Terror financial news: suggested reading

September 10, 2015
  • “Iran will get hundreds of billions of dollars from sanctions relief and investments to fuel its aggression and terrorism in the Middle East and North Africa and beyond,” says Israel’s prime minister… more>>
  • Shurat Hadin is pursuing legal action to stop the Iran deal until the victims of Iranian-sponsored terrorism are compensated… more>>
  • Lawyers for the “British” beheader for ISIS known as “Jihadi John” are fleecing the government for legal defense fees, even though they don’t live in Britain either… more>>
  • An Amnesty International director and her husband have been outed as Muslim Brotherhood supporters… more>>

ISIS’s economy smaller and shabbier than Iraq’s

September 8, 2015

Given the territory it controls, the economic prospects of the Islamic State of Iraq and Syria (ISIS) are crummy, researchers have argued.  Oil notwithstanding, the economies of northern Syria and western and northern Iraq weren’t so great to begin with before the rise of ISIS (also known as Daesh).  The economy in areas of ISIS control has probably worsened given the number of people who have fled or who otherwise lost their jobs when ISIS took control.  On top of that, ISIS spends its money on aggression, not on public service delivery.

This is a persuasive argument.  It has a bit more substance to it than the usual happy talk from than speeches from U.S. Treasury Department officials.  Kudos to Jamie Hansen-Lewis and Jacob N. Shapiro for their research, which was published in the journal Perspectives on Terrorism (hat tip to El Grillo).  A salient excerpt from their article follows:

…Daesh has limited economic activity to draw on. Daesh area’s total economic activity according to G-Econ was at most one-fifth of the rest of Iraq’s and one-third of the rest of Syria’s. Using the more refined DMSP-OLS data the group’s poverty is equally stark, with 2012 illumination in the regions it now controls amounting to no more than one-third of the rest of Syria and one-eighth of the rest of Iraq.

And these methods almost surely overestimate Daesh’s current revenue base. First, we included areas of Daesh support from which their economy might draw in part, but it is not clear how much authority the group has to extract in these areas. Second, we use pre-war data, but the massive population movements that accompanied the Daesh takeover means these areas surely have less economic activity than they did in 1990 (for the GEcon data) or 2012 (for the DMSP-OLS data).[39]

Assuming Daesh is able to transform that economic activity into military spending at rates similar to comparably sized states we should not expect it to be able to sustain large defense expenditures. Worldwide defense expenditures peak at 10.2% of GDP in South Sudan, with many conflict-affected countries spending only 3% of GDP on defense.[40] Countries close to Daesh’s Gross Cell Product had a 2014 GDP of approximately $30B or $4,700 per capita. Combined with the range of observed expenditures this suggests the group could support defense expenditures in the range of $900M to $3B per year. While Daesh’s potential spending totals are large compared to its economic neighbors, they pale in comparison to Iraq’s 2014 spending of $9.5B, Turkey’s $20B, UAE’s $22.6B, or Saudi Arabia’s $80B.[41] While spending clearly translates only indirectly into military power, the gap between what is monetarily feasible for Daesh over the long-run and what its neighbors spend is striking.

Moreover, if we turn to the population under Daesh’s control it is fairly sparse…


Arab Bank settles over terror finance damages

September 7, 2015

Jordan-based Arab Bank PLC has settled on an amount to pay in damages to the families of terror victims.  The bank was found liable in 2014 for helping process transactions for Hamas that facilitated terrorist attacks.  The amount of the settlement wasn’t disclosed, but Arab Bank previously offered $12 million in a deal rejected by the judge.

From The New York Times last month (h/t El Grillo):

Arab Bank Reaches Settlement in Suit Accusing It of Financing Terrorism

Three days before a first-of-its-kind damages trial was supposed to start, a Middle Eastern bank has reached a settlement with hundreds of American plaintiffs, including victims of terrorist attacks around Israel, who had filed a lawsuit against the bank accusing it of supporting terrorism.

A spokesman for the bank, Arab Bank, and a spokeswoman for one of the law firms representing the plaintiffs confirmed on Friday that an agreement had been reached but declined to offer additional details, including the amount of the settlement.

Last year, a jury in Federal District Court in Brooklyn found Arab Bank liable for financing terrorism by processing transactions for members of the militant Islamic group Hamas.

The second phase of the trial, assessing the damages Arab Bank would have to pay to some victims of attacks by Hamas, was scheduled to start on Monday.

All of the plaintiffs are American victims of Hamas attacks or relatives of people who were killed…


Treasury says Iran will keep funding Hezbollah

September 4, 2015

Treasury undersecretary Adam Szubin says Iran will continue sponsoring terrorism regardless of the sanctions deal with Iran.  This seems to be a point upon which many executive branch officials agree.  In fact, it will probably worsen.  We’ve covered many reports over the years of Hezbollah and Hamas budgets suffering because of sanctions against Iran.  Logically, as sanctions are lifted, we can expect the Shia-backed terrorist groups to replenish their bank accounts and fund newer, bolder attacks.

From the Washington Free Beacon:

Sanctions Czar: Iran will Continue Funding Terrorist Armies Under Nuclear Deal

BY: Blake Seitz

Obama’s sanctions czar admitted Wednesday that Iran would continue to fund terrorist proxies like Hezbollah under the nuclear deal.

Administration officials like Secretary of State John Kerry and Secretary of Treasury Jack Lew have downplayed the possibility that Iran could use sanctions relief cash to fund terrorism, saying that much of that money would be earmarked for debt relief and domestic projects.

Adam Szubin, the undersecretary of Treasury for terrorism and financial crimes, was more candid about the most likely use of sanctions relief money.

“Unfortunately I do expect to continue to see Iran funding Hezbollah and its other violent terrorist proxies,” Szubin told the Senate Banking Committee.

Szubin praised the U.S. sanctions regime for bringing the Iranian economy to its knees.

“Thanks to those congressional sanctions, our sanctions against Iran’s proxies carry this international weigh and designated entities become pariahs worldwide,” Szubin said.

Szubin said that “it is incumbent” on the U.S. “to do more” through sanctions to stop Iran’s financing of terrorism—although the president’s nuclear deal lifts many sanctions on Iran and allows its banned banks back into the global financial system…

Szubin has replaced David Cohen as undersecretary for terrorism and financial intelligence.  President Obama has named Cohen as the deputy director of the CIA.


Pakistan keeps protecting rich Islamic terrorists

September 3, 2015

Terror mogul Dawood Ibrahim has left Karachi in southern Pakistan for Murree in northern Pakistan.  Indian news sources say that this move was ordered by Pakistan’s spy agency, the ISI, which has long sheltered Dawood.  Maybe this means India was getting close to figuring out exactly where Dawood was.

Pakistan granted a haven to Osama Bin Laden.  They’re doing the same thing with Dawood Ibrahim.  Whatever happened to “You’re either with us or against us in the fight against terror”?  Is granting a safe harbor to successive multi-millionaire Islamic terrorists a sign of being “with us”?

From India.com (hat tip to El Grillo):

Dawood Ibrahim shifted from Karachi by Pakistan?

New Delhi/ Islamabad, Aug 24: Underworld don Dawood Ibrahim has been shifted from his Karachi residence to other safe place by Pakistan authorities and ISI, according to reports. India’s most wanted criminal, Dawood Ibrahim along with his wife and daughter was shifted from Karachi to country’s North region Muri.

The latest development came after Indian government prepared a dossier showing Dawood Ibrahim’s several residences in Pakistan. Dawood had been in Muri earlier where the ISI has its safe houses. As per reports, the mastermind of 1993 Mumbai serial blasts and Dawood’s brother, Anees Ibrahim with his family have reportedly been shifted from his current location.

In evidence to show that Dawood Ibrahim is holed up in Pakistan, a dossier prepared by India listed nine residences of the underworld don in that country and stated that he is known to frequently change his locations and addresses there. Union Home Minister Rajnath Singh, meanwhile, said that Dawood is permanently living in Pakistan though he may be changing locations in that country…


Palestinian terror sponsors to post token bond in finance case

September 2, 2015

Clinton-appointed federal judge George Daniels is allowing two Palestinian entities to pay $10 million for now instead of the $656 million in damages that they owe to the victims of terrorism that they sponsored.  John Kerry’s lawyers at the State Department argued on behalf of the Palestinian entities, claiming that making them a pay a larger bond would impair their ability to govern.  Judge Daniels says he gave “serious consideration” to the arguments made by State’s lawyers.

In the old days, the State Department represented America’s interests to the world.  Now they seem to be acting more like a lobbyist on behalf of terror-sponsoring states (Palestinian Authority, Iran, Cuba…).

From Reuters (h/t Zadok):

U.S. judge says Palestinian Authority must post bond in terrorism case

Source: Reuters – Mon, 24 Aug 2015 16:06 GMT

By Joseph Ax

NEW YORK, Aug 24 (Reuters) – A U.S. judge ordered the Palestinian Authority and Palestine Liberation Organization on Monday to post $10 million in cash or bond while they appeal a jury’s finding that they supported militant attacks in Israel.

At a court hearing in Manhattan, U.S. District Judge George Daniels in Manhattan said the defendants must also deposit $1 million each month pending the appeal of a February jury verdict worth $655 million in favor of 10 American families.

The order came after the Obama administration took the unusual step of urging Daniels to “carefully consider” the Palestinian Authority’s financial condition, saying too high a bond could compromise its ability to function.

A collapse of the Palestinian Authority “would undermine several decades of U.S. foreign policy and add a new destabilizing factor to the region,” U.S. Deputy Secretary of State Antony Blinken said in a court filing earlier this month.

Daniels said that in fashioning his order he had given “serious consideration” to the State Department’s position, despite objections from the plaintiffs that the amount was far too low.

A federal jury in February found the PLO and the Palestinian Authority liable for six shootings and bombings in Israel between 2002 and 2004, which have been attributed to Hamas and the al-Aqsa Martyrs Brigades.

The attacks killed 33 people, including several Americans, and injured more than 450.

The lawsuit, filed in 2004 by U.S. victims and their family members, was brought under a federal statute that automatically tripled the jury’s verdict of $218.5 million to $655.5 million in damages.

A lawyer for the defendants, Mitchell Berger, said the Palestinian Authority was willing to make a $10 million upfront cash deposit and subsequent monthly payments of $1 million but warned that even those funds would severely hamper its efforts to rebuild schools and provide for needy families.

Kent Yalowitz, a lawyer for the plaintiffs, said the money was a “token amount” and criticized the Palestinian Authority, saying it made payments to terrorists in jail…



Iran sanctions relief can fund “bad behavior”

August 7, 2015

Obama administration official Susan Rice says that we should expect that some assets unfrozen in the Iranian nuclear deal will fund Iran’s “bad behavior.”  This behavior includes bomb attacks by Hezbollah against Israel.

This acknowledgment is an illustration that it’s okay for the federal government to allow piles of money to flow to Iran.  But if you as a private citizen sent just enough money to Iran to buy a Persian rug or a can of pistachio nuts, you could be prosecuted or fined.


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