Al Qaida's west Africa diamond operations

An aggressive year-long European investigation into Al Qaida financing has found evidence that two West African governments hosted the senior network operatives who oversaw a $20 million diamond-buying spree that effectively cornered the market on the region's precious stones.

Investigators from several countries concluded that President Charles Taylor of Liberia received a $1 million payment for arranging to harbour the operatives, who were in the region for at least two months after the September 11 attacks. The militants moved between a protected area in Liberia and the presidential compound in neighbouring Burkina Faso, investigators say.

Long accused of sanctioning illicit diamond and weapons trading, Taylor and President Blaise Campaore of Burkina Faso deny the charge, which is included in a summary of the joint intelligence findings.

The Washington Post obtained a copy of the military intelligence summary, which offers the clearest picture yet of Al Qaida's secretive business operations in West Africa and an elaborate plot that began in 1998 to hide substantial assets in diamonds. This account draws on interviews with senior investigators, the intelligence report and documents obtained independently that verify its findings. The Post also interviewed two sources with direct knowledge of certain events, who asked that their names not be used for fear of retribution.

European and Latin American investigations also found evidence that a group of people buying diamonds on behalf of the militants were simultaneously attempting to procure sophisticated weapons, such as missiles that could shoot down aircraft, The Post has learned. Investigators have been unable to trace the diamonds since they left Liberia and Burkina Faso.

The diamond-buying operation appears to have been hatched in response to a move by the U.S. in 1998 to freeze Al Qaida assets after attacks on two U.S. embassies in Africa that were blamed on the organisation. Senior European intelligence sources said they have been baffled by the lack of U.S. interest, particularly by the CIA, in their recent findings. The CIA, which in the past has downplayed reports of Al Qaida's diamond connections, declined to comment.

In the weeks after the September 11 attacks, the U.S. Defence Intelligence Agency did try to monitor the two senior Al Qaida operatives supervising the diamond trading, who were known to be hiding in an élite military camp in Liberia. Both men were on the FBI's Most Wanted list. The Pentagon prepared a small Special Forces team in neighbouring Guinea to snatch the two, but the mission was not carried out because the team could not confirm the targets' identities, according to sources.

The European law enforcement investigations, launched soon after September 11, have focused on three people who allegedly served as conduits to the Al Qaida operatives: Aziz Nassour, a Lebanese diamond merchant; his cousin Samih Osailly; and Ibrahim Bah, a Senegalese soldier of fortune who has trafficked for years in diamonds and guns across Africa. All three deny involvement with Al Qaida or in illegal activities.

Al Qaida's diamond purchases were first reported in The Washington Post 13 months ago. Subsequent investigations by Belgian police and other European intelligence agencies have shed new light on the operation's scope, its financing and Al Qaida's extensive ties in West Africa.

Several other efforts have been underway to unravel illicit diamond trade through Liberia and its links to weapons smuggling and terrorism. A specially appointed UN panel of experts has studied the issue, and the Security Council in 2001 accepted the panel's recommendation to ban international travel by Taylor, his family and senior government officials.

Much of the new evidence of Al Qaida's diamond plot flows from the April 12 arrest of Osailly, who is in prison awaiting trial on charges of diamond smuggling and illegal weapons sales. Osailly is involved with a small diamond importing company believed to have been used by the Al Qaida operatives. He has pleaded not guilty.

In Osailly's case, Belgian investigators say they uncovered bank records showing that the diamond company enjoyed a sudden surge in business and turned over almost $1 billion in the year before September 11.

Preparations for Al Qaida's diamond operation began in September 1998, six weeks after the bombings of U.S. embassies in Kenya and Tanzania. The U.S. had moved to freeze $240 million in Taliban and Al Qaida assets.

"It was at that point that Al Qaida realised where it was vulnerable in its financial structure and began to systematically move its assets to commodities," said one intelligence analyst who specialised in Al Qaida's finances. "You see a move into diamonds, tanzanite and other commodities along with a new emphasis on creating bodies to handle the finances."

On September 22, a senior Al Qaida financial officer named Abdullah Ahmed Abdullah, who is listed on the FBI's list of most-wanted, arrived in Monrovia, Liberia. Ibrahim Bah arranged for Abdullah to meet with senior Liberian officials and their allies in the rebel Revolutionary United Front (RUF) in neighbouring Sierra Leone.

Bah is a Senegalese who had trained in Libya, fought in the early 1980s in Afghanistan. By 1998, he was the main weapons buyer and diamond dealer for Taylor in Liberia and the RUF, according to UN and European investigators. Bah has the rank of general in the RUF, which won international notoriety for its brutality in the civil war that raged in Sierra Leone from 1989 until this year.

Bah declined numerous interview requests but has issued written statements denying that he has ties to Al Qaida or has dealt in diamonds or weapons. In a statement he described himself as a used car salesman. The United Nations has banned him from international travel because of his alleged smuggling activities.

In March 1999, two other Al Qaida operatives, Ahmed Khalfan Ghailani and Fazul Abdullah Mohammed, went to Liberia for a follow-up visit and spent a few days touring the Sierra Leone diamond fields controlled by the RUF.

The next year, in July 2000, investigators believe that Bah approached ASA Diam, the company associated with Osailly and Nassour, about handling the Al Qaida gems. The company, which had been largely inactive for about two years, suddenly began handling large volumes of money, recording $14 million worth of diamond sales in 2000.

Bah, Nassour and Osailly have denied having the discussion about Al Qaida diamonds. Nassour, who now lives in Beirut and is barred by the UN from international travel, said in an interview that he has met Bah only once, on other business.

On December 26, 2000, according to sources, Osailly and Allie Darwish, another diamond dealer, met with the two Al Qaida operatives. Joined by several senior RUF commanders, they drove by caravan from Monrovia to Sierra Leone.

Osailly collected several large packets of diamonds and returned to Monrovia just after New Year's Day 2001. A courier sent by Nassour delivered $300,000 to pay Bah and the RUF for the diamonds.

Investigators said they have found calls from Nassour's ASA Diam company telephone, as well as a satellite telephone, made over the next several weeks to places