Ayman al-Zawahiri, leader of Islamic Jihad and effective number two leader of al-Qaeda, travels to Chechnya with two associates. His associates are Ahmad Salama Mabruk, head of Islamic Jihad’s cell in Azerbaijan, and Mahmud Hisham al-Hennawi, a well-traveled militant. Chechnya was fighting to break free from Russian rule and achieved a cease-fire and de facto independence earlier in the year (see August 1996). Al-Zawahiri hopes to establish new connections there. However, on December 1, 1996, he and his associates are arrested by Russian authorities as they try to cross into Chechnya. Al-Zawahiri is carrying four passports, none showing his real identity. The Russians confiscate al-Zawahiri’s laptop and send it to Moscow for analysis, but apparently they never translate the Arabic documents on it that could reveal who he really is. Though some Russian investigators suspect al-Zawahiri is a “big fish,” they cannot prove it. He and his two associates are released after six months. [Wall Street Journal, 7/2/2002; Wright, 2006, pp. 249-250] Later in December 1996, Canadian intelligence learns that Mabruk at least is being held. They know his real identity, but apparently do not share this information with Russia (see December 13, 1996-June 1997). Author Lawrence Wright will later comment: “This fiasco had a profound consequence. With even more defectors from [Islamic Jihad during al-Zawahiri’s unexplained absence] and no real source of income, Zawahiri had no choice but to join bin Laden” in Afghanistan. Prior to this arrest, al-Zawahiri had been traveling all over the world and earlier in 1996 he apparently lived in Switzerland and Sarajevo, Bosnia. But afterwards he remains in Afghanistan with Osama bin Laden until the 9/11 attacks. As a result, Islamic Jihad and al-Qaeda will grow even closer until they completely merge a few months before 9/11 (see June 2001). [Wright, 2006, pp. 249-250]
November 1996-Late December 1999: US Government Funding Charity Front It Knows Has Ties to Bin Laden and Hamas
In November 1996, the FBI monitors the progress of bin Laden buying a new satellite phone and tracks the purchase to Ziyad Khaleel, a US citizen and radical militant living in Missouri (see November 1996-Late August 1998). Newsweek will later say that this puts the Sudan-based charity Islamic American Relief Agency (IARA) “on the FBI’s radar screen” because Khaleel is one of IARA’s eight regional US directors. [Newsweek, 10/20/2004] Khaleel is monitored as he continues to buy new minutes and parts for bin Laden’s phone at least through 1998 (see July 29-August 7, 1998). He is also the webmaster of the official Hamas website. His name and a Detroit address where he lived both appear prominently in ledgers taken by US investigators from the Al-Kifah Refugee Center in 1994, a charity front with ties to both bin Laden and the CIA (see 1986-1993). That Detroit address is also tied to Ahmed Abu Marzouk, the nephew of Mousa Abu Marzouk, a high-ranking Hamas leader who is imprisoned in the US between 1995 and 1997 (see July 5, 1995-May 1997). Furthermore, Khaleel is working for the Islamic Association for Palestine (IAP), a Hamas-linked organization cofounded by Mousa Abu Marzook. [National Review, 10/2/2003] A secret CIA report in early 1996 concluded that the IARA was funding radical militants in Bosnia (see January 1996). US intelligence will later reveal that in the late 1990s, IARA is regularly funding al-Qaeda. For instance, it has evidence of IARA giving hundreds of thousands of dollars to bin Laden in 1999. But Newsweek will later note that “at the very moment that the [IARA] was allegedly heavily involved in funneling money to bin Laden, the US branch was receiving ample support from the US Treasury through contracts awarded by the State Department’s Agency for International Development (USAID).” Between 1997 and 1999, USAID gives over $4 million to IARA, mostly meant for charity projects in Africa. Finally, at the end of December 1999, counterterrorism “tsar” Richard Clarke gets USAID to cut off all funding for IARA. But the charity is merely told in a latter that US government funding for it would not be “in the national interest of the United States” and it is allowed to continue operating. At the same time, US agents arrest Khaleel while he is traveling to Jordan (see December 29, 1999. The US government will wait until 2004 before shutting down IARA in the US and raiding the Missouri branch where Khaleel worked. Newsweek will later comment, “One question that is likely to arise [in the future] is why it took the US government so long to move more aggressively against the group.” [Newsweek, 10/20/2004]
Late 1996: Bin Laden Becomes Active in Opium Trade
Bin Laden establishes and maintains a major role in opium drug trade, soon after moving the base of his operations to Afghanistan. Opium money is vital to keeping the Taliban in power and funding bin Laden’s al-Qaeda network. One report estimates that bin Laden takes up to 10 percent of Afghanistan’s drug trade by early 1999. This would give him a yearly income of up to $1 billion out of $6.5 to $10 billion in annual drug profits from within Afghanistan. [Financial Times, 11/28/2001] The US monitors bin Laden’s satellite phone starting in 1996 (see November 1996-Late August 1998). According to one newspaper, “Bin Laden was heard advising Taliban leaders to promote heroin exports to the West.” [Guardian, 9/27/2001]
1997: Bin Laden Family Financial Connection With Osama Continues Until At Least This Year
In 2004, Osama bin Laden’s half brother Yeslam Binladin admits that he and other bin Laden family members share a Swiss bank account with Osama bin Laden from 1990 until 1997. The account was opened by brothers Omar and Heidar bin Laden in 1990 with an initial deposit of $450,000. By 1997, only two people are authorized to conduct transactions on the account: brothers Osama and Yeslam bin Laden. The bin Laden family claims to have disowned Osama bin Laden in 1994 (see Shortly After April 9, 1994), and the US government officially designated him as a financier of terrorism in 1996. Yeslam had previously denied any financial dealings with Osama at this late date until evidence of this bank account was uncovered by French private investigator Jean-Charles Brisard. In December 2001, French authorities will open an investigation into the financial dealings of the Saudi Investment Company (SICO) run by Yeslam Binladin. [Agence France-Presse, 7/26/2004; Scotsman, 9/28/2004; Der Spiegel (Hamburg), 6/6/2005] In 2002, his house will be raided by French police. [Associated Press, 3/20/2002] No charges have been made as of yet, but the investigation will continue and in fact widen its scope in late 2004. A French magistrate will claim he is looking into “other instances of money laundering” apparently involving financial entities connected to Yeslam and other bin Laden family members. [Reuters, 12/26/2004] Yeslam claims he’s had no contact with Osama in 20 years. Yet, in 2004, when asked if he would turn in Osama if given the chance, he replies, “What do you think? Would you turn in your brother?”
[MSNBC, 7/10/2004] His ex-wife Carmen Binladin will also comment around the same time, “From what I have seen and what I have read, I cannot believe that [the rest of the bin Laden family] have cut off Osama completely.… And I cannot believe that some of the sisters [don’t support him.] They are very close to Osama.”
[Salon, 7/10/2004]
1997: US National Intelligence Estimate Briefly Mentions Bin Laden
The US intelligence community releases another National Intelligence Estimate (NIE) dealing with terrorism. It mentions Osama bin Laden on the first page as an emerging threat and points out he might be interested in attacks inside the US. However, the section mentioning bin Laden is only two sentences long and lacks any strategic analysis on how to address the threat. A previous NIE dealing with terrorism was released in 1995 and did not mention bin Laden (see July 1995). [Associated Press, 4/16/2004; 9/11 Commission, 8/26/2004, pp. 54] The NIE also notes, “Civilian aviation remains a particularly attractive target for terrorist attacks.” [Tenet, 2007, pp. 104] There will be no more NIEs on terrorism before 9/11 despite the bombing of US embassies in Africa in 1998 (see 10:35-10:39 a.m., August 7, 1998) and the attack on the USS Cole in 2000 (see October 12, 2000). However, there will be some more analytical papers about bin Laden and al-Qaeda. The 9/11 Commission, in particular executive director Philip Zelikow and staffer Doug MacEachin, will be shocked that this is the final NIE on terrorism before the attacks and that, in the words of author Philip Shenon, “no one at the senior levels of the CIA had attempted—for years—to catalog and give context to what was known about al-Qaeda.” MacEachin thinks it is “unforgivable” there is no NIE for four years and that, according to Shenon, “if policy makers had understood that the embassy bombings and the attack on the Cole were simply the latest in a long series of attacks by the same enemy, they would have felt compelled to do much more in response.” [Shenon, 2008, pp. 314]
1997: CIA Re-opens Afghanistan Operations
Special CIA paramilitary teams enter Afghanistan again in 1997. [Washington Post, 11/18/2001] Gary Schroen, head of the CIA’s Pakistan office during the late 1990’s, will later comment, “We had connections to the Northern Alliance, Ahmed Shah Massoud’s group of Tajik fighters up in the north. The CIA was sending teams into northern Afghanistan from ‘97 up until about 2000 to meet with Massoud’s people, to try to get them involved.” [PBS Frontline, 1/20/2006] (The CIA’s anti-Soviet covert operations officially ended in January 1992. [Coll, 2004, pp. 233] ) Around 1999 there will be a push to recruit more agents capable of operating or traveling in Afghanistan. Many locals will be recruited, but apparently none is close to bin Laden (see 1999). This problem is not fixed in succeeding years. [Washington Post, 2/22/2004; 9/11 Commission, 3/24/2004]
Early 1997: CIA Unit Determines Bin Laden Is Serious Threat, But Cooperation Is Poor
By the start of 1997, Alec Station, the CIA unit created the year before to focus entirely on bin Laden (see February 1996), is certain that bin Laden is not just a financier but an organizer of terrorist activity. It is aware bin Laden is conducting an extensive effort to get and use a nuclear weapon (see Late 1996). It knows that al-Qaeda has a military committee planning operations against US interests worldwide. However, although this information is disseminated in many reports, the unit’s sense of alarm about bin Laden isn’t widely shared or understood within the intelligence and policy communities. Employees in the unit feel their zeal attracts ridicule from their peers. [9/11 Commission, 3/24/2004] Some higher-ups begin to deride the unit as hysterical doomsayers, and refer to the unit as “The Manson Family.” Michael Scheuer, head of the unit until 1999, has an abrasive style. He and counterterrorism “tsar” Richard Clarke do not get along and do not work well together. Scheuer also does not get along with John O’Neill, the FBI’s most knowledgeable agent regarding bin Laden. The FBI and Alec Station rarely share information, and at one point an FBI agent is caught stuffing some of the unit’s files under his shirt to take back to O’Neill. [Vanity Fair, 11/2004]
1997-September 11, 2001: Russian-Born Businessman Provides the US Government with Information about Bin Laden and Al-Qaeda
Felix Sater, a Russian-born businessman, works as a spy for American intelligence, and obtains valuable information about Osama bin Laden and al-Qaeda, including bin Laden’s satellite telephone numbers. [BuzzFeed News, 3/12/2018] Sater was born in Moscow in 1966 but moved with his family to America when he was a child and is now an American citizen. [US Congress. House, 12/2017; ABC News, 8/23/2019] He becomes an informant for the FBI around December 1998 after pleading guilty for his role in a $40 million stock fraud scheme orchestrated by New York mafia members. To avoid a prison sentence, he signs a cooperation agreement with the US government. [BuzzFeed News, 3/12/2018; Politico, 5/16/2019; Hill, 5/16/2019; Daily Mail, 8/23/2019] However, his work for American intelligence begins more than a year before this, he will later claim, when he meets an employee of the Defense Intelligence Agency who tells him his country needs him and then recruits him in support of American intelligence efforts. [US Congress. House, 12/2017; ABC News, 8/23/2019] He works as a spy for over 20 years, assisting the CIA, the FBI, and other agencies. [US Department of Justice, 8/27/2009 
; Politico, 3/12/2018]
Sater Faces ‘Tremendous Risks’ in His Intelligence Work – Sater provides what he will describe as “extraordinary assistance” to the US government that involves “serious matters of national security.” His work poses “tremendous risks to my safety and the safety of my family,” he will state, and implicates “some of our nation’s greatest enemies, whose terrorism threatened our way of life.” His activities include: 
Establishing a network of contacts in various countries that includes intelligence officers, military operatives, and personnel at military research facilities. [US Congress. House, 12/2017] Among these contacts are a former senior KGB officer and arms dealer who possesses information regarding “potential threats to the United States emanating from Afghanistan and certain Central Asian republics,” and an intelligence officer working for the Northern Alliance, the resistance group fighting Afghanistan’s ruling Taliban. [US Department of Justice, 8/27/2009 ; BuzzFeed News, 3/12/2018] Providing information about the location of bin Laden and elements of his command structure. [US Congress. House, 12/2017] Providing information about who is selling arms to bin Laden. [US Department of Justice, 8/27/2009 ] Obtaining five of bin Laden’s personal satellite telephone numbers. [US Department of Justice, 8/27/2009 ; US Congress. House, 12/2017; BuzzFeed News, 3/12/2018] Providing information about the locations of hidden al-Qaeda terrorist training camps. Assembling a team of mercenaries in an effort to kill bin Laden in one of his terrorist training camps. Providing information about the location of Stinger missiles that were initially provided to the mujaheddin in Afghanistan, before they are acquired by al-Qaeda. [US Congress. House, 12/2017]
Sater Goes ‘above and beyond’ What Is Expected – Sater is apparently dedicated and effective in his work for the US government, and will receive significant praise for it. Agents who supervise him will all say he is “an exemplary cooperator who worked diligently to further the aims of the missions to which he was assigned.” [US Department of Justice, 8/27/2009 ] A senior intelligence official who works directly on terrorism cases before and after 9/11 will comment, “Felix likely does not realize how important his work has been in saving American lives” and “deserves a commendation” for his efforts. [BuzzFeed News, 3/12/2018] He went “above and beyond what is expected of most cooperators, and placed himself in great jeopardy in so doing,” federal prosecutors involved with his stock fraud case will write. [US Department of Justice, 8/27/2009 ; Daily Mail, 8/23/2019]
Sater Is Happy to Assist the US Government – Sater is apparently happy to work with US intelligence agencies. He will state that he “enthusiastically embraced” the opportunity to serve and protect his country. He will continue working for US intelligence after 9/11, and provide information about the names and passports of al-Qaeda operatives, and information about the locations of al-Qaeda weapons caches, among other things (see After September 11, 2001). [US Congress. House, 12/2017] He will become known after the 2016 US presidential election for his business ties to then President Donald Trump. [CBS News, 11/29/2018; Hill, 5/16/2019; ABC News, 8/23/2019]
1997-May 29, 1998: US Creates Plan to Capture Bin Laden, but CIA Director Tenet Cancels It
In 1997 and early 1998, the US develops a plan to capture Osama bin Laden in Afghanistan. A CIA-owned aircraft is stationed in a nearby country, ready to land on a remote landing strip long enough to pick him up. However, problems with having to hold bin Laden too long in Afghanistan make the operation unlikely. The plan morphs into using a team of Afghan informants to kidnap bin Laden from inside his heavily defended Tarnak Farm complex. Michael Scheuer, head of the CIA’s bin Laden unit, calls the plan “the perfect operation.” Gary Schroen, the lead CIA officer in the field, agrees, and gives it about a 40 percent chance of succeeding. [Clarke, 2004, pp. 220-221; Washington Post, 2/22/2004; Vanity Fair, 11/2004] The Pentagon also reviews the plan, finding it well crafted. In addition, there is “plausible denialability,” as the US could easily distance itself from the raid. Scheuer will comment, “It was the perfect capture operation becauase even if it went completely wrong and people got killed, there was no evidence of a US hand.” [Shenon, 2008, pp. 192] However, higher-ups at the CIA are skeptical of the plan and worry that innocent civilians might die. The plan is given to CIA Director George Tenet for approval, but he rejects it without showing it to President Clinton. He considers it unlikely to succeed and decides the Afghan allies are too unreliable. [Clarke, 2004, pp. 220-221; Washington Post, 2/22/2004; Vanity Fair, 11/2004] Additionally, earlier in May 1998, the Saudis promised to try to bribe the Taliban and try bin Laden themselves, and apparently Tenet preferred this plan (see May 1998). Scheuer is furious. After 9/11 he will complain, “We had more intelligence against this man and organization than we ever had on any other group we ever called a terrorist group, and definitive and widely varied [intelligence] across all the ends, and I could not understand why they didn’t take the chance.” [Vanity Fair, 11/2004] There will be later speculation that the airstrip used for these purposes is occupied and will be used as a base of operations early in the post-9/11 Afghan war. [Washington Post, 12/19/2001]
February 7-21, 1997: Monitored Calls of Al-Qaeda Operatives in Kenya Indicate One of Them Is Meeting Bin Laden in Afghanistan
US intelligence is monitoring the phones of an al-Qaeda cell in Kenya (see
April 1996 and Late 1996-August 1998), as well as the phones of Osama bin Laden and other al-Qaeda leaders in Afghanistan (see November 1996-Late August 1998). Between January 30 and February 3, 1997, al-Qaeda leader Mohammed Atef calls Wadih El-Hage, the leader of the Kenyan cell, several times. El-Hage then flies to Pakistan and on February 4, he is monitored calling Kenya and gives the address of the hotel in Peshawar where he is staying. On February 7, he calls Kenyan cell member Fazul Abdullah Mohammed (a.k.a. Haroun Fazul) and says he is still in Peshawar, waiting to enter Afghanistan and meet al-Qaeda leaders. [United States of America v. Usama Bin Laden, et al., Day 37, 5/1/2001] Then, later on February 7, Fazul calls cell member Mohammed Saddiq Odeh. According to a snippet of the call discussed in a 2001 trial, Fazul informs Odeh about a meeting between the “director” and the “big boss,” which are references to El-Hage and Osama bin Laden respectively. In another monitored call around this time, Fazul talks to cell member Mustafa Fadhil, and they complain to each other that Odeh is using a phone for personal business that is only meant to be used for al-Qaeda business. Then, on February 21, El-Hage is back in Kenya and talks to Odeh on the phone in another monitored call. [United States of America v. Usama Bin Laden, et al., Day 37, 5/1/2001; United States of America v. Usama Bin Laden, et al., Day 39, 5/3/2001]
