Persian Gulf nation under scrutiny for terrorist money

DUBAI, United Arab Emirates -- For years, liberal banking laws and commitment to free trade attracted enough business to help the United Arab Emirates lessen its reliance on oil and gas production -- and become a commercial center of the Middle East.

Investigators now say those attributes also were attractive to the terrorists who attacked New York and Washington last month, and who needed a place from which to raise and distribute funds for the plot. In addition, one of the 19 suicide hijackers in the Sept. 11 attacks has been identified as an Emirates citizen.

The scrutiny is casting a negative light on liberal financial laws in the small Persian Gulf nation, which has become a major hub for deals involving large amounts of money originating or landing in the Middle East.

U.S. investigators believe they traced wire transfers from a man thought to have piloted one of the attackers' planes to Mustafah Ahmed of the Emirates, according to a U.S. law enforcement source in Washington, speaking on condition of anonymity. The investigators said Ahmed disappeared the day of the attacks.

Another U.S. official said the suicide pilot mailed a package of money and documents to a man in the United Arab Emirates a few days before the attacks. The official, also speaking on condition of anonymity, did not say whether the recipient was Ahmed.

Emirates officials have not said whether authorities are investigating the financial aspects of the attacks.

Last week, the Emirates' central bank ordered financial institutions to freeze any assets they find belonging to groups and individuals linked to Islamic militant Osama bin Laden.