By Carey Gillam

KANSAS CITY, Mo., Jan 16 (Reuters) - A federal grand jury on Wednesday returned a 42-count indictment against a now-defunct Islamic charity for sending money to an Afghan "terrorist" and accused a former Republican congressman of money laundering, conspiracy and obstruction of justice.

According to the indictment, former Rep. Mark Deli Siljander of Michigan allegedly received about $50,000 in stolen federal funds from the charity, the Islamic American Relief Agency. He could not be reached for comment.

He was hired in 2004 to help get the charity removed from a congressional list of non-profit organizations suspected of supporting international terrorism, the government said.

The charity, also previously known as the Islamic African Relief Agency, was based in Columbia, Missouri. It closed in 2004 after the U.S. Treasury Department said it was a global terrorist organization.

Wednesday's indictment supersedes a previous one brought last March that charged the charity with making illegal transfers of more than $1.4 million to Iraq.

"This superseding indictment paints a troubling picture of an American charity organization that engaged in transactions for the benefit of terrorists and conspired with a former United States Congressman to convert stolen federal funds into payment for his advocacy on behalf of the charity," said Assistant Attorney General Wainstein in a statement.

The indictment alleged that IARA and its former executive director, Mubarak Hamed, engaged in prohibited financial transactions for the benefit of Gulbuddin Hekmatyar, an Afghan mujahideen leader designated by the U.S. government in 2002 as a terrorist.

Hekmatyar, a former warlord who fought against the Soviet Union and later served as Afghanistan's prime minister in the 1990s, supported terrorist acts by al-Qaeda and the Taliban, and "vowed to engage in a holy war against the United States and international troops in Afghanistan," the government said.

Siljander served in the U.S. House of Representatives from April 1981 to January 3, 1987. He is an owner and director of Global Strategies, Inc., a marketing and public relations company in Washington.

Prosecutors said none of the defendants are charged with providing material support for terrorism, Instead, they are accused of engaging in financial transactions that benefited property controlled by a designated terrorist.

Islamic charities in the United States complain they have been unfairly scrutinized since the Sept. 11 attacks. (Editing by Alan Elsner)

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