Terrorism, Inc.: The Financing of Terrorism, Insurgency, and Irregular Warfare

by Colin P. Clarke Ph. d.

  The most dangerous and lawless areas of the tribal belt of the FATA comprises seven agencies bordering Afghanistan, which include Bajaur, Mohmand, Khyber, Kurram, Orakzai, North Waziristan, and South Waziristan.87 In October 2006, in an audacious snub of government authority, Al-Qaida declared the establishment of the “Islamic Emirate of Waziristan” and organized a governing shura council to rule the area.88 Al-Qaida and its affiliated groups have sought and established sanctuaries and safe havens in areas governed by religious leaders or tribal laws and norms conducive to the Salafist jihadist ideological worldview. With a rugged terrain and a sympathetic population, Pakistan’s tribal areas are ideally suited for Al-Qaida. Pakistan’s clumsy counterinsurgency effort in the FATA and seminal events like the siege of the disregard; Lal Masjid, or Red Mosque, in 2007, have only served to push Pashtun warlords and tribal leaders closer to Al-Qaida.

  In Pakistan, Al-Qaida has used its safe haven to deepen its connections to a growing network of jihadist groups and militant movements within the country, including Tehrik, Nifaz Shariat Muhammadi (TNSM), Jamiat ul-Ansar, Jamiat ul-Furqan, Harakat ul-Jihad ul-Islami, Jaish Muhammad, LeT and Lashkar e-Jhangvi, among others. Local power brokers like the Ahmadzai-Wazir tribe and members of the Yargulkhel sub-clan of the Zalikhel clan also welcomed Al-Qaida militants as guests.89 In addition to the FATA, core Al-Qaida enjoys safe haven in Pakistan’s major cities like Karachi, Peshawar, Lahore, and Quetta. Its offshoots continue to control large chunks of ungoverned space in parts of the Levant, the Maghreb, the Sinai Peninsula, West Africa, Yemen, Somalia, and elsewhere.90

  In Yemen, AQAP has expanded at the expense of a chronically weak central government which struggles to control territory outside of the capital, Sanaa. Al-Qaida is always on the lookout for new opportunities to establish a safe haven. While failed states present some opportunities, they are often inhospitable in terms of security, stability, and the infrastructure necessary to function as an effective terrorist organization in the twenty-first century. At one point, bin Laden expressed interest in South Africa, which he saw as an “open territory” with a stable, growing economy and a place where Al-Qaida members had used off and on for planning, fund-raising, and logistics over the years.91

  Still, it is important to note that all sanctuary comes at some cost. When Al-Qaida was based in Sudan and Afghanistan, respectively, to operate openly as a “guest” of the government, bin Laden doled out tens of millions of dollars a year to his hosts.92 This is not to say that the cost was not a worthwhile return on investment. The money bought carte blanche sanctuary, which was essential to Al-Qaida’s ability to train, plot attacks, and grow its organization.

  Training

  Following the end of the Soviet–Afghan War, Al-Qaida established a large complex of training camps throughout Sudan, where bin Laden was invited by Hassan al-Turabi.93 After a failed assassination attempt on Egyptian president Hosni Mubarak in Ethiopia, Al-Qaida was forced out of Sudan and eventually made its way to Afghanistan, as a guest of the Taliban. Between 1996 and 2001, it is believed that approximately 18,000 individuals trained in Al-Qaida training camps in Afghanistan.94 Between 2002 and 2004, Abu Faraj al-Libi spearheaded the rebuilding of Al-Qaida’s training facilities in the Shakai Valley of South Waziristan.95 In late 2004/early 2005, Al-Qaida moved its training infrastructure from South to North Waziristan, based in and around the towns of Mir Ali and between Miran Shah and Shawal Valley, at Sedgi and Data Khel. Al-Qaida’s relationship with the Pashtun tribes in this area has been instrumental to its ability to rebuild a sufficient training infrastructure.96

  While some of the terrorists receiving training in the FATA are dispatched to fight against ISAF forces in Afghanistan, others are part of what Cruickshank has labeled the “militant pipeline” between Pakistan’s tribal areas and the West. According to his analysis, between 2004 and 2010, in the majority of the 21 “serious” plots against the West, plotters either received direction from or trained with Al-Qaida or its allies in Pakistan.97 In 2003, it was well-known that Al-Qaida was operating mobile training camps throughout South Asia. Reports surfaced of Al-Qaida militants trained in Pakistan-administered Kashmir, eastern Afghanistan, and camps in both Pakistan’s tribal areas as well as close to major cities like Islamabad, the Pakistani capital.98

  In Yemen, AQAP established training camps throughout the Shabwah region where fighters, including the failed “underwear bomber” Umar Farouk Abdulmutallab, were provided with military and religious instruction.99 Indeed, training is one of the primary reasons why groups ultimately choose to partner with Al-Qaida. Historically, Al-Qaida has offered comprehensive training facilities to a range of jihadist offshoots, which is “an attractive service” for those groups whose fighters lack experience and a physical place to conduct training.100

  Organizational Capabilities

  While it started as a single, monolithic entity, Al-Qaida today is a decentralized, networked, transnational terrorist organization. In addition to the costs of conducting operations, Al-Qaida also needs a healthy budget to maintain its rather substantial structural costs. This includes money for subsistence living for its members (as well as for some of those who have families), communications, travel expenses, media and propaganda, and the provision of social services to selected constituents in an effort to buoy its popular support.101 As groups grow more networked, it can be challenging to retain the cohesiveness of the group. Maintaining lines of communication, agreeing on shared goals and objectives, and remaining relevant in the increasingly crowded universe of global jihad is a time consuming and expensive undertaking, especially when law enforcement and intelligence services around the world are seeking to combat this network wherever it pulses.

  Leadership

  For some time, being the number three leader in Al-Qaida was the most dangerous job in the jihadist world. Top lieutenants including Ilyas Kashmiri, Atiyah abd al-Rahman, and Abu Yahya al-Libi have all been killed by U.S. counterterrorism forces. Still, this organization has proved nothing if not resilient. Indeed, noted terrorism scholar and Al-Qaida expert Bruce Hoffman concludes that “For more than a decade, it has withstood arguably the greatest international onslaught directed against a terrorist organization in history.”102

  The group has expanded beyond its base in South Asia to encompass wide swaths of Africa and the Middle East. It has ensured longevity by devolving power to its local franchises.103 Throughout the group’s evolution, its leadership has continued to play a major role in its longevity. The Amir is the overall leader of Al-Qaida and is tasked with a broad array of responsibilities, including planning on multiple levels (operational, strategic, tactical, logistical, and organizational), approving annual plans and budgets, and just like any corporate chief executive office, serving as the face of the organization.104

  As the founder of Al-Qaida and leader of the organization until his death at the hands of U.S. Special Forces in May 2011, there is still debate over exactly how important he was to the movement.105 Though Bin Laden fancied himself part “lecturer-businessman” part “activist theologian,” his leadership style has been described as “soft-mannered, long-winded, project-oriented, media conscious.”106 On the other hand, his former deputy and now overall Amir of core Al-Qaida Ayman al-Zawahiri has been described as “a formidable figure,” “committed revolutionary,” who is simultaneously “pious, bitter, and determined,” and since its early days had been “the real power behind Al-Qaida.”107

  Just as concerning as Zawahiri’s leadership, Al-Qaida affiliated groups are also led by highly capable veteran jihadists. AQIM has been led by trained engineer and explosives expert Abdelmalek Droukdel since 2004,108 while AQAP is currently headed by Zawahiri loyalist Nasir al-Wuhayshi.109

  Ideology

  In many ways, Al-Qaida’s ideology reflects that it sees itself as a defender of the Islamic world and vanguard of Muslims everywhere, the ummah. In declaring jihad on the United States, bin Laden argued that the West, and in particular
the United States, is hostile to Islam and the only way to respond to this aggression is with force or violence, which is the only language that America understands. In his speeches, bin Laden exhorts his followers to fight back and defend Muslims from the United States, which has perpetrated against Muslims “an ocean of oppression, injustice, slaughter and plunder.”110 Therefore, the next logical step is jihad. In essence, the core of Al-Qaida’s ideology is individual jihad fused with collective revenge.111

  From an intellectual standpoint, David Aaron has noted that jihadi totalitarian ideology is a closed system, but it also allows for disagreements over strategy, tactics, and other critical issues.112 Not as draconian as some scholars make it out to be. Cragin agrees, observing that an analysis of the group’s internal documents reveal a group at ease with allowing for internal disagreement and debate amongst its members and the leadership.113 One well-known ideological divide in Al-Qaida is between those who desire to strike “the far enemy” and those whose interests are more parochial and prefer to target what they perceive as apostate regimes throughout the Muslim world.

  Primarily, and almost exclusively, the bulk of guidance on contemporary insurgency is manufactured by Salafist ideologues. Individuals like Ayman al-Zawahiri, Abu Musab al Suri,114 Anwar al-Awlaki (deceased),115 and Abu Yahya al-Libi (deceased)116 serve as Al-Qaida’s main insurgent theorists, proffering advice on strategy, operations, and tactics (in addition to a host of other issues including diet, grooming, and marriage).117 These modern day insurgency theorists are highly adept at propagating the narrative that the Muslim ummah is being oppressed by an American-Israeli (or “Crusader-Zionist”) nexus.118 According to Bruce Hoffman, Al-Qaida is “more an idea or a concept than an organization” and “an amorphous movement tenuously held together by a loosely networked transnational constituency rather than a monolithic, international terrorist organization with either a defined or identifiable command and control apparatus.”119

  Human Resources and Recruitment

  One of the core missions of a terrorist organization’s bureaucracy is to fulfill a human resources function, to include recruiting new members. Despite the image conjured when envisioning a dark network dispersed throughout 60 countries worldwide and forced to communicate covertly, Al-Qaida remained a highly bureaucratic organization throughout most of the 1990s and 2000s. In the lead up to the attacks of September 11, 2001, Al-Qaida could accurately be characterized as a “unitary organization” with many of the trappings of a “lumbering bureaucracy,” according to Hoffman.120

  In Al-Qaida’s training camps in Afghanistan, recruits were required to take a written exam and sign a contract before acceptance into the group. The contract detailed the moral responsibilities of would-be Al-Qaida members, as well as the stipulations of remuneration, including marital and family allowances, vacation time, and reimbursements for expenses incurred.121 The group’s organizational structure included the following components in addition to the top leadership: the Secretary, the Command Council, the Military Committee, the Documentations Unit, the Political Committee, the Media Committee, the Administrative and Financial Committee, the Security Committee, and the Religious Committee.122

  On the recruitment front, Al-Qaida’s core demographic is disenfranchised, disillusioned, marginalized youth that are vulnerable to radicalization and the message of violent religious extremism. And while the group’s recruiting approach has always been global, more recently it has urged potential followers to conduct “DIY terrorism,” or do-it-yourself attacks against soft targets in the West.123 These “stray dogs,” as Jenkins calls them, can be non-affiliated jihadists who simply share Al-Qaida’s worldview and accept its ideology. Recruiting in diaspora communities is another favored method.124 Al-Qaida has been particularly successful rallying European-born Muslims to its cause and in the past decade, there have been plots and attacks in the United Kingdom, Germany, Spain, Netherlands, France, and Belgium.

  Media, PR, Propaganda, and Publicity

  Al-Qaida uses thousands of Web sites to convey its messages and its production company, As-Sahab, releases dozens of videos each year. In March 2004, a document titled the “Camp al Battar [the sword] Magazine,” was released, offering information on jihadist attacks in Saudi Arabia and Iraq.125 In 2006, an Al-Qaida media distribution wing known as the Global Islamic Media Front released “Jihad Academy,” which included footage showing attacks on U.S. troops, Al-Qaida militants assembling IEDs, and suicide bombers martyrdom tapes, complete with anti-American and anti-Israeli vitriol.126 At the time of this writing, in 2015, the three most important, password-protected/access-controlled jihadist Web sites—al Shumukh al Islam, al Fida, and Ansar al Mujahideen—have recently been focused almost exclusively on the deteriorating situation in Syria.127

  Throughout his tenure as Al–Qaida’s leader, bin Laden consistently used AlQaida’s media platforms to emphasize issues that many across the Arab and Islamic world are passionate about, including the liberation of Palestine, the American occupation of Iraq, and the corruption of apostate governments and regimes throughout the Middle East and South Asia.128 Al-Qaida’s media production is sophisticated, both aesthetically and historically. Propaganda routinely references colonial injustices of the past, including the Sykes-Picot Agreement, which carved up the Middle East between France and Britain. If Al-Qaida’s media production seems high quality and refined, that is because the group has been producing media since its inception, although over the years, the themes have changed and its presentation has grown more nuanced.129

  In February 2012, al-Zawahiri addressed the “Lions of the Levant,” peppering his message with themes that railed against Alawites, Hezbollah, and Iran. In March 2013, a new e-journal was created, named Balagh (“Message”), the group promoting the journal called itself the “Levant News Battalion” and urged its followers to join the fight and send money to support those already fighting.130 Sawt al-Jihad, or Voice of Jihad, is an Al-Qaida online magazine aimed at mobilizing public support for the group and justifying its actions to its core constituency.131 As Evan F. Kohlman notes, in countering the media strategies of terrorist groups, foremost among them Al-Qaida, “technological sophistication is no longer a luxury,” but instead, “a basic survival skill” for law enforcement and intelligence agencies.132

  HOW AL-QAIDA FINANCING WAS COUNTERED

  Al-Qaida financing was countered through a combination of kinetic and non-kinetic activities, aimed at preventing the group from acquiring and spending the funds needed to maintain its vast operational and organizational infrastructure. The response, at least from the United States, was swift and forceful. Laws were passed, task forces formed, and regulatory bodies commissioned to prevent terrorists from raising, storing and moving funds.133

  One of the main challenges of countering Al-Qaida’s financial network is that U.S. expertise in combating the financing of terrorism is more suited to dealing with financial transfers across borders than within them.134 However, more government agencies have realized the importance of targeting terrorists’ financial networks. The U.S. Department of Treasury is just one of several entities that continue to craft measures and laws that are aimed at freezing terrorist assets and targeting their traditional sources of income.135 Nevertheless, Al-Qaida members are aware of government efforts to combat fund-raising schemes and how individual terrorists might be identified through bank transactions, money transfer services, credit cards, and online Web sites.136 As related by Gretchen Peters, Osama bin Laden once noted that Al-Qaida was as “aware of the cracks inside the Western financial system as they are aware of the lines in their hands.”137

  Kinetic Activities

  Before 9/11, numerous financial institutions were responsible for moving millions of dollars of Al-Qaida’s money—some aware of what they were doing, others not.138 Some analysts have speculated that during the 2000s, Al-Qaida earned as much as $1 billion per year from the entirety of its financing efforts.139 Others suggest that before
the 9/11 attacks, Al-Qaida sustained itself on roughly $30 million annually.140 In an article published in 2004, Mark Basile claimed that Al-Qaida operated a significant financial network valued at over $300 million, although it disbursed between $30 and $40 million per year to run the organization.141 The CIA estimated that prior to September 11, 2001, the cost of sustaining Al-Qaida was approximately $30 million per year.142 Despite the fact that the Bank Secrecy Act mandates U.S. financial institutions to file currency transaction reports on transactions of $10,000 or more, terrorists nevertheless felt secure in using the formal banking system to move funds with relative impunity.

  The March 2003 arrest of Al-Qaida’s accountant, Saudi born-Mustafa Ahmed Hawsawi, set the group back in the short term. Hawsawi was the group’s primary money man, responsible for managing day-to-day finances, and even in charge of wiring the money used to conduct the 9/11 attacks.143 Over the next decade, U.S. counterterrorism efforts in Pakistan have included increased covert assets against Al-Qaida as well as a relentless onslaught of armed drone strikes targeted the organization’s senior leadership. In Pakistan, U.S. counterterrorism strikes have been successful in removing senior level Al-Qaida members from the battlefield, including Osama bin Laden, external operations chief Ab Abd al-Rahman al-Najdi, and chief financial officer, Shaykh Sa’aid al-Masri.144