Suit labels Al-Arian terrorist fundraiser

A former federal lawyer accuses the USF professor of using charities to finance Mideast terrorists.

By GRAHAM BRINK, Times Staff Writer
© St. Petersburg Times published March 21, 2002

TAMPA -- In his 25-year career, John Loftus has hunted Nazis and ferreted out terrorist groups in America and abroad.

Now the former federal prosecutor and author has set his sights on a local target: controversial University of South Florida professor Sami Al-Arian.

Loftus filed a lawsuit Wednesday under the Florida Consumer Protection Act that claims Al-Arian used various state-regulated charities and other organizations to solicit and launder money he funneled to terrorist groups in Syria.

His organizations also helped transport communications gear to Osama bin Laden, the suit states.

Loftus said he wants the state to shut down any of those organizations that still exist and force Al-Arian to surrender assets until it is determined whether they were generated from illegal activity. He also wants the Florida Attorney General's Office to take over the case and seek punitive damages for violations of Florida law.

Loftus said he was making his accusations public in an attempt to pressure the government into taking action. At a news conference Wednesday morning, he said federal agents would raid several Saudi Arabian-funded organizations in Virginia with ties to Al-Arian.

The raids took place Wednesday afternoon. One of the organizations searched, the International Institute for Islamic Thought, helped finance Al-Arian's now defunct think tank at USF -- the World and Islam Studies Enterprise, or WISE.

"Sometimes the wheels of justice get stuck," Loftus said. "In this case, I thought they needed a little kick."

Al-Arian, who has been suspended from USF pending President Judy Genshaft's decision on whether to fire him, denied the allegations Wednesday. He called Loftus a "lunatic" who cannot get basic Middle Eastern history straight.

"The whole thing is preposterous," said Al-Arian, a computer engineering professor. "I have done nothing wrong. I've been subjected to exhaustive investigations, and nothing illegal has been found."

Al-Arian was the focus of a federal investigation in the mid 1990s, when agents suspected WISE was a front for Middle Eastern terrorists. The think tank was shut down, but Al-Arian was never charged with a crime.

His latest troubles began with an appearance on the Fox News show The O'Reilly Factor in September. He was grilled about his ties to Ramadan Abdulah Shallah, whom Al-Arian brought to USF in early 1990 and who later resurfaced as the head of Palestinian Islamic Jihad, a terrorist organization.

In a highly unusual move last month, federal prosecutors announced they were conducting an ongoing investigation into Al-Arian's "conduct and activities."

Several of the allegations in the lawsuit filed Wednesday are based on Loftus' connections to "well-placed" agents within U.S. intelligence agencies. He said he has seen much of the evidence himself, but he is relying on his sources for some of the more sensational allegations.

Loftus, 52, worked as a lawyer for the U.S. Department of Justice and investigated CIA cases and Nazi war criminals in the 1970s and 1980s. While with the Justice Department, Loftus held high-level security clearances, he said.

For the past 20 years, he has helped hundreds of intelligence agents obtain permission to declassify and publish intelligence information that they wanted the public to know. Loftus, an Irish Catholic, is president of the Florida Holocaust Museum in St. Petersburg.

According to the suit, Al-Arian used a registered nonprofit organization to solicit funds in the 1990s for the International Committee for Palestine, which was not registered with the state. Loftus said in the suit that the International Committee for Palestine was the "alter ego of the American branch of the international criminal organization Palestinian Islamic Jihad."

Loftus said about $100,000 a year was funneled through Al-Arian's Florida organizations, a small amount of the $1-billion in assets held by the Virginia operations raided Wednesday.

One of the more explosive pieces of evidence Loftus uses to back up his allegations is a tape from a wiretap placed in 1990 by an intelligence service for a foreign government in the Syrian headquarters of the Palestinian Islamic Jihad. According to the suit, the caller from Tampa can be heard screaming in Arabic at a senior leader of PIJ about rival terrorist group Hamas taking credit for PIJ-funded terrorist killings in Israel. The caller said Hamas' gloating would affect his ability to raise more funds for PIJ. Loftus, who has not heard the tape, said voice analysis by government agents proved that the Tampa caller was Al-Arian. 

Al-Arian described the allegation as "absolute nonsense" and said he had not made any phone call to Syria that could be interpreted that way. Al-Arian and his organizations worked in tandem with the groups in Herndon, Va., that were raided Wednesday, Loftus said. Those groups were run by Saudi Arabian interests, which are at the heart of Loftus' theory as to why Al-Arian hasn't been arrested.

Loftus said for several years federal officials have had enough evidence to arrest Al-Arian. Each time they came close, he said, the State Department called them off the case so as not to embarrass the Saudi government, one of America's top allies in the Middle East.

Loftus said that high-level Saudi officials, including King Fahd, knew about the illegal fundraising and money laundering and also knew that the money was going to terrorist groups that not only targeted and killed Jews, but also fellow Arabs who supported the peace process. If federal authorities arrested Al-Arian, all that would have become public, Loftus said.

"This isn't a police failure or a prosecution failure," he said. "This is a foreign policy failure." A spokesman for the U.S. Attorney's Office in Tampa had no comment on the suit.

-- Contact Graham Brink at (813) 226-3365 or brink@sptimes.com.

By MICHAEL FECHTER  
© Tampa Tribune  published March 21, 2002

Federal agents raided 15 homes and offices in northern Virginia and Georgia on Wednesday as part of an investigation into a controversial but now-defunct think tank that worked with the University of South Florida.

The think tank - the World and Islam Studies Enterprise, or WISE - was founded by USF Professor Sami Al-Arian. Al-Arian, the subject of a long-running federal investigation, has been suspended with pay from the school since September.

The raids were aimed at obtaining information about possible terrorist financing networks, a spokesman said.

The U.S. Customs Service said Wednesday's raids were part of Operation Green Quest, a multiagency task force designed to disrupt terrorist financing.

``Operation Green Quest is actively investigating all sources of suspected terrorist financing regardless of where these leads take us,'' a Customs spokesman said.

Al-Arian Sued

The raids came as a St. Petersburg man filed a lawsuit against Al-Arian in Hillsborough Circuit Court on Wednesday. John Loftus, president of the Florida Holocaust Museum in St. Petersburg, claims Al-Arian's charities were part of a vast Saudi Arabian money-laundering scheme that violated state consumer protection laws by funneling money to terrorists.

Investigations like the one into Al- Arian's activities, which was begun six years ago, sometimes fail to generate indictments because of foreign policy considerations, Loftus said. In this case, Loftus said, the United States hasn't wanted to embarrass Saudi Arabia.

Loftus claims to represent ``federal whistleblowers within the U.S. intelligence community.'' He also claims a high-level security clearance borne of his work at the U.S. Justice Department during the 1980s .

Loftus claims to have seen intelligence reports cited in his lawsuit that quote Al-Arian complaining to Islamic Jihad leaders about the aftermath of a Middle East terrorist attack.

The militant organization Hamas claimed credit for the attack, the lawsuit said. That angered Al-Arian, the lawsuit said, because he allegedly had raised the money to finance it.

``Hamas' taking credit for the killings in Israel was impairing his fund- raising efforts in America,'' the lawsuit said.

Al-Arian denies providing support for terrorism and mocked the suit as devoid of truth.

``Whoever wrote this is a lunatic who belongs in an asylum,'' Al-Arian told WFLA, News Channel 8.

Loftus also relies in the lawsuit on evidence made public by federal officials, including a videotape showing Al-Arian being introduced at a 1991 rally in Cleveland as the ICP president. The ICP ``is the active arm of the Islamic Jihad Movement in Palestine, and we like to call it the Islamic Committee for Palestine here for security reasons,'' the person introducing Al- Arian said. Al-Arian did not correct him or address the reference.

Fletcher Baldwin, a University of Florida money-laundering expert, questioned the suit's validity.

``I would be very surprised if any court in Hillsborough County would accept any case like this unless they go [behind closed doors] and find out [Loftus is] a deep source'' in intelligence, Baldwin said.

USF suspended Al-Arian after an uproar that included death threats aimed at him after he appeared on national television. USF trustees later recommended his dismissal.

Reporter Michael Fechter can be reached at (813) 259-7621. mfechter@tampatrib.com