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Canadian Maher Arar remains on a U.S. no-fly list due to allegations from a man convicted of immigration fraud, according to classified American documents seen by The Globe and Mail.

U.S. sources told the newspaper the intelligence documents are key to understanding why Arar remains on a U.S. terrorism watch list despite being cleared of any wrongdoing by a public inquiry and receiving $10 million in compensation from the Canadian government. 

The classified documents, which were only accessible to those with a security clearance, state Arar was seen in Afghanistan in the early 1990s by Lebanese-born U.S. resident Mohamed Kamal Elzahabi, a self-confessed sniper instructor who claims he once led militant training camps in Afghanistan.

Arar maintains he never went to Afghanistan. He did confess to being in the war-torn country, but  under torture by Syrian authorities. 

Elzahabi has been languishing in a Minnesota jail for the past three years. He was convicted last year of immigration fraud. He still faces outstanding charges of lying to the Federal Bureau of Investigation.

Until now, Elzahabi's statements have remained sealed and not been tested in court.

The information comes from FBI interviews conducted nearly two years after Arar was arrested by U.S. authorities. Portions of the statement seen by the newspaper say Elzahabi did not train Arar in Afghanistan and state he didn't know what kind of training Arar may have participated in.

Arar's Canadian lawyer, Lorne Waldman, told The Globe this spring that Arar doesn't remember Elzahabi and only had his car serviced by Elzahabi's brother, who once ran a garage in Montreal.

Elzahabi's statements were not used in the Canadian inquiry led by Justice Dennis O'Connor because only Canadian files that led to the CIA rendition flight to Syria were examined.

Under extraordinary rendition, the U.S. ships off suspected terrorists to third countries for interrogation. Suspected terrorists have allegedly been tortured in those countries.

The U.S. denies that Arar was a victim of extraordinary rendition. Instead it argues that the Canadian citizen was deported to Syria under its immigration laws.

While returning from vacation on Sept. 26, 2002, Arar was detained by American border guards while stopped over in New York. Authorities later sent him via private jet to Syria.

Legal experts in the U.S. say the government in that country is violating a 1998 law which specifically prohibits it from sending people to countries where they are likely to be tortured. The Bush administration has claimed that it gets assurances from countries that prisoners handed over to them will not be tortured.

The inquiry found that the RCMP incorrectly told American authorities that Arar was an Islamic fundamentalist. They also gave other incriminating but incorrect information about Arar to the U.S. The inquiry found that the Mounties' actions likely led to Arar's arrest and deportation. O'Connor cleared Arar of any terrorist links.

On Thursday, Arar told members of the House of Representatives that the pain from the torture was so great that he told Syrian authorities whatever they wanted to hear. At one point, he falsely told them that he was involved with al Qaeda and had gone to Afghanistan. He was eventually released by the Syrian government without charge and returned to Canada.

He testified to Congress via video link from the University of Ottawa and said he has no idea why his attempts at clearing his name in the U.S. have been thwarted.

Members of the U.S. House of Representatives who heard his testimony apologized to Arar for his treatment at the hands of the U.S. government.

Rep. Jerrold Nadler of New York told the hearings he had seen the entire classified file relating to Arar as recently as Wednesday and saw nothing to persuade him that Arar should have been tortured or kept on the no-fly list.

The Bush administration still has not apologized, but has instead tried to quash Arar's attempts at bringing the matter before U.S. courts. Arar says the U.S. government's refusal to allow the legal system deal with his case is a continuation of the psychological abuse he's confronted since his ordeal began.