Yes...they did know...it was more likely that they did not care...
The Clinton administration shut down a 1995 investigation of Islamic charities, concerned that a public probe would expose Saudi Arabia's suspected ties to a global money-laundering operation that raised millions for anti-Israel terrorists, federal officials told The Washington Times.
Law enforcement authorities and others close to the aborted investigation said the State Department pressed federal officials to pull agents off the previously undisclosed probe after the charities were targeted in the diversion of cash to groups that fund terrorism.
In the aborted 1995 investigation, the FBI said in a sealed affidavit that the Islamic Concern Project and World and Islam Studies Enterprise — working with charities in Virginia — committed fraud and "served as a vehicle by which [Islamic Jihad] raised funds to support terrorist activities in the occupied territories." In that probe, investigators found that checks drawn on a bank account of the International Committee for Palestine had been cashed by people in the Middle East. They said the checks had been signed by Mr. Al-Arian.
Clinton Axed Terror Probe
The FBI raided WISE in 1995 and froze its assets. The government also raided al-Arian's and al-Najjar's homes and offices, seizing academic research, videotapes, magazines, letters and other materials.
That year, President Bill Clinton imposed a legal ban on contributing money to the Palestinian group because of its terrorist activities.
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