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The Washington Institute for Near East Policy



"Subversion From Within: Saudi Funding of Islamic Extremist Groups
Undermining US Interests and the War on Terror from within the United States"
September 10, 2003

Well into the war on terrorism, Saudi Arabia continues to serve as the capital of international terrorist
financing. Through groups like the Muslim World League (MWL), the International Islamic Relief Organization
(IIRO), the al Haramain Islamic Foundation, as well as the Islamic Affairs Bureaus located at Saudi
embassies and consulates worldwide, the Saudis continue to fund radical Islamic groups supportive of, or
engaged in, international terrorism.


Some cases are both clearcut and extreme. For example, after his arrest in Indonesia on June 5, 2002, Omar
al-Farouq, al-Qaeda's operational point man in Southeast Asia, told his interrogators that al-Qaeda
operations in the region were funded through a branch of al-Haramain. According to al-Farouq, "money was
laundered through the foundation by donors from the Middle East."[l]

In another case, Italian prosecutors revealed that "Syria has functioned as a hub for an al-Qaeda network"
run out of Europe and linked to prominent al-Qaeda operative Abu Musab al-Zarqawi.[2] Transcripts of
operatives' conversations — first revealed in the Los Angeles Times — "paint a detailed picture of overseers in
Syria coordinating the movement of recruits and money" between cells in Europe and Ansar al-Islam training
camps in northern Iraq. Moreover, one of the al Qaeda cell members arrested in Italy — a Somali -- is
suspected of funding the November 2002 al-Qaeda attack on Israeli tourists in Mombassa, Kenya, while
another associate — a Moroccan — is an accused forger and admitted associate of members of the Hamburg
cell connected with the September 11 attacks. In one intercepted phone conversation, a senior al Qaeda
operative is overheard assuring his subordinate about funding, saying, "Don't ever worry about money,
because Saudi Arabia's money is your money."[3]

Several charities definitively tied to international terrorism were either based or maintained branch offices in
the United States, including the Muslim World League (MWL), the International Islamic Relief Organization
(IIRO), the Benevolence International Foundation (BIF), the Global Relief Foundation (GRF), the Holy Land
Foundation for Relief and Development (HLF), and others.[4]


Other cases, like the activities of a host of purportedly political or social-activist groups operating in the
United States, are far more subtle.

For example, the Council on American-Islamic Relations (CAIR), which says it was "established to promote a
positive image of Islam and Muslims in America,"[5] was co-founded by Omar Ahmed, the same person who 10/30/03
Matthew A. Levitt on Iran on National Review Online Page 1 of4

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Heart of the Axis wm Pride
Al Qaeda has long called Iran home. ^^

By Matthew A. Levitt
Take 3 books for SI each

T headministration
National Security Council is scheduled to hold a
"senior level meeting" Thursday to formulate
policy toward Iran. Electronic intercepts
indicating senior al Qaeda operatives in Iran were behind the
Riyadh bombings suddenly sparked official "concern"
regarding the hospitality master terrorists enjoy with the
compliments of their Iranian Revolutionary Guard Corp FROM THE A0TWGR
(IRGC) and Ministry of Intelligence and Security (MOIS) How Ronald Reaga
The latest: Changed My Life
Chan Canned 10/23 Peter Robinson share
Reagan's life lesson;
They should be concerned. Experts now A Bittersweet Roman
believe Iran's nuclear program is much Week 10/23 Buy it through NR
farther along than previously thought. Failed Leadership Rf r««.!.) fil V , ', >
Iranian dissidents recently identified two 10/23 <-,iw.f • s r - 1 *
previously undisclosed uranium- CBS's Fictionalized
enrichment facilities. This mix of History 10/23
weapons of mass destruction, together
Previous Articles
with frenetic state sponsorship of
terrorism and sheltering of al Qaeda
leadership figures, places Iran firmly at
the pinnacle of the Axis of Evil.

The problem is that officials should have
been concerned long ago. The links
between Iran, described by the CIA as Clegg: Madison
the world's "foremost state sponsoroj Memory 10/23
the 9:49 a.m.
network of networks that is al Qaeda are Karnick: Chan
not new. Canned 10/23
. " 9:27 a.m.
News that al Qaeda's current military Conda: The Bush
operations chief, Saif al Adel, among the Recovery Is

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Date: Fri, 24 Oct 2003 14:04:08-0400
From: MATT LEVITT <>4f'

Analysis of Near East Policy from the scholars and associates of THE
Number seven Hundred and Ninety-Nine
October 24, 2003
By Matthew Levitt
On October 22, 2003, Matthew Levitt, the institute's senior fellow in
terr9rism studies, testified bef9re the U.S. Senate committee on
Banking, Housing, and urban Affairs. The following is an edited version
of his remarks. The full text of his statement is available at
www.washi ngtoni nsti tt/1evi tt!02203.htm
Constricting the Operating Environment
NO counter-terrorism effort, however extensive, will put an end to
terrorist attacks or fully uproot terrorism. There will always be people
and groups with entrenched causes, an overwhelming sense of frustration,
a sejf-justifying worldview, and a healthy dose of evil, who will resort
to violence as a means of expression. The goal of counterterrorism,
therefore, should be to cpnstrict the operating environment in order to
make it increasingly difficult for terrorists to carry out their plans.
This includes cracking down on logistical and financial support networks
as well as operational cells.
Academic experts frequently argue that terrorism is an inexpensive
business and that combating terrorist financing will not prevent
terrorist attacks, in fact, it is extremely expensive to maintain safe
houses, buy loyalties, maintain the physical infrastructure of terrorist
organizations, pay salaries to members, and meet the various other costs
associated with terrorism. Denying terrorists the opportunity to conduct
support activities undermines their ability to perpetrate attacks, even
if their radical ideology and violent intentions remain.
one of the most effective ways to constrict the operating environment
and crack down on terrorist financing is to target the network of
logistical support groups. Many of these groups are not particular to a
single terrorist organization, in fact, militant Islamist organizations
from al-Qaeda to Hamas interact and support one another in an
international matrix of logistical, financial, and sometimes operational
terrorist activity, unfortunately, two years into the war on terror,
these and other groups, along with a variety of Middle Eastern state
sponsors, still receive inconsistent attention despite a sharp rise in
their activity, inattention to any one part of the web of militant
Islamist terrorism undermines the effectiveness of measures taken
against other parts of that web.
The Matrix of Terror 10/24/03
Matthew Levitt on Abu Musab al-Zarqawi on National Review Online Page 1 of4


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The Zarqawi Node in the Terror ' Wftft Pride
Linking the terrorists.
Take 3 books for SI each
By Matthew Levitt

I n mapping out Iraq's links to international terrorism before
the United Nations Security Council, Secretary of State
Colin Powell highlighted the case of senior al Qaeda
commander Fedel Nazzel Khalayleh, better known as Abu
Musab al-Zarqawi. FROM THE AUTHOR
How Ronald Reaqa
The French In fact, Zarqawi exemplifies not only the The latest: Changed My Life

Disease of Iraq role in the web of international Chan Canned 10/23 Peter Robinson share
Anti-Americanism terror but serves as a case in point of the Reagan's life lessons
A Bittersweet Roman
terror matrix itself. Zarqawi's activities Week 10/23 Buy it through NR
Jean-Francois Revel,
a leading French on behalf of al Qaeda span the globe,
intellectual and from Afghanistan to Great Britain, with Failed Leadership HIM
friend of the U.S., 10/23
shows how Europe
equally diverse links to other terrorist
and the rest of the . groups, from Ansar al-Islam in Iraq and CBS's Fictionalized
world caught the Hezbollah in Lebanon to al-Tawhid in History 10/23
French disease of Germany and Beyyiat el-Imam in Previous Articles
An ti'Am erica n is nrt.
Turkey. At least 116 terrorist operatives
from Zarqawi's global network have
already been arrested, including
members in France, Italy, Spain, Britain,
Germany, Turkey, Jordan, and Saudi

WHO IS ZARQAWI? Clegg: Madison
A Palestinian-Jordanian and veteran of Memory 10/23
9:49 a.m.
the Afghan war against the Soviets,
Zarqawi first appeared as a terror suspect Karnick: Chan
when Jordan indicted him in absentia for Canned 10/23
9:27 a.m.
his role in the al Qaeda millennial
bombing plot targeting the Radison SAS Conda: The Bush
Recovery Is
hotel in Amman as well as other .asp 10/23/03
Mr. Matthew A. Levitt Page 1 of 16

Af/OCIATION Senior Fellow in Terrorism Studies,
The Washington Institute for Near
East Policy

"The Causes of the 9/11
Attacks and the Scope of the Threat"
Quick Links to Speakers The attacks in New York, Washington, and Sommerset
County, Pennsylvania, on September 11 brought the specter
® Sen, Richard G. Lugar of international terrorism into the living room of every
® Dr, Chung Hwan Kwak member of the global community. That morning's events will
® Amb. Bill Richardson go down in history as the "where-were-you-when," the
® Arnaud de Borchgrave combined Kennedy assassination and Pearl Harbor of this
® Matthew A. Levitt generation. In fact, September 11 was a watershed event in
the history of terrorism. Until September 11, fewer than 1,000
Americans were killed in terrorist attacks in the United States
& Dr. Graham Allison
or abroad in over 30 years. Until this attack, no one terrorist
® Lawrence S. Eagleburger operation killed more than 500 people at one time.[i] Citizens
®BilLGertz of 85 different countries suffered casualties on September 11.
® Amb. Philip S. Kaplan
® Dr. Timothy Charles Brown
®Dr. Daniel Pipes Most scholars see the 1968 hijacking of an Israeli E1-A1 flight
* Dr. MuazzarnGill by the Popular Front for the Liberation of Palestine (PFLP) as
^ Faiz Rehman a watershed event marking the advent of modern-day
® Robert Baer terrorism. Since then, scholars have asserted time and again
® John O'Sullivan that the primary purpose of terrorist attacks is to draw
® Hafez Al-Mirazi attention to a cause or a plight, not to kill people. In the words
^ Georgie Anne Geyer of one scholar, "terrorists want a lot of people watching and
^DimitriK-Simes listening and not a lot of people dead."[iii] And in fact, the
® Dr JFrank Kaufmann hijackers of at least one of the flights played on this
® Amb. Phillip V. Sanchez assumption, telling their passengers they intended to land at
^Martin Walker an airport and present their demands to the U.S. government.
® Douglas P.M. Joo
September 11 ushered in a new era of terrorism in which
terrorism is not merely a means of conveying a message; in
part, it is the message. Some experts recognized this shift
earlier than others. In 1994, former Director of Central
Intelligence James Woolsey assessed that "today's terrorists
don't want a seat at the table, they want to destroy the table
and everyone sitting at it."[iv] In the summer of 2000, the
National Commission on Terrorism published a report noting 10/23/03
"Confronting Syrian Support for Terrorist Groups" (May 2003) Page 1 of7

^Middle East
Jointly published by the United States Committee for a Free Lebanon and the Middle East Forum
Table of Contents
Vol. 5 No. 5 MEIB Main Page May 2003

Confronting Syrian Support for Terrorist Groups
VIatthew A. Levitt "^

After the unveiling of an American backed Israeli-Palestinian plan
known as the road map earlier this month, US Secretary of State Colin
Powell embarked on a trip to the Middle East. Significantly, however,
he did not stop in Israel or the West Bank on this trip, but went straight
to Damascus to warn Syrian President Bashar Assad "in the strongest
possible terms" that the United States will not tolerate his government's
continued sponsorship of terrorist organizations that have carried out
scores of suicide bombings in Israel during the past two and a half
years.iu As one member of Powell's entourage put it, "we didn't come
here bearing carrots. "121

This display of American resolve - the true test of which will come in
the weeks and months ahead - stems partly from the recognition that
the peace process cannot be revitalized as long as Syrian sponsorship
of Hezbollah, Hamas, Palestinian Islamic Jihad (PIJ). the Popular Front
for the Liberation of Palestine-General Command (PFLP-GC), and Bashar A&sad
other terrorist groups continues unabated. Unlike in the past, however,
the United States is not demanding that Syria merely "rein in" terrorist groups opposed to the peace
process, but that it end its involvement in terrorism completely. In light of the Assad regime's
sponsorship of terror attacks against US troops in Iraq and new intelligence regarding al-Qaeda's
network in Syria, American officials are not likely to tolerate anything short of Syria getting out of the
terror game altogether.

Syrian Meddling in Iraq

The war in Iraq highlighted Syria's status as a state sponsor of terror bent on frustrating US efforts to
bring peace, security and democratization to the Middle East. Syrian Foreign Minister Farouq al-Shara
asserted quite plainly, "Syria's interest is to see the invaders defeated in Iraq/'m He added, "The
resistance of the Iraqis is extremely important. It is a heroic resistance to the US-British occupation of
their country. "HI

Taking Shara's position one step further, Syria's senior mufti called for suicide attacks on American
soldiers in Iraqjsi Indeed, thousands of Arab irregular forces - some volunteers, some members of
terrorist groups like Palestinian Islamic Jihad, Hezbollah and Fatah splinter groups - crossed the Syrian
border into Iraq to battle coalition forces. Coalition commanders commonly referred to these irregulars
as "Syrians" because most of them were Syrian, and most of those who weren't carried Syrian travel
documents, in some cases specifically marked "reason for entry: Jihad. Length of stay: Indefinite. "M In
one case, US military forces captured a large group of Syrians and confiscated seventy suicide jackets -
each filled with twenty-two pounds of military grade C4 explosives, and mercury detonators, m In 10/7/03
Matthew A. Levitt on Terrorism & Britain on National Review Online Page 1 of4

FLORENCE KING'S The complete unedited,
unabridged collection of
NEW BOOK "The Misanthrope's Comer"
Available only from MR CLICK HE«E


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Still With Us? Cfafttxl wm PrHte
Testing Britain's counter-terror resolve.

By Matthew A. Levitt
Take 3 books for S1 each

ast week, two disparate events tested Britain's resolve to
take bold action in the war on terrorism. London passed
the first hurdle with flying colors, arresting a wanted
fugitive, and will hopefully show similar determination by
shutting a terrorist front organization operating openly out of
London. Coming on the heels of intelligence revealing al
Qaeda plots to crash a hijacked aircraft into an important TOM THE AUTHOR
British building, it is critical London signal its continued How Ronald Reaga
The latest: Changed My Life
resolve to fight terror.
Chan Canned 10/23 Peter Robinson share
Reagan's life lessons
Last Thursday, British authorities A Bittersweet Roman
arrested a former Iranian diplomat Week 10/23 Buy it through NR
(traveling on a student visa with no Failed Leadership KCJN'AU) KPAl.AN
diplomatic status or protection) for his 10/23 Cm*».*t< M>
role in a 1994 Hezbollah bombing attack CBS's Fictionalized
in Argentina. London bristled at Iranian History 10/23
threats to downgrade bilateral relations
Previous Articles
and withdraw its ambassador over the
arrest, seeking instead to forge a
common European front on relations to '» J K R t!iil'is*nl
Iran and exploring the possibility of an
EU-wide downgrading of relations with
Tehran over the exposure of Iran's
frenetic nuclear program.
Clegg: Madison
The following day, the U.S. Treasury Memory 10/23
Department fingered the Palestinian 9:49 a.m.
Relief and Development Fund, or Karnick: Chan
Interpal, as a U.K.-based Hamas front Canned 10/23
organization and branded it a "Specially 9:27 a.m.
Designated Global Terrorist entity." Conda: The Bush
While it received a clean bill of health Recovery Is 10/23/03
PolicyWatch 671 Page 1 of 3

Print this page.
The Washington Institute for Near East Policy

Number 671 October 28, 2002


By Matthew Levitt

On Thursday, October 24, the Federal Bureau of Investigation issued a new terrorist threat
alert (this time warning of attacks on transportation systems), highlighting once more why
attention has been focused on al-Qaeda and its affiliated groups since September 11, 2001. A
year on, however, other Middle Eastern terrorist groups and state sponsors of terrorism still
receive inconsistent attention despite a sharp rise in their activity. In fact, militant Islamist
groups from al-Qaeda to Hamas interact and support one another in an international matrix of
logistical, financial, and sometimes operational terrorist activity. Inattention to any one part of
the web of militant Islamist terror undermines the effectiveness of measures taken against
other parts of that web.

Links between Terror Groups

September 11 produced a political will, markedly absent after previous attacks, to take
concrete action to counter and disrupt the terrorist threat to America and its allies. Yet, while
efforts targeting Osama bin Laden and his associates are concerted and continuous, similar
efforts are lacking when it comes to other terrorist groups of global reach and state sponsors of
terrorism. In the months after September 2001, groups such as Hamas and Hizballah were
placed on new U.S. government terrorism lists, and the primary Hamas front organization in
America was shut down. Since then, however, these groups have received only fleeting
attention — usually in the wake of increasingly heinous terrorist attacks. But the links between
terrorist groups reveal a matrix of illicit activity on an international scale. Consider the following
examples of the terror web:

• On February 15, 2002, Turkish police arrested two Palestinians and a Jordanian who entered
Turkey illegally from Iran on their way to conduct bombing attacks in Israel. The three were
members of Beyyiat el-Imam (a group linked to al-Qaeda) who fought for the Taliban and
received terrorist training in Afghanistan. They were dispatched by Abu Musab Zarqawi, then in
Iran and now believed to be in Syria after receiving medical treatment in Iraq. Zarqawi has
been linked to Hizballah, as well as to a terrorist cell apprehended in Germany that had been
operating under the name Tawhid. German prosecutors announced that the group, tied to the
recently arrested Abu Qatada in Britain but controlled by Zarqawi, was planning to attack U.S.
or Israeli interests in Germany. Eight men were arrested, and raids yielded hundreds of forged
passports from Iran, Iraq, Jordan, Denmark, and other countries.

• The International Islamic Relief Organization (IIRO) finances the activities of a diverse cross-
section of international terrorist groups. From 1986 to 1994, bin Laden's brother-in-law
Muhammad Jamal Khalifa headed the IIRO's Philippines office, through which he channeled
funds to al-Qaeda affiliates, including Abu Sayyaf and the Moro Islamic Liberation Front. In
1999, an IIRO employee in Canada was linked to the Egyptian Islamic Jihad. More recently,
official Palestinian documents seized by Israeli forces in April 2002 establish that the IIRO
donated at least $280,000 to Palestinian charities and organizations that U.S. authorities have
linked to Hamas. .htm 10/23/03
Matthew A. Levitt on Khaled Shaikh Muhammad on National Review Online Page 1 of5

FLORENCE KING'S The complete unedited,
unabridged collection of
NEW BOOK i !The Misanthrope's Comer*
Available only from MB CLICK MERE


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KSM in Custody OaftadHftft ftrfcte
Wartime status check.

By Matthew A. Levitt Take 3 books for S1 each

T he capture of Khalid Shaikh Mohammed, al Qaeda's
operational commander and 9/11 mastermind,
demonstrates that the United States can, in fact, walk and
chew gum at the same time. The fact that the greatest success
to date in the war on terrorism occurred well into the
planning stages of the war to liberate Iraq should give pause
to critics who said these two wars could not be fought at r FU0MTHEAWH08

once. Indeed, the information investigators are already How Ronald Reaga
The latest: Changed My Life
collecting — from his interrogation and the materials seized
when he was captured, including his laptop, cell phones, Chan Canned 10/23 Peter Robinson share
Reagan's life lesson;
"pocket litter," and other documents, to the sudden surge in A Bittersweet Roman
international phone and e-mail "chatter" officials are Week 10/23 Buy it through NR
monitoring — strongly suggests there will be more such Failed Leadership
successes in the war on terror in the near future. 10/23
CBS's Fictionalized
MANAGING INTEL History 10/23
Over the past few months, several
respected terror analysts have aired the Previous Articles

legitimate concern that fighting a
conventional war in Iraq would drain
precious intelligence resources from the
ongoing, more dangerous, and
immediate war on terror. And it is true
that supporting military action has
historically trumped other intelligence
Clegg: Madison
functions in times of war. By many Memory 10/23
estimates, traditional war fighting 9:49 a.m.
demands as much as 80 percent or more
Karnick: Chan
of the intelligence community's Canned 10/23
resources to support forces on the 9:27 a.m.
ground. But this fails to account for two Conda: The Bush
critical factors: (1) the introduction of Recovery Is 10/23/03