Archive for September, 2011


Khums is haram, goes into toilet

September 30, 2011

A rather surprising video was uploaded on Sep. 14 to Youtube showing Shia Iraqi scholar Sayyid Ahmed al Qabbanji blasting Iranian leaders on how they use their revenues from the khums tax:

Al Qabbanji is right that the Iranian clerics have become stinking rich taking money from their people (both through religious taxation and government corruption).  He goes as far as to call khums not obligatory, but haram, and that giving khums is like flushing “a million in the toilet.”

Still, given the choice, I’d rather the ayatollahs travel to London and spend khums on hotels and shopping sprees versus diverting the money toward Hezbollah, which is one of the terrorist organization’s key revenue sources.


Hamas still uses Sudan as funding turf

September 29, 2011
Photo evidence of top-level Sudan-Hamas meeting

Sudan's president and Hamas leader in 2009

The State Department’s new “2010” report on global terrorism (that was published several months late) keeps Sudan on the U.S. list of state sponsors of terrorism.  Although State says that the Sudanese government has been helpful in operations against al Qaeda, the government isn’t strong enough to combat terrorism fully.

Moreover, the report revealed that “Sudanese officials continued to view Hamas members as representatives of the Palestinian Authority. Hamas members conducted fundraising in Sudan, and Palestine Islamic Jihad (PIJ) maintained a presence in Sudan.”

Separate outdated reports have said that Sudan hosts “centers for raising funds and Islamic Social Unions (Marakiz li-Jam’ al-Tabarru’at wa-Ittihadat Ijtima’iyyah Islamiyya)” and that “Pro-HAMAS financial activity in Africa is centred in Sudan through the head office of the Islamic Relief Agency (ISRA).”

Earlier this year, the Jerusalem Post called Sudan “a known stop on the smuggling route from Iran to Gaza.”

In March, Hamas top dog Khaled Meshaal and Yusuf al-Qaradawi (the virulently anti-Semitic sharia finance magnate and leader of the Union of Good network of pro-Hamas charities) spoke in Khartoum, Sudan, at a conference hosted by the Al-Quds Foundation—a group that seeks an “Arab identity” for Jerusalem.

Maybe they did a little fund-raising while in Khartoum?  Men like Meshaal and Creepy Qaradawi are a bit like Linda Evangelista:  they won’t even get out of bed for less than $10,000…


Weekly term: currency transaction report

September 28, 2011

A currency transaction report is a form that forfeits your privacy by turning over your address, occupation, social security number, and several other sensitive items to a cashier, bank representative, or casino employee who completes the paperwork and send it to the Feds.  This is required for every transaction over $10,000 even if the cashier doesn’t even find it suspicious!

The textbook definition is a little gentler:

A Currency Transaction Report (CTR) must be filed for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through or to a financial institution, which involves a transaction in currency of more than $10,000.*

The net result?  Some people say there has been an increase of detected financial crimes, especially money laundering, since this was enacted in the 1970s. A 1991 report said that law enforcement found the reports “extremely useful,” although no data were provided to support that assertion.

A cottage industry of software vendors sells products to financial institutions to make the forms easier to file.  Millions of people’s personal information is submitted in these reports annually to the government with little discernible evidence of successfully prevented or prosecuted financial crimes.

*Steiner, Howard and Marini, Stephen L., Independent Review for Banks:  The Complete BSA/AML Audit Workbook, (ImpactAML-INX3 Financial Press, 2008).


Syria’s black market rife with hawala

September 27, 2011

According to the State Department’s “2010” (actually, August 2011) report on global terrorism, Syria remains a state sponsor of terrorism.  That’s not very surprising, but what is interesting to read is that hawala there is rampant within a black market that is as big as Syria’s whole economy.

Syria remained a source of concern regarding terrorist financing. Industry experts reported that 60 percent of all business transitions were conducted in cash and that nearly 80 percent of all Syrians did not use formal banking services. Despite Syrian legislation that required money-changers to be licensed by the end of 2007, many money-changers in 2010 continued to operate illegally in Syria’s vast black market, estimated to be as large as Syria’s formal economy. Regional “hawala” networks remained intertwined with smuggling and trade-based money laundering, facilitated by notoriously corrupt customs and immigration officials, raising significant concerns that some members of the Syrian government and the business elite were complicit in terrorist financing schemes.

Hawala is a method of financial transfer embraced by Muhammad.  It is used today by Muslims across the world to send remittances to their home countries, for routine transactions, but also, thanks to its invisible paper trail, to fund terrorism.


Murabaha markup funds sharia

September 26, 2011

Following up on last Wednesday’s post about murabaha, a typical home loan obtained through sharia finance would look something like this chart:

Graphic depicting sharia home loan

The bank holds the title until the borrower has paid off the loan, although some sharia bankers have even figured out ways to go ahead and transfer the title to the borrower immediately.

One question springing immediately to mind when looking at this chart and seeing “Payment of Marked Up Price (P+X)” is “what is X“?

X is often called a markup.  Kind of like, um, well, an interest charge.  Except the sharia bankers have to call it “X” or “markup” or “profit”—just so long as you don’t call it riba or interest.

But whether murabaha is halal or haram is a somewhat distracting issue.  The main problem with murabaha isn’t whether it is genuinely Islamic or an infidel copycat financial instrument.  The main problem is that X doesn’t just equal profit.

X goes into the revenues of the Islamic bank.  A portion of X is diverted into the Islamic bank’s zakat account.  X is overseen by virulent anti-Semitic and terrorist sympathizing Islamic scholars sitting on the bank’s sharia advisory board who have been documented to transfer a portion of X from their bank’s zakat fund as “charity” for jihadist militants in accordance with their Koran.

Muslims say they invented algebra, but they won’t tell you what the X really stands for in this equation.

The X, it must be said, is for sharia.


Fix for contract scandal: stop nation building

September 25, 2011

A guest on the Fox News Channel has offered a possible solution to the Afghanistan war contracting process that has helped line the pockets of the Taliban.  Kerry Patton of the National Security Leadership Foundation says the U.S. should cease foreign aid to Pakistan and stop nation building in Afghanistan.  The other members of a Fox News panel dismissed the solution as “a bit dramatic.”

A recent U.S. investigation found that the Taliban has received $360 million in U.S. funds since the invasion of Afghanistan.


How Afghan contracts line Taliban pockets

September 23, 2011

In its August report, the U.S. Commission on Wartime Contracting provided nuts & bolts descriptions of how American taxpayer dollars have ended up in Taliban hands.

One piece of visual evidence from the report shows how the Taliban shakes down Afghan subcontractors working on U.S. reconstruction contracts.  This letter is from the “Islamic Imarat of Afghanistan” (Islamic Emirate of Afghanistan), which is how the Taliban refer to themselves.

Taliban message for construction company

The Commission elaborates on how the subcontracting problem takes place (internal citations omitted):

In Iraq and Afghanistan, U.S. funds have been diverted to insurgents and warlords as a cost of doing business in the country. In Afghanistan, insurgents, warlords, or other groups control or contest parts of the country. They threaten to destroy projects and harm personnel. The Commission finds it particularly alarming that Afghan subcontractors on U.S.-funded convoys, road construction, and development projects pay insurgent groups for protection.

While there is no official estimate of the amount of U.S. funds diverted to insurgents, it certainly comes to a significant percentage of a project’s cost. The largest source of funding for the insurgency is commonly recognized to be money from the drug trade. During a March 2011 trip to Afghanistan, experts told the Commission that extortion of funds from U.S. construction projects and transportation contracts is the insurgent’s second-largest funding source.

Afghan contractors hired under the Host Nation Trucking program have turned to Afghan private security contractors. These Afghan subcontractors in turn pay off the insurgents or warlords who control the roads their convoys must use.

Almost 6,000 Afghan truck movements a month are funded under the program. Diversion on this scale did not occur in Iraq, where the U.S. military provided most of the escorts for similar convoys. Many contracts other than transportation provide opportunities for diversion:

  • Afghan subcontractors on a USAID community development program in Kunar Province were paying up to 20 percent of their total subcontract value to insurgents for “protection.” The USAID IG estimated that over $5 million of program funding was at risk of falling into insurgents’ hands.
  • A congressional staff report cited Afghan Taliban demands for pay-offs from businesses and households for electricity generated by USAID-funded projects. This occurs in Taliban-controlled areas like Helmand Province.

Because they directly strengthen the insurgency, diverted funds pose far more danger than other kinds of waste and have a disproportionately adverse impact on the U.S. effort.

H/t JihadWatch.