Merchant of Death
Money, Guns, Planes, and the Man Who Makes War Possible

Blood from Stones

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What is Going on in Madagascar?
It is passing strange that Madagascar, the large island off of East Africa, has come up several times in the past week in relation to terrorism and terror finance.

The first was the death of Osma bin Laden's brother-in-law Mohammed Jamal Khalifa, well-known for his support of radical Islamists. He happened to be on the island as a gemstone dealer.

Seems as though the group that killed him took his computer and some personal belongings, but not the stones that were there. Somewhat unlikely for a robbery. Given Khalifa's extensive ties to al Qaeda financial activities and various designated terrorist financiers and charities, the connection to the gemstone trade is tantalizing.

From the earliest days of my diamond coverage I was told of a strong al Qaeda connection to rubies and sapphires in Madagascar, begun at about the same time as al Qaeda's interest in diamonds in West Africa and tanzanite in Tanzania.

This fits with the timeframe of al Qaeda making a concerted move to put their assets into commodities. The move came after the August 1998 bombing of two American embassies in East Africa and the subsequent freezing of some $220 million of Taliban and al Qaeda gold in the Federal Reserve system by the Clinton administration.

(The freezing was almost accidental, as the Clinton people had no idea the gold was here. But sometimes it is better to be lucky than have good intelligence, perhaps.)

Sapphires led to a mining boom in Madagascar, beginning in 1998, drawing a large influx of foreigners, including a large contingent of Islamists from Pakistan and the Arab Peninsula eager to cash in.

There are folks in the intelligence community that do not agree with my findings on this issue, but there are also senior folks in the community who not only believe it to be true, but who believe Khalifa was involved in the gemstone trade on behalf of al Qaeda and/or other Islamist groups.

What is interesting is the surfacing in Madagascar of Fazul Abdullah Mohammed, one of the architects of the 1998 bombings of two U.S. Embassies in East Africa, as well as one of the three main al Qaeda operatives identified by my sources as being in Liberia and Sierra Leone in 2000-2001 to buy diamonds.

Fazul is from the nearby Comoros Islands, as was reportedly on the ground in Liberia, staying at a guest house rented by Ibrahim Bah, during the time al Qaeda was buying diamonds.

Fazul is also believed by the intelligence community to be directly involved with the Islamists in Somalia, now driven from power but trying to make a come back.

I find all of this too much to be a coincidence. Draw your own conclusions.
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