in Herndon, a
major source of funding for Mr. Al-Arian's World and Islam Studies
Institute.

The warrants sought information on Islamic Jihad, Hamas, the Islamic
Concern Project, the World and Islam Studies Enterprise, and Mr. Al-Arian.
They also sought information on the SAAR Foundation, an educational and
health charity founded by the Al-Rajihi family of Saudi Arabia.

The Islamic Concern Project and the World and Islam Studies

have been named by the State Department as front organizations that raised
funds for militant Islamic-Palestinian groups such as Islamic Jihad and
Hamas. They have been tied to the diversion of millions of dollars to
terrorists for weapons, safe haven, training and equipment.

Nail Al-Jubeir, spokesman for the Saudi information office in
Washington, called the accusations "simply nonsense," adding that Saudi
Arabia has cracked down on terrorists and those who fund them. "There is

one iota of evidence to support these accusations," Mr. Al-Jubeir said.

is nothing more than an effort to smear our name. If there is any proof, I
would suggest it be taken directly to the U.S. government." Mr. Al-Arian

Mazen Al-Najjar, director of the Islamic Concern Project, have been the
focus of federal investigations since the mid-1990s. No criminal charges
have been filed against the two, although the government shut down the

and Islam Studies Enterprise.

Mr. Al-Najjar, who is Mr. Al-Arian's brother-in-law, was detained

ordered deported by the INS on visa violations after the September 11
attacks on America. He is being held at a federal detention center in
Florida pending appeal. In the aborted 1995 investigation, the FBI said in

sealed affidavit that the Islamic Concern Project and World and Islam
Studies Enterprise - working with charities in Virginia - committed fraud
and "served as a vehicle by which [Islamic Jihad] raised funds to support
terrorist activities in the occupied territories." In that probe,
investigators found that checks drawn on a bank account of the

Committee for Palestine had been cashed by people in the Middle East. They
said the checks had been signed by Mr. Al-Arian.

Mr. Loftus is seeking an injunction blocking Florida charities,
including those headed by Mr. Al-Arian, from transferring "money, weapons,
equipment or communications gear" to terrorists. Mr. Al-Arian has

denied any wrongdoing, calling the Loftus lawsuit a "publicity stunt." His
attorney, Robert McKee, did not return calls to his office for comment.

Julie Payne, spokeswoman for former President Bill Clinton, did not
repond to inquiries about State Department policy in 1995 during his
administration. Accusations that the Saudi government used charities as
front organizations to fund international terrorism are long-standing,

surfacing 20 years ago when U.S. intelligence officials warned Congress

the Saudis had taken over the direct funding of terrorist groups such as
Islamic Jihad and Hamas.

One former and three current federal law enforcement officials said
the new probe began after U.S. officials learned that intelligence agents

India had wiretapped the telephone of a Pakistani charity funded by the
Saudi government and discovered the transfer of $100,000 to Mohamed Atta,
one of the 19 al Qaeda hijackers in the September 11 attacks.

That information helped U.S. officials identify the 19 hijackers, 15
of whom were from Saudi Arabia, the officials said.
After the suicide strikes on the World Trade Center and the

the officials said Treasury's interagency task force was created to
investigate ties between charitable organizations in this country and
international terrorist groups.
That ongoing probe, according to the officials, has focused on
accusations that several tax-exempt and nonprofit charities operating from
Virginia to Florida have contributed millions of dollars to international
groups that support terrorism, including Islamic Jihad and Hamas.

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