The Laundering Lobbyist?

When a U.S. Senate committee started investigating a controversial Islamic charity a few years ago, the group responded in the usual Washington way: it hired a politically connected lobbyist to get the panel off its scent. But that move may have backfired Wednesday when the lobbyist, former U.S. congressman Mark Siljander, was indicted on money-laundering, conspiracy and obstruction charges related to his lobbying work for the Columbia, Mo.-based charity known as the Islamic American Relief Agency (IARA).

The indictment, handed up by a federal grand jury in Kansas City, charges that Siljander—a Michigan Republican who was once named by President Ronald Reagan as a U.S. representative to the United Nations—pocketed about $50,000 in stolen U.S. government funds to represent the interests of an organization that, according to federal prosecutors, was funneling money to an Al Qaeda-linked terrorist in Afghanistan. The new charges against Siljander and IARA are some of the most surprising and boldest yet in a Justice Department crackdown against Islamic charities that has had more than its share of setbacks of late. The charges were also vehemently denied by lawyers for Siljander and the former executive director of IARA.

Siljander served in the House between 1981 and 1987, representing a Michigan district that was previously represented by David Stockman, the former OMB director who was indicted last year for allegedly defrauding investors about an automotive firm he once headed. Siljander, who now runs a Washington-area lobbying firm called Global Strategies, is "internationally recognized for his good-faith attempts to bridge the gap between Christian and Muslim communities worldwide," according to his lawyer, James R. Hobbs. Hobbs added that his client has never engaged in any "prohibited financial transactions with any U.S.-designated terrorist" and intends to plead not guilty.

The new case is especially high-stakes for the Justice Department, because it comes after a series of acquittals and mixed verdicts against other Islamic charities accused of financing terrorism. Most notably, a recent trial against leaders of the Holy Land Foundation accused of funneling money to Hamas ended in a mistrial.

IARA, which has since ceased business, was raided by the FBI three years ago and was charged in an earlier indictment last year with violating U.S. sanctions against Saddam Hussein's regime in Iraq by sending money to that country. But the new charges against the group are potentially more explosive. Operating out of modest offices in the sleepy college town of Columbia (home of the University of Missouri), IARA had portrayed itself to the public as a worldwide charity that was dedicated to the "care of orphans" and other worthy causes. In fact, according to the new charges, as recently as three years ago the group was diverting up to $130,000 to bank accounts in Peshawar, Pakistan, controlled by Gulbuddin Hekmatyar, an Afghan mujahedin leader who has vowed to wage a "holy war" against U.S. troops in Afghanistan and heads a group that has participated in terrorist acts by Al Qaeda and the Taliban. The group also employed an individual, Ziyad Khaleel, who the indictment states was a "publicly identified associate and procurement agent of Osama bin Laden."

Curtis Woods, a lawyer for Mubarek Hamed, the former executive director of IARA, disputed these charges, telling NEWSWEEK that if any of the charity's funds were provided to an "unlawful person," such as Hekmatyar, "it was inadvertent and not intended." He also said there was "no truth" to the allegation that the charity employed an agent of bin Laden.

IARA was so successful in its public relations efforts that in the late 1990s the group actually received U.S. Agency for International Development (USAID) contracts worth at least $2 million to help distribute humanitarian relief funds in Africa, according to documents reported by NEWSWEEK in 2004.

Suspicions that IARA might be diverting the funds for terrorism prompted USAID—under pressure from then-White House counterterrorism adviser Richard Clarke—to cancel the contracts. But according to Wednesday's indictment IARA improperly retained $84,922 of those funds and then used some of them to hire Siljander, funneling the money through two other nonprofits called the National Heritage Foundation and International Foundation. Siljander managed the accounts at the foundations, the indictment charges. IARA's goal in retaining the ex-congressman was to have itself removed from a list of Islamic charities being investigated by the Senate Finance Committee and to have itself restored as an approved government contractor, according to the indictment.

What exactly Siljander did for IARA is not mentioned in the indictment. A spokeswoman for Sen. Chuck Grassley, who chaired the committee at the time and oversaw the Islamic charity probe, said a former staffer does recall being contacted by a former congressman on IARA's behalf, but "there was no response to it on our part." But according to the indictment Siljander lied to the FBI about the arrangement, insisting that he had not been hired to do any lobbying or advocacy work for the group and that the monies he received from it were "charitable donations intended to assist him with writing a book about bridging the gap between Islam and Christianity," according to the indictment. He later made similar statements to a federal grand jury, the indictment says.