Funding Terrorism: A Speech Given At Aviation Week

By Dr. Rachel Ehrenfeld, ACD Director
Tuesday, November 27th, 2001 @ 5:24AM

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The terrorists who killed thousands of innocent people while destroying the World Trade Center towers in Manhattan and damaging the Pentagon, delivered a very clear and sobering message: The country that leads the free world is vulnerable.

Indeed, watching the World Trade Center disappear in flames and smoke from the window of my apartment will hunt me forever. Manhattan’s skyline without the twin towers feels like having your front teeth crashed by Hooligans.

Was this unavoidable?

In the welter of events following the bombing of the World Trade Center in Feb. 26, 1993, few noticed that the first man arrested, Mohammed Salameh — the poor, unemployed illegal immigrant — offered $5 million for bail. Where could he get this kind of money?

The judge refused bail. But was the source of Salameh’s offer the same as the one that funded the eight men — arrested shortly afterward — who planned to blow up Manhattan’s tunnels and bridges and to assassinate public officials? Were the same money- sources behind the final attack on the World Trade Center on Sept. 11th?

We have been hearing a lot about the use of charitable organizations to collect and transfer illegal funds, and about alternative payment systems. However, we here almost nothing about the sources of these monies.

The largest source of money to fund terrorism comes from the illegal drug trade. There is no other commodity in the market today, though not traded legally, with such high and fast return. Ample evidence of Narco -Terrorism — the use of illicit drugs to advance political purposes and to fund terrorist activities — has been available for the last five decades. But hypocrisy and willful blindness among bankers, financial institutions, and to some extant lawmakers and enforcers all over the world helped bin Laden and his followers to attack the US. The monies generated by the illegal activities of Bin Laden Inc. were treated as most other illegal activities by other criminal and terrorist organizations; they were happily accepted.

Bin Laden, like other terrorist organizations use the same methods and means as organized crime. The Mafia and other crime organizations are often cooperating with the terrorists. They trade in illegal diamonds, counterfeit money, pirated CDs and Videos, stolen cars, smuggling people, white slavery, drugs, as well as manipulating the markets and orchestrating multi million dollar fraud schemes. These and more were documented throughout the nineties by the British National Criminal Intelligence Unit.

Greed and corruption led to lax policies and to negligence in implementation of the anti money laundering laws and international. This made drug money and other illicit funds easy to launder and hide, and even welcome in most countries — and in tax haven countries in particular.

Now, the frantic search to identify and freeze funds belonging to radical terrorist organizations is on. The President has declared that “Al Qaeda is to terror what the Mafia is to organized crime.” But it is more than that. The threat of Al-Qaeda — a terrorist organization network established in 1989 by Usama bin Laden – is unprecedented to, and was unimagined by the US and the West. Bin Laden managed to contrive an intricate web of international Radical terrorists assisted by rogue states and international drug trafficking and criminal organizations unlike anything seen before.

Indeed, “follow the money trail” has been the focus of all money laundering investigations since1986, when then President George Bush initiated the first anti money laundering law as a weapon to fight drug trafficking. To strengthen the laws and especially their implementation, the current administration changed and updated the U.S. laws dealing with terrorism by incorporating some of the same legislation that has been used against organized crime and drug trafficking organizations for decades. If these laws are enforced, it will be a major step towards winning the war on terrorism.

When Treasury Secretary Paul O’Neill warned that “terrorism constitutes a threat to the world financial system,” he was right. He called the IMF members “to expand its role in the fight against terrorism,” by monitoring its members adherence to anti money laundering practices. Enlisting the IMF to the war against terrorism is a good idea, but if we want to see quick results in cutting off terrorist funding and activities we should take a closer look at the sources that provide the money that is being laundered. The use of charities to raise, funnel and launder money, or of “hawallah” and other alternative payment systems accounts for only a small fraction of the money used by bin Laden and other terrorists.

Now, with the clear evidence that heroin is a major source of funding to bin Laden Inc., President Bush’s statement at the UN, is a step in the right direction. He said: “I make this promise to all the victims of that regime: the Taliban’s days of harboring terrorists and dealing in heroin.. are drawing to a close.” Indeed, flooding America with drugs was allowed for too long. Now, as President Bush had pointed out, it is time to stop this chemical offensive by Narco-Terrorists groups and rogue states like the Colombian FARC, The Sendero Lominoso in Peru, the Islamic Jihad, HAMAS and Hizballah in the Middle East, Syria and Burma, to name a few — that for decades flooded the US with drugs that killed and maimed generations of Americans and others, financed other terrorist activities, and penetrated and corrupted legitimate financial institutions worldwide.

Surprisingly, even now, the role of heroin as the major source of funding terrorism is acknowledged only vis-a-vis the Taliban, Al-Qaeda, and bin Laden. What keeps other illegal drugs such as cocaine, hashish and methamphetamines that have the exact same role for other terrorist organizations worldwide — many cooperating with bin Laden Inc.– from being acknowledged as a weapon in the terrorists’ arsenal?

Why are illicit drugs the terrorists’ favorite tool? Because the drug trade is a triple pronged weapon that helps terrorists:

A. to finance their activities, providing the funds necessary for buying weapons and corrupting officials;

B. to undermine the political, economic, and health of the targeted countries;

C. To use the above factors as examples of social degeneracy which prove the necessity of destruction, and so recruit new members to their ranks.

Since the Taliban took over Afghanistan, the heroin production soared to hundreds of tons each year. In 1999 alone, the world production of heroin was estimated at 500 metric tons; 400 were produced by the Taliban and available to fund bin Laden and his associates worldwide. These tons of heroin — estimated by the State Department’s International Narcotics Control Strategy Report at $8 billion — are strangely excluded from the statements made about the worth of bin Laden. Why?

The Financial Action Task Force Meeting (FATF) that convened on October 24th, in Washington, discussed ways to enforce the new anti-money laundering laws included in the new anti terrorism bill. It is a clear message to tax havens to shore their business practices. One can only hope that the clear jeopardy to our survival will win over greed.

The United States may achieve a short-term goal of finding bin Laden and some of his assets and perhaps unseating the Taliban, but there will remain plenty of anti-U.S. terrorists groups prepared to take their place. They thrive in countries where endemic corruption and lack of transparency and accountability drive the disenchanted to their ranks. These are usually the very same countries that enjoy the IMF’s and other international lending agencies’ largess in order to keep their political stability. The war on terrorism will fail unless the corruption in these countries is addressed. After all, it is corruption that makes it possible for terrorism, drug trafficking and criminal organizations to flourish.

The US, the only superpower and the major shareholder in the international lending agencies should condition all its foreign aid, refusing assistance to countries that use fundamentalism to deflect the public’s attention from their own corruption. The US should adopt the International Integrity standard (IIS) as the major tool for reform and closely monitor its implementation as condition for extending grants and loans.

The West has already had several warnings. If it doesn’t try to choke the financing of terrorism for all terrorists, not only bin Laden and Al- Qeada now, it invites another tragedy like the attacks on the World Trade Center and the Pentagon — probably with even deadlier weapons. In addition to better cooperation and exchange of information to enable identification of suspicious transactions, the US and its allies should pool together the available information on suspicious individuals worldwide that are known to law enforcement agencies as criminals (be it drug traffickers, arms smugglers, terrorists, money launderers etc.). This information should be used in our countries’ borders and banks and airports and other places where identification is required, to stop these individuals. I’m well aware of the difficulties in using such information — even if it is made available. However, such technology is available, and the identification process takes only seconds while the success rate in stopping undesired elements is very high.

It is time to wake up and seriously implement our anti-money laundering laws and anti-drug policies and invest in developing better integration of all our resources to prevent criminals AND their ill gotten gains from destroying our political and economic freedom.

The Sept. 11th attacks on America was a cruel wake up call for the US and other Western governments that there are “no good terrorists”, that all terrorists are criminals, and that there is no good or legitimate reason to launder money. President Bush’s strategy gives hope that this war on terrorism includes the long over due war on Narco-terrorism, corruption and money laundering. This will help the US and its Western allies to eradicate the threat to democracy, the free market and freedom.


Categories: Terrorist Financing, U.S. Policy

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