British bomb plot spotlights charities

For months they dispensed earthquake aid with vigor and dedication. Locals and government officials – even Pakistan's president – praised their work. Analysts said they were more effective at earthquake relief than the state.

But now Jamat-ud-Dawa, a charity banned by the US State Department in April, is at the center of a firestorm suggesting they were doing more than lending a needed hand. The group's leader has been placed under house arrest, and investigators in England and Pakistan are probing whether the group provided financial and logistical support to the London terror suspects, raising fears that it has an appetite for militancy on the international stage.

The New York Times reported that Jamat-ud-Dawa's offices in England were said to be responsible for channeling funds for the plot, which were raised under the guise of earthquake aid. England's Sunday Mirror reported that three Britons arrested in Pakistan received substantial money transfers from several charities, totaling millions of dollars, into at least three bank accounts in Kashmir.

With news of Jamat-ud-Dawa's involvement circulating widely, analysts in Pakistan cautioned against jumping to any conclusions, saying the group's history and recent evolution suggest it has neither the political will, nor the capacity, to be involved in an international terrorist plot.

"Jamat-ud-Dawa has realized that militancy cannot be an agenda in the long run. They have to divest themselves. That is why they have created schools and health clinics. So they're working like Hamas, to spread their religio-political influence," says Ershad Mahmud, an expert on Kashmir at the Institute for Policy Studies, an Islamabad think tank. "I don't think they're so naive as to put their whole infrastructure at risk."

However, Islamic charities are typically poorly supervised, and there are numerous instances of well-known charities in countries like Pakistan, Saudi Arabia, and Indonesia doing good works while simultaneously funneling money to militants. Militant organizations have frequently used charitable activities to build sympathy and recruit new members around the world.

Intelligence officials in Pakistan say there is no direct evidence of Jamat-ud-Dawa's involvement in the plot, but that they are still probing whether the group provided logistical or financial support.

"We are trying to trace links between suspects arrested in Britain and their aides in Pakistan. We have taken several members of militant groups into custody," says one intelligence official, speaking on condition of anonymity.

Intelligence officials here also said they are investigating other quake-related money flows from charities and individuals in the US, the UK, and other parts of Europe to different welfare-based groups and individuals in Pakistan. "We are also seeing whether the money was misused by any religious group," says one intelligence official.

Meanwhile, media reports have surfaced that funding from a British charity, Crescent Relief, was behind the plot.

The organization, which has denied involvement, allegedly sent substantial sums of money to three different bank accounts in Kashmir last December, says Sajjan Gohel, a terrorism analyst at the Asia Pacific Foundation in London.

The father of two men arrested last week in connection to the plot – one in England, and another, Rashid Rauf, in Pakistan – was a founding director of Crescent Relief. His home in Birmingham, England, was searched by police last week.

"Rashid Rauf is now being seen as the linchpin between those arrested in Britain and those picked up in Pakistan," says Mr. Gohel.

While British authorities have not publicly acknowledged any ties between Crescent Relief and the terror plot, the Charity Commission office has said they are looking into the claims.

Pursuing the finance trail in such investigations is well worth the effort, says Paul Wilkinson, chairman of the Centre for the Study of Terrorism and Political Violence at St. Andrews University in Scotland.

"We need to recognize that quite small sums [can be] a lot of money for a terrorist organization in terms of acquiring materials, buying airfares, establishing a safe house," he says. And the finance trail often leads to support individuals. For example, Hambali – a key player in the 2002 Bali bombings with ties to Al Qaeda – was traced as a result of a financial transaction in Thailand.

In Islamabad, Tasneem Aslam, spokeswoman for the Foreign Ministry, dismissed claims that Pakistan was investigating money flows from Islamic charities. She also dismissed as baseless media claims that Jamat-ud-Dawa was in any way tied to the London terror plot. "Some one has cooked up this story," she says.

Hafeez Mohammed Saeed, leader of Jamat-ud-Dawa, was placed under house arrest only days before the London terror plot was unearthed, feeding speculation that his organization was involved. Ms. Aslam, however, denied these reports. "He was detained because the government felt that he was making statements that were not in the public interest. But it has nothing to do with the terrorist plot," she says.

Khwaja Khalid Farooq, the city police chief of Lahore, where Mr. Saeed resides, confirmed this, saying that Saeed was scheduled to hold a rally that the government feared might stir unrest. "We had orders from the government to detain Hafeez Saeed at his house. The [Jamat-ud-Dawa] leader was scheduled to address a public meeting on Aug. 12 in connection with Pakistan Independence Day. His group had applied for permission, which the government had declined," Mr. Farooq says.

A spokesman for Jamat-ud-Dawa, Yahya Mujahid, also denied that his organization was involved in the London terror plot. "We are a charity organization. We have got nothing to do with any terrorist activity." Mr. Mujahid maintained that the group had not received any funds from UK-based organizations or individuals during the quake relief. "We challenge anybody having any evidence of our receiving money from the UK to come forward."

Whether Jamat-ud-Dawa is a front for a terrorist organization has long been a subject of debate. Hafeez Mohammed Saeed is the recognized former founder of Lashkar-i Tayyaba, a terrorist organization credited with several attacks against Indian interests in the disputed territory of Kashmir. Mr. Saeed left the organization when it was banned in 2002, and formed Jamat-ud-Dawa, ostensibly a welfare organization.

But many believe the two organizations are one and the same. Punjab police records say Jamat-ud-Dawa has not been involved in any terrorist activities. But the Pakistani Crimes Investigation Department says the organization is just another face of Lashkar-i Tayyaba.

Intelligence officials, speaking anonymously, claimed that Jamat-ud-Dawa is merely a change in name, and that the group is actually still Lashkar-i Tayyaba, with both groups supervised by the same command. The intelligence officials went on to say that Jamat-ud-Dawa, while never implicated directly in terrorist activity, runs seminaries that have the potential to provide militant training. They added that at least one of the bombers involved in the July attack on London's subways had stayed at the main headquarters of Jamat-ud-Dawa near Lahore during his visit to Pakistan.

Analysts warned against facile assumptions. "I have visited many Jamat-ud-Dawa schools and clinics. It doesn't mean I'm part of any network," said Mr. Mahmud.

• Staff writers Christa Case and Dan Murphy contributed from Berlin and New York.