The Terror Finance Blog

Jennifer White on Libel Tourism

2009-10-15T10:25:49-07:00

I am posting this on behalf of analyst Jennifer White:

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Money Talks: Truly Deterring Libel Tourism

By Jennifer White

During my days working as an attorney on large Wall Street financial cases, one of my mentors said, as I pondered the organizational review of what I knew would be tens of thousands of pieces of paper: “follow the money.” While undoubtedly there have been several equally wise words that I have not taken to heart, that comment has never failed to cut to the kernel of any given matter I have worked on, whether be it worth hundreds of millions or a few thousand dollars.

“The Free Speech Protection Act of 2009” has been introduced in both the House and Senate, (S. 449 introduced by Senators Lieberman and Specter on February 13, 2009 and H.R. 1304, introduced by Representative King on March 4, 2009), specifically to staunch the pernicious practice of libel tourism.

Libel tourism is a tactic used by radical Islamists and their supporters to muzzle information about their activities. Specifically, libel tourists file suits in foreign courts (generally in which they have little or no connection) in order to advantage of that jurisdiction’s law and procedure. England has been a favored spot for these suits as speech is far less protected in England than under our First Amendment, and in English courts, the burden of proof lies on the defendant.

The danger of libel tourism should never be underemphasized. Libel tourism at the heart of lawfare, or the ways in which radical Islamists use our laws against us. Lawfare, a far more subtle foe than groundfare, has already substantially furthered the radical Islamist agenda.

June 15 of this year, the House enacted H.R. 2765, “The Free Speech Protection Act of 2008.” While symbolically important, it utterly fails as a true deterrent to libel tourism. H.R. 2765 prevented courts from recognizing foreign judgments that conflicted with the First Amendment, but stopped short of providing those harmed by libel tourism with a separate cause of action. Both H.R. 1304 and S.449, on the other hand, contain three provisions absolutely crucial if we truly wish to deter libel tourism: 1) the creation of a federal cause of action that the harmed U.S. person can bring; 2) damages should the harmed U.S. person prevail in his or her action; and 3) the possibility of treble damages.

Money talks. Libel tourism was pursued in earnest in response against New York based author Rachel Ehrenfeld for her 2003 book “Funding Evil: How Terrorism is Financed and How to Stop it.” Dr. Ehrenfeld was sued in England by Khalid bin Mahfouz, a Saudi billionaire featured in her book, which, among other things, detailed the Saudi money trail financing the radical Islamist agenda. The British court, applying English law, found for Mahfouz, and issued a default judgment against Ehrenfeld. Bin Mahfouz died August 16, but the practice of libel tourism lives on.

New York state responded to the default judgment entered against Ehrenfeld by enacting a law that prevented New York state courts from recognizing foreign libel judgments that are inconsistent with the First Amendment, referred to as “Rachel’s law.” Illinois and Florida have passed similar laws and California is poised to do so.

The 2008 predecessor to the bipartisan 2009 House and Senate “Free Speech” bills is virtually toothless as a true deterrent. While symbolically important, the law merely allows the non-enforcement of foreign defamation judgments the U.S. if the expression in question is not a violation of the First Amendment. As a number of federal courts had already reached this conclusion, H.R 2765, in fact, merely codified what a number of federal courts had already decided.

Notably, the merry band of Saudi libel tourists (of which bin Mahfouz was a leader) did not appear to give the introduction of The Free Speech Protection Act of 2008 much thought. Records reveal that little, if any, real lobbying done by the Saudis to prevent its passage. And really, why should they have bothered? Without the ability of their victims to bring a cause of action against them and collect damages, what risk were they really running by continuing to suppress the truth?

The Freedom of Speech Act of 2009, however, presents a whole new ballgame, one with real consequences for the Saudis who have, in the words of one Member of Parliament, made libel tourism an “international scandal” and a mockery of the British courts – continuing their game will likely result in large damage awards against them.

Both H.R. 1304 and S. 449 appear stalled in committee – in both cases the House and Senate Judiciary Subcommittees on Courts and Competition. For actual protection against libel tourism, the critical pieces of The Freedom of Expression Act of 2009 must stay in place –the ability for the harmed U.S. person to bring an action and the corresponding damages provisions. bin Mahfouz’s son, Abdulrahman, who engaged in serial libel tourism with his father, appears ready, willing and able to continue the practice. Without the crucial protections of the Free Speech Act of 2009, this bipartisan legislative intiative will turn into yet another symbolic, but toothless, weapon against libel tourism.

Notably, a Saudi initiative to prevent the Freedom of Speech Act of 2009 from passing is newly in place. According to a Member of Parliament who has asked that the British Law Society look into this issue, Shillings is one of the two most active British law firms acting on behalf of libel tourists. Shillings recently teamed up with a prominent D.C firm, one without any involvement in any previous libel tourism suits, but one with an active practice on the Hill, to “investigate” the issue. Already “seminars” on the issue of libel tourism are planned in the District as well as in London. (London appears necessary as various members of Parliament are beginning to express concerns about the issue.)

Money talks. And it speaks in various ways. As my partner meant long ago and Ehrenfeld experienced first hand, money talks by revealing information about alliances, sources and other information. In recent years this has proven vital to our national security, as so aptly demonstrated by Ehrenfeld and others.

Money also talks in that its use influences outcomes. We cannot allow money to talk its way out of the passage of the Freedom of Speech Act of 2009. As Representative King stated: “Our journalists provide us with insight on issues that affect all Americans, such as war and terrorism…We cannot allow their voices to be silenced by those who prefer to keep secret the inner details of these issues.”

Winning the War in Afghanistan

2009-10-01T05:58:41-07:00

By Rachel Ehrenfeld

While the Obama administration is debating whether to escalate the war in Afghanistan, there may be a better solution for stabilizing the country. No one expects Afghanistan to become a peaceful, self-sustaining democracy overnight. However, without an effective strategy to turn the situation around, the surge is likely to result in the unnecessary loss of human lives and billions of dollars, while failing to remove the major reason for the instability in the region–the heroin trade.

Since its liberation from Taliban rule in 2001, Afghanistan’s opium production has gone from 640 tons to 8,200 tons in 2007, reportedly falling to 7,700 tons in 2008. The latest U.N.’s International Narcotics Control Board (INCB) report, however, is based only on the production in seven provinces where NATO and US forces are fighting the Taliban. Indeed, Afghanistan continues to supply over 90% of the global opiate market.

“Insecurity and drug production and trafficking…are very much inter-related,” INCB President Hamid Ghodse told a news conference in London. According to Ghodse, “It is very difficult to say which is the cause and which is the effect.”

But former Afghan Interior Minister Ali Ahmad Jalili is clear: “This is a source of income for the warlords and regional factions to pay their soldiers. The terrorists are funding their operations through illicit drug trade, so they are all interlinked,” he stated in 2005. Since then, the situation has greatly deteriorated.

The Commander of the U.S. Forces (USFOR-A) and the International Security Assistance Force (ISAF) in Afghanistan, General Stanley McChrystal, rightly views the illegal drug trade as particularly dangerous because of its corrupting effects on the Afghan government.

An effective solution for the escalating violence, devastating corruption, crime and growing radicalization in Afghanistan has been available for a while, but previous administrations failed to implement it. The Obama Administration should initiate a new policy that includes drug eradication while providing the farmers with subsidies and skills for viable economic alternatives.

The Administration should fund the final studies necessary to implement the innovative and safe poppy eradication method that previous U.S. governments spent significant resources developing. This entails the use of mycoherbicides, naturally occurring fungi that control noxious weeds. Unlike chemical controls now in use to eradicate illicit plants such as coca shrub in Colombia, mycoherbicides assail only the targeted plant, rendering its cultivation uneconomical. These fungi continue to live in the soil, preventing the future growth of the opium poppy plant, but are harmless to other crops, people and the environment.

On Dec. 29, 2006, then President George W. Bush signed Public Law 109/469, of which Section 1111 requires the Office of National Drug Control Policy to conduct an efficacy study of mycoherbicides’ use on the opium poppy and coca shrub. Yet, the one-year study was never conducted. President Obama should immediately authorize the completion of the study.

The use of mycoherbicides in Afghanistan, combined with adequate enforcement by the military, will diminish the production of heroin. It will also cut off the Taliban’s and the warlords’ hefty money supply, which in addition to funds from the Saudis and the Gulf States, fuels political corruption and the war. This strategy would free up the $150 to $200 billion now used to fight the drug trade and its byproducts–crime, addiction, diseases, accidents, etc.–in the U.S., and make these funds available to help fight terrorism directly.

Unfortunately, while the Obama administration is considering a new policy to stabilize Afghanistan, it has already shifted focus from the War on Drugs to the War on Drug Traffickers. Instead of eradicating the opium crops in Afghanistan, the Administration is now targeting Taliban-linked traffickers and drug labs. But focusing on the criminal elements alone will do little to stop opium cultivation, or boost the economy, if only because there are very few alternatives for most Afghan farmers. Afghan opium production accounts for 97% of the country’s per-capita annual GDP, or $303 of $310.

Implementing this new strategy, while subsidizing the Afghan economy until other crops and industries can replace the illegal heroin trade, seems a better way for America to succeed in fighting the Taliban and the endemic corruption. It would also free up resources for an array of social and governmental reforms, which should be clearly defined and strictly supervised. With no heroin to fund terrorism and subvert the economies and political systems of Afghanistan and Pakistan, the American agenda could take a huge leap forward.

Dr. Rachel Ehrenfeld, author Funding Evil: How Terrorism is Financed – and How to Stop It, is director of American Center for Democracy

Brazil Threatens Americans' Free Speech

2009-10-01T05:42:41-07:00

By Rachel Ehrenfeld

Americans writers' free expression is under attack by foreign courts.

In the most recent assault, a Brazilian widow is suing an American reporter in a Brazilian court for allegedly defaming the entire nation of Brazil. She claims Joseph M. Sharkey, a New Jersey - based freelance travel columnist for the New York Times, offended the "dignity" of Brazil by criticizing its incompetent air-traffic control on his blog. Moreover, she claims that under Brazilian law, an "insult" to Brazil is also a personal insult to her as a Brazilian citizen.

The lawsuit was filed by the widow of one of the 154 victims who died in a mid-air collision of the Brazilian Gol Transportes Aéreos Flight 1907 with a U.S. business jet over the Amazon on September 29, 2006. All 154 passengers on the Brazilian aircraft died; the seven passengers on the American jet survived.

Joe Sharkey was one of the lucky seven survivors on the plane, which made an emergency landing in the Amazon in Brazil. Upon his return to the U.S., Sharkey published a front-page article in the New York Times about the disaster, and told his story on major national TV and radio outlets.

The Brazilian authorities detained the American survivors for lengthy interrogations, and immediately criminalized the accident, assigning blame to the American pilots. They proceeded to prosecute - in abstentia - the two American pilots for homicide.

In response, Sharkey published a blog, which argued against the scapegoating of two innocent American aviators in an atmosphere of hysterical anti-Americanism, and criticized Brazil's attempt to cover up the real problems in its air space over the Amazon.

Sharkey's blog, which is the putative subject of the lawsuit against him, had a major role in sorting out the truth and pressuring the Brazilian judge to release the American pilots who were held for two months. In fact, Sharkey was proved right when the United States National Transportation Safety Board issued a report in December 2008 concluding that systemic and operational faults in Brazilian air-traffic control over the Amazon were the probable cause of the collision.

Sharkey was sued for defaming Brazil late last year, but only received an official copy of the complaint, written in Portuguese, on September 16.th In the meantime, however, the Brazilian court proceeded with the lawsuit, and it is expected that he will be convicted.

If convicted, Sharkey would be ordered to pay $500,000 to the Brazilian widow and publish apologies to the Brazilian nation in major international newspapers and media outlets - a major financial undertaking.

Had Sharkey resided in New York state, he would have nothing to fear. In May 2008, New York was the first state to pass the Libel Terrorism Protection Act, shielding New Yorkers from foreign libel judgments. Illinois and Florida passed similar laws and in California, the governor is expected to sign a free speech protection bill into law by the end of this month.

Alas, Sharkey lives in New Jersey. Although the New Jersey Senate unanimously passed a similar bill (S.1643) sponsored by Sen. Loretta Weinberg, it remains enmeshed in a lengthy approval process by the legislature.

But Joe Sharkey and his family can be saved from the financial ruin they are likely to face from the Brazilian libel suit, if the U.S. Senate promptly passes the Free Speech Protection Act 2009 (S.449 ).

The bi-partisan Free Speech Protection Act 2009 is sponsored by Senators Arlen Specter (D-PA), Joseph Lieberman (I-CT), Charles Schumer (D-NY), and Ron Wyden (D-OR). The bill is widely supported by major writers' and publishers' organizations in the U.S. A less protective bill proposed by Rep. Steve Cohen (D-TN) already passed the House.

The Free Speech Protection Act will defend Americans' First Amendment rights from foreign libel judgments that do not provide protection similar to the U.S. Constitution, and will allow the deterrent of countersuits for damages. The law will ensure that U.S.-based journalists, researchers and publishers no longer need to fear the pernicious threat of foreign libel judgments, and will be able to freely investigate and report on matters of national and international significance. Congress should pass the Free Speech Protection Act without delay.

This article was first published in TownHall.com on Sept. 30, 2009

Libel Tourism Continues to Threaten U.S. Writers

2009-09-17T11:44:23-07:00

This letter was published in the American Spectator as a rebuttal to a misleading claim by the Legal Project's assistant director Aaron Eitan Meyer.

The Saudi billionaire and serial "libel tourist" Khalid bin Mahfouz is dead, but libel tourism (the use of foreign courts to sue American writers) continues to threaten Americans free speech rights.

Sadly, the Special Report on Islamist Lawfare by Aaron Eitan Meyer that appeared in the Spectator on September 15 misleads the reader to think that fighting for laws to protect Americans from libel tourism is "dangerous." Specifically, Meyer hopes that "bin Mahfouz's demise will provide an end to the dangerous overemphasis that has been placed on libel tourism." Such a statement is astonishing from the assistant director of the Legal Project of the Middle East Forum, which uses the dire threat of libel tourism to raise funds for their own organization.

On its own website, the Legal Project offers my struggle against Mahfouz as its first example of silencing free speech. Mahfouz objected to my exposure of his terror financing activities in my book Funding Evil: How Terrorism Is Financed -- and How to Stop It, which was published only in the U.S. Instead of suing me here, he chose the British libel laws and courts in an attempt to silence me. Until I decided to fight for my Constitutional rights for free expression, libel tourism was successfully used as a weapon to intimidate the American media into silence.

Mahfouz, who did the Saudi royals' bidding, was a serial suer. He frequently used archaic British libel laws that allow foreigners to sue other foreigners in British courts. Often with his son Abdulrahman, he sued more than 40 writers and publishers -- mostly Americans -- because he did not like their criticism.

Mahfouz made libel tourism a multimillion-dollar industry for the British Bar, and turned London into the "Libel Capital" of the world. On behalf of the Saudis, Mahfouz succeeded in using libel tourism as a weapon to intimidate the Western media from reporting on Saudi terror financing, and even from reporting his death.

However, due to my personal efforts, in May 2008, New York State was the first to pass the "Libel Terrorism Protection Act," aka "Rachel's Law" protecting New Yorkers from the likes of Mahfouz. Since then, Illinois and Florida passed similar laws and in California, the governor is about to sign the anti-libel tourism law.

Moreover, as a direct result of Mahfouz's libel terrorism, the bipartisan Free Speech Protection Act 2009, sponsored by Senators Arlen Specter, Joseph Lieberman, Charles Schumer and Ron Wyden, is now pending in Congress. The bill is widely supported by major writers and publishers' organizations in the U.S. These legislative victories were achieved with the endorseme nt of the New York Times, the Washington Post, and the Los Angeles Times, and the Association of American Publishers (AAP); the American Library Association; American Association of University Professors, the New York City Bar Association, and many others.

This bipartisan broad-based support could be the reason behind the Saudi new initiative to prevent this bill from passing. They recently hired U.S.-based international law firms to publicly lobby against the Free Speech Protection Act.

Nevertheless, the U.S. is the only country to make free speech the foundation of its Constitution, and this bill would protect Americans free speech rights from foreign libel judgments that do not provide protection similar to our Constitution. Moreover, to deter libel tourism, the bill allows for countersuit and damages. A different version sponsored by Rep. Steve Cohen, passed in the House earlier this year.

Congress passed many laws to protect us from the threats of terrorist attacks. It should now act to stop the war on our First Amendment and strengthen the protection of our rights for free expression. Congress should pass the Free Speech Protection Act 2009 without further delay.

-- Dr. Rachel Ehrenfeld
Director, American Center for Democracy (ACD)

Hizbollah hit in the pocket

2009-09-06T06:22:32-07:00

By David Nordell

If there’s any happy news at the moment in the field of terror finance, it comes from Lebanon. According to the London-based Arab newspaper al-Sharq al-Awsat, the Lebanese terrorist movement-cum-political party Hizbollah has just suffered a huge financial fraud, estimated in hundreds of millions of dollars.

The details are still unclear, but it appears that the Lebanese businessman Salah Ezz al-Din, nicknamed Hizbollah’s financial Imad Moughniyeh in reference to the late operations chief assassinated in Damascus, managed to defraud investors from Lebanon, Kuwait, Qatar and other gulf states in a Ponzi scheme similar to that of Bernard Madoff. Ezz al-Din’s position within Hizbollah was perhaps not as important as Moughniyeh’s, but according to the Lebanese pro-Hezbollah newspaper al-Akhbar, Salah Ezz al-Din was "a close mediator to Hezbollah ... as the majority of deposits from the families and supporters of the movement are made with him. Many people deal with him with great confidence, and this has resulted in a number of things, most notably, the rumors that he is a partner to Hezbollah."

From the little I have seen so far, Ezz al-Din had promised to invest investors’ money, including that of Hizbollah leaders and perhaps the movement itself, in rebuilding parts of Beirut damaged during the Israeli-Hizbollah war in 2006: like many other construction projects, this could be expected to produce the very high yields apparently being returned to the earliest investors -- except that, like in every other Ponzi scheme, the profits actually came from the subsequent investments.

Naturally, anything that hits Hizbollah’s financial resources and so slows down its rearmament, training and eventual operational capabilities is a good thing: it will also lose a lot of face in the rest of the Arab world, which will add to the damage. This time, the organisation’s loss seems to have been nothing more than the result of Ezz al-Din’s tremendous greed. But this incident should act as an inspiration to the more creative Western intelligence services to hit at terrorist organisations’ finances the same way that common cyber-criminals attack members of the general public -- through carefully constructed cyber-fraud. Hizbollah, in particular, is vulnerable, because it’s a legitimate political party in Lebanon with many legally-incorporated companies and other associated bodies, and it can hold bank accounts legally.

This suggestion may look like breaking the rules by which Western states are supposed to play. But both cyber-warfare and financial warfare have already entered the lexicon of modern strategy; and the laws banning money laundering and terror finance in most jurisdictions allow for sequestration of criminal and terrorist funds. If it is possible to cripple or at least damage terrorist organisations by carrying this war to the offensive, without the need to fire a single shot, so much the better.

Speak not only good of the dead

2009-09-06T03:32:22-07:00

By David Nordell

De mortuis nil nisi bonum -- speak only good of the dead -- is an old Latin proverb oft used as a pretext to gloss over the less salubrious aspects of someone’s character and actions after his death. I was very much reminded of this saying during the orgy of praise a week ago for the late Senator Ted Kennedy, both during the funeral services and in the media. And indeed, notwithstanding the many ugly rants from American far-right commentators about Kennedy’s "ultra-liberalism" (an expression that definitely puzzles Europeans, for whom liberalism means something entirely different), Kennedy did a great deal of good during his very long career as a legislator, much of it in partnership with an ostensibly very unlikely co-lawmaker, the highly conservative senator from Utah, Orrin Hatch.

But there were definitely two groups of people who must have expressed the strongest possible reservations, and probably curses too, about the eulogies that the great and the good, from President Obama down, poured on Kennedy’s memory. One, clearly, is the family and friends of Mary Jo Kopechne, whom Kennedy abandoned to a watery death at Chappaquiddick. The other, much larger but less in the public eye, is the families and friends of the thousands of British soldiers and civilians, especially civilians from Northern Ireland, killed during the ’Troubles’ from the ’60s to the ’80s.

For all that Time magazine recalled Kennedy’s role in Northern Ireland as a peacemaker who encouraged the reconciliation process that more or less stopped the killing, he started out as a firm supporter of Irish nationalism and the Catholic struggle against British rule. Political support in itself would have been legitimate, however much it jibed with the official policy of the USA’s closest ally; and this political support was only natural for a proud Boston Irish Catholic. But even leaving aside the rumours that the Kennedy clan actually contributed money to the Irish Republic Army, Ted Kennedy was definitely responsible for a grave sin of omission that cost many lives in Northern Ireland and on the mainland. Simply put, as the de facto leader of the large and powerful Irish Catholic community of the United States, he could and should have spoken out clearly against the organised collection of money there to buy weapons for the Republican cause; and he could and should have initiated legislation to outlaw it. By not doing so, he colluded in a major terror financing operation lasting for years that was aimed, not at destabilising some enemy of the USA such as Russia or Cuba, but the United Kingdom, the country at whose side American soldiers fought in two world wars (and where his father was American ambassador during the second war). He had the clout in his community to say "let the six counties of Ulster be reunited with the South, but not at the price of British or Protestant blood, only through negotiation," and he didn’t. Nor, to the best of my knowledge, did he ever express regrets about his collusion in the bloody civil war.

I don’t know what price Kennedy will have to pay on the far side of the Pearly Gates for this and his other sins of omission. But bank compliance officers and CEOs already face potential jail time in many countries for failing to stop or report money laundering and terror financing activities. Kennedy, of course, was Kennedy and would have got away with it. He always did.

Poetic justice, almost

2009-09-06T00:25:07-07:00

By David Nordell

There was a delicious irony in the assassination attempt made against Prince Muhammad bin Nayef of Saudi Arabia just over a week ago. Muhammad, who is Assistant Minister of the Interior for Security Affairs, was only about a metre away from the suicide bomber, a member of a terror cell who claimed that he wanted to surrender personally to him and even convince other conspirators to do so; he was lucky to escape with nothing more than minor hand injuries.

But Prince Muhammad is not just one of the thousands of members of the Saudi royal family who populate the country’s government and business leadership, Saudi Arabia after all being the only country in the world that is named for its ruling family and actually run as a family business. He is also one of the sons of Prince Nayef, the long-time interior minister and now deputy prime minister, who many analysts consider to be the most likely candidate to inherit the throne when King Abdullah dies. And Nayef is one of the most irredentist of his country’s leaders, who has consistently opposed the gradual and hesitant policy of social and political reforms led by Abdullah, his half-brother. In religious terms, he is one of the most extreme Wahabists in the country’s top leadership, and was noted for once saying that the country’s small Shi’ite minority were "akfar min al-yahud" -- more heretic than the Jews.

The irony, of course, is in the fact that Saudi Arabia continues to be one of the main backers of jihadi terrorism in the world. Since Jihad International doesn’t, of course, publish audited management accounts, it remains impossible to know precisely which source of terror finance is responsible for funding which part of the massive global operation, and how these allocations change from year to year. But it does seem clear that Saudi Arabia -- both members of the royal family and other members of the elite -- is the main source of funds for dawa, Islamic propaganda directed both at Muslims, to persuade them to become more religious; and non-Muslims, to induce them to convert to the true faith. And without the many billions of dollars that have been poured into this propaganda effort over the years, to say nothing of smaller sums donated to Western universities in order to establish rather more respectable ’research institutes’ and chairs of Middle East studies that provide intellectual and political backing for the Muslim and Arab worlds’ imperialist efforts, the global jihad would have remained far poorer and weaker. There would have been fewer Salafi imams preaching hatred of Jews and other non-Muslims in mosques all over the Western world; there would have been fewer recruits to the cause in general, and fewer willing to sacrifice themselves for the sake of Allah. For that matter, there would be fewer Middle Eastern financial institutions willing to transfer funds to terrorist organisations, as Arab Bank did a few years ago. The fact that the actual cost of weapons and explosives for terror operations is just the tip of this iceberg is irrelevant: all the money donated to terror groups, or for that matter raised through their criminal activities, is fungible.

The attempt on Prince Muhammad’s life must have brought home to the Saudi royal family, quite literally, the threat it has created not only to the rest of the world but also to itself. Saudi Arabia has been the target of terror attacks for years, organised and executed by extremist Muslim groups that oppose the country’s general strategic alignment with the United States and its willingness to provide bases for allied operations during the first Gulf war; and which believe that the royal family and its coterie of business elites are the source of corruption in the country and have robbed the general population of its oil wealth. But these groups, including the al Qa’eda-aligned group based in Yemen that dispatched the suicide bomber to kill Prince Muhammad, have also benefitted from Saudi largesse.

Saudi Arabia has indeed made some serious efforts to fight terrorists within its own borders, although one can possibly laugh at its attempts to ’re-educate’ some captured terrorists and return them to a less violent form of Islam. But so long as it continues to support dawa around the world, it will continue to shoot itself in the foot, because even it can control the messages from the schools and academic centres it finances, it can not begin to control the messages of ever more fanatic imams, except perhaps for those within its own territory; and these imams will in many cases continue to see the Saudi regime as an enemy and a legitimate target for violent action. Yet to stop financing dawa would almost be heresy: King Abdullah, the Guardian of the Two Holy Places, by definition has a moral commitment to promote the spread of Islam, and Wahabism is hardly the kinder, gentler Islam one finds in places like Indonesia.

I don’t know anything about Prince Muhammad’s politics and am not sorry that he escaped the attempt on his life so lightly. But it would have been poetic justice for Prince Nayef, until now one of the leaders of extremism in Saudi Arabia, had he lost his son to a terrorist suicide bomber. Maybe this incident will drive the message home -- especially so if he is to become king one of these days -- that he can not back extremism and fight terrorism at the same time, nor can he encourage terrorism abroad without it coming back to bite him at home.

Korean nuclear brinkmanship: pure terror financing

2009-09-05T15:51:14-07:00

By David Nordell

North Korea, according to a report in the London Daily Telegraph, has informed the UN that it is in the "final phase" of enriching uranium, despite the UN’s economic and arms sanctions against it.

Pyongyang’s announcement that it is once again defying the rest of the world should come as no surprise to anyone. Apart from its consistent paranoid fear that any kind of openness or compromise will inevitably lead to the regime’s collapse, no doubt accompanied by the kind of fate for Kim Jong-Il that was meted out to Nicolae Ceausescu, Kim has rightly observed that the more aggressive and apparently irrational his actions, the better the deal it can wring out of the rest of the world, especially South Korea and the USA. South Korea has in the past cut off $1bn-plus of annual food aid to its perpetually hungry northern neighbour, and Kim no doubt believes that renewed talk of his nuclear capabilities will help renew the aid.

But this nuclear brinkmanship is in fact perfectly rational blackmail, directed both at potential donors and also at pressuring the international community into relaxing the sanctions regime. In today’s world, with both China and Russia increasingly assertive and the United States facing massive economic problems and very uncertain success in both Iraq and Afghanistan, and led by an overambitious but underperforming president, it’s most probable that nobody will do anything at all beyond protesting about Kim having added uranium enrichment to his existing small stock of plutonium-based warheads. And if Kim is lucky, he may even be able to squeeze economic aid or significantly relaxed sanctions, or both, out of the other countries in the Six Party disarmament talks.

But it goes without saying that any concessions Kim may manage to get out of the international community will not result in a genuine slowdown of his nuclear programme, still less actual disarmament. On the contrary, it seems almost certain that any additional economic resources he gets will be directed to stepping up the nuclear programme: after all, if the rest of the world is foolish enough to give in to his blackmail, then why shouldn’t he use their generosity to make the blackmail even more frightening in the next round?

In simple terms, this would be nothing less than North Korea pressuring the international community to finance the terrorism he is employing against the civilised world. And yes, it is terrorism, even if he doesn’t fire a single shot or let off a single bomb, because it is employing the threat of violence and war to scare political leaders into doing something they would very much prefer to avoid.

But this threat, however vile, doesn’t only affect a small chunk of east Asia. North Korea is Iran’s most important strategic ally and the source of much of its missile technology. And although North Korea is unlikely to ever need the uranium it’s enriching except as a threat, it is extremely likely to make some available to Iran, of course in exchange for hard currency: whether or not the reports are true that Iran’s centrifuge-based enrichment programme has slowed down, a secret pipeline of uranium from North Korea could easily put the lie to the various Western intelligence assessments of when Iran will actually have complete deliverable warheads, and induce Western leaders to make foolish decisions. Considering, therefore, that the financial sanctions regime the USA tried to impose on Iran has been totally ineffective and that any further economic sanctions the UN might impose in the near future will be too little, too late, the slightest weakness the world shows towards Kim’s odious regime over its nuclear grandstanding may also considerably worsen the danger from Iran.

If there is any moral to this situation, it is this: the free world’s leadership can not afford to give in to political blackmail, because every concession it makes to dangerous dictators like Kim or Ahmedinejad will only finance more terrorism.

Unindicted Co-Conspirators at the White House

2009-09-03T04:02:46-07:00

Despite the ACLU's recent report, apparently being named an un-indicted co-conspirator in a terrorism financing case does not carry much of a stigma. In fact, it can get you invited to the White House. As pointed out in Jihad Watch, Ingrid Mattson, president of the Islamic Society of North America (ISNA), was invited to President Obama's Ramadan dinner.

ISNA is an un-indicted co-conspirator in the Holy Land Foundation case, and as pointed out by the Investigative Project on Terrorism, has admitted links to Hamas and the Muslim Brotherhood. This is not a good preview of President Obama's efforts to engage the Muslim World. Given the fact that he tacitly endorsed the ACLU's complaint about current terror financing prohibitions, by acknowledging that ""in the United States, rules on charitable giving have made it harder for Muslims to fulfill their religious obligation," we may be in for more of the same in the future.

It is a very bad day when an organization linked to suicide terror and Jihad against the West gets an audience at the White House.

Iran’s Privatization Sham

2009-09-02T13:59:12-07:00

By Rachel Ehrenfeld

On September 9, Iran will stage one of its biggest economic shams, seemingly selling fifty percent of its telecommunication company, Iran Telecom (TCI), to private investors. The well-advertised “privatization” of the company, described as “the biggest of its kind in the history of Tehran Stock Exchange,” is expected to fill Iran’s depleted coffers with $7.9 billion. In addition, Iran plans to privatize 230 companies in the coming year.

Could this be the controversial, newly elected Iranian president Mahmoud Ahmadinejad’s plan to remake his image as an economic reformer? Is he really selling off the control over the telecommunications services, including domestic and international telephone and mobile, telegraph, data transmission, and radio paging services? Moreover, this is the national telecommunications system he and his goons were unable to stop from broadcasting to the world dramatic photos, videos and messages of the brutal crackdown on demonstrations following his fraudulent re-election.

Dictators do not give up such important controls. So, who are those investors that Iran's Privatization Organization “previously approved technically and financially”?

Ahmadinejad’s privatization is no laissez-faire style capitalism. If the past is of an indication, Iran’s latest privatization sham is designed to consolidate the Islamic Revolutionary Guard Corps’ (IRGC’s) power over Iran’s state controlled economy.

The Ayatollah Khomeini created the IRGC in 1979 after the successful takeover of Iran by the Islamic Revolution. The IRGC’s early mandate was to defend the Islamic Revolution from within and without. But, over the years, it expanded its security role to control most businesses. The IRGC controls all strategic industries – including nuclear, weapons, transportation, shipping, energy, commercial services, banks, clinics, and even black market industry. What the IRGC does not control on behalf of the State is owned directly by the state.

The forthcoming “privatization” of TCI demonstrates that Ahmadinejad, himself a former IRGC member, is now working to strengthen the IRGC’s power over all state assets, putting his former radical comrades in charge.

As in previous “privatizations,” domestically, the shares are sold to different companies and individuals whose names mean nothing to non-Iranians. Nevertheless, those familiar with Iran can attest that these are minimally veiled fronts for the IRGC.

A few foreign investors have been also pre-approved to buy some of TCI’s shares. Undoubtedly, pragmatic European companies in Germany, Italy, France and England would be pleased to use the pretext of this new “wave of privatization” to bolster their business with Iran.

The U.S. designated Iran as a state sponsoring terrorism on January 19, 1984. Incredibly, it took the U.S. more than thirteen years to identify the IRGC and some, not all, of its affiliated entities as supporting terrorism.

Judging by Obama Administration’s efforts to find “mutual interest” to start a dialogue with disinterested and contemptuous Teheran, perhaps the TCI privatization would be enough of a “reform” for Washington to beg Iran again to come to the negotiation table.

Instead, it is time for the U.S. to follow the money trail and to accurately identify all Iranian linked businesses and organizations as entities that work to advance Iran's nuclear weapons proliferation and accelerate the spread of the Islamic Revolution around the world.

The U.S., preferably with some allies, should then stop the money flow that allows Iran to develop its nuclear weapons, arm itself and fund its many subversive groups and terrorist organizations the world over.

Rachel Ehrenfeld, director of American Center for Democracy (ACD), is author of Funding Evil: How Terrorism is Financed – and How to Stop It.

The Serial Libel Tourist is Dead; But Libel Tourism is Alive and Well

2009-08-21T18:30:05-07:00

Libel tourism is so effective that the Western media apparently fears even to report serial suer Khalid bin Mahfouz's death

By Rachel Ehrenfeld & Millard Burr

Saudi billionaire Khalid bin Mahfouz died in Jeddah last Saturday. The 60-year-old former owner of the Saudi National Commercial Bank and banker for the Royal family also owned a charity, the Muwafaq (blessed relief) Foundation that funded al-Qaeda and Hamas, to name but a few. He should be remembered not only because of his involvement with the shady Bank for Commerce and Credit International (BCCI) aka “banks for crooks and criminals” and the illegal purchase of the First American Bank in Washington, DC, but mostly because inadvertently he led Americans to better protect their free speech rights.

Using British libel laws that allow foreigners to sue other foreigners in British courts, a practice known as libel tourism, Mahfouz became a serial suer. He, sometimes together with his sons, sued more than 40 writers and publishers - mostly Americans - because he did not like their criticism. Singlehandedly, on behalf of his royal masters Mahfouz made libel tourism a multimillion-dollar industry for the British Bar, and London the “Libel Capital” of the world.

Many will miss him. In Riyadh, he will be missed by the ruling members of the royal family who once used his National Commercial Bank as their own piggy bank, and often used him and his family members as fronts for their business and to fund their favorite organizations and terrorist groups. Likewise, those shady characters who run the Saudi-funded Muslim World League, the International Islamic Relief Agency, and the Rabita Trust of Pakistan will miss him.

Georgetown alum (1968) Prince Turki bin Faisal, former Saudi ambassador to the U.K. and the U.S. and director of Saudi Arabia’s General Intelligence Department from 1977 until ten days before 9/11, and overseer of Saudi financial aid to the jihad in Afghanistan, will have lost an old friend.

Bin Mahfouz will certainly be missed by a circle of notorious Saudi plutocrats who make an appearance in the annual Forbes list of the world's wealthiest citizens, many as defendants in the lawsuits filed by the victims of the 9/11 attacks. There are the Rajis, the Bin Ladens, Al Amoudi, and such other disreputable individuals as designated terrorist Yassin al Qadi, who ran some of Mahfouz’s businesses and charities – the Muwafaq foundation, that funded al-Qaeda, Hamas and Abu-Sayyaf, to name but a few.

Al Qaeda, Hamas and Taliban leaders must be grief stricken and worried; will his sons be as generous as he was?

It is supposed that Mahfouz retained a powerful friend in Washington in James A. Baker, III. Baker, who served as chief of staff to Ronald Reagan and Secretary of State under George H. W. Bush, joined Mahfouz during the roaring seventies when Houston was known as Riyadh-west. They worked together through the heady days and even through the bankruptcy of the second-largest banking organization in Texas, MCorp, in the late nineteen eighties. During the dark days of the Bank of Credit and Commerce International (BCCI), Mahfouz could count on Baker, his man in the White House, to keep him out of jail, no matter how persistent the pressure applied by New York District Attorney Robert Morganthau.

Obviously, the ruling family of Abu Dhabi will be thinking different thoughts as they recall the $596 million they paid for the privilege of purchasing Mahfouz’s shares in BCCI, as they were then left holding the bag as the bank went under.

Irish politicians, particularly disgraced former prime minister Charles Haughey, will recall those wondrous days in 1990 when he received $85,000 from Mahfouz so that Mahfouz and nine members of his family would pay $1 million each to obtain an Irish passport -- thus allowing easy commercial entree to the European market.

Surviving members of the Hunt family of Texas likely have mixed feelings on the death of Mahfouz. Bunker Hunt, scion of one of the world's richest men, had used John Connally, former Governor of Texas and Secretary of the Navy, as his go-between in an effort to entice Mahfouz to join in his play to corner the market in silver bullion. Mahfouz then induced members of the Saudi royal family to join in and they, like Mahfouz, lost a fortune. Nearly driven to suicide, Mahfouz was comforted by Salem Bin Laden, perhaps his closest friend ever.

On the West Coast, Boeing directors must recall with fondness the 5% they paid Mahfouz, the fixer, to win perhaps their largest contract ever. And the middlemen in Saudi Arabia who also benefited from their involvement with Mahfouz in clinching the deal must be reminiscing.

As for Osama bin Laden, wherever he is, the al Qaeda leader probably remembers with some affection the days spent with his brother, Salem bin Laden, and Khaled bin Mahfouz at their jointly-held River Oaks estate in Houston, TX. With Mahfouz gone, Osama’s “golden chain” of wealthy Saudi funders has been reduced by a link.

The international law firm, Akin Gump Strauss Hauer & Feld, must be sad to have lost this wealthy and most litigious client. Likewise, the English Bar must be rather upset, especially those lawyers who represented Mahfouz.

Justice David Eady will surely miss Mahfouz. The cases he brought before Eady and Eady’s judgments made both (in)famous for making libel tourism a weapon to silence critics of Saudi Arabia the world over. Even the U.N. human rights commission warned Britain last year that its libel tourism industry has become a tool to suppress the media’s free speech rights and that it endangered national security.

The serial Libel Tourist Khalid bin Mahfouz is dead. But the jihad against the West he helped fund, together with pernicious British libel tourism practices, are alive and well. Unfortunately, the U.S. government did nothing to stop his activities on either front when he was alive. New York State, Florida and Illinois have already passed anti- libel tourism laws, and another was just passed unanimously by the California legislature.

A federal law to protect Americans’ free speech is a legacy Mahfouz never intended. Indeed, he was so successful in his efforts to stifle reports about him that amazingly the Western media refrained from reporting his death. However, his libel tourism led to the Free Speech Protection Act 2009, now pending in the Senate. One hopes the bill passes as soon as Congress reconvenes so that investigative journalists and researchers can expose others like him before they do us more harm.

Rachel Ehrenfeld’s book, Funding Evil, and Millard Burr’s Alms for Jihad were banned in the U.K. after Mahfouz’s libel tourism hobby was rewarded, as many times before, by Justice Eady ruling against them in London’s High Court.

Libyan Oil is Thicker than American Blood

2009-08-20T16:35:56-07:00

By Rachel Ehrenfeld

In a chillingly cynical excuse Scotland released the former Libyan intelligence agent Abdel Basset Ali al-Megrahi who blew up Pan Am flight 103 in December 1988 over Lockerbie, Scotland. The pretext "compassion" for the allegedly terminally ill Libyan, barely disguised the real reason -- oil buried deep in the Libyan sand.

The murder of 189 dead American, and 81 other nationals including 11 from Lockerbie matters not when Libya conditions British oil companies' concessions for exploration in the release of their imprisoned terrorist.

Justifying the unconscious release, David Blair wrote in the Telegraph: "Libya, under the newly pragmatic rule of Col Muammar Gaddafi...ideally placed to help us combat terrorism and nuclear proliferation - the two biggest threats to British national security. So keeping Libya happy matters a great deal, particularly as the country also possesses 42 billion barrels of proven oil reserves and a similar abundance of natural gas." This new friendship won BP the world's largest oil exploration. Therefore says Blair, "Britain needs to make sure that nothing interferes with..."our bilateral relationship" with Libya. If that means sending one 57-year-old prisoner back to his homeland... allowing him to be released on "compassionate grounds" - then so be it."

Blair, whose fictional reporting in 2002 on the Israeli fight against Palestinian terrorist in Jenin, took years to refute. Human Rights International and even the U.N. issued reports refuting Blair's and the Palestinian bogus claims - extols the "companionate" release of the Libyan terrorist, and praises earlier British governments who ignored large-scale atrocities the world over, because the British national interest was on the side of the aggressors.

To remove any doubt where Blair is proud of the Britain's pragmatic "national interest" policy decisions, he reminds us how smart was the decision to quash the 2006 Serious Fraud Office investigation into a £1 billion bribe from BAE Systems to Prince Bandar bin Sultan. The investigation stopped as soon as the Saudis threatened to cancel the £40 billion arms deal for which Bandar and other Saudi royal family members received hefty payments. And Blair applauds that decision because "it was a classic case of interests triumphing over values."

British values? To better comply with the latest radical Muslim dictate, growing number of municipalities in the U.K. ordered swimmers to wear ""Burkinis; The man "must cover the body from the navel to the knee and females must be covered from the neck to the ankles and wrists".

Clearly, justice and national pride are missing from the British political lexicon. In effort to downplay the terrorist release, Britain's Prime Minister Gordon Brown, wrote a personal letter to Gaddafi, asking the Libyan dictator to treat the affair "with sensitivity." The Libyan promptly leaked the letter, and the terrorist was received in as a hero by cheering crowds in Tripoli.

Yet, Blair is so hard at applauding England's "pragmatic" choices that he fails to notice that that "pragmatism" led to the downfall of the once powerful British Empire, and to the rapid pace of Islamization of the remains of Great Britain. Then again, he - like a growing number of British politicians - probably see nothing wrong with that.

In the meantime, the U.S. reaction to all this has been muted, perhaps because the U.S. is also eying prospect oil deals with Libya.

Rachel Ehrenfeld, author of Funding Evil: How Terrorism is Financed and How to Stop It, is director of the American Center for Democracy

This article was first published on the Huffuington Post, on Agu. 21, 2009

The Doping of America

2009-08-13T18:13:04-07:00

By Rachel Ehrenfeld

George Soros must be thrilled. Two hundred days into the Obama administration, and 16 years after Soros began his advocacy for drug legalization and promoting "medical marijuana," the National Institute on Drug Abuse (NIDA) is venturing into the marijuana cigarettes production and distribution. According to the Aug. 5 solicitation for proposals, the selected organizations will be controlled by the Drug Enforcement Administration (DEA), and will have to comply with FDA regulations.

Until the early 1990s, the voices to legalize drugs in the United States were not in sync. This changed with Soros' first foray into U.S. domestic politics in 1992-1993. Soros declared: "The war on drugs is doing more harm to our society than drug abuse itself," and proceeded with his checkbook advocacy through his Open Society Institute (OSI) to give some $15 million to establish and fund several pro-drug legalization organizations. Since then, he and his like-minded friends poured many millions into different programs aimed at drug-legalization.

On Feb. 7, 1996, I observed in The Wall Street Journal that Soros' "sponsorship unified the movement to legalize drugs and gave it the respectability and credibility it lacked." I then opined that unchallenged, Soros would change the political landscape in America. But patiently, Soros has achieved what he set out to get.

Soros, whose motto is, "If I spend enough, I make it right," uses his donations and philanthropy to change--or more accurately deconstruct--the moral values and attitudes of the Western world, and particularly of the American people. While others give to the arts and higher education or to better the quality of the lives of their fellow men, Soros has been funding campaigns for drug legalization, and "medical marijuana," which is described as a "compassionate drug."

Soros and the other proponents of medical marijuana and drug legalization claim that the war on drugs cannot be won. 'People will always be addicted to somethinfg', they say. So instead of making them criminals, let's have government-provided "legal" drugs. This, they claim, would significantly lower their current price, removing the necessity to commit crimes in order to secure the drugs.

But how much would governmental administration add to the cost? And what will happen when the "tax" is added on? When the government outsources the production and distribution, would pharmaceutical and new marijuana-cigarette producers be asked to give up their profits? How much would it cost to investigate the black market that will flourish supplying groups prohibited by law from receiving drugs--adolescents, airline pilots, police officers, etc.? This new industry could create jobs. But are there going to be enough sober workers to perform them?

NIDA's solicitation for marijuana growth for research is nothing new. Marijuana studies have been conducted over decades, and thousands of them document the adverse effects of this controlled (illegal?--its not controlled yet) substance.

Yet, now, for the first time, the government is soliciting organizations that can grow marijuana on a "large scale," with the capability to "prepare marijuana cigarettes and related products ... distribute marijuana, marijuana cigarettes and cannabinoids, and other related products" not only for research, but also for "other government programs."

Since when is the U.S. government in the business of distributing marijuana cigarettes? Is this part of the health care programs the Obama administration is so keen to enforce?

Since Obama took office, "medical marijuana" dispensary owners in some of the 15 states where it's legal, or tolerated, report requests "climbed sky high." Medical Marijuana, Inc., an Oregon-based company, which has been traded on the Nasdaq since April of 2009, offers solutions for this emerging industry. Its Web site claims that "the number of ailing people turning to medical marijuana to ease their symptoms has spiked in 2009. Requests have jumped anywhere from 50% to 300%."

In California, where medical marijuana is already legal, a massive campaign is underway to legalize all uses of the drug. Soros and other pro-drug legalization organizations claim that tax revenues from marijuana sales would fill the empty coffers of the state with at least $1.4 billion for the first year. The more users, the more money for the state.

A revenue collection system is already in place to ensure the tax revenues for the states that allow "medical marijuana." The system, developed by Medical Marijuana, Inc., boasts, "The Stored Value Platform System, a point-of-sale system, is a hallmark element of Medical Marijuana's business solutions package." The company has already signed on many marijuana collectives, and lobbies heavily to sign on the City of Oakland, Calif., which is the first city in the nation that voted in favor of collecting tax proceeds from marijuana sale, "as part of the solution to Oakland's longstanding budget shortfall."

California's current attorney general is former Mayor Jerry Brown, who now runs for governor. While he was previously governor of California (this is confusing? Is he running for governor again?) from 1975 to 1983, Brown lowered the fines on marijuana possession. Yet, now he says, "If the whole society starts getting stoned, we're going to be even less competitive."

As for the harm caused by using marijuana, NIDA reports: "marijuana smoke contains 50% to 70% more carcinogenic hydrocarbons than does tobacco smoke ... which further increases the lungs' exposure to carcinogenic smoke." Moreover, "marijuana users have a 4.8-fold increase in the risk of heart attack in the first hour after smoking the drug ...This risk may be greater in aging populations or those with cardiac vulnerabilities."

In addition, marijuana use causes "distorted perceptions, impaired coordination, difficulty in thinking and problem solving, and problems with learning and memory," lasting weeks after the initial use. "As a result, someone who smokes marijuana every day may be functioning at a suboptimal intellectual level all of the time."

If the government legitimizes marijuana use and develops a new marijuana cigarettes industry, Soros will no doubt boast that he had a part in this feat.

The evidence about the harm caused by marijuana to the individual user and society is overwhelming. Yet the government is now moving for large production and distribution of marijuana. If this is part of the ObamaCare project, it would surely cause the opposite of what it is purp orting to do.

Soros, who paved the way for legalizing "medical Marijuana," because the "war on drugs cannot be won," has made similar claimes that the war on terrorism is a losing propostion. In early 2002, Soros declared that the U.S. should recognize "that the war on terrorism cannot be won by waging war." Instead of fighting the terrorists, Soros suggested to "Correct the grievances on which terrorism feeds."

Legalizing drugs in the U.S. would make Afgaistan's drug problems pale in comparison. Is this the CHANGE we we promised?

(A slightly different article on this subject was first published at Forbes.com)

Rachel Ehrenfeld, author of Funding Evil: How Terrorism is Financed and How to Stop It, is director of the American Center for Democracy.

Al-Kadi's ownership of Ptech acknowledged

2009-07-18T09:12:17-07:00

Rachel Ehrenfeld

On July 15, the Boston U.S. Attorney’s office announced the arrest of a former Ptech officer Buford George Peterson. The announcement also revealed indictments Paterson’s and Oussama Abdul Ziade, also a former officer of Ptech, Inc., a computer software company that operated from Quincy, Mass., for making false statements to the U.S. Small Business Administration (SBA) in connection with a loan application. Thus, revealing that Yassin al Kadi was the major shareholder of the company that provided IT services to most U.S. government offices, and had access to information detrimental to our national security.

In addition to Ptech, Kadi was the Director of the Saudi-based, bin Mahfouz owned Muwafaq Foundation ("Blessed Relief") that fronted for, and funded, Makhtab Al-Khidamat (MK), Al-Qaeda, Hamas, and the Abu-Sayyaf organization, to name just a few. According to a Treasury Department letter to Switzerland’s Attorney General in November 2001, there was "a reasonable basis to believe that Mr. Kadi has a long history of financing and facilitating the activities of terrorists and terrorist-related organizations, often, acting through seemingly-legitimate charitable enterprises and businesses."

Kadi’s businesses extended throughout the world, and included banking, diamonds, chemicals, construction, transportation, and real estate. It would be hard to find a more strategically placed individual to advance the agenda of al-Qaeda, or any other terrorist organization.

The identities and connections of some other Ptech major investors and managers should have also raised a red flag: Suliman Biheiri, an Egyptian, is alleged by the government to have funneled $3.7 million from the Saudi funded charity, the SAAR Foundation, to Islamist terrorists through BMI, a now-defunct New Jersey-based Islamic investment firm of which he was the founder and president, and which fronted for and funded Hamas. Biheiri, who was convicted in October 2004, for lying about businesses with Hamas’ Mousa Abu Marzook, was already in prison for immigration fraud. He also had links to the Muslim Brotherhood's and al Qaeda’s money-laundering machine, the Al-Taqwa network.

Yakub Mirza, a Pakistani, was not only a business partner with Kadi in Ptech, but also the financial mastermind, Trustee, President and CEO of the SAAR Foundation, which according to the government is connected to the Safa Foundation, which the government claimed also provided material support to Islamist terrorist groups. Mirza was also a Trustee on the board of Sanabel, the investment arm of the Saudi International Islamic Relief Organization (IIRO), which shared the same address as the SAAR Foundation: 555 Grove Street in Herndon, Virginia. He set up and was the Secretary/Treasurer of the US branch of the Muslim World League (MWL), another Saudi charity that also served as the fund- raising arm of the US branch of the IIRO. Over the last four decades, the MWL received more than $1.3 billion directly from the late Saudi King Fahad. Both organizations have been documented to support Islamist around the world.

Abdurahman Muhammad Alamoudi was the President of the American Muslim Council (AMC) and the American Muslim Foundation (AMF); both received thousands of dollars from the Success Foundation. The Success Foundation also shared offices with the SAAR Foundation and provided the logistical and financial support for Islamist terror organizations. Alamoudi also served as the Secretary of the Success Foundation, and openly stated his support for HAMAS and Hizbollah. Like Mirza, he was a member of the IIRO. Alamoudi pled guilty in July 2004 on charges related to a Libyan plot to assassinate then Saudi Crown Prince Abdullah.

Other partners in Ptech had similar connections to al-Qaeda and Hamas.

In October 2001, former Vice-President of Sales for Ptech approached the FBI Boston office with detailed information regarding possible links between Ptech and the 9/11 attacks. He was followed by Indira Singh, a risk consultant at J. P. Morgan Chase, in May 2002, who approached the Boston FBI office, the NY Joint Terrorism Task Force, the management of J. P. Morgan Chase and FBI headquarters with more documentation regarding possible Ptech penetration of US government agencies and corporations.

The FBI finally raided Ptech on December 6, 2002. However, no arrests were made and the company continues to operate, and according to Ptech’s CEO, Oussama Ziade, in May 2004, "Ptech still has government agencies as customers, including the White House." If Ziade, a Lebanese national, who left the U.S. in 2005 is "arrested and convicted of the charges in the indictment, he could faces up to 30 years in prison, to be followed by five years supervised release and a $1 million fine....If convicted on these charges, Peterson faces up to 30 years in prison, to be followed by five years of supervised release and a $1 million fine."

Even if convicted, we are still in the dark regarding the information to which Ptech’s employees, management and investors had access. The possibility that the Saudi funded al-Qaeda have taken advantage of then America's free market system to undermine its economy and national security seems quite real when one identifies the connections and affiliations of Ptech’s management, investors and employees.

So, how could a small, Saudi-financed company with questionable terrorist connections obtain significant government and business contracts, and who facilitated this? Was Horizons, its Egyptian branch, ever investigated? Why wasn’t Ptech shut down immediately? And even more importantly, are there other Ptechs around?

Jakarta Marriot & Ritz Carlton, 17 July 2009; Australian Government Dereliction Of Duty Cannot Be Ignored

2009-07-17T21:23:45-07:00

Ganesh Sahathevan

Suicide bombers attacked the Jakarta Marriot and Ritz-Carlton hotels on 17 July 2009, killing nine and wounding at least 50 more at time of writing . (http://www.indianexpress.com/news/Blasts-at-Jakarta-Ritz--Marriott-kill-9--wound-50/490636/. The Al-Qaeda linked Jemaah Islamiyah (JI) had attacked the Jakarta Marriot in 2003 , and there is speculation that these attacks are also the work of the JI (http://www.bloomberg.com/apps/news?pid=20601087&sid=aOxAF.fdhFK0)

B.Raman , director of the South Asia Analysis Group has provided an analysis of attacks against Western and Jewish targets which can be sighted at the link http://www.southasiaanalysis.org/papers34/paper3310.html

The above taken together would suggest that the attacks of 17 July 2009 are also the work of a group of Muslims committed to acts of violence against those they perceive to be enemies of Islam.This writer has on many occasions here and elsewhere critized as naive at best, acts and programmes promoted by Western governments and NGOs designed to "moderate" the "small minority" of Muslims who hold "extremist" views. These iniatives, as well as some recent developments, are reviewed here to show how they aid rather than hinder the jihadist cause.

I have previously written how Australia's intelligence agencies have come to
rely on research provided by universities with links to known terrorist
financiers (see http://www.terrorfinance.org/the_terror_finance_blog/2007/10/further-evidenc.html and http://www.terrorfinance.org/the_terror_finance_blog/2007/03/islamist_influe.html)

The following can now be added to what has been previously written. These would suggest that Australia, which is considered an ally against terrorism in this region,may in fact be contributing to the jihadist or at very least Islamist cause:

A) Australian Government protection afforded Islamist and jihadist.

It has been recently reported that the current Australian Attorney-General , Robert McClelland, has over-ridden and contradicted the advice of the Australian Security and Intelligence Organisation (ASIO) in providing a reference and promoting an application for Australian residence by an Iranian cleric ASIO suspected of being a threat to Australian national security. ASIO adviced that the cleric,Sheik Mansour Leghaei ,was or is an Iranian spy. (see http://www.theaustralian.news.com.au/story/0,25197,25794011-5013871,00.html

As Attorney General , ASIO reports to him.

This would not be the first occasion in which an Australian politician has overridden security concerns to sponsor an application for permanent residence. The former Prime Minister, Paul Keating, actively interfered and promoted an application for permanent residence by Sheik Taj Din al-Hilali despite advice from intelligence agencies that al-Hilali had been at least trained by a Libyan intelligence agency (see http://www.icjs-online.org/indarch.php?article=1107 . Information on Libyan intelligence training from private sources)

B) Universities and think-tanks further compromised

The Muslim World League (MWL) has made some recent in-roads into one of the oldest universities in the country, the University of Sydney. This adds to the universities mentioned in the articles at http://www.terrorfinance.org/the_terror_finance_blog/2007/10/further-evidenc.html and http://www.terrorfinance.org/the_terror_finance_blog/2007/03/islamist_influe.html

In June 2009 the de-facto leader of the Islamic Council of NSW , Ali Roude arranged for none other than HRH Turki bin Faisal to visit the university.

(see http://www.usyd.edu.au/news/84.html?newscategoryid=10&newsstoryid=3497)

This was remarkable given that the University of Sydney, while prominent in Australia, cannot be said to be of equal or near equal standing to the US , UK and European universities that the al-Saud's normally favour. In addition, Sydney is far from their normal circuits outside the Middle East.

In 2007 The Australian reported:

Ali Roude, head of Rissalah College, travelled to Saudi Arabia to meet officials from the Muslim World League during a visit believed to have been carried out in an attempt to attract funds for his proposed school...

A former member of the Prime Minister's Muslim reference group, Mustapha Kara-Ali, yesterday attacked the MWL as the "apex of Wahabism" and expressed his concerns over the body's internet communities.

"(It) provides ideological funds with strings attached to establish satellite communities for Wahabism abroad," Mr Kara-Ali said.

(http://www.theaustralian.news.com.au/story/0,25197,22080423-5001561,00.html)

For references on the MWL see http://www.terrorfinance.org/the_terror_finance_blog/2008/06/sharia-finance.html

For references on the its youth wing, the World Assembly of Muslim Youth ,and its link to terrorism see . for example http://www.abc.net.au/foreign/stories/s798664.htm

Despite the above, the University has seen no difficulty in dealing with Ali Roude and the MWL ( given that the al-Faisals continue to control that organisation that was started by their father , the then Crown Prince al-Faisal ;for further information on the MWL, WAMY and the role of the Al-Faisals see the sworn statement by US ICE Agent David Kane, archived at http://web.archive.org/web/20040828003012/http://www.usdoj.gov/usao/vae/ArchivePress/SeptemberPDFArchive/03/biheirisupp091203.pdf)

The University has refused to comment on the above. It has also refused to answer queries put to it about communications it is believed to have had with Dr Adrian Ong Chee Beng, who has been linked to Sheik Yassin Al-Qadi the Al-Qaeda financier whose activities included the transmission of funds to terrorist groups for and/or on behalf of Mohamad Al-Faisal, Turki al-Faisal's lesser known brother. (http://www.abc.net.au/rn/backgroundbriefing/stories/2006/1754286.htm AND http://www.nytimes.com/2007/08/09/business/09trust.html?_r=1&th&emc=th)

The University has shown a willingness in the past to receive funds from persons of questionable reputation. In 2004 it proudly announced the first of a series of contributions from one Lee Ming Tee, whose run-ins with the Australian corporate regulator in the 1980’s are well publicised. Lee left Australia as a result and moved his base of operations to Hong Kong , where he was arrested for fraud. ( See http://www.usyd.edu.au/news/84.html?newsstoryid=260 AND http://www.physics.usyd.edu.au/messel/messel_donors.htm, http://www.smh.com.au/articles/2004/10/27/1098667837253.html?from=storylhs)

Being one of the oldest in the country the advice of its faculty is often sought by Government agencies on a variety of matters. It is likely that the al-Sauds and the MWL can now count on the University to be part of their lobby.

C) Australian aid for Indonesian madrassahs

I have also written that Australia's Department of Foreign Affairs via an agency named AUSAID, runs a programme in Indonesia named LAPIS (www.lapis.or.id) which involves spending AUD 30 million(about USD 24 million) with the objective of improving the management of madrasahs in Indonesia. AUSAID runs a similar project in Mindanao called BEAM (see www.beam.org.ph).

(see http://www.terrorfinance.org/the_terror_finance_blog/2007/03/this_article_is.html )

This programme will expire this year. This writer expects that the programme will be continued, depending on the availability of funding, despite its obvious errors.

To end, readers attention is drawn to a report on the recent bombings published by the Malaysian National News Agency, Bernama , in which the attackers continue to be described as “pengebom berani mati”; in English "brave courageous bombers”( http://www.bernama.com/bernama/v5/bm/news_lite.php?id=426273).

A more precise definition of the term “pengebom berani mati” is provided by Australian academic Professor Clive Kessler:

A euphamism for Mujahidin Shahid: Suicide bombers prepared to die for the poltical cause in the name of (their understanding of) true religion.

That language is contrasted against a recent initiative launched by Attorney-General McClelland aimed at eradicating such terms as "jihad" and "terror" from the Australian lexicon. It is his considered opinion that if we change our preception of the problem the problem will disappear. (http://www.theaustralian.news.com.au/story/0,25197,25743752-31477,00.html).

END

A True Iranian Reformer, and His Movement?

2009-07-09T19:47:49-07:00

Who is Roozbeh Farahanipour, and what is so striking about his apparent return to Iran?

By Dr. Andrew G. Bostom and Alyssa A. Lappen
American Thinker | Jul. 9, 2009

Pooya Dayanim is an intrepid lawyer, writer, and human rights activist who served Muhammad Khatami a subpoena for his role in the torture and detention of innocent Iranian Jews, while the former Iranian President attended a Council on American Islamic Relations dinner in Arlington, VA on September 8, 2006. Late Sunday July 5, 2009 Pooya sent me an e-mail conveying a remarkable press release from the secular Iranian Marze Por Gohar (MPG) Party (The Glorious Frontiers Party — taken from the first line of the “O’ Iran” National Anthem. [O Iran, O Glorious Frontiers]).

The press release announced that Roozbeh Farahanipour, a prominent leader of the July, 1999 Iranian student uprising, and other leaders and members of the MPG were returning to Iran to organize demonstrations commemorating the tenth anniversary of July 9th. Arguing that competing Islamic Republic of Iran factions were, “…trying to confine the present movement within the tight Islamic and Constitutional limits, preventing cries for free elections and a democratic Iran being heard…,”the announcement released by the MPG — which advocates a secular, democratic republic-urged Iranian students and the general public to re-invigorate the suppressed June election protests with en masse demonstrations throughout Iran on July 9th.

Who is Roozbeh Farahanipour, and what is so striking about his apparent return to Iran?

Farahanipour, a trained lawyer, was the publisher and chief editor of a monthly journal dedicated to Iranian studies (emphasizing Zoroastrianism), from 1994 to 1998. Simultaneously, he also founded the “Roozbeh Publishing” to further disseminate research focusing on pre-Islamic Iran.

Soon after his monthly journal on Iranology was banned, Farahanipour became the chief editor of the weekly Nedayeh Ghomess (”The call of Ghomess,” Ghomess being one of the capitals of ancient Iran). Only five issues of Nedayeh Ghomess had been produced under his editorship when, upon attempting to publish the names of 57 serial murder victims, his efforts were prevented by the Ministry of Intelligence and National Security of Iran and other affiliated elements of the Iranian government. Subsequently, Farahanipour, joined by some of his Nationalist peers organized the “Hezbeh Marzeh Por-Gohar” and “The National Society of Journalists,” in July of 1998, serving on the executive committees in both organizations. Defiantly independent from the Islamic government and its affiliates, these organizations encountered intense opposition, threats, and violent suppression from militias associated with the Islamic Republic.

Under Farahanipour’s leadership, the Marze Por Gohar Party spearheaded the pro-democracy movement of July, 1999. Shortly after The Ministry of Intelligence proclaimed the MPG an “illegal Party,” while denouncing Farahanipour as “one of the leaders of the unrest,”

Farahanipour was seized from his home during a raid by armed Islamic militias. Farahanipour spent 26 days in solitary confinement while being brutally interrogated by the Ministry of Intelligence and the revolutionary court. As recounted in a brief memoir of his imprisonment, while en route to the first interrogation, Farahanipour heard one of the Islamic regime interrogators utter, “..my, my, my this one is a goner, he’s turned into a Zoroastrian, is in contact with Zionists Jews, has indecent relations with the opposite sex, works with Afghans, even the Armenian saboteurs love him.” Thus Farahanipour concluded, “I thought I was about to be executed.” Ultimately spared, Farahanipour was temporarily released on bail. But following eleven months of additional interrogations and court proceedings, and considering the plight of other activists who without exception received unusually long prison sentences, he decided to flee Iran.

Farahanipour’s compelling personal biography, and uncompromised writings and public statements (examples here, here, and here), demonstrate his firm commitment to profound reforms — indeed a wrenching transformation of Iranian society — utterly rejecting both any strain of the Shi’ite theocratic rule (most notably its present incarnation), which has characterized Iran since 1502, and Iran’s more benevolent (if still brutal) and transient experiment with a Western leaning, secular-oriented but autocratic “constitutional” monarchy, from 1925 to 1979.

The July 5, 2009 MPG press release also encouraged journalists to contact MPG Advisor Faryar Nikbakht, and pursuant to that invitation, Alyssa Lappen interviewed Mr. Nikbakht, yesterday, July 8, 2009. During the interview, Nikbakht further elucidated the MPG’s ideals and goals, consistent with what Farahanipour has expounded previously. Nikbakht’s thoughtful responses about the prospects for reform in Iran contrast starkly with the unfettered emotionalism on display elsewhere. Odd, non-sequitur speculations about the murderous former Prime Minister Mir Hossein Mousavi somehow morphing into an acceptable politician, are conspicuously absent from Nikbakht’s statements. Instead, although hopeful, and imbued with measured optimism, Nikbakht acknowledges the very inchoate nature of the contemporary Iranian reform movement, and openly professes having no idea about the extent to which MPG’s vision for a truly secular, democratic Iran is shared by the Iranian populace. However, one of Nikbakht’s most lucid responses demonstrates that he rejects the anti-women’s rights agenda of Mousavi’s equally odious wife (this erstwhile “Lady Byrd” Mousavi) — which has been almost entirely ignored by mainstream media pundits. Alyssa Lappen’s interview is presented below:

Alyssa A. Lappen: Does the Marze Por Gohar (MPG) party advocate fully replacing Iran’s current shari’a-based constitution with a secular document, rejecting Islam and Islamic requirements for civil laws to align with Sharia? For example, do you reject any legal inferiority for women and non-Muslims?

MPG Advisor Faryar Nikbakht: The answer is yes. However, it has to be emphasized that it is not a position against beliefs — but more like a separation of church and state.

AAL: So then, the MPG party supports equal rights for women.

FN: Yes, certainly. Women compose half of the human species, our society included. It is simply unacceptable [to have] laws and a society in which mothers and sisters do not enjoy the same rights [as men]. It is unacceptable even [by] 20th century [standards, and this is 2009].

AAL: Does MPG reject the 1990 Cairo Declaration of the Organization of the Islamic Conference (OIC) — the so-called Universal Declaration of Human Rights in Islam that Iran’s Islamic Republic spearheaded? Does MPG favor true models of equality like the US Bill of Rights and 1948 United Nations Universal Declaration of Human Rights, which aren’t subservient to shari’a?

FN: I am not too familiar with this [Cairo Declaration]. But … any document that would endorse discrimination in any way among the people is unacceptable. Certainly. Yes.

These kinds of attempts are made very consciously to erode the popularity of the Universal Declaration of Human Rights, which is increasingly accepted by people worldwide. It is a conscious attempt to reverse history. Any document that discriminates based on gender — on beliefs, on religion, on race and so on — is unacceptable. Certainly.

AAL: I suppose if you are a Mullah that would problematic.

FN: Yes. And not only for Mullahs. Also for people with fanatic beliefs in their religion and ideology, who don’t want other people to share equal rights.

[But] even among Muslims, [in Iran there is] huge discrimination. [O]nce the fanatics are in power, even regular Muslims — traditional, regular people — always live under some kind of threat due to enforcement of extra legal issues….

AAL: MPG’s advocacy of secular change seems completely opposed to the ideology espoused by Mir Hussein Mousavi.

FN: He is a loyal child of the [Islamic] revolution. While he was Prime Minister [Oct. 1981- Aug. 1989], [Iran conducted] the biggest massacres of political prisoners and [imposed the most] censorship. For a guy like that to become a hero for freedom [in less than one month] sounds very fishy.

However, the post-election movement was very welcome to millions and millions of Iranians, including us.

AAL: How much support does MPG have in Iran?

FN: MPG is only one of many opposition parties that have struggled for at least 10 years to establish democratic principles among Iranians and young people. However, it is not a card holding party. Within Iran’s [current] system, it is almost impossible to have any legal party — to have a regular organization and activities. Therefore, MPG is not big in the sense of old, traditional parties. It is [only] one of many opposition parties active in Iran.

AAL: What is your sense from contacts in Iran? If new elections were held tomorrow, how much support would MPG garner?

FN: First, I am not an MPG member. I am an advisor — an MPG spokesman so long as [party co-founder] Roozbeh Farahanipour is on his dangerous journey in Iran to mark the 10th anniversary of the July 9, 1999 student uprising.

But I guess if Iran held new elections tomorrow, MPG would not get a huge vote. You need free flow of information and legal status to work, to get funding, just to proceed normally in politics. Iran’s only big parties right now are officially sanctioned by hard line rulers, supporting the fanatical discriminatory constitution. And a lot of sanctioned parties, [have been] denied legal rights even as we speak — let alone parties in the real opposition.

AAL: As difficult as it is to read the situation, do you think the people would support regime change?

FN: Well, we do not have exact numbers. But I would say most people in Iran would be content with some reform. The regime shows reluctance to [cede] the smallest demand. People realize that even [those] short term expectations are not attainable [under] this regime. It can be said that the vast majority of people are not actively in the streets for total regime change. They have smaller expectations and demands, which is very natural.

AAL: In other words, any change would be gradual.

FN: Yes, [even] raising the expectations [for change] will be gradual. In times like this, however, [that process] is much faster. [Expectation] grows by leaps and bounds. Certainly in the last three weeks, people’s expectations have grown [as much as might normally take] 20 years in a calm, controlled time. People have gone from total acquiescence and passivity to the borderline of regime change.

People have called for removal of supreme leader [Ayatollah Ali Khamenei], who [heads] a theocratic ruling team. In some places, around universities and in Tehran, they have voiced very harsh slogans against the Islamic regime. In Tehran this week, they were shouting, “Death to Islamic Republic.” There are not millions saying this. But this is the first time it has been heard. Groups of young people have local organizations and go through the streets. But these slogans have never been heard before.

AAL: Could a regime change actually make things worse?

FN: It has [already] gotten worse. In the short run it will get much worse. [To ensure Ahmadinijad's] survival, [in the face of mass] defiance of the supreme leader [and public] demands, [the regime] has begun a wave of crackdowns unprecedented [in the last] generation. More and more people are arrested every day. More and more laws are ignored. The Revolutionary Guard announced [July 7] that they’re in change of Iran’s security — above the courts and laws and local authorities. It has gotten worse.

[B]ut in the long run, I cannot believe that this [regime] can stand. I believe [that] the [newfound] courage people have obtained [since June 12], the force they’ve seen and felt, the power of their huge demonstrations — and because of world attention — this kind of military rule will not stand for long. There will be waves of demonstrations and defiance. I believe [things] cannot [return to what they were] four weeks ago. Probably after this crisis, even if the regime stays alive, things will change considerably.

AAL: Do you honestly think that Islamic rules would be relaxed?

FN: Yes, that would be a part of [the change]. Every day the regime is under rising pressure from below and other countries. Already, in the past years, some [Islamic] practices — from stoning [women in public], to hanging [people] by crane —- were abandoned or [moved] behind walls. This is [still] happening right now in other cities. Last week, they hung 5 or 6 demonstrators in the western city of Kermanshah. But these things have already been reduced, or at least hidden from public view. In the future, after a short period of harshness, this [relaxation] trend will continue.

AAL: Will MPG insist that Iran be a Persian state — where Shia Islam presently remains predominant, but not supremacist — so that Iranians of all faiths, and open agnostics or atheists will acquire full and equal social participation, with full and equal rights?

FN: Certainly. We want separation of church and state. [But besides] what MPG prefers, Iranian Muslims have had such huge doses of extreme religion forced on them that even people without political foundation — just for the sake of personal freedom — are now tilting to less and less religion. Coercive religion has been there for too long. So many Muslims in Iran do not even pray any more — not because they do not believe. They are sick and tired of pretenses [and coercion].

AAL: Will MPG repudiate requirements that non-Muslim women wear veils, and protect all women — especially Muslim women — from coercive attempts to enforce veiling?

FN: Coercive veiling is against our beliefs. Women should be free to go without a hijab or wear a hijab if they like. However women want to [dress], they should be free.

AAL: Persia was once predominantly Zoroastrian. Would MPG encourage a Zoroastrian revival?

FN: A government should not, and may not, advocate or discourage any religion. Everyone should be free to practice their religion. The government should not fund or propagate any religion. Such a government would [only] replace the present one…. Iran’s government now funds their own leaders and even population increase. So long as people support them, [the mullahs] engineer demographics. If any government were to encourage a different religion, that would be equally unfair.

AAL: What is the MPG position on the Mujahedin E Khalq (MEK)?

FN: This is my personal opinion. If the MEK wants to get on the train for democracy, they’ll have to open up and change their organizational mode [from seeking complete control]. It’s still a very rigid, disciplined, old style [Islamic socialist] party. They need to be less isolated and protective of their internal issues, easier to work with, and more attuned to the lives of ordinary, normal people.

AAL: Do Iranians now reject rigidity?

FN: The general Iranian population, of course, wants more liberalism and modernity in their lives.

AAL: It was courageous, — some might say foolhardy — for Farahanipour to go to Iran now. What does he think he can accomplish?

FN: Farahanipour was one of the original 1999 student uprising leaders. He sees his child has grown. He returned to visit his child on the 10th anniversary. He hopes to encourage and lead any part that he can, in the same fashion as before. He is calling for freedom, for free elections — and not just following the Mousavi wave, who are trying to confine this event to their own Islamic and factional criteria.

AAL: So now what?

FN: We are waiting tonight and tomorrow [July 9] to see if the 10th anniversary of Iran’s student uprising will be a massive protest — or sporadic hit and run demonstrations.

Banks Are Not Mere Bystanders

2009-07-01T18:21:23-07:00

By Ilan Weinglass

On behalf of Brett Wallace, I'm posting his recent study of the role the private sector can play in countering terrorism financing. An excerpt:

The best way to improve public-private cooperation between banks and law enforcement is to grant top-secret level clearances to a certain number of bank compliance offers in the United States. This would effectively set up a “secure channel” of information sharing between banks and law enforcement. According to the Undersecretary for Terrorism and Financial Intelligence, Stuart Levey, much of the information held by law enforcement about whom and what to look for is classified. Intelligence agencies have an obligation to protect their sources and methods, making secrecy an imperative. Furthermore, law enforcement is often reticent about declassifying, or ‘downgrading’ intelligence in order to protect ongoing investigations. In addition to intelligence and investigatory concerns, individuals or companies will occasionally remain off OFAC’s list of designated entities due to policy considerations or diplomatic sensitivities.

You may download Brett's entire study here.

Russia the Asymmetric Threat: A Potent Mixture of Energy and Missiles

2009-06-30T18:43:51-07:00

I'm posting this on behalf of John Wood, regarding his new book, Russia the Asymmetric Threat: A Potent Mixture of Energy and Missiles

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

By John Wood

Introduction

The current economic crisis offers the Obama administration a window of opportunity to embark upon a course of constructive engagement - reset. Mutual self interest in the arms control arena and the energy sphere should motivate both sides to cooperate.

Purpose of the Book

In February 2007, at the 43rd Munich Security Conference, then President Putin made the statement that Russia would respond to the United States asymmetrically. The purpose of the book is to explain what Putin meant by that statement. At the heart of Putin’s asymmetric strategy is the use of Russian energy and missiles.

Concept

Under Putin, Russia has emerged as the global energy superpower. The means by which it wishes to transform itself into a knowledge economy. Its military modernization program is designed to support its new national security doctrine. This is a doctrine that emphasizes the need to protect Russia’s energy interests. For Putin, the unipolar approach of the United States represents the greatest threat to the realization of this vision. Therefore, he has conceived an asymmetric response to the perceived U.S. threat: the creation of a new network of energy pipelines that will make Europe even more dependent on Russia than it already is, and will make Asia equally as dependent by 2020. In addition, in order to change the regional balance of power in his favor, Putin has employed a deft use of missile and aircraft arms sales to Russia’s energy partners, who are also not friends of the United States, such as Iran, Libya, Malaysia and Venezuela.

Overview

Due to low levels of debt, massive reserves and the pursuance of a course of fiscal responsibility, the World Bank in November 2008 predicted that Russia was in a good position to financially weather the current economic storm.

Russia holds the world’s largest natural gas reserves, the second largest coal and uranium reserves, and the eighth largest oil reserves. Europe is dependent on Russia for 25% of its oil and gas. Russia is also positioning itself to play a similar role with respect to China.

Russia has embarked on a program of modernization of its military, the centerpiece of which is an overhaul of its aging strategic nuclear forces. The focus is on technologically advanced, but relatively inexpensive missile systems, which by comparison with their U.S. counterparts often exceed them in their capabilities.

From Putin’s perspective, America is in the process of imposing “absolute security” or as Joint Vision 2020 put it: “full spectrum dominance” over the world. As the sole remaining superpower, the United States enjoys a massive strategic imbalance in its favor, which it has used first to contain, but now with the intent to control the world. How? NATO expansion lays the groundwork for a U.S. global missile defense system to contain perceived adversaries, which in turn secures the dominance of America through its Prompt Global Strike capability (PGS) – the ability to strike anywhere on the planet with impunity within 90 minutes of the order being given by The President. Thus, PGS will be to the 21st Century, what British Gun Boat Diplomacy was to the 19th Century.

Potent? If either Israel and/or the United States attack Iran, they can expect to suffer losses of between 20%-40% of their non-stealth aircraft and missiles at the hands of Iran’s air defenses, including Russian S-300s, Tor-M1s and Pantsyr-S1s, as well as losses of civilian and naval ships in the Straits of Hormuz due to supersonic anti-ship missiles. Meanwhile, the world can expect a barrel of crude oil to cost $200.

Conclusion

Russia’s massive oil and gas reserves in the Arctic, Eastern Siberia and Far East, as well as its leading edge missile systems, make it a force to be reckoned with, rather than being ignored or dismissed by the West. Thus, the sooner the United States recognizes and comes to terms with this reality, the better it will be for her.

The book is available on Amazon.com: http://www.amazon.com/Russia-Asymmetric-Threat-United-States/dp/0313359415/ref=sr_1_1?ie=UTF8&s=books&qid=1246228394&sr=1-1

A Caliphate of Toxic Assets

2009-06-29T07:02:34-07:00

By Alyssa A. Lappen
FrontPageMagazine.com | Monday, June 29, 2009

When a pro-terrorist organization announces its intention to launch a financial jihad against the West, it is well worth learning their methods — especially when they promote a religious pseudo-financial scheme through largely unregulated practices purported to be safer than the conventional. But ultimately, the new brand of assets are constructed with as little, and perhaps considerably less, transparency than the last wave of toxic assets that hit the economy, with catastrophic results.

The Muslim organization Hizb Ut Tahrir capitalizes on Muslim Brotherhood founder Hassan al-Banna's 20 ^th century derivative, encouraging followers to build a parallel financial structure. Al-Banna envisioned the resultant Shari'a-compliant finance as a “back door” into Western financial markets and institutions through which to supplant liberty and prosperity with Islam. Muslim clerics including MB spiritual leader Yusuf al-Qaradawi promote Shari'a finance as generally safer than Western investments, a diversification method to steady personal assets -- and a stable economic system that should replace capitalism. Call it “financial replacement theology,” if you wish.

In July, Hizb Ut Tahrir plans to launch its U.S. arm with a huge Chicago “Khalifah conference” heralding the coming Caliphate and global Islamic supremacism. After 9/11, Germany and Sweden outlawed Hizb Ut Tahrir. In July 2005, Pakistan's then-president Pervez Musharaf warned Britain not to tolerate its continued U.K. presence. But in the U.S., Hizb Ut Tahrir has proudly announced intentions to replace capitalism with Islam.

Founded five years into Jordan's illegal occupation of East Jerusalem in 1953, Hizb Ut Tahrir labels itself “peaceful” but strategically objects to violence only for the time being. The group sympathizes with the Muslim Brotherhood, considers Europe's democracies “a farce” -- and deems the U.S., UK, and Israel works of “the devil” -- and seeks to impose Islamic law (Shari'a) worldwide.

Major banks from Citigroup, HSBC, Chase, Bank of America and Lloyds TSB -- probably unaware of the etymology of Islamic finance -- established subsidiaries offering Shari'a-compliant products. Mutual funds at Principal Financial Group, UBS, Amana Funds and SEI Investments, among others, followed suit. Especially late last year as the devastating toll of sub-prime mortgage lending mounted, clients were assured that Islamic banking -- in many respects a dangerous financial fad -- was much safer than other banks and investment houses.

Yet bad economic news has not escaped the supposedly secure Islamic investing sector. Islamic securities can also (like all other asset classes) go into default, moreover. Holders of East Cameron Partners LP's “safe,” asset-backed Islamic bonds (sukuk) now line up before a Louisiana bankruptcy judge with all the other hapless creditors of the Texas-based Easter Cameron Oil and Gas Co. that filed for Chapter 11 reorganization last October.

The East Cameron default was no one-time Islamic finance anomaly, either. In May, Kuwait's Investment Dar Co. -- 50 percent owner of the Aston Martin Lagonda luxury car manufacturer -- defaulted on a $100 million sukuk. And in June Saad Group Islamic bonds traded at a quarter of their “face” value -- that is, the the roughly $650 billion price at which issued by Saudi billionaire Maan al-Sanea's company. The Saad Trading Contracting & Financial Services subsidiary, like East Cameron, went into financial restructuring, aka bankruptcy, after the Saudi Central bank froze the al-Sanea family accounts.

As I've often previously warned, events now show that Shari'a banking may prove more susceptible to market dislocations than other financial sectors.

Islamic bonds employ “some of the most complex” Western structured finance tools ever created. They transform liquid, traceable cash flows from interest-bearing debt into illiquid assets -- that cannot be easily unwound. In the 1980s, bond sponsors transformed trillions of dollars in cash flow claims on illiquid real assets into liquid, traceable mortgage-backed “pass-throughs” and “collateralized debt obligations” (CDOs).

The Muslim Brotherhood quickly re-branded the “special purpose entities” (SPEs) -- that kind that, coincidentally, sank Enron -- as Islamic “special-purpose vehicles (SPVs).” Shari’a banks use these vehicles to “restructure interest-bearing debt, collecting interest [as] rent or [a] price mark-up.” Issuers of sukuk al-ijara -- Shari'a bonds like those now in default -- sell hard assets to SPVs, which sell share certificates to fund their investment and in turn lease the purchased assets back to the sukuk issuers, collecting the principal plus interest that they then pass to sukuk investors as “rent.” But now, sukuk issuers are defaulting on “rent,” implying that SPVs can't sell or return property to issuers when their sukuks mature.

That means, in essence, Shari'a finance is a sham. “There is no such thing as interest free investment,” warns Columbia MBA Joy Brighton, echoing Rice University Islamic economics and finance chairman Mahmoud el-Gamal. “All Islamic finance today is interest based,” el-Gamal complained in the Financial Times two years ago. Furthermore, Islamic finance features a few other unique “complexities,” namely:

“Shari'a regulations can override commercial decisions.”
Documentation is not standardized
Inter-creditor agreements can be complex

As U.S. financial institutions crumble, rattling markets, Congress has focused on regulating the opaque, previously unregulated securities called credit default swaps that Brighton describes as guaranteed boxes of counter-party risks. “One party pays a premium, the second guarantees payment, and a third guarantees the guarantor.” AIG, for example, guaranteed payment on billions of dollars worth of sub-prime mortgage loans. “The credit default swap is the guarantee, and AIG bore the default risk burden in exchange for upfront fees on maybe trillions of dollars in loans.”

But credit default swaps are old news, Brighton says. “A new generation of toxic assets has not yet hit anyone's radar.” While touted as such, Islamic securities aren't immune to default. Many more Islamic issues are likely to succumb as the global economy worsens.

“Islamic banking is in the toxic derivatives genre,” says Brighton. Each counter-party agreement within its complex “boxes” of interwoven counter-party risks, is a contract for “payment” and “delivery/receipt of funds.” Issuers create derivatives when they “peel off and resell pieces” from individual securities containing multiple counter-party contracts. One default by a party to any of the interwoven contracts in a “box” can cause its whole structure to collapse.

Moreover, Islamic finance is doubly toxic. Many banking corporations have created Islamic subsidiaries, says Brighton -- segregated oil wealth managed by “outside money managers” and Islamic radicals who don't circulate money globally, but keep it “within the Islamic community, as a charity- and jihad-funding mechanism.” They're just another economic time bomb that financiers have blindly bought.

Alyssa A. Lappen is a former Senior Fellow of the American Center for Democracy, former Senior Editor of Institutional Investor, Working Woman and Corporate Finance, and former Associate Editor of Forbes. Her website is www.AlyssaaLappen.org.

Morocco- A Muslim Nation's Successful Election

2009-06-21T06:13:05-07:00

Commentary

(Appeared orginally at Forbes.com)
Rachel Ehrenfeld, 06.17.09, 11:55 AM ET

It is 131 degrees Fahrenheit in Marrakesh, Morocco, yet a slow but steady stream of voters--many of whom are women--enter the schoolyard to cast their ballots at the polling stations for the municipal elections.

On June 12, 2009, 1,503 communities chose their representatives in orderly, transparent elections, according to Ahmed Herzenni, chairman of Morocco's human rights watchdog, CCDH. His opinion was shared by more than 150 foreign observers, including the International Strategic Studies Association from Washington, D.C., and the New York-based American Center for Democracy (ACD).

Unlike the Soviet-style election in April that led to the reelection of President Abdelaziz Bouteflika in Algeria, Morocco's eastern neighbor, or the controversial and violent presidential election in Iran, Morocco's election was "fair and free."

The meticulously planned and executed election marked an important step in King Mohammed VI's reform plans to decentralize governance and empower local communities. With 6% economic growth, large investment in education and development, $21.11 billion in foreign debt and $27.29 billion in reserve, Morocco has weathered the global economic storm better than most. In introducing a new form of governance, the king's reforms are designed to increase the participation of all citizens in political and economic systems.

Morocco's interior minister, Chakib Benmoussa, an MIT graduate, led the planning, preparing and training of election officials and volunteers. A budget of close to $62 million was allocated to plan, organize and administer the elections. Special efforts were made to include more women in local politics. To overcome the high level of illiteracy and encourage voting, the ballots included pictures of the political parties, which were well advertised in advance.

These efforts yielded impressive results: Local elections attracted 15.4% more voters than the last parliamentary elections, in 2007. More than 7 million voters (52.4%) elected 27,795 council members; 61% of these were newly elected. The number of women elected rose significantly, from 0.4% in the previous local elections in 2003 to 12.3%. Most of these women are under the age of 35, and 75% of them have higher than secondary education.

"We were impressed because we've seen very clearly that people were well-acquainted with the rules and were well-prepared for elections," noted Leslie Lebl, a senior ACD fellow, one of the international observers. "Everything took place in very good conditions."

Jean-Charles Brisard, a French observer, noted the "professionalism" of the election supervising teams and said he was impressed by the "great sense of responsibility" demonstrated by participating officials and volunteers.

Significantly, there was a high turnout of voters in the Moroccan Western Sahara region. Though this area is still the subject of international dispute, the local inhabitants' active participation demonstrated their self-identification as Moroccan citizens. The Saharans clearly prefer Morocco's reform-oriented government to Algeria's repressive regime.

Morocco's efforts to unify its diverse population of Arabs, Berbers, Jews and other small minorities are impressive. To attract more members, the Islamist Justice and Development party abended its religious rhetoric. Although it gained relatively more votes in the big cities, it came in sixth, with only 5% of the votes. In contrast, the royalist, modernist, and reform-oriented Authenticity and Modernity Party came in first with roughly 18% of the votes and won almost 22% of seats.

In this Muslim country--where Jews and Christians can practice their religions freely, conversion from Islam is permitted by law, a big church stands in the center of the capital Rabat, and alcohol is freely sold in the supermarkets--the regionalization reforms underway promise that Morocco will become even more tolerant. Indeed, Morocco should be used as model by its neighbors in the region and beyond.

Rachel Ehrenfeld, author of Funding Evil: How Terrorism is Financed and How to Stop It, is director of the American Center for Democracy.