Posts Tagged ‘sadaqa’

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Money and the Islamic State of Iraq and Syria

August 11, 2014

In 2007, the Islamic State of Iraq was seen as “the richest of the insurgency groups” in Iraq with $1 billion to 1.5 billion “collected in revenue by the group through foreign donations, enforced taxation and confiscation of the property and funds of Iraqis.” But the U.S. surge and ISI missteps significantly damaged the jihadist group’s ability to raise funds.

Seven years and three names later, ISIS amassed a $2 billion comeback and took control of large swathes of territory in northern Iraq including Mosul and 35 percent of Syria.

ISIS’s financial recovery has been marked by a slight shift away from reliance on local extortion networks (although those are still in effect), improved organizational and financial management by ISIS leader and self-proclaimed caliph Abu Bakr al-Baghdadi, and the departure of U.S. troops in 2011.

The most important elements of ISIS’s funding are sadaqa (voluntary donations) from Arab donors in the Gulf; sales and tolls collected on sales of oil from fields under its control; and increasingly through money made by controlling key infrastructure.

Here’s a rundown of ISIS’s main funding channels:

Sadaqa from private donors

Fundraising is aided by contemporary marketing methods

Oil

  • ISIS controls 60 percent of Syrian oil including the lucrative Omar field
  • In Iraq, ISIS controls Butmah and Ain Zalah oil fields, the refinery in Baiji, and oil and gas resources in Ajeel in northern Iraq
  • ISIS sells or collects a portion on black market sales to Turkey, Iran, and in Syria itself
  • Revenue estimates for ISIS range from $1 million to $3 million daily

Dams

  • In addition to oil, control of key infrastructure such as the dams in Mosul, Fallujah, and Tabqa present increasingly significant revenue potential for ISIS.
  • Professor Ariel Ahram notes this is already occurring at Tabqa, where ISIS is involved in selling electricity.
  • New York Times reporter Tim Arango says that possession of the Mosul dam can enable ISIS to “use it as a method of finance” through extortion schemes to continue their operations.

Other sources

  • Isis has seized arms from Iraqi depots, including U.S. weapons given to Iraqi forces, plus weapons smuggled from Turkey and Croatia
  • The collection of ransom money has sustained ISIS throughout its existence
  • Antiquities smuggling

Incidently, little is being done by the Gulf states to curtail the flow of donations to ISIS because they either want an independent Sunni state carved out of Iraq or to replace Iraq’s Shia-led government with Sunnis. Washington should designate Saudi Arabia and Qatar as state sponsors of terrorism, but it won’t because of diplomatic considerations.

Without interdicting the donations and the contraband oil, U.S. airstrikes will have limited effect on ISIS’s coffers.

This piece is also published at Terror Finance Blog.

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130 requests for zakat, and counting

November 20, 2012

Money Jihad has just added a new page to the website cataloging about 45 previously unpublished requests we’ve received from Muslims around the world asking us to give them money through zakat donations.

Some of the requests claim to be for personal reasons—such as helping somebody with their education or helping them get out of debt—but some have a broader Islamic agenda such as “helping us to raise Muslim power” or “making Islam gain ground.”  Most of the messages don’t request a specific amount.  The smallest amount sought is $200; the largest request hints at $1 million.

Take a look!  Some of them, like one requesting help with “skull fees,” are unintentionally humorous.

There are about 85 separate requests on this old post, too, including a comment that “-Jihad -zakaat, I hope it will go a long way in achieving all predetermined goals.”

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Zawahiri emphasizes Bin Laden’s money jihad

June 18, 2012

Ayman al-Zawahiri, the current leader of Al Qaeda, has released a video playing up the “generous” side of Osama bin Laden.  Zawahiri claims that Bin Laden “spent all his money for jihad.”

Zawahiri uses this Bin Laden fairy tale in order to convince Islamist businessmen to ante up the same way Osama supposedly did.  What’s really happening is that Zawahiri is running into the same cash flow problems as his predecessor.

When he first took command of Al Qaeda, Zawahiri didn’t say much about money.  Now it’s one of his favorite themes.  Accumulating money is one of Zawahiri’s most important means of staying relevant.  In his last few messages, Zawahiri has encouraged Muslims to give their money to support the jihadists involved with Islamist uprisings of the Arab Spring.

In this latest message, Zawahiri claims that Bin Laden used his personal wealth to fund the 9/11 terror attacks—a claim discredited by the 9/11 Commission which found that Al Qaeda was funded “almost entirely” by zakat and sadaqa (donations beyond the 2½ zakat rate).  From the 9/11 Commission Report:

Bin Ladin did not fund al Qaeda through a personal fortune and a network of businesses in Sudan.  Instead, al Qaeda relied primarily on a fund-raising network developed over time.  The CIA now estimates that it cost al Qaeda about $30 million per year to sustain its activities before 9/11 and that this money was raised almost entirely through donations.

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Sadaqa for Allah’s sake will become a mountain

November 6, 2011

Doing something in Islam “for the sake of Allah,” “in the path of Allah,” or “in the way of Allah” often connotes doing it for jihad.  Spending zakat (Islam’s wealth tax) or sadaqa (voluntary giving) for the sake of Allah implies funding jihad.  Even “mainstream” Islamic charities in the West avoid such language because of its disturbing undertone.

But that doesn’t seem to have impeded the boys at Salafi Audio from spreading their message for sadaqa for the sake of Allah.  This recording refers to Ramadan, which took place in August, but was uploaded to the web by an entity called “LearnToReadTheKuran” in October.  In this less than two minute clip, the speaker says that Allah will turn donated sadaqa, no matter how small its size, into the size of a mountain:

Under Islamic law, sadaqa is distributed to the same eight groups of people who receive zakat, one of which is the mujahideen.

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Who really bankrupted Al Qaeda? U.S. Treasury or U.S. military?

February 22, 2010

The March 1 edition of Forbes runs a jarring cover story (with a close-up image of Osama Bin Laden) entitled “Is Al Qaeda Bankrupt?”

Well, maybe, but so is Greece, and it’s not going away anytime soon either.

The article is lengthy, but is well worth a read.  The writer, Nathan Vardi, is more thorough and balanced than others.  For today, however, I’d like to focus on one unpersuasive element of Vardi’s piece, which is the assertion that tougher financial screws from the U.S. Treasury Department are what have put Al Qaeda on the ropes.

Vardi writes that Abd al Hamid al Mujil, a money man for both Osama bin Laden and Khalid Sheikh Muammad, is “out of business,” “largely thanks to efforts by the U.S. Treasury Department and the UN Security Council.”

The article also points out the increasing trend toward self-financing of terror–that is, of Al Qaeda agents using their own funds to wage jihad rather than relying on transfers from Al Qaeda.  Vardi writes, “The change, U.S. officials like [Asst. Secretary for Terrorist Financing David S.] Cohen say, is a direct result of the pressures the U.S. government has placed on terrorist money men.  That has forced al Qaeda to go underground.”

Excuse me, Mr. Cohen, but the change is not a “direct result” of counterterror finance measures from Treasury and the U.N.  That is certainly a factor. 

But another key factor is often overlooked.  Pardon my language in advance, but Al Qaeda had its ass handed to it by U.S. forces in Iraq.  George W. Bush’s strategy worked.  Al Qaeda and the ISI (its Iraq affiliate) were defeated and embarrassed.  Given that most of Al Qaeda’s money came from donations, and that nobody likes to back a losing horse, Muslims stopped donating sadaqa and zakat to Al Qaeda.  Relatedly, this 2008 article from the Washington Post suggested that Al Qaeda alienated Iraq’s Sunni sheiks which led to decreased financial support in the Muslim world.

I cannot prove it at this time, but I believe the unfortunate side effect of Al Qaeda’s declining revenues has been that Persian Gulf donors simply shifted their sadaqa from Al Qaeda to the Taliban.  Why has the Taliban been doing so well financially?  Opium profits?  No, that’s not really the story according to people actually on the ground (Holbrooke, McCrystal, and the mayor of Karachi).

It is bureaucratic arrogance to assert that press releases from the Treasury Department designating terror financiers are going to bankrupt the global jihad against the West.

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Just got your 1040? Well set that aside & check out THIS tax chart!

January 10, 2010

Researchers periodically stumble upon Money Jihad searching for information about tax rates under Islam.  The search engines have sent us folks looking for information on things like “jizya rates, ” “hadith taxes” and “ushr tax.”

To help meet that need, and just as a handy reference for all of us, I’ve added a new Islamic tax chart page to the blog today breaking down the major types of taxes under Islam, who is subject to the tax, what kind of wealth is taxed and at what rates, whether any deductions or exemptions apply, when the taxes are due, and what the basis for the taxes are under Islamic law.

I’ve kept a draft paper copy of this chart on my desk for a while which has been invaluable.  So take a look!  You can click on the link within this post or on the “Islamic tax chart” link on the right-hand sidebar.

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Following the money behind Flight 253

December 28, 2009

AKA Saeed al-Shehri

Did this Guantanamo returnee raise riyals for Abdulmutallab’s bomb?

 

The failed jihadist plot to blow up Northwest Airlines Flight 253 was hatched by Yemen-based Al Qaeda in the Arabian Peninsula (AQAP).  The Yemeni connection has been exposed by many reporters, including Brian Ross of ABC News

The plot to blow up an American passenger jet over Detroit was organized and launched by al Qaeda leaders in Yemen who apparently sewed bomb materials into the suspect’s underwear before sending him on his mission, federal authorities tell ABC News… 

Investigators say the suspect, Abdul Farouk Umar Abdulmutallab, a 23-year-old Nigerian student …says he made contact via the internet with a radical imam in Yemen who then connected him with al Qaeda leaders in a village north of the country’s capital, Sanaa… 

The al Qaeda affiliate in Yemen has increasingly taken on a lead role in coordinating major terror attacks as the U.S. has disrupted al Qaeda training camps in Pakistan, according to American authorities… 

PETN, the explosive used on Flight 253, is expensive.  It would take a major organization like AQAP to procure it.  And just where would they get the money to do so?  Unsurprisingly, they get it from Islamic “donations.”  

Does anybody remember this Reuters article from September, “Yemen’s Qaeda wing seeks donations in Saudi Arabia”?  Keep this formula in mind before you read the article: 

Islamic “donations” = zakat + sadaqa 

Read the rest of this entry ?

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Muslim advice to mourning daughter: pay Islamic taxes in honor of your dead parents

December 17, 2009

An anonymous writer seeking to help her friend whose parents apparently died before conducting the hajj contacted a Muslim-American newspaper in Anaheim, California.  She wanted to know if the hajj could be performed in her parents’ behalf.

InFocus News (IFN) published its answer earlier this month.  After addressing the hajj question, IFN’s “religious advisory board” couldn’t resist adding this unsolicited extra instruction:

It is highly encouraged to offer Sadaqa, Zakat, Udhiya, and perpetual Du`aa’ Maghfira (forgiveness) on behalf of your deceased parents. Rituals performed by a child on behalf of a deceased parent are among the few blessings that continue to count in the book of the deceased even after they have passed.

Zakat is Islam’s compulsory wealth tax of 2½ percent.  Sadaqa is giving beyond that minimum.  (Udhiya is blood sacrifice of an animal, but we’ll leave that aside.)  How would you like it if you wrote a Christian publication for advice on coping with the loss of your parents, and you were instructed to pay extra taxes on their behalf?

It is worth repeating that the beneficiaries of zakat aren’t just charities or the poor.  It has been well-established through the Koran 9:60 and interpretations of Islamic scholars over the centuries that jihad is a legal use for zakat and sadaqa revenues.  (Incidentally, comparing the zakat to Christian tithing is inappropriate for the reason explained on our FAQ page here.)

One hopes that the SoCal readers of this newspaper ignored the advice to give the zakat, which all too often continues to be funneled through Islamic charities in the United States to terrorist organizations abroad.

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The Zakat: Part II

November 7, 2009

Leaving aside the profound flaws of the zakat for the moment, this second post in Money Jihad’s zakat series will address the legal and administrative details of zakat collections.

Who pays & when:  Muslim men and women pay the zakat.  Paupers who are eligible to receive the zakat do not pay the zakat.  However, there are numerous statements in the Hadith to the effect that giving just one date fruit is better than giving nothing.  Payment is due annually at Ramadan.

How much:  The Sahih Bukhari says “For silver the Zakat is one-fortieth of the lot (ie 2.5%)” (2.24.534).  In this passage “silver” has been interpreted throughout Islamic history as liquid monetary wealth, whether it’s in cash, gold, or silver.  The zakat tax rate of 2½ percent should be carefully distinguished from the Christian tithe of 10 percent, or American marginal income tax rates of 10 to 35 percent.  The zakat taxes wealth, not income; that is, it counts against everything a Muslim possesses at the end of their lunar year after paying any debts or expenses.  It is not a tax on profits or net revenues (which are subject to different tax rates, especially among Shiite Muslims).

Just to give you a sense of what the zakat tax rate means, multiply your net worth by 2½ percent.  Compare the result to what you paid in income taxes last year.  If your personal finances are like mine, the two figures are comparable.

Deductions:  With the zakat (somewhat similarly to taxes on personal property such as commercial inventory or privately owned boats in the United States), there is an established threshold value under which no goods are taxed.  In Arabic, this threshold value is known as the “nisab.”  For example, Sahih Bukhari 2.24.534 establishes that no zakat is due on less than 200 silver dirhams (which today would be several hundred U.S. dollars).

Animal wealth:

  • Animal nisab:  Apart from the 200 dirham nisab on monetary wealth, the Hadith outline nisab for animal wealth.  A Muslim pays no zakat on less than five camels or less than 40 sheep.  For animal wealth in general, the zakat is paid with a smaller number out of your animals or an animal of lesser value.  For example, if a Muslim owns between five and 24 camels, he pays the zakat with one sheep.  The larger your herds, the higher animal zakat you’ll pay. 
  • Camel taxesI’m trying to convey the animal tax as simply as possible, but the Hadith’s arcane rules on camel wealth are beyond my powers to condense.  Strikingly, Islam’s tax on money is explained in just one sentence, while the tax on camel wealth goes on for paragraphs after paragraphs.  I suppose this is what happens when a tax system that is supposed to endure for eternity is established in 8th Century Arabia.
  • Horse exemption:  The zakat is not due on horses (Shahih Muslim 2.24.542).  I cannot find a Koranic explanation for the exemption, but I have read elsewhere that it was granted because horses help carry holy warriors in jihad.

Read the rest of this entry ?

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The “richest of the insurgency groups” behind Baghdad blasts?

October 26, 2009

Over 150 people may have died in bomb blasts in Baghdad yesterday.  Somewhere around the eighteenth paragraph of this report, the New York Times finally hints at the culprits of the attack: 

No one has so far claimed responsibility for the pair of bombings, but they were remarkably similar to a pair of coordinated attacks on Aug. 19 that struck the Foreign and Finance Ministry buildings. Those attacks were claimed five days later by the Islamic State of Iraq…

This would be a good time to review just how the Islamic State of Iraq, a jihadist group with foreign (ie, Al Qaeda) leadership, is funded.  Reporting from Britain’s Channel 4 two years ago is worth revisiting:

An Iraqi Security Services report obtained by More 4 News identifies the ISI as the richest of the insurgency groups, estimating that between $1bn to $1.5bn has been collected in revenue by the group through foreign donations, enforced taxation and confiscation of the property and funds of Iraqis (both Sunni and Shia) the ISI accuse of collaborating with the “Crusaders”.

Read the rest of this entry ?

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Taliban revenues: reading between the lines

October 24, 2009

Government officials have appeared to be forthcoming this month about the sources of growing Taliban revenues.  In a speech earlier this month, Assistant Secretary for Terrorist Financing David S. Cohen pointed to drug money and protection payments as major sources of Taliban funding.

The U.S. special envoy for Pakistan and Afghanistan, Richard Holbrooke, blamed “individuals carrying money in their suitcases” during an interview with CNN.  Holbrooke, somewhat more intelligibly, has also addressed donations from the Persian Gulf, hawala financing, and charities.

This week Pakistan’s Interior Minister Rehman Malik said that certain money exchange dealers are financing terrorism, and said the government will be investigating the matter.

The media have weighed in too with a fair summary of funding sources by the New York Times.  Meanwhile, The Times of London confirmed “protection payments” from the Italian intelligence service to the Taliban.

But what’s missing from almost all of these accounts is any examination of traditional methods of Islamic revenue collection.  Read the rest of this entry ?