Evolution of terrorist financing methods following increased law enforcement surveillance

¶ … Technology for Terrorist Fundraising Activities

Over the last ten years, the way terrorist organizations have been funding their operations has been increasingly evolving. Part of the reason for this, is because law enforcement has greater tools in going after these groups. What has been happening is a host of different governments around the world have been giving them: increased powers to conduct surveillance and other covert activities against these organizations. A good example of this can be seen with the passage of: the Terrorism Act (in the UK) and the Patriot Act (in the United States). In both of these laws, investigators are given greater authority to: conduct electronic surveillance and arrest those individuals suspected of supporting terrorism. (Yogev 2008) This is important, because this kind of shift has meant that many traditional sources of financing have been facing increased amounts of surveillance and monitoring.

Furthermore, Levitt (2008) found that, "Until the September 11, 2001 attacks, combating the financing of terrorism (CFT) was not a strategic priority for the U.S. government. In the wake of these events, the United States dramatically increased its focus on combating terrorist financing, designating and freezing the assets of numerous terrorist financiers and support networks, prosecuting individuals and entities for providing material support, as well as increasing its focus on following the money as a means of collecting financial intelligence. The U.S. government also made a variety of structural and organizational changes designed to enable it to better address this key threat." While at the same time, he observed that, "The European Union (EU) established terrorist blacklists, among other actions, and a number of the Persian Gulf countries put regulatory regimes in place to govern this arena. The private sector's role -- and its importance -- in the global efforts to combat terrorist financing also increased. While the United States led the international charge on these issues, two international organizations -- the United Nations (UN) and the Financial Action Task Force (FATF) -- also deserve credit for the scale of the global response since September 11th." (Levitt 2008) This is significant, because it is showing how the overall way that law enforcement is going after terrorist organizations have changed. As a result, this has meant that many of these groups have been forced to: shift their tactics in how they are conducting their operations and funding various activities. To fully understand this change requires looking at: the technology and strategies that are being used to finance these groups. Once this takes place, it will provide the greatest insights as to how terrorists are using various forms of technology to conduct a number of fundraising pursuits.

Examine the Use of the Technology for Terrorist Fundraising Activities

Traditional Financing Activities

The traditional use of financing of terrorist operations has mainly occurred through different charities. This is when they would utilize a nonprofit organization to collect funds directly from local communities. In most cases, these groups will represent themselves as entities that are supporting equality and human rights. Yet, beneath the surface they are directly funneling the money that they are receiving to terrorist groups. As, these activities were controlled by a central command and control structure that was often directly linked to the organization itself. Where, the higher echelons of the group will have the power over the message and kind of fundraising activities that they are involved in. Prior to the September 11th attacks, this was the most common way that many of these terrorist organizations were funding their operations.

However, since that time many different groups have been seeing law enforcement directly target these charities. As, they have been able to shut down a number of operations and disrupt the financing activities to a variety of cells. A good example of this can be seen with the 2009 arrest of Faisal Mustafa (the head of the Green Crescent Charity) by authorities in Bangladesh. On the surface, it appeared as if he was running a series of religious schools throughout the country. However, in reality he was conducting financing operations for Al Queda to purchase weapons and ammunition. This is important, because it shows how this avenue has been facing increased amounts of monitoring, which means that many of these organizations have been changing how they are financing their operations. (Bangladesh Arrests British Charity Chief 2009)

At the same time, many terrorist groups have received funding directly from governments that are known to be sponsors of these activities (such as Iran). This is because many weaker nations, (that are hostile to the West) will often support these activities to directly challenge their interests. At the same time, this is used to create panic and fear about remaining in a particular area. Once this occurs, it can cause economic activity and the political stability of select regions to be brought into question. This is problematic, because the direct funding of these activities means that more groups; can be able to conduct a variety of terrorist operations around the world. This will increase the amounts chaos in many areas that are of strategic importance to the global economy.

Evidence of this can be seen with comments from former Secretary of State Condoleezza Rice who said, "Iran has been the country that has been in many ways a kind of central banker for terrorism in important regions like Lebanon through Hezbollah in the Middle East, in the Palestinian Territories, and we have deep concerns about what Iran is doing in the south of Iraq." (Bruno 2008) This is significant, because it shows how this is continuing to be utilized as a way to finance various terrorist activities.

However, this form of financing has been facing increased amounts of scrutiny from law enforcement. This is because; the laws that were enacted after the September 11th terrorist attacks are allowing governments to: directly target and take action to disrupt these activities. To include: having a ban on selling arms to countries that sponsor terrorism, diplomatic immunity to allow to victims to sue these government in civil court, a prohibition on businesses conducting activities with these nations and serve restrictions on the assets of these governments. This is significant, because it shows how this form of financing has been facing increased amount of focus. (Overview of State Sponsored Terrorism 2008)

As a result, the traditional forms of financing for terrorist activities have been continually shifting. This is because; these groups want to avoid having their activities detected. As, this can contribute to: major disruptions for terrorist operations around the globe and it can have an impact on their ability to conduct an attack. Once this takes place, it makes it more challenging for these individuals and their leaders to operate. To address these issues, many groups have begun to diversify how they are financing their organizations by: using other ways to avoid detection and provide continuing assistance to various cells around the world.

The Changing Tactics of Terrorist Organizations

The increased amounts of focus on traditional sources of financing; have meant that many terrorist groups have begun to use technology as part of their fundraising strategies. This is because technology can be augmented, with other activities to increase the overall reach of these different organizations. Over the course of time, this has meant that many groups will often focus: on using online and offline tools to achieve this objective. Where, they can utilize them in conjunction with various forms of technology to: improve the effectiveness of their activities. As a result, all of these groups have been using these different tactics to address the challenges that they are facing to include: the use of popular support, entrepreneurial and cyber financing. These elements are important, because they are highlighting how the overall nature of terrorism financing has changed. As, the groups are increasingly using technology to: improve their fundraising capabilities. (Jayasekara 2011)

Entrepreneurial

The entrepreneurial approach is when the terrorist groups will: create legitimate businesses or they will place sympathizers inside an organization. The idea is to provide everyone (who supports their activities) with legitimate resources to continually fund their operations. In some cases, this means that terrorist groups will create legitimate businesses that will support: the activities of the group and anyone who is involved as a part of the business itself. (Jayasekara 2011)

A good example of this can be seen with Al Queda owning a ship named the Seastar. This was used to transport a variety of different products around the between: Sudan and Jordan. The most notable include: cement, sesame and watermelon seeds. This helped Al Queda be able to raise money and hide the financing of their operations. At the same time, it enabled them to transport key personnel and weapons to different areas they had operations. On the surface, this appears to have little to do with the use of technology for financing various activities. However, the creation and use of the ship showed Al Queda, how they could directly become involved in legitimate businesses. (Jayasekara 2011)

As a result, the group began to focus on areas that could give them increased access to funding through use of technology. At the same time, they wanted to place key individuals in areas where they could have an impact on the organization itself. This was accomplished through the use of: international banking, commodities trading, informal remittance systems and the distribution of entertainment products. The use of international banking is when Al Queda would use certain institutions to conduct different financial transactions. This occurred at banks where the group had: considerable amounts of influence or they had inside personnel that could assist them. Over the course of time, this helped to provide the organization with numerous avenues of transferring funds around the world. (Jayasekara 2011)

A good example of this can be seen with Al Queda and the Al Taqwa Bank of Egypt. What happened was, the groups had considerable amounts of influence inside this organization thanks to Youssef Nada. He was a member of the Egyptian Brotherhood that was directly linked to Al Queda. As, he was able to use his influence in the bank to be able to: conduct a number of wire transfers for the group and its affiliates around the world. This is significant, because it shows how terrorist organizations are seeking out individuals and institutions that can help them to improve their financing activities. This is based upon: their ability to wire and launder money through a number of third party locations. (Jayasekara 2011)

As far as commodities' trading is concerned, this has become another popular avenue to be able to finance their various activities. This is not limited to one select group of commodities; instead it is focused on a wide range that can be utilized. Some of the most notable include: diamonds, gold, silver and the sale of oil on the black market. This has become an important part of terrorism financing, because many of these resources are in demand and once they are sold to a third party it is difficult to follow the transaction. To accomplish this objective, they will use technology to interconnect the buyer and sellers together. (Jayasekara 2011)

Evidence of this can be seen by looking no further than, Al Queda becoming involved in the diamond trade in: between West Africa and Europe during the 1990's. What happened was; the civil wars that were occurring in: Sierra Leon and Liberia gave the group the ability to create alternative forms of financing their activities. They were able to use this structure to create a market of buyers across Europe (with majority located in Belgium). To coordinate with them, Al Queda began to: utilize the internet and satellite telephones. This allowed the group to be able to create stable network of financing that could fund their operations in Africa. In 1998, this structure was used to help directly support the U.S. embassy bombings in East Africa. This is significant, because it is showing how the sale of commodities is augmented with the use of technology, to give terrorist groups another form of alternative financing. (Farah 2004)

The informal remittance system is where terrorist groups have set up legitimate businesses in regions where there are conflicts. This provides their operatives with direct access to funding from different sources. At the same time, it allows many people in the region to be able to use these businesses to send and wire money to their relatives around the world. A good example of how this kind of approach has been used by terrorist organizations can be seen with the Al Barakat Blessing Network in Somalia. This group has over 40 offices in various countries around the world. As, this is allowing the relatives of Somali immigrants to: be able to wire money to their family members inside the country. This is important, because while this serves as a legitimate business, it also used to send financing directly to Al Queda-based terrorists and other groups that are affiliated with them. (Jayasekara 2011)

The distribution of entertainment products is when terrorist groups will sell satellite television programming and DVDs to the general public. This type of programming is sold in regions where these groups are dominant. This is often involving: everyone purchasing these services and businesses advertising with them out fear of retaliation (for not using their products). At the same time, the distribution of various DVDs and CDs will help to provide these organizations with additional funding. This is because they can sell some of the more popular titles to consumers. While, they are able to control the content and the image of their group in merchandise that they are selling. In both cases, the use of technology is helping to support the financing activities of terrorist organizations. As, the distribution of: satellite television and the sale of DVDs will involve using select elements to deliver the product to customers. This is augmented with: the use of the internet and select cell phones to create a localized network of distributors. (Jayasekara 2011)

Cyber Financing

Cyber financing is when terrorist groups will often use the internet as a way to directly raise money for their organization. Earlier we discussed about how this is being utilized to connect and coordinate these groups. While this is an important part of their financing strategy, many entities will often use other forms to provide alternative ways to raise money. In this case, they will engage in various illegal activities to help achieve this objective to include: phishing and identify theft. Phishing is when these groups will send emails to unsuspecting individuals posing as their bank or financial institution. They will then ask them for personal information about their account based upon a problem they are having. Once this is provided to these organizations, is the point that they will have access to these accounts. At which point, they will take all of the money out of it and transfer to their organization directly. This is important, because it is showing how terrorists have begun to use technology, to raise money through: directly trying to illicit financial information from unsuspecting consumers. (Jayasekara 2011)

At the same time, they will engage in actions that will try to obtain the personal information about an individual such as: their social security number or date of birth. In this case, they will use the information that they obtain from phishing activities, to begin to assume the identity of the person they are stealing financial information from. This will help the terrorists to avoid detection by law enforcement. As, they can use the identity of an unsuspecting consumer to: hide their activities and move around. This is significant, because it is showing how the internet is helping to give terrorist the ability to hide anonymously behind unsuspecting consumers. Over the course of time, this allows them to continue with their financing activates and avoid being monitored by law enforcement. Once this takes place, it means that they can be able to quietly fund their operations.

Conclusion

Clearly, the use of technology has been having a direct impact on terrorist fundraising. This is because many of the traditional sources (i.e. charities and state sponsorship) have been facing increased amounts of scrutiny. As a result, many of these groups have utilized techniques in conjunction with technology to diversify how they are financing their operations to include: through the use of popular support, entrepreneurial and cyber financing. These different elements are important, because they are showing how these organizations are evolving. As, they are using technology with: some of their traditional and new methods to increase their overall amounts of financing. This is in response to the increased amounts scrutiny that many of these organizations are: receiving from law enforcement and the desire to prevent major disruptions in their operations. Over the course time, this means that the nature of threat is changing. This is because law enforcement must monitor more channels for possible financial activity. As, there are a variety of tools that terrorists are using to: adapt with the changes that have taken place.