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United Arab Emirates: Friend or foe?

By Andrea Mitchell, NBC News

March 1, 2006

Modern Dubai is host to world-class golf, championship tennis, the world’s richest horse race, a giant indoor ski resort and luxurious shops.

But Dubai, for years, has also been a center of terror financing, including most of the money transfers to the 9/11 hijackers.

“This is a tiny country in a very rough neighborhood,” says Brian Jenkins, a terror expert for the Rand Corp. “Its ability to fly in the face of a lot of things that are going on in that area is somewhat limited,” he says.According to the 9/11 commission, the U.A.E. “did little to address the problem” of money laundering and was home to two of the terrorists who flew into the World Trade Center’s twin towers.

“We should be concerned that they had a woefully inadequate tracking system on terrorism prior to 9/11,” says 9/11 commission member Tim Roemer.

But since 9/11, U.S. officials and outside experts say Dubai has cracked down and provides a critical military base for the United States.

“They have become quite a strong ally for the United States in terms of the war on terrorism,” says the vice chairman of the 9/11 commission, Lee Hamilton.

Another problem is rampant smuggling through Dubai’s port. A criminal complaint, obtained by NBC News, says the U.A.E.’s director of customs “would not allow” a U.S. special agent to detain a shipment of nuclear equipment heading to Pakistan in 2003 and is still permitting nuclear equipment to get to Iran.

“Unless Dubai is willing to impose restrictions on what Iran can buy, there’s no hope of stopping the Iranian bomb program,” says Gary Milhollin, the director of the University of Wisconsin’s Project on Nuclear Arms Control.

Most recently, the U.S. Coast Guard raised concerns in December that Dubai still has intelligence gaps. Now the Coast Guard says those concerns are resolved. U.S. officials concede that Dubai has had a mixed record since 2001, but say its government may not have known about illegal shipments through its port.

If so, critics say, that raises new questions about how much control Dubai has over its own territory and whether one of its companies should be trusted to run American ports.