Timing was everything in Holy Land crackdown

The answer came to investigators gradually over the last three months — ever since Sept. 11.

First, an FBI criminal investigation was transformed into an administrative review by the Treasury Department, thanks to new policies giving the government more power to freeze assets of groups suspected of helping terrorists. That covered long-held suspicions that the Holy Land Foundation was helping finance the Middle East terrorist group Hamas.

Then came last weekend's suicide attacks in Israel, prompting the Israeli government to once again seek American action against the foundation as Prime Minister Ariel Sharon prepared to meet with President Bush.

Finally, there was the support of Mr. Bush himself, who agreed to speed things up because of evidence that foundation money went to Hamas, the group that claimed responsibility for bombings that killed 26 Israelis.

"The terrorists benefit from the Holy Land Foundation, and we're not going to allow it," Mr. Bush said Tuesday during a Rose Garden ceremony.

Throughout years of investigation, the Holy Land Foundation, which calls itself the largest Muslim charity in the United States, has denied links to Hamas or any other terrorist group. In a written statement, the foundation attributed the freezing order to a post-Sept. 11 backlash, saying it "has been unfairly targeted in the nationwide smear campaign to undermine Muslims and the institutions that serve them."

Bush administration officials, meanwhile, said the decision redeemed the president's pledge to fight all terrorist groups with "global reach," not just Osama bin Laden and other suspects in the attacks on the World Trade Center and Pentagon.

The government's action also served diplomatic interests, officials said. It reflected support for Mr. Sharon and his warning that if Palestinian leader Yasser Arafat didn't stop Hamas terrorism, Israel's military would.

Mr. Bush — who met with Mr. Sharon at the White House last Sunday, a day after the suicide bombers struck — agreed to move up the Holy Land Foundation announcement by a week to underscore the United States' solidarity with Israel, said officials speaking on the condition they not be named.

While Bush administration officials cited legal and diplomatic goals, the Holy Land Foundation and other Muslim groups accused it of having another motive: politics.

"The charity had been targeted by pro-Israel organizations and individuals for several years because of what they said was the group's support for Palestinian militants," the Council on American-Islamic Relations said in a written statement.

Group denies association

Foundation co-founder Ghassan Elashi said last week that his organization is "clear and crisp and has no association with terrorist organizations."

Israeli officials said they have plenty of evidence that Hamas has received money from the Holy Land Foundation, which Israel banned in 1997. They applauded the U.S. action, which they have been seeking since then.

"We're talking about something that has been discussed and has been on the books for a long time," said Mark Regev, a spokesman for the Israeli embassy in Washington.

Indeed, Israeli officials have complained about what they called American inactivity, even after they provided documents and intelligence information.

"We gave the American authorities a lot of evidence in 1996. We gave them all the evidence," a senior Israeli government official told The Dallas Morning News in 2000.

Federal law enforcement officials said it is very hard to make these kinds of cases in criminal court, especially against charities. They noted that the Holy Land Foundation, which raised $13 million last year, does a lot of humanitarian work.

Expanded efforts

The end game began when the FBI's criminal investigation turned into an administrative action led by the Treasury Department, officials said. That resulted from executive orders signed by Mr. Bush after the Sept. 11 attacks.

A little less than two weeks later, on Sept. 24, Mr. Bush declared financial war on terrorists. He signed an order essentially making it easier for the government to freeze the assets of suspected terrorists and groups suspected of helping. The administration activated a "Foreign Terrorist Asset Tracking Center" within the Treasury Department. At first, it focused exclusively on Mr. bin Laden and his al-Qaeda network and any groups linked to them.

Then, on Nov. 2, the administration expanded its efforts toward other terrorist groups, including Hamas.

Three days later, the FBI submitted a memo to the Treasury Department detailing its investigation of the Holy Land Foundation.

Bush, Sharon meeting

Officials were putting the final touches on their case when the suicide bombers struck last weekend in Israel. That forced aides to move up the Bush-Sharon meeting from Monday to Sunday so the prime minister could return home sooner to formulate his government's response.

The subject of the Holy Land Foundation resurfaced as aides prepared for the meeting, but officials disputed a report that the leaders discussed it.

After the Sunday meeting, a White House spokesman told reporters that Mr. Bush and Mr. Sharon talked about "ways to intensify their counterterrorism cooperation, including against those responsible for acts of terrorism against Israelis."

Two days later, Mr. Bush made the Holy Land Foundation announcement in the Rose Garden.

The State Department supported the action. Last year, it successfully persuaded the U.S. Agency for International Development to cut off support for the foundation, calling its inclusion in the program "contrary to the national defense and foreign policy interests of the United States."

There are many reasons for the length of the FBI investigation, officials said, including the difficulty of prosecuting the case in court.

The foundation's charitable work was a factor, and most of its employees and contributors were unaware of any connection to Hamas, officials said. It would have been difficult to prove in court that the foundation sent money to the Middle East for the expressed purpose of terrorism.

Officials also pointed out that the FBI investigation of the foundation included wiretaps of Hamas leaders; authorities may not have wanted to lose information valuable to other investigations by moving against the Holy Land Foundation.

Current and former officials also said that taking action against the Holy Land Foundation in previous years might have had diplomatic ramifications on the Middle East peace process.

The new war on terrorism — combined with new presidential authority — changed those dynamics.

The officials noted that turf wars had created problems during the Holy Land Foundation investigation. But the operation of the terrorist asset tracking center improved information-sharing among various government agencies, officials said, particularly between law enforcement and foreign intelligence.

While other U.S. organizations are also suspected of helping Hamas, officials said they decided to pursue the Holy Land Foundation first because of the evidence they had, as well as the sheer size of the foundation.

As for those other groups, they added, their turn will come.

"We will continue to name the financiers of terrorism to ensure that Hamas and other terrorist organizations have no ability to finance their acts of evil," Treasury Secretary Paul O'Neill said.