Posts Tagged ‘Somalia’

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5-year anniversary of Money Jihad

October 12, 2014

Five years ago today, the first post of this blog was published.

Since then, Money Jihad has blown the lid off connections among Islamic charities including the Zakat Foundation and Muslim Hands, the close financial relationship between Islamic Relief USA and Islamic Relief Worldwide in Britain, and partnerships between Islamic Relief and the Turkish front charity IHH.

Money Jihad has also documented the relationships between sharia banks and terrorist financing—relationships which were previously only discernible through scattered evidence and rumors.

On top of that, this blog has exposed information that was known in Somalia and Bangladesh about terrorist financing in those countries that had never been reported before to Western readers. On several occasions, this blog has helped give voice to dissidents and expatriates from those and other nations who have shared their knowledge about financial mischief in their home countries with Money Jihad to reach a wider audience.

None of this would have been possible if it weren’t for some wonderful people and organizations. Special thanks to Shariah Finance Watch and Creeping Sharia blogs for putting Money Jihad on the map in the first place. Individual thanks go to the vice president at the Center for Security Policy Christopher Holton, human rights activist Puneet Madaan, and American Center for Democracy fellow Ilan Weinglass who have each done a great deal to expand the reach of this blog.

Without additional support and engagement by 1389 Blog, The Counter Jihad Report, EuropeNews, BlazingCatFur, and other counter-jihad blogs—all wonderful blogs in their own right—in addition to news sites Free Republic, American Thinker, FrontPage Mag, The Washington Free Beacon, The Washington Post, and International Business Times, this blog would never have reached the level of influence or readership that it currently enjoys.

Then there’s the vibrant community of readers, sources, jokers and curmudgeons on Twitter! This whole endeavor would be much quieter and boring without them. A special thanks goes out to all-star Twitter users Rushette, El Grillo, MeanKitteh, Sal, Michael, Jackie, Zac, Jack, and FRamabama for all the support and the wealth of information and insights they provide.

Twitter also allows Money Jihad to mutually follow and connect with noted leaders of the counter-jihad movement including author Tarek Fatah, Act for America organizer Brigitte Gabriel, former Navy officer Dr. Zuhdi Jasser, author Diana West, author Dr. Mark Walia, Gatestone Institute president Nina Rosenwald and terror analysts Patrick Poole and Ryan Mauro. TV stars Roseanne Barr and David Boreanaz have helped too (seriously); and prominent financial crimes experts including anti-money laundering reporter Colby Adams; finance and security analyst Tom Keatinge; anti-money laundering attorney Christine Duhaime; Wall Street Journal risk & compliance reporter Rachel Louise Ensign; terrorism and terror finance expert J.C. Brisard; author Jeffery Robinson; fellow financial crime bloggers Helen Gorman and Eric “Mr. Watchlist” Sohn; and a host of certified public accounts, trade and sanctions lawyers, certified fraud examiners, and certified anti-money laundering specialists.

Thanks also to Rachel Ehrenfeld, Robert Spencer, and Kenneth Rijock. The insights and expertise in their writings have helped shape the perspective of this blog.

Now, friends and readers, it’s time for a two-week break. Hasta luego!

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Finland busts 4 Somalis for wires to al-Shabaab

September 23, 2014

As Money Jihad and Tundra Tabloids pointed out earlier this year, Finland criminalized the financing of terrorism 12 years ago, but nobody had been convicted yet. That’s about to change. Four Somali men living in Finland have been interrogated and indicted for transferring hundreds of euros to the terrorist group al-Shabaab. Prosecutors suggest the money could be intended to buy weapons, and some of it may have been used for an abortive plot to abduct, drug, smuggle, and conscript teenagers to fight for al-Shabaab.

The transfer of money in fairly small-dollar increments to avoid detection from some radical Somalis living in the West to Somalia, while claiming humanitarian motives, is consistent with al-Shabaab tactics, techniques, and procedures for obtaining overseas financing.

From the Helsinki Times (hat tip Aisha) on Sept. 17:

Four charged with financing terrorism

The first ever investigation into suspected terrorist offences in Finland has spawned criminal charges, with the Office of the Prosecutor General announcing on Wednesday that it has brought charges of financing terrorism against four people.

The suspects are believed to have raised and provided thousands of euros to al-Shabab, a jihadist militant group based in Somalia, fully aware of the destination and intended use of the money.

Although the wire transfers were no larger than 100–200 euros, they would have sufficed for the acquisition of various firearms, reminds state prosecutor Juha-Mikko Hämäläinen. “At the time, an assault rifle could be bought for 140 American dollars in Somalia. A hand grenade cost 25 dollars and a bazooka 150 dollars,” he highlights.

In addition, one of the suspects is accused of recruiting their brother to al-Shabab and planning to abduct his 15–17-year-old children in Finland and to take them to a terrorist training camp in Somalia against their will. The children were to be lured to Kenya under the guise of a holiday, drugged and transported across the border to a training camp in Somalia, where they would have been subjected to forced labour or similar conditions.

The plan was scrapped due to lack of money, according to the prosecution.

As a result, the suspect will also face charges of recruitment for commissioning a terrorist offence and preparation of an offence to be committed with terrorist intent. The offences are believed to have taken place between January 2008 and March 2011.

The suspects have rejected all criminal accusations in interrogations, insisting that the funds were transferred for humanitarian purposes.

Altogether, six people were suspected in the pre-trial investigation, but the Office of the Prosecutor General decided against bringing charges against two of them, a 28-year-old and 31-year-old man…

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Why can’t you send money home to Somalia? Because your politicians want sharia banking first

September 8, 2014

The fairy tale is that existing financial channels from conventional Western banks in England and Minnesota can create a new, “safe corridor” for high-tech, well-screened remittances from the Somali diaspora back to their families with an eliminated risk of financing terrorism or corruption in the process. The sharia banking plan is to leapfrog over the creation of a conventional, interest-based banking sector in Somalia by establishing sharia financial sector based exclusively on Islamic law. The word on the street is that the notorious money transfer company Dahabshiil is peddling influence with Somali politicians to ensure that no new financial institution cuts into their racket—a charge which (like every other mounting charge against it) Dahabshiil denies.

The result of all this is that there has yet to be a conventional bank in Somalia that can provide banking and money transfer services.  Thus it is becoming increasingly clear that Western banks should not be blamed for the inability of Somali leaders to authorize their own private banks and remittance channels.  The next time you hear somebody demand Western banks to keep the “lifeline” of Somali remittances open, ask yourself why Somali politicians won’t create a lifeline of their own.

The following excerpt from an Aug. 25 Foreign Policy article entitled, “Franchise Opportunity: Western Union in Somaliland” (hat tip Sal) goes a long way to explain why:

…For the past year, Somaliland’s parliament has failed to enact legislation allowing the creation of a commercial banking sector. The reluctance, government insiders say, is rooted in the belief that sends the muezzin’s call to prayer echoing from every corner of Hargeisa five times a day: the Islamic faith. Mindful of a constitution explicitly drafted according to Islamic principles, Somaliland’s parliamentarians have approved an Islamic Banking Law, but have yet to pass its commercial equivalent. They fear it could introduce the charging of interest on economic activity, which is unacceptable under sharia law.

“We’ve visited parliament; we have sat down with the chairman to explain how important this is, how much we need these foreign banks. We push and push and push,” says Abdilahi Hassan Aden, director general of Somaliland’s (unrecognized) central bank. “But we are still waiting.”

A Western advisor to the government sees parliament as ultimately persuadable, but not without work. “A lot of this is about changing the narrative when it comes to religion, changing mentalities,” the advisor says. “Islamic countries like Malaysia or Indonesia, for example, still manage to have commercial banking sectors.”

In private, some officials voice the suspicion that a commercial banking law has been so long in coming because the MTOs, influential local economic players that they are, until recently preferred the remittance system to remain just as it was. It’s a charge Dahabshiil, for its part, rejects. Abdirashid Duale, chief executive officer, insists the company is keen to see legislation allowing commercial banking passed. “Dahabshiil is very supportive of any law or other initiative that supports the commercial banking sector,” he says.*

Dahabshiil, which says it does background checks on all the customers it can, sees itself instead as a victim of world events. “All of this started because of 9/11,” Duale says. “Before then, there was no difference between us and a grocery store opening a bank account to deposit its earnings. With 9/11, the world changed, especially for Muslims.”

MTO operators say Barclays’s move would do the opposite of improving competition on a continent whose inhabitants already pay well over the odds for their money transfers. U.S.-based Western Union and MoneyGram, which the Barclays decision would not affect, charge far higher fees than Dahabshiil, which prides itself on being the cheapest MTO in the world.

Dahabshiil has now applied for and been granted a banking license under Somaliland’s existing Islamic banking legislation. But if that materializes, there would still be an open question of how thousands of rural families who will never see the inside of a bank — too far away, too expensive — would survive financially.

After a spirited lobbying campaign by the Somali diaspora, fronted by Olympic sprinter Mo Farah, whose family lives in Somaliland, the British government set up an action group in the fall of 2013 to try to hammer out a solution. The Department for International Development (DFID), alongside the British Treasury, is working on establishing a “safer corridor” for remittances. Its feasibility study explores ways of improving customer due diligence, from biometric fingerprinting to PINs to bar codes, and the establishment of an independent “trusted third party” to audit transactions. But more than a year after the remittance issue first blew up, the “safer corridor” remains a distant aspiration.

British consultants who were in Hargeisa to address a conference on money laundering, attended by Somaliland government ministers, remittance companies, the local Chamber of Commerce, and the World Bank, dismiss the “safer corridor” idea as a non-starter. (They have been commissioned by Dahabshiil to carry out a regional banking survey.) “It’s a Hans Christian Andersen story concocted by DFID, a case of the emperor’s new clothes,” says Peter Norris of Obiter Consult. “It’s been very unhelpful in luring everyone into a false sense of security.”

“The idea that you can have some massive computer system and somehow feed all this information in … and the computer will somehow work out which clients are dodgy and which are clean is a nonsense,” he adds…

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Claim: al-Shabaab financiers tend to come from one clan

August 19, 2014

Money Jihad cannot confirm the accuracy of a recent claim that financiers of the al-Shabaab terrorist organization tend to come from the Hawiye—the dominant clan in Mogadishu.

A Somali news site says it investigated al-Shabaab’s funding for six months and identified 10 entrepreneurs from various Hawiye sub-clans working in Somalia, Kenya, and Dubai who allegedly fund al-Shabaab. Money from the businessmen is said to be routed through Sheikh Yusuf Sheikh Issa, a.k.a. “Kabkutukade,” but separate media accounts appear to contradict that statement by reporting that Kabkutukade was jailed a year ago.

There is some corroboration that one of the men named in the article, referred to as “Muse Mohammed Ganjab,” does indeed have militant connections. The Times recently reported that “Musa Haji Mohamed Ganjab,” an adviser to Somali president Hassan Sheikh Mohamud, sent an arms shipment to al-Shabaab weeks after the terror siege of the Westgate mall in Nairobi, Kenya, and that he personally delayed an attack against an al-Shabaab base in Barawe.

There is also some indication of Hawiye roots and connections to al-Shabaab: the Jamestown Foundation says that the Islamic Union of Courts and its al-Shabaab offshoot were initially criticized as a Hawiye clan militia, the website Terror Free Somalia has previously noted that al-Shabaab’s sanctioned leaders are “mostly Hawiye,” and the Somalia Report says that al-Shabaab used to be referred to as a Hawiye clan based group. But it is also possible that some claims originate from rival clans, and al-Shabaab has members and supporters from non-Hawiye clans as well.

Nevertheless, the tribal connections are mostly immaterial, since al-Shabaab is, at its core, a jihadist group aligned primarily around its belief in fundamentalist Islam, and not along clan lineage.

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Al-Shabaab profits from Somali telecom sector

August 18, 2014

Without a stable central government, Somalia’s telecommunications network has been unregulated for decades.  This has allowed for tremendous growth and fairly low prices for phone and Internet access in Somalia compared to neighboring countries.

However, this has also created a Wild West atmosphere of clan elders and businessmen in Mogadishu cutting deals with international—often Saudi-backed—telecommunications providers like Arabsat.  Arabsat is based in Saudi Arabia and is owned by the Arab League.  In addition to providing phone coverage, Arabsat’s satellites host television broadcasts by well-known hate channels Al Manar and Al-Aqsa.

The government of Somalia has made attempts recently to begin taxing and regulating the telecommunications industry, but the bigger factors at play are the taxes you don’t see.  Some evidence suggests that informal licenses are granted by warlords or businessmen in exchange for bribes paid behind the scenes.

Reporting from the Gulf News earlier this year went even farther, suggesting that the warlords allow the telecoms to over-charge customers so they can pocket the difference or pay off al-Shabaab too:

…By persuading other telcos worldwide to clip the ticket for them, these [Somali telecommunications providers] groups has [sic] become wealthy enough to avoid attempts by government and the regulatory International Telecommunication Union (ITU) to rein them in.

Not only do these groups exploit vulnerable customers charging them often beyond their means and disproportionate to costs, there are also suspicions that some sponsor the terrorist scourge, Al Shabaab.

By negotiating with foreign companies to charge above the usual rates and to put money collected into overseas funds, these “companies” avoid tax — and have sufficient clout to offer deals to favoured factions, or fund groups they believe will deliver a government suited to their economic or ideological aims…

There are also rumors of relationships between, or at least pressure exerted by, al-Shabaab on several specific Somali telecommunications companies including Hormuud Telecom.  RBC Radio reported this year that, “Al Shabab has closed down Hormuud Telecom Company’s branch in Jilib town, Middle Jubba region after the company failed to pay $50,000 which Al Shabab demanded from local companies,” and added that, “Extorting money from private business companies and aid agencies operating in Somalia is seen as the biggest source of investment for Al Shabab’s war with the government.”  Some sources have gone further, describing Hormuud as “al-Shabaab’s messenger” or “the phone of death” taking its cues from al-Shabaab.

In October 2011, Hormuud was allowed to remain in operation while two rival companies were closed by al-Shabaab.  One of those rivals, Nationlink Telecom, eventually reopened after allegedly paying $30,000 to al-Shabaab to resume operations.  An al-Shabaab member told the Somalia Report that non-cooperative companies would be forced to close “until their managers agree to pay taxation for the war against the infidels as well as the crusaders.”

While it is possible that some of the claims about the telecommunications business in Somalia have been exaggerated due to clan or business rivalries, former al-Shabaab commander Mohamed Farah Al-Ansari confirmed the role of extortion against Somali telecommunications companies in funding al-Shabaab in an interview with Voice of America last year.

There are enough grounds for concern that international investors and corporations would do well to examine any business deals with Somali telecommunications companies with the utmost caution.  Similar to the risks of doing business with the money transfer company Dahabshiil, the taint of al-Shabaab is simply too strong to ignore.

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Somali in Holland funded al-Shabaab

August 4, 2014

Farhia Hassan, a Somali living in the Netherlands, has been arrested as part of a U.S. sting against an international cell of East African women who financed al-Shabaab. Additional arrests were made in Virginia and Washington state. The women sent the money back home to “brothers in the mountains,”—al Shabaab fighters in Somalia. The money was transferred in small increments probably to avoid scrutiny. Hassan is said to be pregnant, which her lawyers will probably use to argue against her extradition.

Thanks to Theo Prinse for sending over the story from Omroep Zeeland. An English account of the development comes from DutchNews:

Dutch Somali woman faces deportation to US over terrorist funding

A 30-year-old woman who lives in Terneuzen faces extradition to the US on charges of helping finance the al-Shabaab terror group.

The woman was arrested on Wednesday on the request of the US authorities, the public prosecution department said.

The woman, who was born in Somalia, has Dutch nationality. She will appear in court on Friday and the US has requested her extradition, the prosecution department said.

Brothers

The US department of justice said in a statement that two other women from Kenya and Somalia were also arrested in the US on Wednesday and two more remain ‘fugitives’.

Three defendants who were arrested face charges of providing material support to al-Shabaab, a designated foreign terrorist organisation that is conducting a violent insurgency campaign in Somalia’, the statement said.

The statement said the women referred to the money they sent overseas as ‘living expenses,’ and they repeatedly used code words such as ‘orphans’ and ‘brothers in the mountains’ to refer to al-Shabaab fighters, and ‘camels’ to refer to trucks needed by al-Shabaab.

The money transfers often were broken down into small amounts as low as $50 or $100, and the funds were intended for use by al-Shabaab insurgents operating in Somalia…

Prior Money Jihad coverage of terror financing based in the Netherlands is here. Posts about the financing of al-Shabaab are here. See this and these for the use of “orphans” as code for terrorist financing.  The AP and the Washington D.C. affiliate of ABC News have more information on the arrests here.

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U.S. Bank backs out of Dahabshiil deal

August 3, 2014

Minnesota banks stopped providing remittance services to Somalia in late 2011 over concerns about the risks of terror finance and money laundering. U.S. Bank, a subsidiary of U.S. Bancorp, considered a partnership with Dahabshiil to reinstate money transfer services to Somalia, but cancelled those plans earlier this year.

Minnesotans for a Fair Economy reported in April that:

U.S. Bank officials informed representatives of Minneapolis-based Dahabshiil, a Money Service Business (MSB) that serves the Somali community, that it would not conduct remittances to Somalia…

Community leaders have met with U.S. Bank officials many times since the last Minnesota bank ceased conducting the transactions. Such a meeting took place just two weeks ago.

“On behalf of our community, I am very disappointed by this decision to back out of our agreement,” said Mohamed Nor of Dahabshiil.

U.S. Bancorp explained its decision by saying, “”Unfortunately, because of some items identified in the independent review of Dahabshiil and the inherent risks of doing business in Somalia, we are not able to open an account as we had hoped.”

U.S. Bancorp should be applauded for its sensible decision. There are simply too many questions about the financial relationship between Dahabshiil and the terrorist group al-Shabaab to proceed with business partnerships between Dahabshiil and Western financial institutions.

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