Posts Tagged ‘Bahrain’

h1

New book: Danish company paid off imams

April 7, 2014

Arla, the Scandinavian dairy conglomerate, paid a “significant amount” of money to Gulf state imams in 2006 in exchange for a fatwa declaring Arla’s products halal.

The deal was struck in the aftermath of violent protests that followed Jyllands-Posten’s publication of cartoons depicting Muhammad. Ahmed Akkari, a Danish Muslim who originally helped inflame the “Cartoon Crisis,” makes these allegations in his new book, Min afsked fra Islamism (My departure from Islamism).

The Danish website Metroxpress explained the deal recounted in the book, in which Arla “would donate a substantial sum for a purpose of the [Islamic] scholars’ choice. In return, they would [issue] a statement saying that it is now again religiously acceptable to buy the Danish, Swedish and Norwegian dairy products.”

In other words, the scholars would bless off on Arla products in Bahrain and the UAE and help simmer down the anti-Danish sentiments that they themselves had whipped up about the cartoons in exchange for what was likely millions of Danish crowns to be spent as the imams saw fit.

The 2006 agreement may have been a violation of Denmark’s anti-corruption and anti-bribery laws. Section 299 of the Danish Criminal Code prohibits bribes among private entities in exchange for a “return commission” (ie, kickback). In this case, the return commission for the money paid to the imams was the profits earned from sales stemming from their endorsement of Arla’s products, thus giving Arla an unfair advantage in the Middle East over its competitors who did not arrange similar off-the-books payments there.

For its part, the Arla conglomerate has been arrogant and dismissive about the seriousness of the new allegations, saying that “We have decided to put the matter behind us,” and that Arla will not comment further events from eight years ago.

The cavalier attitude expressed by Arla may be indicative of the broader Danish attitude toward corporate bribery overseas. Denmark, which by most measures has very little corruption, was admonished last year by the OECD for its failure to do more to investigate allegations of foreign bribery. Danish companies were previously revealed to have paid bribes to Saddam Hussein regime officials as part of the scandal plagued UN oil-for-food program.

The 2006 agreement could also be viewed as simple extortion by the Islamic scholars. There would be a precedent for that as well:  shakedowns for halal certification against Denmark by Saudi Arabia’s Muslim World League were revealed last year. The Gulf monarchies and their elites seem to have realized that Danish companies are rather pliant to their demands.

h1

Mookie moves to export the revolution

February 17, 2014

Bahrainis busted for smuggling weapons from Iraq

Bahrain is alleging that Iraqi militia strongman Muqtada “Mookie” al-Sadr is training fifth columnists to seize power in Bahrain when the time is right.

Yet the headline and allegation cannot be read at face value:  this Bahraini newspaper Gulf Daily News represents the ruling Sunni monarchy and so does the legal system that produced the forced confessions of the Shia defendants in the alleged Sadrist plot.

By the way, it is cases like this that Bahrain’s neighbor Saudi Arabia may replicate if and when it seeks to enforce its new informant rewards program.  Like Bahrain, Saudi Arabia has strategic interests in crippling internal Shia dissidents.

That being said, the very real possibility that Sadr would back elements to Bahrain and wait to take over has a definite ring of truth to it.  Iran and its Iraqi ally Sadr would both love to see an arc of Shia control spanning from Aleppo to Manama.

Here’s the Gulf Daily News account, with thanks to LatLongPacific for notifying Money Jihad about the story:

Arms smuggling six remanded

By NOOR ZAHRA,  Posted on Friday, February 07, 2014

SIX men who allegedly smuggled large hauls of weapons into Bahrain were yesterday remanded in police custody for 30 days.

The Bahrainis reportedly travelled to Iraq last year to receive militia training in weapons with Shi’ite strongman Moqtada Al Sadr’s Mahdi Army, according to case files.

They have been accused of conspiring with a foreign country, joining the movement of Al Sadr, recruiting others and being part of a terrorist cell.

They have also been charged with receiving militia training in weapons and explosives.

One of the men, who was arrested on September 25 last year, was allegedly recruited through a middleman in Iraq.

“We went to Iraq and received militia training along with the army of Moqtada Al Sadr,” said the 23-year-old in his statement to prosecutors.

“The Iraqis told us not to get involved with riots in Bahrain, so we will not be arrested over something small.

“They told us to prepare ourselves for when chaos happened and that is when we come into the picture.

“We went to Karbala and received training in AK47s, explosives and RPGs. We also received $400 each.”

His co-defendant, an 18-year-old Bahraini, told prosecutors they used charity money donated by political societies in attacks against policemen…

h1

What’s really behind the Saudi rewards program

February 16, 2014

Saudi Arabia says it will offer rewards to people within the kingdom who provide evidence about terrorist financing that leads to a conviction (hat tip to El Grillo).

It has been rumored that the maneuver is designed to reign in Saudi-backed elements among the Syrian rebels whom Saudi Arabia can no longer control.

Money Jihad suspects that the initiative, which resembles the U.S. Rewards for Justice program, is a Saudi smokescreen designed to placate Western diplomats, U.S. Treasury officials, and international financial watchdog FATF.

Unfortunately, this wouldn’t be the first instance of Saudi deception about a counter-terror finance initiative.

In 2008, Saudi Arabia announced that its central bank, SAMA, would review charitable contributions from Saudi Arabia overseas (which are rife with donations to terrorist causes), but meaningful oversight has never occurred.  Saudi public statements about the SAMA program have been documented to be false.

In 2010, Saudi Arabia’s ulema council issued a ruling against terrorism, but the very same ruling defended zakat, which has often been used by wealthy Saudis to finance terrorist causes.  Saudi pronouncements against terrorism have often focused on protecting its own oil and gas infrastructure, and have pointedly excluded suicide bombers in Israel or Iraq from its definition of terrorism.

In 2014 we are told that Saudi Arabia will pay rewards to those who provide information about terror finance.  If this is actually enforced, Money Jihad predicts that it will be used against Shia dissidents, particularly in its oil rich, Shia-dominant Eastern Province (see related commentary by Amy Myers Jaffe here), or against those who transfer money to Shias in Bahrain or Syria.

It will not be used to curtail Saudi money flowing to Somalia, Bangladesh, Chechnya, or any of the other countries where Saudi Arabia has strategic interests.

h1

Recommended reading: front charities, ATM bombings, and sanctions violations

January 30, 2014
  • Members of a terror cell that bombed ATM machines across Bahrain have been convicted for detonating explosives and laundering money… more>>
  • Money for training of Islamic militants around the world was routed through Vienna by the Turkish charity IHH, reports a Bosnian newspaper… more>>
  • An Iranian-U.S. dual citizen packed 44 boxes of blueprints and technical specs about the F-35 fighter jet and shipped them off to Iran.  Customs agents weren’t fooled by his shipping label: “House Hold Goods”… more>>
  • Four years after it was revealed that IFCO helped funnel money for George Galloway to Hamas, the IRS might strip IFCO of its tax-exempt status… more>>
h1

Bin Laden’s old bank signs £100m London deal

December 3, 2013

Osama Bin Laden used to send money to his operatives through Tadamon Islamic Bank, a sharia-compliant financial institution based in Yemen.  Hassan al-Turabi, the man largely responsible for the imposition of sharia law in the Sudan, also had free access to Tadamon in the 1990s.

Tadamon, now calling itself Tadhamon International Islamic Bank, maintains a “wholly owned subsidiary” investment bank called Tadhamon Capital in Bahrain.  Tadhamon Capital has just reached a £100 million (163 million USD) agreement to build a mixed-use student housing and commercial development on Paul Street in London.

From ArabianBusiness.com:

Bahrain investment firm inks $163m London deal

By Andy Sambidge

Saturday, 30 November 2013

Bahrain-based Sharia compliant investment firm Tadhamon Capital has announced the acquisition of its second Central London development in a deal worth more than £100m ($163m).

It said the Paul Street development was concluded in a joint venture with Apache Capital and McLaren Property following the full letting of its first prime London student development, Paris Gardens.

The Paul Street development will be comprised of three blocks, two of which will contain 456 student accommodation units with a 1,550 sq ft ground floor retail space, with the third block consisting of a stand-alone office building.

Tadhamon said in a statement that construction work is expected to commence in during the first quarter of 2014 with completion targeted by the end of Q3 2015.

It said the investment is expected to generate a minimum average annual net cash yield of 7.3 percent.

Paul Street is located on the northern fringe of the City, within proximity of the fashionable areas of Hoxton and Old Street.

Waleed Abdulla Rashdan, CEO of Tadhamon Capital, said: “Over the past four years we have taken a strategic decision to expand our investments within the UK and have since focused on building our social infrastructure platform.

“To date, we have successfully closed 10 transactions at a total value of £240m… We will continue exploring further opportunities within these sectors as part of our platform as they have proven their resilience to market changes, and continued their marked growth.”

He added “Over the past years we have established a solid real estate investment platform which will be used to replicate our success and experience within the UK to invest over the next 18 months in selected cities within the EU, US and Turkey.”

h1

Taliban doles out Rs 150 million in funding

February 18, 2013

Freelance journalist Syed Shoaib Hasan reports that the Muraqaba shura, a council of regional Taliban and Al Qaeda faction leaders, routinely distributes millions of rupees to affiliated terrorist tribal organizations at two to six week intervals.  In an example from May of 2012, the shura disbursed 70 million to the Pakistani Taliban, Rs 50 million to another Taliban faction, between RS 30 and 40 to the Islamic Movement of Uzbekistan, and smaller amounts to Harkat ul-Mujahideen and Jaish Mohammad.

In his piece, Hasan also analyzes the history of financing militancy in Afghanistan and Pakistan since 9/11.  He argues that forcing front charities to register with the government actually worsened matters by giving terrorists the patina of legitimacy and access to the international financial system.

Complicating the fight against terrorist financing is the militants’ new tendency to steer donations to small trusts affiliated with mosques rather than madrassas, which is more difficult to track.  Hasan reveals that one in three mosques in Karachi admits to funding militants.

Hat tip to Sal and Colby Adams for sending this over via Twitter.  From Money Matters magazine:

The militant economy

The slush funds accumulated by the militants were fed into the global financial system and were fed into the global financial system and were used to buy legimate businesses involved in construction, shipping and transport. Revenues from these concerns are now fuelling the insurgency

By Syed Shoaib Hasan

On a bright May afternoon in 2012, five men with assault rifles strode into a two-storeyed building near the bazaar in Miramshah. All wore their hair long and oiled under their Chitrali hats but the rangy frame, the narrow, aquiline nose and deep-set eyes instantly betrayed Zulfiqar alias Hakimullah Mehsud, ameer of the Tehreek-e-Taliban Pakistan. An hour later the coterie emerged, with a staggering Rs70 million in cash.

The money was Mehsud’s share from a fund administered by the Taliban’s Shura-e-Muraqibat (Council of Common Interest), ostensibly an oversight committee that handles matters related to various militant groups headquartered in the tribal areas. (While some western news agencies have described it as an Al Qaeda-formed and managed entity, the shura is clearly of Taliban origin and character.) But managing and distributing funds from the Afghan Taliban structure – ‘the emirate’, as it is referred to in militant circles – is one of its primary functions.

Disbursed at two- to six-week intervals, these funds comprise the largest chunk of revenues for all militant groups in the tribal region – barring the Arab Al Qaeda – and, for some, are the only source. That May, other than the TTP, the Taliban factions headed by Hafiz Gul Bahadur and Mullah Nazir got Rs50 million each while the former Islamic Movement of Uzbekistan, now known as the Islamic Movement of Turkestan, got between Rs30 million and Rs40 million. Other recipients of these stipends from the emirate include the Taliban faction of Omar Khalid as well as splinter factions of the Harkatul Mujahideen and Jaish-e-Mohammad and the Takfeeri Group of the Lashkar-e-Taiba. (Some analysts believe that the TTP also funnels money from its share to the Punjabi Taliban.)

The money is to cover the operational costs of militancy. The bulk of it is, of course, spent on arms and ammo. The rest is distributed over transport costs; communications equipment (including satellite and cellular phones as well as walkie talkies) and – in an interesting sign of the times – media cells. (The Afghan Taliban themselves, for example, have a 100-plus dedicated media cell staff that operates a website available in five languages and manages high-tech studios with editing facilities.) Besides this, small amounts are also made available for the ‘shuhuda fund’, which enables payments between Rs5,000 to Rs10,000 for the families of the successful suicide bombers.

The 9/11 shift

The role of the emirate in funding is relatively new. Before 9/11, most militant groups operating in the Af-Pak region drew funds from two main sources: the Pakistani and Middle Eastern Islamic states and large and small private donors. From the times of the Afghan war till about the nineties, say militants, the size of this pie was around $6 billion. Historically, as much as two-thirds came from the states, with Saudi Arabia leading with contributions that went up to 50 percent of total funding. Close on the kingdom’s heels were Iraq and the Gulf Arab states.

Post 9/11, the situation changed. The US-led crackdown on militant groups began with the now-famous ‘follow the money’ directive and the US Patriot Act of 2001. As a result, funds from state sources all but dried up. As the world and Pakistan woke up to the abuse of hundi and hawala – the traditional trust-based system of money transfer in vogue for money transfer to militant organisations as well as conventional Islamic charities – private donations also disappeared.

Over the next 18 months, the flow of money to militant groups ebbed to an all-time low. The period coincided with the time militant operations were at decade-long nadir and many in Pakistan were quick to call it the ‘end of jihad’ in the region. That could well have happened – without funding, the militants could not have continued undermining the US-dubbed ‘War on Terror’. But a loophole emerged – inadvertently provided by the Pakistani authorities themselves, as they looked to close down all non-formal avenues for money transfer.

A better mousetrap

In their bid to screen all ‘suspicious’ transactions, the authorities hit many Islamic charities and some individuals suspected of transferring funds for militant operations. While a few were involved – the Al Akhtar Trust, for example – most were simply what they said they were: welfare organizations and people working primarily among the urban and rural poor. Accordingly, after a thorough examination of their sources of funding, these groups and individuals were allowed to continue their activities.

However, in order to distinguish them from the militant groups, the charities were required to register themselves and maintain bank accounts for financial transactions. This ensured that only those who had valid ID cards issued by the then newly instituted National Database Authority (Nadra) could open bank accounts. Further, the move also ensured that even where occasional hawala transactions were used, the monies did eventually cross banking lanes and were thus documented. The final salvo was the provision of a list of proscribed organizations – the Lashkar-e-Taiba, the Sipah-e-Sahaba Pakistan, Tehreek-e-Nifaz-e-Shariat-e-Muhammadi and Tehreek-e-Jafria Pakistan, among others – to the State Bank of Pakistan, which was to make sure their accounts were frozen.

At the time, this may have seemed a leak-proof system, especially to western observers. But in a corrupt third world bureaucracy, there were more holes in this ‘fool-proof’ mechanism than Swiss cheese.

Step up and identify yourself

For starters, the basis of the system – the newly introduced CNIC – could easily be subverted. Read the rest of this entry ?

h1

Bahrain enlistments triple that of U.S.

May 14, 2012

As a proportion of their labor force, 3.3 percent of Bahrain’s men serve in the Bahraini armed forces while just 1 percent of America’s labor force serves in the U.S. military, according to 2009 data from the World Bank.  Bahrain’s trend line is shown in blue and the U.S. is in red in this chart depicting the data:

American and Bahraini soldier participation

Armed forces personnel (% of total labor force)
Data from World Bank, chart by Google

U.S. service levels have remained consistently under 2 percent for at least the last 20 years.  Bahrain’s has fluctuated anywhere from as “low” as 3 percent to a high of nearly 8 percent in 1995.

Do you think that when colonialism by Europe ended, or that as the U.S. reconsiders its involvement in the Middle East, that no military power would seek to fill the void caused by our departure?

These Islamic countries are addicted to military power—it helps them threaten Israel, to crackdown on their own populations, and to engage in perpetual border wars with jealous Arab neighbors.

h1

Sharia lobbyists target Bermuda

January 25, 2012

In an extension of the ongoing Caribbean Islamization spanning from Venezuela to South Florida, the North Atlantic island of Bermuda is poised to become a gateway for sharia finance.  From EuroMoney on Jan. 18:

Bermuda looks to pioneer Western Shariah-compliant hub

The favourable tax haven is actively seeking to become the first Western centre to provide a Shariah-compliant platform by reviewing its existing legislation.

Bermuda is set to become the first Western centre for Islamic finance in a favourable tax domicile, as the region looks at existing legislation to accommodate a Shariah-compliant platform for such vehicles and products.

In an exclusive interview with Euromoney, executives at Business Bermuda, a non-profit business lobby group that works with the Bermudan government, revealed it is actively educating and pursuing potential clients in Asia and the Middle East, while also working on reviewing existing laws to eventually launch a Shariah-compliant platform for investors.

“We are looking at the Shariah side of Bermuda’s legislation to become the first Western centre for Islamic finance,” says Peter Hughes, group director of Apex Fund Services who also works with Business Bermuda. “We are looking to launch a Shariah platform that will allow us to have Shariah vehicles and products, which would enable us to become the first one of its kind. We have made a real push into this niche area.”

Islamic finance centres around Shariah compliancy – Islamic law derived mainly from the Koran and Hadith. Shariah-compliant finance has consistently grown during the past 10 years, with Western financial institutions looking to tap into the burgeoning markets.

Shariah-complaint finance has become a trillion-dollar business, with sukuks – commonly seen as an Islamic bond, but are actually certificates representing participation and ownership rights in an underlying asset – being one of the largest product sectors.

According to KFH Research, an Islamic investment research firm that is a direct subsidiary of the Kuwait Finance House, sukuk issuance in 2012 is set to increase by 25% to 30% and break the $200 billion barrier. The note says that despite a raft of challenges faced by industry, much like the rest of the world, sukuk issuance will continue to grow.

In 2011, sukuk market issuance grew by 88% compared to 2010.

Cheryl Packwood, CEO and deputy chairman of Business Bermuda, said that the continual growth of Islamic finance and stronger ties with Bahrain and Malaysia led to a focus on developing existing Bermudan legislation more than 18 months ago.

We now have strong links in Bahrain and there is a commonality of wanting to create a niche jurisdiction for Shariah compliancy, that is closer to the US timezone,” she says. “We are also focusing on Kuala Lumpur in Malaysia, as it has an enormous sukuk market. The process for getting this off the ground may be slow but we have the Bermuda Monetary Authority and the Bermuda Stock Exchange behind us.”

The burgeoning Bahrain-Bermuda relationship is not encouraging from an anti-money laundering standpoint.  Bahrain still has no legal means of freezing assets that are laundered or fund terrorism.  Bahrain’s Islamic finance sector recently received a major black eye when an audit of one of its major sharia banks revealed 58 potential criminal offenses by its CEO.

Shariah Finance Watch has speculated that the purpose of introducing sharia finance to Bermuda is to spread Islam and sharia law.  That is certainly a factor.  We must also be concerned that an island nation that is a known tax haven is being specifically targeted by sharia advocates.  One might even wonder if the ruling Sunni elites of Bahrain are attempting to off-shore their wealth and protect their long-term self-interests in case Bahrain’s Iranian-backed Shia majority succeeds in an Arab Spring coup.

Bermuda has growing internal problems as well.  Four ex-Guantanamo detainees live in Bermuda.  Bermuda also appears to be facing a rash of street gang violence with possible Muslim involvement.  The introduction of sharia wealth to the island will probably lead to new mosques and Islamic centers.  Given the history of Gulf-funded mosques, such future mosques are unlikely to be “moderate.”

h1

Obama’s flawed sanctions chief ends Arab trip

December 21, 2011

David S. Cohen, a former Clinton lawyer who Pres. Obama entrusted with a sanctions regime that is supposed to provide for the nuclear containment of Iran, is wrapping up a four-day trip to Saudi Arabia and Bahrain.

The State Department says that Mr. Cohen was conferring with officials in those countries about sanctions against the Central Bank of Iran and against Bashar al-Assad’s regime in Syria.

Surprisingly, although Bahrain shockingly has no legal means of freezing assets in its own country, there is no indication that Mr. Cohen addressed this shortcoming with officials in Manama.

Mr. Cohen has consistently misled the American public about the level of Saudi cooperation in combating terrorist financing.  Consequently, it will be difficult to judge the truthfulness of whatever statements are released at the conclusion of this trip.

Moreover, after Mr. Cohen back-stabbed U.S. Sen. Bob Menendez (D-NJ) during backdoor negotiations on Iran sanctions, one wonders what would make Arab officials trust Mr. Cohen.

Seeking cooperation on sanctions is a good objective, but sending a flawed messenger indicates Pres. Obama’s lack of seriousness about sanctions against Syria and Iran.

h1

Top sharia banker commits 58 criminal offenses

November 15, 2011

Majid Al Refai was no ordinary bank employee–he was the managing director and founding chief executive officer of the billion dollar Bahraini sharia financial institution known as Unicorn Investment Bank.  Prior to that, Mr. Al Refai was the deputy CEO of UBS’s Islamic finance entity, Noriba.

Sharia finance CEO

After auditors released their findings, Unicorn sought to distance itself from Al Refai’s deeds, claiming that “The alleged criminal offences relate mainly to transactions by Mr. Al Refai which were not approved by the Board of Directors.”  Mainly, but perhaps not exclusively…  Here’s Unicorn’s press release from earlier this fall:

Towards the end of 2010, Unicorn Investment Bank submitted a criminal complaint against its former CEO, Majid Al-Refai, to the General Prosecutor of the Kingdom of Bahrain. The General Prosecutor subsequently commissioned renowned global advisory firm Deloitte to conduct an independent investigation into the matter. The Deloitte report concluded that there were 58 alleged criminal offences committed by Majid Al Refai during his tenure at Unicorn, and the General Prosecutor has now referred the case to the Criminal Court of the Kingdom of Bahrain.

It is important to note that several reports issued in 2010 by the Central Bank of Bahrain, PriceWaterhouse Coopers and Ernst & Young arrived at similar conclusions to those detailed in the above-mentioned Deloitte report. The alleged criminal offences relate mainly to transactions by Mr. Al Refai which were not approved by the Board of Directors of Unicorn; personally appropriating and squandering Bank funds; shredding and destroying over 8000 Bank documents; and deliberately preventing the Bank’s partners, associates and other authorized entities from accessing Bank documents, thereby contravening the laws of the Kingdom of Bahrain and the rules and regulations of the Central Bank of Bahrain.

The Bank has also filed two civil cases against Majid Al-Refai and two other former employees of the Bank to retrieve funds that were misappropriated. Consequently, the Bahraini authorities have placed two travel bans on Majid Al Refai in Bahrain. Furthermore, the General Prosecutor has instructed all banks in Bahrain to freeze Majid Al Refai’s assets.

Unicorn confirms that the above-mentioned legal proceedings, which are ongoing since September 2010, are all within the jurisdiction of the Kingdom of Bahrain, and do not affect the ongoing operations of the Bank.

h1

Shia revolutionaries in Bahrain funded by khums

June 6, 2011

The chief investigator of 21 agitators has testified before a Bahraini court that the defendants were working with Iran and funded by khums, Shia Islam’s 20 percent tax on gains. The investigator stated that the men received the khums in cash along with marching orders from Hezbollah.

This conforms to what we already knew about 1) the historical role of khums in funding “jihadi movements” including the Iranian Revolution itself, and 2) the role of khums in funding Hezbollah, and 3) the role khums was reported to play last year in a failed Shia Bahraini coup.

From the Muslim News on May 22:

…At the hearing of the prominent 21 activists, Lieutenant Isa Sultan was brought as a witness. Isa Sultan is the person in charge of the case and investigations. According to people present at the hearing, he was sweating and appeared very nervous. He said that the defendants were working in coordination with Iran as they all followed Velayat-Al-Faqih and wanted an Islamic Republic. He also said that they received payments of “Khums” which is Islamic taxation. The lawyer asked him how he knew this if there were checks or such, and he responded that they received it all in cash and then used it to buy gas and car tires for the youth to burn on the streets. He then said that the defendants were receiving directions from Hezbullah who told them they must achieve a constitutional monarchy…