21 November 2002, Volume
Bankrolling Terror: A Special RFE/RL Report on Terrorist Financing
By Roman Kupchinsky
THE STRUCTURE EMERGES: In the late 1980s and early 1990s a series of discussions took place among Islamic activists throughout the world. The topic was the primacy of the ummah, the great faith, over nation states and the need for some type of loose international network which would help create a nonterritorial Islamic state. An emerging view was succinctly stated by Hafiz Muhammad Saeed, head of the Marka-ul-Dawa-il Irshad and its armed wing the Lashkar-e-Toiba (both suspected of having strong ties to the Al-Qaeda network) operating in Kashmir: "There is a need to raise a pure Islamic movement in the sub-continent. The Muslims can be steered to the right path by giving them the right ideology, calling them to Jihad and forging integrity among their ranks (Jama'at-ud-Da'awa website, http://www.jamatdawa.org/english/articles/)
An even more lucid description of this line of thinking can be found in the October-November 1996 issue of "Nida' ul Islam" (The Call of Islam), a militant-Islamic magazine published in Australia, in which Al-Qaeda leader Osama bin Laden said this about the collective responsibility of the Muslim community against Westernism: "What bears no doubt in this fierce Judeo-Christian campaign against the Muslim world, the likes of which has never been seen before, is that the Muslims must prepare all possible might to repel the enemy, militarily, economically, through missionary activity, and all other areas."
As these discussions were taking place, the internationalization of Islamic militancy was growing. The number of faithful making the pilgrimage to Mecca was vastly growing as people came from all corners of the globe. Students from Indonesia, Malaysia, and the Philippines were studying in the Middle East where they were able to exchange ideas and create close friendships. The network was being created.
The Soviet Union had ceased to exist for all practical purposes and its war in Afghanistan was over. The war, however, had produced unexpected results for the Islamic world in the form of a loosely knit group of veterans. Some 5,000 Saudis, 3,000 Yemenis, 2,800 Algerians, 2,000 Egyptians, and other non-Afghans had fought in Afghanistan. They were returning home victorious. These were men trained to fight, build bombs, and train others to do the same.
Soon these men were involved in creating such terrorist organizations as the Jemaah Islamiyah and the Vanguards of Conquest in Egypt. "Jane's Intelligence Digest" from 28 September 2001 describes how the Afghan vets went about setting up the network. In Algeria, the Algerian Armed Islamic Group (GIA) began the reign of terror which thus far has taken over 100,000 lives; others headed for the Philippines and joined the newly formed Abu Sayyaf guerillas. Some went to Chechnya. In Indonesia, a former Afghan veteran, Ridyan Isamuddin, better known as Hambali, became the main go-between between Al-Qaeda and the Jemaah Islamiyah, the Islamic group fighting for a pan-Islamic Southeast Asia. Jemaah Islamiyah had its origins in a small Islamic school -- the Al Mukmin Quranic Studies Boarding School -- founded in the Ngruki village of Solo, Indonesia, by Abu Bakar and Emir Sheikh Abdullah Sungkar, another Indonesian cleric also of Hadrami descent.
Abu Bakar and Sheikh Abdullah are reported to have traveled to Afghanistan during the 1980s, where they fought alongside Osama bin Laden in the war against the former Soviet Union. Jemaah Islamiyah was allegedly brought into the Al-Qaeda network in the 1980s.
Some 200 veterans of the Afghan war settled in the New York/New Jersey region where some of them congregated around the New Jersey mosque where Omar Abdel Rahman preached. By 1993 Rahman was plotting the bombing of the World Trade Center.
One of the veterans of the Afghanistan war was Bin Laden, a rich Saudi, born in 1955 in Jeddah. In 1979 he went to fight the Soviets with the mujahedin in Afghanistan and in the mid 1980s together with Palestinian Muslim Brotherhood leader Abdallah Azzam, co-founded the Maktab al Khidamat (MAK) (or Service Office), which helped bring fighters and money for the war to Peshawar, Pakistan. The MAK enlisted and brought thousands of young men from over 50 countries to Afghanistan, according to the Federation of American Scientists (http://www.fas.org/irp/world/para/ladin.htm).
In 1988 Bin Laden split from Azzam and formed a new organization which would extend the campaign all over the world. The new organization was called Al-Qaeda (the Base). His concept was that of a worldwide network of franchises operating independently but heading in the same direction. Al-Qaeda would be this network of networks.
THE FINANCIAL NETWORK: Al-Qaeda received its initial funding from the private inherited wealth of Bin Laden. But this was not enough for the planned agenda and therefore funding from various Islamic banks and charities in the world had to be arranged. Front companies and businesses were established around the world to keep the money flowing in. With the help of such Afghan veterans as Wa'el Hamza Julaidan, Bin Laden's "base" began prospering.
It is vital to keep in mind that the "network" was not solely dedicated to terrorism or armed struggle. It created a vast infrastructure of religious schools, "madrassahs" in Pakistan, and supported the students attending these schools. They, after all, were to be the armed cadre of the future and an investment in their education was a key building block of the strategy. At this time, the network began helping fund armed struggles in those places where they were already taking place, and instigated similar movements where they did not exist, but could develop. Al-Qaeda operatives were dispatched to Islamic communities around the world to inspect and report on the situation. At the same time, the network instructed its operatives to try and raise their own operational funds by various legal and illegal means.
The 1990s saw a dramatic growth in the number of religious terrorist groups. In his work "The Clash of Civilizations," Samuel Huntington points out that in 1995, 26 out of 56 known groups were regarded as religious terrorist groups, most of which were Islamic. This growth also carried with it the need for ever larger financing. The competition for the Islamic dollar was growing but the financial base was limited to only a few countries where rich individuals (and secret services) could provide the vast amounts needed.
At this time, the priorities had to be set -- who would get what percentage of the pie. The most important action at the time was the struggle in the disputed Kashmir territory. Pakistan, which sponsored the groups fighting Indian forces in the mountains, was too poor to fund the struggle by itself and had to rely upon outside help. The supplementary funds came from two main sources: Saudi Arabia and, after 1996, Taliban drug money, which was laundered with the help of the ISI, the Pakistani intelligence service, according to "Jane's Terrorism & Security Monitor" of 1 November 2002. Other hot spots on the list of priorities to be funded were: the conflict in Palestine (mostly helped by Iranian support for Hizbullah), the Abu Sayyaf in the Philippines, Bosnian Muslims, Chechnya, and Indonesia. These were armed struggles and as such demanded much greater resources then terrorist cells in Europe or the United States.
One of the funnels for Saudi money to the Abu Sayyaf organization waging war in the Philippines was through the International Islamic Relief Organization (IIRO), a Saudi charitable organization. From 1986 to 1994 Bin Laden's brother-in-law, Mohammad Jamal Khalifa, headed the IIRO's office in the Philippines through which he channeled funds to terrorist groups affiliated with Al-Qaeda, including Abu Sayyaf, according to the Associated Press as quoted by the CBN network. Working with Jamal Khalifa, bin Laden used a network of private Muslim groups, foundations, and businesses to establish a foothold in the Philippines.
In Bosnia-Herzegovina, NATO forces raided the offices of the Saudi High Commission for Aid to Bosnia in October 2001. During the raid they found numerous links to Al-Qaeda and discovered that $41 million of the commission's operating funds were unaccounted for.
Other Saudi based charities were found to be sending money to terrorist-type groups in Africa (The Mercy International Relief Organization played a central role in the 1998 bomb attacks on U.S. embassies in Kenya and Tanzania, according to "Policy Watch" of 11 March 2002.
One of the most important links in the Saudi financing scheme was through the al-Wafa Humanitarian Organization. Described by the same issue of "Policy Watch" as an organization which U.S. officials regard as a key component of the Bin Laden organization, al-Wafa, along with another Saudi-based organization, the Muwafaq Foundation, are still of interest to the U.S. Muwafaq is headed by a wealthy businessman, Yasin al-Qadi, from Jedda and is reputed to be supporting a variety of terrorist groups -- from Al-Qaeda to Hamas, "Policy Watch" claims. According to U.S. court documents, in 1992 al-Qadi provided $27,000 to U.S.-based Hamas leader Muhammad Saleh and then lent $820,000 to a Hamas front organization in Chicago, the Quranic Literacy Institute. According to "Policy Watch" no. 609 from 11 March 2002, "U.S. officials maintain that the Muwafaq Foundation is a front organization through which wealthy Saudis forward millions of dollars to al-Qaeda."
Jonathan Winer, a former U.S. deputy assistant secretary of state for international law enforcement, claims that in 1998 the U.S. complained to Saudi Arabia that the National Commercial Bank (NCB), Saudi Arabia's largest bank, then run by Khalid bin Mahfouz, was funding Bin Laden's, not just Al-Qaeda, activities in Afghanistan, Chechnya, and the Abu Sayyaf guerrillas in the Philippines. The money for this was being extorted, according to Winer, from wealthy Saudi businessmen. Winer names the Al Shamal Bank and the Dubai Islamic Bank as additional funnels for Al-Qaeda funds. The U.S. State Department claims that the Al Shamal Bank, based in Sudan, received a $50 million infusion from Bin Laden and then used it to support the Islamic Salvation Front, which U.S. officials said was behind the 1993 World Trade Center attack (other sources say it was an Egyptian-based extremist group financed with money, from among other sources, Iran).
On 18 October 2002, the Western media reported that U.S. intelligence had identified about 12 of Al-Qaeda's main financial supporters, most of them Saudis. The Treasury Department announced that it would try to freeze their assets, which were located mostly in European banks. According to officials, these benefactors had donated "Tens of millions of dollars to Osama bin Laden's terrorist organization through the years by routing the money through charities and legitimate businesses around the world," "The Washington Post" reported on 18 October 2002.
Earlier, on 8 September, "The Los Angeles Times" reported that a major Al-Qaeda financier, Wa'el Hamza Julaidan, had been located by Saudi officials and was under their control. Julaidan, another veteran of the Afghan war, where he fought alongside Bin Laden, has acted as chief of logistics for Bin Laden and was closely involved in a series of front companies and charities used as conduits for funding terrorism.
As the demand for funds grew, so did the number of charities and their locations. Thus, in 1989 the Holy Land Foundation for Relief and Development (HLF) became a registered nonprofit 501 C (3) charity in the U.S. With offices in Texas, California, New Jersey, and Illinois, the HLF became one of the largest of its kind in the U.S. In 1992 two others followed, the Global Relief Fund (GRF) and the Benevolence International Foundation (BIF). They were able to quietly carry on their business until they were ordered to close by the U.S. government in 2001 on charges of having funneled money to terrorist organizations.
One view on Al-Qaeda financing was provided by an unnamed "defense official" on 19 February 2002 during a background briefing on the Al-Qaeda network: "the way Al-Qaeda financed itself was multifaceted. I mean, I don't think they relied on one single source. In some respects -- I wouldn't say they're fat, but I wouldn't say they're lacking in funds to conduct operations either. You know, if you look at the millennium plot, the operatives were supposed to finance some of their activities through basically burglary. I mean, it was basically get your own money to finance what you need. Some of the more sophisticated operations -- obviously, there's more of a pool of money." (for more information on the background briefing by the U.S. Department of Defense, see: http://www.fas.org/irp/world/para//alqaeda_dod021902.html)
On 21 July 2000, FBI agents raided a house in Charlotte, North Carolina as part of "Operation Smokescreen." Inside they found carton upon carton of cigarettes, cash, weapons (including shotguns, rifles, and an AK-47), and documents written in Arabic, according to the Mackinac Center for Public Policy Research.
The FBI concluded that the North Carolina house was used as a base for smuggling cigarettes. The operation made money on the tax differential between North Carolina, which taxes cigarettes at $.05 a pack, and Michigan, with taxes at $.75 a pack.
According to the government, the smugglers would drive the 680 miles from Charlotte to Detroit in a rented van with 800 to 1,500 cartons of cigarettes purchased with cash in North Carolina. The cigarettes would then be sold to Arab-owned convenience stores in Detroit, which sold them to customers. According to the U.S. Attorney's Office, each trip -- which required absolutely no special skills for the 13-hour drive -- would net $3,000 to $10,000. The profits would then be shuttled back to Charlotte. It was a perfect scheme and was almost legal.
Soon after the arrests, it became known that the owner of the home and the leader of the gang was Mohammad Youssef Hammoud, an individual with alleged links to the Hezbollah terrorist organization in Lebanon.
In one year, Hammoud deposited $737,318 in one bank account, while paying for houses, luxury cars, and other goods with cash. Soon the investigation showed that Hammoud was in regular contact with another Hezbollah supporter, Mohammad Harb, a Lebanese-born, naturalized U.S. citizen. Harb pleaded guilty on 25 February 2002 to conspiring to funnel cash, weapons, and supplies to Hezbollah.
The list of what the U.S. Justice Department claims Harb purchased and sent to Hezbollah contains the following: night-vision goggles, cameras, scopes, surveying equipment, global positioning systems, mine- and metal-detection equipment, video equipment, advanced aircraft analysis and design software, laptop computers, stun guns, radios, equipment for mining, drilling, and blasting, radars, ultrasonic dog reppellers, and laser range finders. For a full description of this incident, see the 13 November article by James Damask on the website of the Mackinac Center for Public Policy Research http://www.mackinac.org/bio.asp?ID=357
On 21 June 2002, Hammoud and his brother Chawki were both found guilty of a racketeering conspiracy in Charlotte. In addition to the cigarette smuggling ring, Hammoud was found guilty of raising money for Hezbollah at prayer meetings and of sending $3,500 to a military commander of the terrorist group in 1999.
ALLOCATING THE CASH: The competition for the Islamic terror dollar is fierce and the needs diverse. From such expensive items as armed struggle in the Philippines, Malaysia, and Chechnya to acts of mass terror in New York and suicide bombings in Israel, every group and cell needs a source of financing or an additional donation to help it meet its needs.
How are funds allocated? Who decides which group gets the money and how much? Hard information is not available about this facet of the operation, but there are some indications that in certain cases a system of set rules do apply. This is best illustrated by the "awards" given by Saudi Arabia to the families of Palestinian suicide bombers in Israel. According to the Jerusalem Center for Public Affairs brief from 6 May 2002, as a result of Israel's Operation "Defensive Shield," new documents were uncovered from Palestinian offices that directly link Saudi Arabia with the financial backing of terrorist attacks against Israel. The brief states:
"Among the documents found was one from Saudi Arabia itemizing the set of payments to the 'Martyrs of the Al-Aqsa Intifada.' The table details how $545,000 was allocated to 102 families. The logo at the top of the document reads: 'Kingdom of Saudi Arabia, the Saudi Committee for Aid to the Al-Quds Intifada.' This committee was established in the fall of 2000 under the Saudi interior minister, Prince Nayef bin 'Abd al-Aziz. Prince Nayef's organization was also responsible for collecting Saudi contributions during the 11 April telethon for Palestinian 'martyrs' on Saudi state television."
The Saudi table itemizing allocations to the families of "martyrs" was not the only document found by Israel in Palestinian offices during Operation "Defensive Shield." According to captured Palestinian intelligence reports, the Saudis also transferred direct aid to Palestinian Islamic terrorist groups -- both to Hamas and Islamic Jihad.
The trail of money leading to Saudi Arabia was further confirmed by the U.S. Treasury Department on 11 March 2002, when it identified the Al-Haramain Islamic Foundation, based in Saudi Arabia, as an organization with which U.S. citizens are prohibited from making any transactions because of its suspected support for terrorism. Al-Haramain receives millions of dollars per year from the Saudi government.
It seems likely that a system of priorities does exist in the allocation process. It also seems reasonable to suspect that Al-Qaeda is somehow involved in the selection of recipients and in the amounts they receive. The previously noted example of the Al Shamal Bank, where Bin Laden's money had been deposited and where he was in a position to decide where it was spent, is a case in point.
Many analysts believe that most of the groups engaged in armed struggle are not solely dependent upon one source of financing. Most are and have been engaged in fundraising on their own. The Abu Sayyef group has employed extortion and kidnapping as a means of raising funds. In one famous incident, Libya's Muammar Ghaddafi paid Abu Sayyef $20 million in ransom money for Western tourists whom they had kidnapped.
Other groups have relied on traditional criminal methods of getting cash -- robbery being the most common. The Algerian GIA is known for this approach. When they were operating in Lebanon, the PLO -- years before the "Base" came into being -- set up and controlled a number of legitimate businesses in Beirut where the profits were used to both fund the organization and to enrich the individuals running them. The largest of these was SAMED (originally the Palestinian Martyr's Works Society), according to Said K. Aburish in his biography of Yassir Arafat "Arafat -- From Defender to Dictator." At the same time, many PLO members were involved in the whiskey and drug smuggling underworld of Lebanon at the time. But these funds are barely enough to keep an armed struggle viable and Arab governments had to fund Al Fatah.
The Taliban is estimated to have raised about $45 million a year through the sale of heroin, not counting the money paid to Pakistani-owned refining plants according to the "Dawn" of Karachi from 4 June 2001. How much of this money was given to Al-Qaeda for its activities is not known, but most observers tend to believe that a substantial amount was paid out.
Once the money is allocated it needs to reach its destination. Most often it was wired to representatives of the selected group in different locations and they forwarded it on to the group. In many instances regular wire transfers were used, while in others, the informal "hawala" system was employed. The hawala was perfect for more conspiratorial transfers since it left no paper or electronic trail. Money was deposited at one end of the hawala and picked up at the other using the age-old system of trust and family. The hawalas themselves were not registered, as Jonathan Winer points out, in September 2000 there was not one single registered hawala in the United States. Furthermore, Winer states in the "International Herald Tribune" on 21 September 2001 that Congress passed a law in 1993 requiring check-cashing businesses and informal financial enterprises like hawalas to register with the government and to report transactions of more than $3,000. But the Clinton administration did not publish all the regulations until 1999. The Bush administration ordered a further delay until 30 June 2002. Only in 2002 did the U.S. government decide that informal money-service organizations such as the hawala register as such. The problem, however, is that the act of registration is a voluntary one. If a hawala, which only its select customers know exists, chooses not to register, it will be very difficult for treasury agents to locate it.
Other known methods used by terrorist groups to move large sums are diamonds and gold. Used in combination with the Hawala, these methods of moving substantial sums around the world are designed to prevent detection and, judging from events of the last decade, have been highly successful.
11 SEPTEMBER: How a terrorist cell intent upon creating mayhem handles and obtains finances can best be illustrated by a case study of the 11 September attacks on targets in the United States. The FBI has gathered numerous evidence on how these 19 men (15 of whom were Saudi) were able to use the existing U.S. financial system to legally open checking accounts, use debit cards, and wire transfers to prepare the most deadly terrorist act in American history. The information on their actions were described by Dennis Lormel, chief of the FBI's Financial Crimes Section before the U.S. House Committee on Financial Services on 12 February 2002.
It must be stressed that the terrorists -- those within the U.S. and their accomplices abroad -- abided by U.S. regulations on money transfers. No transfers over $10,000 were made to their accounts so as to avoid the notification procedures required under U.S. Treasury Department regulations. The secondary reason besides security for this was that the action they were planning was relatively inexpensive. According to most estimates the 11 September attacks cost about $500,000. According to the unnamed "defense official" quoted earlier, "terrorism is not a very expensive thing to do. When you really get down to it...for the bang for the buck of what you get, it's not the most expensive."
It is also known that Al-Qaeda helped financed the New York and Washington attacks, in part, though wire transfers from Dubai for anonymous use in automatic teller machines located in Florida and Maine; exactly who sent those funds is still unknown. The Al Barakaat Hawala operating out of Somalia and the United Arab Emirates (UAE) apparently helped to move funds to the hijackers as well. In general it is known that Al-Qaeda has moved funds through the banks of at least 41 countries including many that are considered to have strong banking regulations. According to a presentation by Jonathan Winer at RFE/RL on 22 October 2002, Al-Qaeda had previously used the Dubai Islamic Bank and local Hawala transfer companies to fund the bombings of the American embassies in Kenya and Tanzania.
The 11 September terrorists opened checking accounts (12 of them at the same bank.) They deposited travelers checks which were purchased overseas into these checking accounts. The hijackers did not have any savings accounts or safe deposit boxes. They opened their 24 accounts using legitimate visas issued to them by U.S. consulates using their real names. They often checked the balance of their accounts and used the debit cards issued to them to pay for most of their day-to-day bills, according to Dennis Lormel of the FBI in his testimony on 12 February 2002.
Some of the accounts received/sent wire transfers of small amounts to the UAE, Saudi Arabia, and Germany. There was also a tendency to use Western Union to wire money. Three of the terrorists had credit cards and checking accounts at banks located in the UAE, Lormel stated.
One of the leaders of the group, a pilot, received substantial funding through wire transfers into his German account in 1998 and 1999 from one individual. Lormel told the Congressional hearing that in 1999 this same hijacker opened an account in the UAE and gave power of attorney over this account to the same individual who had been wiring money into his German account.
It is evident that the organizers of 11 September kept all financial activity within normal bounds and lived unsuspicious lifestyles while planning their attacks. They did not wish to raise any red flags by their actions and in this they succeeded beyond their belief.
THE SAUDIS AND PAKISTAN: Available research shows that there are two major funding centers for much of today's terrorist activity. The largest by far seems to be Saudi Arabia. The role of Saudis in indiscriminately funding terrorist movements throughout the world has recently become a topic of open discussion and calls for it to be stopped have surfaced. As early as 1992 Egyptian sources disclosed that Saudi Arabia played an active role in backing the Islamic groups' activities in Egypt. According to the "Middle East Intelligence Report" from 2 June 1993, Egypt obtained from certain detained leaders of the Vanguard of the Islamic Conquest (Tala'i' al-Fath al-Islami) organization intelligence information proving involvement by high-level Saudi circles in terrorist activity in Egypt.
A briefing paper presented to the Pentagon's Defense Policy Board, (which does not consist of people in office but of outside advisers, including ex-Secretary of State Henry Kissinger, former Vice President Dan Quayle, and several retired military officers. The report's author, Laurent Murawiec of the Rand organization, was an outside adviser to these outside advisers), on 10 July 2002 was extremely critical of the Saudis. It described Saudi Arabia as an enemy of the United States -- "the kernel of evil, the prime mover, the most dangerous opponent" in the Middle East. "The Saudis are active at every level of the terror chain," it argued, "from planners to financiers, from cadre to foot soldier, from ideologist to cheerleader." As "The Economist" wrote on 8 August 2002: "It recommended that American officials give the House of Saud an ultimatum: stop backing terrorism, or face a seizure of your oilfields and your financial assets in America."
U.S. Secretary of Defense Donald Rumsfeld said the report did not represent official thinking. Colin Powell, the secretary of state, told the Saudi foreign minister the same. Yet by the end of October, the U.S. announced that 12 wealthy Saudi businessmen were deeply involved in financing terrorism around the globe.
The second major center for financing regional terrorist groups has been the Pakistani government working through its intelligence agency, the Inter Services Intelligence (ISI). Many analysts claim that it was with the help and financing (sometimes with heroin money) of the ISI that the Taliban came into power in Afghanistan in 1996 and it is the ISI which has been behind the war in Kashmir for the past 13 years. The ISI, according to "Jane's Intelligence Weekly" from 1 October 2001, used funds from former Prime Minister Benazir Bhutto's federal government and from overseas Islamic remittances to enroll graduates from thousands of madrassahs (Muslim seminaries) across Pakistan to bolster the Taliban (Islamic students)."
According to "Jane's" the ISI is believed to have recently formed a secret task force to 'destroy' major political parties and the separatist Mohajir Quami Movement (MQM) in the southern Sindh province.
The weekly writes that: "This task force has reportedly encouraged not only religious Islamic organizations such as the Jamaat-e-Islami (JeI) and Jamiat-ul-Ulema Islam (JuI) but also sectarian organizations such as the fundamentalist Sipah Sahaba and the Lashkar-e-Jhangvi (which are closely linked to the Taliban and Bin Laden) to extend their activities to Sindh."
"Jane's" report further states that "heroin dollars contributed largely to bolstering the Pakistani economy, its nuclear program and enabled the ISI to sponsor its covert operations in Afghanistan and northern India's disputed Kashmir state," according to an Indian intelligence officer. In a "Jane's" report from 13 November 2002, it states: "The Indian intelligence services point to the ISI as the source of finance. But the scale of killings has been so huge, around 30,000, that funding such an operation would require far more resources than a country as heavily in debt as Pakistan could muster.
The cost of arms alone is significant and the number of weapons captured by the Indian forces over a relatively short period of a year has been enough to arm several divisions of men.
However, the Indian Intelligence Bureau says that money is also coming from two other sources. One, it claims, are from fundraising activities in the United Kingdom centered around groups of radicalized Muslims. This is believed to be relatively small compared to the other, far-larger source -- radicalized Muslims from Saudi Arabia.
While it is difficult to prove without firm evidence, recent reports from the region have noted that a Saudi ambassador provided funding for the Taliban. In October, a spokesman for the New York-based Council on Foreign Relations said: "For years, individuals and charities based in Saudi Arabia have been the most important source of funds for Al-Qaeda."
After the 11 September attacks in the U.S., Pakistani President Pervez Musharraf, under pressure from the United States, gave the order to crack down on Islamic radicals. Within weeks 2,000 militants were rounded up and jailed, including several prominent hard-line clerics and militant leaders. But as "The Guardian" newspaper of 25 May 2002 points out: "Most of the militants have been released without charge, among them the heads of groups listed as terrorist organizations by Britain and the U.S. Pakistan has allowed militants backed by its own intelligence agency to continue their war in Kashmir even though it threatens to plunge India and Pakistan into a devastating conflict."
As "The Washington Times" pointed out on 12 November 2002, one of Pakistan's most notorious terrorists was elected to parliament -- from prison.
"Azam Tariq emerged from confinement a free man, he stepped into a limousine and was driven away by his own armed guards. His pro-Taliban, pro-al Qaeda outlawed party, Sipah-e-Sahaba (Guardians of the Friends of the Prophet), was one of five extremist groups banned by President Pervez Musharraf last January as he tried to dulcify U.S. concerns. The Pakistani police blame Tariq's Guardians, the country's most violent group, for some 400 killings in the last year alone."
CONCLUSIONS: Many observers will agree that it is next to impossible to completely stop the financing of terrorist acts. There are too many methods, many of which are legal, by which terrorists can obtain the funds needed to carry out their activities. The cost of a few kilos of plastic explosive tied to the body of a suicide bomber does not require elaborate money-laundering procedures. A hypothetical series of suicide bombings in the New York subway system during rush hour could create panic and chaos in that city for a minimal price tag.
At the same time, the expensive items such as armed guerilla groups numbering in the hundreds or thousands of men can be cut off from their funding. The recently adopted rules of the Paris based Financial Action Task Force (FATF) has done much to stop the flow of funds to such groups. Much of this will depend, however, upon the political will of those governments who have, for whatever reasons, chosen to finance such groups and the infrastructure of hatred which keeps these groups supplied with cadres. Once this infrastructure is neutralized then it will be easier to deal with the suicide bomber or the cell which wants to explode a dirty bomb in a major city.
Both Saudi Arabia and Pakistan have to be convinced that by financially supporting terrorism, sooner or later the terrorists will turn against them and there will be nobody to come to their defense.
And while it is beyond the scope of this report to address the sociopolitical and cultural issues which have contributed to the rise of such groups as Al-Qaeda, these, more than any others, need to be rectified. Al-Qaeda did not develop in a vacuum and the terrorists responsible for numerous attacks did so with a belief, twisted as it might be, that they were righting wrongs done to them and their kind.