Obama seeks money for terrorism trials, prison

WASHINGTON (Reuters) - President Barack Obama on Monday proposed spending $73 million to prosecute the five accused September 11 conspirators and one official said the trials could still be held in the heart of Manhattan.

Facing a surge of bipartisan opposition to prosecuting self-proclaimed attack mastermind Khalid Sheikh Mohammed and four others blocks from the World Trade Center site, the administration has been scrambling to find a new location.

Opposition has been growing to holding the trials in New York City because of security costs, pegged at more than $200 million a year, as well as the impact on nearby businesses and concerns about giving the defendants some legal rights in a criminal court.

But lower Manhattan may still host the trials.

"It's not off the table," Gary Grindler, the incoming acting deputy attorney general, said at a briefing about the Obama's Justice Department budget for fiscal 2011, which begins on October 1.

"A final decision has not been made," he said.

Getting Congress to approve the money could prove tough. Last year, the Obama administration had to lobby Congress not to block funding to transfer and prosecute foreign terrorism suspects held at the U.S. prison at Guantanamo Bay, Cuba.

A bipartisan group of senators plan to introduce on Tuesday legislation that would bar funding to the administration for prosecuting the September 11 suspects in a criminal court. They have pushed for trying them in a military court.

The proposed $73 million would pay for security, detention, litigation and moving the five suspects. If Congress approves the funding, the money would not be available until October 1, a tacit acknowledgment the prosecutions are months away.

However, Justice Department officials said that if they were ready to move ahead with the transfers and prosecutions, they could try to find existing budget funds to do so.

The proposal was part of a larger plan to boost the Justice Department's overall budget by 5.4 percent to $29.2 billion. That includes $300 million more for national security matters and $97 million more for combating financial fraud.

The proposal for the Department of Homeland Security included an extra $213 million to a grant program that could be used to help state and local officials deal with security for the terrorism trials.

THOMSON PRISON FOCUS FOR FISCAL 2011

U.S. Attorney General Eric Holder decided in November to set the September 11 trials in lower Manhattan and while there were some protests at the time, they had faded somewhat until last week when new objections surfaced.

New York City Mayor Michael Bloomberg reversed his earlier support for the trials in Manhattan amid concerns about security and the impact on local businesses. He was quickly joined by others including some of Obama's fellow Democrats.

That backlash caught the White House and Justice Department off guard, forcing them to consider other venues. They also argued that civilian courts are suitable for trying the five men, citing that most terrorism-related trials have been held in such courts.

"The president believes that the forum that the attorney general decided that these trials be held in (is) the best way to deal with Khalid Sheikh Mohammed and others, " White House spokesman Robert Gibbs told reporters.

Obama's fiscal 2011 budget also includes $237 million to acquire and staff a state-run prison in Thomson, Illinois, and to fortify it to house the suspects now at Guantanamo Bay.

That likely means the controversial Guantanamo prison will stay open even longer. When he took office last year, Obama said he wanted the facility closed by January 2010, but political, legal and diplomatic hurdles prevented him from fulfilling his goal.

A task force headed by Holder has recommended about 50 Guantanamo detainees be held indefinitely while an additional 35 or so should be tried in either U.S. criminal or military courts.

There are 192 detainees at Guantanamo and those not facing trials or indefinite detention are expected to be released.

(Additional reporting by Ross Colvin; editing by Mohammad Zargham)