- The Washington Times - Thursday, April 4, 2002

CEBU, Philippines State prosecutors and banking regulators are investigating reports that millions of dollars paid by Libya to Muslim kidnappers in the southern Philippines have been funneled to Osama bin Laden's al Qaeda terrorist network.
The probe comes amid reports that the Bush administration acquiesced to a recent payment of $3 million to the kidnappers in a failed attempt to win the release of two American hostages.
"The volume of money is apparently significant," Justice Secretary Hernando Perez told reporters in Manila. "We were told that perhaps money already here in the hands of terrorists is going toward the way of bin Laden."
Mr. Perez was referring to intelligence from FBI sources in Quantico, Va., provided to visiting Philippine officials late last month.
Jovencito Zuno, a chief state prosecutor who met with FBI officials, told reporters that remittances from the Abu Sayyaf rebels in the southern Philippines to al Qaeda apparently were being made on a "regular basis."
The Abu Sayyaf, a group of Muslim secessionists who turned to kidnapping several years ago, were holding three hostages American missionaries Gracia and Martin Burnham, and a Filipina, nurse Ediborah Yap. The kidnappers had killed one American, Guillermo Sobero, seized along with the Burnhams in May.
In September 2000, the rebels received the final installment of a ransom payment of some $20 million for the release of the remaining hostages taken from a diving resort in Sipadan, Malaysia. Most of the money is believed to have come from Libyan leader Moammar Gadhafi as a humanitarian gesture to secure the freedom of the 21 mostly foreign hostages.
But Philippine officials briefed by the FBI now believe a large portion of the payments may have been funneled to bin Laden, the suspected mastermind of the September 11 attacks.
Fox News reported late last month that the United States had facilitated the payment of an additional $3 million, raised by private groups, to the Abu Sayyaf as ransom for the release of the Burnhams.
The Fox report did not spell out the nature of the U.S. role in the payment, which failed to win the release of the hostages.
Asked about the report, State Department spokesman Richard Boucher said, "There have been all kind of rumors in the Philippines and elsewhere about people negotiating, things happening or not happening, and I am afraid because of our overriding interest in seeing the Burnhams safely released, I am not going to start commenting on all those rumors."
In Manila, the revelations by the justice secretary and his subordinates prompted a swift rebuke from the office of President Gloria Macapagal Arroyo, who was depending on help from Libya in ongoing negotiations with Muslim secessionist groups other than the Abu Sayyaf.
"There is no evidence at all that the Libyan government was involved in the ransom payments much less that it provided funds to any international terrorist network through the Abu Sayyaf," presidential spokesman Rigoberto Tiglao said in a statement. "Suspicions or theories raised in an internal intelligence briefing abroad were not intended for public disclosure."
The Justice Department, however, is expected to continue to follow up the FBI intelligence reports, sources said.
Col. Gadhafi has dabbled for decades in the affairs of the Muslim regions of the southern Philippines. The country is more than 85 percent Catholic, but some 5 percent of its 80 million people are Muslims. A few months ago, one of Col. Gadhafi's sons offered to help negotiate the release of the Burnhams.
Some 650 U.S. soldiers are in the Philippines to train and advise local troops in combating the Abu Sayyaf.
The group was founded more than a decade ago by Abdurajak Janjalani. The son of a Muslim father and Christian mother, Janjalani was educated in Libya and Saudi Arabia and fought in Afghanistan with some of the same men who would make up the core of the al Qaeda leadership.

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