Posts Tagged ‘terrorist financing’

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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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Money and the Islamic State of Iraq and Syria

August 11, 2014

In 2007, the Islamic State of Iraq was seen as “the richest of the insurgency groups” in Iraq with $1 billion to 1.5 billion “collected in revenue by the group through foreign donations, enforced taxation and confiscation of the property and funds of Iraqis.” But the U.S. surge and ISI missteps significantly damaged the jihadist group’s ability to raise funds.

Seven years and three names later, ISIS amassed a $2 billion comeback and took control of large swathes of territory in northern Iraq including Mosul and 35 percent of Syria.

ISIS’s financial recovery has been marked by a slight shift away from reliance on local extortion networks (although those are still in effect), improved organizational and financial management by ISIS leader and self-proclaimed caliph Abu Bakr al-Baghdadi, and the departure of U.S. troops in 2011.

The most important elements of ISIS’s funding are sadaqa (voluntary donations) from Arab donors in the Gulf; sales and tolls collected on sales of oil from fields under its control; and increasingly through money made by controlling key infrastructure.

Here’s a rundown of ISIS’s main funding channels:

Sadaqa from private donors

Fundraising is aided by contemporary marketing methods

Oil

  • ISIS controls 60 percent of Syrian oil including the lucrative Omar field
  • In Iraq, ISIS controls Butmah and Ain Zalah oil fields, the refinery in Baiji, and oil and gas resources in Ajeel in northern Iraq
  • ISIS sells or collects a portion on black market sales to Turkey, Iran, and in Syria itself
  • Revenue estimates for ISIS range from $1 million to $3 million daily

Dams

  • In addition to oil, control of key infrastructure such as the dams in Mosul, Fallujah, and Tabqa present increasingly significant revenue potential for ISIS.
  • Professor Ariel Ahram notes this is already occurring at Tabqa, where ISIS is involved in selling electricity.
  • New York Times reporter Tim Arango says that possession of the Mosul dam can enable ISIS to “use it as a method of finance” through extortion schemes to continue their operations.

Other sources

  • Isis has seized arms from Iraqi depots, including U.S. weapons given to Iraqi forces, plus weapons smuggled from Turkey and Croatia
  • The collection of ransom money has sustained ISIS throughout its existence
  • Antiquities smuggling

Incidently, little is being done by the Gulf states to curtail the flow of donations to ISIS because they either want an independent Sunni state carved out of Iraq or to replace Iraq’s Shia-led government with Sunnis. Washington should designate Saudi Arabia and Qatar as state sponsors of terrorism, but it won’t because of diplomatic considerations.

Without interdicting the donations and the contraband oil, U.S. airstrikes will have limited effect on ISIS’s coffers.

This piece is also published at Terror Finance Blog.

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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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Dahabshiil offices closed for skipping payment to al-Shabaab

July 26, 2014

Somali news outlets reported on July 12 that several Dahabshiil offices in southern Somalia were ordered to close after the money transfer company failed to make required “sako” [zakat] payments to the al-Shabaab terrorist organization.

According to Radio Kulmiye, Middle and Lower Juba offices in Bu’aale, Saakoow, Salagle, and Jilib have been ordered to close. The same development was also reported by Shiniile News, and the website Dayniile says that “feet dragging” by Dahabshiil on making the payments is what prompted the closures.

According to some Somali news outlets, Dahabshiil routinely gives money to al-Shabaab, which the remittance company denies. For whatever reason, payments are occasionally decreased or delayed, and al-Shabaab threatens Dahabshiil in order for payments to resume. The most noteworthy example of this was the April 2, 2013, bombing by al-Shabaab of Dahabshiil’s office in Mogadishu because of a short payment.

The reason you haven’t read about this elsewhere is because English-language media simply don’t report on Dahabshiil’s ongoing financial relationship with al-Shabaab. But the compliance division of Barclays bank is likely aware of such reports, which has why it has tried desperately and rightly to sever ties with Dahabshiil.

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Terror finance trio: Qatar, Kuwait, and KSA

July 22, 2014

They left out Turkey. It is great that more people are coming to this realization and that books are being written about it, but it doesn’t seem to be significantly changing the policies of the West (apart from a growing rift between the U.S. and the Sunni powers in the region over how we’re dealing with Iran). We have yet to designate the major institutional terror donors in Qatar Saudi Arabia as terrorist entities. Kuwait was never blacklisted by FATF even though it took it 10 years after 9/11 to outlaw terrorist financing. NATO has retained Turkey as a member even though it is partnering with Al Qaeda in Syria and helps Iran evade sanctions. And we mostly ignored attacks by Qatari-backed rebels in Mali fighting against our oldest ally, France. Instead of doing something significant, we just nod our heads and say, “yep, the Gulf is where the money for terrorism comes from,” and then we turn the page of the newspaper to something else.

From VOA on July 7 (h/t El Grillo):

Islamist Insurgency Fueled by Global Finance Web

Jeffrey Young

The little cans were at cash registers everywhere in Kuwait, where I lived during much of the 1990s. Covered with pictures of children in anguish amid burning rubble, these cans collected coins and cash for “Palestinian Relief” or the like. Sometimes, I put my change into these cans, causing the person behind the counter to often give me a puzzled look. Then, I learned from my Kuwaiti friends that these collection cans were not always helping those kids – many were funding Hamas, Hezbollah, Islamic Jihad, and other violent groups.

Now, 20 years later, there is an international web of finance that leads to deadly insurgents such as the Islamic State of Iraq and the Levant (ISIL). Part of it runs through so-called “charities,” while another funding stream for terrorists is enabled by official complicity. And, these sources also intersect.

Colin Clarke, author of an upcoming book titled “Terrorism Inc: The Funding of Terrorism, Insurgency, and Irregular Warfare” says much of the cash now pouring into ISIL and other violent groups comes from three regional sources.

“A key component of support to Sunni extremist groups [including ISIL] comes from wealthy individuals in the Arab Gulf states of Kuwait, Qatar, and Saudi Arabia,” Clarke told VOA, adding “The majority of donors likely know exactly where their money is going. Some are blatant about it, while others enjoy the plausible deniability of ambiguity.”

Clarke also contends these three states are using this funding stream as a means of achieving influence with insurgent groups. “The Saudis,” he said, “are reportedly fearful of the threat posed by ISIL, but certainly contribute to radical groups, battling for a leadership role with Qatar, another country active in this funding.”

Kuwait has also allegedly kept the flames of insurgency fueled with cash. Until recently, one of those streams reportedly ran through Kuwait’s Aqaf, its Ministry of Islamic Affairs. In May, Aqaf Minister Nayef al-Ajmi resigned in the wake of accusations by a senior U.S. official that he was enabling terrorists…

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CNN documents Qatari funding of terror

July 21, 2014

The jihad in Syria against the Alawites has been wholeheartedly funded by millionaires in Qatar. The Qatari ministry of culture oversees some of the volunteer operations to fund terrorism like this, and counter-terrorism expert Juan Zarate says the financial support for jihad comes “from the top.” This isn’t new information, but seeing video of the players involved may help some people to grow up and out of the old-fashioned 1990s view of Qatar as an ally in the Gulf.

CNN’s Erin Burnett reports:

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A million a day for ISIS and a grain of salt

July 20, 2014

Is a million dollars a day enough to sustain ISIS’s operations without dipping into its own reserves? Perhaps. There may be about 10,000 ISIS foot soldiers. Paying, feeding, clothing, and transporting that many men is expensive. But if each jihadist were getting a proportionate share of $100 a day, that still well exceeds the median Iraqi income of $15 a day, which probably helps with recruitment efforts.

That being said, such a rapid influx of money does not automatically translate into the ability to spend the money—either wisely or at all. Remember the movie “Brewster’s Millions” where Richard Pryor was challenged to spend $30 million in 30 days? It’s harder than it looks.

But it’s still ominous. From the Telegraph on July 11:

Iraq oil bonanza reaps $1 million a day for Islamic State

Exclusive: Islamic State strengthens grip on northern Iraq by raising millions from sale of oil through Kurdistan to Turkey and Iran

Islamic State jihadists are raising as much as $1 million a day from the sale of crude oil recovered from conquered oilfields in Iraq that is then smuggled on to Turkey and Iran.

Oil industry experts believe the group formerly known as Islamic State of Iraq and al-Sham (Isis) is able to command $25 a barrel for crude its fighters are moving in tankers from the oil plains south of Mosul.

Middlemen based in the Kurdistan region of Iraq are able to turn a handsome profit on the supplies by selling its abroad for refining into the more valuable petroleum and diesel products.

The specialist Iraqi Oil Report said the centre of the $1million trade was the town of Tuz Khurmatu on the fringes of the Kurdish region. Traders there are buying convoys of tankers supplied by Islamic State…

The swift advance of Islamic State after last month’s conquest of Mosul gave it control over the path of the Kirkuk/Ceyhan oil pipeline, the country’s biggest, and the Baiji oil refinery, again the most important refinery in Iraq…

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10 companies that make money from terror ties

July 15, 2014

Longtime Money Jihad readers already know that sharia banks are conduits for funding jihadist groups, but may not be aware of some of the other corporations and businesses that are in financial cahoots with terrorists.

  1. Tajco Ltd.—A Lebanese-based company that uses supermarkets to launder South American drug money through grocery stores in Gambia back to Lebanon for dispersal to Hezbollah. According to former Treasury official Stuart Levey, Tajco and its subsidiaries constitute a “multinational network [that] generates millions of dollars in funding and secures strategic geographical strongholds for Hizballah.”
  2. Dahabshiil—A money services business (technically a remittance company, not a bank) that pays a $500K stipend twice a year to al-Shabaab. Somali journalists and musicians have alleged that the payments aren’t just for “protection,” (ie, the freedom to operate in Somalia without being bombed) but that Dahabshiil shares tribal links and policy goals with the terrorist group.
  3. Al-Aqsa TV—The U.S. describes the media outlet as “a television station in Gaza financed and controlled by Hamas.” Hamas raised the initial capital to create Al-Aqsa TV, negotiated for a satellite provider, and allocates money for its budget. Its programming seeks to prepare children to join and fight for Hamas as they age.
  4. Crescent Foods—the “caterers of the Muslim Brotherhood.” Crescent Foods is routinely selected to provide food at conferences and functions held by a variety of North American Muslim Brotherhood front groups and affiliates including the radical American Muslims for Palestine and organizational co-conspirators of the Holy Land Foundation, a defunct Hamas front charity. Crescent Foods also markets halal foods to the constituencies of these Islamist groups.
  5. Sniper Africa—A South African hunting gear company which is majority owned by a dentist who raised $120,000 for Al Qaeda. OFAC has listed Sniper Africa under its specially designated global terrorist category.
  6. Zurmat Group—A company operating in Afghanistan that sells components that wind up in roadside bombs against our troops. Additionally, the Army Times found that “approximately $1-2 million per month — flow to [the Haqqani network] to finance its activities” from Zurmat Group profits. CENTCOM describes the company as actively supporting the insurgency.
  7. Darkazanli Export-Import Sonderposten—Owned and operated by Imam Mamoun Darkazanli, a longtime Al-Qaeda financier and manager. Darkazanli supports al Qaeda from Hamburg, Germany, and behaved as a type of godfather figure to the Muhammad Atta cell as it prepared for the 9/11 attacks. Darkazanli’s company has provided “cover, business collaboration and communications” for Al Qaeda figures visiting Germany.
  8. The Bank of China—The Chinese bank funded Hamas and Islamic Jihad when it “carried out dozens of wire transfers for the two terror organizations, totaling several million dollars,” from 2003 to 2007 according to a lawsuit by victims of terrorist attacks in Israel. The bank knowingly continued making such transfers even after being warned against it by the Israeli government in 2005.
  9. Jihad al-Bina—Hezbollah’s construction company in Lebanon. Its relationship with Hezbollah apparently transformed it from a $1.8 million business in the 1990s into a $450 million operation by 2006. It has been able to cash in on public contracts to rebuild Lebanese infrastructure through international development aid even though the firm is basically controlled by Hezbollah leaders and Iran.
  10. Al Manar/Lebanese Media Group—This Hezbollah news outlet serves as a “Beacon of Hatred” that runs advertisements encouraging donations to Hezbollah and airs commercials for Hezbollah. The television channel’s programming includes vitriolic anti-Semitic messages and glorification of suicide bombing operations.

In addition to the companies above, there are conventional Western corporations like Chiquita and Echo Bay that have have paid bribes or protection money to rebels or terrorists to prevent their employees and facilities from being attacked, and banks such as HSBC that have dropped the ball on anti-money laundering, sanctions compliance, and counter-terror finance programs. This is totally unacceptable behavior which ultimately helps finance terrorism and increases the odds that more corporations will be exploited by terrorists. At the same time, it should be recognized that these abysmal compliance programs resulted from a combination of mismanagement, lousy judgments, and long-term business motives, but not because of ideological alignment with the terrorists themselves.

A final note: there was an extremely popular article within the past year circulating the Internet about corporations making money off of the global war against terrorism (which itself was only the latest in a decade-long stream of Internet tirades and social media screeds against “war profiteering” in Afghanistan and Iraq). It should just be remembered that for every company allegedly making ungodly profits from providing basic security services that there are companies like those above that are actually funding or making money directly from terrorism. So when you run across articles like that, ask yourself a question: which seems worse to you—a greedy corporation that fights terrorism, or a greedy corporation that funds terrorism?

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ISIS finds taxing more durable than looting

July 13, 2014

Taking a cut from oil refineries and water works is more lucrative and enduring than demolishing infrastructure and selling the spare parts, argues Prof. Ariel Ahram in an incisive piece about Al Qaeda in Iraq from the Washington Post’s “Monkey Cage” blog (hat tip to El Grillo):

…Most researchers point particularly to the “lootability” of resources – whether they are easily seized and can be sold on the international market at a significant mark up – to explain the onset and intensity of resource wars. Control over these goods motivates people to take up arms while the revenue from selling them fund the fight. Jeremy Weinstein shows how resource “rich” rebel movements are prone to attracting opportunists and thugs, who are ill-disciplined and prone to manhandling civilians. Rebel groups with access to lootable resources are liable to splinter and metastasize, becoming more like criminal operations than political movements.

But not all resources are lootable and not all lootable resources have the same centrifugal effects on rebel behavior. As Philippe Le Billon and Eric Nicholls have shown, unlike diamonds or drugs, dams and oil rigs are better targets for extortion than physical appropriation. After all, these structures are far more valuable assembled and operational than broken down for spare parts. Moreover, dams and rigs require a cadre of experts, technicians and engineers to run effectively. And, as Mancur Olson famously pointed out, opportunities for extortion create incentives for building sustainable, long-term rule, which are distinctly different from simply predation. According to New York Times reporter Thanassis Cambanis, IS  left the staff at the Tabqa Dam unharmed and in place, allowing the facility to continue operations and even selling electricity back to the Syrian government. Similarly, oil fields under IS  control continue to pump. Indeed, IS  has shrewdly managed these resources to help ensure a steady and sustainable stream of revenue. As one IS fighter told the New York Times, while Assad’s loyalists chant “Assad or burn the country,” IS retorts “We will burn Assad and keep the country.” Beside revenue from oil and water, IS  collects a variety of commercial taxes, including on trucks and cellphone towers. It has also imposed the jizya (poll tax) on Christian communities under its control…

It sounds as though ISIS has matured beyond the traditional jihadist outlook of a spurned lover (“If I can’t have you, no one will”). It has realized that nine-tenths of the battle is in “staying power,” and that it will be far easier to govern if there is infrastructure in place to keep the economy and society operating after all the dust settles. This strategic thoughtfulness suggests, once again, that state sponsors such as Saudi Arabia, Turkey, and Qatar are coaching ISIS’s leaders, or that Saddam’s old flag officers are mixed in ISIS’s shura council, or both.

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Islamic charity funded Mumbai terror attacks

July 11, 2014

Many of us will long remember the images of smoke billowing up from the Taj Mahal Hotel in Mumbai on Nov. 26, 2008, as a result of the wider operation that would become known in India as the 26/11 terrorist attacks that left 160 dead.

It has been presumed since then that hawala, the traditional Islamic money transfer system, was involved in the financing of the attack, which Money Jihad also believed helped the perpetrators. However, it is now beginning to appear, based on accounts from India’s Intelligence Bureau, that the Islamic charity known as Jamaat-ud-Dawa and its imams were actually behind the equivalent of $200,000 in payments, and that the money was transferred in small increments outside of the hawala system.

Rediff.com reports (h/t Geuzen):

‘JuD used charity money to fund Mumbai 26/11 attacks’

An Intelligence Bureau dossier has revealed that an amount of around Rs 1,17,37,820 was spent to carry out the Mumbai 26/11 terror attack by Pakistan sponsored Lashkar-e-Tayiba. The dossier is significant considering the recent ban on the Jamaat-ud-Dawa — Lashkar’s financial wing — imposed by the United States of America.

The JuD has been raising funds under the garb of charity and diverting it for terror activities particularly against India. The IB dossier details the manner in which the JuD raised funds for the 26/11 attack and diverted it to the Lashkar coffers.

The JuD has 50,000 members and each one is assigned a specific task of raising money under the pretext of charity, says the dossier. Until the year 2002, the Lashkar enjoyed the open backing of the Pakistan government. But after they chose to be more discreet, the JuD was floated to channelise funds.

The IB has said that its dossier was prepared based on statements made by Pakistani-American Lashkar-e-Tayiba terrorist David Headley and intelligence collected from various sources. The dossier states the expenditure for the 26/11 Mumbai attacks were divided into four parts.

The money spent on the ten terrorists, including the pay off to their families and their training, was around 130,000 US dollars. The Lashkar spent 25,000 US dollars on weapons and 500 dollars for the VOIP accounts through which communication was maintained through the operation.

Headley had said that he received an amount of 40,000 US dollars from the Lashkar to carry out surveillance and other expenditure during his visits to India.

The dossier also states that funding for the JuD comes from sympathisers based out of Saudi Arabia. People who subscribe to the Wahabi school of thought contribute the most. Till date many donors contribute money for the Lashkar’s fight in Kashmir.

JuD members travel across the world to collect funds. When planning for the 26/11 attacks commenced a core team was constituted to collect funds. The Lashkar ensured that majority of the funds were collected through donations and every JuD office had a box that read charity on it. While 60 per cent of the funds came from Pakistanis settled in Saudi Arabia and Britain the rest was collected through open donations in Pakistan, the dossier states. It was around this time that the Islamic Society in the Gulf was revived and contributions began to pour in.

Since 2002, the Lashkar has devised several methods to raise funds but according to the Intelligence Bureau, JuD has been most effective in fund collection. What worked in JuD’s favour was that it was considered a legitimate outfit and none of the money was accounted by the international community as it was considered to be a charity organisation.

The JuD not only collected funds for charity and diverted it to the Lashkar, but also helped the outfit legitimise the money collected by extortion, counterfeiting, smuggling and animal skin trade.

The JuD has also set up hospitals, fish farms and a carpet business. The outfit made it compulsory for every agriculturist in Pakistan to contribute 10 per cent of their annual earnings to charity, known as ushr.

But for the Lashkar, its biggest source of income is from the drug trade. While on one hand the Inter-Services Intelligence collects money from Dawood Ibrahim, who is the leader of this trade, the Lashkar has its own set of men who undertake the same business. The Lashkar alone smuggles out 5000 tons of opium every year, which approximately accounts to 2.5 billion dollars. This money is equally shared with the Al-Qaeda and the Taliban, which aides Lashkar operatives smuggle opium out of Afghanistan where it is produced.

The dossier also states that most of the money is sent to different parts of the world where the Lashkar operatives are present. It is also distributed among Al-Qaeda members present in Syria, Iraq, US and other countries. A significant amount is also sent to Jammu and Kashmir. At least 2 banks in the Valley are directly under the control of the Lashkar, which means they do not rely on the hawala network.

Money sent to different parts of the world is often carried by JuD preachers. Until now these persons were not checked, as the JuD was considered to be a legitimate organisation…

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