By Vernon Loeb
Washington Post Staff Writer
Sunday, August 23, 1998; Page A01

As he repairs to his mountain refuge in Afghanistan, his base camps freshly scorched by scores of Tomahawk cruise missiles, Osama bin Laden's power and prestige have largely survived the first major attack from the enemy he has pursued for so long.

Last Thursday's U.S. air strike came a few miles from where it all began for bin Laden 19 years ago. Then, he was a rich, young Saudi fresh from engineering school, come to fight the Soviet invaders. He cut roads through the mountains, recruited Arab volunteers and served alongside Afghan rebels trained and equipped by the CIA. But today, his interests and influence reach far beyond the borders of Afghanistan and even the Middle East. From his isolated base, he presides over a loose transnational network of organizations and causes that have made him an almost unique figure, a leader of no known citizenship who has used money, ideology, entrepreneurship and a vocation for terror to challenge the security of the world's most powerful state.

As he tells it, bin Laden's goal is to foment a religious struggle that will unify the world's 1 billion Muslims. While he has not inspired a large popular following, he appears to have been unusually successful in unifying an array of violent extremist groups -- and in provoking the struggle he envisions with the West.

"We deal with the Islamic world as a single state and cooperate with people on a basis of righteousness and piety as far as we can," he said shortly after his return to Afghanistan in 1996, after his expulsion from Sudan under heavy U.S. pressure. "We are a single nation with one religion."

Bin Laden's efforts have drawn together thousands of Afghan war veterans in 12 countries and violent, sometimes rival, organizations such as the Islamic Jihad and the Islamic Group in Egypt to kill Americans, drive U.S. troops from the Persian Gulf, target Israel and topple what they regard as corrupt regimes in Saudi Arabia and Egypt.

All the while, he has mixed war and profit. His economic holdings include trading companies in Kenya, a ceramic manufacturing company in Yemen and a bank, construction company and investment firms in Sudan, where he and his associates secured a near monopoly on gum arabic, the country's leading export and a staple of much fruit juice production in the United States.

In building this diffuse empire, bin Laden continues to draw on a spectacular nest egg. He inherited a fortune estimated at as much as $300 million from his late father, construction magnate Muhammad bin Laden. Even though estranged today from his family, and his Saudi assets frozen by the Saudi regime since 1994, he has multiplied his wealth through investments and hid it through his organizational ties.

But bin Laden has counted on more than money. He has cultivated a loyal following of "Arab Afghans," fellow veterans of the war against the Soviets who number in the thousands worldwide. These veterans attracted men such as Ramzi Ahmed Yousef, the mastermind of the 1993 World Trade Center bombing in New York, and Wali Khan Amin Shah, a close friend of bin Laden's who was convicted of plotting to blow up a dozen American jumbo jets over the Pacific in 1994 and to kill Pope John Paul II during a 1995 visit to the Philippines. And bin Laden has shaped his ideas into a potent message for his times. His pan-Islamic ideology seems particularly compelling to followers with the continued presence of U.S. troops in the Arabian Peninsula, sanctions against Iraq and a stalled Mideast peace process in which the United States is widely identified as furthering Israel's interests at the expense of Palestinians.

Bin Laden, whose communications network produces a steady supply of interviews and pronouncements for publication in the Arab media, honed his message into an edict issued in February in which for the first time he called publicly for attacks on Americans, according to intelligence officials. The edict announced a new coalition of extremist groups from Egypt, Pakistan and Bangladesh called the International Islamic Front for Jihad Against the Jews and Crusaders.

"For over seven years the United States has been occupying the lands of Islam in the holiest of places, the Arabian Peninsula," the edict begins, "plundering its riches, dictating to its rulers, humiliating its people, terrorizing its neighbors, and turning its bases in the peninsula into a spearhead through which to fight the neighboring Muslim peoples."

Muslims everywhere should kill Americans wherever they find them, soldiers and civilians alike, the edict proclaims, "in accordance with the words of Almighty God."

U.S. officials believe this order culminated in the bombing of the American embassies in Kenya and Tanzania Aug. 7. Said a former State Department official who specialized in counterterrorism: "Without lifting a finger, he has incited others to kill Americans."

Osama bin Laden was 22 years old, the youngest of some 20 bin Laden sons, when the Soviets invaded Afghanistan on Dec. 26, 1979. "I was enraged," he would say in an interview years later, "and went there at once."

The source of bin Laden's Islamic fervor isn't all that clear.

A glowing biography on a Web site maintained by Azzam Publications in London reports that bin Laden was "an ordinary young man" but "more pious than his brothers," having been "deeply affected by the involvement of his family's construction company in rebuilding the two Holy Mosques in Mecca and Medina."

The Mideast Mirror paints quite a different portrait of the years following bin Laden's secondary school graduation in Jiddah in 1973. "Osama bin Laden was a frequent visitor to Beirut, where he made a name as a free-spending, fun-loving [youth] in flashy nightclubs and bars," it says. "His one-time Lebanese barber, an Armenian Beiruti, recalls that bin Laden was then a heavy drinker who often ended up embroiled in shouting matches and fistfights with other young men over an attractive barmaid or nightclub dancer. His Beirut escapades were interrupted by the 1975 outbreak of Lebanon's civil war, however."

But four years later, after graduating from King Abdul Aziz University in Jiddah with a degree in civil engineering, bin Laden arrived on the Afghan border, ready for war.

The State Department, in an unclassified report, credits bin Laden during the anti-Soviet struggle with playing "a significant role in financing, recruiting, transporting and training Arab nationals. Bin Laden imported bulldozers and other heavy equipment to cut roads, tunnels, hospitals and storage depots through Afghanistan's mountainous terrain to move and shelter fighters and supplies."

Initially, bin Laden worked through an organization he co-founded with a Palestinian militant that was called Maktab al-Khidamat (MAK), or the Services Office. "The MAK ultimately established recruitment centers around the world -- including in the United States, Egypt, Saudi Arabia and Pakistan -- that enlisted, sheltered and transported thousands of individuals from over 50 countries to Afghanistan to fight the Soviets," according to an unclassified CIA fact sheet. "It also organized and funded paramilitary training camps in Afghanistan and Pakistan."

The CIA was in the same business at the time, engaged in the last major battle of the Cold War and shepherding billions of dollars in weapons and money to the anti-Soviet forces. Milton Bearden, a former CIA official who ran the agency's covert operation in Afghanistan from 1986 to 1989, said last week in an interview that the CIA knew of bin Laden during the war but had no relationship with him.

"We didn't train Arabs," Bearden said. "We did not train anybody anywhere in the world to use truck bombs or car bombs. . . . Sometimes you work with unsavory people to deal with acute evils."

Bin Laden also maintains that he received no help from the CIA. "Personally, neither I nor my brothers saw evidence of American help," he has said.

Toward the end of the war, bin Laden established a new organization, al-Qaida -- the Islamic Salvation Foundation -- to extend his reach around the world, according to the CIA. The organization survived the war and remains a "formidable" operation, the CIA fact sheet says, "consisting of mujaheddin of many nationalities who had previously fought with bin Laden. Many of these have remained loyal to and continue working with him today."

Bin Laden also maintains an alliance first formed between al-Qaida and the Islamic Group for paramilitary training of recruits during the war. Now joined in bin Laden's coalition by onetime rival Egyptian Islamic Jihad, the Islamic Group would go on, a decade later, to claim credit for Egypt's most lethal terrorist attack, the execution of 58 foreign tourists and wounding of 26 others in November 1997 in the Valley of the Kings near Luxor, according to Kenneth Katzman, a senior Middle East analyst and terrorism export at the Congressional Research Service.

Curiously, neither State Department nor CIA public documents say anything about bin Laden actually fighting during the Afghan war -- combat duty for which he is renowned among his so-called Arab Afghan comrades in arms.

The Web site maintained by Azzam Publications tells how bin Laden and "a few dozen Arabs fought off a Soviet onslaught in a town called Jaji. To the volunteers, it was one of the first demonstrations that the Russians could actually be beaten."

The following year, according to Azzam's biography, "bin Laden led an offensive against Soviet troops in the battle of Shaban. Vicious hand-to-hand fighting claimed heavy mujaheddin casualties, but his men succeeded in pushing the Soviets out of the area."

The source of these stories is unclear, however. Both accounts appear to have been lifted, nearly word for word, from a profile of bin Laden published in Time magazine in May 1996.

Bearden, the former CIA chief in Afghanistan, is skeptical of such tales. "He was a fund-raiser out there," he said. "He was bringing in a lot of money. He probably went in a few times and got into a dust-up where he and some Saudis with an Afghan commander performed well. Nobody had any illusions that these guys were great fighters. The mythology that's sprung up around this guy goes on and on and on, and it's more or less nonsense."

But one former State Department official, experienced in counterterrorism, said that whether bin Laden saw extensive combat is academic. "The fact is, he was there," the official said. "He has ingratiated himself with the Islamic extremist element in Afghanistan on the basis of his contribution during the way -- it's not all just fancy. I'm sure he was there -- he was engaged."

Once he came home from the war in 1989, older, wiser and more radical, bin Laden tried to stay engaged by supporting opposition movements in Saudi Arabia and Yemen while working for his family's construction firm in Jiddah, a vast enterprise called the Bin Laden Group.

Saudi officials tried to rein him in by holding his passport for two years but finally gave up, expelling him in 1991 for his political activities. The Saudis ultimately revoked his citizenship.

As it happened, 1991 was a watershed for bin Laden for another reason, as well: It was the year American troops fought the Persian Gulf War -- and stayed on, victorious, to establish a large, permanent military presence in the region, including in Saudi Arabia.

Bin Laden still seethes, seven years later, at what he saw as an occupying army of infidels in the shadow of Islam's holiest sites. "You will leave when the bodies of American soldiers and civilians are sent in the wooden boxes and coffins," he told ABC's "Nightline" earlier this year. "That is when you will leave."

Finding a new home in the early 1990s proved to be no problem for him. Bin Laden was welcomed in Sudan by Hassan Turabi, a charismatic leader of the ruling National Islamic Front (NIF) in a country then making a reputation for hosting militant extremists.

Soon, bin Laden paid to transport as many as 480 Afghan veterans to Sudan after Pakistani officials threatened to expel them from areas along the border with Afghanistan, the State Department said. He also began financing three terrorist camps in northern Sudan for radicals from Egypt, Algeria and Tunisia, as well as Palestinians.

Bin Laden, meanwhile, was busy investing in businesses with leaders of the NIF and starting companies of his own, using his profits to support his political and military infrastructure. "Bin Ladin formed a symbiotic business relationship with wealthy NIF members by undertaking civil infrastructure development projects on the regime's behalf," the State Department said in a 1996 report. The activities included:

Al-Hijrah for Construction and Development Ltd., which built a 750-mile highway from Khartoum to Port Sudan and a new airport at Port Sudan.

An export-import firm, Wadi al-Aqiq Company Ltd., and an investment concern, Taba Investment Company Ltd., which "secured a near monopoly over Sudan's major agricultural exports of gum, corn, sunflower and sesame products in cooperation with NIF members."

Al-Shamal Islamic Bank in Khartoum, a joint effort by NIF members and bin Laden, who invested $50 million.

While all this was taking place in Sudan, bin Laden was pursuing military, business and religious ties in Yemen, according to a recent report in Al Watan Al Arabi, an Arabic newspaper published in Paris.

The newspaper named bin Laden as one of the 10 "strongest men" in Yemen, with a business empire that includes ceramic, publishing and appliance import firms owned through middlemen and a sizable militia.

"His returns represent a huge financial resource to the radical religious factions [he supports]," Al Watan Al Arabi reported. "It is said that bin Laden's financial and accounting department consists of 17 staffers headed by a Sudanese called Abu-al-Hasan. Yemeni sources say that bin Laden owns commercial firms in Kenya that deal in electrical appliances and make a great deal of profit that is transferred to his financial department that is spread in several European capitals, including Rome."

Yemen was also the scene of the first terrorist attack thought to have been carried out by bin Laden and his associates -- a 1993 bombing at a hotel where U.S. troops had been billeted on their way to a humanitarian mission in Somalia. The soldiers had left before the bomb exploded, but two tourists were killed.

Bin Laden has also claimed credit for helping shoot down American helicopters during a fierce, day-long firefight in Mogadishu in 1993 that killed 18 U.S. soldiers and wounded dozens more. But Robert Oakley, the State Department's former counterterrorist chief, who has firsthand knowledge of the battle, called the oft-repeated claim preposterous in an interview last week.

The next year, a truck bomb in the Saudi capital, Riyadh, killed five U.S. servicemen. The four Saudi men captured and beheaded for the crime described themselves as bin Laden followers. Three had fought against the Soviets in Afghanistan; one had fought for the Muslim-led government in Bosnia.

For harboring bin Laden and other terrorists, Sudan was placed in 1993 on the State Department's list of countries that sponsor terrorist activities. Three years later, under intense U.S. pressure, Sudan told bin Laden to leave.

"People are supposed to be innocent until proved guilty," he complained in a Time magazine interview shortly before his expulsion. "Well, not the Afghan fighters. They are the 'terrorists of the world.' But pushing them against the wall will do nothing, except increase the terrorism."

Forced to move again in May 1996, bin Laden headed back to Afghanistan, where an Islamic fundamentalist militia called the Taliban was just consolidating its place as Afghanistan's dominant guerrilla group after four years of civil war.

The following month, a truck bomb devastated a U.S. military residence in Dhahran called Khobar Towers, killing 19 servicemen, an attack bin Laden lauded as heroic. U.S. officials now believe a Saudi Shiite group was most likely responsible, though some still suspect bin Laden may have played a minor part.

Three months later, he issued his first "Declaration of War" against U.S. military presence in the gulf, declaring that Saudis have a right to strike at the 5,000 American troops there. The statement was bin Laden's most specific call for action and seemed to signal that he was attempting to move from behind the scenes as financier to become a more charismatic religious force.

"I had decided to myself, after the Saudi government clamped down [in September 1994] on the country's [Muslim scholars], dismissing them from posts in universities and mosques and banning distribution of their tapes, virtually preventing all of them from speaking, that I would start saying what was right and denouncing what was wrong," bin Laden told Al Quds Al Arabi, a Palestinian daily, in an interview in November 1996 from his command center, a cave outside the city of Kandahar in southern Afghanistan.

Abdelhari Atwan, the paper's editor, described how the cave, was equipped with a computer and a library of handsomely bound volumes.

Bin Laden said in the interview that he felt he had come "back home, because the whole Islamic world is a homeland for Muslims." He described the Riyadh and Dhahran bombings as "a laudable kind of terrorism, because it was against thieves," and he reflected on the years he had spent in Afghanistan.

"Having borne arms against the Russians for 10 years," he said, "we think our battle with the Americans will be easy by comparison, and we are now more determined to carry on until we see the face of God."

He attended an early 1997 Tehran meeting with Iranian intelligence officials to plot recruiting, logistical and intelligence strategy, according to a report by the House Republican Research Committee's Task Force on Terrorism and Unconventional Warfare.

It quoted Egyptian intelligence as noting that "Osama bin Laden is working behind closed doors [to] prepare a second generation of Arab Afghans charged with installing fundamentalist regimes in several Arab and Islamic countries."

He followed those efforts in February with a call to kill Americans. He called it a fatwa, a religious order issued by clerics. A translated text of the document, issued by a newly formed coalition called the International Islamic Front for Jihad Against Jews and Crusaders, identified bin Laden as a sheikh.

Whatever his religious status, bin Laden had played the role of unifier again, bringing two former rival Egyptian terrorist organizations, the Islamic Group and Egyptian Islamic Jihad, together to issue their most chilling threats to date.

Katzman called the pronouncement "an important demonstration of the unity of disparate groups."

"Bin Laden's willingness to act, his ability to act and his pronouncement that [Muslims] must act," Katzman said, "are making him more of a charismatic leader."

When the International Islamic Front for Jihad Against Jews and Crusaders called a news conference in Peshawar, Pakistan, in late May to announce formation of the coalition, bin Laden challenged a reporter who wondered whether the group could take on the world's remaining superpower.

Bin Laden replied that America would see his latest threats come to pass "in a few weeks."

Staff writer Nora Boustany and correspondents Howard Schneider in Cairo, Karl Vick in Nairobi, Lee Hockstader in Jerusalem and Anne Swardson in Geneva contributed to this report.