Hizbul’s role in counterfeiting confirmed

Once a relatively poor terrorist organization that relied on a monthly grant of $5,000 from Pakistan’s ISI spy service, the Kashmir-based terrorist organization Hizbul Mujahideen has moved on to three more lucrative methods of financing itself:  1) receiving zakat donations transmitted through hawala from charitable fronts sponsored by Pakistan, 2) engaging in the profitable animal skin trade, and 3) flooding India with counterfeit money, devaluing the rupee, and enriching themselves in the process.

From India Today on May 24 (h/t El Grillo):

Hizbul Mujahideen circulating fake currency in India, reveals NIA investigation

The National Investigation Agency (NIA) has established a clear link between Pakistan and Jammu and Kashmir-based terror outfits pooling their resources to circulate fake Indian currency and using it to fund jihadi activities in India.

In a case related to smuggling of counterfeit currency, the NIA’s probe has revealed the role of Hizbul Mujahideen, which operates from J&K, in circulating fake currency.

Completing the investigation in the case registered in 2011, the NIA filed a final supplementary chargesheet in a Jammu court last month. The document exposes Hizbul hand in using fake currency to finance its terror activities.

The chargesheet states that “Fake Indian currency is being used being used by terrorist organisations to damage the economy of India and finance terrorist activities of their cadre operating in India”.

While the chargesheet stops short of naming Pakistan, sources said the trail of counterfeit currency from the neighbour country in West Bengal and then in India has been well-established.

“Through the Bangladesh border, it (fake Indian currency) was being pumped into India from West Bengal. It was being funnelled via Delhi to terror groups like Hizbul Mujahideen,” an officer from NIA said.

Sources said selling of fake currency in return for genuine currency gives huge returns, which can be used by terror organisations…

India: hawala is 30 percent of terror revenues

Hawala, the traditional Islamic system of transferring money and debts, is essentially outlawed in India.  However, the practice, which is difficult to trace and lends itself well to illicit financial activity, is still commonplace.  A recent article in the news website Rediff.com asserts that 10 percent of all such hawala transactions in India go toward funding terrorism, and that 30 percent of terrorists’ money comes from hawala.  Much of it is transferred from the Gulf (including Dubai) to Kerala, a hotspot for terror finance.

Time to revisit hawala policy?  Money Jihad thinks so.

H/t to Bob Connors.

Crores being pumped into India by ISI to finance terror

Apr. 1, 2013

In almost every hawala deal, 10 per cent of the amount goes towards terror funding, reports Vicky Nanjappa  

A sharp rise in the number of terror financing cases in 2012 in India is an indicator to how well terror groups have channelized their resources.

According to the Financial Intelligence Unit, in 2009, the number of terror financing cases was recorded at 200 but rose to 1,400 cases in 2012.

The FIU report states that the Inter-Services Intelligence in Pakistan manages to raise Rs 1,800 crore annually to fund terrorist activities especially against India. Today, the Intelligence units say that the amount has shot up to Rs 2,400 crore, as the intensity of their programme against India too is expected to see a rise.

In the past, the ISI adopted to circulating fake Indian currency, ensuring that a certain amount of money through hawala transactions, extortions and drug trade was handed over to them.

As per the latest FIU report, there have been 1,444 cases of terror financing last year. In 2011 the figures were 428 cases and in 2010 it was 316.

Sources in the Intelligence Bureau say that out of the 1,444 cases, almost 65 per cent are related to fake currency.

Last year, around 3,20,000 fake notes of Rs 500 and Rs 1,000 denominations were found, while the year before that around 2,50,000 notes were found.

Sources say that while fake currency accounted for a major chunk of terror financing, hawala transactions accounted for at least 30 per cent. In almost every hawala deal, 10 per cent of the amount goes towards terror funding. The biggest hawala transactions have been from the Gulf to Kerala. Proof of such transactions being used for terror related activities was found during the 2006 train bombings in which an amount of Rs 4.5 lakh was exchanged to carry out the attack.

The Indian Mujahideen in particular has a dedicated network through which it collects money in Delhi. The money is wired from Gulf to Kerala and then to New Delhi…

ISI offers rewards to fund terror attacks on India

NewsX, a 24-hour Indian news channel, reports that Pakistan’s ISI spy service has established a terrorist “rate card”—a document describing different terrorist acts and the rates of payment offered to those carrying out such attacks.

NewsX further reports that the beheading of Indian soldier Jawan Hemraj in early January was carried out in coordination with the ISI by Lashkar-e-Taiba and Jaish Muhammad operatives for 5 lakh (ie, 500,000) rupees. In Pakistani rupees, that’s about 5,000 USD per beheading.

Note to Western viewers:  the flashy style of news delivery on Indian television may seem a bit overwhelming at first, but the information itself is extremely valuable:

The reward scheme also includes 5,000 rupees for placing land mines on Indian soil and 10,000 rupees to kill an Indian soldier in a firefight.

A profile of Lashkar-e-Taiba’s paymasters

Lashkar-e-Taiba logo

In addition to expatriate donors such as Tahawwur Rana, charity funneled through its Jamaat-ud-Dawa front group, private donors from rich Arabs in the Gulf, zakat collections in Kashmiri mosques, and hawala, the terrorist organization Lashkar-e-Taiba (meaning Army of the Pure) relies on state sponsorship from the Pakistan’s ISI spy service.

The Encyclopedia of Modern Worldwide Extremists and Extremist Groups says that LeT “was founded in 1987 with funding provided by Saudi Islamist Osama bin laden.  Both financial and material support for the Lashkar-e-Taiba has also come from the Pakistan security forces Inter-Services Intelligence (ISI).”

In his book Obama’s War, investigative journalist Bob Woodward says LeT “was created and continues to be supported by the Pakistani ISI.”

Asia Times provided these details last year about LeT’s financing:

…LeT runs a number of training centers in Khyber Pakhtunkhwah province, Sindh, Balochistan, Punjab and Pakistan-administered Kashmir. The objective is to have an office and a center in every district of Pakistan. LeT spends about US$330 on each trainee for its Daura-e-Aam (basic) course and about $1,700 per trainee in the advanced three-month course, with running costs in excess of $5 million a year.

The army and the ISI make contributions at training camps, with Pakistan’s Herald Magazine reporting in June 2006 that ISI payoffs have reached as much as $50,000-60,000 every month. The other key source of LeT money is Islamic charities across the world, particularly those based in Saudi Arabia and the United Arab Emirates (UAE) . Inside Pakistan, LeT acts primarily as a Dawa group promoting a radical interpretation of Islam, much on the lines of its Wahhabi patrons in the Gulf.

These links brings LeT an enormous amount of petro-dollars through donations to madrassas and mosques in Punjab. In 2008, the US estimated these funds at over $100 million a year. Some Pakistani business houses in Punjab also support the group by giving money and food…

If the estimate is accurate that Lashkar-e-Taiba receives over $100 million a year, that would place LeT it in the top tier of the best financed terrorist organizations in the world above al-Shabaab and closing in on Hamas.

LeT’s stated objective is:

[U]niting Indian administered Kashmir (IAK) with Pakistan under a radical interpretation of Islamic law. LeT’s broader objectives include to establish an Islamic Caliphate across the Indian subcontinent, and to reclaim all ‘occupied Muslim lands’ in southern Spain and the Balkans. To this end, LeT intends to pursue the ‘liberation’, not only of Muslim-majority Kashmir, but of all India’s Muslim population, even in areas where they do not form a majority. LeT has declared that democracy is antithetical to Islamic law and that LeT’s jihad requires it to work toward turning Pakistan itself into a purely Islamic state.

All previous Money Jihad coverage of LeT can be found here.

Pakistani money funds terrorist bonuses

Improvised explosive attacks on U.S. and coalition forces in Afghanistan earn the jihadists between $100 to $1,000 apiece, money which originates from Pakistan’s ISI service and other sources, according to a recent Time magazine report entitled “Afghanistan’s IED Complex: Inside the Taliban Bombmaking Industry.”  The whole article is here (h/t Sal Imburgia); a couple key excerpts follow:

“The enemy has ISI money, narcotics money, and other sources,” says Sediq Sediqqi, the spokesperson for the Afghan Ministry of Interior, referring to Pakistan’s intelligence service. “We need to be able to counter their investments”…

Locals in Panjwai claim the Taliban have also turned to subcontracting, so far a trademark of the coalition side of the war. The insurgents supply the explosives, they say, but unemployed youth plant them for cash. If they blow up an Afghan police vehicle, they get anything between 10,000 and 20,000 Pakistani rupees ($100-$200). If they blow up a coalition vehicle, the reward is as high as 100,000 Pakistani rupees. The claim is difficult to prove. But there does exist an internal Taliban bonus structure for operatives carrying out IEDs successfully. Mullah Kalam said he has gotten up to 20,000 PKR for blowing up U.S. vehicles, and 10,000 PKR for Afghan police vehicles. “We definitely have a bonus, a sweetener,” Kalam says.

The ability to pay extra to successful attackers is different from the method used by Al Qaeda in Iraq, which employed a flat wage structure according to a recent study (h/t Paul Gill). Incentive pay in Afghanistan suggests that the Taliban either has extra funds to provide bonuses, or that they want to reward the most ardent fighters and are prepared to expend their money accordingly.  The comment by the Afghan Interior Ministry spokesman supports the former.

Seven ways to stop funding terror

Money Jihad has previously proposed methods to limit zakat and hawala—two major mechanisms for funding terror.  Here’s a more comprehensive set of our recommendations that would reduce terrorist financing overall:

1. Drill, baby, drill.  The U.S. should expand offshore oil drilling, open federal lands for drilling, ease its permitting process for new refineries, encourage hydraulic fracturing methods that tap previously inaccessible energy sources underground, and approve the Keystone XL pipeline.  Increasing domestic U.S. and Western Hemisphere energy production will reduce reliance on Persian Gulf oil supplies and thereby minimize the profits reaped by hostile, foreign regimes that sponsor terror.
2. Eliminate foreign aid to Pakistan.  Pakistan uses its ISI spy service to fund the Taliban, the Haqqani network, and Lashkar-e-Taiba.  Continuing to waste money on Pakistan is not only wasteful when we can least afford it, but it is suicidal.
3. Study the true enemy and threat.  Among the most important concepts for the Western public to understand are:
   • The Koran calls upon Muslims to strive with their lives and wealth for the cause of jihad (Chapter 9, Verse 41).
   • Zakat, one of the five pillars of Islam, shall be allocated to several categories in accordance with the Koran 9:60, one of which is for those waging jihad for Allah.
   • Islam imposes the jizya tax on “infidels” living in Muslims territory (Koran 9:29), even today.
   • Islam calls for taxes on Muslims apart from zakat such as khums and ushr which finance terrorist organizations throughout the Islamic world.
   • Sharia finance is a destructive, opaque financial system that has kept Islamic economies in tatters for centuries.
   • Sharia banks and halal businesses are involved in financing terrorism.
   • Radical Muslims believe, as Anwar al-Awlaki instructed them, that there is a basis in Islamic law for stealing (through robbery, welfare fraud, tax cheating, etc.), especially if the theft takes place to finance jihad.

   If we fail to acknowledge Islam as the animating force behind terror finance, we’ll get confused and aim at the wrong targets.  For example, we’ve spent billions of dollars complying with extensive bureaucratic requirements such as currency reports that have yielded minimal results.

4. Launch a new offensive against Muslim American charities and entities that fund terrorism.  Pick a few of the highest profile ones and make an example of them by prosecuting their leaders and dressing them in orange jumpsuits.  Prosecute Islamic Relief USA under the laws against providing material support for terrorism.  Prosecute the Council on American-Islamic Relations under the Foreign Agents Registration Act.  Strip the halal food certifier IFANCA and the mosque deed financier North American Islamic Trust of their tax-exempt status.

India wanted U.S. to name ISI as terror group

Over a year ago, a prominent Indian newspaper predicted that the U.S. would have little choice but to issue a formal designation against the ISI as a terrorist entity.  The Times of India, perhaps the most widely read English-language newspaper in the world, believed that the Obama administration had “little wiggle room” in its decision due to testimony given during the David Headley trial about the role the ISI played in the 26/11 terror attacks against Mumbai:

Chicago case puts US support to Pakistan on trial

Chidanand Rajghatta, May 24, 2011

WASHINGTON: Far away from the courtroom drama in Chicago, in rarefied policy making circles in Washington DC, the Obama administration is also on trial for continued support to Pakistan despite copious information spilling out on the witness stand about the country’s sponsorship of terrorism and the role of its spy agency ISI in the Mumbai attack.

What puts the US administration in a fix — and spotlight — is that the information is coming from the government’s own witness. Testimony by the Department of Justice’s star prosecution witness David Headley in the trial of his friend Tawahhur Hussain Rana has left no doubt about the complicity of Pakistani intelligence agency ISI in overseeing the Mumbai terrorist attacks in 2008 which killed 170 people, including six Americans.

Headley, who plea bargained with the government to escape death penalty, says he reported to a serving ISI officer named Major Iqbal among others ahead of the Mumbai attack, and a Pakistani Navy frogman helped land terrorists for the attack. He is also providing elaborate details about the ISI’s nexus with Lashkar-e-Taiba and other terrorist entities which are formally designated as such by the State Department.

That leaves the Obama administration little wiggle room in avoiding formally designating ISI as a terrorist entity, although informally Washington already considers it a “terrorist support entity,” as disclosed in secret cables.

The State Department has been circumspect in addressing information emerging from the Chicago trial, even though it is a DoJ witness who is implicating ISI, and by inference, the Pakistani government (since Islamabad insists that the spy agency is compliant with government directives).

“Those are allegations, and we’ve asked the Pakistani Government to address those allegations in the past,” State Department spokesman Mark Toner said on Monday, adding he didn’t want to “get in beyond that” since the trial was ongoing.

But there is growing unease in policy circles about how long Washington can continue to shield Pakistan citing its critical importance in the war on terror, especially in a case where Americans were also killed.

Bruce Riedel, a former CIA analyst now with the Brookings Institution, who has written extensively on Pakistan’s ties to terrorism, says the Obama administration simply can’t make the call. “I think it remains unlikely Department of State (DoS) will put ISI on the terrorist list. They are just too important,” he told ToI.

The Chicago proceedings also animated a Senate Foreign Relations Committee hearing on Tuesday, with at least two Senators wanting Pakistan to be called to account for its sponsorship of terrorism.

“I don’t know how we can just ignore that. The United States should confront Pakistan’s support to terrorists,” said Senator Ben Cardin, referring to the testimony from Headley implicating ISI, which one witness, CIA analyst Paul Pillar said could not be differentiated from the Pakistan military. “That is an issue that will come to consideration of US Congress,” Cardin warned.

But three witnesses who testified at the hearing all seemed to agree that Washington could not call Pakistan to heel despite its sponsorship of terrorism because of larger political and geo-strategic compulsions.

The news media have never had much of a record for predictions, and this case was no exception.  The Headley story never received as much coverage as it should have by the American press, and the Obama administration and the Clinton State Department never came under public pressure to designate the ISI.  Moreover, Washington D.C. has normally preferred to cooperate with Pakistan and give it foreign aid rather than expose the truth about its spy agency.

But it’s not too late.  Given the details we’ve learned over the past year about Pakistan’s role in hiding Osama bin Laden, the State Department should revisit the issue and designate the ISI now.

U.S. General: We’ve known for 2 years that Pakistan aids and abets the Taliban

In a Feb. 1 interview with BBC, U.S. General Jack Keane, a former vice chief of staff of the Army, declared that the U.S. has “known for over two years” that Pakistan has provided resources, sanctuary, training, and aid to the Taliban.  This information corroborates a U.S. report on the Taliban that was disclosed earlier this week.

Gen. Keane specifically accused Gen. Ashfaq Parvez Kayani, the chief of staff of Pakistan’s military, and Lt. Gen. Ahmed Shuja Pasha, the director of Pakistan’s ISI spy agency, of directly providing such aid to the Taliban.  Take a listen:

The Obama administration has known for over two years that our “ally” funds our enemy, and we’ve done nothing about it other than “confront” Pakistan through private, diplomatic channels?

Report reveals ISI’s Taliban backing

This is just further evidence of what we have always known to be the case—that the Taliban receives assistance, protection, and guidance from the ISI, Pakistan’s intelligence service.  No doubt the assistance includes financial support.  From the BBC on Feb. 1:

Pakistan helping Afghan Taliban – Nato

The Taliban in Afghanistan are being directly assisted by Pakistani security services, according to a secret Nato report seen by the BBC.

The leaked report, derived from thousands of interrogations, claims the Taliban remain defiant and have wide support among the Afghan people.

A BBC correspondent says the report is painful reading for international forces and the Afghan government.

A Pakistani foreign ministry spokesman called the accusations “ridiculous”.

“We are committed to non-interference in Afghanistan and expect all other states to strictly adhere to this principle,” Abdul Basit told the BBC.

“A stable and peaceful Afghanistan is in our own interests. We cannot indulge in any activity which takes us away from achieving that objective,” he added.

The report alleges that Pakistan knows the locations of senior Taliban leaders.

“We have long been concerned about ties between elements of the ISI [Pakistan's intelligence service] and some extremist networks,” said US Pentagon spokesman Captain John Kirby, adding that the US Defence Department had not yet seen the report.

Pakistan Foreign Minister Hina Rabbani Khar is currently in Kabul for talks with Afghan President Hamid Karzai.

‘Informational’

The BBC’s Quentin Sommerville in Kabul says the report – on the state of the Taliban – fully exposes for the first time the relationship between the ISI and the Taliban.

The report is based on material from 27,000 interrogations with more than 4,000 captured Taliban, al-Qaeda and other foreign fighters and civilians.

It notes: “Pakistan’s manipulation of the Taliban senior leadership continues unabatedly”.

It says that Pakistan is aware of the locations of senior Taliban leaders.

“Senior Taliban representatives, such as Nasiruddin Haqqani, maintain residences in the immediate vicinity of ISI headquarters in Islamabad,” it said…

Obviously, all foreign aid to Pakistan must be stopped.

 

Hizbul Mujahideen enriched by Pak hawala

Indian television is reporting that over 80 crore (800 million) rupees from a Rawalpindi entity known as the Jammu and Kashmir Affectees Relief Trust has been transferred through hawala to the terrorist organization Hizbul Mujahideen.  Pakistan’s spy agency, the ISI, is thought to be ultimately behind the transfer.  Money Jihad covered a similar revelation last year that the ISI was using Delhi as a hawala hub to finance the Hizbul Mujahideen.

Video: Sen. Kirk confirms ISI funds Haqqani

Money Jihad noted over a year ago that the Haqqani network is probably funded by Pakistan’s spy agency, the ISI.

Navy reservist and U.S. Senator Mark Kirk (R-IL) gives the most recent first-hand confirmation of this disturbing fact in a new video (h/t The Cable) released after his recent two-week annual training to Afghanistan.  Sen. Kirk notes that “The Pakistani government continues to provide financing, operational support, and protection for the Haqqani network in western Pakistan.”  Take a look:

The ISI’s financial and administrative support for the Haqqani network is especially troubling in light of a new CENTCOM report this week that described Haqqani network as more dangerous to the U.S. than the Taliban or Al Qaeda.  Remarkably, there are still people—especially senior State Department officials—who think the U.S. should be supporting the government of Pakistan through foreign aid.