Malaysia: Staging Ground for Terror?

President George W. Bush has identified Iran, Iraq and North Korea as an "axis of evil," and U.S. troops are pursuing militant Islamists in the southern Philippines. But another Asian nation is suddenly emerging as a key meeting place for al Qaeda affiliated terrorists: Malaysia.

The Malaysian link to the September 11 attacks can be discerned in the case of Zacarias Moussaoui, the Frenchman of Moroccan descent now in custody in Virginia — the so-called 20th hijacker. Not only did Moussaoui make several visits to Malaysia, U.S. sources inform TIME that while there he was provided with a letter supporting a cover identity as a marketing consultant for a Malaysian company. The letter also guaranteed that Moussaoui would be paid $35,000 for his services. It was provided by Yazid Sufaat, a former Malaysian army captain and trusted lieutenant of a militant Islamic cleric in neighboring Indonesia long associated with the anti-Soviet jihad in Afghanistan. (Malaysian officials insist Yazid gave no money to Moussaoui during his visits.)

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Yazid is currently being detained by the Malaysian authorities for, among other things, ordering four tons of ammonium nitrate, a fertilizer that can be used as a bomb-making ingredient. (Oklahoma City bomber Timothy McVeigh used only one ton to devastating effect.) The fertilizer was ostensibly headed for the city-state of Singapore, which lies at the tip of the Malay peninsula. On orders from the Indonesian cleric, Yazid had also played host in January 2000 to two of the 9/11 hijackers during their visit to Kuala Lumpur, and also to the roommate of a third and at least one of the suspects in the bombing of the U.S.S. Cole in Yemen. The Indonesian cleric, Riduan Isamuddin, better known as Hambali, has gone underground and is wanted by both the Indonesian and the Malaysian police.

Where the terrorists love to meet

Beyond those pre-9/11 transactions in Malaysia, monitored by the FBI, the terror networks continue to thrive in the predominantly Muslim nation — and across its seas, into Indonesia, the Philippines, Singapore and the rest of southeast Asia. The region's most notorious and violent radical Islamic groups still regularly gather in Malaysia to meet with their al Qaeda backers — and with the region's long-established weapons smugglers. Says "Mat," a pony-tailed Indonesian who has been trading illegal arms for 20 years, "These groups use the internet to set up the venue and date for their meetings. The messages are sent in encrypted codes." If a local radical group wants weapons, they place an order and al Qaeda will pay for it. Malaysia, he says, "is their favorite place to have meetings with the other radical Islamic groups in the region."

Since last September, as part of the worldwide crackdown on extremist Islamic groups, Malaysian police have arrested some 50 suspect radicals. Despite the arrests, as one Malaysian official notes, and 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, tourists — many of them Arab — who pass through or live in the country. Among the radical groups partly funded by al Qaeda who meet regularly with arms smugglers in Malaysia are the Abu Sayyaf and the Moro Islamic Liberation Front from the neighboring Philippines, the Laskar Jihad and the separatist Free Aceh Movement of Indonesia, and Malaysia's own Kumpulan Mujahideen.

Al Qaeda's liquidity

The apparent ability of al Qaeda to command significant funds in spite of its Afghan rout makes it a welcome player in Southeast Asia's flourishing illegal arms trade. Profits are so high that non-Muslim criminals — some of them outwardly respectable businessmen — are a key part of the process. These businessmen often belong to the area's wealthy overseas Chinese community, which has a financial reach way beyond southeast Asia. Says Mat: "The syndicate is based in Malaysia and is made up largely of overseas Chinese and some Malaysian Chinese." Malaysia is a multi-ethnic state: predominantly Muslim Malay but with very large and affluent Chinese and South Asian communities. According to sources at all levels of the clandestine arms trade in Southeast Asia, meetings between representatives of Islamic groups and their al Qaeda financiers continue to take place in Malaysia — sometimes several a month, in cheap hotels and guest houses outside Kuala Lumpur, in the beach resort of Port Dickson, and in the cities of Malacca and Johore Baru across the straits from Singapore. The country, in the words of one U.S. official, is "a perfect place for terrorist R-and-R."

The effectiveness of the arms procurement system is made clear by a spokesman for the fundamentalist Free Aceh Movement. Agreeing to talk only by telephone and refusing to give even a nickname, the 10-year veteran of the murderous struggle whose 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. Following a well-worn trail, the weapons are bought in Thailand, sent down to Malaysia and then carried by boats through the Straits of Malacca to the Indonesian island of Sumatra, where Aceh is located. 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."

Malaysian officials say the security problem is compounded by the country's successful push in recent years to boost the number 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 Malaysian official. "Even if we suspect them we can't just arrest people." That and the easy passage across the seas that link Malaysia, Singapore, Indonesia, the Philippines and the rest of Southeast Asia make leaders in the region increasingly nervous. As Singapore's Prime Minister Goh Chok Tong recently warned residents of his prosperous and flourishing city: "I do not want to alarm you but it is prudent for us to work on the assumption that a bomb may go off somewhere in Singapore someday."

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

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