May 12th, 2010
10:51 AM ET

Security Brief: The 'urgent' choking of al Qaeda's money supply

Editor's note: This is the first of a three-part blog series on terrorist finances. In Part 1 we'll look at al Qaeda’s challenging financial situation. In Part 2 we'll examine at the Taliban’s money trail and in Part 3 we'll look at international co-operation (or sometimes the lack-thereof) in tracking terrorist financing. Bookmark our Security Brief section and check back Thursday for Part 2.

The U.S. Treasury Department may not have drones, but don’t underestimate the power of the pen in the battle with al Qaeda. Persistent pressure on the group’s sources of money over the past few years has left it “in significant financial distress,” says US Assistant Treasury Secretary David Cohen. “And we are urgently working to make it worse.”

The Taliban, funded by the multi-billion dollar heroin trade, are a different proposition, admits Cohen. He says they are not experiencing “much financial stress” and have the funding they need to buy allegiance and hold territory – and challenge American objectives in Afghanistan (more on the Taliban in Part 2 of this series.)

Cohen’s job includes choking off the money supply to an array of terror groups. To that end, he spends plenty of time trying to persuade other governments – especially in the Gulf – to tighten their financial controls. Cohen is pleased with the contribution that Saudi Arabia – once the largest source of funds for al Qaeda – has made. For example, the Saudi central bank now has to approve transactions between accounts of more than $15,000. But senior Treasury officials say other Gulf states – such as Kuwait and Qatar – could do more to help.

“We haven’t seen the same level of co-operation there,” the official says.

Another tool against terrorists’ finances is what’s called ‘designation.’ The US Treasury has ‘designated’ some 500 individuals and entities for their alleged financial support for terror groups over the past decade, barring them from using U.S. financial networks.

Cohen says the process encourages other governments to take similar action, and points to successful co-operation with Saudi Arabia in closing down the al Haramain Foundation last year, which was alleged to be funneling money to terror groups.

There’s certainly evidence that al Qaeda is hurting financially.

Last year, one of its commanders in Afghanistan spoke in an audio message of a lack of weapons and food. European recruits who have been detained in the last two years have complained that they had to pay for weapons and been pressed for donations when in the Afghanistan-Pakistan border area.

CNN Terrorism consultant Paul Cruickshank says court documents showed European recruits claiming they had to pay their Arab trainers more than $500 a head, and double that for equipment and weapons, for a two-week paramilitary course with insurgents.

The decline of al Qaeda in Iraq has deprived the ‘core’ al Qaeda of a useful market in kidnapping and extortion, according to terrorism analysts. Not so long ago, al Qaeda’s number two Ayman al Zawahiri appealed to al Qaeda in Iraq to help the organization with its cash crunch. Now al Qaeda in Iraq seems much less capable of delivering such succour to Head Office.

But the battle to reduce al Qaeda to penury is far from over.

Intelligence analysts say the group is supremely adaptive and that its “franchises” in the Horn of Africa and the Sahel for example are autonomous and raise their own funds through extortion and kidnapping. There is little evidence – so far – to link the Somali group Shabab, which is allied with al Qaeda, with piracy in the Gulf of Aden, but there are reports from Somalia that the group “taxes” pirates and even charges them for training.

Then there is al Qaeda in the Islamic Maghreb (AQIM), which is active in parts of Algeria, Niger, Mali and Mauritania. U.N. and U.S. officials are concerned that AQIM – is looking to make money from guarding illicit drugs as they cross North Africa to Europe. AQIM and ‘fellow travelers’ are already involved in kidnapping and extortion. In April, a Frenchman and his driver were kidnapped in Niger; AQIM subsequently said it was holding him. Four European hostages were released last year – for undisclosed sums.

So it would be premature to think of al Qaeda as on the verge of Chapter 11. In addition, while formal financial networks are better monitored today, millions of dollars moves through the Gulf in the way of charitable donations (zakat) and the informal money markets – known as hawala. Plus some of the millions of pilgrims who visit Mecca every year are a potential conduit for moving cash from Saudi Arabia to other states where al Qaeda is active.

And money isn’t everything.

Al Qaeda seems to be veering towards low-tech attacks (such as the attempt to blow up an airliner on Christmas Day as it approached Detroit) rather than more expensive and ambitious projects such as the 9/11 attacks. That may be by choice as western intelligence has improved; or forced upon al Qaeda because of lack of resources. A suicide bombing is a relatively cheap operation; so is trying to detonate a car in Times Square.

Moreover, being able to recruit people living in Europe or North America to carry out attacks (the likes of Najibullah Zazi and Bryant Neal Vinas) is a priceless asset. Zazi admitted to trying to make his own bombs from readily available materials with the aim of carrying out suicide bomb attacks on the New York subway similar to the London 2005 underground attacks. Those attacks cost an estimated $15,000 to mount, but claimed 52 lives. Zazi pled guilty to terrorism changes in March. Bryant Neal Vinas is awaiting sentence after admitting conspiring to cause an explosion on the Long Island Railroad.

But al Qaeda is not the same organization that it was on 9/11, or in the years when it joined the fight against Soviet occupation of Afghanistan. In those days money was not an issue; al Qaeda even had a finance committee. Today, as the arrests and convictions continue, and the drones fly over Pakistan’s tribal territories, so bank accounts will continue to come under scrutiny, in what David Cohen calls a “sophisticated and comprehensive effort to disrupt the terrorists’ financial networks.”

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Filed under: Al Qaeda • National security • Security Brief • Terrorism
soundoff (71 Responses)
  1. EJK

    "just make it law,and punish those who beak it and then people will comply"

    Good point MIKI. After all, that technique has rendered our nation crime free in so many other ways; the simple expedient of making them illegal has rendered the U.S. free of murder, assault, robbery, speeding....

    May 13, 2010 at 7:21 am | Report abuse |
  2. SLM

    ......nuke them.

    May 13, 2010 at 7:53 am | Report abuse |
  3. Ammar Ali Khan

    I guess anyone can write so .. its just a bunch of lie and there is no perticular evidence its just simple assumption .. please present the facts dont assume that this and that ,,,,, why dont the people in wall street care .. because it will stop there earning and it will stop the sucking of black money which they are gathering ... from taxpayers as well as from these groups ...
    OK you can know that these accounts are so ... paying the al-qaeda .. y dont you just arrest the pople .. ?

    May 13, 2010 at 3:59 pm | Report abuse |
  4. Gary Bjorndahl

    At the field of production, source prices for opium paste in Afghanistan are in the 25-40 $ per kg. range. We are spending enough militarily in Afghanistan pin two weeks to be able to simply buy the entire crop and burn it. The farmers don't care, the warlords wouldn't either because they take their slice anyway. But, the Taliban and Al Queda would care, alot.
    But, this would cause the immediate collapse of several key sectors,The economies of Southern Itlay, Sicily, Corsica, Kosovo and the Bronx would be wiped out, as well as huge slices of the Rotterdam, Antwerp, and Miami trade. Old commitments made by the US Federal Government to the US/Italian mafia would be sorely tested,....
    Now, let's calmly think about why we don't do it,....Think about the political issues, About the cash flows into our political parties, and where do they really come from? Who would suffer?
    Of course the American drug consumer would scream and groan but who cares about them? They will get new supplies next year from other traditional sources, Turkey, North Africa, Yemen etc.
    Nothing like a little penury to tease out who really profits from the trade. Anybody willing to try?

    May 14, 2010 at 4:30 am | Report abuse |
  5. Craig McLombard

    Mohammad A Dar you were programed from birth to hate, steal. murder, and so on the Israeli people. From childhood you and your kind were brainwashed by islam for Jewish blood anything you say is biased.

    May 14, 2010 at 4:53 am | Report abuse |
  6. miscparty features this as one of the top ten articles under Terrorism category.

    May 14, 2010 at 2:15 pm | Report abuse |
  7. SNadarS

    It is true that the financial resources of Al-Qaeda are significantly decreased but what they want to do they can do with little money. They are now situated in regions where they have some advanteges like poverty, lake of education and currupt governments whose officials only thinks about thier own pockets. So it makes it easy forAl-Qaeda to grow. I think we should go not only after the Alqaeda finances but track the money we pay to fight terrorism

    May 15, 2010 at 9:44 pm | Report abuse |
  8. n.krishna

    Terrorism is a cancer created by USA. USA is responsible for 26/11. Faisal Shahzad, 30, may have ties with Daood Gilani alias David Coleman Headley 49 years, and Tahawwur Hussain Rana 48 years, as all of them were using Dubai as the transit center. Daood Gilani the Paki born US citizen changed his name to David Coleman Headley, in 2006. He was a DEA agent sent by USA to India. David Coleman Headley was posted to Mumbai, and lived for almost two years, between November 2006, and July 2008. He ran a visa agency in Tardeo, in Mumbai, as a cover for his spying operatin in India. His firm, was called ‘Immigrant Law Centre’, and it was run from AC Market, at Tardeo. During the two years, Headley travelled to India several times, often spending a couple of weeks in Mumbai and elsewhere. He was identifying terror targets for the Pakis talibans, along with some 1000 Indian mulsim terror modules operating throughout India,that has a total active membership of some 15 lakh Indian muslim Jihadis. America is the main culprit for the 26/11 Mumbai attack by Paki terrorist muslims supported by around 100 local Indian muslim terrorists working for Dawood Ibrahim. The situation is very grave in India from the presence of over 15 lakh Indian muslim active terrorists, that India is forced to negotiate with Pakis for a stop from their Jihadi terrorism. The 2008 Mumabi attack called 26/11 terrorist attack was planned by the Paki American DEA agent Daood Gilani alias David Coleman Headley posted in India. Americans never told India the fullest details to prevent 26/11 even though they came to know about it and has only given a general warning. Tahawwur Hussain Rana, was running an immigration services business in the US. Rana too came to Mumbai for about 10 days in November, 2008. Just five days before the 26/11 attacks Tahawwur Hussain Rana left India. He came from Dubai to Mumbai and went back to Dubai. Daood Gilani alias David Coleman Headley scouted targets for the banned Paki terrorist group Lashkar-e-Taiba and pleaded guilty in Chicago to his involvement in the 2008 Mumbai attack known as 26/11. Shahzad, Headley and Rana and for that matter every known muslim terrorist have used Dubai which is the international terrorist nerve centre. It was in Dubai that Osama bin Laden was treated in a Dawood funded private hospital called Welcare Hospital operated by Kerala Christian front man named Sunny Varkey or another private hospital called American Hospital. Both Daood Gilani and was Tahawwura Hussain Rana were in contact with India’s Maharastra state Home Minister Arif Naseem Khan and was the local help for the 26/11. Khan made 150 calls to Dawood Ibrahim aide since Nov 26 ,2008 as per Mumbai Mirror tabloid dated April 21, 2009. Reports say that Dawood Ibrahim previously based in Dubai provided the local help for the 26/11 attack. Member of India Parliament Mohan Rawle gives detailed phone records of Arif Naseem Khan to the Maharastra state government, urging it to probe the matter. Many politicians like Rane of Maharastra, has also made statements that local politicians were helping the Paki muslim terrorists, and the Court had asked Rane to explain that.,

    May 16, 2010 at 6:53 am | Report abuse |
  9. Damião Carlos

    In the name of oil innocent people are killed in Iraq, innocent people are killed in Gaza's straight, in the name of a stupid fanatism a lot of people have been killed in name of a Holy War... say no to American intervencionism, say no to the terrorism

    May 17, 2010 at 8:24 pm | Report abuse |
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