After the governments of Saudi Arabia and Britain sign the massive Al Yamamah arms deal, “unconventional aspects” of the deal mean that money can be diverted for a variety of purposes. The arms being purchased by Saudi Arabia are paid for not in cash, but in oil, with between four and six hundred thousand barrels a day being bartered to finance the weapons. This enables the Saudis to evade production caps put in place by the Organization of Petroleum Exporting Countries (OPEC). Although most of the money realized from the oil should theoretically go to the British as payment for the arms, some of it apparently finds its way back to Saudi Arabians. It is then used to support a number of covert programs to arm anti-Communists supported by Saudi Arabia, such as the purchase of weapons in Egypt that are then sent to the mujaheddin in Afghanistan. [Coll, 2008, pp. 289] It is possible that some of the money is used to finance a missile purchase by the bin Laden brothers for Arabs fighting in the Soviet-Afghan War (see Mid-1986).
1986: Bin Laden Works Indirectly with CIA
Osama bin Laden and Pakistan’s ISI, helped by the CIA, build the Khost tunnel complex in Afghanistan. This will be a major target of bombing and fighting when the US attacks the Taliban in 2001. [Guardian, 11/13/2000; Pittsburgh Post-Gazette, 9/23/2001; Hindu, 9/27/2001] In June 2001, one article mentions that “bin Laden worked closely with Saudi, Pakistani, and US intelligence services to recruit mujaheddin from many Muslim countries.” This information has not often been reported since 9/11. [United Press International, 6/14/2001] It has been claimed that the CIA also funds Maktab al-Khidamat (MAK) (also known as Al-Kifah), bin Laden’s main charity front in the 1980s (see 1984 and After). A CIA spokesperson will later state, “For the record, you should know that the CIA never employed, paid, or maintained any relationship whatsoever with bin Laden.” [Ananova, 10/31/2001]
After April 1986: Bin Laden Brothers Negotiate with South Africans to Buy Weapons for Arab Afghans
Salem and Osama bin Laden hold a series of meetings with South African arms dealers to discuss supplies for the anti-Soviet mujaheddin in Afghanistan. One meeting is held at the Pearl Continental Hotel in Peshawar, Pakistan, and a person who attends this meeting will later discuss it with a lawyer acting for victims of the 9/11 attacks. The person’s name is not known. The meeting is attended by Osama bin Laden, Afghan commander Abdul Rasul Sayyaf, and two South African officers. The attendees discuss weapons and training. There are other meetings in Jeddah, Saudi Arabia, between South African suppliers and Salem bin Laden, Osama’s older brother. Arms purchases are also discussed there. Reportedly, some of the financing for the weapons comes from the Saudi government. [Coll, 2008, pp. 287]
Mid-1986: Osama and Salem Bin Laden Purchase Anti-Aircraft Missiles in London
Osama and Salem bin Laden purchase anti-aircraft missiles for Arab volunteers fighting in Afghanistan in a deal concluded at the Dorchester Hotel in London. The transaction results from a request by Osama that Salem help him with two purchases, of the anti-aircraft missiles and of equipment to refill ammunition shells for AK-47 assault rifles.
Middleman – Salem attempted to obtain the missiles from the Pentagon, but was rebuffed (see (Early-Mid 1986)), and brought a German acquaintance named Thomas Dietrich in to help him complete the deal. It is difficult to arrange as, even though the bin Ladens are backed by the Saudi government, they do not have clearance to buy the missiles from Western authorities. Dietrich has contacts at the arms manufacturer Heckler & Koch and also gets an arms salesman to meet Salem and Osama in Dubai, United Arab Emirates. However, the salesman tells Osama that refilling the ammunition makes no sense and it would be simpler to just purchase it on the international market. For the missiles, Osama, Salem, Dietrich and Dietrich’s contacts meet two or three times at the Dorchester Hotel over a period of six to eight weeks. Dietrich will later learn that his contacts help arrange the purchase of Soviet SA-7 missiles in South America, as well as the ammunition.
Paid in Oil – However, there is a problem with the deal because the bin Ladens want to pay for the weapons not with cash, but with oil, “just a tanker offshore,” according to Dietrich. This causes trouble as “a company like Heckler & Koch, they don’t want oil, they want money.” Dietrich is not aware of the source of funding for the purchases, but author Steve Coll will note, “The best available evidence suggests it probably came at least in part from the Saudi government,” because the bin Ladens are “working in concert with official Saudi policy” and “seem to fit inside a larger pattern.” This is a reference to the Al Yamamah arms deal (see Late 1985). [Coll, 2008, pp. 284-288]
1987-1991: Bin Laden’s Brother-in-Law Khalifa Sets Up Al-Qaeda Fronts in Philippines
Mohammed Jamal Khalifa, bin Laden’s brother-in-law, moves to the Philippines and sets up numerous financial fronts to benefit al-Qaeda. Khalifa is not only one of bin Laden’s brothers-in-law, but he also says that during the 1980s, “Osama was my best friend. More than a brother….” [Australian, 1/16/2003; CNN, 11/25/2004] In the mid-1980s, Khalifa was already a very senior member of the Muslim Brotherhood in Lebanon and ran the Peshawar, Pakistan, office of the Muslim World League, where he was active in sending recruits to fight the Soviets in Afghanistan (see Late 1980s). Sent to the Philippines by bin Laden in 1987 or 1988, he soon marries two Filipino women. He sets up more than a dozen businesses and charities, all of which appear to be fronts to fund the Abu Sayyaf and Moro Islamic Liberation Front (MILF) militant groups: 
The Islamic Wisdom Worldwide Mission (IWWM), which will later be blamed for funneling bin Laden money to militants (see February 15, 1999 and October 8-November 8, 2002). The International Relations and Information Center (IRIC), which is later seen as the main funding vehicle for the Bojinka plot (see Spring 1995). The Philippine branch of the International Islamic Relief Organization (IIRO), founded in September 1991. The IIRO does some charity work, but a Philippine cabinet official will later note that it “built up the good will of the community through charity and then turned segments of the population into agents.” The IIRO is a charity suspected of funding militant activities in numerous places around the world, but the US has been reluctant to prosecute it due to its direct links to the Saudi government (see January 1996 and October 12, 2001). Khalifa is not only the first head of the IIRO’s Philippine branch, but also the IIRO’s regional director for all of Southeast Asia. The IIRO’s offices are often staffed by members of the Abu Sayyaf and MILF. For instance, one IIRO branch office director is also the Abu Sayyaf’s intelligence chief until he is killed in June 1994. [Philippine Daily Inquirer, 8/9/2000; CNN, 1/27/2002; Contemporary Southeast Asia, 8/1/2003; Strategic Studies Institute of the US Army War College, 9/1/2005 
]
It is estimated that as much as 70 percent of the money from these fronts are spent on militant groups. In one case, a charity that Khalifa claimed had built 30 orphanages had only built one. [Newsweek International, 10/22/2001] The Philippines will investigate Khalifa and expel him from the country by late 1994 (see December 15, 1994 and December 1, 1994). He apparently never returns. He will no longer be directly connected to these charities, but they will all continue operating despite widely reported terrorist ties (see 1995 and After, February 15, 1999, August 9, 2000), and they will usually continue to be run by Khalifa’s close associates (see October 8-November 8, 2002 and September 25, 2003). The US will finally officially declare the Philippine branch of the IIRO a terrorism financier in 2006 (see August 3, 2006).
1988: Bin Ladens Bail Out George W. Bush?
Prior to this year, President George W. Bush is a failed oilman. Three times, friends and investors have bailed him out to keep his business from going bankrupt. However, in 1988, the same year his father becomes president, some Saudis buy a portion of his small company, Harken, which has never performed work outside of Texas. Later in the year, Harken wins a contract in the Persian Gulf and starts doing well financially. These transactions seem so suspicious that the Wall Street Journal in 1991 states it “raises the question of… an effort to cozy up to a presidential son.” Two major investors in Bush’s company during this time are Salem bin Laden and Khalid bin Mahfouz. Salem bin Laden dies in a plane crash in Texas in 1988. [Intelligence Newsletter, 3/2/2000; Salon, 11/19/2001] Salem bin Laden is Osama’s oldest brother; Khalid bin Mahfouz is a Saudi banker with a 20 percent stake in BCCI. The bank will be shut down a few years later and bin Mahfouz will have to pay a $225 million fine (while admitting no wrongdoing) (see October 10, 2001)). [Forbes, 3/18/2002]
1988-1989: Al-Qaeda Golden Chain Lists Financiers
In March 2002, authorities in Bosnia, Sarajevo, will raid the offices of the Benevolence International Foundation (BIF) due to suspected funding of al-Qaeda (see March 2002). The raid will uncover a handwritten list containing the name of twenty wealthy donors sympathetic to al-Qaeda. The list, referred to as “The Golden Chain,” contains both the names of the donors and the names of the recipients (but does not mention amounts given). Seven of the payments are made to Osama bin Laden. [United Press International, 2/11/2003] Most accounts will be vague on what year the Golden Chain document was written; some say 1988. [Wall Street Journal, 3/18/2003] But counterterrorism “tsar” Richard Clarke will say it dates from 1989. [US Congress, 10/22/2003] Al-Qaeda is formed in late 1988 (see August 11-20, 1988). The Wall Street Journal will later note, “The list doesn’t show any continuing support for al-Qaeda after the organization began targeting Americans, but a number of the Saudis on it have been under scrutiny by US officials as to whether they have supported terrorism in recent years.” [Wall Street Journal, 3/18/2003] The donors named include: The “Bin Laden brothers.” Their first names are not mentioned. They give money to Osama bin Laden. UPI will later point out that “the discovery of this document in Sarajevo calls into question whether al-Qaeda has received support from one of Osama’s scores of wealthy brothers.” Adel Batterjee, a wealthy Saudi businessman who is also the founder of both BIF and its predecessor, Lajnatt Al-Birr Al-Islamiah. He appears to be mentioned as a recipient three times. [United Press International, 2/11/2003] The US will declare him as a terrorist financier in 2004 (see December 21, 2004). Wael Hamza Julaidan, a Saudi millionaire and one of the founders of al-Qaeda. He is listed as a recipient. The US will declare him a terrorist financier in 2002 (see September 6, 2002). Saleh Kamel, a Saudi billionaire, and the majority shareholder of the Saudi conglomerate Dallah Albaraka. In 2003, Forbes will call him one of the richest people in the world. The list has him giving money to Batterjee. Sulaiman Abdul Aziz al-Rajhi, another Saudi billionaire. The SAAR network, which is named after him, will be raided by the FBI in 2002 (see March 20, 2002). [Emerson, 2006, pp. 400] Khalid bin Mahfouz, another Saudi billionaire. A lawyer for bin Mahfouz will later say bin Mahfouz did contribute a small amount to fund the mujaheddin in the late 1980s, but only at the behest of the US and Saudi Arabia. [Wall Street Journal, 3/18/2003]
1988-February 1992: US Support for Mujaheddin Declines; Funds from Saudi Donors Increase
US support for the mujaheddin slows down to “a trickle” because of concerns about dangers of promoting Islamic fundamentalism. The slack is picked up, however, by wealthy individual donors, many of whom are Saudis. These donors seem to favor the most extreme fundamentalist groups among the mujaheddin. [Yousaf and Adkin, 1992, pp. 91-92]
1989-90 and Before: Wounded Extremists Receive Top-Class Medical Care in Britain, Also Treated in Saudi Arabia
Many veteran mujaheddin who have been wounded in the Soviet-Afghan War receive expensive treatment for their injuries in London. The care is paid for by rich Saudis and provided at clinics in Harley Street, an area well known for the high quality and price of the treatment provided there. Local extremist Abu Hamza al-Masri acts as a translator for the wounded. He will later speak of the deep impression this makes on him, “When you see how happy they are, how anxious just to have a new limb so they can run again and fight again, not thinking of retiring, their main ambition is to get killed in the cause of Allah… you see another dimension in the verses of the Koran.” [O’Neill and McGrory, 2006, pp. 18] Some wounded mujaheddin are also treated in Saudi Arabia, where their treatment is paid for by the Islamic Benevolence Committee, a charity and early incarnation of the Benevolence International Foundation. The treatment is provided at a hospital owned by the family of the charity’s founder, Adel Batterjee. The committee will go on to help fighters injured in the Bosnian War (see 1993). [Chicago Tribune, 2/22/2004]
May 1990: Bin Laden Family Forms Saudi Binladin Group
Beginning in the 1920s, Mohammed Awad bin Laden rose from relative obscurity by creating a construction company favored by the Saudi royal family. He had 54 children before he was killed in a plane crash in 1968. His son Osama bin Laden was born in 1957. The bin Laden family’s companies continued to grow until they became the second wealthiest family in Saudi Arabia, behind only the Saudi royal family. In May 1990, the bin Laden family registers a new parent company for its business activities called the Saudi Binladin Group. Bakr bin Laden, one of Mohammed’s sons, is running the company by this time. By 9/11, the company will employ 36,000 people in 30 countries. The company has been branching out from construction to many other endeavors. However, it will keep a low profile internationally, as most of its business is still in Saudi Arabia. It has business ties with major international corporations such as General Electric, Unilever, Motorola, Schweppes, Citigroup, and HSBC Bank. [Ha’aretz, 12/18/2002]
