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Bin Laden network profited in diamond trade

Saudi-born militant Osama bin Laden's al Qaeda network has collected millions of dollars in the past three years from the illicit sale of diamonds mined by rebels in Sierra Leone, The Washington Post reported on Friday.

Quoting unnamed US and European intelligence officials and two sources with direct knowledge of the diamond sales, the Post described an operation that has helped finance al Qaeda.

The paper said diamond dealers working with men identified by the FBI as important al Qaeda figures bought rebel diamonds at below-market prices and sold them for big profits in Europe.

The Post. quoted unnamed sources as saying that since July, the diamond dealers have bought far more diamonds than usual, paying premium prices for them.

The rebel Revolutionary United Front hit back, saying the report was "malicious, diabolical and sinister" and denied any link with the group blamed by Washington for the Sept. 11 suicide attacks on the United States.

"The RUF has no business with any terrorist organization. Nor has it done any business transaction with terrorists," said a statement in the Sierra Leone capital Freetown from the group, which has condemned the September attacks.

The US State Department said it did not know if al Qaeda had profited from diamonds. "But certainly we've been concerned about the sale of diamonds from Sierra Leone because it has fuelled conflict and it has fuelled organizations that engage in violence," spokesman Richard Boucher said.

The Post said investigators believe the increased purchases suggest that al Qaeda, perhaps anticipating its funding would be frozen after Sept. 11, strove to protect its money by sinking it into diamonds, which can be hidden easily, hold their value and are hard to trace.

"I now believe that to cut off al Qaeda funds and laundering activities you have to cut off the diamond pipeline," the Post quoted an unnamed European investigator as saying. "We are talking about millions and maybe tens of millions of dollars in profits and laundering."

The diamonds were mined by RUF rebels, known from Sierra Leone's decade-long civil war for hacking off the limbs of civilians and abducting children and forcing them onto the battlefield, the Post said.

RUF denies links to Bin Laden

The country's main diamond fields have been under RUF control for four years, but UN peacekeepers deployed there in recent months have disarmed thousands of rebel fighters under a peace plan.

Quoting sources, the Post reported that small packets of diamonds are transported across the Liberian border to Monrovia by senior RUF commanders.

At a Monrovia safe house protected by the Liberian government, the diamonds are then exchanged for briefcases filled with cash brought by diamond dealers who travel several times monthly from Belgium to Monrovia, the Post said.

It said the diamond dealers are selected by Ibrahim Bah, a Libyan-trained former Senegalese rebel and the RUF's principal diamond dealer. Like bin Laden, Bah spent several years in the 1980s fighting against Soviet forces in Afghanistan, the newspaper said.

RUF spokesman Eldred Collins told a news conference in Freetown that the group had no idea who Bah was.

At United Nations headquarters in New York, diplomats said an expert panel set up to monitor the RUF's trade in diamonds had not detected an al Qaeda connection.

But the panel found that secretive Lebanese dealers in Sierra Leone and Liberia played a key role as middlemen in the trade, buying diamonds from the rebels and laundering them through third countries before they were resold in Europe.

"We will want to look into it," said Ambassador Jeremy Greenstock of Britain, who chairs a U.N. Security Council committee on counter-terrorism set up to help governments dry up terrorists' financing and deny them safe havens.

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