Three weeks after 9/11, when the roar of fighter jets still haunted the city's skyline, the emir of gas-rich Qatar, Sheikh Hamad bin Khalifah al-Thani, toured Ground Zero. Although a member of the emir's own royal family had harbored the man who would later be identified as the mastermind of the attack—a man named Khalid Sheikh Muhammad, often referred to in intelligence circles by his initials, KSM—al-Thani rushed to New York in its aftermath, offering to make a $3 million donation, principally to the families of its victims. Rudy Giuliani, apparently unaware of what the FBI and CIA had long known about Qatari links to Al Qaeda, appeared on CNN with al-Thani that night and vouched for the emir when Larry King asked the mayor: "You are a friend of his, are you not?"

"We had a very good meeting yesterday. Very good," said Giuliani, adding that he was "very, very grateful" for al-Thani's generosity. It was no cinch, of course, that Giuliani would take the money: A week later, he famously rejected a $10 million donation from a Saudi prince who advised America that it should "adopt a more balanced stand toward the Palestinian cause." (Giuliani continues to congratulate himself for that snub on the campaign trail.) Al-Thani waited a month before expressing essentially the same feelings when he returned to New York for a meeting of the U.N. General Assembly and stressed how important it was to "distinguish" between the "phenomenon" of 9/11 and "the legitimate struggles" of the Palestinians "to get rid of the yoke of illegitimate occupation and subjugation." Al-Thani then accused Israel of "state terrorism" against the Palestinians.

But there was another reason to think twice about accepting al-Thani's generosity that Giuliani had to have been aware of, even as he heaped praise on the emir. Al Jazeera, the Arabic news network based in Qatar (pronounced "Cutter"), had been all but created by al-Thani, who was its largest shareholder. The Bush administration was so upset with the coverage of Osama bin Laden's pronouncements and the U.S. threats to bomb Afghanistan that Secretary of State Colin Powell met the emir just hours before Giuliani's on-air endorsement and asked him to tone down the state-subsidized channel's Islamist footage and rhetoric. The six-foot-eight, 350-pound al-Thani, who was pumping about $30 million a year into Al Jazeera at the time, refused Powell's request, citing the need for "a free and credible media." The administration's burgeoning distaste for what it would later brand "Terror TV" was already so palpable that King—hardly a newsman—asked the emir if he would help "spread the word" that the U.S. was "not targeting the average Afghan citizen." Al-Thani ignored the question—right before Giuliani rushed in to praise him again.

In retrospect, Giuliani's embrace of the emir appears peculiar. But it was only a sign of bigger things to come: the launching of a cozy business relationship with terrorist-tolerant Qatar that is inconsistent with the core message of Giuliani's current presidential campaign, namely that his experience and toughness uniquely equip him to protect America from what he tauntingly calls "Islamic terrorists"—an enemy that he always portrays himself as ready to confront, and the Democrats as ready to accommodate.

The contradictory and stunning reality is that Giuliani Partners, the consulting company that has made Giuliani rich, feasts at the Qatar trough, doing business with the ministry run by the very member of the royal family identified in news and government reports as having concealed KSM—the terrorist mastermind who wired funds from Qatar to his nephew Ramzi Yousef prior to the 1993 bombing of the World Trade Center, and who also sold the idea of a plane attack on the towers to Osama bin Laden—on his Qatar farm in the mid-1990s.

This royal family member is Abdallah bin Khalid al-Thani, Qatar's minister of Islamic affairs at the time, who was later installed at the interior ministry in January 2001 and reappointed by the emir during a government shake-up earlier this year.