Yasin Al-Qadi - EWI EXCLUSIVE | by J. Millard Burr

Wednesday, October 17th, 2012 @ 3:44AM

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EWI EXCLUSIVE
October 17, 2012

The U.N. Security Council committee monitoring sanctions against al-Qaida removed a Saudi businessman from its blacklist on October 12th. The committee chairman, Peter Wittig (Germany, said that Yasin al-Qadi had been de-listed, following a recommendation by the blacklist’s ombudsman (a former judge of the International Criminal Tribunal, a Canadian) to remove him.  Al-Qadi filed a lawsuit in 2009 in Washington, D.C., to be removed from a U.S. list of people accused of financing al-Qaida.  Al-Qadi’s charitable Muwafaq foundation was identified by the U.S. Treasury department as an al-Qaida front and placed on a terror list in October 2001. (“UN Removes Saudi Businessman from Blacklist,” AP Headline and article from United Nations press release, 11 October 2012.)

In July 1995 the employees of Africa Confidential (AC), a boutique fortnightly newsletter on African political affairs, which had published for more than three decades in the United Kingdom, learned that a suit charging libel had been brought against it in the British High Court. The journal could not have visualized the agony it was about to endure. Britain’s libel laws are notoriously convoluted to favor the plaintiff, most often political and public figures. This time a billionaire Arab sheikh and his sons who sought compensation from a reputable news journal used these laws.

In a nation where “the courts presume that a published article is false rather than true,” Saudi Arabia’s Bin Mahfouz family charged that AC was responsible for linking the Muwafaq al-Khairiya (Blessed Relief Foundation) founded by Khaled bin Mahfouz, and administered by Yasin Qadi, “to terrorist activities in Africa.”

The suit was brought in London by the Muwafaq trustees, which included two sons of Khaled bin Mahfouz, and by Yassin Qadi the Muwafaq’s director.  According to their lawyers the worldly-wise Arab plutocrats had been made subject to public, “odium, ridicule or contempt” by a small journal with a limited subscription. Thus, AC was charged with libeling the charity — and by inference its founder and chairman of the board, Khaled Bin Mahfouz.

Khalid bin Mahfouz had more than a passing knowledge of the law as it was practiced in the West. In the United States his high-priced lawyers had only recently helped him skirt the possibility of spending jail time as a result of his involvement with the Bank of Credit and Commerce International (BCCI — aka “bank of crooks and criminals”). In what had been the first great banking scandal to emerge in the twentieth century, Mahfouz just managed to escape jail by paying the largest “fine” ever imposed in the history of world banking.

The journal was no match for the billionaire family.

In July 1995 after the Muwafaq name appeared in an Africa Confidential article pertaining to the attempt to assassinate President Mubarak of Egypt as he drove from the airport into Addis Ababa to attend an Organization of African Unity summit meeting. Publications in both Egypt and Ethiopia were quick to assign blame to the Islamist Sudanese government and the Egyptian terrorist organizations it was known to harbor. In reviewing the roundup that followed in Addis Ababa, the AC article noted that one of the suspects claimed to have worked for the Muwafaq foundation in Ethiopia. The claim turned out to be suspect. This charge, according to Mahfouz’s lawyers, “clearly put local Muwafaq staff in some danger.”

It was never proved that the assertion made in Africa Confidential was indeed “false.” (The author is aware that a member of the Ethiopian intelligence service was convinced the Muwafaq had harbored a terrorist in its midst.)  As for the fear that the Muwafaq staff was placed in some danger, the organization was soon expelled from Ethiopia — along with all charities having some involvement with the Sudan.

According to the author of the AC piece, there had been no intent to libel the Muwafaq or its board of directors. Thus, the AC publisher, Blackwell, fought the libel charge. The law suit then dragged through the British court for six years until September 2001, when faced with legal expenses it was no longer willing to endure, Blackwell decided to give up, a few days before the disastrous events of 9/11 in the United States. Its statement of apology was read in High Court. (See, David Pallister and Jamie Wilson, “Untangling the financial Web,” The Guardian, 26 September 2001.) The magazine was instructed never to repeat the allegations, and in addition to the substantial legal costs it had run up it was forced to pay undisclosed damages to Mahfouz and Qadi

THE MUWAFAQ FOUNDATION

Not much was known of the Muwafaq foundation.  It had been founded in Saudi Arabia sometime in 1991, and from its inception was placed under the personal charge of Yasin al-Qadi.  Qadi himself was responsible for the registration of the Muwafaq in the Isle of Man in June 1991. Later, it was registered as a financial trust in the Channel Islands in May 1992. It had a working capital of $30 million supplied by the banker Khaled bin Mahfouz, then owner and director of the powerful National Commercial Bank (NCB) of Saudi Arabia, that nation’s largest bank.

In the Sudan, the Muwafaq worked very quietly, eschewing publicity.  Normally, the appearance of an Islamic charitable organization would not elicit curiosity. Certainly, with the evolution of the Islamist movement in the Sudan, the use of charities in support of various jihadist movements were commonplace. Thus, when the Muwafaq initiated activity in 1992 it was no different from other Islamic charities.  Simply put, it could not have operated in the Sudan if its aims and administration had not received the approval of the civilian political leader Hasan al-Turabi, a man The New York Times called “a sort of supreme religious guide for the Sudanese government.”

Turabi and his Islamist coterie controlled all charitable operations in the country practically from June 30, 1989, when the Revolution brought a military junta and an Islamist foundation to Khartoum.  And it was shortly after the conclusion of the first Popular Arab and Islamic Conference held at Khartoum in April 1991, that Turabi attended a congress of Algerian Islamists and then went on to visit a number of Arab states during which much effort was devoted to the creation and coordination of Islamic relief agencies. Turabi would then use the guise of Islamic charities to support Jihadi elements active from Kashmir to the Balkans.

All Islamic and Western charities were registered in the Sudan by the Ministry of Social Welfare and their directors were vetted by the various Sudanese intelligence ministries. Sudan Red Crescent, the Sudanese agency most intimately involved in the UN and Western relief efforts, was the nation’s most lauded local relief agency; it was dissolved by presidential decree in mid-1990 and reformed under government auspices with a militant Islamist board of directors.

Once established in the Sudan, the Muwafaq benefited from Sudan government funds obtained through an Islamic charity tax (the zakat) on all Sudanese citizens. Soon, like other Islamic charities in the country, it was employed in the government’s war against the Southern Sudanese. For foreign aid workers in the Sudan there was something strange, even sinister about the Muwafaq, which was also known to support various mujahedeen operations occurring abroad, especially in the Balkans.

ENTER YASIN QADI

Well before he served as administrator for the Muwafaq Foundation in the Sudan, Qadi had become a favorite of the Sudan’s Islamist government.  A Saudi citizen and Jeddah resident, Qadi was born in Egypt where his father had worked for the Bank of America in Cairo. Graduating in 1977 from the University of Alexandria, Egypt, with a degree in architecture, Qadi worked at a number of jobs. He spent some time in the United States where he told associates he had attended school. He returned to Saudi Arabia where in 1988 he assumed control of a catering company.  Sometime in the late nineteen eighties he reportedly met with Saudi billionaire Khalid bin Mahfouz and then obtained employment in the Saudi’s National Commercial Bank (NCB).  Qadi was a welcome addition if only because he knew a great deal about the principles of Islamic banking.  It didn’t hurt that his father-in-law was a former finance minister of Saudi Arabia.

Already caught up in the dangerous tidal race that would swamp the BCCI, Mahfouz seems to have chosen Qadi with great care.  Because Qadi had strong Islamist credentials he was given responsibility for the establishment of an Islamic Banking department at the westernized NCB. After accomplishing that effort, Qadi then established the National Management Consultancy Center, which advised Saudi investors on the principles of Islamic Banking.

Whether serving as an agent for Mahfouz or acting on his own behalf, Qadi was welcomed in Khartoum along with a large Saudi delegation that visited in February 1990. The party included such powerful Saudi investors as Ibrahim Affendi, Saleh Kamel, and emissaries from the puissant Al Rajhi Banking and Investment Corporation.  Shortly after that visit, Qadi won a bid on a Sudan scrap metal project. Afterwards, Qadi never appeared to have problems investing in the Sudan.

By 1990 the Sudanese economy was controlled by Muslim Brothers, and all investments were scrutinized by political powerhouse Hasan al-Turabi and his associates. Realistically, Qadi could not have survived had he not been close to Turabi and his inner circle. Qadi likely found easy entree into the Turabi circle because he was known to have a close relationship with HAMAS, the Muslim Brotherhood arm founded in Palestine in 1988, which was favored by Turabi. Qadi admitted that he had met Osama Bin Laden, another Saudi investor in the Sudan “at religious gatherings during the 1980s.” (South Florida Sun-Sentinal story, “Ex BCCI & Al Qaeda Financier Bin Mahfouz Forces Orwellian Re-writing of History,” recounted in Globalresearch.ca http://Globalresearch.ca , July 31, 2004.)  It was also claimed that “Bin Laden’s two money men, Wael Hamza Julaidan and Yasin al-Qadi” had developed close ties with Mohammad  Khalifa before Osama Bin Laden’s brother-in Law departed Afghanistan and later set up the Al Qaeda operation in the Philippines.  (Zachary Abuza, “Funding Terrorism in Southeast Asia,” NBR Analysis, The National Bureau of Asian Research, Volume 14, Number 5, December 2003.)

Once in the Sudan, Qadi also invested in the unpretentious Al Shamal Islamic Bank, the same that would be used by Osama Bin Laden during his stay in the Sudan. In January 1992. he founded the Leemount Company Limited, a Sudanese business registered in the Isle of Man — a site that offered the secrecy sought by both Qadi and Mahfouz.

ENTER THE MUWAFAQ

Since its obscure beginning, the Muwafaq Foundation had chosen to operate on very shaky ground. By 1992 the various Islamic charities operating in the Sudan included radical organizations previously created to support the war in Afghanistan. With the close of that war they were integrated into a worldwide relief operation, and one that would exclude non-Islamic non-governmental organizations from working in Sudan. Muslim charities operating in the Sudan might receive innocent contributions from wealthy Arab and Muslim sources, but all were subservient to the Islamist government which used charities to their own purpose, whether in jihad (holy war) or for outreach (dawaa) programs to spread the faith.

It is in the nature of Islam and its Muslim populace, to distrust political rulers but trust theological authority; therefore, once charity is donated to a mosque or madrassa, or is turned over to an Islamic Charity, the donor takes it for granted that the donation will be used to support a charitable purpose that would benefit Islam. Muslim charity can thus be contrasted to Western charity, especially in the United States where the saying “trust but verify” is apropos.

At the time the Muwafaq was created it was quite uncommon in Saudi Arabia for a private family to create its own charity.  Although Saudi billionaires abounded in 1992 (when a billion was really something to crow about) that sort of gesture was left to the Saudi royal family. Consequently, to those familiar with the Muwafaq operation in the Sudan it seemed sui generis, and though ostensibly a Saudi charity it operated outside the control of the royal family.

Within hours of the attempt to assassinate Egypt’s Mubarak in Ethiopia, both Sudan and Iran were blamed for masterminding the attack. Omar al-Bashir, the Sudanese president who had also been in Ethiopia for the OAU summit, was outraged that his country was being accused of such a deed. He argued that Mubarak had no evidence to support the allegation. However, the Egyptian-controlled media soon reported that Mohammed Seraj, an Egyptian resident in the Sudan, had led the team of assassins. And the plot reportedly had the support of two senior Sudanese officials. Mubarak then directly implicated the Sudanese government, claiming it had allowed Mustafa Hamza, the leader of the Gama’a al-islamiya, an Egyptian Islamist terrorist group believed to have planned the assassination, to reside in Sudan.

For the Islamists governing the Sudan, the Mubarak affair was a political disaster. The Sudan itself was already ringed by determined enemies who formed a “circle of animosity.” The response from Libya in the northwest to Eritrea in the southeast was uniform condemnation.  The Mubarak plot only managed to further isolate the Khartoum government, which was already under political and economic pressure both at home and abroad. It was time for the Muwafaq to cease operating in the Sudan, and it soon closed shop there.

After the Mahfouzes and Qadi, the Muwafaq’s trustees filed a libel suit in London High Court against Africa Confidential. Long before a decision was reached, the unfavorable publicity surrounding the Muwafaq led the Saudi government in 1987 to order the foundation to cease operations. That it was slow to do so can be determined by a Forbes article in 2002, claiming that while the Muwafaq, administered from Saudi Arabia, may have ceased operation, “the charity’s infrastructure — its legal registration and perhaps some of its schools and clinics — was never dismantled.” (N.Vardi, “Sins of the Father?” Forbes.com, 18 March 2002.)

QADI AND THE UNITED STATES

In a letter dated 29 November 2001, from the General Counsel, Department of the Treasury in Washington, D.C., to M. Claude Nicati, the Substitut du Procureur General of Switzerland, the official was informed, “Based upon information available to the United States Government, we have a reasonable basis to believe that Mr. Kadi has a long history of financing and facilitating the activities of terrorists and terrorist-related organization, often acting through seemingly legitimate charitable enterprises and businesses.” (“Re: Yassin A. Kadi,” Department of the Treasury letter, David D. Aufhauser, General Counsel, to M. Claude Nicati, 29 November 2001.)

The Treasury Department interest in Qadi’s activity in the United States focused on a 19 July 1991 wire transfer when the “Saudi businessman” used a Swiss bank to move $820,000 from a Swiss bank account to the inchoate Quranic Literacy Institute (QLI) of Chicago.  The QLI would then serve Muslim Brotherhood interests in the United States and HAMAS interests in the Holy Land. Acting pursuant to specific instructions received from an official representing the QLI, Qadi sent $820,000 for the purchase of property in Woodridge, Illinois. According to the U.S. Justice Department investigators, the funds were “illegally transferred” from Saudi Arabia by “Yassin Kadi of Kadi International with the intent of generating income for the use of Mohammad Salah and others in the HAMAS conspiracy involving past and continuing violent terrorist attacks” (Note: Salah was named a “Specially Designated Terrorist” and Hamas a “Foreign Terrorist Organization.“ Qadi claimed “not to recall” meeting with Salah, but the U.S. government has information to the contrary. See “Re: Yasin A. Kadi,”  U.S. Department of the Treasury, letter to M. Claudi Nicati, Switzerland, 29 November 2001.)

The movement of funds was found to be in violation of United States Money Laundering Statues, 18 U.S.C. S1956. The government held that Qadi had acted in a manner “to disguise the provenance of the funds themselves, and the end-user in the United States.”  The transfer had obscured the connection “from the Saudi entity Kadi International with which the deal was financed.”  The purchase of land in Illinois was then complicated by a bogus mortgage by which the $820,000 was to be repaid to Kadi International Corp, c/o BMI, Inc., Secaucus, New Jersey, on December 31, 1993.  In fact, the mortgage was never recorded as a lien against the property, and thus it “had the effect of further concealing from public notice” the role of the QLI and the transfer of “funds from Kadi in Saudi Arabia.”

While BMI and Kadi International later “disavowed any relationship with QLI,” during the years 1990-1991 the Quranic Literacy Institute “arranged to provide Salah with $3,000 monthly salary from Yasin al-Qadi.”  (Matthew Levitt, “Yassin al-Qadi: The Hamas Connection,” Counterterrorism Blog, http://counterterorismblog.org/
2007/08/ ) In December 1992 Hamas put pressure on Mohammed Salah, its Chicago principle, to sell the property because it needed a quick infusion of cash. The U.S. government would later claim the funds derived were used “to purchase weapons and help reorganize the Hamas leadership in the West Bank and Gaza.” It was not until 1998, however, that the Justice Department froze the Quranic Literacy Institute funds, and Muhammad A. Salah was charged with funneling money to Hamas, which was cited as a foreign terrorist organization. (Jeff Gerth and J. Miller, “A Nation Challenged,” The New York Times, 13 October 2001.)

Yasin al-Qadi also was an investor in PTECH, an American corporation founded in 1993. Qadi was reported to have invested millions in a company directed by a Muslim “computer genius.” However, when the owners of PTECH would not take the company public, he left. The Saudi began by investing $3 million, which he raised to $10 million by the time he left. Following 9/11, PTECH was investigated by a federal antiterrorism task force “for its connection to Saudi businessman Yasin alQadi.”  Federal investigators led by the U.S. Customs Service searched PTECH’s offices. Authorities were concerned because the company provided software and consulting to 18 federal agencies, including the FBI, U.S. Treasury, Customs Service, Secret Service, Department of Energy, the military services, the Federal Aviation Administration, and the White House.

Qadi was also involved tangentially with the Beit Al Mal International (BMI) company of Secaucus, New Jersey. Founded in 1985, the BMI was funded by senior Muslim Brotherhood members located in Europe and the Middle East.  BMI funding sources included the notorious Kuwait Finance House and Abdullah, Nur and Eman Bin Laden.  It was headed by Soliman(sp?) Biheiri who would later move to PTECH. Biheiri later received a call from Yassin al-Qadi in Saudi Arabia informing him that the Saudi wanted to invest $3-4 million in the firm. Biheiri met Qadi on two occasions, once in New Jersey and once in Saudi Arabia. Biheiri later claimed that he had never heard of Qadi, but their meeting in Saudi Arabia was photographed. During that time Biheiri learned from Qadi that he had studied at the University of Chicago and received his Ph.D in physics at Harvard. By then Biheiri was aware that Qadi had worked at the Saudi NCB and was close to Mahfouz. He also learned that Qadi was the founder of Kadi International Inc., a company which operated from Sudan but whose legal papers were filed in New Jersey. It was dissolved in the United States in 1995.

CONCLUSION

But Patrick Smith, the editor of Africa Confidential had lost to the bin Mahfouz, a family he himself had called, “the creme de la creme of Saudi society.” In a decision reached just before 9/11, the Muwafaq trustees won their libel case, “but curiously the court decision did not request Africa Confidential to publish a retraction.” (Jonathan C. Randal, Osama: The Making of a Terrorist, I.B. Tauris Publishers, 2004 page 223.) Africa Confidential was instructed, “never to repeat the allegations, apologize to the trustees and pay substantial damages.”

It was Mahfouz’s and Qadi’s first victory as “libel tourists” in London. But is wasn’t their last. Mahfouz had chosen a comfortable venue in London and utilized a sympathetic judge (David Eady) and judicial system to challenge its antagonists. More than forty journalists, authors and publishers would themselves be forced to confront inordinately wealthy Saudis to whom the enormous legal costs were of no great significance. Most were forced to retract, apologize and pay substantial fines. Mahfouz created a special website on which he posted all the British legal decision in his favor as well as the letters of apology.

In March 2007 co-authors J. Millard Burr (the author of this article) and Robert O. Collins were informed by Cambridge University Press (CUP) that it was being sued for libel in a London court by Mahfouz. The “Sheikh,” sometime resident of the U.K. where he could enjoy his homosexual proclivities denied for which he would be severely punished in Saudi Arabia, had taken offense to what the authors had written in Alms for Jihad, a book published by CUP in 2006.

Burr and Collins were not personally charged and refused to take part in the settlement when CUP caved in. Cambridge not only refused to fight the action, in addition to the small financial fine, it complied with the judge’s orders to destroy all copies of the book in the UK. It even urged libraries all over the world that had purchased the book earlier to do the same.  (Endnote: American libraries do not follow orders well. See articles.)

Aided by the British legal system, Mahfouz managed to silence all his critics and intimidate the Western media. All but one.

FOR THE RECORD

Rachel Ehrenfeld, Ph.D., the ACD/EWI director and author of Funding Evil which examines sponsorship of terror, and as explained in its subtitle, “How Terrorism is Financed And How To Stop It.” She was sued for libel by Mahfouz and his two sons (trustees of Muwafaq) who claimed that copies of the books published in the U.S. had been purchased in the United Kingdom. Ehrenfeld’s fight ( http://www.acdemocracy.org/ ) against Mahfouz’s attempt to silence her, led to new laws, first in 2008 in New York State (aka “Rachel’s Law”). Mahfouz died in 2009. He did not live to see that seven more U.S. states passed similar laws and the 2010 federal SPEECH Act that protects all American authors and publishers from the enforcement of foreign libel judgments in the U.S. that are at odds with the First Amendment to the Constitution.

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