LAX Shooter By SUZANNE GAMBOA .c The Associated Press WASHINGTON (AP) - An Egyptian immigrant who shot and killed two people July 4 at Los Angeles International Airport previously told U.S. authorities he had been falsely accused of being in a militant Egyptian group that the United States now lists as a terror group, officials said Wednesday. An Immigration and Naturalization Service spokesman says a broken asylum system allowed him to remain in the country. In a March 30, 1993 interview for asylum, Hesham Mohamed Hadayet told the INS that Egyptian authorities arrested him and accused him of involvement with Al-Gamma'a al-Islamiyaa, the Islamic Group, said immigration officials who reviewed notes from the interview. At the time, the group was waging a violent campaign to topple the secular Egyptian government and replace it with Islamic rule. The group is now on the State Department's terrorist organizations list, which did not exist until 1997. On Wednesday, Hadayet's wife, Hala El-Awadly, and Egyptian police denied that Hadayet had any links with terrorist organizations. The INS eventually denied Hayadet asylum, deciding his claims lacked credibility, but he did not show up for a 1995 removal hearing. He was able to remain in the United States with a work permit and become a U.S. resident after his wife won her residency in the U.S. visa lottery program. Hadayet was killed by a security guard in the Los Angeles airport after he killed two people at Israel's El Al ticket counter. INS spokesman Bill Strassberger said that when Hadayet applied for asylum, the INS's asylum system was in disarray, allowing applicants to stay in this country on work permits while their cases took years to resolve. ``By 1992, the asylum process was in virtual meltdown, paralysis,'' he said. News of Hadayet's comments prompted Attorney General John Ashcroft to write to INS Commissioner James Ziglar, directing the agency to conduct ``a prompt review of existing asylum files to ascertain whether other individuals may be present in the United States who have admitted that they have been accused of terrorist activity.'' A Justice Department spokesman did not immediately provide comment. The Illegal Immigration Reform and Responsibility Act, passed by Congress in 1996, called for the State Department to start keeping a list of terrorist organizations. A State Department spokesman could not be immediately reached. The group Hadayet mentioned first shows up on the list on Oct. 8, 1999, under a similar name, an immigration official said. ``That long ago, most immigration officials would not know what the guy was talking about. The U.S. understanding of terrorism groups, especially in the Muslim world, there was a lot more distance at that time,'' said Vince Cannistraro, a former CIA counterterrorist chief. Hayadet entered the country as a tourist July 31, 1992 and applied for asylum Dec. 29, 1992. He was allowed to stay legally through Jan. 25, 1993. On his application, he said he was arrested several times for no reason and forced to sign papers saying he committed crimes he did not commit, INS officials said. The asylum system has since been reformed. Now INS officers must decide a case in 60 days and an immigration judge must decide whether to order the immigrant's deportation or reverse the asylum decision. Immigrants seeking asylum now cannot apply for work permits when their cases are pending, even if they are appealing their case, Strassberger said. About 97 percent of asylum applicants now show up for asylum hearings. The INS no longer mails applicants the decision. Instead, the applicant is told at a scheduled interview. An immigrant who misses the interview faces automatic removal. On the Net: INS http://www.ins.gov, State Department terrorism list ttp://www.state.gov/s/ct/rls/pgtrpt/2001/html/10252.htm ig 09/25/02