AL QAEDA TRADE IN HONEY IS SAID TO PROVIDE MONEY AND COVER FOR BIN LADEN

American officials say they have evidence that Osama bin Laden is
using a network of shops that sell honey - a staple of Middle Eastern
life since biblical times - to generate income and secretly move
weapons, drugs and agents throughout Al Qaeda, his terrorist network.

Mr. bin Laden is in control of a number of these retail honey shops
and members of his organization are also involved, one administration
official said.

Officials said the honey entrepreneurs include some of Mr. bin
Laden's top associates, like Abu Zubeidah, the Palestinian director
of Al Qaeda external affairs who controls movement of recruits in and
out of Mr. bin Laden's camps. The honey trade also includes less
senior Al Qaeda members. Officials said one is Khalil al-Deek, a
Palestinian-American who had been jailed in Jordan in connection with
plots to blow up sites in the United States and Jordan around the
millennium but who was released earlier this year for lack of
evidence.

The administration is considering adding the names of some of the
stores under investigation to a list of people and entities whose
assets the United States wants frozen by allies around the world. The
list, the second that the administration has compiled, is expected to
be released as early as the end of this week, officials said.

Honey is deeply rooted in Middle Eastern culture, religion and trade.
The Koran refers to the medicinal and healing properties of honey. In
Saudi Arabia, which produces relatively little honey, families
consume on average more than two pounds a month, according to a 1998
report by the United States Department of Agriculture.

The honey stores that officials say are controlled by Al Qaeda are
found throughout the Middle East as well as in Pakistan. One key
location, they said, is Yemen, which produces some of the purest and
most expensive honey in the region and which is home to many
supporters of Mr. bin Laden. His father was born in Yemen.

The stores, officials said, provide legitimate revenue for Mr. bin
Laden's terrorist network.

A senior administration official said honey ranks as one of Al
Qaeda's most important business operations, less for the income it
generates than for what he called its "operational assistance."

While declining to provide any estimates of the revenue the honey
business brings to Al Qaeda, he said the shops allow the organization
to ship contraband like money, weapons and drugs.

"The smell and consistency of the honey makes it easy to hide weapons
and drugs in the shipments. Inspectors don't want to inspect that
product. It's too messy," said one administration official.

Officials said intelligence officials had finished a study on the
role of honey stores in Al Qaeda earlier this year but have been
aware of the importance of these stores and attempting to monitor
them for almost two years.

The use of honey shops demonstrates Al Qaeda's financial dexterity as
well as its creativity in terrorist logistics. It also suggests the
difficulties inherent in efforts to clamp down on the wide range of
financial networks that support Mr. bin Laden's violence.

Honey is freely traded throughout the region. Pakistan, for example,
is one of the biggest exporters to Saudi Arabia. Honey from Yemen,
the 1998 report states, is the most expensive.

American honey producers exported 1,800 tons of honey to the Middle
East last year, most of which went through distributors, brokers and
importers, according to the National Honey Board. The 1998 report by
the Department of Agriculture listed more than two dozen such
middlemen in Saudi Arabia alone. These brokers, in turn, tend to sell
the honey to small retail outlets.

Officials said that Mr. bin Laden may initially have been introduced
to the utility of honey in Sudan, where he lived and operated from
1991 until his expulsion in 1996. A key bin Laden company, the
International al-Ikhlas Company, made honey at a factory in Kameen,
Sudan, according to testimony last February by a former bin Laden
associate at the trial in New York of men convicted in the plot to
bomb American embassies in East Africa in 1998.

While in the Sudan, Mr. bin Laden had several other legitimate
businesses but officials say that after he was forced out of the
country, his ability to draw on those businesses has been
significantly limited.

Mr. bin Laden moved his base of operations to Afghanistan, which is
also famous for its honey.

Another terrorist group known to have used honey shops to support its
operations is Egyptian Islamic Jihad, officials said. That group,
which was headed by Ayman al-Zawahiri, one of Mr. bin Laden's key
aides, has effectively merged with Al Qaeda.

The Central Intelligence Agency has been gathering information about
Al Qaeda's ties to the honey trade for several years, but it wasn't
until last May that a top secret report on the honey shops was
distributed within the intelligence community, officials said.

Analysts have identified several honey companies they believe are
tied to Mr. bin Laden. These include Al Shifa Honey Press and Al Nur
Honey, both of which are in Yemen, according to American officials.
One official said the honey shops do not appear to be part of a
larger conglomerate that might engage in such activities as
manufacturing or marketing honey.

In addition, the official said, while some of the shops may operate
under one company label, not all of them appear to be connected to
Mr. bin Laden's network.

While officials have long known that Mr. bin Laden has used
charities, banks and informal financial networks to move money and
operatives from country to country, there has been almost nothing
about the role of the honey trade in the public record.

But officials said that customs agents in the Middle East had within
the last year or two confiscated guns that were hidden in bulk
shipments of honey.

Government officials declined comment on the companies being
investigated. But Steven Emerson, a private analyst who maintains a
vast database on suspected Islamic terrorists and their related
activities, said that some individuals associated with the two Yemeni
honey companies have ties to Al Qaeda.

Mr. Emerson said, for example, that information his researchers
gathered shows that one of the owners of Al Nur Honey, based in Sana,
is Muhammad Hamdi Sadiq al-Ahdal, also known as Muhammad al-Hamati
and Abu Asim al-Maki. Mr. Emerson said that a 1992 article in an
Arabic journal described Mr. Ahdal as one of the first Arabs to have
fought in Afghanistan.

Mr. Emerson said that after fighting in Bosnia, Mr. Ahdal was
detained in Saudi Arabia in 1998 for planning terrorist activities
against Saudi Arabia. Upon his release in the summer of 1999, he was
deported. A telephone number could not be found for Mr. Ahdal, and
calls this evening to the Saudi Embassy for comment were not returned.