December 29, 2003

December 29, 2003 | Commentary on Middle East

AL QAEDA'S CA$H

Preventing terror attacks, like the one last week out of Paris, requires international cooperation and coordination. The same is true with fighting terrorist financing.

But it's clear that many countries - and international institutions - aren't doing enough to stem the flow of terrorist financing. The result: Terrorists have money for recruiting, training, planning and operating.

*Last week, for example, the U.S. Navy seized two tons of hashish in the Persian Gulf being moved by suspected al Qaeda operatives. The 54 bags, weighing 70 pounds apiece, have a street value of $4 million to $10 million.

This is a lot of money, considering 9/11 is estimated to have cost less than $500,000. Al Qaeda had always been suspected of running drugs to finance its operations - this may be the first real proof.

Al Qaeda is relying more on commodity trading in gold, gems, (including diamond-trading from various conflicts in Africa), weapons and now drugs, to move and earn money since surveillance and interdiction efforts of the global financial system has been intensified.

* Two weeks ago, six Arabs with suspected al Qaeda links were arrested in Syria carrying $23 million in cash, according to administration officials. (Syria has not confirmed this report.) If true, this is believed to be the largest netting of terrorist bulk cash since the War on Terror began over two years ago.

The good news is that Syria pickpocketed al Qaeda of $23 million. (Not that having $23 million in the hands of the terror-backing Syrians is a comfort either.) The bad news is that al Qaeda couriers were running around with $23 million in cash to some yet unknown destination.

That's a lot of scratch, especially considering the previous belief that al Qaeda's operating budget was in the tens of millions of dollars. So this event will either put a crimp in al Qaeda's finances - or its annual budget is a lot bigger than we thought.

The latter would be alarming, since the bin Laden boys have been known to finance operations by other terrorist groups around the world as well.

* Last month's terrorist bombings in Turkey (against two synagogues and a British bank and consulate) were funded with $150,000 of al Qaeda money, the Associated Press reports. An accomplice of the bombers said that $50,000 came into Turkey via courier, while $100,000 came from the local head of al Qaeda operations. These operations killed 61 and wounded several hundred.

Terrorist operations can be cheap (e.g., Bali: $35,000; U.S.S. Cole: $50,000), and, regrettably, cash for them seems to be pretty readily available. To date, $138 million in terrorist-linked funds have been frozen globally, but $115 million of that came in the first year after 9/11.

* Perhaps most disturbing: A suspected, major al Qaeda financier is still doing business in Europe, according to a new U.N. report.

The al Taqwa financial empire operates in the Middle East, Europe and the Caribbean; it has reportedly funneled tens of millions of dollars to al Qaeda, Hamas and other terror groups via Muslim charities and informal (unregulated) remittance networks, known as hawalas.

A host of U.N. resolutions (i.e., 1267, 1373, 1390, and 1455) form a solid legal basis for freezing terrorist assets globally and require the imposition of sanctions on terrorist groups and those associated with them.

In response, terror backers liquidate their fronts, then reopen under new names - sometimes in different countries. That's how al Taqwa still operates businesses in Europe. Last week, the United States imposed sanctions on Liechtenstein-based Hochburg AG, the new name of the al Taqwa conglomerate.

Terrorist-associated charities, such as the infamous al Haramain Islamic Foundation, are often shuttering one set of offices to open another in a different town in the same country to avoid detection. Al Haramain recently did this in Bosnia, reappearing under the name of Vazir. (Washington imposed sanctions on it last week, too.)

The terrorist financial system is a global operation with significant resources and multifaceted methodologies for earning and moving money. Global financial counterterror efforts are still catching up; they need to be strengthened and harmonized. Many countries, especially in Europe, have not done enough to deal with individuals and companies that have ties to terrorism.

The United States - and the international community - must pressure states that still aren't cracking down on terror funding. In some cases, legal frameworks need to be developed that allow not only the freezing of bank accounts, but the seizing of businesses that finance terrorism, such as al Taqwa.

We can arrest operatives and preempt attacks, but we have to shut off the terror funding stream, too. Terrorism can be done on the cheap, but it is not free. Breaking the bank is a fundamental element to winning this global struggle.

About the Author

Peter Brookes Senior Fellow, National Security Affairs
Douglas and Sarah Allison Center for Foreign and National Security Policy

Related Issues: Middle East

First appeared in the New York Post.