Former Bin Laden friend denies terror ties

Mohammed Jamal Khalifa is cross-legged on the ground, picnicking on a feast of fish and rice. He is upbeat as he points out the features of the restaurant he runs with his brother Abdullah, built into a park-like setting near the Red Sea coast north of Jeddah.

Yet Mr. Khalifa is unsure how long he will enjoy these freedoms. He is a wanted man, believed by analysts and intelligence agencies, including the FBI and CIA, to have links to the heart of Al Qaeda. Using charities in the Philippines as a cover, Khalifa is alleged to have funded the radical Islamic group Abu Sayyaf. He is also said to have spearheaded plots including a foiled 1995 plan to hijack planes and crash them into the Pentagon and CIA headquarters - widely seen as a blueprint for the Sept. 11 attacks.

The victims of Sept. 11 have named Khalifa in their multibillion dollar lawsuit for damages.

"Had the US followed the Khalifa case in the Philippines ... I believe Sept. 11 could have been averted," says Rohan Gunaratna from the University of St. Andrews Center for the Study of Terrorism and Political Violence in Scotland.

In his first interview with the US media since 1994, Khalifa rejects the allegations that have led to his interrogation in prisons in the US, Jordan, and Saudi Arabia.

"I want a chance to prove that I am clean because I know there is nothing," he says. "If I did anything wrong then come and punish me."

Khalifa refutes allegations that he founded Asian terror groups by explaining that as a businessman and the head of a large Islamic charity he met many people. "People came and met me and I gave them my card. I have fully documented evidence that I was working with the Filipino government, not the rebels."

Yet Khalifa admits he looks suspicious. He was Osama bin Laden's best friend and married his sister. His business card was found in the office of 1993 World Trade Center bomber Ramzi Yousef and he knew many of those known to have links to Al Qaeda.

"I was Osama's best friend for 10 years," he says. "I really loved Osama and we were almost never apart. He was very humble, very simple, very polite. I never heard him say a bad word against anybody."

The pair met at university in Jeddah in the late 1970s and shared a house for two years.

"I am surprised to hear about what Osama is doing now because it's not in his personality [to lead]," says Khalifa. "He doesn't have the capacity to organize something as simple as a 15-minute trip. Even at prayer time he would say: 'You lead the prayers.' "

In their free time the two went swimming in the Red Sea or took off to the bin Laden family's property outside Jeddah. "We talked about horses, cars, the normal things youths talk about," Khalifa remembers.

They also talked about jihad. In the early 1980s Khalifa and bin Laden became influenced by Abdullah Azzam, an Islamic scholar who Khalifa describes as his "spiritual leader." Azzam, a Palestinian, promoted jihad and was, according to Gunaratna, the true founder of Al Qaeda.

Azzam, who was killed in 1989, encouraged Khalifa and bin Laden to go to Afghanistan to fight the Soviets.

Khalifa moved from Afghanistan to Pakistan where he ran an Islamic charity delivering aid to Afghan refugees. Meanwhile bin Laden set up a rudimentary military training camp that grouped the Arab jihadis flocking to Afghanistan. This is where Khalifa's version of events diverges from those of analysts like Gunaratna. Far from masterminding Al Qaeda together, Khalifa says he and bin Laden had a falling out that ended their friendship.

According to Khalifa, the Afghans were upset by bin Laden's training camp, called al-Masadah, The Lion's Den. The members of this camp went on to form the first Al Qaeda cell.

Khalifa says the Afghans pleaded with him to stop bin Laden's activities and he left Peshawar to talk to bin Laden. The two friends fought and fell out. "He refused to even listen to what I had to say," Khalifa recalls. "It was very unlike him. In the end he was prepared to lose me rather than back down."

Khalifa's case highlights the difficulties facing the US as it pursues the war on terror. If he is a pivotal Al Qaeda operative, why is he free in Saudi Arabia?

Much of the evidence against him is circumstantial, says Marc van der Hout, a San Francisco attorney who defended Khalifa during his imprisonment in the US in 1994-5. "My assessment at the time was that this was guilt by association in the basest form," he says.

But Gunaratna believes Khalifa's freedom points to failures in international law.

"If Khalifa was guilty of these offenses after Sept. 11, then today he would be in [the Guantánamo detention camp], but Khalifa was active in the '90s when the US did not aggressively pursue terror," he says. "If he entered the US today, he would be imprisoned for a long time."

Khalifa was among the first suspects to be arrested following Sept. 11. He was questioned in a Saudi jail for nearly three months before being released. The Saudi government, which has jailed around 100 suspected Al Qaeda members, stands by its decision to release Khalifa and has said he is "clean."

Indeed, there is no hint of the suspected terrorist at dinner on this mild Saudi Arabian night. Khalifa smiles often and jokes easily. He is charming, dressed in a white ankle-length shirt and skull-hugging white cap.

"I don't know what I did wrong," he says. "When I first heard these allegations I was shocked. Me? A threat? I went straight to the mirror to take a good look at myself."

Gunaratna agrees that Khalifa's charity work in the Philippines did have some legitimacy. He built schools, established healthcare clinics, and distributed food aid. Many residents of the southern Philippines, Christians as well as Muslims, remember Khalifa kindly.

The gray area lies in how much of Khalifa's charity money was diverted to terrorism. Khalifa says none: "I am not only sure, but challenging anyone to prove otherwise." Defectors from Abu Sayyaf claim they received up to 70 percent of the money.

Jamal Khashoggi, a Saudi columnist whose views are aired in the Western media, is a Khalifa supporter.

"I know Jamal very well and there is no way I believe he is involved [with Al Qaeda]," says Mr. Khashoggi.

Khalifa says he was horrified by the Sept. 11 attacks. "I am against Al Qaeda's activities and condemn it all," he says, adding that he is ready to offer insight into the way Islamic charities operate and the roots of Al Qaeda.

Khalifa says the charities are being unfairly targeted as funders of terror. "Maybe some people misuse funds in this way," he says. "I don't think so, because it's our obligation to meet our own financial needs [for jihad]."

The flipside, he says, is the potential threat from closing them down: "Those organizations are giving food and jobs to the needy. When you take the food from their mouth, they will ask, 'Who stopped this organization?' They will be told: America. No American will move safely after that."