Financing Al-Qaeda Identifying & Attempting Term Paper

Length: 10 pages Sources: 15 Subject: Terrorism Type: Term Paper Paper: #73415152 Related Topics: Al Qaeda, Counterfeit, Money Laundering, Donald Trump
Excerpt from Term Paper :

82), and through charities, which has been mentioned in this paper in previous pages.

By the middle of the 1990s, the CIA estimated that "...fifty Islamic charities 'support terrorist groups, or employ individuals who are suspected of having terrorist connections'" (Gunaratna, 83). And as to the international "formal" banking infrastructure of al-Qaeda - such as it was prior to September 11, 2001 - President George W. Bush issued executive order #13224, which froze funds reportedly totaling $100 million of organizations and individuals believed to be linked to al-Qaeda. In his statement outlining the freezing of assets, Bush (2001 p. 1) said "Our attack on terrorists finances is progressing. The assets of more than 150 known terrorists, their organizations, and their bankers have been frozen by the United States."

FUNDING the ATTACKS of SEPTEMBER 11, 2001: The publication that resulted from the investigations on the September 11, 2001 attacks (World Trade Center, Pentagon), the 9/11 Investigations (Strasser 2004, 390-91), edited by Steven Strasser, points to specific dollar amounts and precise movement of monies used to carry out the violence in the United States. To wit, the entire operation launched by the hijackers cost between $175,000 and $250,000, according to the FBI. The money to support the operation was moved through Mohamed Yousef Mohamed Alqusaidi, who utilized "...'the banking and wire service infrastructure' of the United Arab Emirates" (UAE) (Strasser 391).

Interestingly, the money that was not spent by the 19 hijackers preparing for their dastardly deeds in the U.S. was sent back to Mustafa Ahmed Alhawsawi in the UAE just prior to September 11, 2001. The explanation, according to FBI documents quoted in the 9/11 Investigations: "...The hijackers would not have wanted to die as thieves, therefore they returned the money that was provided to them."

COUNTERFEIT FUNDRAISING: But as to the cash needed by al-Qaeda members who work in small obscure stealth cells and are spread out around the world in a decentralized strategy of terror, the terrorists are finding creative ways to raise funds today. With no access to banks and any of the networks bin Laden has set up, their sources of funding often boil down to counterfeit activities. "In its training manual, Declaration of Jihad Against the Country's Tyrants, Al Qaeda instructs its cadres about the production and use of counterfeit currency," including credit card fraud, writes Gunaratna (83).

According to testimony before the U.S. Senate Committee on Homeland Security and Governmental Affairs (May 25, 2005), there is compelling evidence that terrorist organizations, al-Qaeda included, are raising money through the sale of counterfeited goods. Committee chair Senator Susan Collins (2005, p. 2) stated that "...the unclassified evidence linking terrorism and counterfeiting is compelling." The senator went on to cite a report by the Secretary General of Interpol that mentioned al-Qaeda (among other groups) as having received funds through the pirating of software, DVDs, and CDs, and Senator Collins also alluded to the International Anti-Counterfeiting Coalition's (IACC) report that (Collins 2005, p. 2) "...there is ample evidence to confirm that terrorist organizations are profiting" from the production and marketing of counterfeit and pirated materials.

Why would terrorist organizations turn to the strategy of selling rip-off CDs and DVDs to finance their attacks? Senator Collins (2005 p. 2) quotes the undersecretary of the U.S. Treasury Department, Stuart Levy: "We have indications [is] hurting for money [and] avoiding formal financing channels and instead resorting to riskier and more cumbersome channels, like bulk cash smuggling." And one very lucrative source of bulk cash is the sale of counterfeit consumer products, Levy added.

The IACC January 2005 "White Paper" cites a recent discovery by Danish officials (2005, p. 27) of "over a thousand crates full of counterfeit shampoos, creams, cologne and perfume" that was linked to "a member of al Qaeda" by the European Commission's Customs Coordination Office. Another raid of counterfeit CDs, this on in Durban, South Africa, turned up documents linking the illegal merchandize to al-Qaeda (IACC 2005, p. 29).

SOLUTIONS for CUTTING OFF AL-QAEDA FUNDING SOURCES: On January 29, 2002, the Deputy Secretary of the U.S. Department of the Treasury,...


Dam, testified before the Senate Banking Committee that thanks to Title III of the U.S.A. PATRIOT ACT, the U.S. was in a better position to keep Bush's promise to "...starve the terrorists of funding" (Dam 2002 p. 1). Title III, called "The International Money Laundering Abatement and Anti-Terrorist financing Act of 2001," requires American financial institutions " terminate correspondent accounts maintained for foreign shell banks." The Act also compels financial institutions to have an "anti-money laundering program in place by April," 2002.

How does the Treasury Department measure success? Dam told the senators besides tallying up the dollars that are known to have been frozen, Treasury counts the number of foreign governments that are cooperating with the effort to block terrorist funds; as of the date of his testimony, Dam claimed that 147 countries and jurisdictions internationally "have blocking orders in place" (Dam p. 2). Treasury even offers "technical assistance to a number of countries to help them develop the legal and enforcement infrastructure they need..."

Meanwhile, Title III the U.S.A. PATRIOT ACT is also an important tool for use by the FBI, according to testimony of Dennis Lormel, Chief of "Terrorist Financing Operations Section, Counterterrorism Division, FBI," who spoke to the Senate Judiciary Committee on October 9, 2002 (Lormel 2002 p. 1). Lormel told the committee that Title III authorizes the FBI to "...seize money subject to forfeiture in a foreign bank account," and to "prosecute unlicensed money transmitters" (Lormel p. 2). Another enforcement tool that Title III gives to law enforcement includes the ability to "data mine the Suspicious Activity Report (SAR), the Currency Transaction Report (CTR), and Currency and Monetary Instrument Report databases" (Lormel p. 3).

ISLAMIC CHARITIES LINKED to AL-QAEDA: In his report to the Senate, Lormel mentioned that the PATRIOT ACT had given law enforcement the power to freeze the assets of several Islamic charities through "Operation Green Quest." Those charities include Al-Barakaat, the Holy Land Foundation for Relief and Development, the Global Relief Foundation, and the Benevolence International Foundation. Typically, the FBI provides information to a court of law and obtains a search warrant to go into the charity, examine the books, and seize assets.

Meanwhile, some caution should be used when federal agencies in the U.S. seize assets of Islamic charities they believe to be connected to Al-Qaeda. That is the viewpoint of Patricia Rodriguez-Rey, whose thesis at the Naval Postgraduate School (Rodriguez-Rey 2006 p. 1) points to the fact that "Islamic charities account for a large portion of humanitarian assistance throughout the world." In her research paper ("A Balancing Act: Anti-Terror Financing Guidelines & Their Effects on Islamic Charities") the writer explains that the law enforcement agency within the Justice Department that handles seizures of charity-related assets is the Alcohol, Tobacco and Firearms (ATF) division. Unfortunately, the PATRIOT ACT policies often "require little proof before assets are frozen and groups are blacklisted" (Rodriguez-Rey p. 4), and that can be unfair and unproductive.

Blacklisting charities runs the risk of indiscriminately affecting all charities through fear of its constituency base," Rodriguez-Rey writes (p. 8). Further, Islamic charity assets have been frozen "or shut down whether guilty or not, in an effort to 'do something' about the problem," the author explains (p. 5). If the U.S. government agencies involved in attempting to shut off funds to al-Qaeda would attempt to embrace a deeper understanding of Islamic charities, such as relating to the "cultural requirements for charitable donation" rather than use a "search-and-seize approach," better results would be forthcoming (Rodriguez-Ray p. 5).

The way in which ATF and the FBI went about their search shortly after 9/11, the author explains, was more along the lines of "guilt by association" than real investigative methods. Rodriguez-Ray suggests that the U.S. law enforcement agencies "build partnerships" with the Muslim community in an effort to create "understanding and cooperation" (p. 67). Moreover, the U.S. should create a "white list" of charities that are clearly not involved in funneling money to al-Qaeda that would balance out the "black list" of charities that are proven to be supporting al-Qaeda (p. 68). This would be a "good faith" gesture to the Muslim community, showing that the U.S. is "willing to work with them rather than against them in the protection of charitable funds" (Rodriguez-Rey p. 68).

COUNTERTERRORISM and REALITY: Matthew Levitt writes in the Jerusalem Center for Public Affairs that "...dollar amount frozen is not the issue" (Levitt 2003, p. 3). What is at issue is "...shutting down the key nodes through which terrorists raise, launder, and transfer funds." And Levitt explains that "counterterrorism is not about defeating terrorism; it is about constricting the operating environment - making it harder for them to do what they want to do..." (Levitt p. 3). Levitt's point is well taken; there will always be terrorists…

Sources Used in Documents:


Abuza, Zachary, 2003, 'Funding Terrorism in Southeast Asia: The Financial Network of Al Qaeda and Jemaah Islamiya', Contemporary Southeast Asia, vol. 25, no. 2, pp. 169-178.

Bush, George W, 2001, 'Terrorist Financing Fact Sheet', from the Office of Public Affairs, U.S. Department of the Treasury, retrieved 21 April 2007 at

Collins, Susan M, 2005, Chairman, Committee on Homeland Security and Governmental Affairs United States Senate, 2005, 'Counterfeit Goods: Easy Cash for Criminals and Terrorists', One Hundred Ninth Congress.

Dam, Kenneth W, 2002, 'Testimony of Kenneth W. Dam Deputy Secretary department of the Treasury Before the senate banking Committee, the United States Senate'. Retrieved 22 April 2007 at
International Anticounterfeiting Coalition (IACC), 2005, 'WHITE PAPER: The Negative Consequences of International Intellectual Property Theft: Economic Harm, Threats to the Public Health and Safety, and Links to Organized Crime and Terrorist Organizations', retrieved 23 April 2007 at, retrieved 22 April 2007 at

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