Author: Claudia Rosett and George Russell
Published:
Fox News September
17, 2004
LUGANO, Switzerland — Did Saddam Hussein use any of his
ill-gotten billions filched from the United Nations Oil-for-Food
program to help fund Al Qaeda?
Investigations have shown that the former Iraqi dictator grafted
and smuggled more than $10 billion from the program that for seven
years prior to Saddam's overthrow was meant to bring humanitarian
aid to ordinary Iraqis. And the Sept. 11 Commission has shown
a tracery of contacts between Saddam and Al Qaeda that continued
after billions of Oil-for-Food dollars began pouring into Saddam's
coffers and Usama bin Laden declared his infamous war on the U.S.
Now, buried in some of the United Nation's own confidential documents,
clues can be seen that underscore the possibility of just such
a Saddam-Al Qaeda link — clues leading to a locked door in
this Swiss lakeside resort. (To review a series of documents,
audits and other stories related to Oil-for-Food, click
here.)
Next to that door, a festive sign spells out in gold letters
under a green flag that this is the office of MIGA, the Malaysian
Swiss Gulf and African Chamber. Registered here 20 years ago as
a society to promote business between the Gulf States and Asia,
Europe and Africa, MIGA is a company that the United Nations and
the U.S. government says has served as a hub of Al Qaeda finance:
A terrorist chamber of commerce.
In a recent interview, U.S. Assistant Treasury Secretary Juan
Zarate described MIGA as "a very good example of an investment
company that is used as a shell to hide and move money."
As is typical of terrorist financial webs, the details surrounding
MIGA quickly become bewildering — part of the point being
to camouflage the illicit flow of funds with legitimate business.
Part of the problem in finding the truth is that cross-border
transactions out of such financial havens as Switzerland are smothered
in banking secrecy.
But even with that secrecy — and shortly after the Sept.11,
2001, attacks on the United States — both MIGA and its chief
founder and longtime president, Ahmed Idris Nasreddin, landed
on the U.N. watchlist of entities and individuals belonging to,
or affiliated with Al Qaeda.
Nasreddin is a member of the terror-linked Muslim Brotherhood.
Nasreddin's longtime business partner, Egyptian-born Youssef
Nada, also of the Muslim Brotherhood, likewise appears on the
U.N.'s Al Qaeda watchlist, as do a slew of both Nasreddin's and
Nada's enterprises. Former Treasury Secretary Paul O'Neill in
August 2002 described Nada and Nasreddin as "supporters of
terrorism" involved in "an extensive financial network
providing support to Al Qaeda and other terrorist-related organizations."
Far less attention has been paid to the small, select band of
MIGA's other charter members. But one of them, Iraqi-born Ahmed
Totonji, set up shop years ago just outside Washington, D.C.,
and is now among those named by U.S. federal authorities in an
investigation into a cluster of companies and Islamic non-profits
based in Herndon, Virginia, suspected of having funneled money
to terrorist groups.
MIGA had other founders as well. One of them, who does not appear
on the U.N. terror list, is an Arab businessman now in his early
60s, Abdul Rahman Hayel Saeed.
Described by an acquaintance as urbane, polite and fluent in
English, Hayel Saeed was born into one of Yemen's most prominent
business clans, owners of a family-held global conglomerate based
in the Yemeni capital of Taiz and named for its founding patriarch:
the Hayel Saeed Anam Group of Companies, or HSA.
From Yemen, the HSA group boasts a far-flung business empire,
including a Yemen-based Islamic bank, and a host of business subsidiaries,
affiliates and regional trading offices in places ranging from
the United Kingdom to Egypt, Morocco, Nigeria, Ethiopia, Malaysia,
Indonesia, Russia and China.
Abdul Rahman Hayel Saeed sits on the HSA board of directors,
and ranks high in the management — he is currently running
HSA's regional office in Jeddah, Saudi Arabia. In MIGA, Hayel
Saeed holds a prominent spot, as one of four co-founders who back
in 1984 delegated power of attorney to the terrorist-linked Nasreddin,
giving him authority to run the company.
Swiss registry documents show that Hayel Saeed has never resigned
from MIGA, nor revoked that power of attorney. Queried about this
link to MIGA, neither Hayel Saeed nor the HSA Group's chairman
of the board, Ali Mohamed Saeed, has made any response.
HSA is unquestionably a company involved in legitimate business.
But given the involvement of Abdul Rahman Hayel Saeed, it is striking
that between 1996 and 2003, while the United Nations ran its Oil-for-Food
relief program in Iraq, the HSA Group — via U.N.-approved
Oil-for-Food contracts — sold at least $400 million worth
of goods to Saddam.
That might be unremarkable, had the United Nations ran Oil-for-Food
with enough integrity and transparency to prevent Saddam and many
of his business partners from plundering oil earnings meant to
help the people of Iraq. The original United Nations plan was
to let Saddam sell oil solely to buy humanitarian goods such as
food and medicine, with the U.N. Secretariat collecting a 2.2
percent commission on Saddam's oil sales to supervise the integrity
of this process.
As the Oil-for-Food program actually worked, however, the United
Nations let Saddam choose his own business partners. The world
body also kept secret the details of those contracts and the identities
of the contractors, and it let Saddam graft at least $4.4 billion
out of the program through manipulated contract prices, by estimates
of the U.S. General Accountability Office.
Saddam's standard scam was to underprice oil sales and overpay
for relief supplies, thus generating fat profits for his business
partners. Many of those contractors would kick back part of the
take to Saddam's regime — or divert it to whatever uses Saddam
might fancy. By various accounts, those uses ranged from building
palaces to buying arms to supplying Saddam's sadistic son Uday
with equipment for torturing Iraqi athletes.
One of the big questions is whether any of the money skimmed
from Oil-for-Food also slopped into terrorist-financing ventures
such as MIGA.
It's important to note that in tracking terrorist financing,
the simplest starting points are the visible links, the potential
connections through which money might most easily have flowed.
Proving that funds actually coursed through those conduits is
far more difficult.
In the case of Hayel Saeed, MIGA and the HSA Group, there is
no public information available about the precise flow of funds,
and no proof that Saddam's money made its way to MIGA. But in
looking for patterns that beg for further investigation —
especially by authorities with access to detailed U.N. records
and information on MIGA accounts — some items here stand
out.
Most simply, there is the question of why HSA was among those
companies favored by Saddam for such a fat slice of business.
It is increasingly clear that Saddam did not, on average, choose
his contractors either at random, or because they were the most
cost-efficient suppliers of relief for the people of Iraq. While
some of the deals may have been entirely legitimate, many melded
payments for humanitarian goods with illicit kickbacks and payoffs.
In such cases, it was a lucrative privilege to be tapped as an
Oil-for-Food contractor by Saddam's regime.
The lingering question, for any individual case, becomes: Was
there a quid pro quo?
For reasons still unknown, Saddam clearly smiled upon the HSA
Group. Not only does HSA account for the bulk of all Saddam's
business with Yemen, but dozens of deals that appear in the United
Nation's generic public records to originate elsewhere were in
fact signed with HSA companies in countries such as Egypt, Malaysia
and Indonesia.
Within that HSA empire, one company in particular stands out:
A trading house called Pacific Interlink, based in Kuala Lumpur,
Malaysia. Abdul Rahman Hayel Saeed also sits on Pacific Interlink's
board of directors.
From leaked copies of secret U.N. Oil-for-Food records, it appears
that Pacific Interlink alone accounted for more than half the
HSA group's sales of relief supplies to Saddam, with contracts
for such goods as soap, ghee and construction materials totaling
at least $246 million. Pacific Interlink also belonged to the
select set of companies chosen by Saddam and approved by the United
Nations as authorized to buy Iraqi oil under Oil-for-Food —
though whether Pacific Interlink actually got any of Saddam's
fat oil contracts is something the United Nations has so far managed
to keep secret. FOX News attempted to reach Pacific Interlink
for comment, but to date has received no reply.
And though there is no public proof that Pacific Interlink took
part in Saddam's kickback scams, there is an intriguing item in
a study of Oil-for-Food pricing methods released last year by
the U.S. Defense Contract Management Agency (DCMA).
Just after Saddam fell, the DCMA, together with the U.S. Defense
Contract Audit Agency, looked at the terms of 759 sample contracts
out of the tens of thousands of deals done by Saddam's regime
under Oil-for-Food. In that sample, Pacific Interlink pops up
as a purveyor of $20 million worth of palm oil to Saddam, via
a contract approved by the United Nations under Oil-for-Food in
mid-2001. By DCMA estimates, Saddam overpaid Pacific Interlink
on that contract, to the tune of about 15 percent above market
price, which would work out to some $3 million in funds diverted
from relief on that deal alone.
If similar arrangements went on within other Pacific Interlink
Oil-for-Food contracts, which totaled close to a quarter of a
billion dollars, then even at the more modest rate of what has
been widely described as Saddam's typical 10 percent over-pricing
scam, that would suggest well over $20 million diverted from relief.
If so, where did it go? The question is vitally important, because
much of the money grafted out of Oil-for-Food by Saddam remains
unaccounted for.
Both HSA's and MIGA's offices overlap in locations that are hubs
of normal commerce, but also served as hotspots of Al Qaeda meetings
and finance, such as Dubai (where Hayel Saeed reportedly ran an
HSA company, Frimex, in the late 1990s) or Kuala Lumpur (where
some of the Sept. 11 hijackers gathered for a planning conference
in January 2000). Pacific Interlink boasts offices or agents in
places thick with terror networks, such as Algeria, Sudan, and
Syria. MIGA, on its Lugano sign, lists offices in places such
as Italy, Turkey, Syria, Nigeria and Kuwait, and both HSA and
MIGA list offices in Morocco, Malaysia and Jeddah, Saudi Arabia,
where Hayel Saeed is now based.
MIGA is now under active investigation by the U.S. Treasury and
prosecutors in Switzerland and Italy. But there is no sign that
any of these investigations have been tracking funds specifically
via Oil-for-Food contracts or that any of the multiple investigations
into Oil-for-Food have zeroed in on possible terror connections.
It's not even clear that the United Nations has allowed terrorist-tracking
authorities full access to its records.
And though MIGA's door in Lugano may be locked, and its president
and some of his associates posted on the U.N. terror watchlist,
none of these figures has been arrested. Nasreddin, long a resident
in Lugano and neighboring Milan, Italy, is believed by Italian
investigators to have moved about two years ago to Morocco. From
there, says an Italian state investigator who asked to stay anonymous,
Nasreddin maintains a global business network that includes some
2,000 links so far identified to businesses and individuals worldwide,
some tied to terror, and some not.
It is precisely that mix of legitimate and sinister business
that makes it so difficult to prosecute Nasreddin, or shut down
his businesses, says this Italian investigator. Among Nasreddin's
holdings, for instance, is a four-star hotel in Milan, Hotel NASCO,
which opened — ironically enough — in September 2001,
at the same address as Nasreddin's longtime residence. That is
also the same address used by a precursor of MIGA, an outfit called
the Arab Gulf Chamber. Hotel NASCO remains open for business,
serving tea and crescent-moon shaped sugar cookies at its non-alcoholic
lobby bar. MIGA remains active in the Lugano business registry,
and listed in the Lugano phone book.
A recent phone call to MIGA's shuttered office in Lugano, Switzerland,
was answered by someone who picked up the phone in Milan, Italy
— in the Hotel NASCO. MIGA's network, it seems, migrates
as needed.
Nasreddin's longtime partner, Al Qaeda-linked Youssef Nada, still
lives in his plush hillside villa in a small Italian enclave on
Lake Lugano, just a short drive from MIGA's office. Right next
door to MIGA's Lugano office, on the same floor of the same building,
is the Islamic Center of the Canton of Ticino, founded by Nasreddin
in 1992 - and operated initially out of his former Lugano residence
a few blocks away. The Islamic Center later moved next door to
MIGA.
Swiss registry documents show that in 2003, after Nasreddin made
it onto the U.N. terror watchlist and moved to Morocco, he resigned
as president of his Lugano Islamic center. He was replaced this
year by the center's current president, a man called Ali Ghaleb
Himmat, who attended one of MIGA's founding meetings 20 years
ago, and since 2002 has been designated by the United Nations
as affiliated with, or belonging to Al Qaeda.
At that Lugano Islamic Center, which also serves as a mosque,
a spokesman denies that the center has any links to Al Qaeda,
and says of Nasreddin: "He was a Muslim rich man, and he
prays, and he loved God, and that's it." Just down the road,
Swiss businessman Fulvio Passardi, who at one point served as
corporate secretary for MIGA, says he knew nothing about the chamber,
saying it was "an empty box."
According to U.S. officials and the United Nations itself, MIGA
is less an "empty box" than a container of Al Qaeda-related
mysteries. One of those mysteries appears to be Abdul Rahman Hayel
Saeed, with his charter MIGA membership and his prominent part
in a Yemen conglomerate doing hundreds of millions worth of business
with Saddam.
Unraveling the mystery requires much greater access to Oil-for-Food
records than the United Nations currently allows.
Claudia Rosett is a consultant to FOX News and Journalist-in-Residence
at the Foundation for the Defense of Democracies.
George Russell is a consultant for FOX News.
