The hunt for Saddam Hussein’s money could provide some clues to one of the claims made by the Bush administration to justify its war in Iraq — the possible link between the former Iraqi regime and the Al Qaeda terrorist group.
Two entities, a shadowy banking network linked by the administration to Al Qaeda and a Saudi oil company close to the Taliban regime, were involved in buying oil from Saddam Hussein under the United Nations’ oil-for-food program, the Forward has learned.
The now-defunct program allowed Iraq to buy food and medicine with its oil proceeds under U.N. supervision. Although the oil sales in question were legal and approved by the U.N., several observers say the system involved kickbacks and was used by Saddam to buy political support and to finance intelligence activities and even terrorist groups.
“It seems very plausible that some of the oil money went to terrorism financing,” a terrorism-financing expert closely monitoring Iraq said on condition of anonymity. “I believe this actually happened.”
Among Iraq’s oil customers since 1997 is a Liechtenstein-based company called Galp International Trading Establishment, a subsidiary of Portugal’s main oil company, according to a list of oil purchasers obtained by the Forward. The U.N. has not published the list.
The company chose as its legal representative in Liechtenstein — a tax haven known for hosting thousands of shell companies — a company called Asat Trust, according to Liechtenstein business records.
Asat Trust was designated by the United States and the U.N. as a financier of Al Qaeda through its links to Al Taqwa, a cluster of financial entities spanning the globe from the Bahamas to Italy and controlled by members of the Muslim Brotherhood.
The operation raises the possibility that Iraq quietly funneled money to Al Qaeda by deliberately choosing an oil company working with one of the terrorist group’s alleged financial backers.
Another oil company that contracted with Iraq, Delta Services, is a now-defunct, Geneva-based subsidiary of Delta Oil, a Saudi company that enjoyed a close relationship with the Taliban in Afghanistan at the time when they were harboring bin Laden.
Delta Oil was a major actor in a major pipeline project to bring gas from Central Asia to Pakistan through Afghanistan in the mid-1990s alongside the American oil company Unocal and another Saudi oil company controlled by a controversial Saudi millionaire.
Delta Services landed Iraqi oil export contracts in 2000 and 2001, according to U.N. sources and a trade journal.
John Fawcett and Christine Negroni, two investigators working for the New York law firm Kreindler & Kreindler, believe Delta Services won contracts to export 13 million barrels, meaning some $7 million were paid in kickbacks, or 70 cents per barrel.
The law firm has already filed a massive lawsuit against Al Qaeda, Iraq, Saudi officials and an array of Islamic banks, charities and groups on behalf of a group of 9-11 family victims. It is now looking into the Iraqi oil deals to see if they can add defendants to the lawsuit.
Galp Energia, the Portuguese national oil company controlling Galp International, did not answer a series of questions sent via e-mail.
On November 7, 2001, President Bush said that the Al Taqwa network was raising, managing and distributing money for Al Qaeda under the guise of a legitimate banking business activity. The administration froze the assets of several companies linked to the bank, including Asat Trust.
Swiss and Italian police raided the homes and offices of the top Al Taqwa officials the same day, as well as those of Erwin Wachter, the head of Asat Trust.
His son Martin Wachter confirmed that Galp International was one of the companies represented by Asat Trust and that Galp was dealing with Iraq under the oil-for-food program.
However, he told the Forward that Asat was only working as a representative of offshore companies and was not involved in their business operations.
He stressed that Asat had been wrongfully targeted by the U.S. government because it once represented the Islamic bank Al Taqwa in a small real estate deal in Switzerland.
“The Americans, the local police and our financial intelligence unit did not find anything,” Wachter told the Forward.
The U.S. Treasury Department did not return a call seeking comment. The Bush administration has repeatedly stressed, when questioned about the scope of its anti-terrorist financial sanctions, that it was acting carefully.
According to Liechtenstein business records, Galp International was created right after the imposition of sanctions against Iraq in December 1990. The company’s Portuguese administrators and formal ownership changed several times over the years.
In April 2002, six months after the Bush administration move against Asat, Galp changed its legal representative, choosing instead Sercor Treuhand Anstalt, a company controlled by Martin Wachter.
Wachter said Galp was forced to do so because Asat’s accounts were blocked.
The two principals of Al Taqwa, Youssef Nada and Ali Ghalib Himmat, are members of the Egyptian Muslim Brotherhood who acquired Italian nationality and live in a small Italian enclave close to the Swiss town of Lugano. Also sitting on the Al Taqwa board was Ahmed Huber, a Swiss convert to Islam who has expressed pro-Nazi views.
Another character close to them is Ahmad Idriss Nasreddin, a wealthy Kuwaiti of Ethiopian origin who was honorary consul of Kuwait in Milan and controlled several companies.
The assets of all four and of several companies they control were frozen in late 2001 and 2002 by the United States and the U.N.
Two Lugano attorneys, Pier Felice Barchi and Francesco Brusconi, who represented Nada until a year ago and still represent Nasreddin for other businesses, told the Forward that they never found any suspicious activities in Al Taqwa or the Nasreddin-related companies. John Rossi, a Lugano lawyer for Ali Ghilab Himmat, said his client rejects the allegations.
Huber has repeatedly stated that al Taqwa was merely funneling money from rich people in the Gulf region to infrastructure projects in third-world Muslim countries.
But this is not the assessment of American and Italian officials.
Last year, Juan Zarate, a senior U.S. Treasury official, told Congress that Hamas had transferred $60 million into Al Taqwa accounts in 1997 and that intelligence agencies have evidence that in late September 2001 — after the attacks on American soil — Al Qaeda received financial assistance from Nada.
Back in 1996, the Italian anti-terrorist agency DIGOS (Division of General Intelligence and Special Operations) claimed that Al Taqwa and the Nasreddin companies were backers of Islamic groups such as Hamas, the Algerian Armed Islamic Group and the Egyptian Gamaa Islamiya, the group that eventually “merged” with Al Qaeda in 1998, according to two reports obtained by the Forward. They did so through suspicious business activities and a maze of Islamic charities and centers, the reports said.
At the time, the Italians complained that many of their suspicions could not be verified because of the impossibility of checking the banking accounts of the companies and individuals. Switzerland has indeed continuously said there was no evidence against Al Taqwa and only opened an investigation after the American designation of the group. However, the investigation is still in a preliminary stage.
The Bahamas branch of Al Taqwa was shut down in April 2001, reportedly under American pressure. The Swiss-based Nada Management, the successor of Al Taqwa, closed shop at the end of 2002.
Saddam Hussein is known for setting up shell companies in tax havens to channel resources since the 1980s, according to Fawcett, the Kreindler investigator. Whether he used the same trustees and lawyers used by alleged terrorist-related entities remains to be seen.
Interestingly, Ahmed Huber was quoted last year in the Swiss weekly L’Hebdo as saying that Nada enjoyed friendly relationships with numerous Muslim leaders, including Saddam Hussein.
Another unlikely partner of Iraq is the Saudi company Delta Oil, which is run by Badr bin Mohammed al-Aiban, an oil businessman close to the Saudi royal family, one of Saddam’s nemeses.
The pipeline project that Delta promoted with Unocal and another Saudi company, Nimir Petroleum, eventually collapsed in 1998 after the bombings of two U.S. embassies in Africa prompted American military strikes in Afghanistan.
Nimir is controlled by a prominent Saudi millionaire who has been accused in two lawsuits filed by 9-11 families and several reports of backing Osama bin Laden. The millionaire, Khalid bin Mahfouz, has consistently denied the charges.
Delta Oil could not be reached for comment.
A Swiss court liquidated its Delta Services subsidiary in 2001, Swiss business records show. A clerk for the court in Geneva told the Forward that he could not release information on the case over the phone.