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

by Colin P. Clarke Ph. d.

  47. Phil Williams, “Terrorist Financing,” in Paul Shemella, ed., Fighting Back: What Governments Can Do About Terrorism, Stanford: Stanford University Press, 2011, p. 45.

  48. For more, see Vahid Brown and Don Rassler, Fountainhead of Jihad: The Haqqani Nexus, 1973–2012, Oxford: Oxford University Press, 2013.

  49. For more, see Gregory D. Johnsen, The Last Refuge: Yemen, Al Qaeda, and America’s War in Arabia, New York: W.W. Norton & Co., 2013.

  50. Rukmimi Callimachi, “Ransoming Citizens, Europe Becomes Al Qaeda’s Patron,” The New York Times, July 29, 2014.

  51. Ellen Knickmeyer, “Al Qaeda-Linked Groups Increasingly Funded by Ransom,” The Wall Street Journal, July 29, 2014.

  52. Rukmimi Callimachi, “Ransoming Citizens, Europe Becomes Al Qaeda’s Patron,” The New York Times, July 29, 2014.

  53. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 14.

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

  55. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” pp. 12–13.

  56. Ibid., pp. 13–14.

  57. Douglas Farah, Blood from Stones: The Secret Financial Network of Terror, New York: Broadway Books, 2004, p. 4.

  58. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” pp. 12–13.

  59. Gretchen Peters and Don Rassler, “Crime and Insurgency in the Tribal Areas of Afghanistan and Pakistan,” Center for Combating Terrorism (CTC) at West Point, 2010, pp. ii–iii.

  60. Ibid., p. 36

  61. Gretchen Peters, “Haqqani Network Financing,” Center for Combating Terrorism (CTC) at West Point, 2012, p. 47.

  62. Daniel Byman, “Passive Sponsors of Terrorism,” Survival, Vol. 47, No. 4, Winter 2005–06, p. 117. Byman notes that Al-Qaida recruited and raised money in Germany, enjoyed financial support from major financiers in Saudi Arabia, and planned operations in Malaysia.

  63. Daniel Byman, Deadly Connections: States that Sponsor Terrorism, New York: Cambridge University Press, 2005, p. 322.

  64. Letters from Abbottabad, p. 42.

  65. Seth G. Jones, “Al Qaeda in Iran,” Foreign Affairs, January 29, 2012.

  66. Mette Eilstrup-Sangiovanni and Calvert Jones, “Assessing the Dangers of Illicit Networks,” International Security, Vol. 33, No. 2, Fall 2008, p. 34.

  67. Hoffman, “The Changing Face,” p. 551.

  68. Also known as the Pakistani Taliban.

  69. Gunaratna and Oreg, “Al Qaeda’s Organizational Structure,” pp. 1048–1049.

  70. One of the most comprehensive treatments of Al-Qaida attacks worldwide can be found in Bruce Hoffman and Fernando Reinares, eds., The Evolution of the Global Terrorist Threat: From 9/11 to Osama Bin Laden’s Death, New York: Columbia University Press, 2014.

  71. Paper, Dying to Win, pp. 185–186.

  72. Mia Bloom, Dying to Kill, p. 76.

  73. Moises Naim, “Five Wars of Globalization,” Foreign Policy, November 3, 2009.

  74. Stewart Patrick, Weak States, p. 37.

  75. Rabsa et al., Beyond Al Qaeda, pp. 48–50.

  76. Brian Michael Jenkins, Will Terrorists Go Nuclear?, pp. 127–129.

  77. Gaetano Joe Ilardi, “The 9/11 Attacks—A Study of Al Qaeda’s Use of Intelligence and Counterintelligence,” Studies in Conflict & Terrorism, Vol. 31, No. 1, 2009, pp. 171–173.

  78. Ibid., p. 176.

  79. Ibid., p. 178.

  80. William Rosenau, “Understanding Insurgent Intelligence Operations,” Marine Corps University Journal, Vol. 2, No. 1, Spring 2011, p. 23.

  81. Ibid., p. 12.

  82. Gunaratna, “Post-Madrid Al Qaeda,” pp. 92–94.

  83. “Pakistan’s Tribal Areas: Appeasing the Militants,” International Crisis Group, Asia Report No. 125, December 11, 2006, p. 1.

  84. James Revill, “Militancy in the FATA and the NWFP,” Pakistan Security Research Unit, Brief No. 23, November 19, 2007, p. 3.

  85. Rohan Gunaratna and Anders Nielsen, “Al Qaeda in the Tribal Areas of Pakistan,” Studies in Conflict & Terrorism, Vol. 31, No. 9, 2008, p. 777.

  86. The main tenets of pashtunwali include hospitality, asylum, justice, revenge, and strict defense of honor, land, women, nation, and Pashtun culture Palwasha Kakar, “Tribal Law of Pashtunwali,” Harvard University School of Law.

  87. “Pakistan’s Tribal Areas,” Council on Foreign Relations, October 26, 2007.

  88. Eric Sayers, “The Islamic Emirate of Waziristan and the Bajaur Tribal Region: The Strategic Threat of Terrorist Sanctuaries,” The Center for Security Policy, No. 19, February 2007, p. 3.

  89. Rohan Gunaratna and Anders Nielsen, “Al Qaeda in the Tribal Areas of Pakistan,” Studies in Conflict & Terrorism, Vol. 31, No. 9, 2008, pp. 781–782.

  90. Hoffman, “Al Qaeda’s Uncertain Future,” p. 636.

  91. Scott Helfstein with John Solomon, “Risky Business: The Global Threat Network and the Politics of Contraband,” West Point: Combating Terrorism Center, May 2014, p. 55.

  92. During its years in Afghanistan, bin Laden paid the Taliban approximately $20 million a year. In Sudan, a five year stay resulted in approximately $150 million paid to the Sudanese government. Rabasa et al., Beyond Al-Qaeda, Part I, p. 61.

  93. Gunaratna and Oreg, “Al Qaeda’s Organizational Structure,” p. 1049.

  94. Hoffman, “The Changing Face,” p. 551.

  95. Rohan Gunaratna and Anders Nielsen, “Al Qaeda in the Tribal Areas of Pakistan,” Studies in Conflict & Terrorism, Vol. 31, No. 9, 2008, p. 783.

  96. Ibid., p. 788.

  97. Paul Cruickshank, “The Militant Pipeline: Between the Afghanistan-Pakistan Border Region and the West,” New America Foundation, February 2010.

  98. Carlotta Gall, “The Wrong Enemy,” p. 83.

  99. Seth Jones, “Hunting in the Shadows,” pp. 351–352.

  100. Daniel L. Byman, “Breaking the Bonds Between Al-Qa’ida and Its Affiliate Organizations,” Brookings Institution Analysis Paper, No. 27, August 2012, p.v.

  101. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” pp. 4–5.

  102. Hoffman, “Al Qaeda’s Uncertain Future,” p. 636.

  103. Ibid., p. 639. Also see Brian Michael Jenkins, “Al Qaeda in Its Third Decade: Irreversible Decline or Imminent Victory?” Santa Monica, CA: RAND Corp., 2012 as well as Rick Nelson and Thomas M. Sanderson, “A Threat Transformed: Al Qaeda and Associated Movements in 2011,” Center for Strategic and International Studies (CSIS), February 2011.

  104. Gunaratna and Oreg, p. 1054.

  105. Some of this debate played out in the pages of Foreign Affairs while bin Laden was still alive. See Bruce Hoffman, “The Myth of Grass-Roots Terrorism: Why Osama bin Laden Still Matters,” Foreign Affairs, Vol. 87, No. 3, May–June 2008, pp. 133–138. For a synopsis of his importance after his death, see Brian Michael Jenkins, “Al Qaeda After Bin Laden: Implications for American Strategy,” Testimony presented before the House Armed Services Committee, Subcommittee on Emerging Threats and Capabilities, June 22, 2011.

  106. Steve Coll, Ghost Wars, p. 269; p. 380.

  107. Lawrence Wright, Looming Tower, p. 60; p. 264.

  108. Zachary Laub, “Backgrounders: Al Qaeda in the Islamic Maghreb (AQIM),” Council on Foreign Relations, January 8, 2014.

  109. Eli Lake, “Meet Al Qaeda’s New General Manager: Nasser al-Wuhayshi,” The Daily Beast, August 9, 2013.

  110. Anonymous, Imperial Hubris: Why the West if Losing the War on Terror, Washington DC: Brassey’s, Inc., 2004, p. 129.

  111. Bruce Hoffman, “Al Qaeda Trends in Terrorism and Future Potentialities: An Assessment,” paper presented at a meeting of the Council on Foreign Relations, Washington DC Office, May 8, 2003, p. 5.

  112. David Aaron, In Their Own Words: Voices of Jihad, Santa Monica, CA: RAND Corp., 2008, p. 73.

  113. Cragin, “Early History of Al-Qa’ida,” p. 1066.

  114. Also known as Mustafa Setmariam Nasar.

  115. Al-Awlaki’s significance has
been questioned by Gregory Johnsen in “A False Target in Yemen,” New York Times, November 19, 2010. Johnsen argues that by authorizing the killing of Al-Awlaki, an American citizen reported to be hiding in Yemen, the Obama administration has afforded him undue influence far beyond his true position as a “midlevel religious functionary.” Johnsen goes on to point out that far more dangerous individuals should be a priority, including the leader of Al-Qaida in the Arabian Peninsula (AQAP) Nasir al-Wuhayshi, deputy commander Said Ali-al Shihri, AQAP’s top religious scholar Adil al-Abab, its chief of military operations Qassim al-Raymi, its bomb maker Ibrahim Hassan Asiri, and its leading ideologue Ibrahim Suleiman al-Rubaysh.

  116. Declan Welsh and Eric Schmitt, “Drone Strike Killed No. 2 in Al Qaeda U.S. Officials Say,” New York Times, June 5, 2012.

  117. A great source for Salafist jihadist writings is Cronus Global LLC, which can be found in addition to the three insurgent theorists listed above, there are also a number of emerging jihadi pundits in the virtual arena. Some of the most prolific Internet authors include Asad al-Jihad, Abd al-Rahman al-Faqir, Hafid al-Hussain, Shaykh abu-Abd-al Rahman al-Yafi’I, Abu Shadiyah, Ziyad Abu Tariq, Shaykh Abu Ahmad and al-Rahman al-Masri, and Yaman Mukhaddab. For more information see Jarret Brachman, “The Worst of the Worst,” Foreign Policy, January 22, 2010.

  118. For more on narratives, see William D. Casebeer and James A. Russell, “Storytelling and Terrorism: Towards a Comprehensive ‘Counter-Narrative Strategy’,” Strategic Insights, Vol. 4, No. 3, March 2005.

  119. Hoffman, “The Changing Face,” p. 551.

  120. Ibid., pp. 551–552.

  121. Cragin, “Early History of Al-Qa’ida,” pp. 1063–1064.

  122. Gunaratna and Oreg, pp. 1054–1064.

  123. Brian Michael Jenkins, “The al Qaeda-Inspired Terrorist Threat: An Appreciation of the Current Situation,” Testimony presented before the Canadian Senate Special Committee on Anti-terrorism on December 6, 2010, p. 6.

  124. Brian Michael Jenkins, Stray Dogs and Virtual Armies, p. 14; see also, Steven Simon and Jonathan Stevenson, “Al-Qaeda’s New Strategy: Less Apocalypse, More Street Fighting,” The Washington Post, October 10, 2010.

  125. Hoffman, “The Changing Face,” p. 553.

  126. Philip Seib, “The Al-Qaeda Media Machine,” Military Review, May/June 2008, pp. 75–75.

  127. Hoffman, “Al Qaeda’s Uncertain Future,” p. 643.

  128. Marc Lynch, “Al Qaeda’s Media Strategies,” The National Interest, Spring 2006 Vol. 83, pp. 50–52.

  129. Michael Scheuer, “Al Qaeda’s Media Doctrine,” The Jamestown Foundation, Vol. 4, No. 5, May 30, 2007; see also, Manuel R. Torres et al., “Analysis and Evolution of Global Jihadist Media Propaganda,” Terrorism & Political Violence, Vol. 18, No. 3, 2006, pp. 399–421.

  130. Hoffman, “Al Qaeda’s Uncertain Future,” p. 643.

  131. Yariv Tsfati and Gabriel Weimann, “www.terrorism.com: Terror on the Internet,” Studies in Conflict and Terrorism, Vol. 25, No. 5, pp. 317–332.

  132. Evan F. Kohlmann, “The Real Online Terrorist Threat,” Foreign Affairs, Vol. 85, No. 5, 2006, p. 124.

  133. Tom Keatinge, “The Price of Freedom: When Governments Pay Ransoms,” Foreign Affairs, August 13, 2014.

  134. Rabasa et al., Beyond Al-Qaeda, Part I, p. 60.

  135. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 6.

  136. Ibid.

  137. Seeds, p. 187

  138. Rabasa et al., Beyond Al-Qaeda, Part I, p. 58.

  139. Ibid., p. 59.

  140. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 3.

  141. Basile, “Going to the Source,” p. 170.

  142. 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, p. 115.

  143. Gunaratna and Nielsen, p. 782.

  144. Seth G. Jones, “The Future of Al Qa’ida,” Congressional Testimony, presented before the House Foreign Affairs Committee, Subcommittee on Terrorism, Nonproliferation and Trade, May 24, 2011.

  145. The FATF is the de facto international standard for countering financial crime and the illicit use of the global financial system Scott Helfstein with John Solomon, “Risky Business: The Global Threat Network and the Politics of Contraband,” West Point: Combating Terrorism Center, May 2014.

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

  147. Gomez, “A Financial Profile of Al-Qaeda and Its Affiliates,” p. 9.

  148. Ibid., p. 15.

  149. Ibid.

  150. Ibid., p. 11.

  151. Hoffman, “Al Qaeda’s Uncertain Future,” p. 641.

  CHAPTER 8

  1. Al Qaeda in Iraq/Al Qaeda in the Land of the Two Rivers (which was originally known as Jamaat al-Tawhid wali-Jihad, or “Monotheism and Holy War Group”) has undergone several transformations in recent years, becoming the Islamic State in Iraq, the Islamic State in Iraq and the Levant (ISIL)/the Islamic State in Iraq and al-Sham (ISIS), and then finally, the Islamic State, which is the group’s current name at the time of this writing.

  2. In between the time it was AQI and ISIS, the group was alternatively known as Majlis Shura al-Mujahedin (MSM) and the Islamic State of Iraq (ISI). Aaron Y. Zelin, “The War Between ISIS and al-Qaeda for Supremacy of the Global Jihadist Movement,” The Washington Institute for Near East Policy, No. 20, June 2014, p. 1.

  3. William Young et al., Spillover from the Conflict in Syria: An Assessment of the Factors that Aid and Impede the Spread of Violence, Santa Monica, CA: RAND Corporation, 2014.

  4. Tim Arango, “Uneasy Alliance Gives Insurgents an Edge in Iraq,” New York Times, June 18, 2014. See also, Anthony Cordesman, “The Real Center of Gravity in the War Against the Islamic State,” Center for Strategic and International Studies (CSIS), September 30, 2014.

  5. “A New Focus on Foreign Fighters,” The New York Times, September 24, 2014.

  6. Jamie Detmer, “How to Cut Off ISIS Terror Tycoons,” Daily Beast, September 26, 2014

  7. Vivienne Walt, “How Guns and Oil Net ISIS $1 Million A Day,” Fortune, July 24, 2014.

  8. Patrick B. Johnston and Benjamin Bahney, “Hit the Islamic State’s Pocketbook,” Newsday, October 5, 2014.

  9. Matthew Levitt and Lori Plotkin Boghardt, “Funding ISIS,” The Washington Institute for Near East Policy, September 12, 2014.

  10. Matthew Levitt, “Foreign Fighters and Their Economic Impact: A Case Study of Syria and Al Qaeda in Iraq,” Perspectives on Terrorism, Vol. 3, No. 3 pp. 13–24, 16, 2009.

  11. “Did Islamic State Militants Use Bitcoin To Fund Their English-Language Website?” Radio Free Europe/Radio Liberty, October 13, 2014.

  12. Johnston and Bahney, “Hitting ISIS Where It Hurts,” August 13, 2014.

  13. Matthew Levitt, “Show Me the Money: Targeting the Islamic State’s Bottom Line,” Homeland Security Policy Institute, October 1, 2014.

  14. As Daniel Byman notes, intelligence services can more easily penetrate diasporas that are based in Western countries in order to curtail fund-raising. Daniel L. Byman, “Breaking the Bonds Between Al-Qa’ida and Its Affiliate Organizations,” Brookings Institution Analysis Paper, No. 27, August 2012, p. 43.

  15. One of the largest Syrian diaspora communities is in Germany, with an estimated 33,000 Syrians living in Germany. “The Engagement of the Syrian Diaspora in Germany in Peacebuilding,” United Nations University Migration Network, IS Academy Policy Brief, No. 13.

  16. Peter K. Waldmann, “Radicalisation in the Diaspora: Why Muslims in the West Attack Their Host Countries,” Real Instituto Elcano Working Paper, September 2010, p. 17.

  17. See Petter Nesser, “Jihadism in Western Europe After the Invasion of Iraq: Tracing Motivational Influences from the Iraq War on Jihadist Terrorism in Western Europe,” Studies in Conflict & Terrorism, Vol. 29, No. 4, 2006, pp. 323–342
and Peter R. Neumann, “Europe’s Jihadist Dilemma,” Survival, Vol. 48, No. 2, 2006, pp. 71–84.

  18. “Attacking ISIL’s Foundation,” Remarks of Under Secretary for Terrorism and Financial Intelligence David S. Cohen at The Carnegie Endowment for International Peace, October 23, 2014.

  19. Elizabeth Dickinson, “Playing with Fire: Why Private Gulf Financing for Syria’s Extremist Rebels Risks Igniting Sectarian Conflict at Home,” Brookings Analysis Paper, No. 16, December 2014, p. 3; p. 10.

  20. Marc Lynch, “Islamists and Their Charities,” Washington Post Monkey Cage Blog, October 15, 2014.

  21. Steven Brooke, “Assumptions and Agendas in the Study of Islamic Social Service Provision,” in Islamist Social Services, Project on Middle East Political Science (POMEPS), October 15, 2014, p. 14.

  22. Amit R. Paley, “Iraqis Joining Insurgency Less for Cause Than Cash,” Washington Post, November 20, 2007

  23. Phil Williams, Criminals, Militias, and Insurgents: Organized Crime in Iraq, Carlisle, PA: U.S. Army War College Strategic Studies Institute (SSI), June 2009, pp. 83–84.

  24. Ibid., pp. 186–188.

  25. Ahmad Salama, “Kidnapping and Construction: Al Qaeda Turns to Big Business, Mafia-Style,” Niqash, April 6, 2011.

  26. Michael Jonsson, “Following the Money: Financing the Territorial Expansion of Islamist Insurgents in Syria,” Swedish Defense Research Agency, FOI Memo #4947, May 2014.

  27. Indeed, as of February 2015, the Pentagon reported that airstrikes were effective in diminishing ISIS’s overall revenues from oil smuggling. Kate Brannen, “Pentagon: Oil No Longer the Islamic State’s Main Source of Revenue,” Foreign Policy, February 3, 2015.

  28. Patrick B. Johnston and Benjamin Bahney, “Hit the Islamic State’s Pocketbook,” Newsday, October 5, 2014.

  29. Rachel Louise Ensign, “Will Anti-Money Laundering Efforts Work Against the Islamic State?” Wall Street Journal, August 29, 2014.

  30. Josh Rogin, “America’s Allies Are Funding ISIS,” Daily Beast, June 14, 2014. For more on Qatar and Kuwait, specifically, see Lauri Plotkin Boghardt, “The Terrorist Funding Disconnect with Qatar and Kuwait,” Washington Institute for Near East Policy, Policywatch 2247, May 2, 2014.