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

by Colin P. Clarke Ph. d.

  43. Shivan Mahendrarajah, “Conceptual Failure, the Taliban’s Parallel Hierarchies, and America’s Strategic Defeat in Afghanistan,” Small Wars & Insurgencies, Vol. 25, No. 1, 2014, p. 109.

  44. Brian A. Gordon and J. Edward Conway, “Cost Accounting: Auditing the Taliban in Helmand Province, Afghanistan,” in David M. Blum and J. Edward Conway, eds., Counterterrorism and Threat Finance Analysis During Wartime, Lanham, MD: Lexington Books, 2015, p. 82.

  45. Thomas H. Johnson, “Financing Afghan Terrorism,” in Jeanne K. Giraldo and Harold A. Trinkunas, Terrorism Financing and State Responses: A Comparative Perspective, Stanford: Stanford University Press, 2007, p. 101. For more on madrassa students as recruits for the insurgency in Afghanistan, see Carlotta Gall, The Wrong Enemy: America in Afghanistan, 2001–2014, New York: Houghton Mifflin Harcourt, 2014.

  46. Justin Y. Reese, “Financing the Taliban,” in Michael Freeman, Financing Terrorism: Case Studies, Surrey: Ashgate, 2012, p. 99.

  47. Thomas H. Johnson, “Financing Afghan Terrorism,” in Jeanne K. Giraldo and Harold A. Trinkunas, Terrorism Financing and State Responses: A Comparative Perspective, Stanford: Stanford University Press, 2007, pp. 97–98.

  48. Christia and Semple, “Flipping the Taliban,” p. 41.

  49. Shezhad H. Qazi, “Rebels of the Frontier: Origins, Organization, and Recruitment of the Pakistani Taliban,” Small Wars & Insurgencies, Vol. 22, No. 4, pp. 574–602.

  50. Jason Lyall, “A (Fighting) Season to Remember in Afghanistan,” Washington Post, Monkey Cage Blog, October 20, 2014.

  51. Giustozzi, “Negotiating with the Taliban,” pp. 12–13.

  52. See Gretchen Peters, “Crime and Insurgency in the Tribal Areas of Afghanistan and Pakistan,” Combating Terrorism Center, October 2010.

  53. Arabinda Acharya, Syed Adnan Ali Shah Bukhari, and Sadia Sulaiman, “Making Money in the Mayhem: Funding Taliban Insurrection in the Tribal Areas of Pakistan,” Studies in Conflict & Terrorism, Vol. 32, No. 2, 2009, p. 104.

  54. Francisco Gutierrez Sanin and Antonio Giustozzi, “Networks and Armies: Structuring Rebellion in Colombia and Afghanistan,” Studies in Conflict & Terrorism, Vol. 33, No. 9, 2010, pp. 838–839.

  55. Antonio Giustozzi, Koran, Kalashnikov, and Laptop: The Neo-Taliban Insurgency in Afghanistan, New York: Columbia University Press, 2008, pp. 98–99.

  56. Ibid., p. 147.

  57. Thomas H. Johnson, “Taliban Adaptations and Innovations,” Small Wars & Insurgencies, Vol. 24, No. 1, 2013, p. 5.

  58. Giustozzi, p. 156.

  59. Johnson, “Adaptations,” pp. 7–8.

  60. Ibid., pp. 7–8.

  61. David Kilcullen, Out of the Mountains: The Coming Age of the Urban Guerilla, Oxford: Oxford University Press, 2013, p. 27.

  62. Theo Farrell and Antonio Giustozzi, “The Taliban at War: Inside the Helmand Insurgency, 2004–2012, International Affairs, Vol. 89, No. 4, 2013, p. 865.

  63. Ben Brandt, “The Taliban’s Conduct of Intelligence and Counter-intelligence,” Combating Terrorism Center Sentinel, Vol. 4, No. 6, June 2011, p. 20.

  64. C. J. Chivers, “Afghanistan’s Hidden Taliban Government,” New York Times, February 6, 2011.

  65. Ibid., p. 19.

  66. Paraag Shukla, “ISW in Brief: Jailbreak Spurs Attacks in Kandahar City,” Institute for the Study of War, May 12, 2011.

  67. Brandt, “The Taliban’s Conduct of Intelligence,” p. 20.

  68. Borzou Daraghi, “Afghan Intelligence Network Embraces the New,” Los Angeles Times, April 13, 2011.

  69. Seth G. Jones, In the Graveyard of Empires: America’s War in Afghanistan, New York: W.W. Norton & Co., 2009, p. 99.

  70. Thomas H. Johnson, “On the Edge of the Big Muddy: The Taliban Resurgence in Afghanistan,” China and Eurasia Forum Quarterly, Vol. 5, No. 2, 2007, p. 101.

  71. In a 2011 RAND Corporation Delphi exercise, respondents consistently cited the COIN forces’ inability to prevent cross-border smuggling of weapons, narcotics, and fighters as one of the factors most likely to contribute to a potential victory for the Taliban. See Christopher Paul, Counterinsurgency Scorecard: Afghanistan in Early 2011 Relative to the Insurgencies of the Past 30 Years, Santa Monica, Calif.: RAND Corp., 2011. This finding is consistent with that of other expert elicitations, including one chaired by Richard L. Armitage and Samuel R. Berger and directed by Daniel S. Markey, “U.S. Strategy for Pakistan and Afghanistan,” Council on Foreign Relations Independent Task Force Report No. 65, November 2010.

  72. Jones, In the Graveyard of Empires, p. 99.

  73. Paul Staniland, “Caught in the Muddle: America’s Pakistan Strategy,” The Washington Quarterly, Winter 2011, p. 137.

  74. For an in-depth analysis of the difficulty of operating along the AfPak border, see Thomas H. Johnson and M. Chris Mason, “No Sign Until the Burst of Fire: Understanding the Pakistan-Afghanistan Frontier,” International Security, Vol. 32, No. 4, Spring 2008, pp. 41–77.

  75. Thomas H. Johnson and M. Chris Mason, “Understanding the Taliban and Insurgency in Afghanistan,” Orbis, Winter 2007, p. 83.

  76. Paul Cruickshank, “The Militant Pipeline: Between the Afghanistan-Pakistan Border Region and the West,” New America Foundation National Security Studies Program Policy Paper, second edition, July 2011.

  77. Ahmed Rashid, Descent into Chaos: How the War against Islamic Extremism Is Being Lost in Pakistan, Afghanistan, and Central Asia, London: Allen Lane, 2008, p. 222.

  78. Dennis C. Blair, “Annual Threat Assessment of the U.S. Intelligence Community,” Testimony before the Senate Select Committee on Intelligence, 2 February 2010.

  79. For more on the relationship between the Taliban and Iran, see Sajjan M. Gohel, “Iran’s Ambiguous Role in Afghanistan,” Combating Terrorism Center Sentinel, Vol. 3, No. 3, March 2010, pp. 13–16; Alireza Nader and Joya Laha, Iran’s Balancing Act in Afghanistan, Santa Monica, Calif.: RAND Corp., 2011; and Seth G. Jones, “Al Qaeda in Iran: Why Tehran Is Accommodating the Terrorist Group,” Foreign Affairs, January 29, 2012.

  80. Department of Defense Report on Progress Toward Stability and Security in Afghanistan: United States Plan for Sustaining the Afghan National Security Forces, April 2012, p. 1.

  81. James F. Dobbins, After the Taliban: Nation-Building in Afghanistan, Washington DC: Potomac, 2008, p. 166.

  82. Justin Y. Reese, “Financing the Taliban,” in Michael Freeman, Financing Terrorism: Case Studies, Surrey: Ashgate, 2012, p. 96.

  83. Peter Dahl Thruelsen, “The Taliban in Southern Afghanistan: A Localized Insurgency with a Local Objective,” Small Wars & Insurgencies, Vol. 21, No. 2, June 2010, p. 264.

  84. Seth Jones, Counterinsurgency in Afghanistan, Santa Monica, CA: RAND Corporation, 2008, p. 13.

  85. Anne Stenersen, “The Taliban Insurgency in Afghanistan—Organization, Leadership, and Worldview,” Norwegian Defense Research Establishment (FFI), 5 February 2010, p. 24.

  86. Brahimi, “Evolving Ideology,” p. 4.

  87. In fact, a United Nations report attributed 75 percent of civilian casualties to the Taliban and other insurgents. See Alissa J. Rubin, “Taliban Causes Most Civilian Deaths in Afghanistan,” New York Times, March 9, 2011.

  88. Brian Glyn Williams, “Mullah Omar’s Missiles,” Middle East Policy, Vol. 15, No. 4, Winter 2008, p. 28.

  89. Stenersen, “Organization, Leadership, Worldview,” p. 27.

  90. Ibid., p. 27.

  91. Alissa J. Rubin, “Taliban Say Offensive Will Begin Sunday,” New York Times, April 30, 2011.

  92. Mohammad Masoom Stanekzai, Thwarting Afghanistan’s Insurgency: A Pragmatic Approach toward Peace and Reconciliation, United States Institute of Peace, September 2008, pp. 9–10.

  93. Shinn and Dobbins, Afghan Peace Talks, p. 24.

  94. All locations listed are in Pakistan.

  95. Shinn and Dobbins, p. 19.

  96. Giustozzi, “Negotiating with the Taliban,” p. 8.

  97. For example, the “southeastern command” is dominated by th
e Haqqani Network and therefore maintains close relations with the ISI. Ibid., p. 14.

  98. Jeffrey Dressler and Carl Forsberg, “The Quetta Shura Taliban in Southern Afghanistan: Organization, Operations, and Shadow Governance,” Institute for the Study of War Backgrounder (December 21, 2009), 8.

  99. Fotini Christia and Michael Semple, “Flipping the Taliban: How to Win in Afghanistan,” Foreign Affairs, Vol. 88, No.4, July/August 2009, p. 34.

  100. Dressler and Forsberg, “Quetta Shura Taliban,” p. 7.

  101. Ibid.

  102. Ibid.

  103. Peters, Seeds of Terror, pp. 15–16.

  104. Peters, “Crime and Insurgency,” pp. 18–19.

  105. Matiullah Achakzai, “Taliban Code of Conduct Seeks to Win Heart, Minds,” Associated Press, August 3, 2010.

  106. Among the strictures proffered by Mao were: replace straw bedding and wooden bed-boards after sleeping at peasant homes overnight; return whatever was borrowed; pay for any item damaged; remain courteous and humane; and be fair in any business dealings. Philip Short, Mao: A Life, New York: Holt, 1999, p. 222; another great source on Mao is Jung Chang’s Mao: The Unknown Story, New York: Knopf, 2005.

  107. Christopher Paul, “As a Fish Swims in the Sea: Relationships Between Factors Contributing to Support for Terrorist or Insurgent Groups,” Studies in Conflict and Terrorism, Vol. 33, No. 6, 2010, p. 488.

  108. Stenersen, “Organization, Leadership, Worldview,” p. 30.

  109. Antonio Giustozzi, Koran, Kalashnikov, Laptop: The New-Taliban Insurgency in Afghanistan, New York: Columbia University Press, 2008, pp. 38–39.

  110. Ibid., pp. 71–72.

  111. Shahid Asfar, Chris Samples, Thomas Wood, “The Taliban: An Organizational Analysis,” Military Review, May/June 2008, p. 67.

  112. Najibullah Lafraie, “Resurgence of the Taliban Insurgency in Afghanistan: How and Why?” International Politics, Vol. 46 (2009), pp. 102–113. For more on the provincial and district levels of governance in Afghanistan, see Michael Shurkin, Subnational Government in Afghanistan, Santa Monica, Calif.: RAND Corp., 2011; Colin Cookman and Caroline Wadhams, “Governance in Afghanistan: Looking Ahead to What We Leave Behind,” Center for American Progress, May 2010; and Thomas H. Johnson and M. Chris Mason, “All Counterinsurgency Is Local,” The Atlantic, October 2008.

  113. Todd Helmus, “Why and How Some People Become Terrorists,” in Paul K. Davis and Kim Cragin, eds., Social Science for Counterterrorism: Putting the Pieces Together, Santa Monica, CA: RAND Corporation, 2009, p. 86.

  114. Florian Broschk, “Inciting the Believers to Fight: A Closer Look at the Rhetoric of the Afghan Jihad,” Afghanistan Analysts Network, February 2011.

  115. Thomas Ruttig, “The Battle for Afghanistan: Negotiations with the Taliban: History and Prospects for the Future,” New America Foundation, National Security Studies Program Policy Paper, May 2011, p. 5.

  116. International Crisis Group Report, “Taliban Propaganda: Winning the War of Words?” Asia Report No. 158, July 24, 2008.

  117. Giustozzi, Koran, Kalashnikov, and Laptop, p. 120.

  118. Alia Brahimi, “The Taliban’s Evolving Ideology,” London School of Economics Global Governance Working Paper, February 2010, p. 4.

  119. Stenersen, “Organization, Leadership, and Worldview,” p. 32.

  120. Brahimi, “Evolving Ideology,” p. 11.

  121. Ibid., p. 9.

  122. Ibid., p. 8.

  123. Ibid.

  124. Mark Basile, “Going to the Source: Why Al-Qaeda’s Financial Network Is Likely to Withstand the Current War on Terrorist Financing,” Studies in Conflict & Terrorism, Vol. 27, No. 3, 2004, p. 170.

  125. See Aram Roston, “How the U.S. Funds the Taliban,” The Nation, November 11, 2009 and Karen DeYoung, “U.S. Trucking Funds Reach Taliban, Military-Led Investigation Concludes,” Washington Post, July 24, 2011.

  126. Author interview with Gretchen Peters, October 2014.

  127. Ruttig, “The Battle for Afghanistan,” p. 4.

  128. Dexter Filkins, “The Afghan Bank Heist,” The New Yorker, February 14, 2011.

  129. Freeman, pp. 108–109.

  130. Gretchen Peters, Seeds of Terror, p. 178.

  131. Freeman, p. 107.

  132. Giustozzi, “Negotiating with the Taliban,” p. 4.

  133. Shinn and Dobbins, Afghan Peace Talks, p. 5.

  134. Ruttig, “The Battle for Afghanistan,” p. 7.

  135. For more on the challenges of training and equipping ANSF, see Anthony H. Cordesman, Adam Mausner, and David Kasten, Winning in Afghanistan: Creating Effective Afghan Security Forces, Washington DC: Center for Strategic and International Studies, May 2009.

  CHAPTER 7

  1. Al Qaeda, Al-Qaida, Al-Qa’ida and several other variants are often used interchangeably in the literature. Al-Qaeda has been translated variously as the “base of operation,” “foundation,” “precept,” or “method.” Bruce Hoffman, “The Changing Face of Al Qaeda and the Global War on Terrorism,” Studies in Conflict & Terrorism, Vol. 27, No. 6, 2004, p. 551.

  2. R. Kim Cragin, “Early History of Al-Qaida,” The Historic Journal, Vol. 51, No. 4, December 2008, pp. 1051–1052.

  3. Cragin, “Early History of Al-Qaida,” p. 1056.

  4. Core Al Qaeda is sometimes referred to as the Al Qaeda Core, Al Qaeda Central, or the Al Qaeda Senior Leadership (AQSL).

  5. It is important to note that these groups are constantly in a state of flux.

  6. Al Qaeda in Iraq (AQI), once considered an Al Qaeda Affiliate, is now known as ISIS and is outside the orbit of Al Qaeda. As such, it will receive separate, in-depth treatment in Chapter 9.

  7. John Roth et al., Monograph on Terrorist Financing, Staff Report to the National Commission on Terrorist Attacks Upon the United States, Washington DC: U.S. Government Printing Office, 2004, pp. 119–120.

  8. Matthew Levitt, “Al-Qa’ida’s Finances: Evidence of Organizational Decline?” CTC Sentinel, Vol. 1, No. 5, April 2008, p. 7.

  9. Angel Rabasa et al., Beyond Al-Qaeda: The Global Jihadist Movement, Part I, Santa Monica, CA: RAND Corp., 2006, p. 59.

  10. Hearing of the House Permanent Select Committee on Intelligence, “Annual Worldwide Threat Assessment,” February 7, 2008.

  11. Levitt, “Al-Qa’ida’s Finances,” p. 8.

  12. Reuters, “Saudi Says Arrests Qaeda Suspects Planning Attacks,” Washington Post, March 3, 2008.

  13. Bruce Hoffman, “Al Qaeda’s Uncertain Future,” Studies in Conflict & Terrorism, Vol. 36, No. 8, 2013, p. 644.

  14. Levitt, “Al Qaida’s Finances,” p. 8.

  15. Gunaratna and Oreg, “Al Qaeda’s Organizational Structure,” p. 1047.

  16. Seth G. Jones, A Persistent Threat: The Evolution of Al Qaida and Other Salafist Jihadists, Santa Monica, CA: RAND Corp., 2014.

  17. Under zakat, Muslims are encouraged to donate approximately 2.5% of their savings and assets annually, if possible.

  18. Rohan Gunaratna, “The Post-Madrid Face of Al Qaeda,” The Washington Quarterly, Vol. 27, No. 3, 2004, p. 95.

  19. Victor Comras, “Al Qaeda Finances and Funding to Affiliated Groups,” in Jeanne K. Giraldo and Harold A. Trinkunas, Terrorism Financing and State Responses: A Comparative Perspective, Stanford: Stanford University Press, 2007, pp. 122–123.

  20. Paul Watson and Mubashir Zaidi, “Militants Flourish in Plain Sight,” Los Angeles Times, January 25, 2004.

  21. Levitt, “Al-Qa’ida’s Finances,” p. 8.

  22. In March 2002, the U.S. and Saudi Arabia jointly designed the Bosnia and Herzegovina and Somalia offices of al Haramain as Al Qaeda funding sources. Other branches were also implicated, including those in Albania, Croatia, Ethiopia, Kenya, Kosovo, Indonesia, Pakistan, and Tanzania. Comras, “Al Qaeda Finances,” in Giraldo and Trinkunas, Terrorism Financing and State Responses, p. 121.

  23. Juan Miguel del Cid Gomez, “A Financial Profile of the Terrorism of Al-Qaeda and Its Affiliates,” Perspectives on Terrorism, Vol. 4, No. 4
, October 2010, pp. 8–9.

  24. Comras, “Al Qaeda Finances,” in Giraldo and Trinkunas, Terrorism Financing and State Responses, p. 118.

  25. Including associated groups like Lashkar-e-Taiba and Jamaat Mujahidin Bangladesh (JMB).

  26. These countries include Albania, Azerbaijan, Bangladesh, Bosnia, Cambodia, and Russia. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 10.

  27. Levitt, “Al-Qa’ida’s Finances,” p. 7.

  28. Rabasa et al., Beyond Al-Qaeda, Part I, p. 57.

  29. Levitt, “Al-Qa’ida’s Finances,” p. 7.

  30. Terrorist Financing, Financial Action Task Force, February 29, 2008, p. 14.

  31. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 13.

  32. Timothy L. Thomas, “Al Qaeda and the Internet: The Danger of ‘Cyberplanning,’ ” Parameters, Spring 2003, p. 117.

  33. Jeffrey Robinson, “The Money Trail: How Petty Crime Funds Terror,” New York Times, August 13, 2004.

  34. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 18.

  35. Ibid., p. 7.

  36. Peter Bergen, Holy Terror, Inc.: Inside the Secret World of Osama bin Laden, New York: Free Press, 2001, pp. 47–49.

  37. Hoffman, “Changing Face,” p. 553.

  38. Comras, “Al Qaeda Finances,” in Giraldo and Trinkunas, Terrorism Financing and State Responses, pp. 123–124.

  39. Ibid., p. 128.

  40. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 10.

  41. Comras, p. 128.

  42. Edwina A. Thompson, “An Introduction to the Concept and Origins of Hawala,” Journal of the History of International Law, Vol. 10, 2008, p. 83.

  43. Mark Basile, “Going to the Source: Why Al Qaeda’s Financial Network Is Likely to Withstand the Current War on Terrorist Financing,” Studies in Conflict & Terrorism, Vol. 27, No. 3, 2004, p. 170.

  44. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 11.

  45. Ibid., p. 14.

  46. Annie Sweeney, “Al-Qaida Operative Invested with Chicago Brokerage House in 2005,” Chicago Tribune, June 21, 2011.