By Ben Evansky

A letter from the executive director of the Council on American-Islamic Relations, or CAIR, and president of an offshoot group, Muslim Peace Foundation to Libyan leader Muammar al-Qaddafi has added fuel to criticisms of the controversial group and what its critics say are some dubious fundraising tactics.

In the letter, obtained by Fox News and dated Sept. 23, 2009, CAIR executive director Nihad Awad asks Qaddafi for funding for his new project called the Muslim Peace Foundation. Qaddafi was in New York attending the United Nations General Assembly.

Rep. Frank Wolf, R-Va., cited the letter Wednesday at a House Appropriations sub-committee hearing, during which Wolf asked FBI Director Robert Mueller about the FBI's relationship with CAIR. Mueller replied there "is no formal relationship with CAIR."

A translation of the letter, written originally in Arabic, says in part, "I am pleased to send to Your Excellency in my name most solemn assurances of thanks and appreciation for the efforts you exert in the service of Islam, Muslims and all mankind through your initiative to teach Islam, spread the culture of Islam, and solve disputes, for which you are known internationally."

This was long before the uprising in Libya this year, with international calls for Qaddafi to step down after a brutal crackdown on dissent that has escalated into a civil war with rebel forces.

But Wolf said the CAIR director's 2009 letter still was written with the full knowledge of the regime's brutal treatment of its opponents and its deplorable human rights record, as well as its long history of acts of international terrorism. And the congressman said the letter showed that Awad was in the process of setting up the Muslim Peace Foundation and seeking to raise $15 million.

The letter ends by thanking Qaddafi for his "generous support."

Wolf said it was his understanding that Awad had made repeated attempts to solicit funding from Qadaffi and other foreign sources, and he asked Mueller if the FBI was aware of the outreach to Qadaffi and if the group had received funds from the Libyan regime.

"I'll have to get back to you on that," Mueller said. "I am not familiar myself at this point, but we may."

It was late March that the Investigative Project on Terrorism released a report that quoted a Libyan news website that reported that CAIR officials, including Awad, had met with Qaddafi in September 2009. They had asked him then to "underwrite a program to distribute 1 million copies of the Quran to government officials and the general public in America."

But CAIR spokesman, Ibrahim Hooper, told Fox News that the organization didn't receive any money from the Libyan government.

"A number of community leaders and organizations were invited to a meeting in New York, at which support was sought for an initiative, unrelated to CAIR, to promote peace and mutual understanding," Hooper said. "That single meeting mirrored the actions of the Bush and Obama administrations."

Hooper also noted that "CAIR was one of the first American organizations to call for a no-fly zone to protect Libyan civilians."

Steve Emerson, the executive director of the Investigative Project on Terrorism, called it "hypocritical" for CAIR leaders to "ask for funds from Qaddafi given that they've just condemned him."

"Their transgressions are multiple some of them fall into immorality, some into illegality," Emerson told Fox News. As for CAIR raising funds abroad, Emerson says it's legal to raise money but must be reported on the group's annual 990 tax form. However, Emerson said if they were to work at the "direction or control" of a foreign donor they could very well be violating the Foreign Agent Registration Act.

Hooper would not respond to Fox News' questions on whether CAIR receives funding from foreign donors, but he would say that CAIR works with the FBI on "an almost daily basis on civil rights issues."