The Justice Department is conducting a criminal investigation into whether Saudi Arabia's efforts to buff its image in the wake of the September 11, 2001, terrorist attacks ran afoul of laws designed to limit the influence of foreign countries on American politics and public opinion.
Earlier this month, FBI agents raided Washington and Northern Virginia offices of the kingdom's main public relations firm in America, Qorvis Communications. In recent weeks, prosecutors have also subpoenaed witnesses and documents before a grand jury pursuing the probe, people familiar with the inquiry said.
The investigation appears to be centering on a 2002 radio advertising campaign run under the name of the Alliance for Peace and Justice. The ads promoted a Middle East peace plan then being advanced by the de facto leader of Saudi Arabia, Crown Prince Abdullah. Some of the radio spots also denounced Israeli military tactics without mentioning Arab terrorist attacks on Israel. "To stop the cycle of violence, we must first end the military occupation of Palestinian towns and neighborhoods," one ad said.
Under a federal law, the Foreign Agents Registration Act of 1938, American public relations agents for foreign countries must identify the source of funds for advertising or propaganda campaigns that convey political messages to an American audience. The agents are also required to register with the Justice Department and provide copies of materials they distribute in America.
The ads from the Alliance for Peace and Justice contained no statement about their source. It is unclear whether they were ever submitted to the Justice Department.
The chairman of the group was reportedly a scholar and lecturer on the Middle East, John Duke Anthony. Neither Mr. Anthony nor his attorney, Christopher Johnson, returned phone messages yesterday seeking comment for this story.
The FBI and the Justice Department have declined to discuss the investigation.
One of the first to raise questions about the ads was the executive director of the Jewish Community Relations Council of Minnesota, Stephen Silberfarb. "We got a tip these ads were going to be playing here," Mr. Silberfarb said. He obtained an address for the Alliance for Peace and Justice and quickly grew suspicious that the group was a sham. "It sure seemed something odd was going on," he said. "We were just incensed here that a foreign country appeared to be trying to put out propaganda ads without attribution to that country."
Mr. Silberfarb said he dispatched an intern to the McLean, Va., address to find the group's office. "It didn't exist," he said. "It was the office of Qorvis. We said, 'Aha!'"
According to records filed with the Justice Department, Qorvis received $14.7 million from the Royal Embassy of Saudi Arabia between March and September 2002. Details on more recent payments to the firm by the Saudis were not available yesterday.
A spokesman for Qorvis said the firm had obeyed the law. "We understand that the government is conducting a FARA compliance inquiry. Qorvis has fully complied with this regulatory statute and we are confident the matter will be resolved favor ably," said the spokesman, who asked not to be named.
An Arab-American activist involved in early discussions about the Alliance confirmed yesterday that it was a creation of the Saudis' public relations firm.
"It was more of Qorvis's imagination than anything for real," the managing director of the Arab American Institute, Jean AbiNader, said. "They came up with the idea. They went ahead with it without getting anybody's permission."
Among the groups asked to join the Alliance was the American Task Force for Lebanon and the American-Arab Anti-Discrimination Committee, Mr. AbiNader said. All were upset when the ad campaign was launched without the approval of the groups that were consulted, he said.
"There was great umbrage," the activist said.
The airtime for the ads was purchased by Sandler-Innocenzi of Alexandria, Va. One of the firm's founders, Stephen Sandler, confirmed yesterday that within the past few weeks prosecutors have asked for details on the transactions.
"We had information on a media buy we made two years ago subpoenaed," he said.
Mr. Sandler said the purchases were arranged through Qorvis and that his firm didn't know about how the Alliance was created. He did say he forwarded to radio stations a list of groups that Qorvis said belonged to the Alliance. "The radio stations want to know who's buying their airtime," he said.
Mr. Sandler said he is puzzled by the timing of the subpoena and the raids at Qorvis, which come more than two-and-a-half years after the ad campaign hit the air. "Everybody is looking for some ulterior motive, some ulterior plot," he said.
One suspicion expressed by many of those involved in the inquiry is that it stems from an effort by prosecutors to achieve some kind of balance with an ongoing investigation into the American Israel Public Affairs Committee. Earlier this month the FBI searched Aipac's offices in Washington.
While early reports suggested that the Aipac investigation involved allegations of espionage on behalf of Israel, more recent accounts suggest that prosecutors may also be looking at whether the pro-Israel group violated the Foreign Agents Registration Act.
Aipac has denied any wrongdoing.
Mr. Sandler said criticism of the Aipac probe may have led to the renewed interest in Qorvis's alleged malfeasance. "It may be all the whining" over the Aipac investigation, he said. "They may be trying to even it out."
The Minnesota activist, Mr. Silberfarb, said he also suspects that such a factor could be at work. "It does look rather convenient - spread the misery around," he said.
In a story posted on Newsweek's Web site last week, a Justice Department spokesman called the claim that the agency was looking to balance the two inquiries "absurd."
According to the Justice Department's Web site, the agency rarely pursues violations of the Foreign Agents Registration Act as criminal cases. However, deliberate violations of the registration law are punishable by up to five years in prison, a fine of up to $10,000, or both.
Mr. Silberfarb said he doesn't consider the Saudi's stealth ad campaign to be a particularly egregious act, but one that is nonetheless wrong. "This is not Watergate or anything," he said. "It sure looks like somebody's hand was caught in the cookie jar."