Muslim charity executive in Detroit Metro area indicted as spy for Sad. Hussein

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Muslim charity exec indicted as spy
Feds: He helped Saddam, paid for trip for Bonior, others
Paul Egan / The Detroit News

DETROIT -- A former top official with the Southfield-based Muslim charity Life for Relief and Development spied for the regime of the late Iraqi dictator Saddam Hussein and organized a 2002 congressional junket to Iraq secretly paid for by the Iraqi Intelligence Service, a federal indictment unsealed Wednesday alleges.

There is no evidence the congressmen knew Iraqi intelligence paid for the trip. The indictment does not identify the congressmen, but records show former U.S. Rep David Bonior, D-Mount Clemens, and two other congressmen made that trip to Iraq. Bonior could not immediately be reached.

Muthanna Al-Hanooti, 48, of Dearborn Heights received a potentially lucrative contract for the right to purchase 2 million barrels of Iraqi oil in return for his work for the Iraqi Intelligence Service, the indictment alleges.


 
 
Al-Hanooti, arrested at Detroit Metropolitan Airport on Tuesday after returning from a trip to the Middle East, was led in handcuffs Wednesday into federal court in Detroit. U.S. District Judge Paul D. Borman ordered Al-Hanooti to post a $100,000 bond, surrender his passports and wear an electronic tether after government prosecutors appealed more lenient release conditions ordered by a U.S. magistrate judge.

FBI agents raided the Southfield offices of Life for Relief, a highly regarded Muslim charity, in 2006. The charity is not charged with any crime and Wednesday's indictment is the first charge brought against any of its officials.

"These are all false allegations," said Al-Hanooti's son, Suhaib, a 23-year-old university student.

"This is a case that is going to be defended vigorously," said Detroit attorney James C. Thomas, who is representing Al-Hanooti.

Al-Hanooti, an Iraqi-born U.S. citizen with a wife and three children in the Detroit area, is charged in the 14-page indictment with conspiring to act as an agent of the Iraqi government; violating the International Emergency Economic Powers Act -- under which most trade with Iraq was unlawful -- by illegally obtaining the Iraqi oil contract; and making false statements to FBI agents. The most serious charge, related to breaking the embargo, carries a prison sentence of up to 12 years.

According to the indictment, Al-Hanooti worked for Life for Relief between 1994 and 2006 as its public relations coordinator and lobbyist.

He was also president of Focus on American and Arab Interests and Relations, which the government alleges was funded and controlled by Life for Relief and handled many of the charity's political activities.

Shereef Akeel, a lawyer for Life for Relief, denied Wednesday that Life for Relief controlled Al-Hanooti's Focus on American and Arab Interests and Relations. "It's an unfortunate incident," Akeel said of the indictment.

An unindicted co-conspirator in the case is a former officer of the Iraqi Intelligence Service, who asked Al-Hanooti to publicize the harmful effects of U.S. sanctions against Iraq and bring to Iraq delegations from the U.S. Congress, the indictment alleges.

Between 1999 and 2002, Al-Hanooti gave Iraqi intelligence a strategy on how to get the sanctions lifted and a list of members of Congress Al-Hanooti believed wanted to lift sanctions against Iraq, the indictment alleges.

In 2002, Al-Hanooti helped organize a trip to Iraq by a congressional delegation, the indictment alleges. Though Life for Relief paid $34,000 to cover travel expenses, the Iraqi Intelligence Service secretly reimbursed the money through an intermediary, the indictment alleges.

The trip drew a sharp response at the time from critics, one of whom said the congressmen were being used as "props in the Iraqi propaganda machine."

Besides Bonior, records show Democratic Reps. Jim McDermott of Washington and Mike Thompson of California also went on the trip to Iraq.

"The trip was approved by the U.S. State Department," Thompson said Wednesday in a statement released by his office.

Mike DeCesare, spokesman for McDermott, said: "No one would have gone if they had any inkling of this (secret funding), obviously. Jim was invited to go by a church group in Seattle the whole purpose of the trip was to see what was happening to innocent Iraqi children, from economic sanctions, and what might happen if there was an escalation to war, which in fact happened."

Under the economic sanctions, the United Nations created an oil-for-food program that allowed Iraq to sell oil under certain conditions intended to help address the country's humanitarian needs.

Top Iraqi officials selected who could buy the oil, and "these companies and individuals were able to profit by selling their allocations to brokers and/or companies capable of transporting the oil to a refinery." Al-Hanooti assigned his oil allocation to Laru Ltd., a company based in Cyprus, the indictment alleges.

The indictment does not say what compensation he allegedly received for the oil contract.

Al-Hanooti was active in many area Muslim and Arab organizations and briefly worked for the Council on American-Islamic Relations in 2000, executive director Dawud Walid said.

"CAIR will be closely monitoring to make sure he has his rights afforded to him and that he receives due process," Walid said. "He is innocent until proven guilty."

Imad Hamad, regional director of the American-Arab Anti-Discrimination Committee, said although agents who raided Life for Relief wore "Joint Terrorism Task Force" jackets, there is no allegation in the indictment that Al-Hanooti or anyone else was involved in terrorism.

"It is sad to see a humanitarian punished for humanitarian works," said Hamad, who is a friend of Al-Hanooti. "This has to do with what were truly complicated policies, at the time, towards Iraq, and I really wonder if this case should be a priority for the government, or not."

Thomas, Al-Hanooti's attorney, said his client was overseas at the time of the 2006 raid, when Al-Hanooti's home was also searched, Thomas said.

Al-Hanooti was detained and released when he returned to the United States following the raids, in late 2006 or early 2007, said Thomas. The fact that he returned to the United States while under suspicion and has cooperated with federal authorities shows he is not a flight risk, Thomas said.

But Karl Sandoval, a trial attorney with the U.S. Justice Department in Washington, argued Al-Hanooti is a successful fundraiser who has extensive business contacts in the Middle East and a second wife and a young child in Iraq.

"This is a gentleman who could quite easily up and start his life anew in the Middle East," Sandoval told Borman.

Prosecutors wanted Borman to set a $500,000 bond for Al-Hanooti. U.S. Magistrate Judge R. Steven Whalen had ordered Al-Hanooti released on an unsecured bond, with no electronic tether, before prosecutors appealed to Borman.

Founded in 1992 by concerned Iraqi-Americans in response to the crisis in Iraq following the 1991 Gulf War, Life for Relief says it has provided more than $50 million in aid to 13 million people in Iraq and other countries around the world. It describes itself as the largest American Muslim humanitarian organization.

Detroit News Staff Writers Gregg Krupa and Deb Price contributed to this report.