January 16, 2006
Many are aware of widespread Saudi investments in the United
States, but few know how potentially harmful they are. Moreover, U.S.
policy-makers remain unaware of this grave danger.
On Sept. 28, 2001, after the attacks on the United States, Osama bin
Laden called for financial jihad against the United States, and on
Dec. 27, 2001, he called on jihadists “to look for [and strike] the
key pillars of the U.S. economy.” Although now the Saudis claim bin
Laden is their enemy, many of them continue to follow his agenda.
Religious and ideological support has been also provided by Hussein
Shihata, a leading Sunni scholar of Islamic Economy at Cairo’s al-
Azhar University. Mr. Shihata’s July 10, 2002, fatwa says: “We do not
use the term ‘economic jihad’ as a mere motto or a resounding slogan
with no action. Rather, we mean by it a practical jihad that requires
action to turn it into an effective and concrete reality. The aim
behind that is to benefit all Muslims and to challenge the aggression
staged by the U.S. and Jews against Islam and Muslims.”
Prince Alwaleed bin Talal, who claims to abhor bin Laden, seems
nevertheless eager to follow his agenda. In an interview with Arab
News in May 2002, the prince said that if the Arabs “unite through
economic interests,” they would achieve influence over the U.S.
decision-makers. Since government sources estimate Saudi holdings in
the United States at $400 billion to $800 billion, the matter
warrants public attention.
The Saudi agenda extends far beyond policy-makers. In the late 1990s,
the privately owned Massachusetts technology company, Ptech, designed
software used to develop enterprise blueprints that held every
important detail of a given concern. The company was financed with
more than $22 million, by Saudi multi-millionaire Yasin al Qadi, a
Specially Designated Global Terrorist. The Saudis thus gained access
to strategic information about many major U.S. corporations such as
SYSCO, ENRON, and the U.S. Departments of Defense, Treasury, Justice,
Energy, and even the White House. The extent of the damage, if it was
investigated, remains a mystery.
Meanwhile, substantial Saudi and Gulf financial contributions “to
bring the proper message to America’s brightest minds,” are pouring
into U.S. educational institutions through Arab and Islamic centers
and professorial chairs. Last month the prince gave $20 million each
to Georgetown and Harvard universities. According to the Center for
Religious Freedom, the Saudis also supply textbooks for public
libraries, schools and colleges, and provide the content concerning
Islam to some U.S. textbook publishers.
The Saudis’ potential influence on U.S. and international media was
recently illustrated by the prince’s purchase of 5.6 percent of
voting shares in News Corp., the world’s largest publisher of English
newspapers. Moreover, Reuters reported on Dec. 5 that the prince
announced his plan to “spread the right message” via a new television
channel, “The Message,” to broadcast to the U.S. within two years.
Yet, information regarding the magnitude of the Saudi economic
infiltration into the United States is secret. The U.S. Treasury’s
interpretation of the census law, supported by a 1982 court decision,
shields this data from the public. On Oct. 27, 1982, the American
Jewish Congress (AJC) was denied information requested under its own
FOIA inquiry, by the U.S. District Court in Washington D.C. (Civ. A.
No. 81-1745). The AJC litigated its FOIA case up to the Supreme
Court, but the government won.
Indeed, filing a Freedom of Information Act (FOIA) request to the
Department of Commerce is useless. FOIA Director Burton H. Reist
stated in December that this data “is protected by Title 13, United
States Code, Section 9, which requires that census records be used
solely for statistical purposes and also makes these records
confidential.” Furthermore, FOIA “exempts from disclosure records
that are made confidential by statute.” In other words, the
government wants this information kept secret.
Under the “International Investment & Trade in Services Survey Act,”
the U.S. Treasury Department tracks foreign portfolio, and Commerce
tracks direct investments. This information is unavailable for Saudi
Arabia or the Gulf States, following their request that the details
be suppressed “to avoid disclosure of data of individual companies.”
For example, under the heading “Foreign holdings of U.S. long-term
securities, by country,” Treasury aggregates all eight “Middle East
oil exporters.” A Treasury Department official said that this
aggregation is a “Treasury policy,” and justifies the non-disclosure
on grounds that this information could “harm national security and
While the U.S. government seeks to spread American democratic values,
including transparency and accountability, it denies its own citizens
and policy makers the same. In view of the stated Arab and Muslim
strategy to subvert the U.S economy, one wonders why the publication
of Saudi financial interests in the United States would harm national
security and foreign relations. It seems that the secrecy surrounding
Saudi investments in the United States is what may well threaten our
Rachel Ehrenfeld is author of “Funding Evil; How Terrorism is
Financed — and How to Stop It,” director of American Center for
Democracy and a member of the Committee on the Present Danger.
(Alyssa A. Lappen, a fellow at the ACD, contributed to the article.)
the Los Angeles Times, January 15, 2006
U.S. Faults Saudi Efforts on Terrorism
The kingdom has gotten tough within its borders, but militants are
pouring into Iraq, and money is still flowing to Al Qaeda, officials
By Josh Meyer
Times Staff Writer
WASHINGTON – Although Saudi Arabia has cracked down on militants
within its borders, the kingdom has not met its promises to help
prevent the spread of terrorism or curb the flow of money from Saudis
to terrorist cells around the world, U.S. intelligence, diplomatic
and other officials say.
As a result, these critics say, countless young terrorism suspects
are believed to have escaped the kingdom’s tightening noose by
fleeing across what critics call a porous border into Iraq.
U.S. counter-terrorism and intelligence officials confirm an
aggressive role by Saudi fighters in the insurgency in Iraq, where
over the last year they reportedly accounted for more than half of
all Arab militants killed. And millions of dollars continue to flow
from wealthy Saudis through Saudi-based Islamic charitable and relief
organizations to Al Qaeda and other suspected terrorist groups
abroad, aided by what the U.S. officials call Riyadh’s failure to set
up a government commission to police such groups as promised, senior
U.S. officials from several counter-terrorism agencies said in
Those officials said Saudi Arabia had taken some positive steps
within its borders. But they criticized the Saudis for not taking a
more active role in the global fight.
Daniel L. Glaser, the deputy assistant Treasury secretary for
terrorist financing and financial crimes, recalled attending a
counter-terrorism conference in Riyadh last February at which the
Saudis declared they would be an international leader in fighting Al
Qaeda and in eradicating terrorism worldwide.
Nearly a year later, Glaser and other U.S. officials said, many of
those promises are unfulfilled.
“They promised to do it, and they need to live up to their promises,”
Glaser said. “They need to crack down operationally on donors in
Saudi Arabia. And they need to exert their influence over their
international charities abroad.. They have to care not just what Al
Qaeda is doing just within their own borders but wherever it is
In response, a senior Saudi official vehemently insisted that the
kingdom had taken strong steps to fight the terrorist network – not
only at home but worldwide.
In a series of interviews last week, the official said the government
was working closely with regional partners and the United States on
operational and intelligence-gathering fronts.
The Saudi official spoke on condition of anonymity, saying he could
not discuss ongoing “operational matters.”
The official objected to U.S. criticism that Saudi fighters played an
important role in the Iraq insurgency, and said Riyadh had done a
good job of sealing off the border between the two countries. Saudis
seeking to enter Iraq have to do so through other countries, he said.
By contrast, the Saudi official said, U.S. forces in Iraq have done
little to patrol that country’s borders with Saudi Arabia, and
foreign fighters are entering Iraq through Syria and Iran.
“We have captured thousands of people coming into Saudi Arabia from
Iraq, including drug dealers and people trying to smuggle
explosives,” the official said. “And for somebody to have the
audacity to say the Saudis are not doing enough is unreasonable..
Which side is not doing enough? The side that has beefed up its
border or the side that has not?”
The official acknowledged that Saudi Arabia had yet to fulfill its
2004 pledge of establishing a charity oversight commission but said
the government controlled all Saudi money going to charities and
relief organizations overseas.
Saudi Arabia has been under intense pressure from its longtime allies
in Washington since the Sept. 11 attacks, when it became clear that
15 of the 19 hijackers were Saudis. But critics say that the oil-rich
Persian Gulf kingdom, long considered a nexus of Al Qaeda activities,
did not begin seriously cracking down on terrorists until its own
capital was rattled by a series of deadly suicide bombings in 2003.
Since then, the kingdom has killed or captured dozens of senior
The senior U.S. counter-terrorism and intelligence officials from
several agencies praised Saudi Arabia for working closely with the
FBI and CIA on operations within the kingdom.
But they said the Saudi effort had focused almost entirely on
crackdowns on small operational cells of Al Qaeda militants at home.
In interviews and recent congressional testimony, they said they had
urged Saudi Arabia repeatedly, without success, to take a much more
active role in the broader effort.
Some of the Saudis now in Iraq have been trained in explosives and
guerrilla warfare by Al Qaeda cells in their homeland, while others
are gaining the experience in Iraq and using it in attacks on U.S.
troops and other Westerners, the officials said.
U.S. intelligence and military officials estimate that foreign
fighters make up only 5% to 10% of the insurgency, but they say that
foreign fighters are responsible for most of the deadliest, most
sophisticated terrorist strikes.
“We can confirm that there have been Saudi Arabian fighters in Iraq
but can’t go into numbers,” coalition forces spokeswoman Stacy Simon
But Saudis play a disproportionately large role, the evidence
suggests. The few nongovernmental experts who track the insurgency
estimate that 12% to 25% of the foreign fighters are Saudis.
One study of foreign fighters in Iraq concluded that of 154 Arab
fighters killed in Iraq in the six months ended March 2005, Saudis
constituted by far the highest number – 94, or 61% – followed by
Syria, with 16.
The study by the Israel-based Project for the Research of Islamist
Movements also concluded that 23 of 33 suicide bombers killed during
that period were Saudis.
Reuven Paz, the project’s director and a former senior Israeli
counter-terrorism official, said more recent statistics showed
virtually identical percentages of Saudi fighters. He said the study
was based on a detailed analysis of militant websites, the only
U.S. government officials had no comment on why they do not release a
breakdown of foreign militants killed or captured.
The U.S. officials said the Riyadh government, consisting mostly of
the ruling Saud family, had done little to rein in influential Saudi
radical religious clerics who had openly encouraged their followers
to attack U.S. interests in Iraq and elsewhere.
Riyadh also has failed to stanch the flow of millions of dollars in
annual zakat, the charity tax mandatory for Muslims, to highly
suspect Saudi-based charities and relief organizations that have ties
to Al Qaeda, U.S. officials said.
And they said the Saudi government continued to spend lavishly to
promote the spread of a fundamentalist form of Islam known as
Wahhabism. U.S. officials said the government funding of Wahhabist
clerics, mosques, study groups, textbooks and cultural centers in
Asia, Africa, Europe and even the United States was undercutting the
global counter-terrorism effort.
The Saudi official said Riyadh was retraining thousands of teachers
and clerics so they could disseminate a more moderate form of
Wahhabism. But he acknowledged problems in countering the influence
of radical clerics.
“We have a problem with imams,” the Saudi official said. “We have a
hundred thousand of them. Can we stop every one? No. Unfortunately,
extremists exist in every society and every faith.”
On another front, despite repeated pleas from Washington, the Saudi
government did not set up a financial intelligence unit to track
terrorism financing until September, more than two years after it had
pledged to do so, senior Treasury officials and other U.S.
“Even today, we believe that private Saudi donors may be a
significant source of terrorist funding, including for the insurgency
in Iraq,” Stuart Levey, the Treasury undersecretary for terrorism and
financial crimes, told Congress in little-noted testimony six months
One federal law enforcement official involved in international
counter-terrorism efforts said Washington believed Saudi money was,
at least indirectly, aiding similar Islamic militant networks in
Spain, France, Italy, Britain, Belgium, the Netherlands, Algeria,
Morocco, Turkey, Syria and elsewhere.
“There are these petri dishes all over the world, in the slums of
Spain and Italy and so forth, and then they put them in the test tube
in Iraq and that is where they really get going,” the law enforcement
Dissatisfaction with the Saudis’ effort has prompted the FBI, CIA,
Treasury Department and other agencies to undertake a highly
classified effort to track the flood of money from Saudi Arabia, in
part to see whether it is fueling the insurgency in Iraq and other
terrorism hot spots such as Indonesia, Thailand, Pakistan and West
Africa, said federal law enforcement and financial intelligence
The State Department’s top counter-terrorism official, Henry A.
Crumpton, recently told Congress that he traveled to Riyadh last fall
to discuss Saudi Arabia’s lack of progress on several counter-
terrorism fronts, particularly the export of extremist ideology and
the funding of international charities.
Crumpton told the House subcommittee on international terrorism that
Saudi officials had made “some progress . certainly inside their
But he added, “I expressed my disappointment that they have not yet
established a commission to overlook these charitable organizations
and determine [where] this funding is going.”
Riyadh closely monitors Saudi charities, the Saudi official asserted.
However, he acknowledged that the oversight did not extend to the
groups’ offices overseas.
“They are not Saudi entities,” the official said of the foreign
branches. “If a citizen of another country wants to give money to a
local branch of [a Saudi] charity located in that country, how can I
U.S. officials say such remarks illustrate that Saudi Arabia’s
efforts to crack down on Al Qaeda and Islamic extremism appear to end
at its borders.
At least five of the Muslim world’s largest charitable and relief
organizations are headquartered in Saudi Arabia but continue to
engage in highly suspect activity overseas, U.S. officials say. They
cite such organizations as the Muslim World League, the World
Assembly of Muslim Youth and the International Islamic Relief
The Treasury Department has declared some of these organizations as
sponsors of terrorism and frozen their U.S. assets. The department
has done the same with influential Saudi businessmen such as Wael
Hamza Julaidan and Adel Abdul Jalil Batterjee.
All have denied wrongdoing. A senior U.S. counter-terrorism official
said they continued to “operate and live comfortably in Saudi Arabia”
despite U.S. objections.