The Treasury Department has designated American-born, al-Qaeda propagandist Anwar al-Awlaki as a leader of a Yemeni terrorist group, al-Qa’ida in the Arabian Peninsula (AQAP). Under an executive order, the move freezes any assets al-Awlaki has under U.S. jurisdiction and bans individuals in the U.S. from doing business with him.

“Anwar al-Aulaqi has proven that he is extraordinarily dangerous, committed to carrying out deadly attacks on Americans and others worldwide,” Treasury Undersecretary for Terrorism and Financial Intelligence Stuart Levey said in a statement. “He has involved himself in every aspect of the supply chain of terrorism — fundraising for terrorist groups, recruiting and training operatives, and planning and ordering attacks on innocents.”

Al-Awlaki, who had ties to three of the Sept. 11 hijackers, exchanged e-mails with Major Nidal Malik Hasan, who later opened fire on an Army base in Fort Hood, Texas, killing 13 people.

Federal authorities have also arrested and charged Barry Walter Bujol, Jr., with allegedly attempting to travel overseas to fight jihad. Bujol was in contact with al-Awlaki.

Al-Awlaki, who was born in New Mexico in 1971 but is now based in his family’s native Yemen, is reportedly on a CIA list of people approved for targeted killing. U.S. analysts believe he has moved from attempting to incite violence to assisting Al-Qaeda in planning operations.

In an audio statement issued today, al-Awlaki taunted President Barack Obama and the U.S. military.

In May, Rep. Frank Wolf (R-Va.) sent a letter to FBI Director Robert Mueller, raising his concern over a report that the FBI ordered al-Awlaki released from detention at New York’s John F. Kennedy Airport in October 2002. The FBI has not yet responded to the letter, said Daniel Scandling, a spokesman for Wolf’s office.

Attorney General Eric Holder said Friday he found it “intolerable” that  Arab and Muslim Americans feel uncomfortable about their relationship with law enforcement and asserted the Justice Department is working to strengthen the ties with those communities.

ADC National Board Chairman Dr. Safa Rifka, right, introduces Attorney General Eric Holder, seated on Friday (photo by Ryan J. Reilly / Main Justice).

“Since becoming Attorney General last February, I have heard from Arab-Americans and Muslim Americans who say they feel uneasy about their relationship with the United States government.  I’ve spoken to Arab-Americans who feel that they have not been afforded the full rights – or, just as important, the full responsibilities – of their citizenship. They tell me that, too often, it feels like ‘us versus them’,” Holder said in prepared remarks.

“That is intolerable,” he continued. “And it is inconsistent with what America is all about. In this nation, our many faiths, origins and appearances must bind together, not break us apart.”

Holder addressed the American-Arab Anti-Discrimination Committee (ADC), one of the organizations that takes part in bi-monthly meetings hosted by the Justice Department’s Civil Rights Division. The meetings bring Muslim, Arab, Sikh and South Asian American leaders together with representatives of top federal agencies, a spokesman said.

Holder’s speech, at the 30th anniversary convention of the organization, came at a time when government officials have expressed heightened concern about the threat of home-grown terrorism inspired by Islamic extremism.

Those fears were underscored last week by White House counterterrorism adviser John Brennan. In remarks about the Obama administration’s new National Security Strategy last week, Brennan said there had been seven alleged incidents of home-grown terrorism in the past year.

Another case was announced by the Justice Department on the eve of Holder’s speech when the Justice Department disclosed the indictment of an U.S. citizen who was allegedly prepared to fight jihad, inspired by al-Qaeda propagandist Anwar al-Awlaki.

The National Security Strategy (PDF) warned that “several recent incidences of violent extremists in the United States who are committed to fighting here and abroad have underscored the threat to the United States and our interests posed by individuals radicalized at home. Our best defenses against this threat are well informed and equipped families, local communities, and institutions,” the report said.

The Justice Department has tried to carefully cultivate its relationship with Arab and Muslim-American civil rights organizations as it pursues aggressive law enforcement strategies to prevent terrorist attacks which continue to leave some groups saying they feel singled out for scrutiny.

Holder addressed one issue of tension – the Justice Department’s Guidance Regarding the Use of Race by Federal Law Enforcement Agencies, which was issued in 2003. Holder noted that he had initiated an internal review of the guidance in the fall.

“I’m committed to ensuring that department policy allows us to perform our core law enforcement and national security responsibilities with legitimacy, accountability and transparency,” Holder said. “But, today, I want to be clear about something: Racial profiling is wrong. It can leave a lasting scar on communities and individuals. And it is, quite simply, bad policing—whatever city, whatever state.”

Holder also highlighted the outreach efforts of the Arab/Muslim Engagement Advisory Group, which he established last year. He mentioned the FBI’s new Specialized Community Outreach Team (SCOT), DOJ’s Community Relations Service, the Office of Justice Programs and U.S. Attorneys who are working to strengthen the Arab-American community’s relationships with federal law enforcement.

“The era of ‘us versus them’ that some of you have experienced must end. At long last, it is ending. Together, we can make sure it’s replaced by a new era – an era that recognizes the truth reflected in this organization’s name – that regardless of our faiths, regardless of our backgrounds, we are all Americans,” Holder said.

The Justice Department’s relationship with ADC is not new. They worked together throughout the Bush administration, though there were a handful of flair-ups. Several Bush administration Justice Department officials, including former Assistant Attorney General for Civil Rights Alexander Acosta have spoken to the group, as had former Attorney General Janet Reno.

Another U.S. citizen who communicated with al-Qaeda propagandist Anwar al-Awlaki has been charged in federal court, the Justice Department said Thursday.

A federal grand jury in Houston indicted Barry Walter Bujol Jr., 29, for attempting to provide material support to an affiliate of al-Qaeda known as al-Qaeda in the Arabian Peninsula. Bujol also was charged with aggravated identity theft, according to the Justice Department.

Bujol was arrested on May 30 after he boarded a ship at a port in the Houston area prepared to travel overseas to fight jihad, the Justice Department said.

Bujol, of Hempstead, Texas, first came under investigation by the FBI Joint Terrorism Task Force in 2008, according to a DOJ news release.

Agents learned he began communicating with al-Awlaki via e-mail, according to court documents. Al-Awlaki allegedly sent Bujol a document entitled “42 Ways of Supporting Jihad” and other materials. Bujol allegedly made several attempts to leave the country and travel to either Yemen or the Middle East, the Justice Department  said.

Al-Awlaki, who had ties to three of the Sept. 11 hijackers, was also in contact with alleged Fort Hood gunman Nidal Hasan, U.S. officials have said. The Army psychiatrist allegedly opened fire at the Texas military base on Nov. 5, killing 13.

Al-Awlaki was also reportedly an inspiration for the Nigerian national who attempted to blow up a Detroit-bound jet on Christmas Day and the Pakistani-born naturalized U.S. citizen Faisal Shazad, charged with the attempted car-bombing of New York’s Times Square.

The investigation of Bujol appeared to accelerate about the time of Hasan’s alleged rampage, as it became clear that early-warning signs about Hasan’s radicalization — including his contacts with al-Awlaki — hadn’t been fully grasped by law enforcement.

The Justice Department said the FBI deployed a “confidential human source” last November on the Bujol case, but didn’t give the exact date.

Bujol allegedly expressed a desire to travel oversees to fight jihad, and the FBI’s undercover source provided him with a false identification card, which he used to gain access to a secure area of the port, and other materials allegedly for use in jihad, the Justice Department said. FBI agents arrested him once he boarded the ship.

Assistant U.S. Attorneys Mark W. White III and Gary Cobe of the U.S. Attorney’s Office for the Southern District of Texas and Garrett Heenan, a trial attorney from the Counterterrorism Section of DOJ’s National Security Division, are prosecuting the case, said the Justice Department.

Al-Awlaki, who was born in New Mexico in 1971 but is now based in his family’s native Yemen, is also reportedly on a CIA list of people approved for targeted killing. U.S. analysts believe he has moved from attempting to incite violence to assisting Al-Qaeda in planning operations.

Anwar al-Aulaqi

A federal arrest warrant issued in Colorado for radical Islamic cleric Anwar al-Awlaki was withdrawn in 2002 because prosecutors ultimately lacked evidence that he had committed a crime, interim U.S. Attorney Dave Gaouette told the Denver Post last week.

Awlaki has emerged as a key figure as investigators look into the Nov. 5 shooting deaths at Fort Hood. He was an imam at a suburban mosque attended by two of the 9/11 hijackers, Nawaf Alhamzi and Hani Hanjour. Awlaki praised suspected Fort Hood shooter Maj. Nidal Hasan on his blog last month.

ABC News first reported that Colorado prosecutors had issued but then withdrawn a warrant for his arrest on passport fraud charges.

Gaouette, who was an assistant U.S. Attorney for the office in 2002, told the Denver Post that he and other federal prosecutors in his office held a meeting and decided there was insufficient evidence to present a passport fraud case to a grand jury.

“We asked the court to dismiss the complaint and withdraw the warrant in the interest of justice,” Gaouette told the Post. “There is no sense putting a person through an indictment when the government knows all along that we don’t have evidence or that we can prove the violation beyond a reasonable doubt.”

Gaouette’s term as interim U.S. Attorney for Colorado was set to expire on Tuesday, but has been extended by judicial decree until a new U.S. Attorney is appointed, according to his office. President Obama’s nominee for the position, Stephanie Villafuerte, is awaiting confirmation from the Senate. The Colorado Republican Party chairman and other conservatives have pressed the nominee over allegations she used a restricted federal database to help the 2006 campaign of Democratic Gov. Bill Ritter.

Gaouette also said his office never received information about the cleric’s possible ties to terrorists, contrary to what sources told ABC News.

“Even if there was information to us at the time that he associated or communicated with other people, that would not be a basis to get a criminal charge unless those communications were violations of criminal law,” Gaouette told the Post. “That has never been done, and that will never be done, and prosecutors make their decisions on the facts at the time.”

Anwar al-Awlaki

The interim U.S. Attorney for Colorado, David Gaouette, rescinded a felony arrest warrant in 2002 for the radical Islamic cleric who has emerged as a focus of investigators in the Nov. 5 shooting deaths at Fort Hood, according to ABC News.

Gaouette was an assistant U.S. Attorney in charge of terror cases in the state when the warrant for Anwar al Awlaki was rescinded, ABC said.

The day after the warrant was canceled, federal authorities detained the U.S.-born Awlaki at New York’s JFK airport as he arrived on a flight from Riyadh, Saudi Arabia. After questioning, Awlaki was released and continued on his way to Washington, D.C., where he was an imam at a suburban mosque attended by two of the 9/11 hijackers, Nawaf Alhamzi and Hani Hanjour.

Awlaki also had met in 2000 with Alhamzi and another future 9/11 hijacker, Khalid Almihdhar, at a mosque in San Diego.

Members of the Joint Terrorism Task Force in San Diego, speaking anonymously, told ABC News they were “disappointed and shocked” by Gaouette’s decision not to arrest Awlaki in 2002. “This was a missed opportunity to get this guy under wraps so we could look at him under a microscope,” a JTTF source told ABC. It isn’t clear why the warrant was canceled. A spokesperson for Gaouette said he was “unfamiliar with the particulars of the Awlaki case, and would have to research it before he could comment,” ABC reported.

The cleric had first come under FBI scrutiny in 1999. The Bureau found that Awlaki had been in contact with an associate of “blind sheik” Omar Abdel Rahman, whose followers were convicted of attempting to blow up the World Trade Center in 1993, ABC News said. Awlaki, who now lives in Yemen, runs a Web site that promotes violent jihad against the West. He was in email contact last year and this year with Maj. Nidal Hasan, who is accused of killing 13 people in a shooting spree at the Fort Hood military base in Texas.

After looking into the email contacts, the FBI decided they didn’t merit further investigation. The Bureau missed information in Hasan’s training file at Walter Reed Medical Center in Washington that would have shown his colleagues were troubled by views the Army psychiatrist expressed about Muslim conflict with the West. The apparent failure to connect the dots — reminiscent of pre-9/11 intelligence lapses — is the subject of congressional investigations.

Awlaki praised suspected Fort Hood shooter Maj. Nidal Hasan on his blog earlier this month.

Read the full report here: How Anwar Awlaki Got Away – ABC News.