SAUDIS IN NEW $HAME New York Post ^ | 12/02/02 | NILES LATHEM Posted on 12/02/2002 12:30:33 AM PST by kattracks December 2, 2002 -- EXCLUSIVE WASHINGTON - The FBI is investigating a payment from the Saudi Embassy in Washington to an Islamic charity that has been identified by the Bush administration as one of the principal conduits of financing to the al Qaeda terror network, The Post has learned. Investigators are probing a $400,000 payment made in the late 1990s by the embassy to the International Islamic Relief Organization, a Saudi-based charity whose offices were raided and shut down in March. It was targeted because of suspected ties to al Qaeda and the Palestinian militant group Hamas, according to documents that include an FBI affidavit and court records. This is the second controversial donation from the embassy to surface in the last month to draw scrutiny from the FBI and lawyers for the families of Sept. 11 victims who have filed a $1 trillion lawsuit against Saudi royal family members, banks and charitable institutions. It was revealed recently that charitable donations made by the wife of Saudi ambassador Prince Bandar bin Sultan to a Jordanian woman ended up in the hands of two of the Sept. 11 hijackers. That explosive story created fresh tensions between the White House and one of its closest allies in the Arab world. It also forced the Bush administration to call on the oil-rich kingdom to do more to crack down on terrorist financing. The $400,000 payment to the IIRO is certain to add new questions about Saudi cooperation in the terror war and will be a central charge in the Sept. 11 families' lawsuit, said Rita Katz, director of the SITE Institute, a group providing much of the research for that suit. But Prince Bandar and other Saudi officials have vehemently denied supporting terrorists and have said they are "pained" by the recent accusations. IIRO was founded in 1978 as a non-governmental humanitarian organization designed to help Muslim victims of wars and natural disasters. Its funds come mostly from wealthy Saudi donors. But according to documents provided by Katz, the organization has played key roles in laundering of funds to the terrorists in the 1998 African embassy bombings. The lawsuit said IIRO was also involved in financing and "aiding and abetting" terrorists in the 1993 World Trade Center bombing.