Frozen assets: US has crimped Al Qaeda funds

The CIA estimates that prior to Sept. 11, Al Qaeda was spending about $30 million per year. Since then, the US has seized some $265 million in assets linked to the group.

from the October 30, 2007 edition

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Some jurors had a hard time accepting the prosecution's contention that by sending money to Hamas-affiliated local charities named "zakat committees" the Holy Land Foundation was supporting terrorist actions.

"The fact that they couldn't get a single conviction suggests that we need to rethink the process by which [Holy Land] was shut down," says David Cole, a law professor at Georgetown University. "They were able to close it down, freeze its assets ... ultimately on the basis of secret evidence."

The US has issued sanctions against 44 different charitable organizations under authority derived from an executive order signed by President Bush, according to Chip Poncy, director of strategic policy at the Treasury's Office of Terrorist Financing and Financial Crimes.

All these groups were carrying out some legitimate charitable activities, said Mr. Poncy at a May 10 hearing of the Senate Homeland Security Committee. But they were also funding some activities that the US considered to be in support of terrorism.

"The view that we have always taken is that if any aspect of a charity's organization is engaged in terrorist support, then the charitable organization is a problem," said Poncy.

Overall, tackling the financial front of the struggle against terrorism appears to be successful, say experts. In part, this is due to the fact that the US is a center of world commerce, and many global business transactions are carried out in dollars.

Plus, even foreign banks generally do not want the taint of dealing with named terrorists. Thus the world's formal financial system is now generally closed to Al Qaeda and other well-known terrorist groups.

The CIA estimates that prior to Sept. 11, Al Qaeda was spending about $30 million per year. Since then, the US has seized some $265 million in assets linked to the group – about nine years worth of operating expenses.

The US has also named some 460 individuals as terrorist supporters, and thus subject to sanctions. The Oct. 10 designation of the three men alleged to be paymasters of Southeast Asian militants was part of this aspect of the effort.

The 9/11 Commission gave an 'A-' to the war on terrorist financing in its 2004 public report.

"It is premature to assume that terrorist organizations are having difficulty funding their organizations and operations," concludes a monograph on the subject issued by the US Army Command and General Staff College. "What is important is that the global effort against terrorist financing has made it more expensive and more difficult to raise and move funds."

That can be seen in the fact that the most spectacular Al Qaeda-linked attacks in the West in recent years – the Madrid bombings of 2004 and the London bombings of 2005 – were low-tech affairs, cheap, and financed primarily through criminal activities carried out by the bomber groups themselves.

The future of terrorist financing may involve simple theft or the manipulation of stored-value cards, Internet banking, and online payment services.

"Our adversaries will either become more technologically savvy or they will regress to methods that don't leave a paper trail," said John Pistole, FBI deputy director, at an Oct. 22 American Bankers Association seminar on terrorist financing.

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