Feds turn up heat on high-tech industry links to al-Qaeda

Last night's raid of a Massachusetts-based software firm for possible links to al-Qaeda signals a shift in the FBI's focus on nongovernmental organizations and charities to corporate America, including the IT industry, experts close to the investigation said.

Bringing to a close one phase of an ongoing investigation code-named Operation Greenquest, the FBI raided the Quincy, Mass., offices of Ptech Inc. in an effort to search for evidence that the company was involved in helping to finance al-Qaeda operations. It is also investigating the possibility that software Ptech sold to various government agencies may have contained malicious code (see story).

The company's client list reads like a who's who of the high-tech industry, including companies such as IBM, Booz Allen & Hamilton Inc., Motorola Inc., Sprint Corp. and The Mitre Corp.

"We are investigating the [situation] and are cooperating with authorities," said Jeffrey Gluck, a spokesman for IBM Global Services, which works with Ptech to build IT architectures for its customers. "But it's still too early in the investigation to know, with any degree of certainty, exactly what the allegations are," he said.

A spokesman for Allegheny Energy Supply Co. in Hagerstown, Md., another Ptech customer, declined to comment.

Senior counterintelligence officials familiar with the case said the U.S. Customs Service initiated the investigation of Ptech after a disgruntled employee tipped off the agency to the company's alleged hidden ownership. As a result, customs officials and the FBI began investigating Yacub Mirza, a former member of Ptech's board of directors who also manages a number of other businesses in the U.S.

"Mirza was acting on behalf of Yassin Qadi, the Saudi financier who was on the U.S. [terrorism] watchlist and whose accounts here are frozen," said Vince Cannistraro, the former chief of counterterrorism at the CIA. "Qadi is the guy behind Ptech."

Although it's not clear if Ptech made any money for Osama bin Laden's terrorist network, Operation Greenquest is trying to determine if it has served as a laundering entity for al-Qaeda, said Cannistraro.

The company, which currently has 35 employees, issued a statement this afternoon denying that federal agents conducted a "raid" of Ptech's offices, saying instead that the company "granted access" to investigators and is cooperating fully.

"The company categorically denies having any connection with any terrorist organization," the statement read. "Ptech has been informed by government investigators that neither Ptech nor its officers or employees are targets of the government's investigation."

Blake Bisson, the company's vice president of sales, told Computerworld today that he believes federal authorities are routinely investigating companies with employees from Islamic countries. "To my knowledge, there is no link to al-Qaeda," he said.

"What this investigation shows is that the government is now paying as much attention to the role of high-tech companies in terrorism financing as they are with nongovernmental organizations," said Roger Cressey, former chief of staff for the president's Critical Infrastructure Protection Board and a White House counterterrorism specialist.

A senior Bush administration official familiar with the investigation who spoke on condition of anonymity said "a body of evidence" about the company's possible links to al-Qaeda was brought to the attention of the National Security Council months ago and triggered a governmentwide investigation into where Ptech software may have been installed and, more important, whether malicious code was involved.

That probe has so far turned up no sign of malicious code, the official said.

The official also said that the investigation into Ptech isn't an isolated incident and that there is growing concern about terrorist financing coming out of U.S.-based companies, including high-tech firms.

However, it's the company's work with the U.S. Department of Energy, the Federal Aviation Administration and the U.S. Department of Defense that has raised the most concern, experts said.

One of the most sensitive contracts in Ptech's portfolio includes support work for the DOE's plutonium cleanup effort at the Rocky Flats facility, which was once used to develop nuclear weapons.

Notra Trulock, former director of intelligence at the DOE, who was responsible for investigating incidents of Chinese nuclear espionage in the U.S., said he wouldn't be surprised if an al-Qaeda front company had managed to infiltrate nuclear programs at the DOE.

"Nothing surprises me when it comes to DOE, frankly," said Trulock. "Neither [DOE] nor the labs ever perform much in the way of due diligence in these things. Usually, it's [done on] a buddy [basis]," he said.

Larry Johnson, a former CIA counterterrorism expert and CEO and co-founder of The Business Exposure Reduction Group Associates LLC, a Washington-based international business-consulting company, acknowledged links between Qadi and other terrorist groups, such as Hamas.

"As a general principle, any company doing business in the classified [government] arena must take steps to ensure its employees are fully vetted and monitored over time," said Johnson. "It boils down to common-sense security."

Copyright © 2002 IDG Communications, Inc.

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