Frozen assets: US has crimped Al Qaeda funds

For years the three Saudi men had worked as a loosely organized team, according to US intelligence. They'd funneled thousands of dollars in cash – and non-monetary help such as Al Qaeda training manuals – to Islamist militants in the Philippines.

At one point they'd even paid $18,000 for an operation to blow up the US or Australian embassies in Manila, allege US officials. But Philippine authorities disrupted the plot before it could be realized.

So this fall the US government took action against the trio: Abdul Rahim al-Talhi, Muhammad Abdallah Salih Sughayr, and Fahd Muhammad Abd al-Aziz al-Khashiban. On Oct. 10, the Treasury Department designated them as terrorist financiers – freezing their assets and forbidding American citizens from doing business with them.

The move did not draw much notice at the time. But small actions such as this are a crucial part of what may be one of the most successful parts of the struggle against terrorism: the effort to curtail its financiers.

"All our evidence is, this is successful and actually a very important part of the war on terror," said John B. Taylor, former Treasury undersecretary for international affairs, at a Council on Foreign Relations seminar earlier this year.

It's also an effort that has some controversial aspects. Among them is whether the US government has too much power to punish alleged terrorist paymasters and funding groups via simple administrative actions.

In 2004, for instance, the US alleged that a Texas-based charity named the Holy Land Foundation had funneled about $12 million to the Palestinian militant group Hamas – which the US has named a terrorist organization. The Bush administration ordered the foundation closed.

But on Oct. 22 a federal criminal prosecution of five officials from the now-defunct charity collapsed amidst legal confusion. It is unclear whether prosecutors will attempt to try the case again.

Some jurors had a hard time accepting the prosecution's contention that by sending money to Hamas-affiliated local charities named "zakat committees" the Holy Land Foundation was supporting terrorist actions.

"The fact that they couldn't get a single conviction suggests that we need to rethink the process by which [Holy Land] was shut down," says David Cole, a law professor at Georgetown University. "They were able to close it down, freeze its assets ... ultimately on the basis of secret evidence."

The US has issued sanctions against 44 different charitable organizations under authority derived from an executive order signed by President Bush, according to Chip Poncy, director of strategic policy at the Treasury's Office of Terrorist Financing and Financial Crimes.

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