First of two parts.
Less than a mile from the mournful place in Lower Manhattan where the World Trade Center came crashing to the ground, in a hushed federal courthouse, a small band of Philadelphia lawyers is prying loose secrets of the Sept. 11, 2001, terror attacks.
It is here that the Cozen O'Connor law firm has filed an 812-page lawsuit on behalf of U.S. and global insurance companies alleging that Saudi Arabia and Saudi-backed Islamist charities nurtured and financed al-Qaeda, the author of those deadly attacks.
Led by its flinty chairman and founder, Stephen Cozen, the firm has invested thousands of hours and millions of dollars to scour the world for witnesses, documents and other evidence in its attempt to hold the oil-rich desert kingdom liable for more than $5 billion in damages.
Among the companies represented in the lawsuit are Chubb, Ace, Allstate, One Beacon, and nearly three dozen other insurers.
"Our concern was whether there was a viable case to be made against the defendant," Cozen said, "and whether the defendant could pay."
Round 1 in this titanic legal battle went to the Saudis and their high-powered lawyers three years ago when a U.S. District Court judge removed the government and Saudi royals as defendants.
Defense lawyers have declined repeated requests for interviews, citing the pending litigation. But in court papers, they describe Cozen's allegations as "fabrications" and note that the 9/11 Commission found no evidence of official Saudi involvement. Moreover, they point out that Saudi Arabia itself has been an al-Qaeda target.
"The showing that the plaintiffs purport to make is complete and utter garbage," said Michael Kellogg, a top Washington appeals lawyer representing Saudi Arabia and members of the royal family, during an appeals argument in January. "It is a collection of newspaper articles, and reports and press releases that show at most the kingdom exercises some supervisory control over the charities."
But Cozen argued that the kingdom and its officials should be restored as defendants. A fiercely competitive lawyer who built a tiny practice into one of the world's leading law firms for insurers, Cozen, 67, contended that the defendants "knew and intended to support al-Qaeda through these charities."
With a ruling from the U.S. Court of Appeals for the Second Circuit imminent, Cozen and his partners have unearthed facts and made connections missed not only by the 9/11 Commission but also by Congress in its investigations.
At the heart of the suit, the biggest and most complex legal action ever undertaken by the law firm, are warnings from U.S. and European officials that the charities were serving as terror fronts.
Among the suit's key assertions:
Senior Saudi officials and members of the royal family or their representatives served as executives or board members of the suspect charities when they were financing al-Qaeda operations. Overall, the Saudi government substantially controlled and financed the charities, the lawsuit alleges.
The charities laundered millions of dollars, some from the Saudi government, into al-Qaeda and other terrorist groups and provided weapons, false travel and employment documents, and safe houses.
Regional offices of the charities employed, in senior positions, al-Qaeda operatives who helped coordinate support for terror cells.
Although the lawsuit argues that the Saudi government "intended" the 9/11 attacks to happen, the public record supporting that allegation is thin, and lawyers suing the kingdom have yet to generate direct evidence that any senior Saudi official conspired with al-Qaeda to attack the United States.
Instead, the lawsuit compiles hundreds of incremental disclosures from U.S government and other sources and weaves them together to form one basic assertion: Al-Qaeda's development from ragtag regional terrorists into a global threat was fueled by Saudi money, some of it from the government.
And the charities, the lawsuit contends, were the money's conduit.
With the help of charities affiliated with the Saudi government, the lawsuit contends, al-Qaeda spread to the vicious 1990s Balkans war, which pitted indigenous Muslims, their al-Qaeda allies, and other mujaheddin against Serbs and Croats.
The organization then leapfrogged to attack Western targets, including two U.S. embassies in East Africa, the U.S. destroyer Cole, and finally the World Trade Center and the Pentagon.
"In a lot of ways this case is very unique, and in a lot of ways it is very mundane," Cozen said in an interview. "It is unique in that it is grounded in one of the worst events in U.S. history. It is mundane in that we are not breaking new ground in tort [liability] law. The law has always recognized the liability of those who participate in a conspiracy and those who aid and abet."
Cozen is suing under the 1976 Foreign Sovereign Immunities Act, which protects foreign governments from being sued by U.S. citizens except in rare circumstances. While the standard is extremely high, federal courts have permitted lawsuits in cases where foreign countries engaged in criminal conduct, such as murder.
Even if Cozen loses the appeal and the Saudis retain immunity, U.S. District Judge Richard Conway Casey ruled that there is enough evidence to proceed against several Islamist charities, banks, and alleged terrorism financiers named in the lawsuit.
While Cozen was the first, a half-dozen other groups have sued the Saudis to hold them liable for supporting Islamist charities allegedly tied to al-Qaeda.
Among the other plaintiffs: the estate of an FBI agent killed in the 9/11 attacks on the World Trade Center, and the investment firm Cantor Fitzgerald, which lost 657 employees when American Airlines Flight 11 slammed into the north tower.
Outside the courtroom, the Cozen lawsuit has caused friction between the United States and Saudi Arabia, which, after Israel, is this nation's most important Mideast ally.
In a filing with the Second Circuit, Saudi Arabia said the lawsuit had undermined the nations' ability to work together to fight terrorism.
"This concern is felt in all circles of the Saudi government," said Nizar bin Obaid Madani, Saudi minister of foreign affairs.
The litigation, Madani said, "sends a confusing and mixed message about the relationship between the governments of the United States and Saudi Arabia."
The question of whether elements of the Saudi government offered support to jihadists intent on attacking the West has fueled intense and even acrimonious debate at the highest levels of the U.S. government.
Former New Jersey Gov. Tom Kean, who chaired the 9/11 Commission, said he was uncertain. The royal family is so huge - there are thousands of members - that Kean said it was difficult to know how power was distributed and who had authority.
Former Republican Sen. Slade Gorton of Washington, a 9/11 Commission member, is less cautious.
"Clearly, the central moving figures in the 9/11 scandal were Saudi, and clearly that wasn't a coincidence," he said. "The fact that there is a particularly militant and extremely conservative form of Islam that is, in effect, the state religion of Saudi Arabia - well, there has always been tension between the United States and Saudi Arabia over that.
"Do we pull punches with the Saudis on the charities and other matters because they can help us counterbalance Iran, they can help us bring the Palestinians and the Israelis to the table, they can serve as a forward staging area for our military in the Middle East?" Gorton asked. "I don't think there is any question but that is the case."
David E. Long, former deputy director of the State Department's Office on Counterterrorism, who is fluent in Arabic and travels regularly to the Mideast, said he believed it was unreasonable of Americans to expect that before 9/11 the Saudis would have cracked down on terrorism financiers.
They didn't have the forensic skills or financial monitoring tools, said Long, a former lecturer on the Middle East at the University of Pennsylvania. Moreover, until then it was unthinkable to many Saudis that charitable organizations might promote violent international jihad.
One of the central principles of Islam, he said, is Zakat, the giving of alms to the poor, and once the money went out the door, Saudi donors assumed it would be used for charitable purposes.
"Traditionally, there was little or no oversight throughout the economy, trust was highly personalized, and caveat emptor was the order of the day," Long said. "It is . . . my view that there is no basis for the claim that the Saudi government wittingly supports or has continued to turn a blind eye on foundations supporting terrorist operations."
Cozen's case is built on thousands of Treasury Department and law enforcement findings, declassified diplomatic cables, and military and intelligence reports.
The story that emerges details a saga linking the charities to money-laundering, police raids, and terrorist attacks. It spans the globe, from New York and Philadelphia to the Balkans, the Mideast and beyond. It begins in Saudi Arabia.
Riyadh, November 1994French Interior Minister Charles Pasqua, in the capital to discuss security, delivered an urgent official message to his Saudi counterpart, Prince Naif, Cozen alleges.
Pasqua, gruff, confident and imposing, had oversight of French intelligence operations. He pulled Naif aside.
The French, he said, had information that the Muslim World League, a sprawling charity that the Saudi government had created to promote Islam around the world, was funding terror cells in France.
The French were deeply worried, Pasqua said, and he needed the Saudis to address the situation.
Pasqua's warning was the first of several that Western intelligence agencies gave the Saudis before 9/11, the lawsuit asserts.
The government, the suit contends, did nothing.
Washington, 1998Acting on information from sources overseas, U.S. intelligence reported to the Saudis that employees of a government-affiliated charity, al-Haramain Foundation, may have been involved in the bombings of U.S. embassies in Kenya and Tanzania.
Six years later, the 9/11 Commission concluded that the Saudis never acted on that information.
The Cozen suit also cites a conclusion by Sen. Robert Graham of Florida, chairman of the congressional joint inquiry into 9/11, that a Saudi government employee named Omar al-Bayoumi helped two of the hijackers find an apartment in Southern California and lent them money.
Although the 9/11 Commission and the FBI discounted Bayoumi's involvement, Graham told The Inquirer that he was convinced Bayoumi was a Saudi intelligence agent and that his aiding of Nawaf al-Hazmi and Khalid al-Mihdhar signaled some degree of Saudi government participation.
During the inquiry, Graham said, the FBI repeatedly stonewalled efforts to subpoena a Muslim academic and FBI informant who had housed the hijackers.
"That is one of the major unanswered questions of 9/11: Why the administration tried to disguise the role of the Saudis," Graham said.
Washington, 1999The East Africa embassy bombings focused U.S. officials on al-Qaeda. They needed to shut down its financing. Vice President Al Gore made a personal appeal to Saudi Crown Prince Abdullah at the White House: Help the U.S. disrupt al-Qaeda's flow of money.
Abdullah agreed to put U.S. officials in touch with their Saudi counterparts.
Following up on Gore's request, two delegations of senior U.S. officials traveled to Riyadh, one in 1999 and the second a year later.
On both trips, according to people familiar with the meetings, U.S. officials gave the Saudis lists of suspect charities, money exchanges, banks, and suspected terrorism financiers.
It was essential, the Americans said, that the Saudis crack down on these entities. If their financial support could be stopped, jihadist groups would have a harder time extending their reach.
"We gave them detailed and very specific intelligence," said William Wechsler, then a senior National Security Council official, who traveled to Riyadh with the U.S. delegation in 1999 and helped oversee the follow-up visit.
But the delegations did not have the desired effect.
Testifying before the Senate Governmental Affairs Committee in 2003, Jonathan Winer, former deputy assistant secretary of state for international law enforcement, said he had helped oversee the 1999 delegation and had been briefed after the diplomats returned.
"We didn't have as many facts as we should have," Winer said of the charities.
"But we went to the Saudis as a government, shared with them what we had, asked them for more information, warned them of what might take place, and ultimately nothing happened."
After 9/11, the U.S. Treasury Department designated as terrorism supporters many of the charities, banks and alleged financiers that U.S. officials listed on their trips to Riyadh.
The Philippines, 1990sThe International Islamic Relief Organization (IIRO), a major Islamist charity with ties to the Saudi government, opened branch offices in the Philippines, according to Treasury Department reports cited by the Cozen lawyers.
The director of the Philippine branches for a time was Mohammad Jamal Khalifa, Osama bin Laden's brother-in-law and a senior al-Qaeda member, according to the department.
Treasury designated the Philippine and Indonesian IIRO branches as terrorist financiers two years ago for funneling money to al-Qaeda and other radical groups.
At that time, the department also designated Abd Al Hamid Sulaiman al-Mujil, an IIRO official in Saudi Arabia who channeled money to those branches, as a terrorist financier.
Mujil, according to Cozen's lawsuit, traveled regularly to meet with bin Laden; Khalid Sheikh Mohammed, the planner of the 9/11 attacks; and al-Qaeda financiers.
Mujil also "provided donor funds directly to al-Qaeda," Treasury said.
The Cozen lawsuit also cites a 1996 CIA report that said the IIRO had financed six militant training camps in Afghanistan in the 1990s.
Since filing their lawsuit in 2003, the Cozen lawyers obtained a declassified memo by Matthew Levitt, a former deputy assistant secretary for the Office of Intelligence and Analysis in the Treasury Department, concluding that the IIRO supported terrorists from the early 1990s through the first half of 2006.
Before the lawsuit was filed, it might have been plausible to argue, as the Saudi Embassy in Washington once did, that the IIRO had no affiliation with the government.
But since then, investigators have found an IIRO report showing that members of the royal family play a supervisory role in connection with some of the local offices of the IIRO in Saudi Arabia.
Making much the same point, albeit for different reasons, the IIRO has argued that it cannot be sued because it is an agency of the Saudi government and thus enjoys immunity.
Sarajevo, October 2001Three weeks after the 9/11 attacks, NATO forces hunting for jihadists raided the offices of an obscure Islamist charity. What they found had little to do with charitable works.
At the Saudi High Commission for Relief of Bosnia and Herzegovina, they seized computer hard drives with before-and-after pictures of the twin towers; pictures of the bombed U.S. embassies in East Africa; photos of the Cole after a bomb ripped a four-story gash in the destroyer's side, killing 17 U.S. sailors; materials for forging State Department identification badges; and files on pesticides and crop-duster aircraft - potential weapons.
An organization founded and chaired by Saudi Prince Salman, which had represented itself as a humanitarian mission to aid refugees and orphans, seemed instead to be a haven for extremists.
Five months later, during a March 2002 raid in Sarajevo on another Islamist charity founded in Saudi Arabia, the Benevolence International Foundation (BIF), the FBI and Bosnian police uncovered what one prosecutor called "the one and only al-Qaeda archive."
That archive is now part of the Cozen lawsuit.
Seized was a huge cache of computer-stored information on BIF executive director Enaam Arnaout's early ties to bin Laden. It allegedly included published photographs of the two men touring a camp in Afghanistan, a list of al-Qaeda financiers called the "Golden Chain," and bin Laden's plans to use Islamist charities for his jihad.
There were minutes of al-Qaeda's founding in Afghanistan in 1988 and copies of an al-Qaeda loyalty oath and criteria for membership, including, prosecutors said, a need to be "listening and obedient" and to have "good manners."
Chicago, 2002Based on evidence from the Sarajevo raid, U.S. authorities indicted Arnaout in Chicago, where the BIF had begun fund-raising a decade earlier.
He was charged with illegally diverting charitable funding to al-Qaeda operatives in the Balkans and elsewhere.
The government also shut down the organization, then the third-largest Islamist charity in the United States.
The Chicago-based BIF traced its origins to Saudi Arabia in the 1980s, when Saudi businessman Adel Batterjee founded it to raise money for Arab fighters battling to eject Soviets from Afghanistan, according to the Cozen suit.
The FBI had been investigating the charity for years. While the BIF had no apparent institutional links with the Saudi government, the Cozen lawsuit contends that the Sarajevo files and Arnaout's criminal investigation show that the BIF was part of a conspiracy that included Islamist charities openly tied to the Saudi government.
The lawsuit cites criminal evidence that bin Laden planned to use the BIF and other charities, including the Muslim World League, to fund his jihad beyond Afghanistan.
And it contends that BIF officials were al-Qaeda insiders who worked for other relief organizations with links to the Saudi government.
One day before his 2003 trial, Arnaout pleaded guilty to reduced charges that he fraudulently diverted charitable funds to rebel fighters in Bosnia and Chechnya for the purchase of boots, telecommunications equipment, blankets and other supplies.
Arnaout's lawyers and the trial judge said the government had failed to prove that Arnaout had used BIF money to support al-Qaeda.
He was sentenced to 11 years and three months in federal prison, later reduced to 10 years, for sending BIF money to Islamist fighters while telling donors it was used for humanitarian purposes.
Treasury still lists the BIF as a supporter of bin Laden. And designating the BIF as a terrorist supporter, which the charity challenged, was upheld by a federal judge.
Riyadh, May 12, 2003On a clear, hot evening, what had been to many Saudis a nightmarish possibility became a grisly reality.
Car bombs exploded in three Western housing compounds, while gunmen fired on buildings. Al-Qaeda, which for a decade or more had been hitting targets outside Saudi Arabia, had struck inside the country.
When the smoke cleared, 35 people were dead, including nine Americans, and the kingdom seemed far less secure.
Within months, the Saudis arrested or killed more than a dozen alleged al-Qaeda figures involved in the bombings. The government pledged to redouble strikes at homegrown operatives, a resolve U.S. officials lauded.
In the litigation over the 9/11 attacks, the Saudis cite those attacks in their defense: How could the government promote a movement that had vowed to destroy it?
In fact, Saudi officials insist they had been pushing hard against bin Laden for years.
When in the early 1990s it became clear that bin Laden was emerging as a threat, the Saudis revoked his passport.
After bin Laden moved from Sudan to Afghanistan, the Saudis point out, Prince Turki, then head of Saudi intelligence, traveled twice to Kandahar in 1998 to persuade the Taliban to turn him over.
When the Taliban leader, Mullah Omar, refused, the Saudis broke off diplomatic relations with Afghanistan.
In his own defense to Cozen's lawsuit, Prince Turki said Saudi intelligence had formed a security committee with the United States to share information regarding bin Laden's activities.
"I was deeply shocked and remain profoundly saddened by the tragic events of Sept. 11, 2001," Turki said. "The victims of the terrorist attacks and plane crashes and their families have my deepest sympathy. I share their resolve to bring to justice the perpetrators of these terrible crimes. My own father, King Faisal, was killed in a terrorist attack on March 25, 1975."
As to why Saudi Arabia would finance a movement that has attacked the kingdom, Cozen contends the Saudi royal family was trying to mollify radical clerics and buy peace.
"As best we can tell, the kingdom was between a rock and a hard place," Cozen said. "They had radicals and extreme imams within Saudi Arabia who wanted to see worldwide jihad; they wanted to see Wahabism [a conservative form of Islam] spread and succeed, and if the kingdom did not support them, they would become their victims. It was peace within the nation at almost any cost."
The Islamist CharitiesMost of the Islamist charities named in the Cozen lawsuit are based in Saudi Arabia or trace their origins to the kingdom. Here are brief descriptions of six that are central to the case:
The Muslim World League was founded in 1962 in Saudi Arabia. It is closely tied to the government and is one of the world's largest Islamist charities.
The International Islamic Relief Organization was founded by royal decree in Mecca on Jan. 29, 1979. It says its purpose is to provide relief to victims of famine, floods, and other natural disasters. It describes itself as an arm of the Muslim World League. The U.S. Treasury Department has designated two IIRO offices, in Indonesia and the Philippines, as terrorism supporters.
The Saudi High Commission for Relief of Bosnia and Herzegovina was founded by the government in 1993 to provide relief to Muslims uprooted during the Balkans war. It describes itself as an instrument of Saudi government policy. In its detainee hearings, the Pentagon considers past employment by the commission a reason to keep someone in custody at Guantanamo Bay.
The Benevolence International Foundation was founded in Saudi Arabia by Saudi financier Adel Batterjee. It moved to Chicago in early 1992. It described its mission as providing humanitarian relief projects throughout the world. The Treasury Department has designated the BIF and Batterjee as terrorism supporters.
Al-Haramain Foundation, a sprawling Islamist relief organization, long enjoyed close ties to the Saudi government. Since 9/11, it has been under pressure from U.S. authorities, which designated more than a dozen of its overseas offices, including one in the United States, as terrorism supporters. The Saudi government joined the United States in making more than half those designations.
The Rabita Trust says it was founded to assist struggling refugees in Bangladesh. It is based in Islamabad, Pakistan, and is headed by Wa'el Julaidan, a financier whom Treasury has designated a terrorism supporter. The Rabita Trust also has been designated.
Tomorrow: How Cozen O'Connor built the case.
Contact staff writer Chris Mondics at 215-854-5957 or email@example.com.