WASHINGTON: Saudi Arabian authorities have located one of Osama bin Laden’s trusted lieutenants, according to US officials who said on Friday that they had frozen the assets of the alleged Al Qaeda financier.

US officials would not disclose the current whereabouts of Wa’el Hamza Julaidan — a man who they say fought alongside Osama long before he established Al Qaeda and who has been a key lieutenant in the terrorist network ever since. But they confirmed that Julaidan is either in custody in Saudi Arabia, under house arrest there or being closely monitored and prohibited from leaving the country while US and Saudi authorities continue to investigate him.

“This individual is directly tied to Al Qaeda and Osama bin Laden,” said a Treasury Department official. “He is a big fish.”

In interviews on Friday, US officials cited their freezing of Julaidan’s assets as evidence that they have made much progress in the effort to staunch the flow of terrorist financing, despite growing concerns that they have been unsuccessful in dismantling Al Qaeda’s economic support system. But if Julaidan is indeed in custody, it would mark a major coup for US authorities in pursuing their global investigation into the Sept. 11 attacks on the World Trade Center and the Pentagon, and into the worldwide activities of Al Qaeda.

Since Sept. 11, only a handful of senior Al Qaeda leaders have been captured, while most — including Osama bin Laden and top aide Ayman al-Zawahiri — remain at large. In addition, many believe that Al Qaeda remains flush with enough cash to launch more large-scale terrorist attacks, and that the financial crackdown has been largely unsuccessful, according to a top Swiss official.

“When I talk to my contacts throughout Europe, they share the same opinion,” said Swiss Attorney General Valentin Roschacher during a visit to Washington this week. Al Qaeda operatives “are still here, they are functioning and they have enough money to carry out other attacks.”

Tracking Al Qaeda’s finances, Roschacher said, “is difficult work,” particularly since the organization has converted much of its money into gold and diamonds. Those valuables are universally accepted as currency on the black market, and virtually impossible for authorities to trace, he said.

The United Nations also says in a report to be released next week that the global financial crackdown on terrorist financing has done little to thwart Al Qaeda.

“Despite initial successes in locating and freezing some $112 million in assets belonging to Al Qaeda and its associates, Al Qaeda continues to have access to considerable financial and other economic resources,” said the UNs’ special monitoring group in charge of tracking worldwide efforts to dismantle the terrorist network.

“Government officials have indicated that it has proved exceedingly difficult to identify ...Al Qaeda-related funds and resources,” a draft version of the report says. “The funds collected and disbursed by a number of Islamic based charities is proving particularly difficult for governments to monitor and regulate.”

US Treasury officials dispute that, saying that they have made much progress in cracking down on Al Qaeda’s financing.

“Our war on terror is working — both here in the US and overseas. ... We are seeing progress,” according to a draft version of the report obtained on Friday by the Los Angeles Times.

Treasury officials said Al Qaeda’s shift to using gold and diamonds is actually an indication that the crackdown has made an impact, because such bulky currencies can’t be wired from one end of the globe to the other as they can in more traditional banking systems. And they said that while the frequency of the blocking actions has slowed, that is only because so many already have been issued.

To date, the US government has designated 235 individuals, entities and organizations as “supporters of terrorism,” enabling financial institutions here and abroad to freeze their assets. A treasury official on Friday said he could not discuss the specifics of Julaidan’s current status: “The Saudis know exactly where he is. And they know that he is as much a threat to them as he is to us.”

Julaidan is believed to have been living in Saudi Arabia for ”at least the last few months,” the official said. He has for years been closely involved in a series of front companies and charitable organizations that Al Qaeda uses as conduits for raising money to launch terrorist attacks.

Julaidan, authorities said, has acted as a chief of logistics for Osama and the two have spent a significant amount of time together over the years. Julaidan fought along with Osama in Afghanistan in the 1980s, Treasury officials said.

Julaidan also is close with bin Laden lieutenants al-Zawahiri, Abu Zubeida and Mohammed Atef, the former military commander of Al Qaeda believed killed last year in an airstrike. He also has been associated with Makhtab al Khedmat, a precursor organization of Al Qaeda, the Rabita Trust and al-Gam’a al-Islamiya terrorist organization. —Dawn/LAT-WP News Service (c) Los Angeles Times