Who really bankrupted Al Qaeda? U.S. Treasury or U.S. military?

The March 1 edition of Forbes runs a jarring cover story (with a close-up image of Osama Bin Laden) entitled “Is Al Qaeda Bankrupt?”

Well, maybe, but so is Greece, and it’s not going away anytime soon either.

The article is lengthy, but is well worth a read.  The writer, Nathan Vardi, is more thorough and balanced than others.  For today, however, I’d like to focus on one unpersuasive element of Vardi’s piece, which is the assertion that tougher financial screws from the U.S. Treasury Department are what have put Al Qaeda on the ropes.

Vardi writes that Abd al Hamid al Mujil, a money man for both Osama bin Laden and Khalid Sheikh Muammad, is “out of business,” “largely thanks to efforts by the U.S. Treasury Department and the UN Security Council.”

The article also points out the increasing trend toward self-financing of terror–that is, of Al Qaeda agents using their own funds to wage jihad rather than relying on transfers from Al Qaeda.  Vardi writes, “The change, U.S. officials like [Asst. Secretary for Terrorist Financing David S.] Cohen say, is a direct result of the pressures the U.S. government has placed on terrorist money men.  That has forced al Qaeda to go underground.”

Excuse me, Mr. Cohen, but the change is not a “direct result” of counterterror finance measures from Treasury and the U.N.  That is certainly a factor. 

But another key factor is often overlooked.  Pardon my language in advance, but Al Qaeda had its ass handed to it by U.S. forces in Iraq.  George W. Bush’s strategy worked.  Al Qaeda and the ISI (its Iraq affiliate) were defeated and embarrassed.  Given that most of Al Qaeda’s money came from donations, and that nobody likes to back a losing horse, Muslims stopped donating sadaqa and zakat to Al Qaeda.  Relatedly, this 2008 article from the Washington Post suggested that Al Qaeda alienated Iraq’s Sunni sheiks which led to decreased financial support in the Muslim world.

I cannot prove it at this time, but I believe the unfortunate side effect of Al Qaeda’s declining revenues has been that Persian Gulf donors simply shifted their sadaqa from Al Qaeda to the Taliban.  Why has the Taliban been doing so well financially?  Opium profits?  No, that’s not really the story according to people actually on the ground (Holbrooke, McCrystal, and the mayor of Karachi).

It is bureaucratic arrogance to assert that press releases from the Treasury Department designating terror financiers are going to bankrupt the global jihad against the West.