The Miscreants’ Global Bust Out (Chapter Two): The “Money Weapon” and a Jihad Bigger than Bin Laden
Posted on 03 May 2011 by Mark Mitchell
Tags: Abu Dhabi, Al Qaeda, Al Safi Trust, Anthony DeLorenzo, Arboon, Dawood Ibrahim, Dubai, Financial Terrorism, Golden Chain, Hamas, Holy Land Foundation, Islamic Society of North America, ISNA, Khalid bin Mahfouz, Mohammed bin Rashid Al Maktoum, NAIT, Osama bin Laden, Palestinian Islamic Jihad, Sami al Arian, Shariah Capital, Sterling Management, terrorist financiers, Victor Bout, Viktor Bout, Yaqub Mirza, Yasin al Qadi
This is Chapter Two of a multi-chapter story…
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Al Qaeda’s supporters are “aware of the cracks in the Western financial system as they are aware of the lines in their own hands.”
– Osama bin Laden, in a 2001 interview with a Pakistani Journalist
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After my first unsuccessful conversation with Zuhair Karam, I called him again, but he still refused to admit that he knew anything about Tuco Trading, and he declined to tell me anything about the goings on at the Bridgeview Mosque. He continued to insist that he was “just one of the little guys” and refused even to meet me for a cup of coffee.
I have no doubt that Zuhair is “just one of the little guys” and it is possible that he himself has done nothing worse than engage in entirely legal political activities in support of jihadi causes. But I kept calling Zuhair because I knew that his friends and business associates included some people who were far from being “little guys”. Indeed, they were among the most dangerous jihadis and financial criminals in the world.
Zuhair and his family are tied to such characters as Palestinian Islamic Jihad leader Sami al-Arian and to the folks at Benevolence International, the Al Qaeda front that had contacts with people trying to obtain nuclear weapons for Osama bin Laden. Another of Zuhair’s closest associates is Imad E Kharda, the director of the Indiana-based Greater Lafayette Islamic Center, whose one-time imam, Juma Al-Dosari, recruited six Yemeni-American men and set them to an Al Qaeda training camp in Afghanistan.
Upon their return, the Yemeni-Americans, known as the “Lackawanna Six” (because they all hailed from a town in Pennsylvania by that name), moved to Buffalo, New York, allegedly to establish an Al Qaeda sleeper cell. There has been much controversy concerning the Lackawanna Six, with some journalists complaining that there was no conclusive evidence that the six Yemeni-Americans posed a serious danger.
Be that as it may, their recruiter, Juma Al-Dosari, was certainly a threat. In fact, when he was later captured in Aghanistan, it was determined that he was full-fledged Al Qaeda operative. While working as a cleric at another mosque in Indiana, he recruited a disciple who was found with manuals detailing methods for wiping out a portion of the American citizenry with anthrax, plague, and small pox.
Of course, this is a free country, and people have the right to hate it. They even have the right to get their kicks from collecting manuals about mass murder. So let me be clear about something before I continue. I will be referring to a number of financial operators in this story as “jihadis,” but I do not believe it is a crime simply to adhere to the jihadi ideology.
That said, the media fails us if it does not report on people who are not only jihadi ideologues, but also engaged in activities that threaten or harm the United States. Osama bin Laden is dead. But the jihad was always bigger than him. And some surviving jihadis are richer, smarter, and, perhaps, just as dangerous.
If nothing else, such people make for interesting reading. So let’s meet some more of Zuhair Karam’s jihadi friends. These friends do not possess nukes or manuals for biological warfare. They do, however, create financial weapons of mass destruction.
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In the summer of 2003, customs agents at London’s Heathrow airport inspected the luggage of a man named Abdurrahman Alamoudi, and found hidden in a secret compartment of one of his suitcases a total of $350,000 in cash. Mr. Alamoudi failed to adequately explain why he was hauling large stacks of $100 bills in a secret compartment, so there was an investigation. This investigation yielded some startling facts.
Mr. Alamoudi, a member of a wealthy family in Saudi Arabia, had been a long time resident of the United States, where he was among the most prominent members of the Muslim community, and a close associate of Zuhair’s family and the directors of the Bridgeview Mosque. Given those associations, it is not surprising that he was an outspoken supporter of Hamas and Hezbollah. Nor is it a surprise that one of his closest friends was Palestinian Islamic Jihad leader Sami al Arian.
Some people believe that groups like Palestinian Islamic Jihad, Hamas, and the Muslim Brotherhood have legitimate political grievances, and perhaps they do. But given that the stated missions of these outfits is to wipe Israel off the map, it is also fair to say that they are extreme. And while many jihadi groups seem to be focused on faraway lands like Palestine, most of them have ties to Al Qaeda, and all of them are united in their hostility to the United States. Moreover, they pay close attention to the U.S. markets – and they see the economy as key to undermining American power.
When the financial crisis hit in 2008, Hamas leaders reacted with glee and issued an official statement proclaiming that the economic cataclysm marked the “End of the American Empire.” Meanwhile, outfits like the Muslim Brotherhood regularly preach the glory of Al Jihad bi-al-Mal, or the “Financial Jihad.”
Government investigators generally interpret Financial Jihad as “contributing money to jihadi groups like Hamas.” But as was noted by the authors of the report commissioned by the Defense Department’s Irregular Warfare Support Program, there are good reasons to believe that an important component of the Financial Jihad is attacking the Western financial markets.
Muslim Brotherhood leader Hamud bin Uqla al-Shuaibi implied as much when he stated in 2007 that jihadis must resist the West, but do not necessarily need to do so with violence. He suggested that “Financial Jihad” was a viable alternative to violence and was indeed “more important than self sacrificing [in armed battle].” He did not specify what he meant by “Financial Jihad” but he was certainly not talking about giving to charity. Rather, he said, “Money is a weapon of Jihad,”
Similarly, Muslim Brotherhood spiritual leader Yussuf al Qardawi has spoken of the need for Muslims to deploy Silah al Naft – i.e. “the weapon of oil” – against the U.S. economy. This was precisely in line with the thinking of Osama bin Laden, who had stressed “the absolute necessity to use the oil weapon.”
In another typical manifesto, Osama bin Laden and his deputy wrote that “it is very important to concentrate on hitting the U.S. economy through all possible means.” In 2007, bin Laden released a video on which he taunted the U.S. for having too much mortgage debt.
Although Osama bin Laden is dead, his words remain important. Indeed, among jihadis, the words of the fallen “martyr” might have more resonance than ever. And, again,the jihad is bigger than bin Laden. It is a global movement that has clearly articulated its goals, and remains intent upon acheiving them.
Al Qaeda and many other outfits have repeated over and over that jihadis should wage economic warfare any way they can. They don’t mean knocking down buildings – they mean wiping out the markets. As Al Qaeda operative Monin Khawaja wrote in 2003, “We have to come up with a way that we can drain their economy of all its resources, cripple their industries, and bankrupt their systems…”
Then there is the Muslim Brotherhood document, which is quoted all too frequently, and often to the wrong purposes. It says that Muslims “must understand that their work in America is a kind of Grand Jihad in eliminating and destroying the Western civilization from within and `sabotaging’ its miserable house by the hands of the believers…”
When I say that the document is quoted to the wrong purposes, I am referring to those who point to it as evidence that the Islamism is taking over America, which it is not. Certainly, we should not be hysterical about Muslims calling America a “miserable house”, which is a relatively accurate description of our current state of affairs. However, it is possible that jihadis are, in fact, “sabotaging” our miserable house from within.
As early as 2003, the Department of Homeland Security warned that Al Qaeda was interested in infiltrating American financial institutions, and that Al Qaeda operatives possibly had already obtained jobs at American brokerage houses and banks. Said DHS spokesman David Wray: “There is new intelligence that indicates specific interest [on the part of Al Qaeda] in financial services and indirect indication…that led us to believe that threats could come from within as well as without.”
Osama bin Laden, meanwhile, liked to brag (as he did in the statement with which I opened this chapter) that his supporters understand the weaknesses in the American financial system. In another statement, he was even more explicit, saying not only that his supporters knew how to “exploit” the “cracks inside the Western financial system”, but also that the “faults and weaknesses are like a sliding noose strangling the [American economy].”
Which brings us back to Mr. Alamoudi, the fellow caught with $350,000 stuffed in his suitcase. Mr. Alamoudi was a central figure in what FBI investigators have come to call the SAAR Network, or sometimes the Safa Group, a complex web of companies, investment funds, banks and charities alleged to have funded a host of jihadi outfits, including Al Qaeda. Shortly after the 9-11 attacks in 2001, the SAAR Network became the principal target of Operation Green Quest, the U.S.. government’s effort to shut down the flow of money to terrorists.
One SAAR Network outfit was called the Ficq Council, where Mr. Alamoudi served as a trustee. The founder of the Ficq Council, Taha Jaber Al-Alwani, was named as an “unindicted co-conspirator” in the government’s case against Mr. Alamoudi’s friend, Sami al-Arian, who was himself a central figure in the SAAR Network until he was jailed for his activities as U.S. leader of Palestinian Islamic Jihad. (Although Sami al-Arian was suspected of providing support to the 9-11 hijackers, he was never charged for doing so).
The secretary and board director of the Ficq Council was a man named Sheikh Yusuf Talal DeLorenzo, who is another one of Sami al Arian’s close associates. Sheikh DeLorenzo and Mr. Alamoudi (the fellow with the suitcase full of cash), meanwhile, co-founded a SAAR Network outfit called the Graduate School of Islamic and Social Sciences (GSISS). Amazingly, while FBI agents were diligently investigating this network, U.S. politicians convinced the FBI’s press office to describe the GSISS as “the most mainstream Muslim organization in America.”
On that recommendation, Mr. Alamoudi and Sheikh DeLorenzo earned a contract from the U.S. Department of Defense to screen and hire Muslim Army chaplains who would accompany U.S. troops in Afghanistan. After that, it was learned that Sheikh DeLorenzo and Mr. Alamoudi were not, in fact, the “most mainstream Muslims” in America. To the contrary, Mr. Alamoudi was a full-fledged Al Qaeda operative.
That became apparent soon after the Heathrow customs agents found the $350,000 in cash hidden in a secret compartment of Mr. Alamoudi’s suitcase. The investigation that ensued revealed that Mr. Alamoudi had received the cash from Libyan dictator Moammar Qaddafi, and that he planned to use it to finance a plot that he had hatched with another Al Qaeda operative to assassinate Crown Prince Abdullah of Saudi Arabia. At the time, many jihadis worried that when the crown prince (who is now king) took the throne, he would crack down on prominent terrorist financiers (people like Mr. Alamoudi, who delivered boat loads of money to Al Qaeda).
After it became clear that Mr. Alamoudi (who is now serving a 23-year prison sentence) was an Al Qaeda operative, the U.S. Senate held a hearing to discuss how it came to be that an Al Qaeda operative and his partner, Sheikh DeLorenzo, were hiring chaplains to accompany American troops to Afghanistan. Echoing the words of most everyone else at that hearing, Senator Jon Kyl of Arizona said that it was pretty “remarkable” that “people who have known connections to terrorism are the only people to approve these chaplains.”
It took some time for the government to realize just how “remarkable” it was, but the Defense Department did ultimately conclude that the GSISS had probably been inserting Al Qaeda spies into the U.S. Army. At least one of the chaplains that Mr. Alamoudi and Sheikh DeLorenzo hired for the Army was eventually charged and convicted for passing U.S. military secrets to Al Qaeda. Other GSISS clerics were suspected of espionage and merely fired.
Three years later, a lot of people still thought it was “remarkable” that Sheikh DeLorenzo and an Al Qaeda operative had managed to insert spies into the U.S. military. But that didn’t stop Sheikh DeLorenzo (a sophisticated financier who looks the part in his pin-striped suits) from seeking permission from the Securities and Exchange Commission to set up a trading platform called Al Safi Trust, the ostensible purpose of which was to enable Muslim traders to engage in short selling without violating shariah law.
In 2007, the SEC granted permission, which is pretty “remarkable” because Al Safi Trust creates precisely the sort of crack in the financial system that would likely be exploited by people looking to crash the markets. Traders who engage in legal short selling (as opposed to illegal naked short selling) first borrow stock, then sell it, hoping the price will fall. This is a perfectly legitimate practice because it does not manipulate the markets. The stock that is borrowed and then sold is real stock; it is not phantom stock that artificially increases supply and drives down prices.
When Sheikh DeLorenzo set up Al Safi Trust, he explained that Muslim traders cannot borrow stock because shariah law prohibits paying interest. This claim is, to begin with, extremist. Shariah law does not ban interest. It merely warns against “excessive” interest, or usury. Nobody ever said that Muslims cannot pay interest until the radical jihadi movement started to take off in the 1980s. And one goal of this movement is to create a separate, jihadi financial system. This is about politics, not religion.
Regardless, the interest problem could have been resolved in any number of ways. For example, Al Safi Trust could have worked out a fee structure whereby the prime broker, rather than the jihadi traders themselves, paid the interest on the borrowed stock. Instead, Al Safi Trust provides an altogether novel service, known as Arboon, the amazing feature of which is that nobody locates or borrows any real stock. The clients of Al Safi Trust can simply sell as much stock as they like even if there is no stock available to sell.
Of course, if there is no stock available, they are not selling actual stock. They are simply hitting the “sell” buttons on their computers, indicating to the markets that stock has been sold, and creating phantom supply that drives down prices. According to Sheikh DeLorenzo, Al Safi Trust’s short sellers enter into an agreement to eventually buy stock so that they can deliver what they have sold. But an agreement to buy stock at some indeterminate point in the future is a far cry from having actual stock before selling it.
Presumably, Al Saft Trust’s clients do fulfill their agreements by eventually purchasing stock and delivering it to whomever bought it. But by that time, the phantom stock that was sold would have already done its damage to the markets. With the damage done, Al Safi Trust’s traders can buy shares at lower prices, deliver them, and then unleash another blast of phantom stock, futher driving down prices.
In short, Al Safi Trust is nothing more than a cloak for another form of naked short selling, embroidered in Islamic jurisprudence so that regulators will not see through it.
Criminals (or, for that matter, financial terrorists) looking to inflict damage on the markets now have a service, Al Safi Trust, that allows them to conduct their mischief without fear that American regulators will pay even the least bit of attention to what they are doing. I shudder to think who the clients of Al Safi Trust might be, but we should probably consider the possibilities. And towards that end, maybe we should know more about Sheikh DeLorenzo’s background.
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Sheikh DeLorenzo was born in Massachusetts as Anthony DeLorenzo, the son of upper-class parents, and the grandson of Italian immigrants from Sicily. At the age of twenty, he dropped out of Cornell University, and converted to Islam. Soon after, he moved to Pakistan, gradually making his way to Karachi, where he spent several years receiving religious training at Jamiah Ulum Islamia, a maddrassah led by scholars who, like the Taliban, subscribe to the strict Deobandi school of Islam.
According to the International Crisis Group, a well-known non-profit organization that studies war zones and political conflict, the Jamiah Islamia maddrassah has “carried the mantle of Jihadi leadership,” since the days of the Soviet invasion of Afghanistan, and now serves as “the fountainhead of Deobandi militancy countrywide.”
The International Crisis Group notes further that the Jamiah Islamia “boasts close ties with the Taliban” and has played a “major role in helping to establish and sustain” Pakistan’s most violent jihadi outfits, including Harkat ul-Mujahideen, Jaish-e-Mohammed, and Sipah-e-Sahaba.
All of these groups have close ties to Al Qaeda, and Jaish-e-Mohammed, along with the intimately affiliated Lashkar-e-Tayiba, have become, for all intents and purposes, Al Qaeda subsidiaries.
As evidence of this, investigators note, as just one example, that Omar Sheikh, a leading member of Jaish-e-Mohammed, wired money to Mohammed Atta, the ring-leader of the Al Qaeda hijackers who carried out the 9-11 attacks. Omar Sheikh was also responsible for kidnapping Wall Street Journal reporter Daniel Pearl, who was subsequently killed, his head sliced off with an ornate, Yemeni knife and held up to be filmed for jihadi propaganda video. Khalid Sheikh Mohammed, the mastermind of the September 11 attacks, has said that he committed the murder himself.
This was a great tragedy because Daniel Pearl (whom I knew by phone when I worked for the Wall Street Journal) was one of the few journalists to understand the threat to the United States is not just Al Qaeda, but a much larger, complex web of interlinking jihadi groups, shady financiers, agents of rogue states, narcotics smugglers, nuclear weapons traffickers, and Mafia kingpins. We’ll dig into that web in future chapters, but I’ll note now that Jaish-e-Mohammed, one of the outfits spawned by Sheikh DeLorenzo’s madrassah, has been implicated in multiple terrorist plots, including one to fire Stinger missiles at passenger planes in New York.
There is no question that Sheikh DeLorenzo — who is also known as Usama DeLorenzo, and Usama a-Ali, and Usama Ashraf Ali, and a lot of other aliases — is on familiar terms with jihadi groups. Indeed, in the 1980s, Sheikh DeLorenzo worked as key advisor to Zia ul-Haq, who was then the dictator of Pakistan. Sheikh DeLorenzo’s job was to implement the Pakistani government’s most pernicious program — the further development of the country’s network of madrassahs in order to strengthen relationships between the government and jihadi paramilitaries, including many that are now plotting the demise of the West.
As part of Shiekh DeLorenzo’s program, many of these jihadi groups became closely intertwined with Pakistan’s spy agency, the ISI. And, to this day, these entanglements cause conniptions among U.S. government officials who rely on Pakistan as an American ally, but acknowledge that the ISI is sheltering and nurturing jihadi groups who are among America’s most dangerous enemies.
The nexus between the ISI, the jihadis, and key Mafia figures (such as the Indian Mafia kingpin Dawood Ibrahim, who lives under the protection of the ISI and is a key money man for Al Qaeda, according to multiple U.S. government reports) is a genuine threat to global stability, and to the financial system that underlies the American economy. Forbes Magazine ranks Ibrahim one of the 50 most powerful people in the world.
The extent to which Sheikh DeLorenzo remains part of the Pakistani nexus is unclear, but his experience in Pakistan might be less worrying than his time in America, where he came to be on close terms not only with the leader of Palestinian Islamic Jihad and the Al Qaeda operative who was his partner in the GSISS spy scandal, but many other important jihadis, most of them key figures in the SAAR Network of alleged terrorist financiers.
For example, in addition to his high-level positions with the Ficq Council, Sheikh DeLorenzo was a board member at the International Institute of Islamic Thought (IIIT), another outfit identified by FBI investigators as being part of the SAAR Network. Other top officials of IIIT have been linked directly to Al Qaeda and provided logistical support to at least two of Al Qaeda’s biggest achievements – the simultaneous attacks on the U.S. embassies in Tanzania and Kenya; and the bombing, in 2000, of the USS Cole, an American destroyer that was parked at the Yemeni port of Aden.
One top IIIT officer, Tarik Hamdi, hand delivered the satellite phone that Osama bin Laden used to order the assault on the USS Cole. The IIIT was also the largest “donor” to the World and Islam Studies Enterprise, which simply handed the money over to Sami al-Arian’s Palestinian Islamic Jihad and other terrorist groups.
After Sami al Arian’s arrest, the secretary general of the Palestinian Islamic Jihad (who was once a professor, along with Sami Al-Arian, at the University of South Florida, and is now based in Syria) identified IIIT as the group’s most important source of funding.
In addition, Sheikh DeLorenzo was a top executive (and continues to serve as a key consultant for) a large investment fund called the Amana Trust, which is interesting on several levels. For one, the Amana Trust was founded by a Muslim Brotherhood figure named Yaqub Mirza, who is the most important U.S.-based operative in the SAAR Network of terrorist financiers.
Mr. Mirza was the incorporator or manager of more than a dozen SAAR Network hedge funds, charities, and financial entities, including Mar-Jac Investments, Mena Investments, Sterling Management Group, and Reston Investments. In addition, Mr. Mirza ran the SAAR Network’s centerpiece, an outfit called the SAAR Foundation, which advertised itself as a charity, but was allegedly an important vehicle for laundering money raised in the United States for jihadi groups.
In 1998, the SAAR Foundation reported that it had an astounding $1.8 billion in annual revenue. After the 9-11 attacks, when the authorities began investigating the foundation for alleged ties to Al Qaeda, the foundation issued new books that stated that it had zero income. In other words, $1.8 billion simply vanished, and officials suspect that the money ended up in the hands of terrorist outfits, including Al Qaeda. In another instance, the SAAR Foundation transferred $9 million to an off-shore account held in the name of Humana Charitable Trust, an entity that did not exist.
Mr. Mirza has also been named by FBI investigators and terrorism experts as the principal U.S.-based bagman for Yasin al-Qadi, a Saudi billionaire who was, until recently, one of a select number of people labeled by the U.S. government as a “Specially Designated Global Terrorist.” Although the State Department recently removed that designation under pressure from the Saudi government, which did not want the world to know that one of its most prominent citizens had been linked to Al Qaeda, I will continue to refer to Yasin al-Qadi as a “Specially Designated Global Terrorist” because the evidence is clear that he is, in fact, a “Global Terrorist” who needs to be “Specially Designated.”
In fact, as upcoming chapters will make clearer, it is probably correct to say that Yasin al Qadi was Osama bin Laden’s favorite financial operator. As evidence of this, we need only to know that in addition to being a major league hedge fund manager and market manipulator, Yasin al-Qadi ran the Muwaffaw (Blessed Relief) Foundation, which was, according to the U.S. Treasury Department, an “Al Qaeda front” and one of the most important sources of funding to Osama bin Laden’s operation.
In addition, Yasin al-Qadi was a major investor, along with a man named Sulaiman al-Ali, in a Chicago company called Global Chemical, which was ostensibly involved in warehousing chemicals for the manufacturing of soap. But the chemicals had nothing to do with making soap. When Global Chemical was raided in 1997, government experts said that the chemicals were likely for use in manufacturing explosives or even chemical weapons.
The president of Global Chemical was Mohammed Mabrook, who used the alias Mohamed Elhazeri, and who was, in the 1990s, the director of an outfit called Mercy International. Given that U.S. authorities have accused Mercy International of funding Al Qaeda and providing logistical support for Al Qaeda’s 1998 bombing of the U.S. embassy in Kenya, one might be suspicious of the intentions of Global Chemical’s operation.
Meanwhile, Global Chemical co-investor Sulaiman al-Ali incorporated, along with Yasin al-Qadi’s bagman, Mr. Mirza, a company called Sana-Bell Inc. As far as anyone can tell, Sana-Bell’s only purpose was to generate and manage money for the U.S. arm of the International Islamic Relief Organization (IIRO).
Among the principals of the IIRO was Mohammed al-Zawahiri, who was the leader of the military wing of Egyptian Islamic Jihad (which has since merged with al Qaeda). Mr. al-Zawahiri is also the brother of Ayman al-Zawahiri, who was Osama bin Laden’s deputy, and is now presumed to be the new leader of Al Qaeda.
Given these connections, it should not be surprising to learn that IIRO has been identified by authorities as an organization that funds terrorism. The United Nations, at one point, officially declared that the IIRO’s branch offices in the Philippines and Indonesia were Al Qaeda subsidiaries. For a long time, the Philippines office was directed by Mohammad Jamal Khalifa, a high-ranking Al Qaeda figure who is Osama bin Laden’s brother in law.
The IIRO, meanwhile, is a subsidiary of the Muslim World League, which Osama bin Laden identified (in a recorded conversation with Al Qaeda lieutenant Jamal Ahmed al-Fadl) as one of his primary sources of funding. The Muslim World League, which was also a big backer of Sami al Arian’s Palestinian Islamic Jihad, Hamas and other jihadi outfits, was incorporated in the United States by Yasin al-Qadi’s bagman, Mr. Mirza, chairman of Sheikh DeLorenzo’s Amana Trust.
While Mr. Mirza handled affairs in the U.S., the Muslim World League’s Peshawar office was managed by Wael Jalaidan, one of Al Qaeda’s founding members. The Muslim World League’s vice president in the U.S., Mr. Hassan Bahfazallah, was a member, along with Mr. Mirza, of Sana-Bell’s board of directors.
Mr. Bahfazallah, meanwhile, was also the executive director of Benevolence International, which received considerable support from “Specially Designated Global Terrorist” Yasin al-Qadi. Benevolence, recall, is the outfit that was (according to the U.S. embassy in Moscow and the FBI) in close contact with people who were trying to obtain nuclear bombs for Al Qaeda by buying them from Chechens with ties to the Russian Mafia.
Given the increased scrutiny that Yasin al-Qadi has faced from U.S. law enforcement, it is possible that he is no longer able to deliver money directly to Al Qaeda. But his expertise as a major league hedge fund manager with deep experience in the U.S. markets might be of service to the Grand Jihad. Same goes for bagman Mr. Mirza, who seems to be a first rate financial operator and has billions at his disposal.
I do not know whether Yasin al-Qadi, Mr. Mirza and the other jihadi financiers are clients of Sheikh DeLorenzo’s naked short selling phantom stock machine, but these people certainly operate in the same circles. Tax returns show that one investor in Sheikh Delorenzo’s Saturna Capital, which owns the Al Safi Trust naked short selling operation, was the Holy Land Foundation, named by U.S. prosecutors as the principal U.S. front for Hamas.
Sheikh DeLorenzo also ran (and continues to serve as a consultant to) the Saturna Brokerage, which is affiliated with the Islamic Society of North America (ISNA), a Saudi funded outfit tied to the Muslim Brotherhood. Mr. Mirza’s Amana Trust also operates under the ISNA umbrella, as does the NAIT investment bank and Tuco trader Zuhair Karam’s Bridegview Mosque, whose directors help run the operations of all of these financial entities.
The current president of Saturna Brokerage is Monem Abdul Salam, who was formerly a principal at Dickinson & Co., a brokerage that was a unit of the Stotler Group, which received a pile of subpoenas in 1989 as part of Operation Sour Mash and Operation Hedge Clipper – two famous FBI investigations into financial firms suspected of laundering money for narcotics kingpins and organized crime.
Mr. Salam was not directly implicated in those investigations, but there is no doubt that Dickinson was a dubious brokerage. Several of its leading traders left to found MB Trading, which never bothered to register itself with the authorities until it became the first brokerage ever sanctioned by the U.S. government for catering to a customer in Iran in violation of laws that prohibit doing business with state sponsors of terrorism.
As of 2008, the president of ISNA (the outfit that controls NAIT, Saturna, and Amana Trust) was Muzammil Siddiqi, who also served as president of the Ficq Council, where Sheikh DeLorenzo served as secretary and as a director of the board. Mr. Siddiqi has since been named as an unindicted co-conspirator in the Holy Land Foundation’s terrorist financing case.
There are many other reasons to be concerned about the brokerages and other financial outfits operating under the ISNA banner, one of which is that ISNA was co-founded by Palestinian Islamic Jihad leader Sami al Arian, who (we know) has been accused of providing support to the 9-11 hijackers, and was (according to court documents) taking directions from agents of the Iranian regime operating out of the UN headquarters in New York. This is one reason why NAIT, the multi-billion dollar investment outfit, was named as an unindicted co-conspirator in the government’s case against Sami al-Arian.
ISNA, meanwhile, was named as an unindicted co-conspirator in the government’s case against the Holy Land Foundation. According to United Press International, U.S. government investigators believe that ISNA has transferred money directly to Al Qaeda, but ISNA has not been charged on that account and likely wouldn’t be charged in deference to the Saudi government, which is one of ISNA’s big donors and would be embarrassed by any association with Al Qaeda.
The best the FBI can do, apparently, is occasionally mention ISNA officials as “unindicted co-conspirators” in cases related to Al Qaeda. As just one example, ISNA vice president Siraj Wahhaj was named by the U.S. government as an “unindicted person who may be alleged” to have participated in the 1993 “Day of Terror” plot, hatched by a diverse assortment of jihadis, all with ties to Al Qaeda.
The mastermind of both the “Day of Terror” plot and the 1993 bombing of the World Trade Center was a religious scholar and cleric named Omar Abdel Rahman, otherwise known as the “Blind Sheikh” – and he is one of the most important people in the world because his words, more than those of any other Islamic clerics, inspire the actions of Al Qaeda and other leaders of the Grand Jihad.
The Blind Sheikh was until his imprisonment the leader of Al-Gama’a al-Islamiyya, an Egyptian jihadi group. It was long assumed that Al-Gama’a al-Islamiyya was a fierce rival of Egyptian Islamic Jihad, led by Ayman al-Zawahiri, who merged his outfit with Al Qaeda and is now expected to take over bin Laden’s position. To be sure, al-Zawahiri and the Blind Sheikh had their differences when it came to tactics and strategy (especially with regard to Egypt), but they were nonetheless united in their mission to wage jihad against the United States.
Meanwhile, nearly all jihadis are united in their admiration for the Blind Sheikh because his PhD. from Egypt’s prestigious Al Azhar University, the fount of Muslim Brotherhood thought, gives his fatwahs legitimacy. Moreover, his fatwahs are bolder than those of any cleric, and they have a particular ring to them. “Tear the Americans and Jews to pieces! And kill them wherever you find them. Ambush them. Take them hostage…Kill these infidels! Until they witness your harshness. Fight them, and God will torture them…”
And so on…
In his most famous fatwah, the Blind Sheikh was the first to call for the use of airplanes as weapons. In this same fatwah (issued from his prison cell after the 1993 attack on the World Trade Center) the Blind Sheikh was also the first prominent jihadi to publicly declare that jihadis the world over should join forces to attack the American economy.
The lengthy fatwah is worth a read, but one line can give you a general idea. The Blind Sheikh began with the usual command to “tear [the Americans and Jews] to pieces”. He then specified how this could be done: “destroy their economies, burn their corporations, destroy their peace, sink their ships, shoot down their planes and kill them on air, sea, and land.”
At the press conference where Osama bin Laden announced his declaration of war against the United States, the Al Qaeda leader gave the assembled journalists laminated cards printed with a photo of the Blind Sheikh and a few words of his famous fatwah – namely, the words that I quoted above. Meanwhile, many of the polished jihadi financiers in the SAAR Network had advocated for the Blind Sheikh’s release from prison.
That was in the 1990s, and nobody paid much attention. Given what we now know, however, maybe the SEC or somebody should pay attention to jihadi financiers who might, indeed, be working to “destroy [our] economies” and “burn [our] corporations” – not with fire, but with the weapons of high-finance.
Weapons such as Sheikh DeLorenzo’s phantom stock machine, also known as Al Safi Trust, which is, in fact, a unit of Saturna Capital — which is, in turn, an affiliate of ISNA. But to the extent that the SEC does pay attention to ISNA (or to the former ISNA officials who are alleged accomplices of Al Qaeda and the Blind Shiekh), it is only to give the SEC stamp of approval to ISNA’s financial empire.
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The leaders of the jihad are often portrayed as primitive bumpkins who live in caves and are armed with nothing more dangerous than a few maniacs willing to blow themselves up. This is to ignore the power of the jihadi ideology, which is articulated with great eloquence by countless people who are eminently learned scholars of both Islam and global politics.
It is also to ignore the jihad’s fighting capabilities. The jihadis have done much more than dispatch a few terrorists here and there. They have organized and commanded insurgent armies with thousands of soldiers. And these armies have fought, with considerable success, two all-out wars (Afghanistan and Iraq) against the world’s most powerful military.
Perhaps even more importantly, the notion that jihadis are backward thinkers right out of the seventh century grossly underestimates the jihad’s sophistication as a modern-day global financial operation. And it is not just sophisticated; it is a massive criminal undertaking that has, according the United Nations, laundered more than $1 trillion through the global banking system in the last five years alone.
As one report prepared for the French Directorate of Military Intelligence explains, “the financial network of [Osama] bin Laden, as well as his network of investments, is similar to the network put in place in the 1980s by BCCI [Bank of Credit and Commerce International] for its fraudulent operations, often with the same people…The dominant trait of bin Laden’s operations is that of a terrorist network backed up by a vast financial structure.” [Italics are mine.]
For those who do not know, the Bank of Credit and Commerce International (BCCI) was a massive and complex financial institution, founded by a Pakistani wheeler-dealer named Agha Hasan Abedi in partnership with Sheikh Zayed bin Sultan al-Nahyan, then leader of Abu Dhabi. Among the other founding shareholders who helped run the operation were the Gokal family of Pakistan; a close-knit network of Saudi billionaires; and the ruling family of Dubai, which is (like Abu Dhabi) part of the United Arab Emirates.
In 1991, BCCI was forced to close its doors after New York District Attorney Robert Morgenthau declared that it was the “largest bank fraud in world financial history.” Eventually, prosecutors demonstrated that it had done illegal business with everyone from La Cosa Nostra and Colombian drug cartels to shady arms dealers and rogue intelligence agents.
BCCI, as we will see, was also a major player, along with U.S. financiers tied to the Mafia, in the savings and loan bust outs that wrought havoc on the U.S. economy in the late 1980s. Meanwhile, several of BCCI’s subsidiaries, such as First Commerce Securities, specialized in manipulating the U.S. markets. By most accounts, some of BCCI’s principals even played a major role in masterminding the 1973 OPEC oil embargo that quadrupled the price of oil, causing the inflationary recession (“stagflation”) that crippled the United States for the remainder of that decade.
The 1970s oil embargo is evidence enough that the U.S. economy is vulnerable to attack by politically motivated financial operators. BCCI co-founder Sheikh al-Nahyan of Abu Dhabi initiated the embargo as a way to retaliate against the United States for providing military aid to Israel, which had just fought a coalition of Arab states in a war that broke out in October 1973. As Sheikh al-Nahyan has said, the idea for retaliating against the United States with an embargo came to him in consultations with his BCCI co-founder, Abedi.
The details of the plan were worked out with Sheikh Ahmad Turki Yamani, then the Saudi minister of petroleum; and Sheikh Abdel Hadir Taher, the governor of the Saudi state oil company Petromin. Both of those Sheikhs were also shareholders in BCCI. And the mammoth oil profits that these Sheikhs earned from the embargo were, to a large extent, delivered to BCCI, which opened for business just before the embargo went into effect. It was, in fact, this new oil money that made BCCI a powerhouse in the world of finance and a giant criminal enterprise capable of plundering the U.S. economy throughout the latter half of the 1970s and the 1980s.
Henry Kissinger once said that the oil embargo was “one of the pivotal events in the history of the [twentieth] century.” Kissinger was not referring to BCCI, but the emergence of BCCI as destructive criminal element was certainly an important outcome. And it is not out of the question that some of the acts that BCCI subsequently perpetrated against the United States were, like the oil embargo, motivated to some extent by ideology and the by the resentment that the sheikhs felt as a result of the 1973 Arab war with Israel. After all, a principal tenet of both Salafi Islam (the brand of Islam subscribed to by the sheikhs behind both BCCI and the oil embargo) and radical Shiite Islam (subscribed to by a number of BCCI’s key executives) is that Muslims should fight their enemies by “plundering their money.”
Regardless of what the motives of BCCI’s founders were in the past, it is clear that most of them are, to this day, major players in the global financial system. They have more than enough firepower to inflict damage on the U.S. markets. And, as the French intelligence report noted, “directors and cadres of the bank [BCCI] and its affiliates, arms merchants, oil merchants, Saudi investors” have been among the most important financial supporters of America’s Enemy Number One – Al Qaeda.
By way of introducing just a few of the billionaire BCCI figures who support Al Qaeda, I need to relate a story about Benevolence International, the Al Qaeda front that was accused by the U.S.. government of having contacts with people trying to obtain nuclear weapons for Osama bin Laden.
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In 2002, U.S. soldiers stationed in Sarajevo raided the local offices of Benevolence International and found a document that referred to the “Golden Chain” – an elite club of twenty Saudi billionaires whom Osama bin Laden had identified as his most important financiers. These financiers not only delivered large sums of money to the prospective nuclear weapons proliferators at Benevolence International, but can correctly be understood to have been among Al Qaeda’s founding fathers.
Some highly regarded authors, such as Steve Coll, who is otherwise quite reliable (though arguably a bit over-reliant on his Saudi sources), have suggested that the Golden Chain members funded Al Qaeda only in its early years. This is false. Most of them continued to support Al Qaeda after bin Laden declared war against the United States and after Al Qaeda carried out the 9-11 attacks.
The Golden Chain document has, meanwhile, received virtually no attention from the media, perhaps because it would seem a bit “crazy” to suggest that Al Qaeda is a movement whose most important operatives are not rag-tag fringe fanatics living in caves, but rather the crème de la crème of Saudi society – the people who control much of the world’s oil wealth, the people who own the most powerful manufacturing conglomerates, and the biggest Saudi banks, and the biggest hedge funds, and the biggest stock brokerages, and the Saudi stock exchange itself.
There is something in the wiring of American brains that makes it impossible for even the smartest people in this nation to accept surprising or unpleasant realities. There are a few exceptions, such as Glenn Simpson, who was once The Wall Street Journal’s finest investigative reporter, and who did write about the Golden Chain. But Simpson has left The Journal, and the newspaper has since failed to investigate Saudi ties to terrorism. In fact, it has failed to investigate much of anything at all.
Nowadays, it almost seems like the media is under under strict orders not to write anything surprising whatsover. When I mentioned the Golden Chain document to a former colleague of mine at The Wall Street Journal, he first insisted that there was no proof that the document even existed. When I sent him evidence that it did exist, he did a quick Google search and concluded that the document was not reliable because an American judge had said the document was not admissible in court since it was not clear who had authored it.
The Journal reporter was not interested in investigating the facts; a judge had spoken, and that was enough. It didn’t used to be like this. But now it’s how our media works – nothing is to be reported unless it represents the thinking of some recognized fixture of the establishment.
Never mind that there is a vast body of additional evidence that most of the people identified as members of the Golden Chain have actively participated in the Grand Jihad on multiple fronts. And never mind that the Golden Chain document had been confirmed to be authentic by, among others, American intelligence officials, multiple FBI agents, Al Qaeda’s most reliable defector Jamal al-Fadl, and the nation’s most learned terrorism experts, including Steve Emerson of the Investigative Project for Terrorism, which possesses the world’s largest non-governmental database of intelligence on Al Qaeda and other jihadi groups.
So we must know more about Al Qaeda’s Golden Chain. For starters, we must understand that these extremely wealthy financiers are bound together by the sorts of relationships that many Americans do not understand. These are not mere business relationships. They are the bonds of brotherhood and blood. They are the bonds of fervor and ancient grievances. They are, moreover, the bonds between people who are united in their disdain for the prevailing order, and whose financial crimes have, in many cases, helped subvert that order.
One billionaire member of the Golden Chain, according to the Benevolence International document, was Sheikh Khalid Bin Mahfouz, who had been among the masterminds and co-founders of BCCI, and had paid more than $200 million to settle charges for his role in that massive criminal enterprise. Sheikh Mahfouz, who passed away under somewhat mysterious circumstances in 2009 (there were unconfirmed rumors that he was murdered), had also founded National Commercial Bank, which is the single largest financial institution in the Middle East.
Some of Sheikh Mahfouz’s companies – such as Al Khaleejia, SEDCO, and the Saudi Sudanese Bank – have done business directly with companies that were founded by Osama bin Laden. And it was Sheikh Mahfouz who originally set up the Muffawaw Foundation, the outfit that was managed by Yasin al-Qadi until the U.S. government declared Muffawaw to be an “Al Qaeda front” and labeled Yasin al-Qadi as a “Specially Designated Global Terrorist.”
There are some American pundits who claim that Saudi billionaires like Sheikh Mahfouz donate to Al Qaeda only to avoid being attacked, like frightened shop owners paying protection money to the local Mafia thug. These pundits misunderstand the nature of Saudi society, the two most important features of which are Salafi Islam (one of the foundations of the jihadi ideology) and the inviolability of personal relationships.
Sheikh Mahfouz not only believed in the Grand Jihad, but his relationship with the bin Laden family went back decades. Osama bin Laden’s father, Mohammed, and Sheikh Mahfouz were best friends, and it was Sheikh Mahfouz who provided the original finance that allowed Mohammed to build Saudi Arabia’s largest construction company. To cement these ties and to further demonstrate his commitment to the Grand Jihad, Sheikh Mahfouz tried (unsuccessfully) to arrange for his sister to marry Osama bin Laden.
While he was still alive, Sheikh Mahfouz filed lawsuits against the few journalists who sought to expose his ties to Al Qaeda. Meanwhile, the families of the victims of the 9-11 attacks filed lawsuits against Sheikh Mahfouz for providing financial support to the people who killed their loved ones.
And I am thinking I might file a lawsuit against Sheikh Mahfouz’s estate seeking damages for all the stress that I have endured as a result of learning that Sheikh Mahfouz and his friends not only have ties to the world’s most skilled financial criminals, but also billions of dollars that might come in handy to people like Shiekh Mahfouz’s friend, Mohamed Loay Bayazeed, who tried, according to the FBI, to “obtain uranium for Osama bin Laden for the purpose of developing a nuclear weapon.”
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Another member of Al Qaeda’s Golden Chain is Sheikh Saleh Abdullah Kamel, owner of Dallah Albaraka, a conglomerate involved in banking, stock trading, construction, and jihadi media. In addition, Sheikh Kamel, who is linked to the Muslim Brotherhood and Sami Al-Arian’s Palestinian Islamic Jihad, owns the powerful Saudi al-Baraka Bank, which, according to U.S. government investigators, provided much of Al Qaeda’s financial infrastructure in Sudan. Shiekh Kamel also gave Hamas, the jihadi outfit that controls the Gaza strip, more than $20 million so that Hamas could open a bank of its own.
The new Hamas financial institution, which is called al-Aqsa Bank, quickly formed a joint venture with Citibank. That joint venture was quite lucrative for Citibank, which may have been willing to turn a blind eye to illicit financial transactions until 2001, when it cut off relations with Al-Aqsa on the advice of the U.S. Treasury Department. Unfortunately, the U.S. Treasury, though quick with advice, never officially labeled any of the banks or financial institutions linked to Shiekh Kamel as fronts for jihadi groups.
U.S. authorities have also taken no substantive action against Sheikh Ibrahim Muhammad Afandi, a member of Al Qaeda’s elite Golden Chain club who owns some of Saudi Arabia’s most influential businesses, including the Saudi Industrial Services Company, the Great Saudi Development & Investment Company, and the Arabian Company for Development and Investment Limited. Sheikh Afandi also controls BSA Investments, a big private equity fund active in the U.S.
Then there is Abdel Qader Faqeeh, a member of the Golden Chain club and chairman of major corporations and financial institutions, including Bank Al Jazeera and the Savola Group, which recently merged with Azizia Panda to become Saudi Arabia’s 13th largest company. A business partner of Sheikh Faqeeh is Golden Chain member Sheikh Saleh al-Din Abdel Jawad, who is the CEO of the blue chip General Machinery Agencies manufacturing company in Jeddah.
Sheikh Faqee also had a joint venture business with the above-mentioned Sheikh Mahfouz. Indeed, each Golden Chain member has some sort of business partnership with each of the other Golden Chain members – one reason why I say that these people need to be viewed as not just a club, but as a family. I will not bore the reader with a long recitation of every financial transaction that ties Al Qaeda’s financiers together, but I will mention a few, just to erase any question as to whether the relationships exist.
For example, National Commercial Bank, owned until recently by Sheikh Mahfouz, is a partner in a multi-billion dollar investment outfit called the Middle East Capital Group, which is partly controlled by Sheikh Rahman Hassan Sharbatly – who is another member of Al Qaeda’s Golden Chain club. Sheik Sharbatly is also a partner, with Sheikh Faqee, in a unit of Sheikh Faqeeh’s Savola Group. In addition, Sheikh Sharbatly is a board member and major shareholder of Beirut Ryad Bank SAL, Egyptian Gulf Bank, and several other major financial institutions.
Meanwhile, Sheik Sharbatly and Sheikh Mahfouz were both board members of the Saudi Arabian Refinery Company, which refines much of the world’s oil supply. This brings to mind the report that I mentioned at the outset of this story – the one commissioned by the U.S. Defense Department’s Irregular Warfare Support Program. That report speculates that one component of the possible financial attack on the U.S. economy in 2008 might have been the manipulation of oil prices to excruciating highs in the summer of that year.
I do not know if oil prices were manipulated, but it seems like a possibility that is worth considering, especially in light of Osama bin Laden’s proclamations about the “absolute necessity of using the oil weapon.” Another reason to ask whether oil prices might have been manipulated is that the membership of Al Qaeda’s elite Golden Chain club includes Sheikh Abdel Hadir Taher and Sheikh Ahmad Turki Yamani – the two former BCCI shareholders who masterminded the 1973 oil embargo with Sheikh al-Nahyan of Abu Dhabi.
Sheikh Taher, in addition to being an Al Qaeda Golden Chain member and the former governor of the Saudi state oil company Petromin, has also served as director of Saudi European Bank, a big financial institution that is important to the stability of global economic order. Al Qaeda Golden Chain member Sheikh Yamani, we know, is a former Saudi minister of petroleum. He is also a former director of Saudi Aramco, which is the largest oil company in the world.
In addition, Sheikh Yamani presides over Investcorp, an investment firm that he founded. Actually, it’s not just an investment firm; it’s a market-moving behemoth – one of the largest hedge fund and private equity outfits in the world, with more than $50 billion under management. Investcorp has made a deep imprint in the American markets, and has been involved in everything from short selling to the trading of self-destruct CDOs. As for what sort of short selling Investcorp engages in, we need only know that Ivestcorp is a client of Sheikh DeLorenzo’s Al Safi Trust phantom stock machine.
Investcorp was also a pioneer, and continues to be one of the few major players in the shady world of so-called PIPEs deals, also known as “death spiral” finance. PIPEs, or “Private Investments in Public Equity” are simply transactions that see the investors buying stock directly from companies rather than on the open markets. But far from being investors who want the companies to succeed, PIPEs investors often scheme to destroy the company to which they are supposedly serving as benefactors.
Since PIPEs finance dilutes shareholder value, a company that does a PIPEs deal often sees its stock price decline. When this happens, short sellers (often naked short sellers who are colluding with the outfit that provided the PIPEs finance) attack the company, causing its stock price to drop. The more it drops, the greater the number of shares are owed to the PIPEs financier. The greater number of shares, the greater that drop; and so on. Hence the term, “death spiral” finance.
Once the stock price of a PIPEs victim is mauled, the finance is cut off, and the company goes bankrupt, delivering big profits to the short sellers (i.e. profits that far exceed the cost of providing the PIPEs finance in the first place).
The emergence of the PIPEs industry has, without doubt, been a scourge on the markets. As numerous court cases attest, it has destroyed countless companies and countless jobs. Basically, it is a not-insignificant reason why America’s “miserable house” (as that Muslim Brotherhood document called it) is, in fact — miserable.
Sheikh Sulaiman Abdul Aziz al-Rajhi is not miserable. He’s the patriarch of the wealthiest family in Saudi Arabia, and thus one of the 100 richest people in the world. He is jolly and well. So, naturally, he is also a member of the Golden Chain, the elite club of Al Qaeda’s 20 most important financiers.
Maybe because the twenty members of the Golden Chain club are the most prominent people in Saudi Arabia, the U.S. government does not label them as “Specially Designated Global Terrorists.” It does not take steps to shut down their bank accounts or bar them from trading in the U.S. markets. It does not even dare utter their names, perhaps because to do so would embarrass the Saudi government, which is ostensibly a U.S. ally.
When the U.S. government’s “9-11 Commission” issued its final report on the Al Qaeda attacks on New York and Washington, it contained 28 pages that reportedly detailed Saudi ties to Al Qaeda. But when the report was released to the public, the 28 pages about the Saudis were censored, so ordinary people could not read them. A full 28 pages – with no words; nothing but big blocks of black ink.
Thus, it is left to independent jihad experts to sort out many of the connections. Steve Emerson and his Investigative Project on Terrorism have done especially heroic work in this regard. Some former top government officials have said that Emerson is better informed about the jihad than the government itself. But Emerson and other people who have done excellent research are largely ignored by the media, which will not report the facts unless they have been stated explicitly by some official spokesman.
At any rate, you won’t read about it in the media, but it is clear that Sheikh al-Rajhi, the wealthiest man in Saudi Arabia, is an important leader of the Grand Jihad. Aside from being an Al Qaeda Golden Chain member, he is the principal force behind the U.S.-based SAAR Network of jihadi financiers that I began to dissect earlier in this chapter and will describe in greater detail in later chapters. In fact, the SAAR Network is named after Sheikh al-Rajhi himself. The initials, S.A.A.R., stand for Sulaiman Abdul Aziz al-Rajhi.
Most of the other Golden Chain members are also involved with the SAAR Network financiers operating in the United States. For example, Shiekh Afandi and Sheikh Kamel were board members of Sana-Bell, the outfit run by “Specially Designated Global Terrorist” Yasin al Qadi’s bagman, Mr. Mirza. Also a board member of that outfit, you will recall, was Mr. Bahfzallah, head of Benevolence International, the outfit that was dealing with people who were shopping for nukes.
Yasin al Qadi’s lawyer, Cherif Sedky also worked for Sheikh Mahfouz. And this same lawyer represented Shiekh Rajhi when the FBI began to ask how it came to be that $1.8 billion dollars from the SAAR Foundation disappeared, most likely into the hands of other jihadis.
Given his important role in the Grand Jihad, it is fair to assume that Shiekh al-Rajhi (who, like all the Golden Chain members is also on familiar terms with Tuco trader Zuhair Karam’s crowd at the Bridgeview Mosque) harbors some disdain for the global financial order. At the same time, Sheikh al-Rajhi is one of the most important players in the global financial order, a person who is perfectly capable of transforming or even undermining it. Indeed, it is fair to say that few men have more sway over “the system” than Sheikh Sulaiman Abdul Aziz Rajhi.
Said to be a whiz with numbers, Sheikh Rajhi directs multiple hedge funds that manage many billions of dollars, several stock brokerages, and the massive Al Rajhi Bank, which is the most venerable of the elite financial institutions that control the Stock Exchange of Saudi Arabia, also known as the Tadawul. Sheikh Rajhi’s companies have around $100 billion in cash at their disposal. All told, the financial fire power of Al Qaeda’s Golden Chain exceeds that of most mid-sized nations.
But, rest assured, jihadis are just bumpkins in caves.
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Despite the death of Osama bin Laden, the jihad’s sophisticated financial operation remains entirely in place. Moreover, it is doubtful that the Securities and Exchange Commission is monitoring the activities of the billionaire financial wizards who are members of Al Qaeda’s Golden Chain. Certainly, it has never charged any member of the Golden Chain for engaging in financial schemes (such as self-destruct CDOs and “death spiral” finance) that have done damage to the U.S. economy.
Indeed, as we know, the SEC has made it easier for these people to manipulate the markets by allowing characters such as Sheikh DeLorenzo (who, as a prominent member of the SAAR Network, is certainly on good terms with the Golden Chain) to operate trading platforms such as Al Safi Trust’s naked short selling machine. Meanwhile, Wall Street’s largest institutions stumble over themselves to do business with other financial behemoths that might not be entirely committed to keeping the U.S. economy in good health.
One such behemoth is the financial empire of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum — or “Sheikh Mo,” as he is affectionately called in the West. Sheikh Mo, whose family members were among the controlling shareholders of BCCI’s criminal enterprise, now operates, among other entities, the Dubai International Finance Center, which houses Sheikh DeLorenzo’s Al Safi Trust (set up in partnership with Sheikh Mo) and countless hedge funds, most of them intertwined with Dubai’s sovereign wealth fund.
The Dubai International Finance Center’s stated mission is to advance shariah compliant finance (such “compliance” being demanded only by radicals who misinterpret shariah law), and it has at its disposal more than a trillion dollars. Frank Gaffney, former assistant secretary of defense for international security, insists that shariah compliant financial products “threaten what is left of the integrity of our free market system. Worse yet, they – and the theo-political-legal doctrine, Shariah, from which they spring – pose a real threat to our society and form of government.”
On the surface, it seems that there is nothing wrong with people creating shariah compliant financial products, even if they cater to an interpretation of Islam that is radical in the extreme. People have a right be radical and to create radical financial products. Indeed, it took me a long time to believe that Shariah finance posed any threat whatsover. My instinct was to believe that it was merely an effort to cater to people who are devoutly religious, no more dangerous than Halal beefsteak.
However, it is prudent to consider whether there is more than religion behind the astounding growth of shariah compliant finance in recent years. Indeed, we must understand that the new and radical interpretation of shariah “compliance” is overtly anti-American, and was invented by jihadi leaders as a means to challenge the U.S. financial order. This is well-documented in a book called “Understanding Sharia Finance”, by Patrick Sookhdeo, Director of the Institute for the Study of Islam and Christianity.
Paul Bracken, professor of management and political science at Yale University, notes that shariah compliant finance has become a powerful force and raises “the prospect that Wall Street could be knocked out of action [with] strategic implications for the United States and for the entire global system of finance.”
As for Sheikh Mo, the eminence grise of shariah “compliant” finance, many in Washington consider him to be an important ally of the United States. But Sheikh Mo considers one of his most important allies to be the regime in Iran, which would like to see the United States obliterated. Meanwhile, Sheikh Mo and his family have been among the biggest supporters of organizations that are carrying out the Grand Jihad.
For example, Sheikh Mo’s family, along with the Muslim Brotherhood, the Golden Chain Saudis, and some factions of the Saudi government are among the biggest contributors to ISNA, an organization whose depredations I have partially described.
A charity founded by Sheikh Mo also donated $50 million to the Council on American Islamic Relations, an ISNA-tied outfit that grew out of the Islamic Association of Palestine, which was the U.S. propaganda arm of Hamas. Numerous CAIR officials have been allegeged to have ties to Al Qaeda, which might explain why CAIR has plotted ways to secure the release from prison of the Blind Sheikh.
In Europe, where Sheikh Mo is received warmly (the BBC recently called him an “enlightened dictator”), Muslim Brotherhood spiritual leader Yousef al-Qaradawi (the cleric who has issued calls for “Financial Jihad”) runs the European Council for Fatwa and Research, which has played a key role in fostering the development of shariah “compliant” finance. That outfit was funded almost entirely by Sheikh Mo and his family until it was implicated by authorities for having ties to violent jihadis.
Meanwhile, Dubai, with Sheikh Mo’s acquiescence, has long served as an important operational hub for some the world’s most notorious organized crime figures, some with direct ties to jihadi groups. For example, Indian Mafia kingpin Dawood Ibrahim was, until he moved to Karachi to live under the protection of the Pakistani spy services, one of Dubai’s most honored and ostentatious residents, regularly holding lavish parties at his landmark white mansion – parties attended by prominent figures in the world of high finance (some of whom I will introduce in upcoming chapters), and also by members of Sheikh Mo’s royal family.
Mr. Ibrahim had the full protection of Sheikh Mo until Dubai was pressured by the international community to send him packing. And Mr. Ibrahim was no ordinary Mafioso. He was, as I mentioned, intimately intertwined with the operations of Al Qaeda and other jihadi groups – the only person in the world to be labeled by the United States government as both a “Global Narcotics Kingpin” and a “Specially Designated Global Terrorist.”
Former ABC News journalist Gretchen Peters, a friend and work colleague of mine when we both lived in Cambodia, has published an excellent book about the nexus between jihadis and the heroin trade. One CIA official whom Peters interviewed for the book noted that “if you want to know what Osama bin Laden is up to, you have to understand what Dawood Ibrahim is up to.”
Another close friend of Sheikh Mo was Viktor Bout, a Russian Mafia figure who was, for a long time, flying cargo planes filled with weapons from Dubai to Taliban and Al Qaeda redoubts in Afghanistan and Pakistan. Viktor Bout, like Dawood Ibrahim, operated with the full support and protection of the Dubai government until Interpol put out an arrest warrant for him. Then he moved to Moscow, where he enjoyed the protection of Russian prime minister Vladimir Putin until he was lured to Thailand and arrested by the FBI.
Viktor Bout was also closely tied to Abu Dhabi’s ruling family, whose leading members (like Dubai’s ruling family) probably first came into contact with organized crime while they were presiding over the criminal operations of BCCI. Some cargo planes that Bout used to smuggle weapons to Afghanistan were registered as belonging to a company called Flying Dolphin, which was owned by Sheikh Mansour Al Nayan, the present ruler of Abu Dhabi.
Then there is the famous story of why President Bill Clinton failed to kill Osama bin Laden. Soon after Al Qaeda’s 1998 attacks on U.S. embassies in Tanzania and Kenya, the CIA located Osama bin Laden and reported that the Emir of Jihad was hosting some of his closest friends at a party in a remote corner of Afghanistan. The Al Qaeda leader and his friends were spending their days hiking in the mountains and hunting with falcons, then retreating to an Al Qaeda training camp to drink tea and talk of subversive notions.
Figuring that there would not be much time before Osama would vanish again, the U.S. military told President Clinton that this was the ideal moment to blow the Al Qaeda leader to smithereens with a precision-guided Hell-Fire cruise missile. The generals were ready to pull the trigger, but Clinton and his cabinet stopped them. They aborted the mission because Osama bin Laden and his friends were having a party. And these friends were all from Dubai. In fact, they were among the most prominent members of Sheikh Mo’s ruling family.
Sheikh Mo’s family and the leaders of Al Qaeda had finished hunting and were relaxing in the tents that Shiekh Mo’s family members had brought with them to Afghanistan – house-sized luxury tents equipped with giant electricity generators, and decorated with fine carpets, and fabrics laced in gold. No doubt, Osama bin Laden regaled the Dubai ruling family with stories of his exploits, and the Dubai ruling family members no doubt responded with praise for their host’s glorious victories against the United States, perhaps even noting that America’s “miserable house” had gotten what it deserved.
At any rate, the CIA watched the satellite images. The generals asked Bill Clinton if they should fire the missile. And Bill Clinton said, “No” — because, of course, Dubai’s royals were American allies. As George Tenent, who was then the director of the CIA, later put it, Clinton could not take this rare opportunity to kill Osama bin Laden because the missile strike “might have wiped out half the royal family of the UAE.”
Put differently, one might say that “half the royal family of [our ally] the UAE” was partying with Osama bin Laden.
That’s some ally.
Well, never mind, say America’s elite – if Sheikh Mo is supporting jihadis, it is only a matter of political expediency. Perhaps. But, in the end, it doesn’t matter whether the politics are expedient or not. What matters is the end result. And it is probably safe to assume that the Dubai royals who went on hunting expeditions in Afghanistan with Osama bin Laden may be (at least to some extent) sympathetic to the jihad. That is, they have, to a degree, been possessed by a subversive notion – that “the system”, as epitomized by the United States, can be undermined.
Unfortunately, the billionaire sheikhs of the Middle East – whether they be members of ruling families, members of the SAAR Network, or members of Al Qaeda’s Golden Chain – are not the only potential threats to America’s economic well-being. As I mentioned at the outset of this story, there is nexus between jihadi groups and organized crime, and there is a network of financial operators that illustrates this nexus nicely.
So we need to examine this network and what role it might have had in the 2008 financial crisis. But to know the network in more detail we must first go back in history a few decades – back to the time when BCCI was at the height of its power and a singularly destructive financial criminal named Michael Milken was the most formidable operator on Wall Street.