Terrorism Financing

 

Testimony of Dr. Rachel Ehrenfeld
Director
American Center for Democracy
www.public-integrity.org
before the
SUBCOMMITTEE ON PUBLIC SAFETY AND NATIONAL SECURITY OF THE STANDING COMMITTEE ON JUSTICE,
HUMAN RIGHTS, PUBLIC SAFETY AND EMERGENCY PREPAREDNESS
House of Commons
Ottawa, Ontario, CANADA

 

I thank the Committee for inviting me to testify on this urgent matter.

 

Earlier this month, President George W. Bush finally declared that our war is with Radical Islam. He said:

“In pursuit of their goals, Islamic Radicals are empowered by helpers and enablers…They are strengthened by front operations – such as corrupted charities – and those who aggressively fund the spread of Radical, intolerant versions of Islam.” Defeating “the murderous ideology of the Islamic Radicals,” he said, is the “great challenge of our century.” This plague cannot be eliminated by appeasement, dialogue, or negotiated solutions.

 

The religious and philosophical justifications for promoting Jihad around the world, is found in the Quran, says Dr. Hussein Shehata, a leading Islamic scholar at al-Azhar University in Cairo. According to Dr. Shehata, the following terms in the Quran combine to justify the spreading of Jihad: in Arabic- Al-Jihad bil-Lisan – which means – Jihad of the Tongue, and al-Jihad bil-Qalam – Jihad of the Pen. Both combine for preaching and writing to promote Jihad.

 

These commands are complemented by Al-Jihad bil-Mal – the Financial Jihad; namely, raising and contributing money to support the Jihad warriors – known as the Mujahideen. The Islamists of al-Qaeda, Hamas and Hizballah – from Egypt and Saudi Arabia to Spain, England, Africa, Asia, South America, the Caribbean, the U.S. and Canada – vow to convert the world to Islam. As documented by Jonathan Dahoah Halevi, Director of Orient Research Group in Toronto, “if a country does not allow the propagation of Islam to its inhabitants, then the Muslim [s] ..would be justified in waging Jihad against that country.”

 

President Bush declared repeatedly that; “ money is the lifeblood of terrorist operations.” Stopping the flow of money to the terrorists would stop the Financial Jihad which feeds the efforts to revive the Islamic Caliphate.  It would also stop the financing of terror attacks, hate propaganda and education, and the undermining of democracies. In Israel, it has financed more than 26,000 terror attacks in the last five years, including 144 suicide attacks. This comes to at least 14 attacks a day in a country the size of Vancouver Island.

 

While acknowledging the dangers of Radical Islam, and the support its propagators receive from “authoritarian regimes ­– allies of convenience like Syria and Iran,” the President neglected to mention Saudi Arabia, and the illegal drug trade that provides major financial resources for Islamist and other terrorist organizations worldwide.

Despite the oil crisis, we can no longer pretend that the Saudis are our allies in the war against Radical Islam. Continuing to do so—or failing to recognize illegal drugs as a major source of terror funding—sets us up for failure.

Let me illustrate:

SAUDI ARABIA

Former U.S. Central Intelligence Agency Director James Woolsey testified before the U.S. House of Representatives’ Committee on Government Reform in April this year that: “Some $85-90 billion has been spent from sources in Saudi Arabia in the last 30 years, spreading Wahhabi beliefs throughout the world.”  The U.S. National Intelligence Reform Act of December 2004 requires development of a Presidential strategy to confront Islamic extremism, in collaboration with Saudi Arabia. So far, says a September Government Accounting Office (GAO) report, U.S. agencies have been unable to determine the extent of Saudi Arabia’s domestic and international cooperation.

Indeed, the Saudis continue to fund terrorists: in August, Y’akub Abu Assab, a senior HAMAS operative, was captured after he opened the Judea regional HAMAS Communication Center in East Jerusalem. Assab transferred hundreds of thousands of dollars, as well as operational instructions from HAMAS headquarters in Saudi Arabia to HAMAS operatives in the West Bank and Gaza for terror attacks in Israel, as well as funds for the families of suicide bombers.

On Iqra TV, on August 29, 2005, Saudi Arabia’s secretary-general of the official Muslim World League Koran Memorization Commission, Sheikh Abdallah Basfar, urged Muslims everywhere to fund terrorism.  He said: “The Prophet said: ‘He who equips a fighter — it is as if he himself fought.’ You lie in your bed, safe in your own home, and donate money and Allah credits you with the rewards of a fighter. What is this? A privilege.”
Under U.S. pressure, Saudi Arabia declared repeatedly that it would close some charities identified as spreading Wahhabism and funding terrorism. However, the GAO report notes that “in May 2005, …it was unclear whether the government of Saudi Arabia had implemented its plans.” Despite Saudi promises to establish a new National Commission for Relief and Charity Work Abroad, the GAO said:” “as of July 2005, this commission was not yet fully operational.”

At least two members of the Saudi government, Riyadh Governor Prince Salman and Minister of Defense Prince Sultan, are sponsor of the Saudi High Commission, which evidence in the 9/11 victims lawsuits show “’has long acted as a fully integrated component of al-Qaeda’s logistical and financial support infrastructure.” Moreover, the lawsuits detail that, “the Sept. 11 attacks were a ‘direct, intended and foreseeable product of [the High Commission’s] participation in al-Qaeda’s jihadist campaign.”

Princes Salman and Prince Sultan are also affiliated with the International Islamic Relief Organization (IIRO), which “had been involved in terror plans and plots and had purposely directed its activities against the United States.” The Princes have also been affiliated with the Saudi Charity al- Haramain, whose U.S. branches were shut down.

The most important finding by the GAO, however, was buried in a footnote. It says: “the distinction between the [Saudi] government’s support and funding, versus that provided by entities and individuals, especially in the case of Saudi charities’ alleged activities, is not always clear.”

While the U.S. Treasury Department is obligated to monitor funders of terrorism, the GAO reports that Treasury is not fulfilling its duty, in that Treasury “does not identify, monitor, or counter the support and funding or the global propagation of Islamic extremism as it relates to an ideology.” This ideology, according to the GAO, “denies the legitimacy of non-believers and practitioners of other forms of Islam, and that explicitly promotes hatred, intolerance, and violence…”  Indeed, the propagation of this ideology, known as “DAWA,” is an integral part of Islamic institutions in the West.

 

Meanwhile, legal systems in the West are doing their best: the US Court of Appeals for the Ninth Circuit in California decided (October 20) that the U.S. can designate foreign organizations as terrorist groups and bar Americans from financially backing them—in a case involving money raised for the Iranian terrorist group Mujahedin-e Khalq.

 

Similarly, The European Court of Justice, on September 22, 2005 ruled that the EU has the right to freeze assets belonging to suspected terrorists on a United Nations list. The case was brought by the Saudi based Al Barakaat International Foundation and two individuals, Yassin Abdullah Kadi, the Saudi who headed the bin Mahfouz owned Muwafaq foundation. Both organizations and individuals were identified as funding al-Qaeda.

 

Iran
Like Saudi Arabia, Iran exports Radical Islamic ideology and terrorism, chiefly through Hizballah. Western intelligence sources estimate Hizballah’s operational budget at about $200 to $500 million annually. Hizballah’s money comes from many sources, including :
· at least $120 million a year from Iran, and less from Syria.

And like other terrorist organizations, Hizballah receives funding from:
· Charitable organizations
· Donations from individuals
· Proceeds from legitimate businesses

In addition, Hizballah also derives profits from illegitimate businesses such as:
·  Drug trafficking
·  Illegal arms trading
·  Cigarette smuggling
·  Currency, video and CD counterfeiting
·  Fraud
·  top 5 remote control cars
·  Operating illegal telephone exchanges
·  Extortion

The money raised by Hizballah is used to fund not only its “political” party in Lebanon, which serves a cover for Hizballah.  Most of the money goes to fund Hizballah’s terror activities, including the operations of its major hate propaganda distributing machine, the al Manar satellite television station. It also goes to fund Palestinian terrorism. According to the October 13, 2005 Palestinian daily, al Ayyam, the Iranian sponsored Ansar Welfare Society and Palestine Shahid Society, distributed $1 million dollars to families of martyrs, and in a ceremony attended by Palestinian Authority officials, and shown on official Palestinian television, the Iranian Shahid Foundation recently distributed an additional 2 million dollars in grants to martyrs’ families. (Jonathan Dahoah Halevy, Wilton Park Presentation, October 20, 2005).

Illegal Drugs
Since the mid 1980s, Hizballah has used illicit drugs as a major funding source and weapon against the West. An official Iranian fatwa ruled: “We are making these drugs for Satan America and the Jews. If we cannot kill them with guns, so we will kill them with drugs.”

Hizballah’s involvement in the illegal drug trade centers on a transnational triangle of illicit activity conducted from areas of Lebanon, the Balkans and the tri-border region of Argentina, Brazil and Paraguay. The unstable, often corrupt, government structures, weak economic platforms, porous borders and largely unsupervised waterways and airfields in these regions are highly conducive to illicit operations.
In Lebanon’s Beka’a Valley, Hizballah controls approximately 13,000 acres that produce at least 300 tons of hashish annually, most of which is exported to Europe.  This high-quality Lebanese hashish grosses Hizballah $180 million annually. Hizballah run laboratories refining tons of heroin, are estimated to bring in some $3 billion annually. Hizballah also smuggles arms. However, one smuggled Kalashnikov wholesales for $500, while one kilo of heroin wholesales for $3,000- $5000.

Hizballah operatives have strong relationships with major Narco-terrorist organizations, criminal gangs and other Islamist organizations throughout Europe; Africa; South and Central America; the Caribbean and Mexico.

Brazilian authorities estimated that tri-border region criminals launder approximately $6 to $6.5 billion annually. A Paraguayan former Interior Minister reported that from 1991 to 2001 alone, Hizballah received anywhere from $50 million to $500 million from this region.

Brazilian security agents also estimate that in 2000 alone, at least $261 million was sent to the Middle East from Islamist organizations in the tri-border region, including Hizballah, Islamic Jihad and HAMAS.
A March 2005 U.S. Congressional report on Terrorism in Latin America acknowledges the presence of Hizballah, but says that: al- Qaeda[’s] “presence in the tri-boarder region remain[s] uncorroborated.” However, there is ample evidence that al Qaeda, works with other terror organizations such as Islamic Jihad, a Hizballah subsidiary, and HAMAS who share the same agenda—to create Islamic rule worldwide.

 

 

 

 

Afghanistan

 

After the fall of the Taliban, the evidence that heroin was their major financial resource was overwhelming. Yet, UN Secretary-General Kofi Annan failed to mention illegal drug trafficking as a global threat in his plan to improve international security and reform the U.N.  Moreover, last week, the supreme allied commander of NATO forces in Europe, Gen. James Jones while acknowledging “that (poppy production) is the number one problem that Afghanistan has to face for its future, “ failed to connect the revenues derived from the heroin trade to the resurgence of the Taliban and al Qaeda.

 

Clearly the U.S. did not intend to turn Afghanistan into a multi-billion dollar heroin exporter when it liberated the country from the oppressive Taliban regime. Yet, reluctance to deal with Afghanistan’s ever expanding poppy fields and heroin labs has caused an 800% increase in its heroin production since 2001. The latest U.N. Office on Drugs and Crime (UNODC) report indicates that a slight decline in poppy cultivation has not yet cut availability of heroin in Europe or the U.S. In fact Afghanistan supplies 87% of the world’s heroin market, bringing in an estimated $7 billion dollars annualy to local warlords and a resurging Taliban and al-Qaeda.

 

Now the Pentagon is reluctantly engaging in the counter-narcotics effort, but there remains disagreement among Afghan, U.S., and U.N. officials about how best to fight this problem. President Hamid Karzai often warns that the drug trade poses a greater danger to Afghanistan than terrorism and calls on his countrymen to “do jihad” against drugs. Yet, at the same time, he argues that since heroin provides at least 60% of the Afghan gross domestic product, a drastic eradication program will destabilize the country.

 

 

Potential solution

The US government has spent more than $10 million in the last decade to develop mycoherbicides—naturally occurring plant-pathogenic fungi that could easily and safely eradicate coca bushes, and poppy and cannabis plants. According to mycoherbicides researcher Dr. David Sands, all that is needed to use this eradication method, is “a battery of six tests to verify the safety of the mycoherbicide from the point of toxicity and probable environmental impact…[and]would cost $40,000 for each fungal strain.” This seems like a very small investment to eradicate the cocaine, cannabis and heroin problems. It would also work towards the development of a sustainable economy for the Afghan people.

 

In addition to supporting and subsidizing the establishment of alternative crops and industries wherever these drugs are cultivated, including Afghanistan, this safe method would be a cost effective solution for all parties involved. It would further the US and UN agenda to eradicate drugs, reduce crime, and fight poverty. It would also help to build stable and secure Afghan state, and it would surely cut off the funds for terrorists. The use of mycoherbicides would render the cocaine, heroin and Hashish unprofitable, and criminal and terrorist organizations alike will be deprived of billions of dollars. Yes, this would have an effect on the economies of many countries, but terrorism would be the biggest loser, and free societies all over the world the winners.

 

The Financial Action Task Force (FATF) meeting, which was held in Paris earlier this month, and the many other conferences devoted to terrorism financing, have issued self-congratulatory statements and plans for further meetings. But as important as the statements, new laws and banning of terrorist organizations are, they are useless as long as the financing of Radical Islam is allowed to flourish. Indeed, without the political will to stop the direct and indirect financing of terrorism, no law or convention will stop it.

 

The West is essentially combating terror financing solely by its own Jihad of the tongue. Until we face up to sources of terrorist money being provided or condoned in various ways by our putative allies, we will be fated to issuing more lame statements condemning future attacks.  We have the ability to end the plague of terrorism if we only chock – off the funding that make it possible. We owe it to future generations to do so.