Saudis spooked by sputtering oil prices

Sweeter news than any Halloween candy, the T. Boone Pickens’s blog is reporting that the Gulf monarchies are suffering from increased U.S. energy production that has helped keep the global oil price in check.

Perhaps the Saudis wanted the U.S. to bomb Syria, not just because it would help Saudi-sponsored rebels to defeat the Shia-backed Alawite regime in Damascus, because it would have helped increase instability in the Middle East and drive up oil market prices.

The next time our heads of state meet, U.S. presidents won’t have to hold hands with or bow to the Saudi king.

From the Daily Pickens on Oct. 20:

Arab Sheiks Need – And Want – Higher Oil Prices

As U.S. oil and gas production numbers continue to climb, oil prices have leveled off. In fact, for the first time in three years, some American consumers are seeing the price of gasoline at the pump dip below $3 a gallon.

And that’s got Arab sheiks worried.

According to The New York Times – and T. Boone Pickens – the social commitments of the monarchies in the Persian Gulf require hundreds of billions of dollars each year. But lower oil prices and diminishing reserves are making that increasingly difficult, especially for the Kingdom of Saudi Arabia:

Thus, on top of declining oil reserves, rapidly rising domestic energy consumption and increasing energy-supply diversification among its allies, the kingdom’s spiraling spending is also fast raising the break-even oil price for Saudi Arabia and all five of the other Gulf monarchies; in other words, the price of a barrel of oil that these states need in order to balance their books is getting higher and higher. In Bahrain it’s now over $115 (far higher than yesterday’s price of around $102) while in Oman it’s up to $104.

There is no easy short-term fix for this drain on the Saudi treasury.

Moreover, spending for stability’s sake in Saudi Arabia and the other Gulf monarchies will necessarily be quite short-lived. The kingdom pledged a record-breaking $500 billion for “welfare” this year — most to be spent on social security subsidies and new public sector jobs.

Such vast wealth distribution can’t be kept going for much longer. That level of public expenditure is not sustainable and it flies in the face of decades of efforts to promote better fiscal accountability in the kingdom and wean the population off handouts and public-sector entitlement.

Enforcement action news: recommended reading

• A company in the United Arab Emirates that exported U.S. merchandise to Iran has been caught, fined, and slammed… more>>

• A new ruling says that the Lebanese bank that funded Hezbollah through an account in New York can be sued by terror victims… more>>

• The UN casually mentions that the latest addition to their sanctions list may have been involved in the attack in Benghazi… more>>

• Sanctions against Iran have done more damage to the Islamic Republic than anything since its war against Iraq, says a former spymaster… more>>

 

Lashkar-e-Taiba raises money in plain sight

McClatchy reports that Pakistan has stopped enforcing the international ban against the terrorist organization Lashkar-e-Taiba.  (We must have missed when the government actually did enforce the ban.)  The prediction that LeT and its charitable front group, Jamaat-ud-Dawa, would use the recent Eid holiday to raise money from selling animals and trading hides has been borne out.

The fundraising activities seem strong in residential areas near Islamabad which are populated by government employees.  Fancy that.

Pakistani group banned after Mumbai attack found operating openly

Published: October 17, 2013

By Tom Hussain — McClatchy Foreign Staff

ISLAMABAD — Pakistan’s government appears to have relaxed its enforcement of a 5-year-old United Nations ban on the Lashkar-e-Taiba terrorist organization, which incurred the sanctions because of its militants’ alleged involvement in the November 2008 rampage in Mumbai, India, that killed 166 people.

Two of Lashkar’s front organizations openly raised money this week as the Muslim festival of Eid al Adha got underway. No authorities made any effort to stop them – not a surprise, perhaps, because the groups have been known to work with the government when natural disaster strikes.

But the Pakistani military’s Inter-Services Intelligence Directorate has kept a tight leash on Lashkar-e-Taiba, which the U.S. has labeled a terrorist organization, since Pakistan told the United Nations it would enforce a ban on the group and its affiliates after the Mumbai assault. The attack destroyed the significant progress the two countries had made in settling the feud that had led to two wars and four localized conflicts since the nations were created when Britain ended its colonial rule in 1947.

Lashkar’s public resurgence follows the end in August of a decade-long cease-fire between Pakistani and Indian forces along the disputed border of the mountainous Kashmir state. Since then, Lashkar and other Pakistani militant groups with a history of terrorist activity in India have made a rapid comeback.

It wasn’t difficult for McClatchy to find them in Islamabad, the Pakistani capital, on Wednesday, the first day of Eid al Adha, which commemorates the biblical tale of Abraham’s willingness to sacrifice his son upon God’s command. Abraham’s hand was stayed by the angel Gabriel at the last moment and he was instructed to sacrifice a ram instead. Muslims who can afford to now mark the celebration with the slaughter of a ram or sheep.

Lashkar’s black-and-white striped flag was clearly displayed on banners flying just 200 yards outside the residential suburb of Korang Town. Emblazoned across the banners were the addresses and phone numbers of mosques affiliated with Lashkar’s Jama’at-ud-Da’wah proselytizing sister organization.

Afghan Taliban funds mayhem in Pakistan

The Pakistani Taliban, which seeks the overthrow of the government of Pakistan and a deeper implementation of sharia law there, is receiving financial assistance from the Afghan Taliban.  The irony is that the Afghan Taliban itself is funded by the Pakistan’s spy service, the ISI.

This story illustrates, once again, that attempting to use jihadists as a strategic asset always comes back to haunt those who thought they could control them.  Saudi Arabia, Pakistan, and certain agencies of and politicians in Western governments repeatedly make this mistake.

This news on the Taliban boomerang came from the Associated Press earlier this month, and the AP even branded it a “Big Story,” but sadly seems to have received scant attention.  Thanks to Arye Leonid Glozman for sending over a link to it:

Afghan Taliban supporting Pakistani militants

By ISHTIAQ MAHSUD

— Oct. 7, 2013

WAZIRISTAN, Pakistan (AP) — The Afghan Taliban are financially supporting Pakistani militants at war with Islamabad and providing sanctuary for them in neighboring Afghanistan, the Pakistani Taliban’s spokesman said, highlighting the risk both groups pose to the Pakistani government.

The disclosure, which the spokesman made Saturday in an interview with a small group of reporters, is meaningful because Pakistan has long been accused of pursuing a policy of differentiating between the Afghan and Pakistan Taliban as so-called “good” and “bad” militants — even though Islamabad denies this.

Pakistan has waged war against the Pakistani Taliban, which seeks to replace the country’s democratic system with one based on Islamic law. But it has held off on targeting the Afghan Taliban, which has focused its attacks on U.S.-led troops in Afghanistan. Pakistan has historical ties with the Afghan Taliban, and many analysts believe Islamabad views the group as a useful ally in Afghanistan after foreign forces withdraw.

But the Taliban spokesman’s comments illustrate the dangerous nexus between the two groups. This link could become even more dangerous for Pakistan as the U.S. withdraws most of its combat forces from Afghanistan by the end of 2014. That could give the Afghan Taliban more space to operate inside Afghanistan, which could benefit Islamabad’s enemies in the Pakistani Taliban.

“The Afghan Taliban are our jihadi brothers,” Shahidullah Shahid said in an interview in Waziristan, the Taliban’s main tribal sanctuary in Pakistan along the Afghan border. “In the beginning, we were helping them, but now they are strong enough and they don’t need our help, but they are now supporting us financially.”

The Afghan Taliban are also providing sanctuary for a prominent Pakistani Taliban commander, Mullah Fazlullah, in eastern Afghanistan’s Kunar province, said Shahid. Fazlullah was the commander of the Taliban in Pakistan’s northwest Swat Valley but was driven into Afghanistan when the Pakistani army launched a big offensive there in 2009.

The army has also staged many offensives in Pakistan’s semiautonomous tribal region, the Taliban’s main sanctuary, but the militants have proven resilient and continue to carry out regular attacks.

The Taliban have financed many of these attacks through a combination of kidnappings, extortion and bank robberies. But Shahid’s comments indicate these sources of financing do not always provide the funds they need.

The government has more recently stepped up efforts to negotiate a peace deal with the Taliban, but those efforts do not appear to be making much progress…

Eritrean tells of $30K ransom for captive cousin

The BBC has interviewed yet another Eritrean with a tragic story to tell about Islamist (or as the BBC calls them, “tribal”) kidnap-for-ransom schemes being conducted against hapless refugees trying to make across Sinai to a better world in Israel.

His cousin was burned, raped, and was only released after extended relatives were able to meet a ransom demand of $30,000—a big amount anywhere, but especially exorbitant for that part of the world.

The interview doesn’t get into it, but the ransom money from these kidnappings is often used to purchase weapons for Hamas.

Listen—it’s just a one-minute clip:

U.S. energy boom the “biggest strategic game changer since we won World War II”

Going back to the Wall Street Journal‘s remarkable finding that the U.S. is now the world’s largest energy producer, Fox News hosted a great discussion with Steve Moore and KT McFarland about the economic and strategic implications of the shift.  Please watch especially for McFarland’s insights on what this means for global affairs:

H/t to CJR for finding the video link on YouTube!

Gulf “allies” ignore us and pay Al Qaeda

Saudi Arabia, Qatar, and Kuwait refuse to listen to U.S. diplomatic entreaties to stop funding Al Qaeda affiliated rebels in Syria, according to reporting from the Washington Times.

Frequently since 9/11, officials from the Treasury Department’s Terrorism and Financial Intelligence (TFI) office have shuttled back and forth from the U.S. to the Persian Gulf to try to convince countries there to cooperate in blocking funds or making arrests of specific terrorist financiers.  TFI has usually trumpeted its own successes in the past, even to the point of exaggerating Gulf cooperativeness, but this time even TFI is admitting that no cooperation is to be found when it comes to financing Al Qaeda in Syria.

Officials quoted seem to be shrugging their shoulders and saying that all they can do is tell Gulf officials, “Look at what this person is doing.”  They claim interdicting the flow of money to jihadists is out of American control because the funds aren’t channeled through U.S. banks.

Forgive me, ladies and gentlemen, but the claim that we can’t do anything is a crock.  We could name the Saudi, Qatari, and Kuwaiti banks that serve as conduits between the fundraisers and the fighters as entities that support terrorism, just as we have done with Iranian banks that support Hezbollah or Iran’s nuclear program.

This is not a narrowly legalistic problem of the applicability of U.S. sanctioning authority.  This is a political and diplomatic failure of willingness to confront our so-called allies, and name them and shame them for spreading terrorism.

U.S. allies let funds flow to al Qaeda in Syria

By Guy Taylor

The Washington Times

Sunday, October 13, 2013

The United States has had limited success cutting off funding to the al Qaeda-linked fighters and foreign jihadists flowing into Syria — in part because of a lack of cooperation on the part of Middle Eastern allies, Intelligence and national security community sources say.

Officials say they are tracking the movements of funds from various wealthy individuals in the Persian Gulf, but the governments of key Gulf countries are reluctant to crack down.

“Unless the money is actually in the U.S. financial system, you have to point out to these governments where the money is going and try to work with them to make sure it goes to legitimate groups,” said one U.S. official who spoke with The Washington Times on the condition of anonymity because of the sensitivity of intelligence related to tracking such money.

“The U.S. can’t shut down bank accounts in Kuwait or Qatar,” the official said. “We can tell them, ‘Look at what this person is doing.’”

The approach has worked with variable success over the past decade, during which U.S. authorities have worked closely with counterparts in such nations as Kuwait, Qatar and Saudi Arabia to choke off streams of cash to al Qaeda’s core leadership in Pakistan and Afghanistan.

But when it comes to stemming the flow of aid to Salafist and al Qaeda-linked groups inside Syria, the strategy has been less successful — suggesting authorities in the Gulf now may see American pressure for such action as less worthy than previous calls to block cash to al Qaeda.

“In some nations where they have had success in clamping down on terrorist funding for al Qaeda’s core, this is a source of funding that has not really been clamped down on,” the official said.

The extent to which that money is aiding the rise of extremists in Syria seemed to burst open last month when 11 Syrian rebel groups, including the Nusra Front — an organization U.S. officials link to al Qaeda — banded together in a public rejection of the more secular political opposition groups outside the country that are receiving aid from Washington.

By calling for a new government in Syria to be ruled by Islamic law, the newly formed coalition dealt a major blow to U.S.-led efforts to support a democratic alternative to embattled Syrian President Bashar Assad.

Although the Islamic State of Iraq and the Levant (ISIS) — another rebel group with al Qaeda ties in Syria — was left out of the coalition, analysts say, it, too, is growing dangerously in the war zone. As the extremist foothold has deepened, so have reports of abuses and war crimes carried out by opposition fighters.

A report released last week by Human Rights Watch said members of the Nusra Front and ISIS were among rebel fighters who killed some 190 unarmed civilians during an August offensive on villages perceived to be supporting the Assad government. The report said 67 of the civilians were slain at close range while trying to flee.

The bottom line is that the landscape of extremist groups among the opposition has grown increasingly complex over the past year, said Mouaz Moustafa, executive director of the Syrian Emergency Task Force, an advocacy arm of Syria’s more secular political opposition that lobbies in Washington for a greater U.S. role in the conflict.

“The Islamic State of Iraq and the Levant has increasing power and influence in places like Aleppo and Raqqa Province,” said Mr. Mustafa. “But at the same time, other Islamist battalions have coalesced and improved their organizational structures while rejecting both the ISIS and the more secular outside political coalition.”

He said that “all of these groups are getting assistance” and that the task of pinning down the precise source of the money is difficult. “That’s the million-dollar question,” he said.

When it comes to ISIS, said Mr. Moustafa, “you’re talking about al Qaeda’s network, and I would assume most of the aid and resources they’re getting comes directly from Iraq, where the system was already in place to raise money going back to the rise of al Qaeda in Iraq several years ago.”

Kuwait-Turkey connection

U.S. officials say that system has relied heavily on the activities of an Iran-based al Qaeda “facilitator” named Muhsin al-Fadhli.

A little-reported press release circulated by the U.S. Treasury Department last October described al-Fadhli as “a veteran al Qaeda operative” who provided “financial and material support” to al Qaeda in Iraq leader Abu Musab Zarqawi.

Zarqawi was known for orchestrating a series of gruesome bombings and beheadings in Iraq before U.S. forces killed him in 2006. But the activities of al-Fadhli’s network supposedly have carried forth — and have evolved toward tapping a reserve of Kuwait-based sympathizers to fund extremist groups fighting in Syria.

“In addition to providing funding for al Qaeda activities in Afghanistan and Pakistan, this network is working to move fighters and money through Turkey to support al Qaeda-affiliated elements in Syria,” according to the Treasury Department press release. “Al-Fadhli also is leveraging his extensive network of Kuwaiti jihadist donors to send money to Syria via Turkey.”

That extremist elements of Syria’s opposition are gaining strength appears to expose the limitations of the U.S. government to block the flow of such money — or at least to persuade partners in Kuwait and other Persian Gulf nations to do so.

Officials at the Kuwaiti Embassy in Washington did not respond to a request by The Times to comment for this article.

But an article published last month by Foreign Policy shed some light on the situation. In the article, William McCants, a former senior adviser in the State Department’s office of the coordinator for counterterrorism, wrote that “the Gulf monarchies have not been able or willing to stem the tide of private money their citizens are sending to the Salafi charities and popular committees.”

“Kuwait in particular has done little to stop it because it lacks an effective terror financing law and because it cannot afford politically to infuriate its already angry Salafi members of parliament,” wrote Mr. McCants. “Qatar and Saudi Arabia have tried to crack down on fundraising for the Salafi militias but their citizens just send their money to Kuwait.”

Political storm in Turkey

The rise of extremists among Syria’s rebels, meanwhile, has set off a political storm in Turkey, where the leadership of the nation’s main opposition party is accusing the government of Turkish Prime Minister Recep Tayyip Erdogan of supporting al Qaeda-linked groups in the nearby war zone.

IMF weighs debt relief for genocidal Sudan

The genocidal and Arab supremacist regime of Omar al-Bashir is demanding that the International Monetary Fund bailout Sudan by cancelling billions of dollars of external debt.

The Sudan has long been under international and U.S. sanctions for its bloody repression by Arab Sudanese Islamists against black Sudanese Muslims and Christians, and for historically playing host to terrorists from Carlos the Jackal to Osama Bin Laden.  Cancelling the Bashir regime’s debts would amount to aiding and abetting a state sponsor of terrorism.

The Save Darfur Coalition has rightly condemned the possible debt forgiveness in even starker terms, declaring:  “No Bailout for Sudan’s $34 Billion Debt.”  Read it all:

Save Darfur Coalition says No Bailout for Sudan’s $34 Billion Debt

Group Offers Recommendations for Dealing with Odious Debt

ISTANBUL- The Save Darfur Coalition is at the IMF and World Bank Meetings asking officials not to forgive Sudan’s debt.  Save Darfur considers Sudan’s debt to be odious, meaning it was borrowed and used against the interests of its own people, in this case, used to finance civil war in the south and genocide against the people of Darfur.

Sudan currently holds USD$34 billion in debt, owed mostly to the IMF/World Bank, western Chinese and Arab creditors. And according to a recent policy report published by the IMF, of all countries, Sudan has the most overdue arrears to the Fund – owing 75% of the USD$2.09 billion in total backpayments.  Now, with the global economic recession bringing down oil prices, Sudan’s Minister of Finance, Dr. Awad Ahmed Al-Jaz is in Istanbul asking for a debt-relief package from the IMF and the World Bank.

At the height of meetings in Istanbul, Save Darfur is offering recommendations to the World Bank, the IMF and international leaders on how to deal with odious debt and on what conditions Sudan’s debt can and should be relieved.

Save Darfur is calling on the international community to make clear that Sudan’s debt can only be forgiven if there is concrete and lasting progress toward:

• Peace in Darfur
• The full implementation of the Comprehensive Peace Agreement (CPA), and
• Significant structural reforms that fundamentally change the repressive systems in Sudan.

“The international community should deal simultaneously with Sudan’s economic challenges and human rights abuses. Providing debt relief to Sudan before its leaders demonstrate a commitment to peace will not serve the interests of the Sudanese people, it will only give more political legitimacy and further financial resources to the repressive regime in Khartoum,” says Save Darfur’s Senior Policy Advisor Sean Brooks.

Turkey conducts zero probes of terror finance in 30 years

If Turkey hasn’t even investigated the financing of the PKK terrorist group, which Turkey regards as a real threat, then Turkey certainly hasn’t investigated the financing of the Turkish charity IHH—a Hamas-linked charity that operates as a proxy of the government.  Nor is Turkey scrutinizing the weapons that are being transshipped through its territory across the border to jihadist rebels in Syria.

Is it too much to ask a NATO ally to conduct at least one investigation into the financing of terrorism within its own borders?

From Today’s Zaman via Antalya Central:

‘Turkey hasn’t launched any probe on terror financing’

11 October 2013

Turkey has been fighting against terrorism for almost 30 years and this has resulted in the deaths of tens of thousands of people while billions of liras have also been spent.

However, previous efforts have all failed to produce the expected results in this fight. Recent research conducted by experts from the Ministry of the Interior, the Ministry of Justice and the Ministry of Finance has revealed that no judicial investigation into the financing of terrorism has ever been launched nor has any complaint on the issue ever been filed in Turkey.

Stressing that Turkey has been missing out key points in its fight against terrorism, the country’s most urgent problem, experts underlined that most of the criminal cases filed on the issue of terrorism are on propaganda crimes which resulted in Turkey being convicted by the European Court of Human Rights (ECtHR).

Security units in the country have recently taken some steps to eliminate the financial sources of terrorist organizations including the Kurdistan Worker’s Party (PKK) and the Kurdistan Communities Union (KCK), an umbrella terrorist organization that includes the PKK. But while the necessary legal infrastructure have been established, the sources of financing of the terrorist organizations were also discussed in further detail by the experts. Opium fields have been raided to eliminate drug incomes, the most important financial source of the PKK and the KCK. But it was found that money transfers to these organizations have never been fully monitored…

…PKK demands share from tenders

The experts also reported on sources of income for the PKK/KCK in detail. The organization reportedly earned around TL 100 million in 2012 from public tenders originally valued at TL 1 million. In 2013, this figure increased to TL 150 million. In addition, the PKK conducts customs control in various cities, primarily in Hakkari, Van, Şırnak, Mardin, Ağrı and Iğdır. The smugglers who use these customs points have to pay a tax to the terrorist organization, with the amount ranging between 2 and 5 percent of the value of the smuggled items, which amounted to TL 250-300 million in total.

Cash flow through borders

The amount of ilegal money flowing through Turkey’s borders on an annual basis exceeds $2.5 billion, which is described in the country’s financial system as money with unidentifiable sources.

“There is no information on where the huge amount of illegal cash goes or what purposes it serves. Officials need to identify the amount of money used by terrorist organizations,” said a senior official to Today’s Zaman speaking on the condition of anonymity, underlining Turkey’s inefficiency in keeping track of money flowing through its borders.

Terrorists lose out on heroin money

Time to salute the crew of the Toronto, which has once again carried out a major drug bust on the high seas.  Most likely, profits from the heroin sales would have inured to the benefit of the Taliban.

Thanks to El Grillo for sending this over from CTV News:

Heroin seized by Canadian warship linked to terrorist groups: commander

A commander on board a Canadian warship that seized more than 180 kilograms of heroin says the drug came from suppliers in the Middle East and is linked to terrorist groups.

HMCS Toronto Cmdr. Matthew Bowen said the drugs were destined for recipients in Africa, and would have funded “extremist elements.”

He said the drugs likely have ties to terrorist organizations with connections to Afghanistan.

“We have information that leads us to believe (the heroin) is definitely linked to terrorist organizations,” Bowen told CTV News on Sunday.

The massive drug bust took place approximately 800 kilometres east of the Horn of Africa. Crew members of the HMCS Toronto boarded a suspected smuggling ship and seized 154 bags of heroin.

Bowen said the operation went “smoothly.”

“Once (the smuggling ships) are confronted with a very large helicopter, a significant and well-armed boarding party that clearly knows their tactics, knows how to look after security with again, a very large warship in the background, they don’t tend to give us any trouble.”

The 258-crew frigate, which was on patrol in the Arabian Sea, is part of a multinational counter-terrorism effort.

Bowen said his crew has achieved its goal and they will not be pursuing the “middle men” involved in the drug operation.

“Once we have the drugs in our possession and we dispose of them, we’ve achieved the goal of what we want to do, which is to deny terrorist organizations the funding that comes from being involved in these kinds of smuggling operations,” he said…

Qatar Charity gains beachhead in Somalia

Qatar Charity, which Osama Bin Laden once considered to be one of Al Qaeda’s three most important front charities, and which has more recently been observed to be working in concert with jihadist fighters in Mali, has established a “model village” in Mogadishu, Somalia.

The village is actually a refugee camp with “amenities” such as schools and drinking water, and a mosque that will be in keeping with Qatar Charity’s values.

This is the latest demonstration of Qatar’s attempt to shop for influence in unstable countries that are ripe for Islamist coups d’état.

From Bernama on Oct. 1:

Qatar Charity Establishes Model Village In Somalia

DOHA, Oct 1 (Bernama) — Qatar Charity (QC) has established a model village at a cost of around QAR1 million (RM890,986.75), near the Somali capital Mogadishu, within the framework of Eemaar project, to support the return of Somali displaced to their homes, Qatar News Agency (QNA) reported.

According to a QC’s statement, the village includes a primary school, a mosque, shops and wells with the capacity of about 6,000 persons. It will also be receiving aid including food and non-food items in addition to the distribution of seeds, plowing equipment and pesticides to farmers and other income-generating projects.

QC’s Executive Director for International Development, Mohamed Ali Al-Ghamdi, noted that the establishment of the village comes under Eemaar project a year ago, aimed to support and encourage the displaced Somalis to return to their areas and provide them with income-generating projects.

By the way, how many public contracts and sub-contracts have been awarded to al-Shabaab fighters during village construction?