Lawyers for foundation’s Al-Buthe petition federal Treasury Department designation

The Saudi Arabian partner in an Ashland-based Islamic foundation accused of terrorist ties is challenging his own federal designation as a global terrorist.

Soliman Al-Buthe, who is wanted in America for tax fraud and money-laundering charges, wants the Department of Treasury to remove his "specially designated global terrorist" label, issued in September 2004.

Al-Buthe and Ashland resident Pete Seda were officers in the Al-Haramain Islamic Foundation’s Oregon chapter. The pair was accused of using the organization to funnel $150,000 illegally from Egypt to Saudi Arabia.

The global terrorist designation has frozen the financial assets of the 45-year-old Al-Buthe, who works on "beautification" projects for the city of Riyadh, Saudi Arabia, and has heaped worldwide scorn on him, said Tom Nelson, Al-Buthe’s Portland-based lawyer.

Nelson said he will petition the Department of Treasury’s Office of Foreign Assets Control to remove Al-Buthe’s from the global-terrorism list, saying he never deserved designation.

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Al-Buthe has severed all ties with the Al-Haramain chapter, which also was designated a terrorist organization in September 2004, Nelson said.

"Even if there was justification for designating Soliman to begin with, and we’d vehemently argue there wasn’t, there no longer is a reason to keep that designation on him," Nelson said.

"Besides, Al-Haramain Oregon is a dead animal," Nelson said.

Nelson said Al-Buthe was never told why he was labeled a terrorist and has not been allowed to review or respond to any information OFAC used in issuing the terrorist designation.

"It’s just another day of due process in the 21st century," Nelson said.

If the petition fails, Al-Buthe would challenge the designation in a suit brought to federal court, Nelson said.

Seda has not been labeled with the terrorist designation. Federal agents believe he is living in his native Iran.

OFAC documents show that removing someone from the terrorist list is possible, but rare.

The petitioner must prove to have made a "demonstratable break" from the terror organization, admit and describe the past relationships and pledge not to re-associate with the terrorist or the designated organization, OFAC petition documents state.

OFAC officials in Washington, D.C. did not return telephone calls Friday seeking comment.

The global terrorism designation is separate from the tax fraud and money-laundering charges, which stem from the federal terrorism investigation but specifically do not mention terrorism.

OFAC officials last week licensed Nelson to become the registered agent of the Al-Haramain chapter here. Nelson said he hopes it will speed up the eventual sale of the foundation’s Ashland residence and the end of Al-Haramain in Ashland.

The license is required as an exemption to federal law that makes it illegal to conduct any business for or with anyone or any entity listed as aiding terror.

The property is frozen by OFAC. OFAC officials have issued permission to a Chicago firm to sell the property, which has been vacant since FBI agents raided it in February 2003.

The 4,157-square-foot house sits on 4.13 acres at 3800 Highway 99 and the property is valued at $464,970, according to Jackson County Assessor’s Office records.

Nelson said the property has "deteriorated" since the raid in February 2003 and has lost much of its value.

It also contains several boxes of Korans as well as some of Seda’s personal property that Nelson would like removed and given to Seda’s two sons, who now live in Portland, Nelson said.

The Al-Haramain chapter bought the property in 1998 and owes more than $8,000 in back taxes and fees over the past four years, said Gary Cadle, the county’s finance director.

The county has filed plans to foreclose on the property to get the back taxes and fees paid.

Nelson said he expects the county and anyone else with a lien on the property to be paid from the proceeds of the property sale. Any remaining profits likely would be frozen by OFAC, Nelson said.

"Al-Haramain is swinging slowly in the wind," Nelson said. "It can’t do anything. I can’t do anything. All I’m doing is trying to wind this puppy up."

Reach reporter Mark Freeman at 776-4470, or e-mail mfreeman@mailtribune.com.