Al Qaeda’s rainy day fund?

The Los Angeles Times recently published a good article on how Al Qaeda in the Arabian Peninsula (AQAP) has leveraged kidnap-for-ransom schemes into a $10 million annual enterprise.

But is AQAP spending all of that money as soon as it comes in?  Probably not.  One possibility is that AQAP is saving up their money for a wider-scale operation, such as the overthrow of the government of Yemen.  That was the guidance from Osama Bin Laden to AQAP in a letter he sent them before his death:  raise enough money to pull off something spectacular rather than wasting it on small operations while you’re still too weak financially to elude the Yemeni authorities.

Al Qaeda group is operating on ransom money from the West

Al Qaeda in the Arabian Peninsula has extorted $20 million in two years, an official says. Western nations face the dilemma of paying up or seeing hostages die.

By Ken Dilanian

October 21, 2013

WASHINGTON — Dominik Neubauer stared into the camera, the steel barrel of an assault rifle pointed at his head.

A Yemeni “tribe” had taken him hostage, the 26-year-old Austrian student said in English, a tear rolling down his left cheek. If they aren’t paid a ransom, he continued, “they will kill me seven days after this video is published.”

In May, three months after the video appeared on YouTube, Neubauer was freed along with a Finnish couple who had also been kidnapped near an Arabic language school in Sana, Yemen’s capital. Multimillion-dollar ransoms were paid for their release, Yemeni and Western officials said.

The three were seized not by a tribe but by Al Qaeda in the Arabian Peninsula, the officials said — the group that has been trying for years to blow up U.S. airliners and overthrow the Western-backed government in Yemen. The ransoms went into the group’s coffers, according to the officials.

Over the last two years, AQAP, as Western officials refer to the group, has extorted $20 million in ransom money, according to an estimate by Alistair Burt, who until this month was the top British diplomatic official for the Middle East.

If those payments continue, “AQAP’s attack capability in Yemen and against its friends and neighbors will only strengthen,” he said at a recent diplomatic meeting in New York. Kidnapping has become the group’s single largest source of funds, U.S. and European officials say.

Much of the money comes with the complicity of Western governments that have rebuffed British and American exhortations not to pay ransoms, the officials allege. The governments of Finland and Austria said they did not provide ransom money to terrorists. But two Western officials, speaking on condition of anonymity to avoid publicly criticizing allied governments, said that those denials are for public consumption and that the size of the ransoms shows government involvement…