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Head of Charity Indicted for Terror Links

Aired October 9, 2002 - 13:58   ET


KYRA PHILLIPS, CNN ANCHOR: We're waiting for Attorney General John Ashcroft to reveal new information about an indictment involving a Muslim charity. It allegedly provided financial assistance to al Qaeda. We're going to bring this to you live as soon as it happens.
Our Jeff Flock is on the scene, also following the latest news -- Jeff, can you hear me OK?

JEFF FLOCK, CNN CORRESPONDENT: Indeed, Kyra. We've been watching this for a long time. It is Benevolence International Foundation, it was headed by a man named Enaam Arnaout, 40 years old. He will be indicted today in connection with what the government calls a ten-year conspiracy to take, essentially, charitable contributions from Muslims, non-Muslims, as well as corporations from around the world and funnel them to al Qaeda.

Mr. Arnaout is from the Chicago suburbs. As I said, he heads Benevolence International Foundation, it is one of those charities that had their assets frozen, their files seized. The government has been working since April, translating a lot of those files, looking at computer hard drives, translating that information, and they have pieced together -- I am just now reading all of the details of what they alleged, but it is, as we said, a 10-year conspiracy to funnel these charitable contributions on to al Qaeda in places around the world.

So it is a fairly complex scheme, it is a multi-count indictment. This should be interesting when the secretary comes out and reveals what the government thinks it has found out -- Kyra.

PHILLIPS: And Jeff, I'm told Mr. Arnaout did admit to knowing Osama bin Laden.

FLOCK: Yes, the government has found on computer hard drives some of the pictures that you are now seeing, pictures that show him, allegedly, at camps where bin Laden frequented. There are some photographs -- I don't know if we have them -- there is one there -- that shows him with -- using heavy artillery.

I think there is another photograph with a rocket launcher. The government released these photographs. They had some difficulty keeping Mr. Arnaout in custody. They charged him initially with perjury, and the judge, last month, threw those charges out, largely on procedural grounds.

So the government hurriedly went back and refiled this document that I've got here, which is essentially a refiling of the perjury charges, although it wound up being an obstruction of justice charge. But with what the government presented up to this point, they didn't have a lot to hold him.

It was similar to the Buffalo case, in which the government -- you know, the judge was really considering whether or not those defendants needed to be held without bond, and Mr. Arnaout has been held. The government was able to make a successful argument to keep him in custody.

But it was widely believed that the government investigating, and hoping to come up with more serious charges. It appears today that they have -- Kyra.

PHILLIPS: And so, we're talking about Enaam Arnaout, the executive director of this organization. Jeff, I'm sort of reading this along with you, and I am seeing that prosecutors also say that most of the people who donated to BIF were unaware of this group's activities.

FLOCK: Well, indeed. This is a group that did -- we, at one point, took a look at their balance sheet, and we're talking thousands upon hundreds of thousands of dollars, and this group had a lot of support in the Muslim community. People were outraged. There have been protests here in Chicago demonstrating for Mr. Arnaout's release, belief that this organization did a lot of positive, charitable work.

And in fact, I think it is entirely possible that it did, independent of what the government is alleging, did a lot of positive charity work around the world.

The government is alleging that in addition to that, however, that money was funneled other places. They're saying al Qaeda, as well as other violent organizations, and it's not clear from what I'm initially reading what other organizations they refer to. But it is certainly possible that a lot of people that donated to this organization had no idea where the money ultimately wound up.

PHILLIPS: All right. We're going to continue to wait for Attorney General John Ashcroft to step up to the mic. Actually, I am being told that it looks like they're getting ready to go.

We were talking about the links of this organization, Jeff. It seems like there's a lot of discussion about Chechnya. I guess prosecutors presented documents that allegedly detailed how BIF channeled these hundreds of thousands of dollars to Chechnya during four months in 2000. I mean, it is amazing just the details that they have collected here.

FLOCK: This is one of the treasure troves of information. They were apparently able to seize computer hard drives from offices around the world that had information, specifically in Chechnya, as well as elsewhere, that had this information, a lot of detailed information that they were able to pull off those hard drives, and apparently, that is how they pieced this together. As we said, it's been a long time in coming. It's been April since they initially seized some of this here in Chicago -- here we see the secretary -- or attorney general, and this is the U.S. attorney from Chicago here as well.

JOHN ASHCROFT, ATTORNEY GENERAL: Thank you, Pat. It's always good to be back in Chicago. I was born in Chicago, went to law school in Chicago, met my wife in Chicago and have a lot of good friends in Chicago.

I just spent the last few days in Minneapolis at the International Association of Police Chiefs with Superintendent Terry Hillard (ph), so it's good to be back in Chicago.

This afternoon, in the United States District Court for the Northern District of Illinois, a grand jury indicted the director of the Illinois-based Benevolence International Foundation. Enaam Arnaout is charged with conspiracy to obtain, fraudulently, charitable donations in order to provide financial assistance to Al Qaida and other organizations engaged in violence and terrorism.

The grand jury charges Arnaout with operating Benevolence International Foundation as a racketeering enterprise. Benevolence International Foundation or BIF is a tax-exempt, purportedly charitable organization with offices in Illinois, Pakistan, Bosnia- Herzegovina and in other locations.

The indictment charges that Arnaout operated BIF for more than a decade in order to use fraudulently the charitable contributions of Muslim Americans, of U.S. corporations and other donors to support terrorism and violence overseas.

The grand jury charges Arnaout with several counts: one count of conspiracy to engage in racketeering in a racketeering enterprise, one count of conspiracy to provide material support to terrorists, two counts of money laundering, two counts of mail fraud and one count of wire fraud.

If convicted of these crimes, Arnaout will face a maximum punishment of 90 years in prison without the possibility of parole.

Arnaout is accused of defrauding charitable contributors by falsely claiming that the Benevolence International Foundation used donated funds solely for humanitarian relief. In fact, funds were being used to support Al Qaida and other groups engaged in armed violence overseas.

In addition, in an effort to conceal donors who knowingly supported terrorism, Arnaout is charged with co-mingling charitable contributions intended for humanitarian purposes with the contributions intended for the support of armed violence. In order to deceive donors and to guarantee the success of his operation, Arnaout is charged with concealing at all times from the government, the general public and a considerable number of donors his relationships with Al Qaida, its leader, Osama bin Laden, and other terrorist organizations.

In fact, the indictment describes an archive of incriminating documents recovered in the Bosnian offices of BIF in March of 2002, documents that linked Arnaout directly to Osama bin Laden and Al Qaida.

Discovered in the possession of the Benevolence International Foundation were notes summarizing the 1988 meeting in Afghanistan at which the Al Qaida terrorists developed their network and in which it was originally formed.

Also discovered were notes specifying the text of the original oath of allegiance pledged by all Al Qaida members. Also discovered, personnel files of individual mujahedeen fighters trained in Afghanistan under bin Laden's direction.

Also a list of wealthy sponsors from Saudi Arabia, including references to Osama bin Laden and Adel Barji (ph), the founder of BIF.

Documents indication that in the mid- to late 1980s, Arnaout served as the director of communications at a mujahedeen camp in Afghanistan under the direction of bin Laden were also found.

Additional documents were found indicating that Arnaout was involved in acquiring and distributing hundreds of rockets, mortars and bombs on behalf of a camp in Afghanistan, dating to the time period when Al Qaida was founded there.

The documents recovered in the Benevolence International Foundation's Bosnia offices provide for the first time documentary proof of the founding of Al Qaida and the oath sworn by Al Qaida members.

The documents uncovered from the Benevolence International Foundation, headed by the man charged in the indictment today, show the American people and show the world for the first time tangible proof of the founding of the world's most dangerous terrorist network and the oath of allegiance its members pledge.

It is chilling that the origins of Al Qaida were discovered in a charity claiming to do good.

From the first hours following the September 11 attacks, the Department of Justice has pledged to use all of its means within the law to identify, to disrupt and to dismantle terrorist networks. A central element of our strategy is to identify, disrupt and destroy those organizations that supply the financing that makes terrorism possible.

There's no moral distinction between those who carry out terrorist attacks and those who knowingly finance terrorist attacks. And what is perhaps the most disturbing thing about this case is that Enaam Arnaout is charged with using a purportedly charitable organization to deceive Muslim American charitable givers who are obliged by the principles of their religion to donate to legitimate charities.

Please note a charge from the indictment. I believe it's on page 14 of the indictment. In November 2001, Arnaout spoke via telephone to a BIF employee in Bosnia and agreed with that employee that financial support for an injured fighter could not be reflected on BIF's financial records, and that the employee should create a new list of orphans as a means of justifying the expenditures.

Well, it is sinister to prey on good hearts to fund the works of evil.

The Department of Justice, under the leadership of the president, will use every means and leave no stone unturned in finding those who will knowingly fund violence and terrorist groups. We will sort through the evidence and separate legitimate donors from those who break the law.

So to those who give to legitimate charities, my message today is this: Know that the United States government supports charitable giving and will, as we are doing in this case, protect legitimate donors from fraud.

But to those who would exploit the generosity of others, break the law, to those who provide financing to terrorists and other groups engaged in violence, my message is this: We will find the sources of terrorists blood money, we will shut down those sources, and we will ensure that both terrorists and their financiers meet the same swift, certain justice of the United States of America. Many individuals are responsible for this indictment today, but none more so than the U.S. attorney for the Northern District of Illinois, Patrick Fitzgerald. I don't think there's anyone in the United States or perhaps the world that knows more about prosecuting terrorism than Pat Fitzgerald. He was the prosecutor in the embassy bombing cases in Dar es Salaam and Nairobi.

He was the prosecutor of the 1993 WTC effort. And it is clear to see why Pete Fitzgerald, the senator from the state of Illinois, was so enthusiastic about endorsing this candidacy or his nomination as the U.S. attorney for the Northern District of Illinois.

And it's an honor to work with him. He's been a leader in the Justice Department. He heads up the Attorney General's Advisory Council Committee on Terrorism. He knows this arena of violation and enforcement better than any other person in the country. I thank him for his service and his leadership, and it's an honor to stand with him.

Thank you very much, Pat.

I want to recognize and thank some others who are here. FBI special agent in charge Tom Caneir (ph) is with us today. The members of the FBI that have participated in this particular matter are to be congratulated on their excellent work. And I am grateful to them. I appreciate their hard work.

Also, the assistant special agent in charge for the IRS Criminal Investigative Division, Charlotte Bonners (ph) is here.

And Charlotte (ph), I thank you for your work.

Both Charlotte (ph) and Tom (ph) have distinguished themselves in their work on this case. And I thank them for their effort. PHILLIPS: Attorney General John Ashcroft there announcing -- or actually talking about the federal grand jury today returning a seven- count indictment. We're talking about the executive director of Benevolence International Foundation, a charitable organization based in suburban Chicago. He was indicted today on racketeering. His name is Enaam Arnaout, 40 years old, indicted -- racketeering and other charges for conspiracy to fraudulently obtain charitable donations, funneling that money to al Qaeda.

Our Jeff Flock also listening in to what the attorney general had to say -- plenty of tangible proof, actually, Jeff.

FLOCK: Well, they think they have got a lot, yes. Obviously, they seized a lot, as we pointed out from those computer hard drives and the files of the organization, when they moved in in April, around the world, not only here in suburban Chicago, but in the offices elsewhere around the world.

Apparently a treasure trove of evidence came to them. You know, it should have been a tipoff that Patrick Fitzgerald, the man you just saw there at the end of the press conference, the U.S. attorney for the Northern District of Illinois -- his background, of course, is in New York, in the U.S. Attorney's Office in New York, prosecuting the embassy bombing case.

This is a man who has a high profile in terms of prosecuting terrorism -- alleged terrorists.

He -- from the start, decided that he would prosecute this case himself, and that sort of raised a few red flags. Well, that is interesting that the U.S. attorney himself is going to prosecute this man, and of course, up until now, Mr. Arnaout has been only charged with perjury. So, some indication of how big a fish perhaps they thought he was.

Kyra, the other thing I want to bring up, as the attorney general was talking, I got hold of the Benevolence International Foundation financial statements for the last several years, just to give you some sort of perspective about the kind of money we're talking about -- I'm looking -- the fiscal year 2000, 2001, a total -- amount of money expended by the charity, looks Russia/Chechnya, 1.3 million. Bosnia, 400,000. Pakistan, 190,000. Tajikistan, 240,000. A total for the year, it appears, by my read, 2.7 million for the year 2000-2001.

Looking at the year 1999, 2000 looks like 1.7 million -- again, another 800,000 expended in Chechnya, and it looks like '98, '99 just short of a million, 915,000.

So, we're talking about some real money here, and of course, perhaps the most troubling thing to those listening, as well as, obviously, the attorney general, is that this money, apparently, came from otherwise -- donors that otherwise believed they were contributing to a charitable organization, having money go for good. So, interesting.

We'll have to see all the rest of the details of this, Kyra, how that all flushes out.

PHILLIPS: Yes, and we'll be following it. Jeff Flock, thanks so much.


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