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Context of 'September 12, 2008: Britain’s Third Largest Tour Operator Collapses'

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Al-Rajhi Bank logo.Al-Rajhi Bank logo. [Source: Al-Rajhi Bank.]A 2003 CIA report will claim that extremists “ordered operatives in Afghanistan, Indonesia, Pakistan, Saudi Arabia, Turkey, and Yemen” to use accounts at the Al-Rajhi Banking & Investment Corp. The Al-Rajhi Bank is one of the biggest Saudi banks, with billions in assets. Who gave this order and when has not been made public. However, some examples of militants using the bank are later alleged:
bullet When al-Qaeda leaer Mamdouh Mahmud Salim is arrested in late 1998 (see September 16, 1998), he is carrying records of an Al-Rajhi account.
bullet When Wadih El-Hage’s house in Kenya is raided in 1997, investigators find contact information in his address book for Salah Al-Rajhi, one of the billionaire co-owners of the bank (see Shortly After August 21, 1997). [Wall Street Journal, 7/26/2007]
bullet Some of the 9/11 hijackers use the bank. For instance, Hani Hanjour is sent wire transfers from Al-Rajhi bank in Saudi Arabia at least six times in 1998 and 1999. In September 2000, Nawaf Alhazmi uses $2,000 in Al-Rajhi traveler’s checks paid for by an unnamed person in Saudi Arabia. [Federal Bureau of Investigation, 10/2001, pp. 19, 31, 33, 34, 41, 87 pdf file] And Abdulaziz Alomari has an account at the bank (see September 7, 2001).
bullet The bank is used by a number of charities suspected of militant links, including the International Islamic Relief Organization (IIRO), the Muslim World League, the Saudi branch of Red Crescent, Global Relief Foundation, and the World Assembly of Muslim Youth (WAMY). [Wall Street Journal, 10/13/2003]
bullet An al-Qaeda affiliate in Spain holds accounts at the bank. According to a fax later recovered by Spanish police, the group’s chief financier tells a business partner to use the bank for their transactions. [Wall Street Journal, 10/13/2003]
bullet In 2000, Al-Rajhi Bank couriers deliver money to insurgents in Indonesia to buy weapons and bomb-making materials.
bullet According to a 2003 German report, bank co-founder Sulaiman Abdul Aziz al-Rajhi contributes to a charity front buying weapons for Islamic militants in Bosnia in the early 1990s. He also was on the “Golden Chain,” a list of early al-Qaeda funders (see 1988-1989).
bullet A US intelligence memo from shortly after 9/11 says that a money courier for al-Qaeda second-in-command Ayman al-Zawahiri travels on a visa obtained by the bank.
The 2003 CIA report will state: “Islamic extremists have used Al-Rajhi Banking and Investment Corporation since at least the mid-1990s as a conduit for terrorist transactions.… Senior al-Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank.” [Wall Street Journal, 7/26/2007]

Entity Tags: International Islamic Relief Organization, Red Crescent (Saudi branch), World Assembly of Muslim Youth, Global Relief Foundation, Sulaiman Abdul Aziz al-Rajhi, Salah al-Rajhi, Abdulaziz Alomari, Ayman al-Zawahiri, Hani Hanjour, Mamdouh Mahmud Salim, Nawaf Alhazmi, Wadih El-Hage, Muslim World League

Timeline Tags: Complete 911 Timeline

US District Judge Ricardo M. Urbina approves a plea agreement requiring Riggs Bank to pay a $16 million criminal fine for its failure to report suspicious transactions by former Chilean dictator Augusto Pinochet and leaders of Equatorial Guinea that occurred between 1994 and 2003. The judge calls the bank “a greedy corporate henchman of dictators and their corrupt regimes.” [Washington Post, 3/30/2005] Jonathan Bush, uncle to President Bush, has been a top executive at Riggs Bank since 2000, running their investment management division. [Washington Post, 5/15/2004] The plea agreement clears the way for Riggs Bank to be bought. It is dissolved into PNC Financial Services Group Inc. in May 2005. [Washington Post, 10/13/2005]

Entity Tags: Riggs Bank, Augusto Pinochet, Jonathan Bush

Timeline Tags: US-Chile (1964-2005)

The XL Leisure Group, the third largest package holiday company in Britain, collapses and goes into administration. The company attributes the failure to volatile jet fuel prices, which had increased by over US$80 million year-on-year, the economic downturn, and its inability to acquire new funding. The group had 21 aircraft and transported 2.3 million passengers in 2007. The failure leaves 1,700 staff looking for new jobs and around ninety thousand British tourists stranded abroad, only some of whom are insured for return flights. Two of the group’s subsidiaries, in France and Germany, are saved from collapse by a late sale to Straumur Investment Bank, which intends to keep them running. [BBC, 9/12/2008]

Entity Tags: Straumur Investment Bank, XL Leisure Group

Timeline Tags: Global Economic Crises

AIG logo.AIG logo. [Source: American International Group (AIG)]In an historic move, the federal government bails out insurance corporation AIG with an $85 billion loan, giving control of the firm to the US government. After resisting AIG’s overtures for an emergency loan or other intervention to prevent the insurer from falling into bankruptcy, the government decided AIG, like the now-defunct investment bank, Bear Stearns, was “too big to fail” (see March 15, 2008). The US government will lend up to $85 billion to AIG. In return, the government gets a 79.9 percent equity stake in warrants, called equity participation notes. The two-year loan will carry a LIBOR interest rate plus 8.5 percentage points. LIBOR, the London InterBank Offered Rate, is a common short-term lending benchmark. The bailout comes less than a week after the government allowed a large investment bank, Lehman Brothers Holdings Inc., to fold (see September 14, 2008). As part of the loan agreement, Treasury Secretary Henry Paulson insists that AIG’s chief executive, Robert Willumstad, steps aside. Willumstad will be succeeded by Edward Liddy, the former head of insurer Allstate Corp (see September 18, 2008). [Wall Street Journal, 9/16/2008] Shares in AIG drop to $3.75 on the news. [Bloomberg, 3/5/2009]

Entity Tags: Henry Paulson, AIG (American International Group, Inc.), Edward Liddy, Robert Willumstad, US Federal Reserve

Timeline Tags: Global Economic Crises

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