U.S. targets assets of suspected Hamas financiers

December 4, 2001 / CNN

Officials warn financial strike may be just the beginning

WASHINGTON (CNN) –The Bush administration Tuesday froze the U.S. assets of a Texas-based Islamic foundation that calls itself a charity, saying the organization acts as a front to finance the militant wing of the Palestinian group Hamas.

The administration also targeted two banks based in the Middle East, accusing them of ties to Hamas.

The move marks the broadening of the U.S. financial war on terrorism in the wake of the September 11 attacks.

It is the first time that the U.S. crackdown has included organizations believed to finance terrorist groups other than al Qaeda, the terrorist network headed by Osama bin Laden believed responsible for the attacks on New York and Washington.

Hamas claimed responsibility for this weekend’s suicide bombings that killed 25 Israelis, but Bush administration officials said they were working on Tuesday’s action before those attacks.

At a White House announcement, President Bush said the Treasury Department acted at midnight Monday to freeze the assets and accounts of the Holy Land Foundation for Relief and Development, based in Richardson, Texas.

Top Treasury Department officials warned the financial strike may just be the beginning and that other groups suspected of financing Hamas militants may find their assets frozen.

On Tuesday morning, FBI and Treasury agents, along with local law officers, raided the foundation’s Texas headquarters, seizing assets and records and executing what an FBI agent described as a “blocking order.”

Agents also raided foundation offices in San Diego, California, Paterson, New Jersey, and Bridgeview, Illinois.

“The message is this: Those who do business with terror will do no business with the United States, or anywhere else the United States can reach,” said Bush, calling Hamas “one of the deadliest terror organizations in the world today.”

In a document posted on the front door of its Texas office, the Holy Land Foundation disputed the government’s allegation linking it to terrorism.

Bush said the foundation, which is registered with the Internal Revenue Service as a charity, raised $13 million in the United States last year.

“The money raised by the Holy Land Foundation is used by Hamas to support schools and indoctrinate children to grow up into suicide bombers,” Bush said.

“The money raised by the Holy Land Foundation is also used by Hamas to recruit suicide bombers and support their families.”

Foundation: ‘A smear campaign’

The foundation is the largest Muslim charity in the United States. The organization’s statement said it was a humanitarian organization that has worked to serve the needy since 1989.

“We feel the Holy Land Foundation has been unfairly targeted in the nationwide smear campaign to undermine Muslims and the institutions that serve them,” the statement read.

The foundation may file suit in federal court to have its assets “unfrozen.” The organization is represented by the high-profile national law firm of Akin, Gump, Strauss, Hauer & Feld.

In a mission statement posted on its Web site, the foundation said it works to find “solutions for human suffering through humanitarian programs that impact the lives of the disadvantaged, disinherited and displaced peoples suffering from man-made and natural disasters.”

The statement said the foundation’s focuses on “Palestinian refugees in Jordan, Lebanon and Palestine.”

Treasury officials conceded that a “substantial amount” of the money raised does go to worthy causes, but insisted that Holy Land’s primary purpose has been to subsidize Hamas.

They said the organization solicited funds from unsuspecting donors to finance its activities.

“This is not a case of one bad actor stealing from the petty cash drawer and giving those stolen monies to terrorists. This organization exists to raise money in the United States to promote terror,” said Treasury Secretary Paul O’Neill, who attended the White House announcement along with Attorney General John Ashcroft.

Officials said the investigation into the foundation’s activities began “long before” Bush became president, that the government had “substantial and credible evidence” and that the foundation has been financing terrorism but proof could not be presented publicly without “compromising confidential sources and methods.”

Holy Land Foundation’s Chief Executive Officer Shukri Abu Baker said the government’s action “is not based on any legal grounds. This is a political decision.”

Baker also said the agents operated under a presidential order because they did not have enough evidence to go to court, even after investigating the organization since the mid-1990s.

The two other targeted organizations, which are not believed to have any assets in the United States, are the Al Aqsa Bank in the West Bank and Beit El-Mal Holdings Co., based in the West Bank and Jordan.

Administration officials said the United States was encouraging other nations to freeze whatever assets they might have for those two groups and said the two could not do business in the United States.

“They are direct arms of Hamas, established and used to do Hamas business,” O’Neill said.

In addition, Ashcroft said the government previously had frozen assets of an Internet company believed to share office space and employees with the Holy Land Foundation.

The company, Infocom, had its assets seized and frozen six days before the September 11 terrorist attacks, Ashcroft said. Infocom also is based in Richardson, Texas.

Both groups, Ashcroft said, had an “early sponsor” in Mousa Abu Marzook, a top Hamas official deported by the United States in 1997.

Hamas assets frozen since 1995

Ashcroft said Hamas is intent on destroying the Middle East peace process.

“By freezing the financial apparatus of Hamas, we signal that the United States of America will not be used as a staging ground for the financing of those groups that violently oppose peace as a solution to the Israel-Palestinian conflict,” Ashcroft said.

“We won’t tolerate it any more than we will tolerate the financing of groups that on September 11 attacked our homeland.”

Assets of Hamas have been frozen in the United States since 1995 when the group was listed as a foreign terrorist organization.

But under a Bush executive order in October, the Treasury Department was given the authority to go after the financiers of terrorist groups beyond al Qaeda.

The last major announcement on this front came a month ago when the administration added 62 organizations and individuals to the list, saying most of them operated as part of two financial groups providing support to bin Laden and al Qaeda: the al Taqwa and al Barakaat networks.

Officials allege those organizations and their affiliates gave financial as well as communications and other support to al Qaeda.

So far, $61 million in assets belonging to al Qaeda or the Taliban — the Afghan regime that harbored al Qaeda and bin Laden — have been frozen worldwide, O’Neill said.

– CNN correspondents Tim O’Brien, John King, Kelly Wallace and Susan Candiotti contributed to this report.

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