YOU ARE HERE: LAT HomeCollections


Islamic American Nonprofits Face Increased Scrutiny in U.S.

Charities' financial records are sought to see if any money is funneled to terrorist groups.


From Boston to Burbank, federal authorities are intensifying their scrutiny of Islamic American nonprofits as possible sources of funding for Al Qaeda and other terrorist organizations.

In a recent confidential letter to state charity officials, the U.S. Treasury Department sought financial records on eight Islamic American groups, including some of the largest Muslim charities in the United States.

The inquiry is the first examination of domestic nonprofits to come to light since U.S. authorities launched a global anti-terrorism initiative in response to the Sept. 11 attacks linked to Osama bin Laden's Al Qaeda network.

Treasury has pressured banks across the world to freeze the assets of 66 individuals and organizations with suspected ties to terrorism, including several overseas charities. Bush administration officials now believe that money raised by American charities has also ended up financing Bin Laden's network.

"There's significant fund-raising taking place in the United States right in front of our noses," an administration official said.

Investigators are looking for Al Qaeda connections in a wide range of nonprofits--from a multimillion-dollar relief agency that received money from an alleged Bin Laden front organization to an obscure Islamic center once headed by a man now identified as Bin Laden's chief of logistics.

Evidence appears to be emerging that shows links between Al Qaeda and Hamas, the Palestinian militant group. The Bush administration added Hamas and 21 other terrorist groups to its broad financial dragnet Friday. Charities tied to Hamas have been under investigation in the U.S. for years.

The confidential Treasury letter names two charities that the State Department removed last year from its international aid program. Citing classified evidence, the department refused to explain in detail the reasons for its decision. In letters to the charities, it said only that funding them would be "contrary to the national defense and foreign policy interests of the United States."

The State Department ruling did not prevent the groups from raising money in the U.S. or shipping it overseas. The two charities--the Islamic American Relief Agency in Missouri and the Holy Land Foundation for Relief and Development in Texas--collected nearly $16 million in contributions last year.

Representatives of those and other groups say they do not finance or support terrorism. Some of the officers said they had nothing to hide and welcomed federal scrutiny, while others said the Treasury investigation reeked of "McCarthy-era treatment."

Each of the eight nonprofits under scrutiny has condemned the Sept. 11 attacks. The six that are formally registered as charities are soliciting funds for the victims on their Web sites.

Experts say it will be difficult to determine with certainty whether any of the millions of dollars sent overseas by U.S.-based charities winds up in the hands of terrorists--or if it does, whether the groups had knowledge of its illicit use. Past investigations have yielded little solid evidence.

"Often you'll find there are rotten veins in charities that also do good work," said Daniel Benjamin, who served on the National Security Council in the Clinton administration and is a terrorism expert.

In March, the Justice Department charged seven Iranian immigrants in Los Angeles with funneling more than $1 million to the Moujahedeen Khalq, a group committed to the overthrow of Iran's Islamic government. The U.S. has designated the Moujahedeen Khalq a terrorist organization.

The FBI alleges that most of the money was collected at Los Angeles International Airport in the name of the Committee for Human Rights in Iran. The money was supposedly going to Iranian refugees overseas, but the FBI said it traced the funds to bank accounts in Turkey controlled by the terrorist group. The defendants have pleaded not guilty and are awaiting trial.

Many Islamic charities and religious organizations within the United States contribute to each other. Then the money goes overseas as humanitarian relief, where accountability is scarce.

Most foreign countries, unlike the U.S., do not require nonprofits to file annual statements on their fund-raising and expenditures--although Kuwait recently said it would tighten its regulation of charities to make sure the money does not go to terrorists.

"It's very difficult because there are a mixture of funds," said Oliver "Buck" Revell, a former FBI associate deputy director who now researches terrorist groups. "Some of these organizations are pure fronts, but there are others that are obviously involved in legitimate humanitarian needs."

Legislation Has Been Seldom Used

Los Angeles Times Articles