Money Trouble

Enaam Arnaout is not an especially rich man. Yet every time the Syrian-born director of the Benevolence International Foundation, an Islamic charity, visited Bosnian offices over the past few years he would withdraw the same sum from a local bank: $50,000 in neat notes, 10 times in two years, or up to half a million bucks since 2000. Then the money would disappear. “We have no idea where it went,” Ivica Misic, head of Bosnia’s antiterrorism commission told TIME. He has his suspicions, though. In a case now before a U.S. court, FBI investigators are arguing that Arnaout used his Illinois-based charity and its worldwide offices to fund terrorism operations, including Osama bin Laden’s al-Qaeda. Benevolence is the first charity to be criminally linked to international terror.

It may not be the last. Back in Bosnia, where humanitarian aid is still a major pillar of the postwar economy, U.S. and local investigators are examining the finances of no fewer than eight Islamic charities they believe may be linked to terrorism. The U.S. Treasury has blocked the funds of both Benevolence and the local branch of Saudi Arabia’s Al-Haramain Islamic Foundation. The biggest source of concern: some two dozen suspected terrorists have been deported from Bosnia and other Balkan countries over the past 12 months; most worked for Islamic aid organizations. “They were preaching good, and even sometimes doing good, while plotting evil,” Lieut. General John Sylvester, commander of NATO peacekeeping forces in Bosnia, told an audience recently in the capital Sarajevo. The irony is that Islamic charities have also done a great deal of good funneling hundreds of millions of dollars in aid into the Bosnian economy since 1991, supporting everything from mosques to war orphans’ education. Already the probe has triggered angry rebuttals from Muslim ambassadors and aid groups who say investigators are casting too wide a net. Just last week the deputy director of Bosnia’s antiterrorism commission quit because he said his government was focusing too much on Muslims and not enough on known war criminals like Bosnian Serb leader Radovan Karadzic.

For General Sylvester — who is leading the antiterror task force — that is beside the point. He is clearly a man on a mission. He was in Bosnia in 1996 when NATO troops uncovered a terrorist training camp run by Iranian and other Islamic militants, or mujahedin, who had come to help their Muslim brothers — by making items like boobytrapped ice-cream cones and exploding toys. Soon after returning to Bosnia last September, Sylvester helped uncover a plot to attack the U.S. and British embassies and then presided over the arrest and deportation to Guantanamo Bay of six Algerian-born suspects. “These are hard-core Islamic networks which are using Bosnia — because of its weak rule of law and porous borders — to prepare new attacks,” Sylvester said. Charities, including those carrying out honorable programs, provide ideal cover, he said.

A search of a Sarajevo office of the Saudi High Commission for Relief turned up anti-Semitic and anti-American videotapes and children’s pamphlets as well as maps of Washington and photos of U.S. military installations. A raid this month on the offices of Al-Haramain netted tapes calling for attacks on foreign peacekeepers, said Sylvester. One recurring theme: the tale of the “poison roast,” in which Jews invite Islamic children to a deadly feast. “Why are they teaching Bosnian children to hate America?” he asked. (Saudi officials denied knowledge of this material.) Raids on Benevolence, where another of the suspects worked, turned up correspondence between Enaam Arnaout and Osama bin Laden dating back to the 1980s, as well as photos of the two men.

At his home in the town of Zenica, the head of the local Bosnian branch of Benevolence, Alen Cosic, denied his former boss Arnaout was a terrorist. He claimed the FBI was fabricating evidence because it was “jealous” of his success. He also said large cash withdrawals without bookkeeping were normal in the aid business. “I can’t say Enaam didn’t see bin Laden,” Cosic said, “but he is a serious guy who dedicated his life to helping people.”

As for Al-Haramain, the director of European operations, Hesham al-Mashari, also denied any link with international terror. He said he only heard of the U.S. Treasury’s blacklisting of his organization by reading newspapers, although the decision was taken in March. “Civilized countries,” al-Mashari said during a tightly orchestrated interview at the Saudi embassy in Sarajevo, would provide evidence before accusing organizations of a crime. “If they have evidence then let them show it.” A diplomat then questioned whether anything incriminating had been found at Saudi agencies. Why have there been no arrests?” Earlier this month, Mustafa Ceric, head of the Islamic Community in Bosnia, held a press conference in which he distributed a list of dozens of agencies in the country with a note by each one that had been investigated. All were Islamic. Targeting organizations “on the basis of what they could do and not what they have done might cost Bosnia a lot,” he said. Officials note that the investigations are being carried out not by FBI agents but by Bosnian financial police: the first inquiries have to do with bookkeeping. If anything is out of order, a broader search is conducted. Ibrahim Satti, local director of Al-Haramain & Al-Masjed Al-Aqsa (not related to the other Al-Haramain) said his agency’s accounts were frozen for no apparent reason, interrupting a project to build schools and dormitories for 300 orphans mainly from the Srebenica massacre. “If we take care of your children,” he asked, “is that terrorism?” “I’m not in the business of picking on orphans or widows,” said Sylvester. “If the organizations are reputable they need to clean themselves out.” Bosnia, of course, is not the only place to have seen a shift toward preemptive justice and the use of “secret evidence” to detain terror suspects since Sept. 11. But NATO peacekeepers hold unusually sweeping powers in the Balkans, and the consequences of alienating Muslims are worrying. Anela Kobilica, wife of one of the six Algerians deported to Guantanamo Bay, paused on a dusty road in the town of Zenica. “This is not a war on terror,” she said, holding up her veil for emphasis. “This is a war on Islam.” In the current atmosphere, it’s an easy claim to make.