Archive for the ‘Charts & tables’ Category

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Thousands of NGOs get foreign money but don’t report it

April 14, 2014

MHA warns of terror fundings in NGOs

India’s home ministry has found that the number of non-governmental organizations receiving funds from outside India is on the rise, and that most of the groups receiving the foreign funds aren’t reporting it as they are required to do under the law, highlighting the vulnerability that such funding goes toward terrorist purposes.

Some of the external funding involved comes from Western nonprofits that send money to Islamic front charities or alleged Kashmiri relief groups that are actually turning over the cash to jihadi militants.

India isn’t alone in the struggle to get nonprofit organizations to disclose foreign sources of funding. Compliance in the U.S. with the Foreign Agents Registration Act is a joke. Penalties for noncompliance with 501(c)(3) filing requirements are miniscule. The tendency for regulators globally is to be tougher on existing groups that have gone through the registration process rather than on discovery of groups that have failed to register.

These noncompliant groups need a site visit from the police. The policemen can wait while a manager at the NGO completes the required paperwork.

From the Daily Mail‘s India edition:

Government warns of NGOs’ vulnerability to terror funding and money laundering

By Abhishek Bhalla

PUBLISHED: 21 March 2014

Thousands of NGOs which receive foreign aid, many of whom do not file returns on such contributions, are vulnerable to terror funding and money laundering, the home ministry has warned.

Though there are more than 22,000 NGOs registered under the Foreign Contribution Regulation Act (FCRA), intelligence inputs indicate that there are many others that work secretly and are not registered.

On the other hand, 19,000 of the registered organisations do not file returns on foreign contributions.

Foreign funding for NGOs has risen by almost 12 per cent in 2011-12, with Rs 11,549 crore being pumped into these organisations from abroad every year, according to the home ministry’s latest report on the FCRA.

According to the report, foreign contributions worth Rs 2,253 crore come for activities other than the most common causes listed by the Ministry of Home Affairs for foreign contributions.

The common sectors for foreign funding are rural development, welfare of children, health, awareness camps and religious purposes.

“We need to know where this money is being used. We need to coordinate with the authorities of the donor countries and crack down on some of these NGOs,” said an official in the home ministry.

The five major donor countries are the US, Britain, Germany, Italy and Netherlands. Countries like the UAE, Mauritius, Austria, Sweden and Spain are also among the top 15 donor nations…

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The indirect expenses of jihad

October 1, 2013

Ernst & Young and the Federation of Indian Chambers of Commerce and Industry (FICCI) have issued a report on emerging trends in the financing of terrorism.  The central argument of the study is that piracy, smuggling, and counterfeiting have been growth sectors for funding terror, and that India and the world need to establish more mechanisms to combat these methods.

The full report is available here, and a news article about it is here (h/t El Grillo).

There is a lot of value to the report, but one component that readers should take special note of is Ernst & Young’s distinction between the direct expenses for terrorism on things like bombs, materials, and attack plans versus indirect expenses for the bigger picture infrastructure of terrorism:  recruitment, gathering intelligence, and public relations.  This chart comes from their report:

Two broad classes of terrorist expenditures

This is the distinction that Money Jihad has tried to make over the last several months about the Tsarnaev brothers and the Boston marathon bombing.  (See here and here.)  The attack wasn’t just about the costs of the explosives purchased by Tamerlan, or even his travel expense s to Russia, although that certainly still needs to be explained more thoroughly.

The larger question is the indirect expenses that were made toward jihad in the North Caucasus long before the Tsarnaevs hatched their plot.  These were expenditures made over several decades by the Saudis and Western-based Islamic front charities in spreading Salafism through the Caucasus.  It took millions of dollars to create and support radical new mosques, fake “relief” programs, to pay and provision Chechen militants and their leaders, to buy loyalties and pay-off ambivalent politicians, and to create a mushroom patch of jihadist websites in the mother tongue of the Tsarnaev family.

It doesn’t do much good for the federal government and banks to scrutinize and report on every single financial transaction that we undertake if, at the same time, we ignore the millions of petrodollars and zakat donations that go toward paying the indirect expenses of terrorism and inculcating the next generation of jihadists.

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Islamic Relief’s financial rating tumbles

July 1, 2013

The financial health of the largest Islamic charity in the U.S. has been downgraded by Charity Navigator from four to two stars.  The financial rating lowered Islamic Relief USA’s overall rating down to three stars—IR-USA’s lowest rating since fiscal year 2001.  The following chart is a portion of Charity Navigator’s ratings from the present going back to 2008:

Charity Navigator gives IR-USA low marks

The rating was published in May and reflects data from 2011.  Charity Navigator is widely regarded as the nation’s top evaluator of nonprofits.

A decline in IR-USA’s stated revenues and soaring administrative costs contributed to the downgrade.  IR-USA reported $160 million in donations in 2010 but only $63 million in 2011.  At face value, the plummeting revenues suggest fewer donations, but a more accurate valuation and decrease of in-kind donations of medicine has more to do with the apparent financial nosedive.

In 2011, Forbes reported that Diana Sufian, an independent contractor, was terminated by IR-USA after hyper-inflating the charity’s assets over a five year period.  Sufian used grossly inaccurate valuations of deworming drugs.  The overstatement was no minor bookkeeping technicality—IR-USA’s drug stockpiles represented 75 percent of their stated assets.

Sufian was paid $510,000 for the year in which she was fired for services she performed.  One wonders why Ms. Sufian has never been charged with financial statement fraud.

Rather than being fired by the board of IR-USA over the Sufian drug value catastrophe, the charity’s CEO Adeb Ayoub is paid $168K a year, and has been reappointed by the Obama administration as an adviser to the State Department for the next two years.

IR-USA donates millions of dollars each year to Islamic Relief Worldwide, a UK-based organization that has aided Hamas and whose leadership is linked to the Muslim Brotherhood.  A Department of Justice official has implicated IR-USA for being a conduit for the flow of money from America to terrorist groups abroad.  Russian intelligence indicates that IR-USA funds militants in the North Caucasus—the region where the family of the Boston marathon bombers originate.

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Islamic Relief accepted £60K from Al Qaeda front

May 15, 2013

Financial statements show that Islamic Relief Worldwide has received over £62,000 (nearly 100,000 U.S. dollars) from the Al Qaeda-linked, Yemen-based Charitable Society for Social Welfare (CSSW) over the past 10 years.

CSSW donated funds to Islamic Relief in 2003, 2004, 2007, and 2008, mostly for “Palestinian relief” activities.  The 2004 funds transfer was recently discovered by Stand for Peace (with a h/t to Money Jihad reader and IMED research fellow Jacob Campbell for alerting us).  A review of Islamic Relief’s annual statements by Money Jihad revealed the subsequent donations:

CSSW donations to Islamic Relief

Year Amount given Project
2008 £13,060 Gaza Strip Emergency
2007 £9,999 Lebanon Water and Sanitation Programme
2004 £11,265 Palestine Relief
2003 £28,100 Palestine Relief and Emergency Projects
Total £62,424

The CSSW came under FBI surveillance in 1999.  In 2004, CSSW’s Brooklyn branch chief Numan Maflahi was convicted for obstructing the FBI investigation into the charity’s fundraising.  In 2008, the Washington Post revisited the matter, writing that “federal prosecutors in [the Maflahi] New York terrorism-financing case described the charity [CSSW] as ‘a front organization’ that was ‘used to support al-Qaeda and Osama bin Laden’.”

In 2010, IntelWire revealed that the U.S. Department of Labor awarded a $3.5 million grant for a partnership that included CSSW.

CSSW has previously denied terrorist connections by claiming mistaken identity, despite evidence to the contrary from the Maflahi prosecutors and IntelWire.

Islamic Relief itself has previously been under fire for receiving $50,000 from a Bin Laden front in 1999, for financing Hamas in 2005-06, for cooperating with pro-Hamas Union of Good charities on an ongoing basis, and for its leadership being dominated by Muslim Brotherhood officials.

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Flash crash and the Obama hoax

May 14, 2013

When a fake news bulletin was distributed after the Associated Press’s Twitter feed was hacked on April 23, the stock market instantly dropped a full 1 percent. 

On his Global Economic Warfare website, Kevin Freeman tackles the implications of the fake tweet on the market, and how market manipulation can be used as a financial warfare tactic.  Read his important posts here and here.  An excerpt follows:

A Single, Man-Made Stock Market Crash is a New-Concept Weapon

Bogus tweet claims president hurt

When the two PLA Colonels wrote Unrestricted Warfare in 1999, they listed “a single man-made stock market crash” as one of three specific new-concept weapons for the 21st Century. They called it financial warfare.

We have been warning about market manipulation for several years, first in our report for the Department of Defense and then in the New York Times Best-Seller, Secret Weapon. Yet, most in the intelligence and defense community know little about the financial markets. And, those who understand the markets generally know little about defense. Unfortunately, our enemies have studied both.

This week, we saw a hacked Twitter account used as a weapon resulting in a mini flash crash for stocks. Even as the market recovered in minutes, estimates are that there was something like $150 or $200 billion lost even if only briefly. We mentioned this in an earlier post.

While any human could clearly see that the White House was not bombed as the hacked tweets claimed, computer algorithms that monitor social media sites could not tell the difference. As a result, massive sell programs began and other high-frequency algorithms picked up on it.

The Syrian Electronic Army claims that they were the source of the false tweet…

Mr. Freeman also included this graphic which showed the plunge in trading.  The person or entity responsible for the planned Twitter forgery could have anticipated the miniature flash crash and hedged against it in order to profit from the hack:

Market nose dive from Twitter hoax

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Terror budgets illustrated

April 29, 2013

The Taliban, Hezbollah, FARC, al-Shabaab, Lashkar-e-Taiba, and Hamas are the best funded terrorist groups worldwide.  Published estimates of their budgets vary by source.  The dots in the graph below reflect the highest and lowest estimates reflected in millions of U.S. dollars for each group:

Low-high chart displaying estimated annual revenues of jihadist groups and the FARC

This chart is an update to Money Jihad’s earlier post here.  The only significant change is the inclusion of Lashkar-e-Taiba, for which revenue estimates now range from $5 million to $100 million annually.  Al-Shabaab has faced revenue setbacks in the past year, but revised figures are not yet available.

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Rivers of fake money flow into India

April 19, 2013

A flood of counterfeit notes from Dubai, Pakistan, Jammu and Kashmir, Nepal, Bangladesh, and to some extent from Sri Lanka have left Indians swimming in a pool of devalued rupees.

http://i.dailymail.co.uk/i/pix/2013/02/12/article-2277688-178A6F62000005DC-489_634x445.jpg

The fake Indian currency note crisis is benefiting terrorist organizations such as Hizbul Mujahideen and Dawood Ibrahim’s D-Gang with backing from the Pakistani ISI spy service.  Profits from counterfeiting help militants buy weapons.

http://indiatoday.intoday.in/story/made-in-pakistan-fake-money-floods-india/1/123103.html

There seems to be a new story from Indian media every two weeks or so documenting the surging problem.  Here’s the latest from the Times of India, which illustrates both the J&K and Bangladeshi points of ingress for bogus bills, and the jihadist beneficiaries:

NIA files charges against 3 for raising terror funds for Hizbul Mujahideen

TNN Apr 12, 2013

NEW DELHI: The National Investigation Agency (NIA) has filed charge sheet against three more persons, including a Bangladeshi national, for allegedly raising terror fund for the banned outfit Hizbul Mujahideen (HM) through circulation of fake Indian currency notes (FICN) in Jammu & Kashmir.

The charge sheet against the three accused Badal Sheikh and Fayaz Ahmed (both Indians) and Shafiq-ul (Bangladeshi) was filed in the NIA Special Court in Jammu under various sections of the Ranbir Penal Code and the central anti-terror Act on Wednesday.

The Court subsequently issued a non-bailable warrant against absconding Shafiq-ul who was key point person of the Indian accused for supplying FICN through a trans-border cattle smuggler – Badal Sheikh — of West Bengal’s Malda district.

Earlier, the probe agency had filed charge sheet against five persons in the case, alleging that the accused used to procure and supply high quality FICN from Bangladesh and smuggle it into Jammu & Kashmir for raising funds for the terror group.

The five who were charge sheeted earlier include two HM members – Mubarak Ahmed Bhat and Shafaqat Mohiudding Kuchey – and Badal Sheikh.

The NIA in its charge sheet claimed that HM operatives had first contacted Badal who, in turn, approached the Bangladeshi national for procurement of FICN.

“Fayaz Ahmed Rather – a notorious FICN smuggler – started getting high quality fake Indian currency notes from Malda and circulate it in Jammu & Kashmir,” said the NIA.

It’s interesting to note the cattle rustling connection in this story.  The black market in cows, which are revered and illegal to export from India, is a growing area for illicit trade along the border of India and Bangladesh.

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Freedom from Arab oil boosted by record production in North Dakota

March 29, 2013

770,000 barrels per day closer to independence

Texas, federal waters, and North Dakota constitute the holy trinity of the U.S. energy production, and North Dakota contributes an increasingly larger portion of the total.

Bakken output puts us the U.S. closer toward energy self-sufficiency, which, over time, will mean less power for OPEC, fewer petrodollars going to state sponsors of terrorism, a decreased risk of supply interruptions, and less pressure for America to become involved in the squabbles of the Middle East.

This encouraging data comes to us from PennEnergy on Mar. 18 (hat tip to Steve Maley):

http://www.pennenergy.com/articles/pennenergy/2013/03/north-dakota-oil-production-reaches-new-high-in-2012.html?cmpid=EnlDailyPetroMarch192013

North Dakota oil production reaches new high in 2012

North Dakota crude oil production (including lease condensate) averaged an all-time high of 770,000 barrels per day in December 2012. Total annual production more than doubled between 2010 and 2012 through the use of horizontal drilling and hydraulic fracturing of deposits in the Bakken Formation in the Williston Basin. North Dakota production in 2012 trailed only Texas and the U.S. Federal Offshore region, and the state accounted for 10% of total U.S. crude oil production.

Much of crude oil production in North Dakota is gathered and transported by truck to railcars leaving the state. In the four counties where production is concentrated, about 75% of production is transported by truck, and this can cause supply chain problems at times. Severe weather can impede truck travel, which may lower oil production in the state. Once on-site storage tanks at production sites are full, production stops until the trucks can move again. For example, in November 2012 North Dakota crude oil production fell slightly from the October level to 735,000 bbl/d because of weather-induced transportation problems caused by an unusually heavy snowstorm. Pipeline networks, which can be more efficient and less subject to storm disruptions than trucking, are currently being expanded.

Weather slowing or halting truck transportation can also affect the completion of wells that are not yet producing. According to the North Dakota Department of Mineral Resources (DMR), almost all (95%) wells drilled in North Dakota use hydraulic fracturing to produce the crude oil embedded in shale rock and tight (low permeability) formations. To start production, each well needs hundreds of truckloads of material (900-2,000, including 800 truckloads of water, according to the DMR) on-site that are delivered by tank trucks to storage tanks, unless a sufficient quantity of water is available at the wellsite. The total amount of water needed for hydraulic fracturing must be at the wellsite before hydraulic fracturing can begin.

Because over 80% of North Dakota’s wells are located in only four counties—Dunn, McKenzie, Montrail, and William—in the northwest area of the state, harsh weather in these areas can reduce the state’s total crude oil production, as happened in November 2012 and again in January 2013.

It’s also worth noting that pipeline expansion would help even further—a point lost on extreme environmentalists and Democrats.

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Canada’s taxpayers unwittingly fund Hamas

February 17, 2013

IRFAN, the Islamic charity whose tax-exempt status was revoked by the Canada Revenue Agency over suspicions that it finances Hamas, has received funding from a slew of smaller Islamic groups—some of which include Edmonton-area mosques and nonprofits that have been beneficiaries of grant money from the provincial government of Alberta.  This is the conclusion reached by Point de Bascule after detailed research.

A tip of the hat to Gisele for sending in the link.

Point de Bascule has many diagrams depicting the relationships among the Canadian mosques, charities, and front groups involved.  Here is just one of the diagrams, which shows how the Millwoods Mosque, an Alberta grant recipient, donated zakat in the last decade to middlemen that funded IRFAN.

http://pointdebasculecanada.ca/articles/10002905-alberta-gave-$250,000-to-islamists-who-financed-hamas%E2%80%99-fund-collector-and-invites-promoters-of-sharia-in-edmonton.html

Read the full PdB piece here.

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Recommended reading from the Economic Warfare Institute

February 10, 2013
http://www.unodc.org/unodc/secured/wdr/Graphs_Cocaine_globa_seizures_all.pdf

Chart from UNODC’s World Drug Report 2012

Terror finance expert Dr. Rachel Ehrenfeld and Ken Jensen have written a new piece on the Economic Warfare Institute Blog entitled “Trafficking Cocaine in the Name of Allah.”

Ehrenfeld & Jensen report that terrorists in Mali and Algeria use the drug trade to finance their activities, noting that, “While Islam forbids the use of drugs by Muslims, there are no such limitations in selling it to the infidels.”

The article also accounts for several other funding sources of the Mali rebels, which, as Money Jihad has indicated, include Saudi Arabia and QatarIt’s all well worth the read; check it out here.

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Terror financing reliant on hawala, NPOs

February 4, 2013

The use of unlicensed money services businesses leads a new list published in the Journal of Money Laundering Control about the financing of terrorist operations.  The use of hawala for terrorism is followed by the use of nonprofit organizations (NPOs) such as charities, and the use of front companies comes in third place.  Their figures are in Australian dollars:

http://www.google.com/imgres?um=1&hl=en&sa=N&tbo=d&biw=1366&bih=572&tbm=isch&tbnid=_s_XH8uOV1y0AM:&imgrefurl=http://www.emeraldinsight.com/journals.htm%3Farticleid%3D17004748%26show%3Dhtml&docid=k5I0iwaRSW_p5M&imgurl=http://www.emeraldinsight.com/content_images/fig/3100150105019.png&w=921&h=452&ei=h3UIUY7qLcHq2AWJ_4CQDg&zoom=1&ved=1t:3588,r:9,s:0,i:111&iact=rc&dur=1270&sig=109810502792531716370&page=1&tbnh=157&tbnw=321&start=0&ndsp=11&tx=68&ty=74

Researchers Angela Samantha Maitland Irwin, Kim-Kwang Raymond Choo, and Lin Liu also find that terrorists are unlikely to use classic money laundering techniques such as placement, layering, or integration (which is consistent with prior Money Jihad analysis).  Their paper, “An Analysis of Money Laundering and Terrorism Tinancing Typologies” is based on an examination of 184 typologies published by financial compliance bodies.

This is very valuable research, and the authors have done very well to quantify the categories of terror financing.  It is somewhat unfortunate that data is not yet available from the various financial bodies on trafficking, insurance fraud, and the other types of financing mentioned in the chart.

Previously, Money Jihad has endorsed a 1 percent tax on hawala remittances to 1) provide for better tracking of hawala by putting hawala dealers under the jurisdiction of tax authorities rather than financial regulators who are focused on larger banks, and 2) to recoup some of the regulatory costs associated with monitoring hawala transactions.

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