Senators warn White House they will seek sanctions against Saudis

Friday, August 1, 2003

Congressional sources said several prominent senators have determined that despite U.S. appeals Riyad has failed to stop the funding of groups deemed by the State Department as terrorists. The sources said the senators have warned the Bush administration that they will press for sanctions on the kingdom over the next year unless Riyad halts the flow of money to these groups.

The United States was said to have threatened Saudi Arabia with sanctions as early as 1999. The congressional sources said an increasing number of senators are dismayed that the Bush administration, despite the U.S.-led war on terrorism, failed to fulfill that threat in wake of the investigation that demonstrated Saudi complicity in the Al Qaida suicide attacks on New York and Washington in September 2001.

Saudi Arabia has reduced financing to Al Qaida in wake of the May 12 suicide strikes by the organization in Riyad that killed 35 people, the sources said. But they said the administration and the U.S. intelligence community have acknowledged that Riyad might have increased its financial support of Hamas and other Islamic insurgency groups.

The sources said the most important backers of Saudi financing to Al Qaida, Hamas and aligned groups are Saudi Interior Minister Prince Nayef Bin Abdul Aziz and Riyad Governor Prince Salman Bin Abdul Aziz. Both men were said to have been instrumental in establishing Al Qaida and sending thousands of Saudis to support the Taliban regime in Afghanistan in the 1990s.

Sen. Charles Schumer, a New York Democrat, has demanded Nayef's resignation from the Saudi Cabinet. In a letter to Saudi ambassador to Washington, Prince Bandar Bin Sultan, Schumer said Nayef has a "well-documented history of suborning terrorist financing and ignoring the evidence when it comes to investigating terrorist attacks on Americans."

The threat of congressional sanctions on Saudi Arabia was raised during a hearing of the Senate Governmental Affairs Committee on Thursday. Sen. Arlen Specter, a Pennsylvania Republican, proposed the imposition of criminal sanctions on Saudi Arabia. He did not elaborate.

The hearing contained some of the harshest criticism on the Saudis voiced either in Congress or by administration officials. An administration official acknowledged that the White House and State Department have blocked efforts to penalize Riyad for its alleged support of Al Qaida while senators accused President George Bush of protecting the Saudis.

"There is considerable concern here in the Congress about Saudi Arabia being shielded for foreign policy purposes," Specter said.

The senators asked the Treasury Department for a list of Saudi organizations and individuals investigated on suspicion of transferring money to groups deemed as terrorist. Several senators accused the administration of blocking Treasury efforts to impose economic or criminal sanctions on Saudi organizations.

R. Richard Newcomb, director of Treasury's Office of Foreign Assets Control, acknowledged that the administration rejected his agency's recommendation that Saudi entities be sanctioned. The refusal came from an interagency national security committee that included officials from the State Department and Justice Department.

"I can't say whether it's because they were Saudi organizations," Newcomb said. "The extent to which that [Saudi financing to terror groups] takes place is not completely clear, but I would characterize it as considerable."

The senators asked Newcomb whether the administration protected such Saudi state-sponsored groups as the World Assembly of Muslim Youth and the International Islamic Relief Organization. Newcomb said Treasury has been examining both organizations, but would not elaborate.

The administration again pledged to press the Saudi government to crack down on financing to Islamic insurgency groups. John Pistole, deputy assistant director of the FBI's Counter-Terrorism Division, said he will meet Saudi security officials in Jedda next week and urge that the kingdom increase cooperation in the effort to halt terror financing.

Pistole said Saudi Arabia has significantly improved security cooperation with the United States in the aftermath of the May 12 suicide bombings in Riyad. The FBI official said that for the first time Saudi authorities allowed the FBI to interview Saudi nationals.

"I think the royal family in particular feels vulnerable," Pistole said. "I think they see themselves as in a struggle for survival at this point."

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