Targeting Jordan

Iranian Links to al-Qaeda

Conclusion

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Lebanon may well have come to the West Bank and Gaza. Over the past year and a half, Hamas has adopted traditional Hizballah guerilla tactics such as roadside bombings, short-range rocket and mortar launchings, using squads of terrorists from a variety of groups, and videotaping attacks and potential suicide bombers. In the proud words of Hizballah leader Hassan Nasrallah, “[Palestinians] are now operating against the Israeli occupation with Hizballah methods.” More ominous, there are increasing signs that Hamas may follow Hizballah’s example and broaden its operational objectives to include targeting Americans for attacks. 

Terror in Harmony

At the beginning of the current intifada, Hamas played a surprisingly small role in the violence: Fatah elements were the main force followed by Palestinian Islamic Jihad (PIJ). But after key Hamas bombmakers and military commanders were released from Palestinian Authority (PA) prisons, Hamas quickly became the dominant actor in an umbrella organization of opposition forces including PIJ, the Popular Front for the Liberation of Palestine, and various elements of Arafat’s Fatah organization — such as the Tanzim and Force 17 — under the banner name of the National and Islamic Front. Six months later, Hamas spokesman Ibrahim Ghawsheh described the “harmony” that quickly developed between “the Islamic forces represented in the Hamas and [Palestinian Islamic] Jihad movements and the national forces, especially the Fatah movement.” Ghawsheh explained that this harmony “helped in expanding and diversifying areas of confrontation, especially with the Fatah’s ownership of various weapons.” Since then, Hamas has conducted terrorist attacks independently as well as in joint operations with Fatah under the rubric of “popular resistance committees,” the “Salahadin Brigades,” or the “Return Brigades.”

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Responding to the al-Aqsa Martyrs Brigades’ latest suicide bombing — which threatened to undermine the third straight peace mission of Middle East envoy Gen. Anthony Zinni — the State Department broke with tradition and announced the group’s pending designation as a Foreign Terrorist Organization (FTO), even before Congress completed the process leading to its official listing in the Federal Register.

More telling than this break in procedure, however, is al-Aqsa’s intimate relationship with Yasir Arafat’s own Fatah organization, the dominant faction within the Palestine Liberation Organization (PLO), the Palestinian Authority (PA), and the various Palestinian security forces. Long hesitant to probe too closely into terrorism conducted by Fatah elements for fear of delegitimizing the PA as a peace partner, the State Department’s addition of al-Aqsa to the FTO list underlines both the sharp rise in al-Aqsa terrorist tactics and Washington’s post- September 11 zero tolerance for terrorism.

Who is al-Aqsa?

The infrastructure, funds, leadership, and operatives that comprise the al-Aqsa Martyrs Brigades and facilitate the group’s activity all hail from Fatah. For example, Israel’s Public Security Ministry announced that among the more than 100,000 documents seized from Orient House, the PA’s East Jerusalem headquarters, investigators found documents showing that the PA had transferred funds to Fatah, the Tanzim, and its affiliated fighters. The documents include a July 9, 2002, letter signed by Arafat empowering Kamil Hmeid — a Fatah leader in Bethlehem — to disburse payments to twenty-four Fatah activists, including Atef Abayat, an al-Aqsa commander in Bethlehem. Most of the Brigades’ leadership are salaried members of the PA and its security forces, like Nasser Awais, a full-time employee of the Palestinian National Security Force and a senior al-Aqsa commander. In an official al-Aqsa statement faxed to Reuters, Awais called the designation “a medal of honor that we wear on our chests,” and promised to “continue on the road of resistance and martyrdom unconcerned about the American decision.”

While the State Department maintains that the extent of the knowledge and approval between al-Aqsa, other violent Fatah elements, and senior Fatah leadership remains unclear, Fatah is, by its own admission, al- Aqsa’s parent and controlling organization. Asked if al-Aqsa is under Arafat’s control, senior Fatah leader Hussein al-Sheikh openly responded, “of course, there is control.” In another interview, al- Sheikh confirmed that Fatah controls al-Aqsa “to one extent or another.”

Al-Aqsa members say much the same. According to the Brigades’ Maslama Thabet, “the truth is, we are Fatah itself, but we don’t operate under the name Fatah. We are the armed wing of the organization. We receive our instructions from Fatah. Our commander is Yasser Arafat himself.”

Fatah officials who hold senior positions within the PA also consider al-Aqsa part of Fatah, and, more disturbingly, laud its accomplishments. Arafat’s foreign media spokesman, Mohammed Odwan, confirmed to USA Today that the Brigades are “loyal to President Arafat.” Just two days before al-Aqsa’s latest suicide bombing in Jerusalem, West Bank Preventive Security Organization chief Jibril Rajoub described the group to the al-Ayyam newspaper as “the noblest phenomenon in the history of Fatah, because they restored the movement’s honor and bolstered the political and security echelons of the Palestinian Authority.” Rajoub further asserted that the PA would not dismantle the al-Aqsa Brigades.

Rajoub’s stance will now be tested, in light of both the FTO designation and Secretary of State Colin Powell’s demand that Arafat issue “unambiguous orders to the Palestinian security services to enforce the cease-fire and a serious effort to prevent terror attacks.” The will of security officers on the ground will also be tested, since most al-Aqsa operatives, like Mohammed Hashaika (the al-Aqsa suicide bomber who struck Jerusalem on March 21) are current or former PA police officers.

FTO as a Counterterrorism Measure

Al-Aqsa commander Marwan Zaloum responded to news of the group’s pending designation, promising that attacks would “continue until we vanquish the occupation.” Unfortunately, the FTO designation alone is unlikely to impact the group’s ability to conduct terrorist attacks. The move makes it illegal for Americans to provide the group with any kind of “material support” — including funds, goods, or services — and requires U.S. banks to freeze funds held in its name. As an FTO, members of al-Aqsa can be denied visas to enter the United States. Realistically, the fact that al-Aqsa is a semantic subsidiary of Fatah (its military wing) means that U.S. investigators are unlikely to find bank accounts in al-Aqsa’s name. Nor will they find individuals or front organizations raising funds for al-Aqsa as distinct from Fatah.

Similarly, the denial of visas under the FTO designation will likely have little tangible impact. Self-proclaimed al-Aqsa commanders are unlikely to venture a trip to the United States, and the State Departments hesitancy to address Fatahs role in al-Aqsa terrorism means that the visa ban is unlikely to extend to the groups leaders like Marwan Barghouti and Hassan al-Sheikh.

According to State Department deputy spokesman Philip Reeker, the department is already preparing to take the next important steps. These include listing the al-Aqsa Martyrs Brigades as a Specially Designated Global Terrorist (SDGT) group under President George W. Bush’s September executive order (EC 13224), and listing individual terrorists such as Nasser Awais, Abdel Karim Oweiss, Marwan Zaloum, Maslama Thabet, and Nasser Badawi as Specially Designated Terrorists (SDT) under the 1996 terrorism legislation passed under the Clinton administration. This would subject the group to full financial blocking orders and empower the secretary of the treasury to sanction foreign banks that provide services to those listed. Additionally, the SDGT designation allows the government to block the assets of any individual or organization that associates with designated SDGTs. As a result, Fatah and the PA would be forced to cease funding al-Aqsa and paying the salaries of its members or risk financial sanctions for engaging in financial dealings with an SDGT group.

The “Martyrs of al-Aqsa” group, identical to the al-Aqsa Martyrs Brigades, is already featured among the original slate of groups included on the attorney general’s Terrorist Exclusion List (TEL) established under the USA Patriot Act of 2001. Al-Aqsa’s listing on the TEL, which reportedly used a variation of the group’s name by mistake, should be amended to reflect the name used in the FTO listing. An Immigration and Naturalization Service memorandum guiding regional offices in the implementation of the USA Patriot Act explains that the TEL enhances the government’s ability to deport or deny admission to any alien who, like Barghouti and other Fatah officials, use their “position of prominence to endorse or espouse terrorist activity or to persuade others to support terrorist activity in a way that the Secretary of State has determined undermines United States efforts to reduce or eliminate terrorist activities.”

Shot over the PA’s Bow

The designation of al-Aqsa is a clear message to the PA and its affiliate groups, especially Fatah, that they could be next. In his press briefing, Deputy Spokesman Reeker noted that last year’s Palestine Liberation Organization Commitments and Compliance Act (PLOCCA) report already referred to Fatah elements being “involved in acts of violence.” In the wake of the State Department’s request that Congress facilitate al-Aqsa’s designation as an FTO, Congress will now expect a much more blunt and straightforward assessment of the relationship between Fatah, the PA, and al-Aqsa in this year’s PLOCCA report, to be issued in the next few weeks. Congrshould anticipate a detailed accounting of the nature of the fungible financial links between these organizations. In particular, the State Department should be obliged to explain how it intends to distinguish between terrorist and other funds floating among and between these groups, and between the many individuals who belong to al-Aqsa, Fatah, and/or the PA.

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https://www.washingtoninstitute.org/media/levitt/levitt080102.htm 

Cracking down on terrorist financing demands an all-encompassing approach, targeting not only the full array of terrorist groups, but also the individuals, businesses, banks, criminal enterprises, and charitable and humanitarian organizations that finance terrorism.

Charitable and Humanitarian Organizations

Charities and humanitarian organizations play a particularly disturbing role in terrorist financing. Many present an especially sensitive challenge to authorities, who must discern between 1) legitimate organizations, 2) organizations that are unknowingly hijacked by terrorists who divert funds to finance their activities, and 3) organizations that proactively support terrorist groups.

Long before September 11, U.S. officials were aware that the financial networks of certain charitable organizations were funding terror. For example, investigators looking into the 1993 World Trade Center attack traced funding for the operation back to a company that imported holy water from Mecca to Pakistan. Only now, however, is the trend receiving the attention it properly deserves. A recent U.S. Treasury Department report acknowledged that terrorist activity is financed primarily through fundraising, more often than not through legal, nonprofit organizations. Moreover, Ambassador Francis X. Taylor, the State Department’s Coordinator for Counterterrorism, recently noted, “I believe that terrorist organizations, just like criminal enterprises, can bore into any legitimate enterprise to try to divert money for illegitimate purposes.” Although such manipulation is of tremendous concern, an even more disturbing trend is the effort of some charitable and humanitarian organizations to knowingly raise funds for, or facilitate the activities of, terrorist groups.

Financing Terrorism

Charitable and humanitarian organizations have long been a preferred venue for terrorist financing, with or without the knowledge of the organizations or their donors. For example, on December 14, 2001, federal officials raided the offices of the Global Relief Foundation (GRF) in Chicago and froze its assets. Days later, NATO forces raided GRF’s offices in Kosovo after receiving credible intelligence information that the foundation was involved in planning attacks against U.S. and European targets. GRF raised more than $5 million in the United States last year alone. Although much of this funding likely went to legitimate causes, investigators maintain that GRF served as an important front for al-Qaeda. Other examples of terrorist front organizations include the Hatikva Center (funding Kahane Chai), the Holy Land Foundation for Relief and Development (funding Hamas), and the al-Wafa Humanitarian Organization (funding al-Qaeda).

Facilitating Terrorism

Several charitable and humanitarian organizations have not only financed terrorist groups, but also actively facilitated terrorist operations. For example, the Mercy International Relief Organization (MIRO), along with several similar groups, played a central role in the 1998 U.S. embassy bombings in Africa. At the New York trial of four men eventually convicted of involvement in the bombings, a former al-Qaeda member named several charities as fronts for the terrorist group, including MIRO. Documents presented at the trial demonstrated that MIRO smuggled weapons from Somalia into Kenya, and that Abdullah Mohammad, one of the Nairobi bombers, delivered eight boxes of Wadi el-Hage’s belongings to MIRO’s Kenya office; el-Hage is a convicted al-Qaeda operative, and the boxes included false documents and passports. Other examples of front organizations include the International Islamic Relief Organization (along with its parent, the Muslim World League), the al-Rashid Trust, the Saudi High Commission for Aid to Bosnia, and the Benevolence International Foundation.

Disrupting the Flow of Terrorist Financing

Halting the flow of terrorist funding from charitable and humanitarian organizations is difficult, particularly since terrorist front organizations actively conceal their illegitimate activities under legitimately funded causes. Disrupting the flow of such funding is not impossible, however. Since September 11, the Bush administration has issued a series of financial-blocking orders targeting terrorist groups, front companies, and individuals. According to U.S. officials, intelligence information indicates that terrorist operatives are finding it increasingly difficult to access the funds they need to conduct further attacks, to escape the international dragnet targeting them, or to communicate effectively with cells in different parts of the world. Despite these gains, the United States must commit to a strategy that addresses the following key areas.

International Cooperation

A well-coordinated international effort is needed to target the wide array of organizations that generate and transfer terrorist funds. Many nations have followed the U.S. lead in this regard, blocking millions of dollars in terrorist assets. Nevertheless, a more formalized legal and operational agreement on combating international terrorist financing is necessary.

Gaining Saudi Support

Saudi officials have exhibited, at a minimum, a clear pattern of tolerating funds earmarked for extremist purposes. For example, one Saudi official stated that a Saudi organization created to crack down on charities that fund terrorism has been ineffective because its personnel do not want to uncover high-ranking Saudis actively financing such charities. The Saudis have taken steps to combat money laundering and freeze accounts related to the September 11 conspirators. Moreover, they recently passed new regulations governing private fundraising. Saudis are now encouraged to donate funds only through established groups operating under the direct patronage of the royal family. Unfortunately, some of these approved groups feature prominently on U.S. terrorist lists.

Working with Europe

U.S. officials complain that European allies have contributed few names to the list of alleged terrorist financiers, that most of these contributions have been domestic in nature, and that Europe has yet to act on all of the names that are already on the list. Europeans, in return, have repeatedly expressed their frustration with U.S. requests to add people or groups to terrorist lists without sufficient justification for their inclusion. The European Union (EU) recently added eleven organizations and seven individuals to its financial-blocking list. This list marks the first time the EU has frozen the assets of non-European terrorist groups; unfortunately, it also draws a fallacious distinction between the nonviolent and violent activities of terrorist groups. For example, by distinguishing between the terrorist and welfare wings of Hamas, the EU lends legitimacy to the activities of charitable organizations that facilitate terrorist operations.

Streamlining American Bureaucracy

America’s financial war on terrorism has been hamstrung by bitter turf wars between the Treasury and Justice Departments, whose parallel task forces on terrorist financing reportedly do not share information with one another. Although such inefficiency and territoriality are disconcerting, they pale in comparison to the strategic gap seen in policymaking circles. If they are to bear any fruit, counterterrorism techniques must be as comprehensive, continuous, and cooperaas possible. In order to dismantle the logistical and financial support networks of terrorist groups and prevent terrorist attacks, the governments and agencies involved must act in concert and, at a minimum, mirror the resolve displayed by terrorists themselves.

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Abstract: Political terrorism has long been a key feature of Middle Eastern politics given the high degree of conflict, relative ineffectiveness of direct military means, ideological rationalizations, and willingness of states to sponsor such activities. The aftermath of the September 11, 2001, attacks on the United States and the subsequent American war against terrorism have focused attention on the financing of such movements and operations. The lines of political influence follow those of economic assistance. This article analyzes the state of knowledge regarding this issue.

Political terrorism, often sponsored by states, has long been a major factor in Middle East politics. Terrorist groups’ ability to act more frequently and effectively is closely linked to financing. Such patronage today, however, is proportionately less in the hands of state sponsors. While Iran and Syria continue to back international terrorism, groups increasingly finance their own activities through a network of charitable and humanitarian organizations, criminal enterprises, front companies, illicit and unregulated banking systems, and the personal wealth of individual militant Islamists. This article highlights the network of sub-state actors that, on their own and in concert with state and other sponsors, finance such movements and activities.(1)

The synchronized suicide attacks of September 11 highlighted the critical role financial and logistical support networks play in the operations of international terrorist organizations. According to the FBI, the attacks cost between $303,672 and $500,000.(2) In contrast, after his capture in 1995, Ramzi Yusif, the convicted mastermind behind the 1993 bombing of the World Trade Center and other attacks, admitted that the terrorists were unable to purchase sufficient material to build as large a bomb as they had intended because they lacked cash. In fact, the operation itself was rushed and carried out earlier than planned because the cell simply ran out of money. In the end, the terrorists’ attempt to reclaim the deposit fee on the rental truck used to transport the bomb provided a key break in the case.(3)

The al-Qa’ida suicide hijackings underscored the post-blast, investigative utility of tracking the money trail, but they also drove home the critical need to preemptively deny terrorists the funds they need to conduct their attacks. Early financial leads in the September 11 investigation established direct links between the hijackers of the four flights and identified co-conspirators, leading investigators to logistical and financial support cells in Germany and elsewhere in Europe as well as in the Gulf. Financial leads led investigators to key al-Qa’ida operatives and moneymen such as Ramzi Bin al-Shibh in Germany and Mustafa Ahmed al-Hasnawi in the United Arab Emirates. Financial analysis provided some of the earliest evidence proving the synchronized suicide hijackings were an al-Qa’ida operation, and linked the German cell, the hijackers, and Zakarias Mussawi. Wire transfers between Mussawi and Bin al-Shibh played a crucial role leading to Mussawi’s indictment for his role in the attacks.

Financial investigation also established links between Mussawi and members of the al-Qa’ida associated cell of Jama’a al-Islamiyya terrorists arrested in Malaysia.(4)

Effective though it may be, stemming the flow of terrorist financing will not stamp out terrorism. In fact, unlike Polio or Small Pox, terrorism cannot be eradicated. There will always be grievances, causes, conditions that, coupled with a healthy dose of evil, will lead people to target civilian noncombatants for political purposes or even as a means in itself.

The primary responsibility of all states, however, is to protect their citizenry, and to that end it is incumbent upon all states to employ the full range of protective, deterrent, and preventive counter-terrorism measures available in an effort to provide for the security of its populace. The fact that terrorism cannot be eliminated does not absolve states of the responsibility to fight it as much as possible.

In this regard, tackling terrorist financing represents a critical and effective tool both in reacting to terrorist attacks and engaging in preemptive disruption efforts to prevent future attacks. Often, as was the case in the investigation of the September 11 attacks, financial transactions provide the first and most concrete leads for investigators seeking to flush out the full scope of a terrorist attack, including the identities of the perpetrators, their logistical and financial support networks, and al-Qa’ida links to other terrorists, groups and accomplices.

Since September, the US government has spearheaded a groundbreaking and comprehensive disruption operation to stem the flow of funds to and among terrorist groups. Combined with the unprecedented law enforcement and intelligence effort to apprehend terrorist operatives worldwide, which constricts the space in which terrorists can operate, cracking down on terrorist financing denies terrorists the means to travel, communicate, procure equipment, and conduct attacks.

THE MATRIX OF INTERNATIONAL TERRORISM

Contrary to conventional wisdom–which pigeon-holes al-Qa’ida in one box and Hizballah, Hamas, Iran and Syria in boxes of their own-militant Islamic groups from al-Qa’ida to Hamas interact and support one another in a matrix of international logistical, financial and sometimes operational terrorist activity. State sponsors of terrorism, particularly Iran and Syria, are similarly woven into the fabric of militant Islamist terrorism.

For example, many of the patrons of al-Qa’ida fund the suicide bombings and Qassam rockets of Hamas as well. International terrorist groups do not operate in solitude.

A task force on terrorist financing, sponsored by the Council on Foreign Relations, recently highlighted this interaction, noting: “Other Islamic terrorist organizations, Hamas and Hizballah specifically, often use the very same methods-and even the same institutions-[as al-Qa’ida] to raise and move their money. And more recently, published reports suggest that al-Qa’ida has formed additional tactical, ad-hoc alliances with these terrorist organizations to cooperate on money laundering and other unlawful activities.”(5) In fact, while there is no shortage of examples of operational and logistical links between disparate militant Islamist groups, these interactions are most pervasive in the realm of financing.

THE NETWORK OF TERRORIST FINANCING

Terrorism in the Middle East is financed by an array of states, groups, fronts, individuals, businesses, banks, criminal enterprises and nominally humanitarian organizations.

Terrorist Groups. Realistically, terrorist groups tend not to open bank accounts under their organization’s name, especially in the West. Nonetheless, there are in fact cases, such as Hizballah in Lebanon, where groups operate openly and have accounts in their own or other known names. Other groups may boast of their links to such groups. The Islamic Action Front (IAF) in Jordan and the Muslim Brotherhood in Egypt openly state their support for Hamas, and the IAF called for Arabs and Muslims to donate funds to finance Hamas suicide operations.(6) As such, they could be subject to US financial penalties themselves despite the fact that they are not listed in any of the terrorist lists published by the United States or others.

Individuals. A few wealthy individuals are able to sponsor much terror. For example, Mustafa Ahmad al-Hasnawi, a Saudi national and Bin Ladin moneyman, sent the September 11 hijackers operational funds and received at least $15,000 in unspent funds before leaving the UAE for Pakistan on September 11. US officials say that Yasin al-Qadi, a Prominent Jidda businessman and head of the Muwafaq Foundation, has supported a variety of terrorist groups from al-Qa’ida to Hamas. According to US court documents, in 1992 al-Qadi provided $27,000 to US-based Hamas leader Muhammad Salah and lent $820,000 to a Hamas front organization in Chicago, the Quranic Literacy Institute (QLI). Based on their connection to Hamas, the US government has frozen the assets of both Salah and QLI. Similarly, US officials maintain that the Muwafaq Foundation is a front organization through which wealthy Saudis send millions of dollars to al-Qa’ida.

In another example, Israeli authorities arrested Usama Zuhadi Hamid Karika, a Hamas operative, as he attempted to leave Gaza via the Rafah border crossing in December 2001. Karika was found with documents detailing the development of the Qassam rockets, and admitted that he was on his way to Saudi Arabia to brief people on the development of the rockets and to obtain their funding for the project. Before his arrest, Karika had already made one successful trip to Saudi Arabia where he secured initial funding for Hamas’ Qassam rocket program.(7) In an indication of the significant role played by individual wealthy financiers in sponsoring terrorist operations, Treasury Department Undersecretary for Enforcement Jimmy Gurule traveled to Europe in October 2002 with a list of about a dozen of al-Qa’ida’s principal financial backers, mostly wealthy Saudis, to persuade European counterparts to designate them financiers of terrorism and block their assets.”(8)

Legitimate Business. Investigation into al-Qa’ida sleeper cells In Europe in the wake of September 11 revealed the widespread use of Legitimate businesses and employment by al-Qa’ida operatives to derive income to support both themselves and their activities. According to Congressional testimony by a senior FBI official, a construction and plumbing company run by members of an al-Qa’ida cell in Europe hired mujahadin (holy warriors) arriving from places like Bosnia where they had fought what they considered a Jihad (holy war). Cell members ran another business buying, fixing and reselling used cars, and in these and other examples cell members deposited their legitimate salaries, government subsidies, supplemental income from family members, and terrorist funds received by cash or wire transfer into the same one or two accounts.(9) According to the Lebanese state prosecutor, members of an al-Qa’ida cell broken up there had funded their activities by buying and selling cars in Germany and discussed establishing other business interests to cover the cell’s activities.(10)

Legitimate employment offers terrorists cover, livelihood, and, sometimes, useful international contacts. Muhammad Haydar Zammar, the Syrian-born German national who recruited a number of the September 11 hijackers, worked at Tatex Trading. Tatex’s director, Abd al-Matin Tatari, was reportedly a member of the Syrian Muslim Brotherhood and one of its principal shareholders is Muhammad Majid Said, director of Syria’s General Intelligence Directorate from 1987 to 1994.”(11)

Banking Systems. International and unofficial banking systems have also played a role in terrorist financing. The Arab Bank was a special favorite for funneling money used by Iran, Syria, and the Damascus headquarters of Hamas and PIJ to transfer funds for attacks to operatives in the West Bank.(12) For example, Thabet Mardawi and Ali Saffuri, two captured PIJ activists from the Jenin area, revealed that they opened several bank accounts, some in their names and others in the name of an elderly woman, and that PIJ leaders in Damascus transferred funds into these accounts via the Arab Bank.(13) According to Palestinian documents seized by Israel in the West Bank, Saudi organizations transfer money for organizations linked to Hamas and the families of killed Palestinians-including suicide bombers-through branches of the Arab Bank in the West Bank.(14)

In another example, Colonel Munir al-Maqda, also known as Abu Hasan, used the Arab Bank to funnel Iranian funds to Fatah’s al-Aqsa Martyrs Brigades.(15) Beginning in mid-2001, al-Maqda transferred between $40,000 and $50,000 for weapons, expenses, and bomb-making materials to the Arab Bank account of Nasser Aweis, a senior Fatah figure. In return, al-Maqda instructed Aweis to report back by telephone on the success of his attacks, such as the assault on the Hadera banquet hall that resulted in the deaths of six Israeli civilians.(16)

The Arab Bank’s links to terrorist financing, however, extend beyond the Middle East. According to court documents filed in Spain, an al-Qa’ida cell charged with helping prepare the September 11 attacks and serving as a logistics hub and recruitment center used the Arab Bank to wire money from Spain to associates in Pakistan and Yemen.(17) The cell includes Imad Eddin al-Yarkas (Abu Dahdah), who discussed terrorist attacks on a telephone line tapped by Spanish intelligence.(18)

Beyond the official international banking system, unofficial banking systems and hawala are of particular concern. The Treasury Department froze the assets of 62 organizations and individuals associated with the al-Barakat and al-Taqwa financial networks in November 2001. Federal agents raided these groups’ offices across the United States and subsequently in Europe and the Bahamas as well. President Bush stated that the two institutions provided fundraising, financial, communications, weapons-procurement, and shipping services for al-Qa’ida. A few months later, Deputy Assistant Secretary of Treasury Juan C. Zarate told Congress that in 1997 $60 million collected for Hamas was moved to accounts with Bank al-Taqwa.(19) Al-Taqwa shareholders reportedly include known Hamas members and individuals associated with a variety of organizations linked to al-Qa’ida. A 1996 Italian intelligence report linked al-Taqwa to Palestinian groups, the Algerian Armed Islamic Group (GIA) and the Egyptian Jama’at al-Islamiyya.(20)

In August 2002, the United States and Italy, in cooperation with the Bahamas and Luxembourg, designated 25 individuals and institutions–including fourteen businesses owned or controlled by Ahmed Idris Nasraddin or Yusif Nada and linked to al-Taqwa-as terrorist Entities and blocked their assets.(21) The Treasury Department announced that Bank al-Taqwa “was established in 1988 with significant backing from the Muslim Brotherhood” and financed groups such as Hamas, Algeria’s Islamic Salvation Front and Armed Islamic Group, Tunisia’s An-Nahda, and Usama Bin Ladin and his al-Qa’ida organization.(22)

Criminal Activity. Criminal enterprises have also serviced the Spread of terrorism financing. Ahmad Omar Sayid al-Shaykh, convicted of the abduction and murder of Wall Street Journal Reporter Daniel Pearl, linked up with Aftab Ansari, a prominent figure in the Indian mafia, to provide al-Qa’ida with recruits, false documents, safe-houses and proceeds from kidnappings, drug trafficking, prostitution and other crime.(23) Authorities in Belgium issued an arrest warrant for Victor Bout, a notorious arms trafficker suspected of supplying weapons to the Taliban and al-Qa’ida as well as warring factions throughout Africa in an elaborate guns-for-diamonds scheme.(24)

Al-Qa’ida and Hizballah also raise millions of dollars in drug money to support their operations. By one account, al-Qa’ida raised as much as 35 percent of its operating funds from the drug trade.(25) Hizballah benefits from the drug business in Lebanon, much as al-Qa’ida did from the drug business in Afghanistan. Hizballah not only used the Biqa’a Valley’s poppy crop for funds, but also to buy support from Israeli Arabs ready to carry out operations.(26)

Hizballah and other terrorist groups also traffic narcotics in North America to fund their activities back in the Middle East. A Drug Enforcement Agency (DEA) investigation into a pseudoephedrine smuggling Scam in the American Midwest led investigators as far as Jordan, Yemen, Lebanon, and other Middle Eastern countries, including bank accounts tied to Hizballah and Hamas. DEA chief Asa Hutchinson confirmed, “a Significant portion of some of the sales are sent to the Middle East to benefit terrorist organizations.”(27) A senior US law enforcement official added, “There is a significant amount of money moved out of the United States attributed to fraud that goes to terrorism.” Groups like al-Qa’ida and Hizballah also capitalize on black market gold and diamond markets. One official noted the “influx of hard-core Islamist extremists” in the Congo, including those from Hizballah and other groups, involved in diamond smuggling.(28)

Smuggling, kidnapping and extortion are also well-established techniques employed by terrorist groups. For example, in June 2002, Muhammad and Chawki Hamud, two brothers involved in a Hizballah support Cell in Charlotte, North Carolina, were found guilty of a variety of charges including funding Hizballah activities from the proceeds of an interstate cigarette smuggling ring. Seven other defendants pled guilty to a variety of charges stemming from this case, including conspiracy to provide material support to terrorists, cigarette smuggling, money laundering and immigration violations. In South America, Hizballah operatives engage in a wide range of criminal enterprises to raise, transfer and launder funds in support of their terrorist activity. These activities include small-scale businesses that engage in a few thousand dollars worth of business but transfer tens of thousands of dollars around the globe, mafia-style shakedowns of local Arab communities, and sophisticated import-export scams involving traders from India and Hong Kong, to name just a few.(29)

Taking a page from Hizballah operatives in the Tri-border area (where Paraguay, Brazil and Argentina meet), Hamas and others fund themselves with the proceeds of pirated multimedia. Copying intellectual property brings in millions of dollars a year from “royalties” that terrorist groups collect from criminals engaged in the counterfeit multimedia business. Hamas, Fatah, and even senior members of the Palestinian Authority may participate in such activities.(30)

In the United States, law enforcement officials are investigating a variety of criminal enterprises suspected of funding Middle East terrorist groups including the stealing and reselling of baby formula, food stamp fraud, and scams involving grocery coupons, welfare claims, credit cards and even unlicensed T-Shirts.(31) US officials believe “a substantial portion” of the estimated many millions of dollars raised by Middle Eastern terrorist groups come from the $20 million to $30 million annual illicit scam industry in the US(32) Recent examples of such activity include an Arab-American in Detroit caught smuggling $12 million in fraudulent cashiers’ checks into the United States, and a fitness trainer in Boston accused of providing customers’ social security and credit card numbers to Abd al-Ghani Meskini, an associate of Ahmad Ressam, the Algerian convicted of plotting to blow up Los Angeles international airport in 2000.(33)

CHARITABLE AND HUMANITARIAN ORGANIZATIONS

Humanitarian organizations present an especially sensitive challenge, as authorities must discern between legitimate charity organizations, those unknowingly hijacked by terrorists who divert funds, and others deliberately engaged in supporting terrorist groups. Leaders of the latter organizations raise funds both from individuals purposely seeking to fund terrorist groups as well as from innocent contributors unwitting of the groups’ links to terrorists.

Financing Terrorism

Long before September 11, officials were aware that financial Networks of charitable and humanitarian organizations were financing terror. Investigators looking into the 1993 World Trade Center attack traced funding for the operation back to a company that imported holy water from Mecca to Pakistan.(34) In 1997, Canada cut all government funding to Human Concern International, a Canada-based charity then under investigation in both Canada and the United States for terrorist connections.(35) Only afterward, however, did the trend receive major attention.(36)

On December 14, 2001, federal officials raided the offices of the Global Relief Foundation in Chicago and froze its assets. NATO forces raided the group’s offices in Kosovo a few days later after NATO was provided credible intelligence information regarding the group’s alleged involvement in planning attacks.(37) In 2001 alone, Global Relief raised more than $5 million in the United States. While much—perhaps most-of these funds likely went to legitimate causes, investigators maintain the organization served as an important front for al-Qa’ida. International terrorism investigations have raised further reason for concern. For example, according to information provided by the Spanish Interior Ministry, a senior Bin Ladin financier arrested in Spain, Muhammad Ghalib Kalaje Zuaydi, transferred funds to several individuals linked to the Bin Ladin network, including $205,853 to the head of the Global Relief office in Belgium, Nabil Sayadi (Abu Zaynab).(38)

US officials have described the al-Wafa Humanitarian Organization–a major Saudi Arabian charitable organization–as a key component of Bin Ladin’s organization. One official said al-Wafa is among those charitable groups that “do a small amount of legitimate humanitarian work and raise a lot of money for equipment and weapons.”(39) For example, Afghan police discovered an explosives’ laboratory in a building occupied by al-Wafa’s Kabul office prior to the city’s liberation from the Taliban.(40) Abd al-Aziz, a Saudi citizen and senior al-Qa’ida official who was captured by US forces in Afghanistan, also allegedly financed al-Qa’ida activities through al-Wafa.(41)

The US offices of a number of Saudi organizations were also raided in Virginia in March 2002, including the offices of the SAAR Foundation, the Safa Trust, and the International Institute for Islamic Thought (IIIT), most of which shared office space. The SAAR Foundation had recently closed but was of particular concern because of the close links between the Saudi royal family and its founder, Saudi banker Shaykh Sulayman Abd al- Aziz al-Rajhi (initials SAAR). Tarik Hamdi, an IIIT Employee, personally provided Bin Ladin with the battery for the Satellite phone prosecutors at the New York trial of the East Africa Embassy bombers described as “the phone Bin Laden and others will use to carry out their war against the United States.”(42)

Both SAAR and IIIT are also suspected of financing Hamas and Palestinian Islamic Jihad through the World and Islamic Studies Enterprise (WISE) and the Islamic Committee for Palestine (ICP), once PIJ fronts in Florida but since closed.(43)

The assets of Ghalib Himmat have also been frozen for links to Terrorism. Himmat, reported in a German intelligence report to have Expressed “pleasure” over the news of the September 11 attacks, is a Board member of the Geneva section of the Kuwait-based International Islamic Charitable Organization (IICO).(44) The IICO’s Palestine Charity Committee (PCC), headed by Nadir al-Nuri, sends its funds through local committees, many of which are linked to Hamas.(45) Himmat is also an executive of the al-Taqwa banking network.

On December 4, 2001, the Bush administration exposed the Holy Land Foundation for Relief and Development as a front organization for Hamas. Five days before the September 11 attacks, the FBI raided the offices and froze the assets of Infocom, an Internet company that shares personnel, office space, and board members with the Holy Land Foundation. The two organizations were formed in California around the same time, and both received seed money from Hamas leader Musa Abu Marzuk. According to its 2000 tax return, Holy Land Foundation’s (HLF) total revenue exceeded $13 million. In a detailed 49-page memorandum, the US government established that these funds were used by Hamas to support schools and indoctrinate children to grow up into suicide bombers. Money raised by the Holy Land Foundation was also used by Hamas to recruit suicide bombers and to support their families. The HLF relied heavily on local zakat (charity) committees in the West Bank and Gaza to funnel funds to Hamas. The FBI memorandum establishes that known Hamas activists ran the zakat committees. For example, the memorandum reported that a financial analysis of HLF bank records indicated the foundation donated over $70,000 to the Tulkarm zakat committee from 1997 through 1999. Among the senior Hamas members affiliated with the Tulkarm zakat committee are Muhammad Hamid Qa’adan, head of the Tulkarm zakat committee, and Ibrahim Muhammad Salim Salim Nir al-Shams, a member of both the Tulkarm zakat committee and the Supreme Hamas leadership.(46)

Militant Islamist organizations like the Tulkarm zakat committee are funded by a wide array of international organizations, which frequently mask their support for Hamas as generic support for Palestinians. For example, in July 2002, the “Islam-on-line” portal featured a special page stressing the need to support Palestinian armed struggle and glorifying suicide attacks but also the need to support youth education, social activity and economic assistance (which it defined as “economic Jihad”).(47) The site provided a long list of European, American, South African and Arabic social organizations, which serve, according to the site, as a channel to transfer funds to recommended Palestinian associations, many of which are directly linked to Hamas.(48)

Facilitating Terrorism

Several charitable and humanitarian organizations have not only financed terrorist groups, but actively facilitated operations. According to a US Defense Department official, interrogators in Afghanistan quickly realized that if captured suspects say, “‘I’m a humanitarian aid worker caught up in the fighting,’ they likely have been through [military] training.” The official continued, “That’s the answer they were told to give [if captured].”(49)

Several humanitarian organizations, such as the Mercy International Relief Organization (Mercy), played central roles in the 1998 US embassy bombings in Africa. At the New York trial of four men convicted of involvement in the embassy attacks, a former al-Qa’ida member named several charities as fronts for the terrorist group, including Mercy. Documents presented at the trial demonstrated that Mercy smuggled weapons from Somalia into Kenya, and Abdullah Muhammad, one of the Nairobi bombers, delivered eight boxes of convicted al-Qa’ida operative Wadi al-Haji’s belongings—including false documents and passports–to Mercy’s Kenya office.

Along with Mercy, the Kenyan government also banned the International Islamic Relief Organization (IIRO) after the embassy bombings.(50) From 1986 to 1994, Bin Ladin’s brother-in-law, Muhammad Jamal Khalifa, headed the IIRO’s Philippine office, through which he channeled funds to terrorist groups affiliated with al-Qa’ida, including Abu Sayyaf.

In November and December 2001, Philippine police arrested four Arabs associated with the Moro Islamic Liberation Front (MILF) and described them as an al-Qa’ida “sleeper cell.” Mohammad Sabri, one of the four men arrested, is a Palestinian who, according to Philippine police worked closely with Khalifa in running the IIRO office.(51)

In January 1999, Indian police foiled a plot to bomb the US consulates in Calcutta and Madras. The mastermind behind the plot was Sayid Abu Nasir, an IIRO employee who received terrorist training in Afghanistan.(52) In 2001, Canadian authorities detained Mahmud Jaballah based on an Interpol warrant charging him with being an Egyptian Islamic Jihad terrorist. In 1999, Canadian officials attempted to deport Jaballah based on his work for IIRO and what they described as IIRO’s involvement in terrorism and fraud.(53)

The IIRO came up in the investigation into the September 11 attacks as well: hijacker Fayez Ahmed reportedly told his father he was going abroad to work for IIRO when he left for the suicide mission. Furthermore, documents seized by Israeli forces during recent operations in the West Bank include records from the Tulkarm zakat committee, the same Hamas-controlled committee noted above, indicating that the IIRO donated at least $280,000 to the Tulkarm zakat committee and other Palestinian organizations linked to Hamas.(54)

Like many other Saudi humanitarian organizations, IIRO is part of The Muslim World League, which is funded and supported by the Saudi Government (in fact, the Muslim World League and IIRO share offices in many locations worldwide).(55) A senior League official in Pakistan, Wael Hamza al-Jlaidan, is listed on the Treasury’s terrorist financial Blocking order list.(56)

In March 2002 the northern Virginia offices of both the IIRO and Muslim World League were raided by a Treasury Department task force searching for evidence they were raising or laundering funds for al-Qa’ida, Hamas or PIJ.(57) Attempting to mask the League’s radical agenda, League officials recently completed a US-tour aimed at “improving the image of Muslims among Americans,” an admirable objective if not for the group’s established links to terrorist organizations and proactive terrorist financing.(58)

The Treasury Department has frozen the assets of other Muslim World League member organizations suspected of funding terrorism, including the Rabita Trust. Rabita, which US officials say changed its name to the Aid Organization of the Ulama, is based in Pakistan and Actively raised funds for the Taliban from 1999 to 2001.(59)

The al-Rashid Trust, another group that funded al-Qa’ida and the Taliban, is closely linked to the Jaish Muhammad terrorist group (an organization also associated with al-Qa’ida). Al-Rashid has been directly linked to the January 23, 2002, abduction and subsequent murder of Wall Street Journal reporter Daniel Pearl in Pakistan. The attackers, linked to domestic Pakistani radical Islamic fundamentalist groups (including Jaish) operating in cooperation with, and on behalf of, al-Qa’ida, held Pearl in a two-room hut in the compound of a commercial nursery owned by al-Rashid. Several madrassas, or Islamic schools, under construction dominate the immediate area around the nursery, the largest and closest of which is owned by al-Rashid.(60)

Pakistani investigators uncovered twelve telephone calls placed by one of the kidnappers, a rogue policeman named Shaykh Adil, to an unidentified al-Rashid Trust employee.(61) In addition, a British Internet site called the Global Jihad Fund, which openly associates itself with Bin Ladin, provided bank account information for al-Rashid and other fronts and groups to “facilitate the growth of various Jihad movements around the world by supplying them with funds to purchase their weapons.”(62)

Last October, NATO forces raided the Saudi High Commission for Aid To Bosnia, founded by Prince Selman bin Abd al-Aziz and supported by King Fahd. Among the items found at the Saudi charity were before-and-after photographs of the World Trade Center, US embassies in Kenya and Tanzania, and the USS. Cole; maps of government buildings in Washington; materials for forging US State Department badges; files on the

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Within hours of Mahmoud Abbas’s (Abu Mazen) confirmation as the new Palestinian prime minister and the presentation of the Quartet’s roadmap to peace, two suicide bombers struck a seaside bar next to the U.S. embassy in Tel Aviv, killing three civilians and wounding sixty more. As is frequently the case, authorities investigating the attack are likely to find that the bombers were fed, housed, prepared, armed, and transported to their target by terrorists drawn from the social welfare “wing” of one terrorist group or another. The most critical test facing the nascent Palestinian government is the immediate task of weeding out the logistical support networks that facilitate such attacks under the cover of charitable or humanitarian activities.

Dawa Support for Terror

Hamas social welfare support organizations play a direct role in facilitating its terrorist attacks, including suicide bombings.

Hamas is known to use the hospitals it maintains as meeting places; to bury caches of arms and explosives under its own kindergarten playgrounds; to use dawa operatives’ cars and homes to ferry and hide fugitives; and to transfer and launder funds for terrorist activity through local charity (zakat) committees. Funds from abroad support these activities.

Take for example Muhammad Zouaydi, a senior al-Qaeda financier in Madrid whose home and offices were searched. Spanish investigators found a five-page fax dated October 24, 2001, revealing Zouaydi was not only financing the Hamburg cell responsible for the September 11 attacks, but also Hamas. In the fax, which Zouaydi kept for his records, the Hebron Muslim Youth Association solicited funds from the Islamic Association of Spain. According to Spanish prosecutors, “the Hebron Muslim Youth Association is an organization known to belong to the Palestinian terrorist organization Hamas which is financed by activists of said organization living abroad.”

U.S. investigations led to similar conclusions. A November 2001 FBI memorandum on the Holy Land Foundation for Relief and Development -the primary Hamas front organization in the United States until its closure in December 2001 — noted that Hamas “benevolent programs” like the Hebron Muslim Youth Association “are used to enhance its image and earn goodwill in the Palestinian community.” Indeed, the FBI cited electronic surveillance of a 1993 Hamas meeting in Philadelphia where Hamas fundraisers in the United States decided that “most or almost all” funds collected from that point on “should be directed to enhance the Islamic Resistance Movement [Hamas] and to weaken the self-rule government [Palestinian Authority].” To that end, the Holy Land Foundation funded zakat committees tied to Hamas.

The Hamas social welfare activists running these organizations are often closely tied to the group’s terror cells. Frequently, they are current or former members of Hamas terror cells. Consider just three of the many examples cited in the FBI memorandum:

• Ahmed Salim Ahmed Saltana, head of the Jenin Zakat Committee, was involved in transferring bomb making materials for the preparation of explosives in 1992, participated in a car bombing in 1993, and recruited young men working for the charity committee into Hamas.

• Khalil Ali Rashad Dar Rashad, an associated member of the Orphan Care Association in Bethlehem, was known to provide shelter and assistance to Hamas fugitives, including Hamas bomb maker Muhi a-Din al-Sharif and Hassan Salameh, the commander behind the string of suicide bus bombings in February-March 1996.

Forgiving Terror for Good Works

The latest effort to downplay the role that elements of the social welfare network play in financing, supporting, and facilitating Hamas terror attacks came in a report recently released by the Brussels based International Crisis Group (ICG). Sadly, the report concluded that humanitarian organizations associated with Hamas provide Palestinians with such desperately needed social welfare services that their good works somehow legitimize their support for Hamas and its other, more deadly, activities.

ICG researchers interviewed many people, including Hamas leader Abdel Aziz al-Rantisi, but no Israelis. They interviewed American officials with the U.S. Agency for International Development (USAID), but not experts like David Aufhauser, the general counsel to the Treasury Department and chair of the National Security Council’s policy coordinating committee on terrorist financing. Indeed, Aufhauser describes the logic of making distinctions between terrorist groups’ charitable and military wings as “sophistry,” and he correctly maintains that “the idea that there’s a firewall between the two defies common sense.”

Palestinians face dire social welfare needs that are not addressed by the Palestinian Authority, creating an opportunity Hamas eagerly exploits. Tolerating this exploitation is not in the interest of either Israeli-Palestinian peace or Palestinian humanitarian assistance. Indeed, Islamic social welfare groups that contaminate their benevolent activities with support for terrorism muddy the waters of charitable giving and good works, making the job that much harder for those simply trying to better conditions in the West Bank and Gaza.

Targeting the Terror Infrastructure Alone

Under the first phase of the roadmap, Abu Mazen’s government is required to begin “sustained, targeted, and effective operations aimed at confronting all those engaged in terror and the dismantlement of terrorist capabilities and infrastructure.” Unfortunately, all indications are that Abu Mazen will receive little support from key segments of the international community should he attempt to stop the flow of funds and support to Hamas front organizations facilitating attacks like the one that greeted him and his new cabinet.

Even as they call for renewed U.S. “engagement” in Mideast peace, European and Arab governments continue to whitewash the role of Hamas dawa activists and organizations in facilitating the group’s terror attacks. Despite overwhelming evidence to the contrary, Syria insists Hamas and Palestinian Islamic Jihad offices in Damascus are merely “media offices.” Even more disturbing, several European countries refuse to crack down on Hamas front organizations and the Hamas social welfare (dawa) infrastructure—both of which provide financial and logistical support for Hamas terrorist attacks—even as they demand such action of the PA in the roadmap they coauthored. For example, the European Union’s financial blocking list of terrorist entities lists only the Izz al-Din al-Qassem Brigades, but not the rest of the Hamas support infrastructure.

Terror and Charity Do Not Mix

Islamic social welfare groups cannot be given a free pass for their support of terror simply because they also provide critical humanitarian support. Instead, the international community must insist that humanitarian support for Palestinians be divorced from support for terrorist activity — both to obstruct Hamas efforts to torpedo the peace process and to clear the names of humanitarian groups untainted by terror. It is essential that Europe, the Gulf States, and other countries strictly regulate which Palestinian charities receive international aid and shut down front organizations raising funds for Hamas and other terrorist groups.

Aufhauser hit the nail on the head when he said, “No one is at war with the idea of building hospitals or orphanages or taking care of people who are displaced. But the same people that govern how to apply the money to hospitals govern how to apply the money to killing people, and you cannot abdicate responsibility for celebrate what you’re doing on the other: it remains blood money.” For any renewed peace initiative to take hold, the international community must endorse this basic principle.

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