Caucasus jihadists seek off-grid donations

Islamic State supporters from the North Caucasus are using Russian-language social media and a digital wallet service called QIWI to raise money to “fight against the disbelievers.” Use of the relatively anonymous QIWI service helps avoid monitoring and reporting of suspicious activity.

Thanks to El Cid, El Grillo, and Moscow Ghost for sending in this May 17 report from Radio Free Europe:

IS Militants Use Popular Russian Web Payment System To Raise Cash

A group of Islamic State (IS) militants from Russia’s North Caucasus region are using the popular Russian QIWI wallet electronic payment system to raise money online.

The group’s use of the QIWI wallet sheds light on how individual factions within IS carry out their own fundraising and outreach, and shows that this particular group has managed to raise cash openly using mainstream resources in Russia even though Moscow has banned IS and donating money to it illegal.

The militants involved in the fundraising are doing so through an unofficial Russian-language IS media activist group, ShamToday, which mostly comprises people from the North Caucasus who are with IS in Syria and Iraq…

Read the rest of RFE’s detailed report here.

Terror payola news: recommended reading

• 300 plaintiffs would have their health or loved ones back if it hadn’t been for Arab Bank and the money they handled for Hamas, a jury finds… more>>

• Qatar gave $15 million to the institute that keeps a key U.S. negotiator for peace in the Middle East on its payroll.  The summary in Latin is quid pro quo… more>>
  (h/t Europe News)

• The smoke clears on the history of Hezbollah‘s cigarette smuggling in North Carolina with the publication of Lightning out of Lebanon… more>>
  (hat tip El Grillo)

• The Israel-Gaza rocket war was triggered by a $61.5K contract killing of three Israeli teenagers ordered by Hamas… more>>

• Treasury’s top authority on the subject says, “Qatar, a longtime U.S. ally, has for many years openly financed Hamas”… more>>

• On Hamas’s recent bank robbery of $750,000 from the Bank of Palestine in Gaza City… more>>
  (h/t El Grillo)

• Ukraine lists 172 Russian citizens & 65 Russian companies to be sanctioned “for financing terrorism”… more>>

 

Audio: Moscow funding Donbass militia

Russia claims its 260-truck convoy into eastern Ukraine was just delivering humanitarian aid, not weapons and supplies for pro-Russian fighters.

This would be a good time for a quick review of who has been financing the separatists from the outset of the conflict. Previous reports include:

• Money for the breakaway movement is passed through four Russian banks including state-owned Sberbank;
• Potentially billions of dollars worth of funding was and continues to be provided by former Ukrainian president Viktor Yanukovich;
• Reuters recently reported that weapons for the separatists come from Russia; and
• Pro-Russian forces claim their arms come from Ukrainian weapons depots.

Yet most signs suggest that catspaw elements in eastern Ukraine, such as the “Donbass People’s Militia,” receive funding on orders from the Kremlin. Here’s a report from Buzzfeed last month after the crash of Malaysia Airlines flight 17, which includes the possibility of a 5 percent tax on businesses to fund pro-Russian rebels:

Ukraine Says New Tapes Prove Russia Finances Rebels Who Shot Down Malaysian Plane

DONETSK, Ukraine — Ukraine says it has unearthed new evidence that the separatist militia in the country’s east shot down a Malaysian airliner last week and is funded from Russia, after releasing recordings of rebels discussing strategy and military movements.

Ukraine’s security service, the SBU, posted three recordings to YouTube on Friday that it said were phone taps of the separatists’ political leader, military commander, and the loose cannon rebel it alleges shot down Malaysia Airlines Flight 17, killing all 298 on board. The new tapes could not be independently verified, though the content of some other conversations previously leaked by the SBU — some of which involve the same men — has been proven genuine.

The first tape purports to be a leaked phone conversation between Alexander Borodai, a Russian citizen and prime minister of the self-proclaimed “Donetsk People’s Republic,” and Alexei Chesnakov, a former senior figure in the Kremlin administration and deputy secretary of President Vladimir Putin’s party, United Russia. During the conversation, which has been edited, the men discuss financing the revolt against Kiev’s government with cash from Moscow and debate how to rein in the militia’s mercurial Russian commander, Igor Strelkov.

“The military situation sucks. You know and understand that,” says the man alleged to be Borodai. “The DNR [Donetsk People’s Republic] looks like a dick with Donetsk as the head and it’s not looking promising.”

The man alleged to be Borodai then discusses difficulties implementing a 5% tax on local business that he says is part of a plan prepared by the Russian presidential administration, and then asks the other man for more money.

“The biggest problem I have now is that I’m running out of dough,” he says. “Out of the 150 I took with me, they’re basically all gone, because I gave 50 to Zakhar, a million hryvnia [$85,000] to Igor [Strelkov], plus all the other expenses.”…

Russia-Egypt arms deal worth $2 billion

Egypt may purchase $2 billion in weapons from Russia—a deal which could be underwritten by Saudi Arabia.  Cairo has its eyes set in particular on a batch of MiG-29 interceptor jets.

What are the motives of the players?

The Egyptian military gains a new source of arms and aid after losing some U.S. support in the wake of Muhammad Morsi’s fall from power.

Russia gains financially through the sale and politically by further reestablishing its influence in the Middle East.

Saudi Arabia gets another way of expressing its dissatisfaction with U.S. policy on Syria and Iran.

From the business pages of United Press International:

Egypt said to edge closer to Russian arms package

Nov. 26, 2013

CAIRO, Nov. 26 (UPI) — Speculation persists regarding an emerging Egyptian-Russian military accord that may include the sale by Moscow of a package of weapons systems worth at least $2 billion.

It would likely hinge on Saudi Arabia, a supporter of Egypt’s military-backed regime, underwriting a deal that would be a major boost for Russian efforts to regain influence in a changing Middle East as U.S. power in the region is eroding.

The Saudis, the United Arab Emirates and its partners in the Gulf Cooperation Council have pledged $12 billion to Cairo and have delivered about $7 billion.

There are reports Riyadh has agreed to pay for the Russian arms. But the switch from U.S. weapons — supplied to Egypt since 1979 — back to Russia, the primary supplier to throughout the 1970s will entail a significant expenditure that could signal a possible shift in Arab military procurement policies…

Russia nabs Islamist-funding mobsters

Organized crime is a huge global enterprise generating up to $900 billion per year.  The possible link between organized crime and terrorism in Russia shown by recent arrests poses a disturbingly massive problem which authorities will have to continue confronting.

In this case, money from a Central Asian crime syndicate was being transferred partly by hawala, the traditional Islamic debt transfer system, to Hizb ut-Tahrir, a radical Sunni group that seeks the creation of a new caliphate.

Hat tip to El Grillo for alerting us to the news.  This article comes from Blouin News:

Russia cracks down on gangs financing jihadist terror

On November 25, Russian police detained seven leaders of a large ethnic Central Asian organized criminal group whom they have accused of running an underworld financial operation. Their claim is that this 18 billion ruble-a-year (that’s US$550 million) venture was financing the Hizb ut-Tahrir (Islamic Liberation Party) movement, banned in Russia for its links to international Islamist terrorist organizations. The arrest demonstrates not only Russia’s continuing campaign against jihadist terrorists but also a growing concern about its rise in Central Asia and amongst the Central Asian diaspora.

According to police accounts, the organization, which had more than 40 members, was active in major markets across Russia, including Moscow and the Perm Region. Over 178 million rubles ($5.4 million) were seized in the operation. The syndicate reportedly engaged in fraud, protection racketeering, illegal migration scams and laundering not just its own dirty money, but that of other Central Asians, as well as natives of Azerbaijan, Georgia and Abkhazia. The arrested leaders reportedly held Russian, Georgian, and Uzbek citizenship.

The gang also seems to have been highly structured, with separate sections responsible for each stage of their operation, from collecting the money to transferring it to temporary deposits and then moving funds to shell companies. There were some 120 foreign commercial entities and accounts that they used to launder their funds, and they also made use of the global network of informal hawala “shadow bankers” to move substantial sums internationally without turning to traditional banking channels.

According to the police, they have evidence that the group financed Hizb ut-Tahrir. The organization was banned in Russia in 2003 as an extremist group.  With jihadist sentiment apparently on the rise in Central Asia and more than 5 million Central Asian legal migrants and temporary workers in Russia — and unknown number of illegals, but possibly another 2-3 million — the Kremlin is concerned that such extremist views will spread…

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!

Back on top: U.S. world’s biggest energy producer

Hydraulic fracturing is quickly changing the global balance of power.  This year U.S. has become or will shortly become the #1 producer of oil and gas on the planet.  This analysis comes from the Wall Street Journal:

U.S. Is Overtaking Russia as Largest Oil-and-Gas Producer

The U.S. is overtaking Russia as the world’s largest producer of oil and natural gas, a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations.

U.S. energy output has been surging in recent years, a comeback fueled by shale-rock formations of oil and natural gas that was unimaginable a decade ago. A Wall Street Journal analysis of global data shows that the U.S. is on track to pass Russia as the world’s largest producer of oil and gas combined this year—if it hasn’t already.

The U.S. ascendance comes as Russia has struggled to maintain its energy output and has yet to embrace technologies such as hydraulic fracturing that have boosted American reserves.

“This is a remarkable turn of events,” said Adam Sieminski, head of the U.S. Energy Information Administration. “This is a new era of thinking about market conditions, and opportunities created by these conditions, that you wouldn’t in a million years have dreamed about.”

The U.S. produced the equivalent of about 22 million barrels a day of oil, natural gas and related fuels in July, according to figures from the EIA and the International Energy Agency. Neither agency has data for Russia’s gas output this year, but Moscow’s forecast for 2013 oil-and-gas production works out to about 21.8 million barrels a day.

U.S. imports of natural gas and crude oil have fallen 32% and 15%, respectively, in the past five years, narrowing the U.S. trade deficit. And since the U.S. is such a big consumer of energy, the shift to producing more of its own oil and gas has left substantial fuel supplies available for other buyers. Nations that rely on peddling petroleum for their economic strength and political clout face dwindling market power as a result. Oil prices so far remain high, however, closing Wednesday at $104.10 a barrel, up 18% from a year ago.

Many analyses of energy markets look only at crude oil. But Russia and the U.S. also are major players in natural-gas markets, where they far outproduce countries such as Saudi Arabia, the world’s largest oil producer.

The U.S. last year tapped more natural gas than Russia for the first time since 1982, according to data from the International Energy Agency. Russia’s exports have been crimped by rising competition and the economic slump in Europe. Russia forecasts that its gas production will increase slightly in coming years, but its forecast for this year is below current U.S. production.

The U.S. is also catching up in the race to pump crude. Russia produced an average of 10.8 million barrels of oil and related fuel a day in the first half of this year. That was about 900,000 barrels a day more than the U.S.—but down from a gap of three million barrels a day a few years ago, according to the IEA.

The amount of crude from two of the hottest plays in the U.S.—the Bakken oil field in North Dakota and the Eagle Ford shale formation in South Texas—continues to rise rapidly…

Readers should take a look at this video from Fox News which addresses the strategic implications of this development for U.S. national security.  The shift means a reduced likelihood of U.S. entanglement in Middle Eastern affairs, less risk of disruption due to volatility in and hostility from that part of the world, and a reduced flow of petrodollars to regimes that fund terrorism.

The indirect expenses of jihad

Ernst & Young and the Federation of Indian Chambers of Commerce and Industry (FICCI) have issued a report on emerging trends in the financing of terrorism.  The central argument of the study is that piracy, smuggling, and counterfeiting have been growth sectors for funding terror, and that India and the world need to establish more mechanisms to combat these methods.

The full report is available here, and a news article about it is here (h/t El Grillo).

There is a lot of value to the report, but one component that readers should take special note of is Ernst & Young’s distinction between the direct expenses for terrorism on things like bombs, materials, and attack plans versus indirect expenses for the bigger picture infrastructure of terrorism:  recruitment, gathering intelligence, and public relations.  This chart comes from their report:

This is the distinction that Money Jihad has tried to make over the last several months about the Tsarnaev brothers and the Boston marathon bombing.  (See here and here.)  The attack wasn’t just about the costs of the explosives purchased by Tamerlan, or even his travel expense s to Russia, although that certainly still needs to be explained more thoroughly.

The larger question is the indirect expenses that were made toward jihad in the North Caucasus long before the Tsarnaevs hatched their plot.  These were expenditures made over several decades by the Saudis and Western-based Islamic front charities in spreading Salafism through the Caucasus.  It took millions of dollars to create and support radical new mosques, fake “relief” programs, to pay and provision Chechen militants and their leaders, to buy loyalties and pay-off ambivalent politicians, and to create a mushroom patch of jihadist websites in the mother tongue of the Tsarnaev family.

It doesn’t do much good for the federal government and banks to scrutinize and report on every single financial transaction that we undertake if, at the same time, we ignore the millions of petrodollars and zakat donations that go toward paying the indirect expenses of terrorism and inculcating the next generation of jihadists.

Russia says 50 groups in U.S. raise funds for North Caucasus extremists

According to the Jamahiriya News Agency, Russian intelligence reveals that 50 organizations, many of which are Islamic charities, are actively soliciting and distributing funds from their headquarters in U.S. to terrorist groups in the North Caucasus—the same region where Tamerlan Tsarnaev journeyed prior to the Boston Marathon bombings.  Islamic Relief, the largest Muslim charity in America, is included on Russia’s list.  Read it all:

…According to the Russian Ministry of Internal Affairs, over 60 international extremist organizations, about 100 foreign companies and 10 banking groups participate in providing financial, material and other assistance to the terrorists «touring» the Northern Caucasus. In the U.S. alone, almost 50 organizations are raising funds for the Northern Caucasian extremists. And this is not the entire list of the Chechen terrorists’ accomplices in the U.S.; these organizations began sponsoring the rebels from the moment the bands led by Basayev and Khattab (the latter of which is known to be an emissary of Ben Laden, a staff member of the CIA, and a Canadian citizen who was stripped of his native Jordanian citizenship for his links to American intelligence agencies) invaded the territory of Dagestan.

The following groups are actively raising funds in the U.S.: the Muslim American Bar Association; the Islamic American Center, located in Washington; the Muslim American Council; Islamic Relief/Chechnya appeal, registered with the U.S. Department of State; Islamic City Relief; the Islamic-American Zakat Foundation (president I. Akhmadov); the Islamic Action Center; the Chechen-Ingush Society of America, also known as Chechen relief expenses, with a division called Chechen Relief (president Dr. Mohkammed Musa Shishani); the international Muslim organization Al-Ehsan Charitable Relief Organisation, with its headquarters in Washington; the International Relief Association in Michigan; Islamic Relief Worldwide in California; Mercy International, with its headquarters in Plymouth, Michigan; and the Benevolence International Foundation. In regard to the latter organization, it must be noted that when in January 2003 U.S. intelligence agencies found the head of the foundation, Syrian (or Albanian) American Enaam Arnaut, in the course of investigating sources of financing for Al Qaeda, he admitted that the foundation finances rebels in Chechnya and Bosnia; earlier, in October 2002, U.S. attorney general D. Ashcroft charged him with financing Ben Laden, but when Arnaut stated that the money was going to Chechen terrorists and not Ben Laden, Ashcroft…dropped all charges against him.

The following U.S. organizations also provide various support to Chechen extremists, constantly monitor the situation in Chechnya and conduct political campaigns “in support of the struggling people of Chechnya”: the American Muslim Council; the American Committee for peace in Chechnya; the American Friends Service Committee; and the Islamic Circle of North America.

The role of the organization American Muslim Assistance (AMA) deserves special mention. It is registered with the U.S. State Department, and its main task is «helping our Muslim brothers throughout the world». The director of AMA, Sheikh Hisham Muhammad Kabbani, who is also the chairman of the influential Islamic Supreme Council of America, chairman of the As-Sunna Foundation of America, and the founder and chairman of the Haqqani Islamic Trust for New Muslims, is known as the author of many works on Islam. AMA operates in the Northern Caucasus and conducts active propaganda to discredit the actions of the Russian authorities. AMA often acts under the cover of other Muslim organizations, in particular, the Islamic Supreme Council of America, which unites 15 million Muslims living in the U.S.

Active propaganda and political activity in the interests of Chechen separatists in the U.S. are also conducted by: the online company Amina Network, with an office in Washington; Human Assistance Development International, which has been in existence for 13 years; an Islamic information server for spreading the ideas of Chechen separatism and extremism on the Internet; and the public relations office of Ruder Finn, Inc. The Islamic Charity Foundation and the Council on American-Islamic Relations regularly organize media presentations in support of Chechen extremists, interact on a regular basis with many American analytical centers, and initiate hearings in the U.S. Congress, to which they actively invite consultants, experts and U.S. government advisors…

Islamic Relief USA’s website says that Islamic Relief was one of the first aid agencies in Chechnya in the ‘90s and that it has worked in the North Caucasus since 1995.

Money scheme: Russian mafia conducts tutorials on how to commit car insurance fraud in U.S.

“People would be very shocked to know who is involved,” with the growing number of fraudulent claims, says an insurance industry expert.  Indeed.  From WCCO, the CBS affiliate in Minneapolis, earlier this year:

MINNEAPOLIS (WCCO) – Mark Kulda of the Insurance Federation of Minnesota says anyone involved in even a slight car accident could be at risk for insurance fraud.

“You might be driving down the street and maybe have a very minor accident and that could trigger a case where there could be insurance fraud,” Kulda said. “People would be very shocked to know who is involved.”

Organized crime involved in insurance fraud has gone up from 16 claims five years ago to 53 in 2011.

“There’s evidence that the Russian mafia is here in south Minneapolis setting up fake clinics, staging fake accidents, overbilling, billing for accidents that never happened,” he said.

The criminals cash in by making out on staged collisions and fake personal injury claims – getting as much as $40,000 per person.

“There’s direct evidence to show that those fraudsters are coming here to Minn. and setting up shop,” he said…

New front in economic warfare: business data held for ransom

The cyber-attacks originate “overseas,” often from Russia, but can Iranian-backed hackers or groups like “Izz ad-Din al-Qassam” be far behind?  Surely they can get a mullah to declare fatwa saying that holding data for ransom is permissible under Islamic law, yes?  As long as the purpose is to destroy the “infidel” Western financial system, and especially if the ransom money is used to advance jihad.  From CNN Money:

The article accompanying this video in December also said that “Security firm McAfee on Thursday released a report warning that a massive cyberattack on 30 U.S. banks has been planned, with the goal of stealing millions of dollars from consumers’ bank accounts.”