AL TAQWA BANK _______________ A Thesis Presented to the Faculty of San Diego State University _______________ In Partial Fulfillment of the Requirements for the Degree Master of Science in Homeland Security _______________ by Jason Jonathan Vaught Summer 2011 iii Copyright © 2011 by Jason Jonathan Vaught All Rights Reserved iv DEDICATION This thesis is dedicated to my mother, for all of her love and support—both emotional and financial—during these challenging times. v Prescribed for you is fighting, though it be hateful to you. Yet it may happen that you will hate a thing which is better for you; and it may happen that you will love a thing which is worse for you. God knows and you know not. —K. 2:216 vi ABSTRACT OF THE THESIS Al Taqwa Bank by Jason Jonathan Vaught Master of Science in Homeland Security San Diego State University, 2011 This study examines the banking activities of Al Taqwa Bank and investigates the reasons why the United States government, the United Nations and the European Union concluded that it was a major financier of terrorist organizations after the events of September 11th. This study analyzes literature, interviews and government documents in order to portray accurately the events and actions that this bank and its affiliate members undertook to fund terrorism. This study also covers the philosophy that lies beneath the creation of Al Taqwa Bank, including the integration of Nazi ideals with that of Arab nationalism after the defeat of Nazi Germany in World War II. It considers not only how this helped Al Taqwa come into fruition, but also the ramifications this has had on the international community in the past and may have in the future. This study also examines the individuals who had the greatest influence within Al Taqwa Bank. It considers the links among members and their philosophies, most notably their affiliations with Nazi Germany and with The Muslim Brotherhood, in searching for a common agenda among its members. In addition, this study reviews the clientele served by the bank—a clientele that evidently included both terrorists and “regular” citizens. This study delves into the different banking mechanisms that allowed this financial transfer of illicit funds to occur, such as money laundering, the use of shell companies, trade diversions, and other illicit activities, and examines what the international community has done to combat this presence as a security threat. Individuals involved in the creation and operation of Al Taqwa Bank either have died or been found not guilty, due to lack of evidence and due to major connections within the political world of Swiss and Italian entities. Even so, there is much to learn about the operation of the bank and the environment in which it was able to operate with apparent impunity. Issues of “bank secrecy” and dual-criminality are discussed, as well as the continuing efforts to revise international agreements in order to remove the shroud of secrecy behind which terrorist activities may flourish. Finally, this study examines the extent to which established protocols of secrecy—and prominent figures—stood in the way of a crucial investigation. This study touches on key elements of international diplomacy and the overlap of states’ interests and businesses’ interests. Sometimes these interests seem indivisible and, when that is the case, new approaches to diplomacy are indicated. vii TABLE OF CONTENTS PAGE ABSTRACT ............................................................................................................................. vi LIST OF FIGURES ................................................................................................................. ix ACKNOWLEDGEMENTS .......................................................................................................x CHAPTER 1 INTRODUCTION .........................................................................................................1 2 THE PEOPLE OF AL TAQWA ....................................................................................4 Arab Nationalism .....................................................................................................4 Franςois Genoud ......................................................................................................7 Ahmed Albert Friedrich Armand Huber ................................................................18 Ali bin Mussalim (aka Mussalem) .........................................................................21 Ahmed Idris Nasreddin ..........................................................................................23 Youssef Moustafa Nada .........................................................................................25 3 HISTORY OF AL TAQWA BANK............................................................................29 The Muslim Brotherhood, and the origins of Al Taqwa ........................................29 Roots of the Muslim Brotherhood: Hassan al-Banna ...........................................30 The Rise of Said Ramadan .....................................................................................31 Al Taqwa ................................................................................................................32 Al Taqwa Comes Under Suspicion ........................................................................35 9/11: All Eyes on Al Taqwa..................................................................................36 The Investigation of Al Taqwa ..............................................................................37 Epilogue .................................................................................................................42 4 AL TAQWA’S AFFILIATES .....................................................................................45 5 SWISS BANKING SECRECY ...................................................................................51 Swiss Banking Secrecy: A Brief History ..............................................................53 Swiss Secrecy Under Attack ..................................................................................56 Money Laundering and the FATF .........................................................................57 The New Front: Tax Evasion and “Double Criminality” .....................................59 viii 6 PREVENTION ............................................................................................................62 New Laws Limiting Bank Secrecy and Financing of Terrorism ...........................65 Analysis of Laws....................................................................................................69 7 RECOMMENDATIONS .............................................................................................73 8 CONCLUSION ............................................................................................................80 9 METHODOLOGY ......................................................................................................83 BIBLIOGRAPHY ....................................................................................................................85 ix LIST OF FIGURES PAGE Figure 1. Cost of terrorist attacks. ............................................................................................65 Figure 2. Comprehensive counter-terror strategy. ...................................................................73 x ACKNOWLEDGEMENTS This course of study would not have been possible without the encouragement and wisdom of my excellent instructors, mentors and friends who compose the faculty of San Diego State University, and especially Professors Eric Frost and Jeff McIllwain, whose devotion to their field is an ongoing inspiration. Certainly I could not have completed this thesis without the support of my mother, whose strength and encouragement have inspired me always to try and reach my full potential. I would also like to thank all the teachers who are too numerous to name for always challenging me to excel through my academic career. Finally, I would like to thank my family at large for their understanding during all the times that I was unable to show up at social gatherings, knowing I was trying to better myself. 1 CHAPTER 1 INTRODUCTION Allah is our goal; the Qur’an is our constitution; the Prophet is our leader; Struggle is our way; and death in the path of Allah is our highest aspiration. —Credo of the Muslim Brotherhood The events of 9/11 galvanized the United States in pursuit of those who had played any role in the planning and execution of the attack. The world knows well what happened militarily, with the attack upon Afghanistan’s Taliban, the subsequent occupation of Iraq and the ousting of Saddam Hussein. Even prior to 9/11, of course, the United States and its interests suffered casualties as a result of terrorist attacks. Embassies had been bombed; suicide bombers attacked the Marine barracks in Beirut. Terrorists attacked the U.S.S. Cole in a Yemeni harbor, and exploded a bomb in the underground garage of the World Trade Center. Efforts already were underway to identify the network of organizations and their financiers that were conspiring against the interests of the United States, endangering its citizens and its military personnel. Many of the world’s nations considered and implemented international agreements and protocols; intelligence agencies endeavored to infiltrate terrorist networks and intercept their communications. After September 11, 2001, however, these efforts