Februarcy 10, 2002

Ever since the Sept. 11 attacks in the U.S., speculation has been rampant about the extent of al-Qaeda's ambitions in Southeast Asia. Some analysts fingered sprawling, chaotic Indonesia as the possible nexus of an Asian network, pointing to its thousands of radical Muslims fighting bloody private wars against their Christian neighbors. Others suggested the Philippines, whose lawless, predominantly Muslim south harbored well-armed Islamic militias that have been waging war against the central government for decades. Very few suspected peaceful, relatively prosperous Malaysia, where Muslims make up two-thirds of the population but seemed to have bought into the consumerist, essentially pro-Western views espoused by their leaders.

But after months of investigation and hundreds of hours interrogating detained terrorist suspects, even government officials in Kuala Lumpur can no longer deny that Malaysia was the financial and planning center for the region's main al-Qaeda-linked terrorist network, the place Osama bin Laden's proselytizers chose to recruit a core of loyal followers, launch new groups into neighboring countries, and coordinate with Southeast Asia's existing Islamic radicals. Increasingly, it seems clear Malaysia was one of a number of hubs used in the worldwide preparations for the carnage of Sept. 11 in the U.S.

If that isn't shocking enough, consider this: the networks are still thriving. Underworld figures involved in Southeast Asia's flourishing illicit trade in arms assert—and senior Malaysian government officials acknowledge—that representatives from the region's most notorious and violent radical Islamic groups still regularly gather in Malaysia to meet with their al-Qaeda backers. Listen to Mat, a pony-tailed Indonesian who has been trading illegal arms for 20 years. "How stupid can you be? Of course al-Qaeda is still here in Malaysia," he snorts. "This is their favorite place to have meetings with the other radical Islamic groups in the region."

Mat says the crackdown by police since the Sept. 11 attacks has yet to interfere seriously with his business, either with ordinary criminal groups or with regular customers from a laundry list of Asian Islamic militant organizations that he says are funded in part by al-Qaeda: the Moro Islamic Liberation Front (MILF) and Abu Sayyaf from the Philippines, the Laskar Jihad and Free Aceh Movement from Indonesia and Malaysia's own Kumpulan Mujahideen Malaysia (KMM).

To learn that terrorist groups continue to hold such meetings with apparent impunity is especially alarming in light of new details interrogators have gleaned from the roughly 50 terrorist suspects being held in Malaysian jails. For the first time, police have a detailed picture of how al-Qaeda stepped in and—mostly through the liberal use of cash and the services of two Indonesian clerics who acted as proxies—managed to transform a radical Muslim group preoccupied with domestic concerns into a band of foot soldiers in Osama bin Laden's crusade against the U.S.

Malaysia is, in the words of one U.S. official, "a perfect place for terrorist R. and R.," where Islamic radicals from around the region and their al-Qaeda backers can meet. The most notorious gathering of al-Qaeda operatives took place in January 2000 and involved two hijackers who died in the suicide attack on the Pentagon, the roommate of a third hijacker and at least one of the suspects in the U.S.S. Cole bombing. Zacarias Moussaoui, the Algerian-born French citizen now in custody in Virginia—the so-called 20th hijacker—also made several visits to Malaysia. Last week Washington labeled the country a staging area for the U.S. attacks, a charge that has put the Malaysian government on the defensive. "Malaysia is definitely not a primary launchpad for terrorists' activities," says a government official. "But it appears that Malaysia was used as a convenient meeting and transit point by some of these people from the radical groups." 

Despite the semantic disagreement, there's little doubt that Malaysia is cooperating with the U.S. in seeking to apprehend militants. Although Malaysian Prime Minister Mahathir Mohamad is known to rail against U.S. policy in the Middle East and its conduct of the war in Afghanistan, he has long warned of the threat of radical Islam. Malaysian police made their first arrests—of 12 KMM members—in early August 2001, well before last year's attacks, at the time raising a chorus of complaints from human rights advocates who said the arrests were politically motivated to stamp out opposition.

That tough antiterrorist line has continued. Since September, as part of the global crackdown on extremist Islamic groups, Malaysian police have arrested some 50 alleged members of the KMM, which they say sought the violent overthrow of the government for the purposes of installing a fundamentalist Islamic administration. Despite the arrests, as the Malaysian official notes, even with new, stringent surveillance of visitors and tightened-up immigration checks, it's nearly impossible to track what he estimates are "several hundred" al-Qaeda-linked businessmen, bankers, traders and tourists—many of them Arab—who pass through or live in the country.

"Let's draw parallels with, say, the Tamils and LTTE," another official explains, referring to the Liberation Tigers of Tamil Eelam, who have been waging a bloody campaign for two decades for an independent state in Sri Lanka. "If Tamils set up businesses in Sri Lanka and then support the Tamil Tigers, what can the Sri Lankan government do? It can only monitor these businessmen but cannot arrest them without concrete proof. It's the same here. Al-Qaeda representatives are sent to ensure the radical groups in the region have the necessary funding to buy arms and don't have to worry about other logistics. You must always remember that Osama's main aim is to see powerful radical groups emerging."

Police in Malaysia say they now have a clear picture of how al-Qaeda managed to reprogram just such a radical group. The Malaysian authorities had been tracking the KMM for months before they moved to arrest the 12 alleged ringleaders under suspicion of a rash of crimes, including a bank robbery that left several members dead, a political assassination and bombings of temples and churches.

The KMM, which official sources allege was founded and led by the son of opposition leader Nik Aziz, had established branches in all nine states in peninsular Malaysia. KMM members were told that the group was conducting militia-style training to protect Nik Aziz's fundamentalist Islamic Party of Malaysia in the event of a government crackdown. But top KMM leaders were actively planning the violent overthrow of the country's government in favor of an Islamic regime, police say.

In the mid-'90s, that domestic focus changed with the appearance in Malaysia of two Indonesian ulema, or Islamic teachers. The two men, Abubakar Ba'asyir and Riduan Isamuddin, better known as Hambali, preached a radical new vision of Islam, heavily influenced by the worldview of Osama bin Laden, a man Hambali claimed to have met personally on two occasions. The militant clerics found a receptive audience among many KMM members, government officials say, focusing their attention on a KMM branch in the state of Selangor, outside the capital Kuala Lumpur.

With Abubakar acting as the spiritual leader and controller of the purse strings and Hambali responsible for most of the planning and day-to-day administration, the two men wooed KMM members in Selangor and elsewhere into a new organization they established in the late 1990s, called the Jemaah Islamiah. Abubakar hammered home the themes he still preaches at his school in central Java today: the glory of a martyr's death and the overriding goal of setting up a Muslim government. Officials say he espoused the formation of a new Islamic state encompassing Malaysia, Indonesia, the southern Philippines, Singapore and Brunei. To fund such an ambitious vision, he was in contact with al-Qaeda paymasters and responsible for funneling money through branches of some Middle Eastern banks in Malaysia to his own newly founded cells of Jemaah Islamiah, which gradually stretched through peninsular Malaysia to Singapore, as well as to other Islamic groups in the region.

If Abubakar was the founding father and spiritual leader, Hambali was his chief executive officer. A 36-year-old veteran of the Afghan struggle against the Soviet Union, Hambali was the practical man who made the plans and gave the orders. Officials say he was responsible for organizing paramilitary training stints for Jemaah Islamiah members in Afghanistan and Pakistan. 

These sources also say he was the mastermind behind a series of bombing missions around the region. In one example, Hambali sent a known associate, Malaysian Taufik Abdul Halim to Jakarta, where he was arrested on Aug. 1, 2001, after a bomb he was carrying exploded and blew off one of his legs. Last fall in Malaysia itself, Hambali instructed Yazid Sufaat, a former Malaysian army captain now under detention in Kuala Lumpur, to place an order for four tons of ammonium nitrate, a fertilizer that can be used as a bombmaking ingredient. The current whereabouts of the chemical remains a mystery.

The role of bombmaker was a surprising one for Yazid, who officials say was a minor figure in the Selangor branch of the KMM, a "runner" as one puts it. But Yazid flourished in the Jemaah Islamiah, rising to become Hambali's most trusted lieutenant. Hambali ordered Yazid to host the two hijackers who died in the Pentagon attack at his condo in Kuala Lumpur. Yazid has told his interrogators that he had no knowledge of the Sept. 11 attacks but, one official says, he suspected the men who stayed at his apartment had some role in the attacks because "they had asked if there were flying schools in Malaysia. Yazid recommended one in [BRACKET {Melaka}] but they said it would not be suitable for them."

Yazid has admitted to giving suspected hijacker Moussaoui a cover letter from a Malaysian company introducing him as its U.S. marketing consultant. The letter, U.S. sources say, contained a guarantee that Moussaoui would be paid $35,000 for his services. Malaysian officials deny reports, however, that Yazid confessed to actually giving money to Moussaoui during his visits to Malaysia. "Yazid has told us no money changed hands," one official says. 

Despite the growing list of allegations against Abubakar and Hambali, Indonesian officials have been circumspect in dealing with Abubakar, who recently moved back to Indonesia after 15 years. (Hambali, who is wanted by police in Indonesia and Malaysia, has disappeared). Recently questioned by police, Abubakar was released after two days and continues to teach at his religious school in the town of Solo. In an interview with Time, the soft-spoken 63-year-old vigorously denies any connection with a terrorist network. "I am not advocating the overthrow of any government," Abubakar says. "What I want to see is a government committed to Islam." He blames Mahathir, the U.S. and a worldwide Jewish conspiracy for his problems (see interview). "This is just a political game," he says of the charges. "Jemaah Islamiah is an invention by Mahathir to instill fear [BRACKET {into}] the Muslim community."

But the Jemaah Islamiah's reach extends far beyond just Malaysia. In December, Singaporean police arrested 13 alleged members of the Jemaah Islamiah and uncovered detailed plans to bomb U.S. targets in the city-state. In addition to the scheme involving the missing tons of ammonium nitrate that were destined for Singapore, police there have unearthed another Jemaah Islamiah plot to order a further nine tons of the chemical. (For comparison, the devastating Oklahoma City bombing required only one ton of ammonium nitrate.) 

More arrests might be in store. Malaysian officials say that despite the 50 previously detained suspects, several hundred more are still at large. And in Singapore, Prime Minister Goh Chok Tong recently warned residents that despite the arrests there could well still be terrorists in their midst. "I do not want to alarm you," he said, "but it is prudent for us to work on the assumption that a bomb may go off somewhere in Singapore someday." 

There is plenty of evidence that al-Qaeda operatives, or their proxies, are still active in the region. According to sources at all levels of the clandestine arms trade in Southeast Asia, meetings—sometimes several a month—between representatives of militant Islamic groups and their al-Qaeda financiers continue to take place in Malaysia: in cheap hotels and guest houses outside Kuala Lumpur, in the beach resort of Port Dickson and in the cities of Melaka and Johore Baru across the strait from Singapore. "These groups use the Internet to set up the venue and date for their meetings," says Mat, the arms trader. "The messages are sent in encrypted codes. For example, MILF might want 3,000 M-16s and the al-Qaeda member will agree to pay for the weapons."

Just how effectively this system operates is made clear by a spokesman for the fundamentalist Free Aceh Movement, better known by its Indonesian acronym gam. Agreeing to talk only by telephone and refusing to give even a nickname, the 10-year veteran of the murderous struggle—his wife and three children have all been killed in the fighting—says that he regularly places orders with arms syndicates for hundreds of weapons: M-16 and AK-47 automatic rifles, handguns and ammunition. Tracing a well-worn route, the weapons are bought in Thailand, sent down to Malaysia and then carried on boats through the Strait of Malacca.

But, he adds, he has nothing to do with the financing of the deals. He doesn't have any idea how much the weapons cost. Payment is taken care of by sympathizers, such as al-Qaeda. "My job is only to place orders with the arms brokers," he says. "When the weapons arrive, I will be notified." 

That notification comes from middlemen like Mat, who are present at the initial meetings, then take over the ordering and delivery, working through the several criminal syndicates that control the region's flow of illegal arms. Due to the sensitivities and dangers involved, only one syndicate actually buys arms for the radical groups. Because the profits for the transactions are so high, official sources say, and al-Qaeda is still apparently able to command significant funds, non-Muslim criminals—some of them outwardly respectable businessmen—are a key part of the process. "The syndicate is based in Malaysia," says Mat, "and is made up largely of Overseas Chinese and some Malaysian Chinese." The middlemen and their sponsors represent the murky underworld where Islamic ideology becomes entwined with the straightforward criminal activity of gunrunning. The size and complexities of that network illustrate the difficulties of an effective government crackdown.

Malaysian officials say the security problem is compounded by the country's successful push in recent years to boost the numbers of visitors from the Middle East, attracted in part by Malaysia's policy of visa-free entry for citizens of most Islamic countries. "How do we stop these Arabs?" asks one official. "Even if we suspect them we can't just arrest people."

While the scope and reach of Malaysia's terror network is alarming, what is more surprising is that fundamentalist and separatist movements throughout Southeast Asia have been funded and armed by al-Qaeda operatives, sometimes without the guerrillas themselves knowing the identity of their backers. Equally troubling is the fact that the al-Qaeda terror network is linked with not only extremist Islamic groups but a host of criminal syndicates. Kuala Lumpur and the other governments can no longer blame foreigners, especially Arabs, for their domestic terrorist problems. The money might come from abroad, but the extremism and criminal support networks are largely homegrown. How Malaysia and the other countries counter this threat will become increasingly the concern not just of the U.S. and other potential targets of terrorism, but of other Asian populations and governments that will face persistent unrest until the War on Terror is finally won. 

—With reporting by Robert Horn/Bangkok, Mageswary Ramakrishnan/Kuala Lumpur, Elaine Shannon/Washington, Jason Tedjasukmana/Solo and Douglas Wong/Singapore