Wednesday September 26, 2001
Guardian Unlimited
But a Guardian investigation into their origins and the controversy that has surrounded them shows how difficult it is to disentangle innocent charity organisations from local groups which have been infiltrated by Bin Laden supporters. President Bush may have difficulty in making stick his assertions that he can wage war on terrorist finance by proscribing organisations and freezing bank accounts.
The organisations collect money from Muslim supporters around the world, including wealthy Saudi businessmen. One of them was set up in the Isle of Man and subsequently in Jersey - both favoured offshore locations offering secrecy to companies. Their accounts are not available for inspection, making scrutiny of their finances difficult.
In June 1991 Muwaffaq (sic) Ltd was set up in the Isle of Man, a tax haven where "non-resident" firms can avoid paying tax and revealing financial information. Its backers were named as a group of Saudi investors from Jeddah.
According to documents disclosed in legal proceedings, operations had already commenced in Sudan. A hardline Islamist government had taken power in 1989 and Sudan had become a base for international Islamist operations. In 1991 Osama bin Laden moved there from Saudi Arabia. By 1993 he was reported to have set up a network of charitable organisations. He broadened his ambitions from shipping funds and supplies to mojahedin in Afghanistan and Pakistan, to backing embattled Islamists, particularly in Bosnia, Kosovo and Albania.
Blurred
But did Muwafaq have anything to do with this? Its Saudi trustees say not. They say their objects are simply to relieve famine and war suffering.
The charity's formal structure is very blurred: in May 92 it described itself in documents with a new structure as the Muwafaq Foundation based in Jersey, but focused on Pakistan, with offices in Islamabad and Peshawar.
Jersey does not have a charities commission, as the UK mainland does, requiring charities to register and submit accounts. The self-governing offshore island, whose company secrecy laws and tax haven status have attracted growing international concern, does not appear to maintain any public record of the Muwafaq Foundation. Officials there say if it was structured as a financial trust, it would not require to be registered at all. The Muwafaq Foundation said its objectives included the provision of cash for education and publishing books and videos.
In February 1993, documents show a Muwafaq Foundation office in Somalia, where anti-American Islamist fighters were arriving from neighbouring Sudan. But this time its headquarters were recorded as being in Delaware, a US state with one of the country's most relaxed corporate disclosure requirements. It shut in September 95.
Libel suit
Another Muwafaq branch was set up in Ethiopia. During the 1990s, branches appear to have been set up in the Balkans where addresses and phone numbers are recorded for the Muwafaq Fondacija in Zagreb, Croatia, and also in Split, Tirana in Albania, Konjic in Bosnia, Zenica, and Sarajevo - as well as in Vienna, Austria, and Siegen in Germany.
The complex and decentralised structure means outside investigation of the charity is difficult.
In July 1995, however, the organisation's name figured in Africa Confidential when the magazine published an article about the attempt to assassinate President Mubarak of Egypt as he drove to the airport. The Sudanese government and Islamist organisations were suspected, and the magazine mentioned that one of the suspects claimed to have worked for Muwafaq in Ethiopia.
This claim, which turned out to be false, clearly put local Muwafaq staff in some danger. [All Sudanese charities, including Muwafaq, were subsequently expelled from Ethiopia]
A prolonged libel suit began in London by the organisation's Saudi trustees, which eventually ended six years later with a statement of apology by Africa Confidential read out in the high court.
After the arrest in 1995 of Ramzi Yousef for the first World Trade Centre bombing in New York, the Pakistani police raided the local offices of Muwafaq in Islamabad, and those of a second charity, Mercy International (registered in Switzerland). The local head of Muwafaq, Amir Mehdi, was held in prison for several months before being released without charge, according to the Islamabad lawyer for both organisations, Farrukh Karim Qureshi.
Mr Qureshi said the head of Mercy International, Zahid Shaikh, had told him the police investigation was sparked because Yousef had made a phone call to the Mercy offices. There is no evidence Mercy had any involvement in the crimes.
Muwafaq's plans to build two $3m hostels for an Islamic university in Islamabad had to be aborted, he said.
The next note of controversy came in February 1996 when a Paris-based Arab newspaper, Al-Watan al-Arabi, published what it said was an interview with Bin Laden, who by now had been expelled from Sudan and was eventually to end up in Afghanistan with the Taliban.
Bin Laden listed the Muwafaq Society in Zagreb as part of a network of humanitarian organisations which he supported. But there was no evidence that this claim was correct, or that any of Muwafaq's officials worldwide were aware of his support.
During 1997 Mufwafaq's office in Sudan, for example, continued its charity work. In a UN report it was described as implementing projects in health, education and agriculture.
In June 1998, Muwafaq became a target of inquiry by the FBI, although there is no evidence that this led to any suspicion being confirmed. An affidavit filed by agent Robert Wright of the FBI during proceedings to seize the assets of a suspected money launderer for Islamist extremists, revealed that a man linked to Muwafaq had been named as a terrorist supporter.
Shortly afterwards more reports appeared in the US, saying that a Saudi businessman, Khalid bin Mahfouz, had funnelled money through a bank in Saudi Arabia to finance charities. These included Muwafaq. The present management of the bank say the reports were "incorrect, false and frivolous".
Last year Mercy International again entered the limelight. It was alleged during this year's trial of the 1998 bombers of the Nairobi and Dar es Salaam US embassies that several of the bombers had used that charity as cover. No evidence emerged to implicate the charity in any wrongdoing.
But claims that the charities have had links to Osama bin Laden clearly need detailed investigation - not least because the public needs to be reassured.
The foundation's lawyers in London, Peter Carter-Ruck, said last night: "It is totally untrue that the Muwafaq fund supports Osama bin Laden. Our clients strongly condemn the atrocity committed in New York and consider that such acts are totally immoral." They said their clients did not collect money from the public.
