Ten most revealing terror funding stories of 2009

If the FBI can do a top ten list of terror in 2009, we can come up with a list too!  Money Jihad selected these ten stories because they help expose the threat of jihadist financing in 2009 the best.

10.  Zakat funds jihad:  Candor alert—the leader of jihadists in the Caucasus let the cat out of the bag by admitting that most of his groups funding comes from forced zakat collections from the local populace.  Oops, or was it Muhammad that let that cat out centuries ago?  (And yes, this story also made my top 10 list of zakat scandals in the past five years.)

9.  WMD risks mount:  The Brits predicted that more money, more technology, and more mobility would lead to an increased threat of dirty bombs & illicit materials being used against us.  Najibullah Zazi and Umar Farouk Abdulmutallab are proving them right.

8.  President is zakat enabler?  Despite ample warnings of the dangers of modern zakat-giving, including the funding of the 9/11 terrorist attacks through zakat, Pres. Obama promised in Cairo to help Muslims fulfill their zakat obligations.

7.  Abysmal zakat accounting throughout the year as documented in the short history of this blog here, here, and here.  Why is this a problem?  If you don’t really know where zakat is going, then you don’t really know where zakat is going.

6.  Palestinian aid scandal:  United Nations humanitarian “aid” to “Palestinian refugees” is revealed to give “services to people who simply don’t need the charity, and many are not refugees, and some are not even Palestinians” and even to use medical aid for military purposes.  This fiasco serves as a perfect case study in what Islamic fundamentalists do with “charity”—they funnel it into holy war.

5.  Jizya lives in Pakistan.  In accordance with the Hadith, Non-Muslims who wouldn’t pay the jizya (and even some who did), faced the ransack or eviction from their property, or even death.  The facts were so disturbing that even the accommodating U.S. State Department was forced to condemn Pakistan in its annual religious freedom report.

4.  Philippine ransom spree & beheading bloodbath.  Abu Sayyaf beheads those who won’t pay or can’t afford ransom payments as authorized by the Koran.

Tunisian bank rebrands itself

Tunisia, often considered a moderate Muslim country, or at least a country that has put appropriate constraints on Islam (according to this post from Hugh Fitzgerald on Jihad Watch), is poised to mirror Saudi/Bahraini-style sharia banking.

The Tunisian bank formerly known as “Bank Et-tamweel Al-Tunisi Al-Saudi” is renaming itself Al Baraka Bank Tunisia.  The new moniker aligns the bank with the Al Baraka Banking Group (or Dallah Al-Baraka), one of the largest Islamic banking networks in the world, headed by Saleh Kamel, one of the world’s richest Arabs.  The full story from Zawya is here, but here are the highlights:

In line with the strategy being implemented by the Bahrain-based leading Islamic banking group Al Baraka Banking Group to have a unified new corporate identity for the Group and its subsidiary banks, Al Baraka Bank Tunisia launched its new unified corporate identity…

On this occasion, Sheikh Saleh Abdullah Kamel, Chairman of Al Baraka Banking Group said that he was delighted with Al Baraka Bank Tunisia joining the new corporate identity of the ABG Group, a step that would go much further than just a change in the name or logo to include the added value provided by the Bank to its owners, shareholders, investors and the economic and social activities that the bank serves…

Mr. Adnan Ahmed Yousif, member of the Board of Directors of Al Baraka Bank Tunisia and President & Chief Executive of Al Baraka Banking said that “We are glad to see Al Baraka Banking Group, despite the global financial and economic crisis, continue the implementation of its strategic plans since the beginning of the year. During the second quarter of this year, we launched the new corporate identity of ABG group at highly publicized unveiling ceremonies held at head office and the subsidiary units of the Group. The new corporate identity requires us to adopt a set of policies and high ethical and professional standards with regard to the offering of innovative and efficient Sharia-compliant services and products.

Remember that old jazz tune, “Night in Tunisia”?  Unfortunately, the dark trends of sharia finance give that title new meaning.

For freedom, Filipino pays ransom

Brave Abu Sayyaf rebels wear ammo belts (and ski masks)

Again, Islam and the Koran permit imposing ransoms for jihad.  Thankfully, this Filipino educator escaped a jihadist organization with his life.  But not all of Abu Sayyaf’s victims have been so fortunate this month.  This story arrived from the Philippine Inquirer on Christmas Day:

ZAMBOANGA CITY, Philippines–It is a happy Christmas for the family of a kidnapped Basilan university official after all.

After spending 14 days in the hands of his captors, Dr. Orlando Fajardo was finally freed, rejoining his family a few hours before Christmas.

Basilan Vice Governor Al Rasheed Sakalahul said Fajardo, vice president of Basilan State College, was set free between Tipo-tipo and Tuburan towns around 9:30 p.m. Christmas eve Thursday.

Sakalahul admitted that the Fajardo family shelled out P100,000 to the kidnappers but refused to call it ransom. He said it was “board and lodging fee.”

The kidnappers initially demanded P20 million in ransom but lowered it to P3.5 million.

“No ransom was paid except for the P100,000, which was given by installment,” Sakalahul said.

Suspected Abu Sayyaf bandits snatched Fajardo inside his canteen, which is just across the university compound in Isabela City.

Meanwhile, the fate of Chinese nationals Oscar Lu Tan and Michael Tan, who were kidnapped in November, remained uncertain.

Certainly the euphemism for ransom used here, “board and lodging fee,” will catch on with Western media.  And they can call the jizya an “exemption fee.”  (That is, exemption from death.)

Following the money behind Flight 253

Did this Guantanamo returnee raise riyals for Abdulmutallab’s bomb?

 

The failed jihadist plot to blow up Northwest Airlines Flight 253 was hatched by Yemen-based Al Qaeda in the Arabian Peninsula (AQAP).  The Yemeni connection has been exposed by many reporters, including Brian Ross of ABC News: 

The plot to blow up an American passenger jet over Detroit was organized and launched by al Qaeda leaders in Yemen who apparently sewed bomb materials into the suspect’s underwear before sending him on his mission, federal authorities tell ABC News… 

Investigators say the suspect, Abdul Farouk Umar Abdulmutallab, a 23-year-old Nigerian student …says he made contact via the internet with a radical imam in Yemen who then connected him with al Qaeda leaders in a village north of the country’s capital, Sanaa… 

The al Qaeda affiliate in Yemen has increasingly taken on a lead role in coordinating major terror attacks as the U.S. has disrupted al Qaeda training camps in Pakistan, according to American authorities… 

PETN, the explosive used on Flight 253, is expensive.  It would take a major organization like AQAP to procure it.  And just where would they get the money to do so?  Unsurprisingly, they get it from Islamic “donations.”  

Does anybody remember this Reuters article from September, “Yemen’s Qaeda wing seeks donations in Saudi Arabia”?  Keep this formula in mind before you read the article: 

Islamic “donations” = zakat + sadaqa 

Islamic prof: takaful will lead to zakat bonanza

As Shariah Finance Watch has pointed out, Islamic insurance, or takaful, is on the rise, particularly in Iran and South Asia.

But if one Qatari scholar of Islamic law has his way, takaful will multiply in the Persian Gulf states as well.  This recent article from the Gulf Times points out that the number of Islamic insurance companies has increased from one to three in the past ten years, and Dr. al-Qaradaghi would like to see it increase much further.  The growth of Islamic insurance presents its own sharia finance problems, but what caught my eye was the zakat connection of the scholar’s sales pitch:

A leading industry expert has predicted a huge growth potential for Qatar’s Takaful (Islamic insurance) market, estimating its annual growth at 25%.

Dr Ali Mohayeddin al-Qaradaghi, a professor of Islamic jurisprudence at Qatar University, said that the local Islamic insurance market has lots of expansion opportunities since “every policy holders with the conventional insurance firms is willing to turn to the Takaful scheme”…

The scholar also estimated the annual Zakat that should be given by banks and companies listed in region’s stock markets at $100bn, which he said, can tackle the poverty problem in the world if invested in aid programmes.

“Based on a recent study I made, I calculated the value of the Zakat due by companies and banks in Gulf and other Islamic states can make $200bn. If this amount was properly invested through a ten-year plan to eradicate poverty, there would be no more poor people who starved to death around the world,” he added.

All right.  So that’s $200 billion in corporate zakat dollars due out “around the world.”  That sounds nice at first.  Until you listen to Ambassador Holbrooke, the U.S.’s special envoy to Afghanistan and Pakistan, who says that most of the Taliban’s revenue comes from zakat donations from Persian Gulf benefactors.  I feel no excitement about a new zakat tidal wave crashing down on the shores of an increasingly radicalized Islamic world.

Only half of zakat goes to Pak poor

In addition to “losing” 7 percent of its zakat revenues, Pakistan has failed to spend 50 percent of its zakat in the last two years on the causes for which Pakistan intended it.  The revelation comes from the Pakistani Daily Mail this week:

ISLAMABAD—`Zakat Fund’ is principally meant to help the hardcore poor and deserving people and it is the duty of an Islamic community not just to collect zakat but to properly and fairly utilize it as well.

Unfortunately, the 50 per cent funds collected under the head of Zakat remain unutilized every year due to one or the other reason depriving many deserving and needy people.

The Ministry of Zakat and Ushr has disbursed an amount of Rs 6336.322 million, out of total allocated fund of Rs 13072.319 million, among the needy throughout the country during two years (2006-07, 2007-08). According to official data available here, the figure showed that more than 50 percent Zakat funds remained unutilized during the period.

Jesus the tax reformer. Muhammad the tax collector.

This Christmas, Money Jihad examines the striking contrast between the attitudes of Jesus Christ and Muhammad toward taxation.  

The Christmas story begins in a manger in Bethlehem.  Why Bethlehem?  Because of the Roman census and taxes.  Joseph’s lineage traced to Bethlehem, so that is where his family was due to be counted in the census of Judea (Luke 2:4).  In antiquity, a primary purpose of a census was to establish the tax amount due to the state, in this case to Rome. 

Rome depended heavily on tribute—taxes paid by the subjects of conquered provinces—to fund its imperial growth.  The Romans could not collect all taxes personally, and outsourced the collection process to local publicani, or tax farmers, who would bid for the collection rights, pay the Romans upfront, and then collect enough from their own countrymen not only to cover their expenses but to line their bulging pockets. 

The tax farmers of the Roman provinces became stinking rich in the process.  They were subject to little regulation or control by any civil authority.  This was the context of tax collection at the time of Jesus. 

Matthew, also known as Levi and traditionally considered to be the author of the Gospel of Matthew, was a tax collector.  We do not know how personally corrupt Matthew was, but his reputation seemed to be no different from most tax farmers at that time.  That all changed one day when Jesus found Matthew, and Matthew found Jesus (Matthew 9:9).  Many depictions of Jesus summoning Matthew show the tax collector working at a desk, focused on his tax rolls with gold coins on the table: 

The Calling of St. Matthew

This painting by Hendrick ter Brugghen is especially helpful in showing the utter confusion of Matthew at being selected by Jesus.  His perplexed expression and head-scratching gesture say, “You mean, me?  A tax collector?”  It was a surprising choice in an era when tax collection was frequently equated with harlotry and sin. 

When the Pharisees asked why Jesus would eat and drink with tax collectors and sinners, he answered, “Those that are whole need not a physician; but they that are sick.  I came not to call the righteous, but sinners to repentance” (Luke 5:31-32). 

In other words, Matthew was not selected because his profession was “righteous,” but to bring him to repentance and salvation.  Neither was Matthew selected for his abilities to collect revenues for a new Christian state, because Jesus would never impose any taxes. 

Later, when the Pharisees tried to ensnare Jesus by asking him if it were lawful to pay taxes to Caesar, Jesus answered, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s”  (Mark 12:17).  Thus Jesus acknowledged the civil authority of the state.  At the same time, Jesus rejected profiting from the house of God, as when he famously drove the money-changers out of the temple in Jerusalem. 

Metzger & Coogan’s entry on the publicani in the Oxford Companion to the Bible says, “Most of the time we hear of the humble and despised publicans, whom Jesus made a point of treating, as he did other outcasts, like human beings who could be saved.”  If Jesus had any message for the tax collectors, it wasn’t “how much can you rake in?” it was “go and sin no more.” 

In addition to saving mankind, Jesus ushered in a new way of looking at taxes:  he acknowledged the power of the state to collect it, but he worked to reform individual tax collectors by abandoning their sins, and Jesus never profited from taxes himself. 

Muhammad, on the other hand…

Who funds Iraqi Shia militias? And what about the Christian militias? Oh…right…

Precisely where did the sectarian militias that caused the worst violence in pre-surge Iraq get their money?  And where do those militias continue to receive their funding today?  Lt. Gen. Jacoby has an answer in a recent article from Agence France Presse with the headline, “US commander says Iran still arming Iraq militias”:

BAGHDAD — The number two US commander in Iraq, Lieutenant General Charles Jacoby, charged on Thursday that neighbouring Iran was still providing weapons and funds to militia groups undermining stability.

“Iran still smuggles equipment and aid to terrorists across the border,” the general said.

“I find Iranian influence in Iraq unhelpful across all domains — political, military, economic,” he added.

“The Iranians also continue to train special group leaders and provide them opportunities to come back to Iraq.”

Special groups is the term US commanders use to refer to Shiite militia factions that have refused to join the political mainstream and which they hold responsible for many of the reprisal killings carried out during the sectarian bloodshed of 2006 and 2007.

That “sectarian bloodshed” resulted in the deaths of Sunnis, American servicemen, other Shias, and Arab Christians.

Christians in the Middle East, it turns out, are a dying breed.  As we near Christmas, the London Telegraph provides a poignant account of Christian populations withering on the vine in that part of the world.  Suffering under the boot well-funded Muslim militants, Christians are also dwindling through emigration and low birth rates.

The Telegraph article provides a striking contrast to AFP’s account of Shia-funded militias, because, as Father Remon Moussalli, a Chaldean priest in Amman, notes, “The Christians are like the peaceful Muslims, but there are no Christian militias to protect them.”

The khums tax menace: keep an eye on the recipients, not just the rate

The khums tax is based on the Koran 8:42: 

And ye know, that when ye have taken any booty, a fifth part belongeth to God and to the apostle, and to the near of kin, and to orphans, and to the poor, and to the wayfarer, if ye believe in God, and in that which we have sent down to our servant on the day of the victory, the day of the meeting of the Hosts.

Shia Muslims interpret this passage to apply to all financial gains—or ghanima—not just war booty the way Sunnis interpret it.

But what is wrong with the khums?  I can summarize the problem in three words:  Khums. Funds. Hezbollah.  But you don’t have to take my word for it.  Just read what members of Hezbollah have said about their khums revenue.

Admin costs of 50%? Islamic NGOs say OK

This one slipped by us until now.  Last month, a workshop was held among the leaders of major Muslim charities (ie, zakat, sadaqa, and khums tax collectors) in—of course—London.

A Shia Muslim advocacy group called “The World Federation of Khoja Shia Ithna-Asheri Muslim Communities” provided the only account of the workshop I could find .

One off-hand remark in the summary is particularly eye-opening.  Two small group discussions were held during the workshop.  “In one of the groups, a poll of the 6 large and small NGOs was held. The results showed that 5 of 6 charged administration costs between 7-15%, or project based costs which can sometimes be up to 50%.”

Overhead costs are something that all charities, including the best-run Western charities, face.  Seven to fifteen percent is not completely unreasonable…  Charity Navigator, a rater of American charities, finds that the median American fundraising charity spends “only 6% on administrative expenses.”

It’s hard to tell what the context of the discussion would be that allows “project based costs” that can consume 50 percent all donations in overhead expenses, but it seems awfully high.  Perhaps, as Money Jihad has speculated before, the zakat collectors feel justified in keeping a higher cut than most non-Islamic charities because the Koran specifically authorizes the zakat payments to be given to “those who collect them” (9:60).

What was also noteworthy, at least in the account provided by the World Federation, is the Shia machinations to spread khums taxation throughout the Islamic world.  We’ll publish a post going into greater detail about the khums within the next couple days, but basically it is a 20 percent tax traditionally imposed among Shia Muslims on gains or profits (ghanima)—or on net income in contemporary Shia societies.

The relatively high tax rate on ghanima, much of which goes directly into the pockets of imams, is a point of pride among Shias for supporting imams’ independence from state support.  But for the West, the khums should be a point of concern. 

Funding slavery & terror: Part III

A final connection worth pointing out on our series about the financial connections between terrorism and human trafficking is the question of enforcement.  Laws and policies that help crackdown on terrorism are complementary to restricting human trafficking.  A recent development in the Philippines illustrates the dual benefits of tightening AML controls.

The Philippine House of Representatives just voted to strengthen its anti-money laundering law.  According to the bill’s sponsors, the new legislation would make the Philippines compliant with modern international restrictions on terrorist financing.  The Business Mirror offers these details:

He [House Speaker Prospero Nograles] said the measure covers designated nonfinancial businesses and professions as reporting institutions, such as casinos, including Internet casinos, real-estate agents, dealers in precious metals, dealers in precious stones, lawyers, notaries, other independent legal professionals and accountants when they prepare for or carry out transactions for their clients’ money, monetary instrument, property or other assets.

“The bill would expand the list of unlawful activities to include terrorism and terrorist financing, trafficking in human beings, sexual exploitation of children, corruption and bribery, forgery and environmental crime,” Nograles said.

The measure grants the Anti-money Laundering Council (AMLC) the authority to inquire on a bank deposit upon the order of a court based on an ex-parte application.

The council shall also prescribe due process requirements in the implementation of a freeze order; provide for a system of incentives and rewards; and provide for the disposition of forfeited assets and retention.

The article doesn’t say, but presumably the measure now goes to the Philippine Senate.  It’s unclear when a final bill would pass given the Philippine government’s scramble to pass its 2010 budget. 

Hopefully the new measure will pass, especially given that the Philippines are a safe haven for terror and for high-volume human trafficking.

To summarize our series on the financial connections between terrorism and human trafficking, the funding sources overlap, the perpetrators interact, and the AML enforcement techniques for the phenomena overlap.

The bottom line is that if you are concerned about human trafficking and its financing, keep an eye on terrorist financing as well.