David T. Johnson, Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs delivered a speech last week entitled, “The Escalating Ties Between Middle Eastern Terrorist Groups and Criminal Activity.”
His full speech is worth a read, but three passages from his remarks that I’ve excerpted below are worth special attention and correction. [My observations are bracketed, bold, and green.]
The first problem is that Johnson exaggerates the role of drugs in financing terrorist organizations.
In recent years, many of these (terrorist) groups have focused almost exclusively on using narcotics as a means to finance their activities. [Groups such as? Even senior U.S. officials concede in unguarded moments that most of the Taliban’s revenues come from donations, not from drugs.] As the international community clamped down on state-sponsored terrorism and pressured governments from financially supporting terrorist organizations, many groups resorted to drug trafficking and other illicit activities as sources of revenue. According to the U.S. Drug Enforcement Administration, 19 of the 44 groups that the U.S. Government has designated as Foreign Terrorist Organizations (FTOs) participate in the illegal drug trade and many also engage in financial and other forms of crime.
[Like I said earlier this week, some observations about the connections between drugs and terror are valid, and some are mere hyperbole. “Participate” does not equal focusing “almost exclusively on using narcotics as a means to finance their activities.” None of the world’s most dangerous terrorist organizations—Al Qaeda, the Taliban, Hezbollah, and Hamas—have focused almost “exclusively” on narcotics. The Taliban comes close, but even that is an arguable and possible outdated viewpoint.]
Secondly, Johnson exhibits typical Western short-sightedness about hawala:
A convergence of crime and corruption can also pave the road for terrorist organizations to finance their terror, as was the case in Bali, Madrid and Mumbai. In particular, terrorist financiers are not only concealing their financing assets through complex transactions in the formal banking system, but also harnessing centuries-old money laundering tactics. They exploit informal value transfer mechanisms such as hawala or hundi and trade-based money laundering, and use illegal cash couriers as bulk cash smugglers, particularly in countries with non-existent or weak anti-money laundering enforcement practices.
[With all due respect, sir, hawala did not finance the terror in Mumbai. Hawala is a type of transaction—a verbal wire if you will—but fundamentally it is not a revenue source. It is a transfer; the question is, a transfer from whom? Most reports have indicated that Lashkar-e-Taiba funded the Mumbai attacks, and yes, LeT transferred funds via hawala, but LeT did not obtain their wealth through hawala. LeT’s money came from zakat “donations”.]
Lastly, Johnson repeats the conventional wisdom about the role of state sponsorship of terrorism:
In the Middle East, and other parts of the world, the United States is working with partner governments to develop effective, democratic, civilian-led and skilled law enforcement and justice sector institutions. Hamas and Hizballah continue to finance their terrorist activities mostly through the state sponsors of terrorism , Iran and Syria, and through various fundraising networks in Europe, the United States, and the Middle East. The funds channeled to these organizations frequently pass through major international financial capitals, such as Dubai, Bahrain, Hong Kong, Zurich, London, or New York. Hizballah also continues to profit from the drug trafficking groups in the Bekaa Valley of Lebanon.
[Don’t get me wrong—state sponsorship by countries like Iran is significant, and I have blogged about state sponsorship many times myself. But according Hezbollah itself, most of its revenues come from the khums, the Shia Islamic 20 percent tax on all profits, which originates from Iran without necessarily being “state sponsored.” It would be more accurate to say “Islam sponsored.”]
Overall, Mr. Johnson did not acknowledge the true sources of terrorist revenue. He only referenced the ushr obliquely, and he didn’t mention zakat or khums at all, which are the true revenue sources behind the trends he described.
I don’t mean to pick on David Johnson. He’s got a tough job which mostly involves anti-drug enforcement, so naturally his bias is to perceive terrorism as the twin brother of drug trafficking. And actually his speech is more detailed, honest, and informative than the spin job we were treated to last October by David S. Cohen.
Still, it seems that our public officials and media are too afraid to say the word “Islam.” It’s far easier for them to talk about “narco-trafficking,” “money laundering,” and “state sponsorship” instead. They have effectively “de-Islamized” discourse about the financing of terrorism.