ILLEGAL DRUG MONEY SENT TO TERRORISTS

Operation in U.S. Midwest Helped Finance Hezbollah, Authorities Say

Federal authorities have amassed evidence for the first time that an
illegal drug operation in the United States was funneling proceeds to such
Middle East terrorist groups as Hezbollah.

Evidence gathered by the Drug Enforcement Administration since a series of
raids in January indicates that a methamphetamine drug operation in the
Midwest involving men of Middle Eastern descent has been shipping money
back to terrorist groups, officials said.

"There is increasing intelligence information from the investigation that
for the first time alleged drug sales in the United States are going in
part to support terrorist organizations in the Middle East," DEA
administrator Asa Hutchinson said.

DEA officials said that the men, most of whom were indicted on drug charges
after their January arrests, were smuggling large quantities of the
chemical pseudoephedrine from Canada into the Midwest.

Officials said that the smuggling went through two primary Midwest
locations, Chicago and Detroit, and involved several men with ties to
Jordan, Yemen, Lebanon and other Middle East countries. There is no
evidence that any of the money was connected to the Sept. 11 terrorist
attacks, officials said.

Pseudoephedrine is used in some popular cold and allergy medications. It is
an essential ingredient in the creation of methamphetamine, a powerful and
increasingly popular drug known on the streets as "ice," "poor man's
cocaine" or "crystal meth."

Users generally inject or smoke meth. The powdery substance is produced by
heating about a dozen chemicals.

The U.S. drug ring was reselling pseudoephedrine to Mexican drug operations
in the Western United States that used the pseudoephedrine to produce
methamphetamine, authorities said.

The Middle Eastern men then were diverting some of the proceeds from the
pseudoephedrine sales back to the Middle East to accounts authorities have
begun to connect to terrorist groups, DEA officials said.

Some of the connections involved the Iranian-backed terror group Hezbollah.
Some of the money has been traced to accounts in Lebanon and Yemen,
officials said.

DEA officials said that U.S. authorities don't know yet how much money was
funneled from the drug sales to the terrorist groups, but said that the
pseudoephedrine sales alone amounted to millions of dollars.

"A significant portion of some of the sales are sent to the Middle East to
benefit terrorist organizations," Hutchinson said.

The drug ring was broken up Jan. 10 as part of a massive DEA investigation
called Operation Mountain Express, which has smashed several major
methamphetamine operations in the past two years. Arrests were made in
Detroit, Cleveland, Chicago, Phoenix and several California cities.

The raids have resulted in criminal charges against 136 people and the
seizure of nearly 36 tons of pseudoephedrine, 179 pounds of
methamphetamine, $4.5 million in cash, eight real-estate properties, and
160 cars used by the drug gangs.

Hutchinson has been saying for months that illegal drug money provides a
compelling opportunity for terror groups to siphon support from the United
States, but the DEA investigation provided the first evidence of a direct
flow of money.

The evidence of the terror ties emerged after the arrests. U.S. authorities
said that some defendants charged with drug violations could face
additional charges.

The Bush administration has been stepping up efforts to stem the flow of
money and items from sympathizers in the United States to foreign terror
groups under a law that prohibits providing "material support and
resources" to known terrorist organizations.

Six men who lived in the United States were indicted last week on charges
that they conspired to provide such support to al-Qaida or related
terrorist causes.

Federal agents believe that they have uncovered a broad effort by American
residents, many of them legal immigrants or visitors, to use credit-card
thefts, illegal cigarette sales, diverted charitable funds and cash
smuggled in airline luggage to enrich anti-American and anti-Israeli terror
groups, officials said.

"The money mechanisms being used to aid terrorism are limited only by your
imagination," said one senior law-enforcement official involved in the
effort. "There is a significant amount of money moved out of the United
States attributed to fraud that goes to terrorism."

The official spoke only on condition of anonymity because much of the
details remain sealed in a grand-jury investigation.

The official said that the early evidence suggests that groups like Hamas
and Hezbollah benefit far more from funds based in the United States than
Osama bin Laden's al-Qaida network.