Posts Tagged ‘accounting’

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Fastidious terrorists are no laughing matter

January 24, 2014

Recordkeeping for purchases as little as 60¢ by Al Qaeda in Mali engendered a lot of mirth and clever commentary in the blogosphere around Christmastime, but there’s a serious implication to the jihadist organization’s techniques.  Al Qaeda’s financial policies indicate that they may well still remain a disciplined and hierarchical group, despite perceived fragmentation and a proliferation of Al Qaeda offshoots over the last five to 10 years.

From the Associated Press on Dec. 29:

TIMBUKTU, Mali –  The convoy of cars bearing the black Al Qaeda flag came at high speed, and the manager of the modest grocery store thought he was about to get robbed.

Mohamed Djitteye rushed to lock his till and cowered behind the counter. He was dumbfounded when instead, the Al Qaeda commander gently opened the grocery’s glass door and asked for a pot of mustard. Then he asked for a receipt.

Confused and scared, Djitteye didn’t understand. So the jihadist repeated his request. Could he please have a receipt for the $1.60 purchase?

This transaction in northern Mali shows what might seem an unusual preoccupation for a terror group: Al Qaeda is obsessed with documenting the most minute expenses.

In more than 100 receipts left in a building occupied by Al Qaeda in the Islamic Maghreb in Timbuktu earlier this year, the extremists assiduously tracked their cash flow, recording purchases as small as a single light bulb. The often tiny amounts are carefully written out in pencil and colored pen on scraps of paper and Post-it notes: The equivalent of $1.80 for a bar of soap; $8 for a packet of macaroni; $14 for a tube of super glue.

The accounting system on display in the documents found by The Associated Press is a mirror image of what researchers have discovered in other parts of the world where Al Qaeda operates, including Afghanistan, Somalia and Iraq. The terror group’s documents around the world also include corporate workshop schedules, salary spreadsheets, philanthropy budgets, job applications, public relations advice and letters from the equivalent of a human resources division.

Taken together, the evidence suggests that far from being a fly-by-night, fragmented terror organization, Al Qaeda is attempting to behave like a multinational corporation, with what amounts to a company-wide financial policy across its different chapters.

“They have to have bookkeeping techniques because of the nature of the business they are in,” said Brookings Institution fellow William McCants, a former adviser to the U.S. State Department’s Office of the Coordinator for Counterterrorism. “They have so few ways to keep control of their operatives, to rein them in and make them do what they are supposed to do. They have to run it like a business.”

The picture that emerges from what is one of the largest stashes of Al Qaeda documents to be made public shows a rigid bureaucracy, replete with a chief executive, a board of directors and departments such as human resources and public relations. Experts say that each branch of the terror group replicates the same corporate structure, and that this strict blueprint has helped Al Qaeda not just to endure but also to spread…

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Islamic Relief’s financial rating tumbles

July 1, 2013

The financial health of the largest Islamic charity in the U.S. has been downgraded by Charity Navigator from four to two stars.  The financial rating lowered Islamic Relief USA’s overall rating down to three stars—IR-USA’s lowest rating since fiscal year 2001.  The following chart is a portion of Charity Navigator’s ratings from the present going back to 2008:

Charity Navigator gives IR-USA low marks

The rating was published in May and reflects data from 2011.  Charity Navigator is widely regarded as the nation’s top evaluator of nonprofits.

A decline in IR-USA’s stated revenues and soaring administrative costs contributed to the downgrade.  IR-USA reported $160 million in donations in 2010 but only $63 million in 2011.  At face value, the plummeting revenues suggest fewer donations, but a more accurate valuation and decrease of in-kind donations of medicine has more to do with the apparent financial nosedive.

In 2011, Forbes reported that Diana Sufian, an independent contractor, was terminated by IR-USA after hyper-inflating the charity’s assets over a five year period.  Sufian used grossly inaccurate valuations of deworming drugs.  The overstatement was no minor bookkeeping technicality—IR-USA’s drug stockpiles represented 75 percent of their stated assets.

Sufian was paid $510,000 for the year in which she was fired for services she performed.  One wonders why Ms. Sufian has never been charged with financial statement fraud.

Rather than being fired by the board of IR-USA over the Sufian drug value catastrophe, the charity’s CEO Adeb Ayoub is paid $168K a year, and has been reappointed by the Obama administration as an adviser to the State Department for the next two years.

IR-USA donates millions of dollars each year to Islamic Relief Worldwide, a UK-based organization that has aided Hamas and whose leadership is linked to the Muslim Brotherhood.  A Department of Justice official has implicated IR-USA for being a conduit for the flow of money from America to terrorist groups abroad.  Russian intelligence indicates that IR-USA funds militants in the North Caucasus—the region where the family of the Boston marathon bombers originate.

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“Anomalies” checker Sudan’s zakat fund

June 24, 2012

Sudan, one of six countries in the world with a mandatory, government-run zakat collection and distribution program, has accused its zakat chief of “administrative anomalies” regarding fund distribution.

The Koran 9:60 requires that the zakat tax be spent on eight groups:  1) the poor, 2) those in temporary distress, 3) the tax collectors themselves, 4) new converts to Islam as an incentive for conversion, 5) captives for their ransom, 6) debtors, 7) the mujahideen, and 8) wayfarers.

The Sudan Tribune is careful in its reporting to refer to the poor as the only eligible group, as is often the case when English speaking Muslims describe zakat in media that may be monitored by Western analysts.  But Sudanese lawmakers understand that Islam calls for a broader distribution of funds.

The zakat chief herself is probably well aware of group #3 above, and may have felt entitled to shave a little off the top.  The best case scenario is that this is just be another example of the miserable state of corruption, theftineffectiveness, extreme overhead, and incompetence of zakat administration throughout the Islamic world.

The more disconcerting possibility is that some of the unaccounted for funds may have been diverted to group #7 in accordance with the Koran.  But without the proper disclosures, we’ll never really know.

Read it all:

Sudan: Lawmakers Grill Sudanese Minister Over Zakat Authority

>Khartoum — Sudan’s minister of social welfare, Amira Al-Fadil, faced volleys of criticism on Wednesday from members of the national parliament who accused her ministry-run Zakat Authority of administrative anomalies.Al-Fadil appeared in the parliament to answer questions regarding a report she previously presented on the operations of the Zakat authority which is run by the ministry of social welfare.

The head of the parliament’s external relations committee Mohammed Al-Hassan Al-Amin said that the director of the Zakat Authority has been receiving instructions to disburse funds to certain quarters instead of giving it directly to the poor as the authority’s mandate stipulates.

“We want the money to go directly to the poor without passing through intermediaries” he told the minister.

Another MP, Aisha Al-Ghabshawi, also criticized the Zakat Authority, accusing it of being involved in investment and commercial activities. She further faulted the Zakat authority for releasing funds through microfinance projects, saying that this has prevented the needy from receiving their money directly.

Similarly, the MP and former media minister Abdella Massar said that the Zakat Authority has turned into a tax-levying institution. He went as far as saying that the Zakat money was being spent on political agendas.

Massar demanded that the Zakat money be sent to the poor as required by the laws that established it.

Reacting to the criticism, the minister Amira Al-Fadil accused the MPs of being subjective. A remark she was later forced to apologize for after MPs insisted that she retracts her statement.

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Muslim CPA concedes payments by Al Qaeda

June 12, 2012

A Muslim accountant in New York City has pleaded guilty to charges of conspiring to provide material support for terrorism (h/t JihadWatch).  The indictment against Sabirhan Hasanoff alleges that he accepted $50,000 from an un-named Al Qaeda operative to carry out tasks in Al Qaeda’s behalf.  One might expect a certified public accountant to adhere to a higher professional standard.

Speaking of professional standards, it used to be that reporters tried to answer who, what, where, when and why, but the Associated Press made no attempt to explain Hasanoff’s motive in this case.

Did Hasanoff, a former senior manager at PricewaterhouseCoopers, do it all for a $50,000 payment?  Given the number of “secular” opportunities that are available in the world to accept bribes, financial need is not a credible motive at all.

Some Islamic businessmen and financial professionals fund terrorism in order to gain street credibility with among ordinary Muslims.  Some are true believers in traditional Islam and who don’t care what any mortal thinks.  Some are both.  Some are simply following the instructions of the Koran, the Hadith, and jihadists who tell them that striving with their wealth for jihad (ie, funding terrorism), will spare them from hellfire and reserve a place for themselves in paradise.

Expecting the Associated Press to look into those motivations is a pipe dream.  But they could have at least reported what mosque Hasanoff attends, what professional organizations he belongs to, whether his co-workers at PricewaterhouseCoopers ever observed anything problematic, whether he was a member of the Muslim Students Association when he attended Baruch College, etc.  Come on, AP—do some legwork.

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Zakat spent marrying off orphan “girls”

September 12, 2011

The Hyderabad Zakat & Charitable Trust (HZCT) in India proudly displays on their website the following chart of their zakat expenditures:

zakat stats

Three observations:

  • Notice that 2 percent of zakat is being spent on “marriages of orphan girls.”  Girls!
  • Three percent is being spent on “Other Schemes.”  No doubt!
  • The figures only total out to 98 percent…
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Link teases

June 29, 2011

• To ease Taliban peace talks, the U.N. will split its list of terrorists in two:  the irreconcilables & those to slip under the sheets with… more>>

• Congressional staffers aren’t happy about a growing “a culture of aid dependency” in Afghanistan.  But what do the Republicans think?  more>>

• We’ll just need a few of your British tax dollars to fund a lawsuit that my cocooned wife and I have against the French burqa ban… more>>

• “What’s wrong?” she asked. “Oh nothing,” said the dismayed inspector looking up from his ledger, “just the largest theft of funds in national history”… more>>

• “Engaging in riba, or the charging of interest? Haram! Blowing up the bank and making off with the cash? Halal!” writes Marisolmore>>

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IRS revokes CAIR’s tax-exempt status

June 28, 2011

The IRS has revoked the tax-exempt status of the Council on American-Islamic Relations.  CAIR hasn’t filed a single 990, a fairly simple tax form required for most nonprofit organizations to submit, in over three years!  (See our related coverage here from last year.)  This is in line with a pattern of slipshod accounting, misappropriation, unknown overheads, missing money, mysterious spending, and unacceptable financial controls by Islamic entities throughout the world.

The Investigative Project on Terrorism hints that CAIR did not file the required paperwork because it would reveal their reliance on foreign funding sources.  That is plausible because, if you were the attorney for CAIR, you too would probably make the decision that it’s better to lose your tax-exempt status than it would be to be prosecuted in federal court for violating FARA, the Foreign Agents Registration Act.  (CAIR’s FARA problem is documented here, which was exacerbated by CAIR’s servile request to Libyan looney-toon Muamar Qaddafi.)  Violations of FARA carry up to a five year prison sentence.

But as a co-conspirator with the Holy Land Foundation in its scheme to fund Hamas, CAIR could be concealing far worse truths than its Gulf revenue stream.  Missing 990s not only means that we don’t know CAIR’s funding sources, but we don’t know much about their expenditures either.  CAIR’s historic involvement in terror finance schemes is chilling.

From the Politico (which notes that CAIR lied to their own reporter for this story) on June 23:

CAIR loses nonprofit status

The Council on American-Islamic Relations has lost its nonprofit status, according to the Internal Revenue Service.

The civil rights group, long accused of ties to radical Islam, is on a list of 275,000 organizations who have not filed the requisite paperwork with the IRS to maintain nonprofit status. Tax law requires annual disclosure of assets, expenditures and salaries for 501(c) nonprofits. Both CAIR and sister organization CAIR Foundation have lost their status.

A CAIR attorney initially told POLITICO that its appearance on the IRS list referred to a defunct arm of the nonprofit, and that CAIR and CAIR foundation were unaffected — a claim that a review of the IRS documents did not support. CAIR then told POLITICO the IRS was to blame, citing a number of other errors that have occurred on the IRS list. However, CAIR could not produce their IRS disclosure forms for 2007 through 2010 — which are required to be open for public inspection.

“We are looking into all of these issues and are working with the IRS to clear things up,” CAIR spokesman Ibrahim Hooper told POLITICO. “CAIR was clearly not targeted or singled in any way by the IRS.”

CAIR was named an unindicted co-conspirator in a landmark terrorism financing trial in Texas. Some Islamic charities facing federal investigations have been advised by attorneys not to file IRS paperwork for legal reasons, but there is no evidence that CAIR is currently the target of a federal probe.

Incidentally, the move helps IRS catch up with its Canadian counterpart, Canada Revenue Agency, which has so far been more agressive on revoking the tax-exempt status of nefarious Islamic charities.

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ISNA’s zakat scandal par for the course

January 25, 2011

ISNA Canada is in scalding hot water for how little of the money it collects in zakat actually goes to the poor.  ISNA Canada is the Canadian branch of the Islamic Society of North America, which was an unindicted co-conspirator in the Holy Land Foundation’s Hamas terrorist financing operation.  The Star has published a devastating article on ISNA Canada’s finances on Jan. 20 based in large part on the findings of a rather brave auditing firm.  The article gives us a rare glimpse into the inner workings of an Islamic charity.

That being said, the article focuses a little too much on the personal mismanagement by Ashraf.  There is a much broader phenomenon pervading most Islamic charities which includes three Koran-based patterns:  1) The use of charitable funds for personal gain.  We’ve seen this everywhere from Pakistan’s zakat ministries to Western Islamic charities.  This is justified by the Muslim charity managers in part because the Koran authorizes those who collect zakat to keep a portion of the zakat.  2)  The Koran mandates that zakat will go toward the mujahideen.  However, terrorist financing is illegal in the West.  That creates a built-in temptation by the Muslim charity leaders to conceal their actual expenses and the nature of their charitable programs.  3) A widespread lack of professional accounting at Islamic organizations.  This is partly a cultural problem of the third world where Muslims have immigrated from, but it also has roots in Islam.  Financially speaking, Islam encourages believers to treat each other with trust, but to treat non-Muslims with doubt and watchfulness.  The prejudice results in greater scrutiny by Muslims of in their transactions with non-Muslims but with meager oversight or controls on their internal revenues and expenditures.

Here’s the Star’s full account (h/t RoP):

Muslim charity squandered money for the poor

Jesse McLean, Staff Reporter

Devout Muslims donated hundreds of thousands of dollars to one of Canada’s largest Islamic organizations on the promise that the cash would be used to help the poor.

But only one in four dollars donated to a special pool of money at the Islamic Society of North America Canada (ISNA Canada) actually reached the needy.

Mismanagement of more than $600,000 is among the findings in a scathing audit obtained by the Star.

A “very small portion . . . is distributed to the poor and needy and the major portion is spent on the administration of the centre,” concluded the 2010 audit of the previous four years.

ISNA Canada is embroiled in controversy, with the audit revealing the practice of giving free perks to family members of a top official; the improper issuing of charitable tax receipts; and the diversion of charity money to private businesses. At the centre of it all is long-time secretary general Mohammad Ashraf, who has recently announced he is stepping down.

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USAID turns up nose at Pakistan

January 24, 2010

Saudi Arabia’s King Abdullah isn’t the only one with an accounting shitstorm, I mean sandstorm, on his hands.  Pakistan still has its own accounting embarrassment after embarrassment.

Most recently, the U.S. Agency for International Development says the lack of financial controls within Pakistan are so severe that the United States should not give foreign aid to Pakistan at this time.  From The Gov Monitor earlier this month:

As the United States prepares to drastically increase civilian aid in Pakistan, the agency in charge has asked for help training the local organizations that will spend that aid money, saying those organizations “do not meet the minimum standards for managing” U.S. government funds.

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Faqih to King Abdullah: Get a grip

January 17, 2010
Al Faqih

Al Faqih

King Abdullah

Saudi Arabia’s top auditor, Osama Al Faqih, has presented King Abdullah with a report of “massive abuse of public funds” throughout the kingdom.  Faqih cited illegal spending and off-budget expenditures.  From Emirates Business 24/7 earlier this week:

Saudi Arabia’s top government auditing body has reported massive abuse of public funds in a report presented to King Abdullah to seek his support for an intensifying anti-corruption crackdown in the world’s oil superpower.

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Ten most revealing terror funding stories of 2009

December 31, 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.

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