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EXCLUSIVE: Obama administration gave US aid money to Al Qaeda affiliate in Sudan

The Obama administration gave taxpayer money to an Al Qaeda affiliate in Sudan — with most of the funds transferred after officials became aware of the mistake, a joint i24NEWS-Middle East Forum investigation reveals.

The US Agency for International Development (USAID) gave $200,000 to the Khartoum-based Islamic Relief Agency (ISRA), a designated global terror entity placed on the US sanctions list over its financial support for Osama Bin Laden and other terrorist groups including Hamas.

Independent sources have confirmed to i24NEWS that the funds were stopped as soon as it became clear that ISRA was a proscribed group — but that the US Treasury nonetheless issued a special license permitting a one-time $125,000 transfer to ISRA once the mistake was known.

In February 2014, USAID authorized a grant of $723,405 to World Vision, an evangelical international charity, for a humanitarian project in the Blue Nile region of Sudan. According to the funding agreement, $200,000 of that grant was designated as a sub-award for the Islamic Relief Agency for the purposes of humanitarian relief for displaced persons.

Ten years earlier, however, the George W. Bush administration had designated the worldwide network of ISRA as a global terrorist entity for its financial support for Osama Bin Laden and others. The US Department of the Treasury announced in October 2004 that ISRA was “formerly affiliated” with Maktab Al-Khidamat, the precursor organisation of Al Qaeda, and that its international offices “provided direct financial support” for Osama Bin Laden.

The US Treasury also singled out ISRA for “serving as a conduit to Hamas” in an unnamed European country during the Second Intifada of the early 2000's, raising funds and transferring them to the Palestinian territories for terror attacks against Israelis.

This designation blocked all of ISRA’s US-based assets and criminalized the provision of funds or support to any of its offices. ISRA was placed on the "Specially Designated Persons List" maintained by the Treasury’s Office of Foreign Assets Control, and was also marked as prohibited or restricted on the US government database of service providers.

(AP Photo/Abd Raouf)

Under the funding agreement with USAID, World Vision was required to verify that ISRA was not on the sanctions list. World Vision told i24NEWS that it searched the blocked parties list for “Islamic Relief” in Sudan, and no results came up. The database in fact lists ISRA as based in Missouri, registered at the address of its former American offices.

It is not clear why USAID failed to check that ISRA was not on the sanctions list. An official said USAID partners have the “primary responsibility” to run those checks, but USAID “did not identify ISRA as an organization subject to US sanctions when it made the initial award”.

World Vision says in May 2014, it applied to the Treasury to renew its registration as a charity working in Sudan, listing ISRA as a sub-grantee. It says the Treasury approved the renewal in August “without any comments or questions” about ISRA.

In November 2014, World Vision alerted USAID that its local partner might be the same Islamic Relief Agency that appears on the Treasury’s sanctions list. World Vision suspended transactions with ISRA while USAID informed the State Department and the Treasury.

USAID confirmed with the Treasury that ISRA “appears to be the same entity” as the one on the sanctions list, and then wrote to World Vision in February 2015 ordering it to suspend any further transfers to ISRA.

“ISRA should never have been a USAID sub-awardee,” said the USAID official, adding that the Agency took “immediate corrective action”, including instituting new guidelines requiring staff to screen organisations receiving assistance by checking the sanctions list.

In May 2015, however, the Office of Foreign Assets Control issued World Vision a license authorizing it to complete a one-time transfer of $125,000 to ISRA in Khartoum.

That sum included $115,000 owed for humanitarian work that World Vision says “was verified to have already been completed under the grant” from USAID.

The revelation means that Obama administration officials knowingly authorized the transfer of US taxpayer dollars to an organisation on the government’s own terror financing blacklist.

The remainder of the $125,000, said the USAID official, was “for an unrelated funding arrangement between Irish Aid and World Vision”.

(AP Photo/Jerome Delay)

Ireland’s Department of Foreign Affairs denied this claim, telling i24NEWS “no Irish Aid funds granted to the Islamic Relief Agency” under its agreement with World Vision, insisting partners are required to comply with all laws and regulations “including those related to terrorist financing”.

According to the USAID official, the Office of Foreign Assets Control issued the licence approving the transfer to ISRA “in consultation with, and after receiving guidance” from the State Department in 2015.

The State Department declined to clarify why it had advised the Treasury to authorize the transfer of funds to the Islamic Relief Agency in Khartoum.

State Department Spokesperson Heather Nauert assured i24NEWS that Trump administration officials “had no involvement in decisions surrounding this award or subsequent license”, which “occurred under the prior Administration”.

But David Wade, Secretary John Kerry’s chief of staff at the time, told i24NEWS that this was the first he or Kerry had heard of the USAID award to ISRA. “Grants don’t typically cross the desk of the Secretary’s office,” he said. “I don’t recall that I ever or the Secretary ever had eyes on any specific grant award—that's just not the way it works.”

The US Treasury Department did not respond to i24NEWS’s questions about why it issued a special licence for the remainder of the grant to be sent to a designated terror entity. Then-Treasury Secretary Jacob Lew could not be reached for comment.

World Vision said in a statement that it has “robust controls and screening processes in place… and strongly condemns any act of terrorism or support for those activities.”

“We have no evidence that any of our funds have been used for anything other than urgent humanitarian work,” it said.

This is not the first time USAID has been implicated in funding ISRA. The US office of ISRA, also known as the Islamic American Relief Agency, pleaded guilty in July 2016 to illegally funneling $1.4 million to Iraq in violation of US sanctions. The indictment stated that USAID had awarded ISRA some $2 million for relief efforts in Mali in the late 1990's, but that two ISRA officials illegally retained unspent funds--and then illegally sent money to Iraq.

The Michigan indictment alleged ISRA had sent some $130,000 to help Afghan warlord Gulbuddin Hekmatyar. As part of the same case, former Michigan congressman Mark Deli Siljander was jailed in 2012 for lobbying on behalf of ISRA to have it removed from the Senate Finance Committee list of charities suspected of financing terrorism.

It remains unclear why the Treasury’s Office of Foreign Assets Control authorized the transfer of taxpayer dollars to a designated terror group, and who in the State Department advised it to do so.

It is also unclear who exactly in the Obama administration was aware of the error and—if the Secretary of State did not know—why bureaucrats made this decision without consulting the political echelons.

Eylon Levy is the i24NEWS investigative reporter. Twitter: @EylonALevy

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