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

by Colin P. Clarke Ph. d.

  112. Hilal Khashan, “Collective Palestinian Frustration and Suicide Bombings,” Third World Quarterly, Vol. 24, No. 6, December 2003, pp. 1049–1067.

  113. On a lack of economic opportunity, see Richard Clutterbuck, “Peru, Cocaine, Terrorism, and Corruption,” International Relations, Vol. 12, No. 5, 1995, pp. 77–92 and Robert Looney, “The Business of Insurgency: The Expansion of Iraq’s Shadow Economy,” The National Interest, Fall 2005, pp. 1–6.

  114. C. Christine Fair and Bryan Shepherd, “Who Supports Terrorism? Evidence from Fourteen Muslim Countries,” Studies in Conflict & Terrorism, Vol. 29, 2006, pp. 51–74.

  115. Michael P. Boyle et al., “Expressive Responses to News Stories about Extremist Groups: A Framing Experiment,” Journal of Communication, Vol. 56, No. 2, 2006, pp. 271–288.

  116. Todd C. Helmus, “Why and How Some People Become Terrorists,” in Davis and Cragin, eds., Social Science for Counterterrorism, p. 77.

  117. Thomas Hegghammer, “Terrorist Recruitment and Radicalization in Saudi Arabia,” Middle East Policy, Vol. 13, No. 4, 2006, pp. 39–60; see also, Robert F. Worth, “Hezbollah Seeks to Marshal the Piety of the Young,” New York Times, November 20, 2008.

  118. On Saudi recruits for Iraq, see Thomas Hegghammer, Saudi Militants in Iraq: Backgrounds and Recruitment Patterns, Norwegian Defence Research Establishment (FFI), February 5, 2007 and Alexandrea Zavis, “Foreign Fighters in Iraq Seek Recognition, US Says,” Los Angeles Times, March 17, 2008; on Jemmah Islamiyah recruitment see Helmus, “Why and How Some People Become Terrorists”; on the PKK, see Ami Pedahzur, Suicide Terrorism, Cambridge, United Kingdom: Polity Press, 2005.

  119. Brynjar Lia and Ashild Kjok, Islamist Insurgencies, Diaspora Support Networks, and Their Host States: The Case of the Algerian GIA in Europe 1993–2000, Kjeller, Norway: Forsvartes Forskningsinstitutt, FFI/APPORT-2001/03789, August 8, 2001.

  120. On clan and tribal connections see William S. McCallister, “The Iraq Insurgency: Anatomy of a Tribal Rebellion,” First Monday, Vol. 10, No. 3, March 2005; on the use of social services see Teresa Shawn Flanigan, “Charity as Resistance: Connections Between Charity, Contentious Politics, and Terror,” Studies in Conflict & Terrorism, Vol. 29, 2006, pp. 641–655 and Alexus G. Grynkewich, “Welfare as Warfare: How Violent Non-State Groups Use Social Services to Attack the State,” Studies in Conflict & Terrorism, Vol. 31, 2008, pp. 350–370; Erik A. Claessen, “S.W.E.T. and Blood: Essential Services in the Battle Between Insurgents and Counterinsurgents,” Military Review, November/December 2007.

  121. Kelly M. Greenhill and Paul Staniland, “Ten Ways to Lose at Counterinsurgency,” Civil Wars, Vol. 9, No. 4, 2007, p. 407.

  122. Byman et al, Trends in Outside Support, pp. 88–89.

  123. “Terrorist Financing,” Council on Foreign Relations, Report of an Independent Task Force, 2002, p. 2.

  124. Anne L. Clunan, “U.S. and International Responses to Terrorist Financing,” in Jeanne K. Giraldo and Harold A. Trinkunas, Terrorism Financing and State Responses: A Comparative Perspective, Stanford: Stanford University Press, 2007, pp. 271–272.

  125. Kathryn L. Gardner, “Fighting Terrorism the FATF Way,” Global Governance, Vol. 13, No. 3, July–Sept 2007, p. 329.

  126. Clunan, “U.S. and International Responses,” p. 270.

  127. Interestingly, neither the Treasury Department nor its Financial Crimes Enforcement Center (FinCEN) designated analysts for the FTATG. Ibid., p. 275.

  128. Aimen Dean et al., “Draining the Ocean to Catch One Type of Fish: Evaluating the Effectiveness of the Global Counter-Terrorism Financing Regime,” Perspectives on Terrorism, Vol. 7, No. 4, 2013.

  129. Jonathan M. Winer and Trifin J. Roule, “Fighting Terrorist Finance,” Survival, Vol. 44, No. 3, 2002, p. 91.

  130. Jeffery M. Johnson and Carl Jensen, “The Financing of Terrorism,” The Journal of the Institute of Justice & International Studies, No. 10, 2010, p. 111.

  131. Financial Action Task Force (FATF) IX Special Recommendations, October 2001. These recommendations were significantly revised again in 2012.

  132. Clunan, “U.S. and International Responses,” p. 267.

  133. Author interview with anonymous United States Government (USG) official, December 2014.

  134. Juan C. Zarate, Treasury’s War: The Unleashing of a New Era of Financial Warfare, New York: Public Affairs, 2013, p. 46.

  CHAPTER 2

  1. On the origins of the Provisional Irish Republican Army (PIRA) and a historical background to Irish terrorism, see Tim Pat Coogan, The IRA, New York: Palgrave, 2000.

  2. Coogan, The IRA, p. 5.

  3. James Adams, The Financing of Terror: How the Groups That Are Terrorizing the World Get the Money to Do It, New York: Simon and Shuster, 1986, p. 131; p. 164.

  4. John Horgan and Max Taylor, “Playing the ‘Green Card’—Financing the Provisional IRA: Part 2,” Terrorism and Political Violence, Vol. 15, No. 2, Summer 2003, p. 6.

  5. John Horgan and Max Taylor, “Playing Green Card—Financing the Provisional IRA: Part I,” Terrorism and Political Violence, Vol. 11, No. 2, Summer 1999, p. 2.

  6. Horgan and Taylor, “ ‘Green Card’—Part 2,” pp. 38–41.

  7. According to Adams, although sources of financial support from the Irish-American diaspora once accounted for over half of the PIRA’s budget in the early 1970s, by the mid-1980s these funds comprised no more than £135,000 ($200,000). Adams, The Financing of Terror, p. 136.

  8. Ibid., pp. 142–143.

  9. Ibid., p. 134.

  10. Daniel Byman, Deadly Connections: States that Sponsor Terrorism, Cambridge: Cambridge University Press, 2005, pp. 246–258.

  11. Daniel Byman, “Passive Sponsors of Terrorism,” Survival, Vol. 47, No. 4, Winter 2005, p. 134.

  12. In many of these cities, NORAID maintained what it called “Century Clubs,” which were groups of 10 individuals who would be called on to donate $100 at a moment’s notice. Each “Century Club” produced $1,000.

  13. Adams, Financing of Terror, p. 143.

  14. Richard English, Armed Struggle: The History of the IRA, Oxford: Oxford University Press, 2004, p. 117.

  15. Adams, Financing of Terror, p. 137.

  16. Ibid., p. 141.

  17. Ibid., p. 136.

  18. Ibid., p. 131.

  19. Ibid., p. 142.

  20. Peter Taylor, Provos: The IRA & Sinn Fein, London: Bloomsbury, 1997, pp. 84–85.

  21. John Horgan and Max Taylor, “The Provisional Irish Republican Army: Command and Functional Structure,” Terrorism and Political Violence, Vol. 9, No. 3, 1997, p. 13. According to Adams, tax exemption scams earned upwards $60 m a year. Adams, p. 180.

  22. Keith Maguire, “Fraud, Extortion and Racketeering: The Black Economy in Northern Ireland,” Crime, Law, and Social Change, Vol. 20, No. 4, 1993, pp. 284–285.

  23. Horgan and Taylor, “ ‘Green Card’—Part 2,” p. 8.

  24. Maguire, “Fraud, Extortion, Racketeering,” p. 285.

  25. Horgan and Taylor, “ ‘Green Card’—Part 1,” p. 8.

  26. Horgan and Taylor, “ ‘Green Card’—Part 2,” p. 4.

  27. Adams, Financing Terror, p. 175.

  28. Keith Maguire, “Policing the Black Economy: The Role of C.13 of the R.U.C. in Northern Ireland,” The Police Journal, Vol. 66, No. 2, April–June 1993, p. 133.

  29. Adams, Financing Terror, p. 177.

  30. Author interview with John Horgan, October 2014.

  31. Horgan and Taylor, “ ‘Green Card’—Part 2,” pp. 17–32.

  32. Ibid., p. 33.

  33. Horgan and Taylor, “Command and Functional Structure,” p. 13.

  34. Riding shotgun is a term used for providing an armed escort on international drug shipments.

  35. Coogan, The IRA, p. 522.

  36. Ibid., p. 523.

  37. James Dingley, The IRA: The Irish Republican Army, Santa Barbara: Praeger Security International, 2012, p. 194.

  38. The Active Service Unit (ASU) is made up
of PIRA insurgents who are directly responsible for executing military operations such as shootings or bombings. A typical ASU was trained for a specific task (e.g., bombing, intelligence, robberies, etc.) and consisted of 4 Volunteers and had one OC, with 3–4 ASUs in each Brigade.

  39. Horgan and Taylor, “ ‘Green Card’—Part 1,” p. 13.

  40. Adams, Financing Terror, p. 179.

  41. By the 1990s, only armed robberies that were thought to have the potential to net large sums of money were sanctioned, as scores of 100,000 pounds or more were capable of funding specific projects. Dingley, The IRA, p. 194.

  42. There is a fierce debate in the literature over whether or not the PIRA engaged in drug trafficking. Because a consensus has never been reached, this chapter eschews further analysis of the issue. For a thoughtful and balanced analysis of the debate, see Horgan and Taylor, “ ‘Green Card’—Part 1,” pp. 24–30.

  43. Horgan and Taylor, “Command and Functional Structure,” p. 13.

  44. Dingley, The IRA, p. 196.

  45. Ibid.

  46. Horgan and Taylor, “ ‘Green Card’—Part 1,” pp. 20–21.

  47. Dingley, The IRA, p. 194.

  48. Adams, Financing Terror, p. 171.

  49. In August 1972, two members of the PIRA’s ruling body, Joe Cahill and Denis McInerney, met with members of Libyan intelligence in Warsaw, Poland. Ed Moloney, A Secret History of the IRA, New York: WW Norton & Company, 2003, p. 9.

  50. English, Armed Struggle, p. 344. Coogan puts the group’s annual income in the early 1980s at over 1.5 million pounds. Coogan, The IRA, p. 430. Nevertheless, it should be noted that many scholars, including Horgan and Taylor, stress that most of the estimates on the PIRA’s income are mere “guesstimates.” Horgan and Taylor, “ ‘Green Card’—Part 2,” p. 46. By definition, the nature of a clandestine organization makes an accurate assessment extremely difficult.

  51. Horgan and Taylor, “ ‘Green Card’—Part 1,” p. 4.

  52. Ibid., p. 5.

  53. Still, as the expertise of the “Engineers” grew, the group relied on low-cost detonators that could be fashioned out of everyday devices like garage door openers.

  54. Though this is not an exhaustive list, some IRA explosive device innovations included: radar detectors, police radar guns, photographic unites triggered by flashes of light, infrared transmitters from garage door openers, projectile detonators, Memopark timers, and electromagnetic traps. See Brian Jackson et al., Aptitude for Destruction, Volume 2: Case Studies of Organizational Learning in Five Terrorist Groups, Santa Monica, CA: RAND Corp., 2005, pp. 100–104.

  55. Ibid., p. 107.

  56. Horgan and Taylor, “ ‘Green Card’—Part 1,” p. 5.

  57. Toby Harnden, Bandit Country: The IRA & South Armagh, London: Hodder & Stoughton, 2000, p. 53. For a thorough analysis of the PIRA’s intelligence capabilities, see also, Gaetano Joe Ilardi, “IRA Operational Intelligence: The Heartbeat of the War,” Small Wars & Insurgencies, Vol. 21, No. 2, June 2010, pp. 331–358.

  58. For an in-depth explanation of each department, see Horgan and Taylor, “Command and Functional Structure,” pp. 9–18.

  59. Ilardi, “IRA Operational Intelligence,” p. 333.

  60. Horgan and Taylor, “ ‘Green Card’—Part I,” p. 6.

  61. Ibid.

  62. Brian Jackson, “Training for Urban Resistance: The Case of the Provisional Irish Republican Army,” p. 123, in James J. F. Forest, ed., The Making of a Terrorist, Volume II: Training, Santa Barbara: Praeger, 2005.

  63. Horgan and Taylor, “Command and Functional Structure,” p. 7.

  64. Training camps were located throughout the entire ROI even as far south as Cork and took the form of farms, beaches, and wooded areas. Jackson, “Training for Urban Resistance,” p. 128.

  65. Jackson, “Training for Urban Resistance,” p. 127.

  66. Jackson et al., Aptitude for Destruction, Vol. 2, p. 124.

  67. Ibid., p. 103.

  68. Brian Jackson, “Training for Urban Resistance,” p. 131.

  69. Don Mansfield, “The Irish Republican Army and Northern Ireland,” in Bard E. O’Neill, William R. Heaton, and Donald J. Alberts, eds., Insurgency in the Modern World, Boulder: Westview Press, 1980, p. 73.

  70. Horgan and Taylor, “ ‘Green Card’—Part I,” p. 7.

  71. Adams, Financing Terror, pp. 164–166

  72. Author Interview with John Horgan, October 2014.

  73. Dingley, The IRA, p. 191.

  74. Ibid., p. 192.

  75. English, Armed Struggle, p. 107.

  76. Gerry Adams cited in Taylor, Provos, pp. 283–284.

  77. English, Armed Struggle, p. 216.

  78. Peter Neumann, Old & New Terrorism, Cambridge: Polity Press, 2009, pp. 33.

  79. Rogelio Alonso, “Irish Republican Thinking Toward the Utility of Violence,” Studies in Conflict and Terrorism, Vol. 24, No. 2, 2001, p. 141.

  80. Óglaigh na hÉireann is an Irish-language title for the Irish Volunteers of 1913.

  81. Interview with John Horgan, October 2014.

  82. Horgan and Taylor, “ ‘Green Card’—Part I,” p. 7.

  83. This was a common tactic of the security services in Northern Ireland. Individuals would be arrested and promised steady payments and freedom from prosecution for agreeing to become a “tout,” or informer of PIRA activities and operations. Martin McGartland, Fifty Dead Men Walking: The Heroic True Story of a British Secret Agent Inside the IRA, London: John Blake, 2009.

  84. Handbook for Volunteers of the Irish Republican Army: Notes on Guerrilla Warfare, Boulder: Palladin Press, 1985, pp. 17–18.

  85. Cronin provides examples of active support, such as hiding members, raising money, and joining the organization. Passive support includes ignoring obvious signs of terrorist activity, declining to cooperate with police investigations, sending money to organizations that act as fronts for the group, and expressing support of the group’s objectives. Audrey Kurth Cronin, “How al-Qaida Ends: The Decline and Demise of Terrorist Groups,” International Security, Vol. 31, No. 1, Summer 2006, p. 27.

  86. Coogan, The IRA, p. 581.

  87. English, Armed Struggle, p. 115.

  88. Quoted in Patrick Bishop and Eamonn Mallie, The Provisional IRA, London: Corgi Books, 1992, p. 330.

  89. English, Armed Struggle, p. 181.

  90. In Adams’ description of a 1979 NORAID benefit dinner, he lists among the guests a chairman of the House Judiciary Committee, former ambassadors, an Under Secretary of State, treasure of an AFL-CIO branch, an Attorneys General from the State of New York and Long Island respectively, several congressmen, AOH leaders, and influential union representatives. Adams, Financing Terror, p. 137.

  91. Ibid., p. 136.

  92. These politicians included Edward Kennedy, Thomas “Tip” O’Neill, Daniel Patrick Moynihan, and Hugh Carey, who were subsequently dubbed “The Four Horsemen.” Ibid., p. 138.

  93. Moloney, A Secret History of the IRA, p. 16.

  94. Ibid., p. 101.

  95. Adams, Financing Terror, p. 145.

  96. Ibid., p.183.

  97. Maguire, “Fraud, Extortion, Racketeering,” p. 284.

  98. Maguire, “Policing the Black Economy,” p. 134.

  99. Adams, Financing Terror, p. 146; pp. 151–152.

  100. Maguire, “Fraud, Extortion, Racketeering,” p. 288.

  101. Adams, pp. 165–166; see also, Horgan and Taylor, “ ‘Green Card’—Part 1,” pp. 21–22.

  102. Maguire, “Fraud, Extortion, Racketeering,” p. 283.

  103. Ibid.

  104. Paul Norman, “The Terrorist Finance Unit and the Joint Action Group on Organised Crime: New Organisational Models and Investigative Strategies to Counter ‘Organised Crime’ in the UK,” The Howard Journal, Vol. 37, No. 4, November 1998, p. 379.

  105. Ibid., p. 380.

  106. See John Horgan and John F. Morrison, “Here to Stay? The Rising Threat of Violent Dissident Republicanism in Northern Irelan
d,” Terrorism and Political Violence, Vol. 23, No. 4, pp. 642–669, 2011; see also, Martyn Frampton, “The Return of the Militants,” “Violent Dissident Republicanism,” “International Centre for the Study of Radicalisation and Political Violence,” 2010.

  CHAPTER 3

  1. Robert I. Rotberg, ed., Creating Peace in Sri Lanka: Civil War & Reconciliation, Washington DC: Brookings Institution Press, 2005, p. 4. A 2001 census notes that Sri Lanka’s main ethnic populations are Sinhalese (82 percent), Tamil (9.4 percent), and Sri Lanka Moor (7.9 percent). Jayshree Bajoria, Council on Foreign Relations Backgrounder: The Sri Lankan Conflict, May 18, 2009.

  2. Rotberg, Creating Peace, p. 43.

  3. Ibid., p. 47.

  4. Ibid., pp. 44–50.

  5. Rohan Gunaratna, “International and Regional Implications of the Sri Lankan Tamil Insurgency,” December 2, 1998.

  6. Rotberg, Creating Peace, p. 7.

  7. By the mid-1990s, it is estimated that the LTTE has cells in as many as 38 countries throughout Europe, the Middle East and North America. These cells could collect donations from the Tamil diaspora, or obtain money through coercion and extortion. Phil Williams, “Insurgencies and Organized Crime,” in Phil Williams and Vanda Felbab-Brown, Drug Trafficking, Violence, and Instability, Carlisle Barracks, PA: U.S. Army War College Strategic Studies Institute, April 2012, p. 50.

  8. Personal interview with Peter Chalk, October 2014. Gunaratna estimates that by late 1995, 40 percent of the LTTE’s war budget was generated abroad until the loss of the Jaffna peninsula in 1996, when this number rose to 60 percent.

  9. Peter Chalk, “Liberation Tigers of Tamil Eelam’s (LTTE) International Organization and Operations—A Preliminary Analysis,” Canadian Security Intelligence Service, Commentary No. 77, Winter 1999.

  10. Peter Chalk, “The Liberation Tigers of Tamil Eelam Insurgency in Sri Lanka,” in Rajat Ganguly and Ian MacDuff, Ethnic Conflict and Secessionism in South and Southeast Asia, London: Sage, 2003, p. 146.

  11. Ibid., p. 131.

  12. Gunaratna, “International and Regional Implications.”

  13. Frederic Lemieux and Fernanda Prates, “Entrepreneurial Terrorism: Financial Strategies, Business Opportunities, and Ethical Issues,” Police Practice and Research: An International Journal, Vol. 12, No. 5, p. 371.