The Saudi Connection
How billions in oil money spawned a global terror network
Deep freeze. Two things soon became clear. The first was that the Saudis had virtually no financial regulatory system and zero oversight of their charities. The second was that Saudi police and bank regulators had never worked together before and didn't particularly want to start. Those were problems, but the Americans made it clear they meant business. If the Saudis didn't crack down, Newcomb explained, Treasury officials had the ability to freeze assets of groups and individuals who supported terrorists. That struck a nerve. The mention of wealthy Saudis prompted lots of nervous chatter among the Saudis. But on some points, the Saudis seemed genuinely puzzled. Some stressed that jihad struggles in certain regions, such as Israel and Chechnya, were legitimate. Still, the Saudis agreed they may have a problem. Changes, they said, would be made.
But none were. A second visit by a U.S. delegation, in January 2000, elicited much the same reaction. Worse, the team was getting the same treatment back home. Frustrated with Riyadh, Newcomb's Office of Foreign Assets Control at Treasury began submitting the names of Saudi charities and businessmen for sanctions. But imposing sanctions required approval from an interagency committee, and that never came. CIA and FBI officials were lukewarm to the idea, worried that sanctions would chill what little cooperation they had with their Saudi counterparts. But it was the State Department that objected most strenuously. "The State Department," recalls one official, "always thought we had much bigger fish to fry."
Not everyone in Foggy Bottom agreed. In the fall of 1999, Michael Sheehan, State's tough-minded coordinator for counterterrorism, had seen intelligence on the Islamic charities and was appalled. As part of a still-classified report, he wrote a cable instructing U.S. ambassadors to insist that host governments crack down on the groups. But some at State argued that the charities were doing important work and fought to kill Sheehan's initiative. The cable was deep-sixed.
Underlying the reluctance to confront the Saudis was a more fundamental failure--Washington's inability to recognize the strategic danger posed by the growing jihad movement, of which al Qaeda is but the head. The U.S. government, in effect, largely missed the gravest ideological threat to national security since the end of the Cold War. "There were people who got it at the analyst level, at the supervisory level, but all of us were outnumbered," says Pat Lang, the former Pentagon analyst. "You just couldn't get people to take seriously the world of Islam and the threat it represented."
Consider the work of the National Intelligence Council, which is tied closely to the CIA and reports directly to its director. In 1999, the NIC brought together experts from across America to identify global trends--key drivers, they called them--that would affect the world over the next 15 years. A senior intelligence official, the anonymous author of Through Our Enemies' Eyes, which chronicles the rise of al Qaeda, described to U.S. News how he perused the NIC draft report and was shocked to see that Islamic fundamentalism was not listed among the key drivers. The analyst sent a note to the NIC chief, stressing that there were nearly a dozen Islamic insurgencies around the world, knitted together by Saudi money, al Qaeda, and thousands of Afghan veterans. The response: "I got a Christmas card back with a note hoping my family was well," the man recalls. The NIC's final report, Global Trends 2015, barely mentioned radicalism in the Islamic world. The NIC's vice chairman, Ellen Laipson, later wrote that their report "shied away" from the issue because it "might be considered insensitive and unintentionally generate ill will."