Terrorist Financing and Resourcing (Initiatives in Strategic Studies: Issues and Policies)

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T e r ror ist F i na nci ng a n d R e s ou rc i ng

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Initiatives in Strategic Studies: Issues and Policies James J. Wirtz General Editor Jeffrey A. Larsen T.V. Paul Brad Roberts James M. Smith Series Editors I NITIATIVES IN STR ATEGIC STUDIES provides a bridge between the use of force or diplomacy and the achievement of political objectives. This series focuses on the topical and timeless issues relating to strategy, including the nexus of political, diplomatic, psychological, economic, cultural, historic, and military affairs. It provides a link between the scholarly and policy communities by serving as the recognized forum for conceptually sophisticated analyses of timely and important strategic issues. Nuclear Transformation: The New U.S. Nuclear Doctrine Edited by James J. Wirtz and Jeffrey A. Larsen Proliferation of Weapons of Mass Destruction in the Middle East: Directions and Policy Options in the New Century Edited by James A. Russell The Last Battle of the Cold War: The Deployment and Negotiated Elimination of Intermediate Range Nuclear Forces in Europe Maynard W. Glitman Critical Issues Facing the Middle East: Security, Politics and Economics Edited by James A. Russell Militarization and War Julian Schofield Global Politics of Defense Reform Edited by Thomas Bruneau and Harold Trinkunas Perspectives on Sino-American Strategic Nuclear Issues Edited by Christopher P. Twomey Strategic Culture and Weapons of Mass Destruction: Culturally Based Insights into Comparative National Security Policymaking Edited by Jeannie L. Johnson, Kerry M. Kartchner, and Jeffrey A. Larsen Terrorist Financing and Resourcing Jodi Vittori

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T e r ror ist F i na nci ng a n d R e s ou rc i ng

Jodi Vittori

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TERRORIST FINANCING AND RESOURCING

Copyright © Jodi Vittori, 2011. All rights reserved. First published in 2011 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN: 978–0–230–11188–2 Library of Congress Cataloging-in-Publication Data Vittori, Jodi. Terrorist financing and resourcing / by Jodi Vittori. p. cm.—(Initiatives in strategic studies: issues) Includes bibliographical references. ISBN 978–0–230–11188–2 1. Terrorism—Finance. I. Title. HV6431.V5814 2010 363.325—dc22

2010035160

A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: February 2011 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

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With Love to Pasquale and Marcus

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C on t e n t s

List of Illustrations and Table

ix

Acknowledgments

xi

1 2 3 4 5 6 7 8 9 10

Introduction Terrorism Cannot Live on Idealism Alone Terrorist Groups’ Resourcing Menu The Evolution of Terrorism Resourcing The Multinationals of Terrorism State Sponsored Groups Medium Autonomy Groups—Franchises and Bundled Support Lone Wolf Groups All the Rest—Shell States, State Sponsoring Groups, and Transnational Corporation Groups Conclusions

1 13 25 51 63 85 99 121 135 157

Notes

169

Index

223

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I l lust r at ions a n d Ta bl e

Illustrations 1.1 Capability versus Autonomy 9 1.2 Capability versus Autonomy for Individual Terrorist Groups 10

Table 3.1 Variations in Terrorism Resourcing

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Ac k now l e dgm e n t s

I

am deeply indebted to my colleagues throughout academia, the Department of Defense, and the Intelligence Community for their time, insights, and numerous discussions. At the United States Air Force Academy, David Sacko, Frances Pilch, Douglas Murray, Brenda Vallance, Kristin Bremer, and all my colleagues in the Department of Political Science have been immensely helpful in their support—in time, patience, and funding—in completing this project. Likewise, the mentorship of Jonathan Adelman and Joseph Szyliowicz at the University of Denver were invaluable from the earliest outlines through the finished book. Jim Smith at the Air Force’s Institute for National Security Studies provided not only the initial impetus to rigorously study terrorism financing, but also continuous and generous support along the way. The Combating Terrorism Center’s Reid Sawyer’s impressive knowledge of terrorism and analytical insights were crucial to this project, without which this book could not have been researched nor written. I am also grateful to those who made the publication of the book possible, including Jim Wirtz and Jeff Larson for their support as part of the series Initiatives in Strategic Studies. Finally, I could not have undertaken writing this book without my family’s unceasing love and encouragement. Most important has been the support of my husband (and chief editor) and my son, as well as my parents and brother. Nevertheless, the responsibility of this book and the opinions therein are solely my own. The views expressed herein do not necessarily represent the U.S. Department of Defense nor the U.S. government.

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Ch apter 1

I n t roduc t ion

F

ormer Texas Senator Phil Gramm once quipped that “ready money is the mother’s milk of politics,” and what is true for legitimate political campaigns is just as true for terrorist groups using violence for political goals. The most successful, long-lasting terrorist groups have amassed tremendous war chests. For example, in the 1980s, the Palestine Liberation Organization used clever investments—both within its own population and internationally—to acquire 5 billion USD in assets. In turn, these yielded an annual income of 1.25 billion USD, used to maintain popular support, pay for leaders’ affluent lifestyles, and conduct worldwide guerrilla and terrorist operations.1 More recently, Usama bin Laden took a roughly 25–50 million USD fortune2 and, through donations and investments in construction companies, multinational agricultural firms, and securities, acquired a 5 billion USD economic empire3 to run a terrorist operation with global expenditures of approximately 35 million USD per year before 9/11.4 How do terrorists obtain the financing and resourcing they need? And how are these used to conduct actual terrorist campaigns? The study of how these groups acquire financing and resources to sustain themselves, conduct operations, and then live to fight another day has been sorely neglected. This book offers a primer on how terrorists have acquired assets throughout history and analyzes the overall effects of their resourcing strategies on their capabilities and target selection. Henceforth, the term “resourcing” will be used to describe three types of assets: (1) money or other readily liquid assets; (2) tangible goods, such as life’s necessities and the items needed to conduct attacks; and (3) intangible goods such as operational space, security, intelligence, and some level of training and expertise. The history of terrorism resourcing demonstrates that while groups such as al Qaeda have been considered revolutionary because of their

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Te r r or i s t F i n a nc i ng a n d R e s ou r c i ng

use of charities and front companies, in reality they are evolutionary, adding some new ideas to already proven methods. Those groups whose leaders take a long-term view in procuring resources have the greatest likelihood of surviving as viable terrorist organizations for years to come. They are the only ones likely to establish the diversity of resources needed to withstand the fickleness of governments and other sponsors, as well as a size that is sufficient to survive when some of their members or cells are rolled up. The most common means to typify a terrorist organization is through an analysis of its goals, the most accepted categories being leftists, ethno-nationalists, right wing, and religious extremists, often augmented by a fifth, nongoal-based classification of state sponsored terrorism. Using a goal-based typology of terrorist organizations is useful, because ideology indicates the intended audience for violent attacks and the kind of targets that can be legitimated or justified to that audience. For instance, leftist organizations tend to target those they can blame for economic exploitation as they are representing, at least in theory, a proletarian constituency, while religious terrorist organizations often consider themselves to answer to none but God (based on their interpretation of His imperatives). The latter have, therefore, a much larger potential target set and carry out more indiscriminate attacks.5 Hence, knowing the goals of a terrorist organization is one key to identifying the path a terrorist group may take. Goal-based typologies, however, do not provide any indication of the actual capabilities a group may have to conduct violent acts. Goals point to what a terrorist organization would like to achieve, but do not indicate the practical steps taken in order to achieve those goals. An analysis of terrorist resourcing, on the other hand, is what provides this information. The origins and number of resourcing avenues show the degree of operational autonomy a terrorist organization is likely to have. Also, resourcing avenues indicate the potential capabilities of a terrorist organization; groups with more resources will have the theoretical capability of conducting larger and more frequent attacks, although they may not always choose to act to their full potential. In addition, resourcing delineates the time horizon of a terrorist group. Most organizations—and terrorist ones are no exception—are mainly interested in the short-term consequences of their actions, and the long-lasting effects tend to be heavily discounted.6 Nevertheless, a very few terrorist groups have made the acquisition of assets from a large number of sources under their direct control an organizational priority, highlighting the presence of a long time horizon. In

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addition, knowledge of terrorist resourcing helps identify possible counterterrorism options. If a terrorist group has only one or a few supporters, then it can be effectively shut down by stopping the flow of resources from its sponsor(s). If the group has a vast support network, then working to halt its resourcing may be akin to attempting to kill the nine-headed hydra, and counterresourcing operations would only be effective when utilized in concert with other counterterrorism strategies.

Defining Terrorism Perhaps the most difficult aspect of writing about terrorism is to clearly define it, since there still is no internationally recognized definition.7 Often, this concept is left undefined or simplified as “[. . .] what the bad guys do.”8 Nevertheless, what is considered a bad deed will depend on one’s viewpoint and can include everything from criminal behavior to peaceful political activity to state repression.9 This book defines terrorism as premeditated, politically motivated violence perpetrated against noncombatant targets by individuals or subnational groups, usually intended to influence an audience, which is closely based on the statutory definition of terrorism the American government uses to keep statistics.10 Terrorism is first of all premeditated, meaning that “there must be an intent and prior decision to commit an act that would qualify as terrorism under the other criteria.”11 This is purposeful violence;12 hence spontaneous, unplanned, and unorganized mass violence such as riots are not considered terrorism. Second, terrorists are politically motivated, whether they intend to achieve political power for its own sake or use it to change the social, religious, or economic setting of a society.13 Third, the actions must be violent. As terrorism scholar Bruce Hoffman notes, “Many persons, of course, harbor all sorts of radical and extreme beliefs and opinions, and many of them belong to radical or even illegal or proscribed political organizations. If, however, they do not use violence in pursuance of their beliefs, they cannot be considered terrorists.”14 Fourth, terrorists explicitly target noncombatants, which Paul Pillar has defined as “people who cannot defend themselves with violence in return.”15 This makes terrorism different from standard combat operations, in which the enemy can return fire and defend himself. Fifth, the perpetrators are individuals or subnational groups; a state’s military or security forces attacking another state are considered to be committing an act of war, not

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terrorism. Moreover, a still-common usage for the term “terrorism” is to connote a state’s repression against its own citizens,16 but this kind of state violence is better identified as “terror.”17 The word “individuals” was added to the original United States State Department definition of terrorism because recent attacks have demonstrated that a single person can indeed conduct significant violent actions for political purposes.18 The final element in the definition is that of influencing an audience. Many classifications of terrorism expressly emphasize that all attacks aim to create fear or panic. Terrorists, however, undertake their actions not only to inspire fear (although this is certainly a primary goal), but also for a variety of other reasons, normally addressing at least four different audiences: (1) the government of the targeted state; (2) the group’s “constituency” for whom the terrorists claims to speak (“exploited workers,” coreligionists, etc.)19 for recruiting purposes, to win more converts, to ensure compliance, or to undermine public confidence in the government; 20 (3) like-minded groups, from which the terrorists seek acceptance into a larger, similarly aligned “terrorist community”; and (4) the terrorists themselves, to help maintain their morale and cohesion, dampen dissension, or justify particular decisions or operations within the group.21

Autonomy and Capability Variations in terrorist groups’ resourcing are reflected in the various levels of autonomy and capabilities of those organizations. Autonomy is the freedom to determine the timing, target selection, and weapons for operations. It has traditionally been linked with an organization’s attempt to take control over the resources at its disposal, because groups that find themselves too tied to any particular donor will be subject to his whims. The more “investors” (be they states, private donors, other terrorist groups, or charities) there are, the less control any one donor has over the group, and the more autonomy the latter will retain. Also important is the percentage of total resourcing a single donor provides. Even in the event of many donors, if one of them supplies, for instance, 75 percent of the resourcing, it essentially controls the organization. Therefore, a group with one or very few resourcing avenues will find itself beholden to them, and only those targets of which the donors approve may be consistently selected for attack. Should the terrorists too often go against the wishes of the donors, the donors

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I n t r oduc t ion

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will cut off the organization from future resources. By the same token, should the donor’s objectives change, then the terrorist group’s targets would have to be modified accordingly. When a terrorist group has many donors (none of whom individually provides the preponderance of resourcing), then one or a few donors pulling their support will not have a major impact on the group’s campaign. Also impacting autonomy is the origin of an organization’s resources. A group relying on external sources, such as wealthy individuals or state sponsors, will find itself beholden to their wishes. Alternatively, an organization with primarily internal backing— generating its own means from petty crime, charities under its control, or ownership of front companies—will not be tied to anyone in its decision-making process. For a group to be truly autonomous, it must develop its own resourcing. A diversified and seamless flow of funds and other resources is not easily available or created. For young terrorist groups with little publicity or track record of attacks, it may be difficult to acquire a substantial number of donors. They may thus find themselves faced with a hard choice: using the few funds and resources they can generate internally, with the inherently limited reach, or accepting the help of the first available donor, thereby giving up a corresponding level of autonomy. As Daniel Byman and his colleagues note, “Insurgent movements themselves often face a difficult dilemma: although they have much to gain from outside support, this often comes with a price, imposing political or military restrictions and even diminishing a group’s legitimacy.”22 This is not only true of insurgents, but also of terrorist groups. Accepting a donor can lead to three possible scenarios. In the first case, a terrorist group may take a short-sighted view and be happy to enjoy the fruits of the single or small number of sponsors it has acquired, ignoring the sponsor’s possible fickleness. In the second case, a donor may keep a very close reign on the resources it provides the organization, making it difficult for the group to divert some resources to longer-term investments, precluding the terrorist group from self-sufficiency. The third possibility is that either because the donor chooses not to put too many stipulations on the use of its resources, or because the group is able to maneuver around them, the terrorists begin to invest in alternative avenues of resourcing.23 In this book, the autonomy of a terrorist organization is measured as low, medium, or high. A low-autonomy group has a low number of external sources of funding and, as a consequence, the donors ultimately determine the organization’s survival, leaving the group

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little control over its own destiny. Medium autonomy is found in groups relying on one main external donor, along with several other minor sources of support, and also in groups who rely on a number of smaller external donors whose contributions are bundled together. In these cases, even though some outside entity exerts a strong influence over the terrorist organization, it does not outright control it. The third level is high autonomy, in which a terrorist organization has developed a high number of internal and external resourcing avenues, so that the loss of one or a few sources will have little impact on the group’s ability to choose its own destiny. Resourcing also affects the capability of organizations to conduct their operations, especially their ability to transform available assets into political violence. While autonomy was based on the variety of resourcing opportunities, it is the quantity and quality of resources to largely determine the level of capabilities. A terrorist organization will use an array of assets in order to conduct political violence, including tangible resources, personnel and their expertise, and leadership. For instance, explosives and other materials are utilized to conduct bombings, which are carried out by the organization’s operatives. Also, the organization must be able to find personnel to fill its ranks, as some will eventually be killed or arrested, or will defect. Likewise, the leadership may also be killed, imprisoned, or become otherwise unavailable, and those skills, along with the liaisons and allegiances that come with them, must be replaced. Thus, to sustain itself over the long term, a terrorist organization must regenerate a number of assets, and if it wishes to grow, resourcing must be expanded. Capability can be measured in terms of the level of violence achieved by a terrorist organization in the pursuit of its goals. A very low-level capability is one in which the organization carries out only property damage, and any casualties are accidental. This is because such attacks usually require little more than simple bombs, or even just the proverbial “Molotov Cocktail.” The second level of capability is characterized as “ low-level,” which is the ability to kill or injure 50 or fewer people in a single terrorist attack. Organizing such an attack requires more planning than in the first category, as well as the additional ethical issues of deliberately taking a life. Nevertheless, relatively simple terrorist tradecraft, like the ability to manufacture and use conventional explosives, is all that is generally required for at this level. Medium capability is killing or injuring 50–150 people in a single attack, or intentionally attacking unguarded foreign nationals,

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because such acts require significant planning. A high-level capability is one in which a single attack kills or injures more than 150, or in which multiple attacks are coordinated or strikes conducted against guarded targets, such as foreign embassies. These actions earn great media attention, but are fortunately relatively rare, as they require planning akin to a major military campaign, and can be conducted only by the best-resourced organizations.24

The Terrorism Resourcing Typology On the basis of the strategy used to acquire, move, and store their resources, terrorist organizations can be grouped into seven categories: lone wolf, state sponsored, franchise, bundled support, state sponsoring, shell state, and transnational corporation. The lone wolf category includes individuals or small groups who identify with a particular ideology or grievance and take up actions to further their beliefs with little or no outside direction or funding, taking their cues for conducting operations from their own vision of how they fit into the overall ideology. Assuming that the group maintains a high level of operational security, it poses a challenge to law enforcement because of its small size, few exploitable connections to other groups, and inherently internal resourcing. Once compromised, however, the group will usually be relatively easy to eliminate. The scale of the attacks they conduct will generally remain small, so they have very high autonomy, but low capacity and, usually, a short lifespan. In the second category, state sponsored groups receive all or nearly all resourcing from a willing state sponsor, who then uses them to advance its own foreign policy objectives. This contrasts to “unwilling hosts,” which are states that are too weak to stop terrorists within their borders or lack sufficient knowledge of the group in order to do so (paramount is the case of failed states).25 They vary along the spectrum of autonomy based on how integrated they are into a state’s overall command and control structure,26 but usually receive all or nearly all of their support from a state, including sanctuary. These organizations exist only so long as their sponsor considers them worthwhile.27 The franchise category has been extensively used to describe al Qaeda–associated groups. It includes any terrorist group that receives a large percentage of its resourcing from one source, but is

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still diversified enough to remain reasonably autonomous. Should the major sponsor pull its support, the terrorist organization will likely be weakened, but probably not face extinction. Because of its multiple resourcing strategies, such a group enjoys a high degree of autonomy. In the bundled support category, terrorist organizations do not receive the bulk of their resourcing from one or a small number of contributors, but rather from numerous, dispersed donors—under this category falls the widespread phenomenon of diaspora support. Bundling allows terrorist groups to receive funds from nonstate entities, tap into the resources of like-minded groups, and maintain diversified funding sources. The terrorist organization, however, receives resources only as long as its actions satisfy its donors, or until those donors move their support to other available alternatives. In the category of shell states, which includes narcoterrorism, the terrorists gain control over a geographic area and exploit it for sanctuary and resourcing, 28 thereby reaching very high autonomy. The local civilian population can be compelled to provide support, such as with “revolutionary taxes,” and terrorists can steer the economy to their advantage and openly recruit new members. The resulting shell state can be as small as a few neighborhoods or as large as substantial regions within a country. The terrorist group’s capacity depends on the amount of resources it is willing and able to expropriate from the population and allocate to its cause. The shell state will stand until some stronger group comes along, such as a rival terrorist faction or warlord, a newly invigorated local government, or a foreign power. A state sponsoring terrorist organization is one that has achieved such a high level of resourcing and capabilities that a state agrees to allow it to share its monopoly on violence in return for advantages that the terrorist group is able to provide. So far, only al Qaeda has managed to achieve this status. In Sudan, it exchanged money and the building of infrastructure for the opportunity to run training camps and extensive money-making concessions.29 In Afghanistan, al Qaeda offered its men as troops to the Taliban in return for sanctuary and a free run of the country.30 Terrorist organizations in this category must possess very high capabilities in order to have something the state considers worth trading for, and always achieve very high autonomy. The seventh category is based upon the model of a transnational corporation, which is truly removed from any national identification and is potentially willing and able to locate itself anywhere on the globe.31 In the case of a terrorist organization, it is so complex and

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diversified in resourcing, membership, and geography that attacking the group in one or a few countries makes little or no impact on the group’s autonomy or overall capabilities. Groups within this model are highly efficient at money laundering and readily string together front companies, charities, international investments, smuggling, and other criminal activities in order to meet their resourcing needs. They exploit globalization, especially the revolution in communications and transportation—what is good for international business is good for them32 —and represent the pinnacle of autonomy and capabilities. Plotting these seven categories, based on the levels of autonomy and capability shown, leads to the representation shown in figure 1.1. This representation comes with two caveats. First, although state sponsored terrorist organizations may achieve very high capabilities, they are limited by the support their sponsor is actually willing to provide, lest these groups one day threaten the state’s foreign policy objectives—or existence itself. Thus, the solid line represents the theoretical capabilities of state sponsored groups, and the dashed line represents their actual capabilities. Second, the lone wolf category is denoted as an upward rising arrow because globalization, and in particular, more widespread access to the Internet, have allowed autonomous groups to glean additional learning and expertise, increasing their capabilities. Examples of individual terrorist group case studies are shown in figure 1.2.

High

State Sponsored

Capability

Medium

TNC

State Sponsoring

Franchise

Shell States

Bundled Support

Low

Lone Wolf

Very Low Low

Figure 1.1

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Medium Autonomy

High

Capability versus Autonomy

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High

• Al Qaeda

• Iranian Revolutionary • Hizbullah Guard Forces • North Korean terrorist attacks • HAMAS

• Fatah (PLO)

Capability

• PIRA • GIA (1990s)

• IMU

Low

• Syrian-controlled Palestinan groups • Carlos the Jackel (1980s–90s) • Abu Nidal (1980s–90s)

• Red Army Faction and like-minded groups

Low

• FARC • Sendero Luminoso (1980s) • AQ-inspired Lone Wolves • Neo-Nazis/White Supremacists • Anarchists High

Autonomy

Figure 1.2

Capability versus Autonomy for Individual Terrorist Groups

Book Format This book is divided into three sections. The first explores the needs that terrorist organizations must satisfy in order to survive and operate, and the ways these needs are met. Chapter 2 lays out the requirements of terrorist organizations in terms of money and tangible and intangible goods, while Chapter 3 examines the numerous ways terrorist organizations have fulfilled those needs, through state sponsorship, crime, front companies, and money laundering. Chapter 4 provides a history of financing and resourcing through a century and a half of modern terrorism, examining how these methods have evolved over time. Chapter 5 highlights how a small number of terrorist groups recognized the need to create formalized resourcing structures in order to ensure their long-term viability. The five most prominent and formally institutionalized terrorist organizations are then examined in greater depth: the Palestine Liberation Organization, the Provisional Irish Republican Army, HAMAS, al Qaeda, and the Liberation Tigers of Tamil Eelam. The second section imparts a detailed study of the seven-category typology of terrorist resourcing. Chapters 6 through 9 discuss the group terrorist organizations by the level of autonomy they exhibit. Chapter 6 describes the low-autonomy category of a state sponsored organization, highlighting why terrorists take on state sponsors,

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and why states are willing to provide for such groups, using factions of the Palestine Liberation Organization as an example. Chapter 7 provides detailed explanations of the medium-autonomy categories of franchises and bundled support groups. State and nonstate franchised groups are discussed, with state franchised groups highlighted by the example of Iran and Syria’s support to Hizbullah. Nonstate franchises are represented by the case of al Qaeda in the Islamic Maghreb. Bundled support groups are illustrated through the support provided by Irish Americans to the Provisional Irish Republican Army. Chapter 8 describes lone wolf groups, with ecoterrorism as an example. Chapter 9 then discusses the high autonomy categories of shell states, state sponsoring groups, and transnational-corporation-like groups. The Palestine Liberation Organization’s control of refugee camps in Lebanon from 1970 to 1982 provides an excellent description of a shell state, and al Qaeda’s sponsorship of the governments of Sudan and Afghanistan is the only example so far of a state sponsoring group. Moreover, the case of al Qaeda as a transnational corporation-like group will also be examined. Chapter 10 concludes with an examination of the future of each of these types of terrorist organizations and offers an explanation of how these results are applicable to the study of other forms of political violence, especially insurgencies. Finally, counterterrorism insights based on these typologies is provided.

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Ch apter 2

Te r ror ism C a n no t L i v e on I de a l ism A l on e

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hough terrorism is a cost effective means of making a statement, there remains the need for some minimum level of resources for the organization to survive and conduct operations. As author James Adams has noted, “Destroy the economic base and a terrorist group will wither and die. After all, terrorists cannot live on idealism alone, and even if their services do come cheap, they need to eat and to buy ammunition for their guns.”1 This chapter explains what a terrorist group needs to operate, for it is only through understanding what they need that one can understand why terrorist groups struggle so mightily to meet those needs. The minimal requirements for terrorist operations are rarely explicitly stated, not only by scholars of terrorism, but also by the terrorists themselves. These needs have a tendency to be assumed as understood or identified as they arise (“we’ll know them when we see them”). Instead of listing requirements, scholars often focus on one, or at most a few, critical resources. For instance, common topics of terrorism scholarship have included a discussion on how weapons are used, how ideology forms a critical center of gravity for many groups, and how leadership is important—all, per se, paramount aspects of terrorist resourcing—but an actual listing of the basic requirements of a terrorist organization is a surprising rarity. The minimum resources required by terrorists are classified into three categories. The first is money and other negotiable instruments. Second are tangible resources—those material goods that have a monetary value. Third are intangible resources—which a terrorist group cannot act without, but these are not materials and so they cannot as easily be given a monetary value. Some intangible

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resources, nevertheless, have been traded for money. For instance, the Provisional Irish Republican Army traded its expertise in urban bomb making by sending three of its operatives to South America to assist the Colombian group FARC (the Revolutionary Armed Forces of Colombia) for as much as 2 million USD in 2001.2 Nonetheless, training itself is not a material good and is considered an intangible one. The resourcing needs of terrorist organizations can vary wildly. The cost of an actual attack can range from a few dollars for a simple assault involving a knife all the way up to the 9/11 attacks, the most expensive terrorist attack ever, which cost 300,000–500,000 USD. Moreover, what terrorist organizations are willing to pay for can also vary greatly. Many lone wolf groups are self-financing and exist on a shoestring budget. Other groups, such as the Palestine Liberation Organization, develop a taste for the “good life,” and managing costs can rise into the billions.3 Finally, some groups are more generous to their members and their families than others. While many provide no benefits to families,4 there are some that provide salaries to members5 and pay extensive sums to support the families of the terrorists killed or incarcerated. As a consequence, the list below specifies the minimum requirements for a terrorist organization to operate and remain viable, while individual groups may have some additional resourcing needs based on their particular circumstances. All the resources identified are necessary for terrorist organizations to survive, but may not be sufficient for the specific needs of some individual groups.

Money Money has three traditional functions: (1) a unit of account, conveying pricing information both reliably and expeditiously; (2) a medium of exchange, given its general acceptability for satisfying contractual obligations; and (3) it has value itself and is a convenient means of storing wealth.6 Terrorist organizations will need at least some readily available cash or items with very high liquidity to purchase tangible goods, as well as some intangible goods. As Daniel Byman and colleagues note for insurgencies (also holding true for terrorists), “Money has a powerful effect on insurgent movements: it can be used to buy weapons, bribe local officials, pay operatives, write propaganda, provide a social network that builds a popular base, and otherwise fill a myriad of purposes.”7

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Particularly useful to any transnational organization, terrorist groups included, are so-called top and patrician currencies, for just like anyone else, terrorists prefer to use currencies that hold their value well and are generally accepted or easily convertible into other currencies. The two top currencies are the U.S. dollar and the Euro—the ones dominating most cross-border transactions and most commonly accepted anywhere in the world. Below them are patrician currencies, which are less dominant, but still generally accepted. The Japanese yen is a classic example, and prior to the introduction of the Euro, the Deutsche Mark also filled this role.8 Even as terrorists may often claim to fight against a hegemonic Western system, they, too, will generally choose to use those currencies most widely accepted and considered the most stable.

Tangible Goods Terrorist organizations also need tangible goods, which can either be obtained in their own right (such as stealing the weapons needed for an attack), acquired using money, or by trading or bartering some tangible or intangible goods. At a minimum, terrorist organizations need four categories of tangible goods: life’s necessities, personnel, a message generation infrastructure, and items required to conduct attacks. Life’s Necessities All terrorists who hope to live to fight another day will have to acquire the basic necessities of life for themselves and their families. This includes food, clothing, shelter, and access to medical care. For “parttime terrorists,” those who maintain normal jobs while taking up terrorism as a part-time “profession,” their normal employment may be sufficient, but as groups expand, they generally will have at least a small cadre of “underground” members—those who have become full-time, professional terrorists. Often, these members are wanted by law enforcement, and so cannot hold normal, paid employment. Some members may also be “skilled labor,” such as bomb makers, for whom working for the organization full time ensures its ability to maintain the desired operational tempo. Such full-time members represent a significant cost, as the terrorist group must take on all expenses for their care. For instance, based on financial records of the leftist terrorist group the Italian Red Brigades in the 1970s, each underground

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member cost roughly 15,000 USD per year for salary, rent, food, clothing, and personal weapons. This did not include extras such as plane tickets, explosives, and other assets needed for actual operations.9 Therefore, a larger, more professional terrorist organization with many full-time members will require far more money and other goods, and so must engage in greater effort at various forms of fundraising and other resourcing. Personnel All terrorist organizations require personnel to carry out attacks. Moreover, members who leave, are killed, arrested, or otherwise are not available must be replaced, lest the organization bleeds members until it is no longer viable. At the lowest level, a lone wolf terrorist group will require only one or a few members, though once those few members are caught or killed, the organization ceases to exist. Large, complex organizations like the Palestine Liberation Organization, Tamil Tigers, and al Qaeda and its associated groups utilize thousands or tens of thousands of fighters and terrorists, plus a large network of support personnel. Communications and Message Generation Infrastructure Terrorists need the ability to receive, store, manipulate, and disseminate information.10 This must be accomplished not only within the organization itself, such as when communicating operational plans, but also with the outside world. As terrorism is propaganda by deed, there must be a message generation capability to explain and justify the violence undertaken and the political goals behind it. Thus, terrorist organizations publish all sorts of documents including manifestos, press releases, speeches, and even at times whole books. Though the cost of communication has dropped dramatically, some resources are still required to enhance it. Internal communications among members can be free, as in the case of word of mouth between colocated members, or almost free, as in the use of e-mail, which only costs either Internet café time or a computer and Internet capability. Groups will likely need more timely and versatile communications as well, such as radios or cell phones. For example, though relatively cheap, to maintain operational security, a group may use and then dispose of a number of cell phones, which adds to operational costs.11

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As for external communications, the expense of propagating the terrorist group’s message can vary widely. At the very cheapest is writing and releasing a manifesto or press release to mass media, in the hopes that they will broadcast that message on the group’s behalf. This has drawbacks, including that the media may not broadcast the message or they may manipulate it before broadcasting. Because of this, terrorists are increasingly moving away from their reliance on state-run and commercial broadcasting, and instead, are generating their own media. The earliest forms were newspapers run by terrorist organizations, and later, clandestine radio stations. For instance, El Salvador’s leftist FMLN (Farabundo Marti Liberation Front) published the newspaper Veneremos (albeit with a limited readership) and manned a shortwave radio station.12 Today, a basic global communications capability is quite cheap—it can be as inexpensive as having a computer, accessibility to the Internet, and some Web software for creating a Web site, but groups are becoming much more sophisticated. For instance, As Sahab clandestinely creates and publishes numerous, high quality video products on behalf of al Qaeda.13 The most complex and sophisticated communications network is perhaps that of the Lebanese Shia group Hizbullah, which owns and operates the al Manar satellite television channel; maintains Web sites in a English, French, and Arabic; and even created its own video games entitled Special Forces and Special Forces 2: Tale of the Truthful Pledge to recruit younger members to their cause.14 Operational Resources Terrorists require weapons to conduct violence—these can be anything from inexpensive knives or box cutters to weapons of mass destruction.15 Along with those weapons comes the cost of acquiring, transporting, and storing them for use. If weapons are internally acquired, that is, created by the organization itself rather than purchasing or stealing them, then the workshops and laboratories to develop and improve on those weapons will be necessary. This will substantially add to the size and complexity of a terrorist organization.16 If weapons are to be purchased, then there is considerable extra expense for using the black market.17 Transporting the terrorist and his weapon to and from the target (or just to the target, if it is to be a suicide bombing), such as a car or airline tickets, is also needed. There will also have to be safe houses to

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plan and organize the attack, and assuming it is not a suicide mission, secure locations to hide the perpetrators afterward. Depending on the complexity of the attack, numerous other tangible assets may be needed, including false papers, laboratories for developing weapons or countermeasures to law enforcement, and intelligence-gathering equipment.

Intangible Goods Terrorist organizations also need seven categories of intangible goods: operational space, operational security, intelligence, a political or ideological narrative, a command and control structure, a recruitment pool, and training and expertise. Operational Space Operational space, also known as sanctuary, is the time and space needed to plan, train for, and execute attacks. It is the most important intangible resource, for without it, operations are impossible.18 It can be as small as a “safe house,” perhaps an apartment in an urban area or a farm away from the prying eyes of neighbors. So long as that location remains a secret from local law enforcement (or so long as local law enforcement is for some reason willing to look the other way), that location remains secure. Other, larger operational spaces include refugee camps, university campuses, land owned by the terrorist organization, religious sites, and even prisons.19 These environments all provide a location for people to meet, live, recruit, organize, and conduct at least some minimal training. For civil liberties and cultural reasons, many sites may also be off limits, or at least restricted, to law enforcement. For instance, a defining attribute of a liberal democracy is that of property rights, so law enforcement’s access to private property will be restricted to some degree. Also, most cultures have sensitivities to law enforcement or intelligence gathering in “sacred” spaces, and such attitudes are often backed up with legislation. Thus, even in authoritarian states, terrorist organizations may find their church, synagogue, or mosque to be a useful location. These smaller operational spaces may be sufficient locations for short-term terrorist campaigns or for relatively low-level attacks. For terrorist organizations with a large cadre of fighters or desiring to plan more sophisticated attacks, more space will be needed, at least for a long-term campaign.20 Larger organizations will need space to

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protect leaders, accommodate fighters, and stockpile weapons and an area the size of a few rooms, or even a few buildings, will be insufficient. Once attacks have commenced, law enforcement will be actively searching for the organization, and it is only a matter of time before authorities discover and interrogate some of the members or stumble upon the safe house, and the organization begins to be rolled up. Larger and more complex forms of sanctuary will be required by larger organizations, especially those targeted by intelligence and law enforcement agencies. One option is to utilize “brown areas”: parts of a failed state, areas controlled by terrorist organizations’ allies or, in some circumstances, an entire state. In Western countries, these can be “no-go” areas for law enforcement, such as the infamous French banlieues and “Cites” (ghettos and housing projects). Another option is for terrorist organizations to find a state willing to provide sanctuary, at which point such groups become state sponsored terrorist organizations, or in more rare cases, state sponsoring organizations. Having a sanctuary out of which to operate vastly improves the odds that a terrorist group will survive, especially when it is young, and it certainly increases the opportunities to grow in capabilities. Nevertheless, terrorist groups may find themselves giving up substantial autonomy in order to hold that sanctuary. Operational Security Terrorists must keep security forces from discovering their plans, members, and locations, for they survive only as long as law enforcement does not discover and effectively attack the terrorist organization. Terrorist organizations will place substantial resources toward maintaining their security. This can be accomplished by using a cell structure where perhaps as few as one member knows the identities of other members in that cell, including those higher up in the chain of command. Or operational security can be obtained by devising very loose and amorphous networks. Moreover, organizations will spend resources instructing members on maintaining good operational security, such as an al Qaeda manual discovered in the United Kingdom, which provided advice on how to establish safe houses, maintain a cover, and act during interrogation.21 As the Internet has become a primary means of communications within and among terrorist organizations, protecting those communications is also paramount. For instance, the Global Islamic Media

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Front provides encryption tools to protect the communications of al Qaeda–associated movements, replacing the Pretty Good Protection encryption formally used.22 Intelligence Intelligence is the information terrorists need to identify a potential target, plan a method of attack, and correctly understand the response that the attack will garner from their intended audience.23 It also includes internal security on its own members to minimize the chances of disloyalty or infiltration by law enforcement or enemy groups.24 How much intelligence is required, and the resources expended to acquire it, relates to the complexity of the attack. For a simple attack by a local terrorist organization, driving or walking around the site, perhaps augmented by an Internet search, may be sufficient. If the target is located a substantial distance away, is heavily guarded, or hardened against attack, then significant resources may have to be used. Intelligence can be based on human sources (both witting and unwitting), reconnaissance, surveillance, and published materials.25 Of growing importance has been the Internet. For example, the Palestinian terrorist group the al Aqsa Martyrs Brigade has admitted to using Google Earth to help determine targets for rocket strikes, and British officials have claimed that al Qaeda–associated groups also used the Web site to locate potential targets inside British bases around the Iraqi city of Basrah.26

Political or Ideological Narrative A necessary tangible good is resources to broadcast a terrorist organization’s message, but as an intangible component, terrorists must have a message to broadcast. Without an overriding political or ideological narrative justifying the organization’s existence and the reason for its attacks, such attacks are mere criminality or insanity. The ideological message behind a terrorist group motivates its actions, unifies members, links the organization to communities on whose behalf it claims to fight, and inspires individuals to provide material resources.27 Publicity enables the group to promote its ideology and advertise its message to various audiences.28 Acquiring support, financial or otherwise, does not just happen, but must be pursued through organizational efforts and informational campaigns. Thus, well organized

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groups able to establish a message resonating with at least a few, and ensuring that attacks are commensurate with the stated strategy, are in a better position to do this than disorganized groups.29 The crucial case of the role of ideological narrative for a terrorist movement is al Qaeda. Both scholars and policy documents have ascribed ideology as a center of gravity in the fight against it.30 Al Qaeda understands the importance of ideology for its continued success, and is careful to cite selected Koranic verses, hadith (quotes from the Prophet Mohammad), and respected Islamic scholars to bolster its movement’s legitimacy. It also uses ideology to promote a popular grievance—that of perceived Western moral corruption and neoimperialism—and then to pose itself as the vanguard against such worldly evils. As a consequence, potential sympathizers are able to find an explanation for the world as it is today and an answer to their particular grievance. Moreover, the ideology has enabled al Qaeda to absorb some significant setbacks brought upon it by counterterrorism forces, for whenever a leader is killed or captured, it can rightly claim that al Qaeda itself will not die, as it is not founded upon individuals, but on the ideas they believe in.31 This gives the organization incredible resilience. As long as al Qaeda can appeal to like-minded Muslims worldwide, then support and operational cells can regenerate.32 Were al Qaeda’s ideological bases to lose their power, it would quickly find itself threatened by other organizations and leaders for primacy within the larger jihadist movement. This, in turn, would lead to a decline in recruitment and other resources, and eventually, to the organization’s demise. Command and Control Structure Terrorist organizations require leadership, a means to control its members, and the ability to replace key figures upon their capture, death, or defection from the terrorist group. Leadership provides the motivation and energy necessary to progress toward a goal,33 as well as to supervise and implement planning for the organization. Without good leadership, the personnel, training, and expertise will be useless. This role is particularly important in terrorist organizations; hence these are often led by charismatic leaders,34 rather than by some form of internal democracy or committee action. Moreover, groups require a “bench” of leaders trained and prepared to assume greater responsibilities if required,35 along with command and control to plan, coordinate, and execute their attacks.36

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A crucial example of a resilient command and control network is al Qaeda, which, despite the largest worldwide campaign against a terrorist organization in history, has so far managed to survive for nine years.37 In fact, since 9/11, al Qaeda has done more than simply survive—it has undergone a resurgence through which it has experienced unprecedented growth, both in its organization and its associated movements. A telling example is the proliferation of foreign fighters in Afghanistan and Pakistan. By all accounts, United States and allied forces are witnessing “an unprecedented level of reports of foreign-fighter involvement,”38 in Afghanistan and they have proven to be even more extreme than Taliban militias.39 In Iraq, based on captured al Qaeda in Iraq administrative records, the United States identified over 600 persons who had come to fight on behalf of the group and its associated movements from Libya, Morocco, Syria, Algeria, Oman, Yemen, Tunisia, Egypt, Jordan, Saudi Arabia, and even Belgium, France, and the United Kingdom.40 With these additional fighters, al Qaeda has been able to wage jihad on a number of fronts, including the United Kingdom, Indonesia, Iraq, Afghanistan, and the Philippines. Recruitment Pool Having a pool of qualified potential recruits is perhaps one of the most important resources an organization requires to survive over time. To grow, the organization must recruit members faster than their attrition rate. Indeed, one primary reason to conduct terrorist attacks is to induce the recruitment of more members.41 Though the basic goal of terrorism is to instill fear in a targeted audience, terrorist organizations also seek to publicize their deeds to possible supporters. After all, one audience for terrorist violence is the group’s “constituency,” whether real or imagined. This may be “the people,” “the workers,” or the “oppressed people of the Third World” in the hopes of drawing their sympathy and mobilizing them.42 Expertise As with any skill-intensive organization, an important resource is human capital. Terrorist groups will have to provide their members with technical skills with which to conduct operations, including bomb making, weapons handling, and operational security techniques. In addition, organizations may have to provide training in

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support functions like document procurement or forgery, weapons supply or fabrication, smuggling, and the use of disguises, expending considerable resources to do so.43 For instance, the Palestine Liberation Organization charged other terrorist groups such as the Italian Red Brigades and Argentine Monteneros 5,000–10,000 USD per 6–10 week training course in the 1970s, and even at this high price, there appeared to be no lack of students.44 This training can be conducted in terrorist training camps or in other ad hoc venues; through “virtual” training, such as the use of DVDs or Internet resources; or through the exploitation of legal programs, like sending suicide terrorists to flight schools or martial arts classes.45 The higher the complexity of the organization and the larger the number of members, the more training the terrorist organization will have to organize and the more resources that will have to be dedicated to it. Room and security for training is a primary reason for seeking sanctuary. Barring that, groups will utilize whatever they can. For example, Mustafa Setmariam Nasar, better known as Abu Musab al Suri, a leading ideologue for al Qaeda–associated groups, has created a 1,600 page treatise on organizing the al Qaeda movement since the loss of its sanctuary in Afghanistan in 2001, focusing on creating homegrown groups and training virtually through videos and the Internet. He emphasized that training “could be in secret houses, apartments, or gyms.”46 These measures, however, are only stop gap measures until al Qaeda can again acquire a sanctuary commensurate in size and security to Afghanistan. Money, tangible goods, and intangible goods are the minimum requirements for a terrorist organization to remain capable of conducting violence. Should any of these resources substantially wane, the organization itself will be threatened with extinction.

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Ch apter 3

Te r ror ist Grou ps’ R e sou rc i ng Menu

Ideally, the leadership of a terrorist organization seeks the resourc-

ing that has the best attributes: (1) support that is simple and does not require too much expertise to access and exploit; (2) security from discovery or confiscation by the law or others who wish to do the terrorist organization harm; and (3) availability of large amounts of resources without expending too much effort to attain them. There is no easy and secure way to acquire, move, and store resources, so terrorist groups will have to balance the specific resourcing options available, hoping to find the right mix that, at a minimum, will allow them to maintain an acceptable operational tempo, or better yet, to step up their campaign. In order to meet their needs, terrorist organizations have a “menu” of options. Just as a menu in a restaurant may limit a diner’s choices, but does not determine them, so too does the menu I discuss in this chapter. Once some form of resourcing is chosen, over time it will come to affect the behavior of the organization.1 Path dependence emerges, so that choosing alternative resourcing strategies appears prohibitive, even though the original course of action has its own considerable difficulties.2 Furthermore, terrorist resourcing is embedded in the larger international monetary and trade regimes, and it is buffeted by those regimes, just as they, too, are changed by terrorist resourcing. For example, globalization of the international monetary system has opened up whole new possibilities for terrorist groups to acquire, launder, and use financial resources on a global scale, giving them the potential for access to funds and other resources almost anytime and anywhere. At the same time, the larger international monetary system has responded by making terrorists’ use of the system more

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difficult, such as through the implementation of the Financial Action Task Force’s recommendations against money laundering and terrorism finance. This has forced terrorist groups to modify their practices if they want to continue to access funds as easily without those funds either being frozen or traced back to the terrorist group itself.

Acquiring, Moving, and Storing Resources Terrorism resourcing can be divided into a framework with three levels: activities accomplished to earn money; strategies to move the money from the location where it has been collected to where it will be stored or where it is needed; and means of storing such money or value until it is needed. This framework then assesses whether that money or other resources are internal or external to the terrorist group. The former are collected, moved, or stored within the organization, whereas the latter must move through some entity outside the organization’s control, such as commercial banks.3 Al Qaeda has earned money internally from Usama bin Laden’s personal wealth, from front companies that he controlled, and through assets brought into the organization by other members. It has then internally moved its money via bulk cash smuggling thanks to its operatives and by over- and underbilling through its front companies. It has also stored that money internally by depositing it in banks sympathetic to or controlled by the group. These internally generated funds and other stores of value never leave the immediate control of al Qaeda.4 Al Qaeda has also used external sources for its financial needs. Money has been earned through charitable contributions and from returns on investments, all routinely moved via wire transfers or other business transactions allowed by legitimate trade and monetary regimes. The proceeds are then stored in bank accounts, stocks, bonds, and real estate. What differentiates externally held finances from internal ones is that the former is not entirely controlled by al Qaeda. For instance, bank accounts can be frozen and various business transactions made illegal, and donors can choose to send their funds elsewhere.5 The various means of terrorist resourcing identified in this framework are listed in table 3.1. The first three columns illustrate whether a specific resourcing method is used by the terrorist group to acquire the means necessary to survive and operate, used to move them to where they are needed, or store them for later use (or a combination

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Te r r or i s t G r ou p s’ R e s ou r c i ng M e n u

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Table 3.1 Variations in Terrorism Resourcing Resourcing State Resourcing Smuggling Fraud Robbery Kidnap & Ransom Narcoterrorism Terrorist for Hire Training Wealthy Donors Diaspora NGOs (Charities) Front Companies Sympathetic Banks Financial Instruments Commodities Hawala E-banking Stored Value Cards E-gold Money Laundering “Reverse” Money Laundering

Acquisition

Movement

X X X X X X X X X X X X X X X X

X X

X X X X X X X X X X X X

Storage

Internal

External X

X X X X X X X X X X X X X X X X X X X

X X X X

X X X X X X X

X

X

X X X X X X X X

of these). The categorization also highlights whether the resourcing process is internally or externally controlled by the terrorist group, or if it can be both, depending on the circumstances. Each of these means of financing and resourcing is explained in depth in the following pages. Table 3.1 focuses how not only money but also tangible and intangible goods can be brought into the organization. For instance, front companies can be used to divert all or part of the profits of a business to the terrorist group and obtain the goods it needs. Somebody employed by a mining company, for instance, might be able to use their position to acquire explosives, which could ultimately be used for bombs. Also, the resource of training is included under the category of “storing,” as the expertise and the skills needed to create it are intangible goods constantly maintained by the organization. Assuring high levels of “professionalism” is, therefore, a means of storing those assets. Training is also a way to acquire resources, as evidenced by those groups that have “sold” their expertise to others.

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Whether the group chooses to acquire, move, and store their assets internally or externally comes with its own advantages and disadvantages. Externalizing resourcing means that the organization does not have to dedicate time, resources, or personnel to pursue such activities, but can instead use existing means. Especially in the case of international banking and trade regimes, these are already global, relatively easy to access, reliable, and well-understood by those with a business background. Of course, these attributes are applicable only so long as these various accounts or financial transactions remain secret, which leads to external resourcing’s primary disadvantage— that, once discovered, assets can be frozen, confiscated, stolen, or otherwise made unavailable for the group to use. Using an internal resourcing network has the advantage of preserving maximum autonomy, insofar as the organization is in no way reliant on external donors, but significant resources must be expended for the organization to set up internal financing systems and to find skilled members to run such schemes. Resourcing operations also have the potential to hinder the group’s operational security. For example, having members engaged in front companies means that those operatives are interfacing with elements of the public at large, government agencies, and banking networks, all with the potential to eventually compromise the organization. If a terrorist group is funding itself through criminal activities, these could lead the police to discover and roll it up for its criminal acts, even before the first terrorist attack might be accomplished. A recent example is that of Fatah al-Islam in Lebanon. Fatah al-Islam had conducted training of al Qaeda–associated persons (including individuals from Europe and northern Africa) from the Nahr al-Bareed refugee camp outside of Tripoli, Lebanon.6 A bank robbery by members of the group led the Lebanese government to use the full force of its power to destroy the organization in the summer of 2007.7 Terrorist organizations face a tradeoff as they decide on the balance of internal and external resourcing. External funding may be easier, but it entails the possibility of a loss of autonomy. Internal funding ensures the organization is entirely self-sufficient, but it is more difficult and increases chances of discovery by law enforcement.

Variations in Terrorist Resourcing What types of resourcing an individual terrorist organization will choose is based on four characteristics.8 The first is represented by

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the group’s inherent (or easily acquired) capabilities. For example, if the group can count on some members who are adept at credit card fraud, then this may become a primary means of resourcing. The second aspect lies in the opportunities at hand. For instance, if the organization finds a wealthy supporter willing to provide a wide set of resources, then the group will have a head-start. Another trait is found in entry costs, which can vary dramatically on the basis of the kind of enterprise. Prior to 9/11, for instance, using charities had low entry costs, while today this practice, still used by terrorist groups, comes at a considerably higher price. The fourth aspect is the needs of the organization in its entirety, as well as by the requirements of specific operations. For the organization as a whole, needs are based on the anticipated longevity of the group, its size, its objectives, and a “shopping list” of items it needs for the particular attacks it plans to conduct.9 When it comes to overall resourcing, terrorist groups can acquire, move, and store their resources in three basic ways. The first is to have it given to them, such as from a state sponsor, another terrorist group, or from charities. The second is to steal it—to become involved in criminal enterprises. The third is to work for it, using what would normally be legal businesses or financial ventures but diverting the proceeds of those activities to resource terrorism.10 Terrorist organizations have used various methods to meet their resourcing needs. This resourcing has been accomplished through state sponsors, crime, donations and charities, investments in legitimate businesses and financial instruments, along with the use of money laundering and “reverse” money laundering to hide the sources and destinations of those assets. Nevertheless, if there is a means to make a profit, somewhere there has been a criminal element to utilize it, including, oftentimes, terrorists themselves.

State Resourcing State support for terrorism is an important part of resourcing for many terrorist organizations. States support terrorism for three reasons: the terrorist group can serve the strategic interests of the supporting state, for ideological reasons, or to bolster the state leadership’s domestic position. States provide the following categories of resourcing to terrorist organizations: training and operations; money, arms, and logistics; diplomatic backing; assistance with initially organizing the group; ideological direction; and sanctuary.11

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State resourcing has substantial advantages to a terrorist organization. The most important support states can provide is sanctuary, which can prevent the organization from being crushed by counterterrorism forces, thus substantially increasing a group’s chances of survival. Moreover, early support of arms and money can provide a timely boost to the organization, thereby also increasing its chances of survival.12 There are just as many disadvantages when it comes to accepting state assistance. The biggest cost is that, in gaining state support, they lose substantial freedom of action. States place a number of restrictions on terrorist groups in return for their assistance, and this is for a number of reasons. First and most important, states fear reprisals or escalation from enemy states due to a terrorist organization’s attacks. Second, states do not want terrorists’ actions to lead to direct military action. Third, terrorist organizations are not necessarily trustworthy, and they have been known to switch sides. Fourth, states want to limit damage to their reputations. Fifth, states can see terrorist organizations as potential threats to their own interests, should they become too powerful. Sixth, states can crack down on terrorist organizations or even turn on them entirely, should it be in a state’s interests to do so.13 In addition, foreign support may induce a terrorist organization to ignore local support and even ignore the constituency they are supposed to be advocating for. As a result, seeking foreign state support can compound, rather than alleviate, a terrorist organization’s weaknesses.14

Crime Regardless of the old adage, crime really can pay for terrorist organizations, because it can generate tremendous amounts of money or other resources, often with little threat of being arrested or detained, especially in states with corrupt or nonexistent law enforcement.15 For example, in 1992, estimated worldwide revenues for crime were almost 1 trillion USD, and though no one knows how much of that went to the resourcing of terrorism, it certainly demonstrates the sums available.16 Crime also allows for the acquisition, movement, and storage of resources away from the prying eyes of law enforcement, record keepers, and state regulators whose supervision and tracking might give the terrorist organization away.17 Nevertheless, there are disadvantages to using crime for resourcing. It could taint the “pure” goals of the terrorist movement,

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endangering its legitimacy in the eyes of its supporters. Should law enforcement discover the crime, it could lead to the discovery and capture of the terrorist organization.18 The organization could also become so involved in crime that the group might lose political focus and instead become motivated by money, in a situation of “fighters turned felons.”19 They, too, could themselves become victims of criminal enterprises, such as when, in 1993, Usama bin Laden spent 1.5 million USD for what he thought was black market uranium, but instead only received red mercury (better known as cinnabar).20 As Jeanne Giraldo and Harold Trinkunas have noted, “[. . .] even terrorists run the risk of being mugged in the highly globalized underworld in which they operate.”21 Smuggling Smuggling can be particularly useful because it acts as both a way of acquiring resourcing and moving assets to where they are needed. As a side benefit, it also helps erode the state’s power.22 For instance, the Sri Lankan Tamil Tigers (also known as the Liberation Tigers of Tamil Eelam, or LTTE) acquired substantial resourcing through human trafficking, charging between 18,000 and 32,000 USD per each person they smuggled from Sri Lanka to India or the West.23 Smuggling literally facilitates the movement of money in the form of bulk cash. For instance, Jamal al Fadl, an al Qaeda financier until he defected, testified as a witness in the 1998 Embassy bombing trials that he was given cash to transport either to where operations were to take place or to locations where that cash could be put into the international financial system with less risk. Al Qaeda arranged for travel documents for the couriers, as well as an address or description of a contact to meet at the designated location.24 Money is also believed to have flown as bulk cash into Cairo, traveled in camel caravans from Upper Egypt through Sudan, and even sailed on a boat Usama bin Laden owned from Port Sudan.25 Smuggling cash has the advantage that it is easy to convert into any other needed resource, readily accepted, entirely fungible, and completely anonymous.26 Moreover, given the unregulated or underregulated banking systems in many parts of the world, cash is still king, and the purchase of expensive items with suitcases of cash is entirely legitimate and will not raise suspicions. Nevertheless, bulk cash has some substantial disadvantages. Large quantities of currency are difficult to conceal, and if the courier is caught, this could lead

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investigators to begin to unravel other aspects of the organization. Governing bodies of the international monetary regime have also begun cracking down on bulk cash movements, with the Financial Action Task Force requiring member states to criminalize large movements of cash.27 For example, the United States requires that a transaction report be filed for any large quantities of cash used in transactions. Cash itself can also be easily stolen; hence terrorists have been shifting tactics, by buying jewelry, real estate, stocks and bonds, vehicles, furniture, antiques, or any other expensive items28 that will maintain their value and liquidity.29 These commodities are then converted to cash only as needed.30 Practically anything can be smuggled for profit. One of the most famous cases is that of Thomas “Slab” Murphy’s farm, one of the Provisional Irish Republican Army’s (PIR A) most lucrative regular sources of income. This farm straddled the border between the country of Ireland and Northern Ireland, and by manipulating customs and currency regulations was able to contribute between 250,000 USD and millions of dollars each year to PIR A. One of the smuggled items was pigs, for the European Community (now the European Union) would pay a subsidy of about 12 USD per animal exported from the United Kingdom to Ireland. Murphy and his group would drive pigs into the south, fill out customs forms, smuggle them back into Northern Ireland, and then reexport them, over and over again.31 Another infamous example is the “Tri Border Area” of Paraguay, Brazil, and Argentina. The area has been a primary smuggling route for decades for computer parts, electronic components, counterfeited luxury goods, liquor, cigarettes, and stolen cars, among other goods. More than 2 billion USD was sent abroad from the Tri-Border region between 2004 and 2005, and though it is unknown how much of that went to fund terrorism, Mohammed Nasser, a leader in the local Lebanese community (which is estimated to consist of about 30,000 people) admitted that local Lebanese Shia send money every month to Hizbullah.32 A 2005 Paraguayan intelligence report claimed that about 20 million USD were collected each year to finance Hizbullah and HAMAS operatives from this area, and Lebanese Shia business leaders in the area continue to come under investigation for ties to Hizbullah and criminal enterprises.33 Hizbullah has also been implicated in a number of other smuggling operations worldwide. For instance, in September 2007, five Canadian men were charged by U.S. law enforcement for shipping tax-free cigarettes, rolling papers,

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and fake Viagra across the U.S.-Canadian border in a 500,000 USD per month operation to raise money for Hizbullah (one of the accused pled guilty in a plea bargain).34 These examples demonstrate that anything that can be smuggled for a profit will be. Fraud Defrauding governments can also be lucrative and criminals, to include terrorist organizations, have devised a myriad of unique schemes. The advantages are that these can be good sources of money from the very governments they are trying to undermine. The disadvantage is that, should the criminal scheme be defeated by law enforcement, the terrorist organization could find itself discovered and rolled up. One example was that linking PIR A to building site fraud and tax exemption certificates. Great Britain would allow subcontractors to pay taxes on their employees at a rate of 30 percent at the end of each year, and would supply a contractor with a certificate to establish his legitimacy for this. Instead, forged certificates could be bought for about 5000 USD, and subcontractors would claim they had sub-subcontractors, and on down the line, until an investigator discovered the final company in the chain did not exist, was owned by someone dead, and so forth. PIR A began carrying out this fraud, thereby collecting the 30 percent rather than turning it over to the government. To avoid confrontation among different paramilitary groups, Belfast was divided into sections, with each group controlling construction in certain neighborhoods. Building site workers would claim unemployment benefits while working off the books—and indeed, workers often would not be hired if they were not willing to work off the books and collect unemployment.35 Petty scams and fraud can yield substantial sums. The most famous terrorist scheme was the Hizbullah cigarette scam perpetrated by brothers and Hizbullah members Mohammed and Chawki Hammoud between 1996 and 2000. North Carolina had a 5 cent tax per pack of cigarettes, while Michigan had a 75 cent tax, so they would transport cigarettes from North Carolina to Michigan and sell the cigarettes at a higher price, which yielded a profit of 8–10 USD per carton, or about 13,000 USD per van load. In only 18 months, this generated 7.9 million USD, which was reinvested in businesses owned by Hizbullah members, sent by cash or cashier’s check to Lebanon for Hizbullah, or used to buy equipment for Hizbullah, which was then shipped to Lebanon.36

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Identity theft scams too have yielded substantial financial resources to terrorists. The most infamous remains that of three men in Britain who raised millions of dollars through identity fraud for al Qaeda– associated terrorists. More than 37,000 stolen credit card numbers were found in a West London apartment of one of the conspirators, along with the account holders’ addresses, dates of birth, credit balances, and credit limits, which they had acquired from phishing scams and distributing Trojan horse computer virus. With these credit card numbers, they registered more than 180 Internet domains with 95 different Web hosting companies in the United States and Europe. They also purchased items such as global positioning satellite devices, night-vision goggles, sleeping bags, prepaid cellular phones, survival knives, tents, and at least 250 airline tickets for fellow jihadists to battle American and allied forces in Iraq. They used the purchased Internet domains to host numerous Web sites for jihadist propaganda, bomb-making instructions, and so on. Much of the proceeds were laundered through 43 different online gambling sites.37 Any scam can be used to acquire money. Members of the “Blind Sheik” Omar Abdul Rahman’s group, which conducted the 1993 World Trade Center bombing, used a coupon scam, where a friendly merchant would send in coupons to manufacturers, receive the money back, and split the proceeds. The Blind Sheikh’s group also raised money with counterfeit brand-name clothing.38 Indeed, similar scams have become such a common criminal enterprise that retailers have asked the U.S. Congress to make organized retail crime a felony, in that criminals commonly steal mass quantities of items from stores, anything from Prilosec to Crest White Strips to baby formula, and then resell them in flea markets or online.39 Robbery Robbery, sometimes called “expropriation” or “revolutionary tax,” can be very profitable. It can serve both an ideological and a material use—as when leftist groups rob and extort from financiers or multinational corporations, thereby hoping to give themselves an air of “Robin Hood” by robbing from the rich to, at least in theory, give to the poor. Bank holdups also have been a particularly prominent form of robbery because in the end, as famous bank robber Willie Sutton once noted, “that’s where the money is.” The most famous and successful bank robbery involving a terrorist organization took place at the British Bank of the Middle East in

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1976 in Beirut, Lebanon, as a joint project by the Palestine Liberation Organization (PLO) and the Christian Phalange movement. The robbers instructed workers and residents in the area not to show up for work and then cordoned off the area. They tunneled through the wall of the Catholic Capuchin Church next door. They could not crack the safe, however, and allegedly called on the services of the Italian mafia, who eventually blew up the safe with dynamite. The estimated 100 million USD in loot was split three ways, some of which the PLO invested abroad and some was used by senior PLO members at the casino tables in Monte Carlo. The PLO also seized the bank records, which the organization used for blackmail for years. That robbery was large enough at the time to make it into the Guinness Book of World Records as the biggest bank robbery ever.40 Kidnap and Ransom41 After robbery, kidnapping for ransom is perhaps the most used means to acquire money. There are plenty of potential candidates, and governments are reluctant to take action against the kidnappers for fear of hurting the victims, thus leaving all the initiative to the kidnappers. Ransoms can be very profitable, and at the same time, garner great publicity for the group.42 Indeed, the kidnap and ransom strategy often has a professional air, with many groups hiring professional abduction teams and guards to plan and accomplish the kidnapping, and with professional negotiators, often paid for with insurance payouts that companies take out for their employees. Then, as serial numbers on bills used for ransom are usually recorded, another industry developed to launder those funds.43 Kidnapping was the favorite means used by the leftist Italian Red Brigades to garner money in the 1970s and 1980s. For instance, according to the well-kept financial records of the group, the Ciro Cirillo kidnapping netted 2 million USD, which was split between the terrorist group and the Camorra (one of the various mafia organizations in Italy). The 1977 Piero Costa ransom was used to purchase guns, weapons, and the safe house used in former Italian Prime Minister Aldo Moro’s kidnapping and murder.44 Al Qaeda in Iraq uses kidnapping and ransom (along with other criminal tactics such as carjacking, counterfeiting, and extortion) to finance its operations there as the cash that used to be couriered in along the foreign fighter network of “rat lines” (which formally made

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up about 70 percent of the operating budget of at least one sector of al Qaeda in Iraq) has dried up.45 The Taliban also uses ransoms from foreigners it has kidnapped to buy weapons, such the 10 million USD ransom alleged to have been paid to free 21 South Korean Christian missionaries.46 Narcoterrorism Narcoterrorism involves the terrorist organization growing, processing, and/or smuggling illicit drugs, or the group being paid to protect other producers’ fields, facilities, or smuggling routes. Either aspect of narcoterrorism is incredibly profitable, and in failed or failing states, nearly risk-free so long as the local government’s control does not improve or outside intervention takes place. The Colombian leftist group FARC is an example of the second option—it levied a 10 percent protection payment on coca growers in their region. To legitimize this, FARC’s governing body ruled it legitimate and acceptable for the armed struggle.47 The Peruvian group the Shining Path also used protection of coca fields to become a self-financing terrorist organization. Local coca growers in Peru were paid in advance by drug traffickers, and it was up to these peasants to produce the coca leaf, or the consequences were almost certain death. Hence, growers had a strong incentive to not be caught by the police, and the Shining Path was able to offer the growers protection from traffickers (usually from Colombia) as well as the police.48 A more recent example was the Islamic Movement of Uzbekistan in the 1990s, who controlled 70 percent of the opium and heroin that moved through Central Asia, much of it originating in Talibancontrolled Afghanistan. With this money, the Islamic Movement of Uzbekistan was able to pay salaries of 100–500 USD per month, which was a very sizeable income in such an impoverished location with very high unemployment. It also engendered good will, as the group was careful to pay for all supplies taken from local villagers.49 Perhaps the most famous current example of narcoterrorism is Afghanistan, where a 2007 United Nations report claimed that the total value of the export of opiates from Afghanistan stood at about 4 billion USD, which was shared among insurgents, warlords, and drug traffickers. Afghanistan accounts for 93 percent of the world’s opium production, making it the largest narcotics producer since China in the nineteenth century.50 Less than 1 percent of the opium produced in Afghanistan is seized, and the efforts of Afghan, United

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States, and NATO to combat the problem have been significantly lacking.51 Terrorist for Hire Terrorist organizations can also hire out their services to states or other organizations. One of the earliest examples was that of the Internal Macedonian Revolutionary Organization (IMRO), which fought for an independent Macedonia, under the jurisdiction of Greece and Yugoslavia between the turn of the twentieth century and the 1930s. Much of the group’s early funding came from Bulgaria, which had lost the territory in the Second Balkan War, and the organization’s headquarters was eventually established in Sofia, Bulgaria. By the 1920s, however, as the New York Times noted, “For some strange reason, the Bulgars are Europe’s finest murderers,”52 who were known to accept as little as 20 USD per each assassination they conducted. By the 1930s, IMRO was a mafia-like organization, hiring themselves out to other radical groups, including the Croatian pro-Nazi Ustashe, in turn being paid by Benito Mussolini.53 A more recent, and more notorious, example is the Abu Nidal Organization. In the 1980s, Abu Nidal54 was the most radical and ruthless of the Palestinian leaders and well-known for hiring his services to the highest bidder. Originally a member of the PLO and perhaps linked to Black September (the group that conducted the Munich Olympics massacre of 1972), around 1970, Abu Nidal was sent to be the PLO’s local representative in Baghdad, Iraq. It was at that point that he left the PLO, allegedly because it was not radical enough, and went to work for Iraqi intelligence.55 The Iraqis gave him 4 million USD of the assets of Fatah (the largest and richest PLO faction) located in Iraq, 15 million USD in arms, and a bonus of 5 million USD when Fatah sentenced him to death in 1974, as well as about 10 million USD per year. But Abu Nidal also earned money through extortion and as an arms broker.56 In the 1970s, most of his operations were directed against other Arab leaders, such as the assassination attempt against PLO leader Yassir Arafat at a meeting in Morocco, and the attack on PLO offices in Syria, Italy, Pakistan, France, and Great Britain. In particular, about 70 operations were carried out against Syria, as this was Iraq’s main rival for regional hegemony.57 After years of service to Iraq, in the 1980s, he switched sides and, even after all his operations, began working for the Syrians and Libyans.58 Abu Nidal also had ties to Bulgaria and Iran.59 In the

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early 1990s, he again moved back to Iraq,60 where he committed suicide, say the Iraqis, in 2002.61 Terrorists who regularly hire themselves out to others have a distinct likelihood of shifting their cause from primarily political grounds to financial motives. As they become more criminal, any chance of legitimacy from various audiences disappears, until they are perceived as merely “thugs with guns.” Training Training serves a variety of resourcing needs. It is a critical intangible need for a terrorist organization, and it can also be a means of acquiring resources. PIR A has trained the FARC in bomb-making and urban terrorism techniques, garnering them approximately 2 million USD. In the 1970s, the PLO’s training camps were premier sites for terrorists from all over the world, including PIR A, the Basque nationalist group ETA, and the Colombian M-19. The PLO did not do this out of some sense of terrorist camaraderie, but rather, because they could charge thousands of dollars for each trainee.

Donations and Charities Donations from nonstate sources are a common means of funding, whether those donations come from individual donors or are amassed from charity organizations. As James Adams has noted, “No matter how revolting the methods used by terrorists, some part of the announced reasons for a group’s existence—the wrongs they proclaim they will right—will evoke sympathy.”62 Moreover, donors can also be tricked into their donations when they are told they are giving to widows and orphans, rather than suicide bombers. Finally, some donors are coerced into providing monetary aid to terrorist organizations. After the end of the Cold War, such nongovernmental support to terrorist organizations has increased in both quantity and scope. Wealthy Donors The support of a wealthy donor can be particularly helpful in the early stages, for at that time, the terrorist organization is in most need of funds and other resources, but has the fewest willing contributors.63 The most famous wealthy supporter of a terrorist organization is Usama bin Laden, who used his estimated 20–30 million USD inheritance,

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plus his roughly 1 million USD per year stipend, for al Qaeda.64 He is definitely not the only one. Shad Sunder, a wealthy Tamil living in California and a staunch advocate for a separate Tamil state, allegedly donated as much as 4 million USD to the Tamil Tigers.65 Moreover, such supporters are not necessarily obscure persons living far away. Paul Watson, a member of the radical environmental group Sea Shepherd Conservation Society and who has sunk eight whaling ships (one Portuguese, two Spanish, two Icelandic, and three Norwegian), claims he receives funding from, among others, Pierce Brosnan, Martin Sheen, Christian Bale, John Paul DeJoria (CEO of Paul Mitchell), Yvon Chouinard (founder of Patagonia clothing), and Steve Wynn (the Las Vegas hotel and casino operator).66 Diaspora One subclass of resourcing through donations is the contributions of a diaspora.67 Diasporas are playing an increasing role in the funding of political violence, which has some significant advantages. It is a reliable form of support and is less likely to be reduced or disappear, in contrast, for example, to state sponsored support. Restrictions against diaspora support to terrorist organizations by hosting states is less likely, as the authorities must expend substantial resources to stop the phenomenon, but with little benefit for the state in doing so. Diaspora support, however, has its disadvantages, in that such groups can wield influence over the terrorist organization, withholding support or transferring it to other groups as they see fit, and the type of support diasporas can give is often limited, as groups usually cannot provide any substantial level of safe haven or military procurement.68 The Sri Lankan Tamil Tigers was particularly noteworthy in this field for its diaspora support, which formed the backbone of its resourcing operations. The Tamil Tigers had representatives in at least 54 countries around the world, and in some locations, a baseline “tax” was collected from those Tamils. Some paid willingly, while others were coerced or intimidated into giving. Another example was the U.S.-based NOR AID, which is believed to have sent 3 million USD to PIR A from 1970 to 1986, and another 600,000 USD from 1986 to 1999.69 Even diaspora money can have strings attached, and unpopular operations by terrorist organizations can affect what the diaspora is willing to provide. For instance, after the 1983 Christmas bombing of Herrods department store in London by the PIR A, NOR AID’s

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support in the United States declined, and Irish-American politicians kept their distance.70 Nongovernmental Organizations Nongovernmental organizations (NGOs) such as charities are also a common means used to take “good money” and use it for foul purposes. Al Qaeda is perhaps the most famous, but surely not the sole, example for this.71 The use of NGOs is not only a means of acquiring resourcing through donations, but also a convenient way of moving and storing those resources. An NGO provides crucial capabilities such as a base of operations out of its branches, especially if that organization has a worldwide reach. NGO branches also provide a shipping address, housing, employment, identity cards, and a recognized reason to be at a particular location. They can also provide access to legitimate bank accounts in which to move money.72 If one controls an entire NGO, then donations into it are nearly untraceable, and large sums of money transferred between branches would arouse little suspicion.73 Controlling or subverting humanitarian NGOs hold additional advantages. For instance, if a terrorist sympathizer were to be employed by a humanitarian NGO such as the Red Crescent, that employee could be able to “vouch for” and provide fake identification for terrorist members, and perhaps be able to arrange shelter and transportation. In addition, humanitarian NGOs often have privileges unavailable to other members of the local populace, such as the use of ambulances, which can be employed to clandestinely transport weapons or other supplies, or access to refugee camps or prisons, which would ease communications among terrorist members. NGOs can also help enhance a group’s appeal, which may in turn provide more access to potential recruits.74 As one U.S. official put it, “Charities are the best cover. They do good works with one hand and provide money and cover for terrorists with the other hand.”75 Prior to 9/11, charities appeared to be a primary source of income for al Qaeda.76 One example was the Benevolence International Foundation, an Illinois-based charity located in Bosnia-Herzegovina and run by a Syrian holding both U.S. and Bosnian citizenship. The charity allegedly included everything from running an orphanage in Azerbaijan and a tuberculosis hospital in Tajikistan to assisting in the attempted acquisition of uranium and providing cash for the 1998 bombing of two American embassies in Africa.77

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Charities can be utilized in three ways. One is to create from scratch or entirely take over a charity, making it an indigenous source of resourcing. The donors may or may not know to whom that charity is tied. A second is infiltrating an established charity, for example, by taking over one or a few branches of a larger NGO. The third and lowest level of NGO infiltration is having a few members or sympathizers of a terrorist organization employed in an unwitting NGO. For instance, al Qaeda members testified that they received identification cards from the Nairobi, Kenya-based Mercy International Relief Organization as they planned the 1998 Embassy bombings.78

Investment in Legitimate Businesses and Financial Instruments 79 A more complex means of funding is through a series of legitimate business holdings. In its simplest form, a terrorist organization can skim the profits off a local business to put them toward terrorist operations, and perhaps use that business to help acquire some necessary materials. The essence of business-oriented funding is that it involves turning “good money into bad.” In and of themselves, investments in stocks, bonds, real estate, and businesses are not a crime, and indeed, are considered positive attributes in a capitalist society. Unfortunately, terrorist organizations can turn the legal business, trade, and financial regimes into a means of acquiring, moving, and storing resources. Front companies have a number of advantages similar to those of NGOs. They, too, provide access to employment, bank accounts, mailing addresses, and a reason to be at a particular location. They have easy access to international trade and monetary regimes, and the utilization of these regimes would raise no suspicions. They can also ease access to some critical components for terrorist operations. For instance, a front business involved in agriculture or mining would be an excellent excuse to purchase explosives or explosive precursors. Controlling a legitimate money exchange service or money transfer company enables a terrorist organization to also exchange or move money without drawing attention to it. Nevertheless, establishing complex business and financial infrastructure is not easy. In fact, it is particularly complex because not only does it require establishing, running, and manning these businesses, but the profits funneled to the terrorist group may have to undergo “reverse money laundering,” so that the source of this money or goods is hidden (reverse money laundering is explained in greater

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detail below). Otherwise, authorities may eventually track it to the terrorist organization and either freeze or confiscate the resources, or use them to develop an intelligence picture of the organization. For instance, Usama bin Laden estimated in an interview that he lost 150 million USD in established businesses, plus unpaid work from contracts for the Sudanese government, when Sudan forced him out of the country in 1996 and confiscated those assets.80 Only a few terrorist organizations have ever managed such complex resourcing entities. One was the Tamil Tigers, which had interests in the gold and jewelry trade, wholesale commodity and freight, and local Tamil computer, telephone, and bus services. Moreover, the Tamil Tigers also provided start-up capital for Tamils who hoped to open a business, with the Tamil Tigers and the business-owner splitting the profits.81 Sympathetic Financial Institutions A sympathetic financial institution is one that is owned and operated by the terrorist organization or its closest supporters, so it is considered a form of internal resourcing. One example is al Taqwa Trade, Property, and Industry Company Limited, and its associated Bank al Taqwa, which has been tied to resourcing for both HAMAS and al Qaeda. Incorporated in Liechtenstein, al Taqwa Trade was established in the late 1980s through a registry office known as the Asat Trust, which was operated out of Lugano, Switzerland.82 Bank al Taqwa, a hawala,83 was registered in the Bahamas. It had correspondent accounts in Banca del Gottardo in Locarno, Switzerland, which in turn had correspondent accounts in Citibank and the Bank of New York, which gave al Taqwa entry into the U.S. banking system.84 Al Taqwa was formed and managed by Youssef Mustafa Nada and Ahmed Idriss Nasreddin. Also on the board was Ahmed Huber, an elderly Swiss businessman and convert to Islam who is known to attempt to forge links between Islamic fundamentalist movements and those of the far-right and neo-Nazis.85 Nada is an Italian citizen born in Egypt who had allegedly been a member of the Egyptian Muslim Brotherhood since the 1950s. Nasreddin is an Ethiopian who had formally worked for the Binladen Group of Milan.86 The bank’s owners deny all associations with terrorist activities, and in 2005, the Swiss government dropped its investigation into the firm and Nada is currently suing the Swiss government for violating his rights by blocking his assets. Though the Swiss case has

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been dropped, because he remains on the United Nations terrorism finance blacklist, his assets remain frozen,87 and al Taqwa has remained suspect. This organization reportedly handled as much as 60 million USD per year for HAMAS, and was also linked to the Virginia-based SAAR Foundation (the acronym for one of the founders, Sulaiman Abdul Aziz al Rajhi), which was associated with over 100 charities, think tanks, and businesses. The SAAR Foundation, which was renamed the Safa Group in 2000, had ties to a group known as the “Golden List” of 20 financiers of al Qaeda, and utilized the al Taqwa Bank, which 2 members of the Safa Group had helped found.88 Nasreddin has served on the board of the Islamic Center of Milan. Milan has had a long track record as a center of al Qaeda–associated terrorist planning, training, and organization in Europe, and it may have been the main hub for Islamist foreign fighters traveling to Bosnia to fight in the war in the early 1990s.89 Over its 12–14 years in operation, al Taqwa handled an estimated hundreds of millions of dollars, though it is unknown what percentage of it was actually linked to terrorist organizations.90 Financial Instruments While having access to a sympathetic bank is certainly convenient for the terrorist organization, more savvy groups can also utilize the established international monetary system by resorting to means similar to those used by money launderers. For instance, accounts can be opened under fake names, held offshore, which guarantees privacy, or created as numbered accounts. In the case of al Qaeda, while Usama bin Laden resided in Khartoum, Sudan, he reportedly not only helped establish a bank known as al Shamal, but also held accounts in three other Sudanese banks. Moreover, his inner circle maintained accounts in British banks, as well as in Dubai, Malaysia, and Hong Kong.91 Using legitimate financial institutions to manage funds is an external form of resourcing, for those assets reside in institutions outside the control of the terrorist organization. Offshore banking systems are particularly susceptible to use by terrorist organizations. Countries such as the Cayman Islands, Antigua and Barbuda, Bahrain, Dominica, Grenada, Liechtenstein, and the Seychelles have been known for their strict bank secrecy laws that criminalized the release of customer information, prohibited cooperation with international law enforcement, and licensed banks with neither personnel nor a physical presence in the country. The

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United Nations International Drug Control Program estimates that approximately one-half of the world’s money flows through offshore banks. From these, terrorists can then move funds into the legitimate international banking system.92 While intergovernmental organizations (IGOs) such as the International Monetary Fund, World Bank, and the Financial Action Task Force have all pushed states toward international standards of greater transparency in banking practices, substantial capabilities for offshore financial institutions and bank secrecy still exist.93 One of the most successful groups ever in using legitimate financial investments was the PLO. In December 1999, hackers broke into the PLO’s computer system and publicized that it had £5 billion in numbered bank accounts in Zurich, Geneva, and New York, along with smaller sums throughout the world, none of which was registered to the PLO. The PLO also owned shares on the Frankfurt, Paris, and Tokyo stock exchanges and real estate in Paris, London, Geneva, and New York. PLO leader Yassir Arafat alone was believed to have amassed 1.3 billion USD in accounts that he alone controlled, and may have had another 300 million USD in Swiss bank accounts as well.94 Commodities95 The importance of commodities, especially conflict diamonds, has come to the fore with the publicity of al Qaeda’s possible use of them to move and store value, especially as an alternative to the formal international financial system. Commodities are usually considered external forms of resourcing, as the terrorist organization controls neither the source of the commodity nor the markets in which it is bought and sold. If a terrorist group actually acquires the commodity sources, such as in the case of diamond mines, however, such an asset could be considered an internal resource. Al Qaeda is believed to have been active in this field, and likely acquired an interest in buying diamonds (along with a stone known as tanzanite) after the 1998 crackdown on its finances that followed the twin Embassy bombings in Kenya and Tanzania. In July 1999, the United States froze approximately 240 million USD in al Qaeda and Taliban assets, especially gold reserves that had been deposited overseas. Realizing the vulnerability of having cash in the formal monetary system, al Qaeda began converting it into commodities,96 such as the notorious “blood diamonds.” These were smuggled through

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Liberia from the territory controlled by Sierra Leone’s Revolutionary United Front 97 and would then make their way to Europe.98 Al Qaeda, however, has not been the only terrorist dealer in blood diamonds. Hizbullah has long had connections in this field through the influential Lebanese Shia community in Sierra Leone, to include well-known diamond trader Ibrahim Bah, former Liberian President Charles Taylor’s intermediary with Europe, who had reportedly been a Hizbullah member.99 Another important commodity is gold. Gold is probably one of the most frequently used items for smuggling. It can be deposited in an account without a transaction report being generated, it can be melted into a variety of forms, and it is untraceable and easily exchanged on the gold market, particularly in Dubai, the world’s hub of the informal money sector.100 Much economic activity in the developing world takes place using gold. For instance, Saudi donations to the Taliban were in gold, and the Taliban assessed taxes on opium in gold. Al Qaeda manuals explain how to smuggle it in dhows (a style of ship common throughout the Middle East) and in special vests. After 9/11, the Taliban and al Qaeda allegedly moved tens of millions of dollars out of Afghanistan via courier to Karachi, Pakistan, which then was flown to Dubai, UAE, before being converted to gold bullion and scattered throughout the world using the hawala system.101 Hawala and Import-Export Firms Hawala and import-export firms often work in tandem. Hawala (also known as the Informal Value Transfer System, IVTS) is a means for an individual or group to “wire” money to another geographic location using a series of informal, and often unlicensed, money exchanges. While an individual in one venue is able to ensure that someone in another location receives money, in reality, no actual cash is moved. Instead, “value” is transferred between hawalas. This is a trust-based system, often built on ethnic, tribal, or other longstanding ties between different hawala branches.102 Such financial arrangements predate the formal banking system and are known by a variety of names: hundi (India and Bangladesh), fei chi’ien (China—“flying money”), hui k’uan and chi’io hui (Mandarin Chinese), nging sing kek (Cantonese Chinese), and phoe kuah (Thailand).103 In 1998, hawalas were estimated to have handled approximately 680 billion USD in India alone, which is roughly the size of Canada’s entire economy.

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While many hawala transactions are entirely legitimate, especially those initiated by expatriate workers trying to wire remittances home, the sheer magnitude of the money circulated and the anonymity of the system make it an excellent means to move illicit money as well.104 Transferring money usually involves a sender, a receiver, and two hawaladars (persons who operate hawalas). The sender approaches the hawaladar and provides him with funds plus probably a small processing fee and the location and other information of the funds’ recipient.105 The first hawaladar makes arrangements, whether by phone, fax, or e-mail, to a hawaladar in the receiver’s location. The receiving hawaladar then makes arrangements for the receiver to acquire the money, perhaps minus another small fee. The ultimate recipient of the funds might go to the hawala with a preestablished code, or perhaps the hawaladar will deliver the funds, depending on how that specific hawala network operates. The two hawaladars will eventually settle the accounts between themselves in any variety of ways. It is possible that the two roughly match one another as sending and receiving branches, so the books mostly balance on their own. When this is not the case, some other means will be used to transfer the excess value between them. One of the most common ways is by manipulating the billing on the import or export of goods. This is probably the most common means to launder money and transfer illicit earnings worldwide. As Raymond Baker has noted, “Anything that can be priced can be mispriced.”106 For instance, a hawala branch that owes money to another branch, and that also exports goods, might export goods at a price lower than the market value. The other hawala branch can then import the goods and sell them at market value, pocketing the difference as a way to balance the books. While most countries have rules regarding filing false customs forms, there is such a volume of world trade that few customs officials anywhere in the world would probably notice, and even if the cargo was inspected, many inspectors would probably never realize that items have been under- or overvalued. Many experts on illicit financing contend that the under- and overvaluing of goods is the primary means to avoid capital controls or other trade-based taxes throughout the world.107 Hawalas have a number of advantages for any criminal moving money, including terrorists. First, most societies have some version of hawala, making its reach nearly as broad as the formal monetary regime. Second, hawalas are reliable, especially in countries with poor, corrupt, or nonexistent banking systems. Third, they are often

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cheaper and more efficient that established money transfer companies such as Western Union. Fourth, they tend to be more anonymous than traditional banking systems. While the vast majority of hawala transfers are probably in no way involved in terrorism resourcing, the sheer volume, especially in an industry with little or no regulation, contributes to the anonymity of those who want to avoid monitoring. Moreover, while more states are requiring in-depth record keeping, hawalas often maintain few or no records of their transactions, aside from a general accounting on bulk sums transferred between branches, and thus even greater anonymity is achieved. Hawalas have been used extensively by terrorist groups with roots in the Middle East, especially al Qaeda. For instance, the 1998 attacks against the U.S. embassies in Kenya and Tanzania were financed in part by a Pakistani hawaladar.108

New Means of Acquiring, Moving, and Storing Resources New technologies and the continued globalization of various means of acquiring, moving, and storing resources indicate that as soon as a new procedure develops, someone is available to use it for illicit purposes. As these new technologies tend to grow much faster than the national and international laws to regulate them, they offer high degrees of ease of use combined with anonymity—both characteristics sought after by criminals, including terrorists. One such innovation is e-banking and e-cash. With the Internet, a bank or other financial instrument account can be opened and money deposited and withdrawn from accounts anywhere in the world with great speed and anonymity. Moreover, one can open such accounts in other countries, making it difficult for local law enforcement to track or prosecute. Another innovation is that of smart cards and stored value technology. For example, prepaid debit cards can be used to hold thousands of dollars and transfer it without suspicion from customs or immigration personnel, and if necessary, the card can be handed over to the next person in the illicit supply chain. The debit cards can often be reloaded electronically from anywhere in the world with an Internet connection, or cash can be added to the cards at legitimate businesses or ATMs. In other words, the same reasons why such cards are a boon for travelers or grandparents who want to gift their grandchildren serves as a bane to some who move or store money for illicit purposes.109

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Even commodities markets are not immune. For instance, the value of gold can be traded online without actual gold ever moving from its stored locations through a system known as e-gold.110 E-Gold Ltd. advertises that it allows persons to open accounts denominated in quantities of gold, and that that value in gold can be transferred to any other account in the world through an “e-gold shopping cart interface” or a Web-enabled mobile phone instantaneously.111 The United States Department of Justice has pointed out that, to open an account, all one needed was a valid e-mail address—no other identification information was required.112 So far, e-gold has not been implicated in terrorist financing, although it has been involved in other money laundering schemes used by criminal enterprises, with three of its principal directors and owners pleading guilty to criminal money laundering charges.113 Because they are not banks, international commodity exchanges like E-Gold are only minimally regulated, allowing them to operate with far fewer controls. Given the inherent capabilities for its use in any criminal enterprise, however, states are seeking to better understand and regulate such organizations.114

The Role of Money Laundering and “Inverse Money Laundering” in Terrorist Resourcing Money laundering is defined in U.S. law as “the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States financial institutions.”115 Just like anyone else, criminals (terrorists included) will seek to place at least some of their assets in legitimate financial systems, such as banks located in London and New York. Just like any common investor or saver, they want their money to be safely stored in reputable institutions, to have high liquidity, and be capable of being accessed anywhere in the world. For this to occur, the sources of such liquidity must be hidden, which is where money laundering comes into play. Money laundering expert Nick Kochan summarizes the reasons for money laundering as follows: The criminal who possesses black money and wants to pass it off as legitimate must fabricate an explanation to make the source look genuine. These tricksters make friends with corrupt elements in the financial system. They will hide their money so that it becomes untraceable to those who may want to hurt it. As more people or financial institutions handle money with dirty origins, those origins can be lost. And criminals are caught and convicted by the dirty money they possess.116

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Terrorist organizations use both money laundering and “reverse money laundering.” In the case of standard money laundering, there is a “predicate crime”117—such as theft, fraud, narcotics trafficking, or counterfeiting—from whence the money or other resources have originated and which must be hidden if the criminal wishes to use conventional monetary regimes. If the funds are acquired “legally,” that is, from a source of income that would be entirely legal under normal circumstances, then the terrorist organization must engage in reverse money laundering. In such a case, there is no predicate crime, as the resources involved have a perfectly legitimate origin—such as businesses or charities. What needs to be hidden is the destination (which is a terrorist organization), as “good money” is being changed to bad. Stefan Cassella of the United States Department of Justice has noted on how reverse money laundering intersects with standard money laundering: They use the same professional money network, they use the same convoluted transactions to hide the location of the money or where it’s going. They can use the same clandestine shipments of cash to avoid paper-trails. They can engage in the same international shell games as they move money from this account to that, disguised as legitimate funds for some lawful purpose when it really is to finance new crimes and new criminal enterprises . . . The source of the money doesn’t matter, it is the deadly purpose the money was intended to fund.118

In the end, while the origins of the money in these specific circumstances are clean, the actual tactics of both money laundering and reverse money laundering are identical.119 Both processes generally take place in three phases. The first stage is placement, in which a person adept at locating loopholes in financial regulations moves the money into the international financial system. This is frequently done this is done via offshore accounts. The second stage is what is called layering, in which the funds are redistributed to hide their origins and make them appear legitimate. In the United States, this is often done by making a number of financial transactions below 10,000 USD, an amount that generates a Currency Transaction Report. The third step is integration, which is hiding the funds through legitimate-appearing transactions such as investing in businesses or buying real estate.120 The Internet has opened up new opportunities. In the past, casinos and other gambling venues had been of particular concern in the fight against money laundering, but modern online gambling and

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auctioneering can provide even more money laundering opportunities by making cash appear to be the proceeds of a lucky streak at virtual (or actual) gambling locations. Online bidding also allows one to disguise illicit proceeds, as if they came from sales of goods via auction rather than from more dubious sources. Online auctions can be used for the well-known practices of over- and underbilling for merchandise or services, but are now accomplished faster, more easily, and more anonymously through online schemes.121 Much has been made of terrorist organizations and other criminal entities utilizing “cyber laundering” or “cyber fraud” to filter or reverse launder their assets. Globalization and technology have generated numerous innovative means of acquiring, moving, and storing resources, with new ones being developed day by day. Nevertheless, the goals and processes of money laundering and reverse money laundering have remained the same.122

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Ch apter 4

Th e Evolu t ion of Te r ror ism R esou rc i ng

T

here is a tendency to consider groups like al Qaeda to be revolutionary in their use of charities, front companies, and wealthy donors to gather resources, but in reality, they are actually trodding a rather well worn path, and are hardly the first to string together such assets. As terrorism scholar James Adams writes, “All terrorist groups have begun with a few dedicated idealists, no money, no training, and few concrete ideas. In the progression from fringe radicals to recognized terrorists, all groups first have to acquire some income; second, they must buy some arms; and third, they have to achieve the international recognition that will help gather donations from supporters outside the organization.”1 How terrorist organizations have accomplished these tasks has evolved over time from a hand-to-mouth existence to, in rare cases, complex and sophisticated resourcing institutions with structures akin to multinational corporations. David Rapoport has described a historical framework of international terrorism that envisions four distinct waves. Within each one, a particular ideological bend and revolutionary vision predominate: the Anarchist Wave, Anti-Colonial Wave, New Left Wave, and the current Religious Wave. These waves have each run their course in 40–45 years, corresponding roughly to a human life cycle pattern, coming to a close “where the dreams that inspire fathers lose their attractiveness for the sons.”2 History demonstrates that some means of resourcing, such as crime and state sponsorship, have existed for over a century and encompassed most waves. Every wave of terrorism has seen a rise or fall in particular resourcing methods, with an overall trend toward an increase in diversity and sophistication.

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The Anarchist Wave (Nineteenth Century–1914) Political violence has taken place for millennia—the modern word “zealot” derives from a fanatical Jewish group known as the Zealots, which fought against the Roman Empire by assassinating individuals using a dagger 2,000 years ago. Between 1090 and 1272 CE, a Muslim Shia Ismaili sect, which became known as the Assassins, undertook political violence to vanquish their Christian enemies and hasten the beginning of a new Millennium in Islam.3 History is replete with political violence, against a state or other groups, including the incessant threat of regicide. It has only been in the past 150 years, however, that the justifications and methods of political violence against civilians in order to communicate a political message (what we today recognize as terrorism) have become accepted and codified by its adherents as a means not only to change particular leaders, but an entire political order as well. The first organizations in the modern era to undertake this endeavor is the one characterizing the first wave of terrorism—that of the Anarchists. Rapoport notes two reasons why the Anarchist Wave began in the nineteenth century: doctrine and technology. Russian revolutionary writers such as Sergei Nechaev, Mikhail Bakunin, and Peter Kroptkin created both doctrine and strategy for the use of terrorism. The communication and transportation patterns that emerged at the time, such as the telegraph, daily mass newspapers, and railroads, shrank time and space. This was the era of the first global war on terrorism, as countries throughout Europe and North America fought what was perceived as a global anarchist conspiracy. Anarchists conducted remarkable assassinations and attacks, including those on the German Emperor and King of Spain in 1878, the assassination of Tsar Alexander II of Russia in 1881, French President Carnot in 1894, the Premier of Spain in 1897, the Empress of Austria in 1898, and the King of Italy in 1900.4 Most of these attacks took place after the demise of any central organizational body for anarchist violence, given that the main body of the International, a formal meeting of socialist and anarchist forces, formally dissolved in 1876, followed by the last meeting of the famous anarchist Bakunin’s loyal supporters in 1880. Thus, after 1880, while there were plenty of anarchists, there was no longer any international umbrella organization.5 Even at this early stage, terrorists recognized that resources were an important part of their struggle. For instance, in 1876, extremist Irish

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nationalist Jeremiah O’Donovan Rossa urged the establishment of a “Skirmishing Fund” of 5000 USD to undertake a campaign against England in the Irish World, with the goal of inflicting 500,000 USD worth of damage to English industry.6 At the same time, among early terrorist strategists to explicitly write about resources’ importance was Johann Most,7 a Marxist-turned-anarchist and prominent author and ideologue from the 1870s through the 1890s. In 1884, Most argued that money, even more than dynamite, was the key to success, for money could buy more reliable and effective explosives than one could make at home. He believed that A revolutionary who could somehow put his hands on a hundred million dollars would do mankind a greater service than one who killed ten monarchs; this kind of money could turn the world upside down. The few cents collected by workers were quite insufficient for any meaningful conspiratorial work. Gold would open a great many doors normally closed to the terrorist, corrupting and disarming enemy agents, and enabling the revolutionary to infiltrate “society.” In short, funds were needed to carry out the “deed” and these had to be “confiscated.”8

Indeed, “confiscations” on behalf of the proletariat were not only acceptable but morally necessary, and anyone who attempted to intervene should be destroyed.9 These early groups operated on a shoestring, and most revolutionaries relied on “confiscations” or “expropriation,” usually in the form of bank robbery.10 The first documented bank robbery conducted by terrorists occurred in 1879 in Russia,11 and it has remained a primary means of resourcing ever since. A few lucky terrorists also found themselves with wealthy patrons, such as the Spanish anarchist who received a million francs from a French lady friend and a billiard champion who contributed to the Irish Revolutionary Brotherhood. Some groups also tried forgery, such as Indian terrorists fighting British colonialism who, in 1906–1907, attempted to counterfeit coins; the Croatian Ustashe who forged Yugoslav 1,000-dinar notes (with Italian help) in the 1920s; and the Jewish LEHI group, in what would later become Israel, which printed government bonds.12 In spite of the occasional wealthy sponsor, however, terrorism historian Walter Laqueur lists most anarchist movements’ budgets as “insignificant,” with the notable exception of the Social Revolutionaries13 of the early 1900s, who earned about 5–10 million USD (in 1980 dollars) to conduct their actions.14

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Also during this period, lone wolf terrorism emerged. Laqueur notes regarding the anarchist movement: “There was no global conspiracy, no high command, no ‘party discipline’; each individual anarchist, each group, felt free to register his protest in the form and at the time he saw fit.”15 What remained were individuals who took up the ideological cause, acting alone or perhaps with one or two companions,16 they read the propaganda and determined what their role should be within a larger goal of fomenting radical change in society.17 While most of the theorizing on lone wolf cells, also known as leaderless resistance, would not emerge until the 1990s, the actions undertaken by anarchists were remarkably similar.

The Anticolonialist Wave (Early Twentieth Century–1960s) The second wave, the Anticolonialist Wave, emerged in the late nineteenth century, reached its crescendo at the end of World War I as empires were broken up and the idea of national self-determination was preeminent, and continued after World War II.18 This wave includes Jewish terrorism against the British and local Arabs, attempts to free Cyprus from the British, and the fight of the Algerian Front de Liberation Nationale (better known by its acronym, the FLN) against the French,19 just to mention a few. One of the most notable groups was Crna Ruka, better known as the Black Hand, which had links to Serbian military officers, 20 and whose assassination of Archduke Franz Ferdinand in Sarajevo on June 28, 1914, ignited World War I. The assassin, Gavrilo Princip, was a member of the Mlada Bosna (Young Bosnians), a Bosnian Serb faction fighting the Hapsburg Empire. Mlada Bosna had originated from the group Narodna Obrana, 21 which, in a foreshadowing of later franchising by terrorist organizations, actively recruited, trained, and armed movements such as the Young Bosnians against the Austrians. Princip was trained and armed by the Black Hand for his infamous operation, although it remains unclear whether the operation was actually sanctioned by Serbia.22 State sponsored terrorism also emerges. To return to the Black Hand example, Serbia had directly financed and trained the Black Hand, even providing some weapons. Another example is the Italians and Hungarians, who gave Croatian and Macedonian nationalists about 44 million lira between 1929 and 1933. Later, during the 1950s and 1960s, Arab states gave the Algerian FLN political aid and sanctuary as they fought the French.23 State sponsorship has persisted

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through the three remaining waves, continuing today with Iranian and Syrian support to groups such as Hizbullah and HAMAS. During this wave, bank robberies were still frequent, though less common. Instead, diaspora funding emerged. For instance, the Irish Republican Army, and its successor the Provisional Irish Republican Army (PIR A), received substantial money, weapons, and volunteers, particularly from those of Irish ancestry living in the United States.24 PIR A supporters did not simply provide money; they also lent out their bank accounts as repositories for PIR A funds, 25 stole weapons, and shipped them to PIR A cells.26 Jewish groups also received substantial support, especially from the American diaspora, toward the creation of Israel.27 Today, diaspora funding remains the mainstay of many terrorist organizations, such as Hizbullah.

The New Left Wave (1968–1989) The New Left Wave began with protests against United States’ involvement in the Vietnam War, 28 notably the mass demonstrations of 1968. This third wave tended to combine leftist radicalism with nationalism, for self-determination has always had a larger constituency than any other kind of extremism. In this context, groups such as the left-wing secessionist Basque Nation and Liberty (better known as ETA) came to the fore, and nationalist groups such as PIR A espoused more Marxist leanings. This wave also saw the rise of organizations like the Red Army Faction in Germany and the Red Brigades in Italy, which sought a violent overthrow of governments, not for the strict benefit of any particular nationality, but on behalf of a world proletariat. Moreover, this was the start of modern international terrorism, in which extremist groups from one locale attack persons or property of their enemy in a third, usually unrelated venue—a change made possible due to a combination of ease of travel and modern communications, especially TV coverage.29 Bank robbery continued to play a prominent role in terrorist resourcing, and European terrorists in particular relied on it extensively. The German Red Army Faction acquired over a million Deutsche Marks from a bank robbery spree that took place during a few months of 1971.30 In the United States, armored car robberies were popular because they were considered less risky than bank holdups. The Weather Underground held up a Brinks armored car in 1981, and a right-wing group stole 3.6 million USD from another Brinks car in California in 1985.

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Kidnapping for ransom was also refined into a professional practice. The Argentine ERP (Ejercito Revolucionario del Pueblo, better known as the Montoneros) were especially successful, collecting more than 1 million USD ransom for a Ford executive, 2 million USD for an Arrow Steel executive, 3 million USD for a Firestone executive, and 14 million USD for one from Exxon. These and other corporations also paid the Montoneros protection money to prevent their employees’ abduction.31 Professional kidnappers began acting on behalf of terrorists, and full-time negotiators started to consistently represent the families of the kidnapped persons and any insurance companies holding policies on those victims. Private firms began to insure their executives in case of kidnapping, and because this made hostage negotiations easier to consummate on the hostage-takers’ terms,32 the unintended consequence was that abductions became even more lucrative. It is estimated that 350 million USD was earned from kidnapping and ransom in this era.33 Another aspect of resourcing was the nexus between transnational organized crime and terrorism. The first known example of cooperation between a purely criminal organization and a terrorist group dedicated to overthrowing the established political order was the Red Brigades and the Camorra (a version of the Italian mafia). In 1980, the Red Brigades split a 2 million USD ransom for Italian politician Ciro Cirillo with them, as the mafia had acted as middlemen in the ransom negotiations. As part of the deal, the Camorra would also assassinate a number of people designated by the Red Brigades.34 In particular was the rise of narcoterrorism as a substantial threat to states, especially in Latin America.35 Narcoterrorism was more profitable and less complex than bank robbery, and the same smuggling networks that moved drugs out of a country could move arms and other necessities back into it for terrorist operations.36 Terrorists supplied well-armed protection and the growers and smugglers gave the terrorists a source of regular income.37 In the 1980s, after making agreements with some prominent narcotics traffickers, the Colombian Marxist organization FARC, taking its cue from the local M19 terrorist organization, levied a 10 percent protection payment on coca growers,38 yielding an estimated 10 million USD per month protecting coca production and smuggling.39 State sponsorship was especially prominent as a warfare-by-proxy strategy. Up until about 1970, the Cubans gave indiscriminate support to Latin American guerrilla and terrorist organizations (though they became more selective in later years), while in the late 1960s, the first

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terrorist training centers opened in North Korea.40 But the pinnacle of state sponsorship came in 1978, when the Arab League pledged to support the PLO with 250 million USD annually, and other Arab states, such as Libya, added their own pledges.41 Throughout the 1970s, Libya was one of the most active and loudest supporters of terrorist organizations, providing direct payments to groups, sanctuary, weapons, training, and logistic support. In addition to this predominantly Arab network, seizures of documents and arrests of graduates of Soviet-bloc training centers highlighted that support was also being provided to various guerrilla and terrorist organizations by members of the Warsaw Pact—although much of this assistance was channeled through Libya, Cuba, Syria, and the PLO.42 The Warsaw Pact and other Soviet allies also provided critical sanctuary, such as hiding German terrorists in Bulgaria, Romania, and Yugoslavia, as well as the use of hotels in Sofia, Bulgaria, in order to plan the 1972 attack on the Munich Olympics.43 A subset of the state sponsored group was terrorists for hire, who reached their peak during this wave with the likes of Carlos the Jackal and Abu Nidal. One notable example was the Japanese Red Army (JR A), which acquired a fortune in the 1980s conducting terrorist attacks on behalf of others. They first cooperated in a supporting role for the Popular Front for the Liberation of Palestine, such as in the 1972 machine gun and hand grenade attack on Israel’s Lod Airport, and then worked on behalf of Carlos the Jackal, such as in the 1974 takeover of the French embassy in The Hague. In 1986, the JR A cut a deal with Libya to seek revenge on its behalf for the 1986 U.S. attack there. Under the alias “The Anti-Imperialist International Brigade,” it conducted a June 1986 attack on the American and Japanese embassies in Jakarta, Indonesia, and, in 1987, on U.S. diplomatic facilities in Madrid, Spain, and Rome, Italy, among other targets. The JR A has been inactive since 1988, with many of its members living in “retirement” in Lebanon’s Beka’a Valley or in North Korea.44 The most important innovation of this era was the creation of business-oriented terrorist organizations. The Fatah faction of the PLO under Yassir Arafat was the first to recognize that a strong financial base was essential for the organization to flourish, and it made accumulation of capital and wealth an organizational priority.45 Arafat recognized that the Palestinians must see the PLO as a humanitarian organization; also, he had to maintain personal control over the military aspects of the organization. Hence, in 1970, the PLO created SAMED (the Palestine Martyrs World Society) under the Fatah

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banner, which became the economic arm of the PLO’s military factions, providing employment, education, and welfare to Palestinians within refugee camps, especially in Lebanon.46 Over time, the PLO amassed an amazingly diversified portfolio. It has front businesses in various industries including construction, as well as legitimate investments on Wall Street, the London Stock Exchange, Japan, and real estate in London and Paris. Prior to the 1982 Israeli invasion of Lebanon, it had 35 factories with 5,000 employees in Lebanon alone, plus employees in Syria and parts of Africa. The PLO was also involved in corruption, crime (including bank robbery and hashish trafficking from the Beka’a Valley),47 and, until the 1980s, was receiving aid from Arab governments. In all, the Palestine National Fund (the main financial body of the PLO) administered in those years an estimated 1.6 billion USD, which paid out about 300 million USD annually48 —about a third of which went to Yassir Arafat’s Fatah faction. There have also been allegations that Fatah controlled another 7–8 billion USD.49 Not only did these proceeds keep the organization relatively well off and its leadership as millionaires, but the industries and employment garnered them support and provided the means to control the Palestinian population. As a result, “This diversification increased the PLO’s total financial resource base, and increased its options in moving and storing its wealth. Importantly, increasing the number of donor states and individuals decreased the group’s dependency on any individual donor and, therefore, the PLO’s autonomy.”50 Indeed, the PLO’s resourcing sophistication has been the blueprint for other organizations to emulate.51 Two other groups found themselves reaping great benefits by expanding their portfolios to include legitimate business dealings along with their illicit ones: PIR A and Sri Lankan Tamil Tigers (also known as the Liberation Tigers of Tamil Eelam, or LTTE). PIR A’s myriad of resourcing interests included front businesses such as taxi cab operations; the manufacture of pirated CDs and videos; smuggling livestock; and theft, burglary, tax fraud, and counterfeiting.52 The Tamil Tigers developed one of the most substantial, global diaspora support networks, along with its own fleet of deepwater vessels, multiple front companies, and substantial smuggling capabilities (to include human trafficking). This enabled the Tamil Tigers to develop capabilities no other terrorist organization has been able to acquire, including a navy and air force. With these wealthy, diversified, business-like institutions came the ability for terrorist organizations to provide large-scale social

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programs to their supporters or potential supporters.53 For example, PIR A entered into providing some social services. In 1972, it established the Andersontown Co-operative Industrial and Provident Society, which included a butcher shop, supermarket, and construction business, with the co-op offering prices at lower than the market rate. PIR A also became involved as an independent housing broker for the working class in Belfast in the 1980s, moving families from slums to newer housing,54 Newer organizations that are part of the fourth wave, the religious one, have taken this social endeavor a step further. Hizbullah, for instance, has operated sizeable social service networks throughout Lebanon that, although mostly for Shia, are at times open to the general public. This has included everything from garbage collection to water delivery, and from establishing nursery and vocational schools to sustaining welfare and microloans programs for small farmers.55 This latest wave of business-oriented terrorist resourcing coupled with social programs created a need for these organizations to move away from informal resourcing institutions with short-time horizons. Instead, some were forced to undertake complex, formal resourcing akin to those of states or multinational corporations.

The Religious Wave (1979–Present) As the third wave ebbed in the 1980s, the Religious Wave began to emerge, and by the 1990s, most serious terrorist attacks were religiously motivated.56 Certainly, there had always been some religious undertones to many terrorist campaigns, such as those of Israeli Jews in the 1930s and 1940s; in Ireland, where the struggle devolved into a battle of Catholics versus Protestants; or Christian Armenians struggling against their Muslim Ottoman (and later Turkish) foes, beginning in the early twentieth century. The aim of all of these groups, however, was ultimately to create secular, sovereign states. With the Religious Wave, attempts are made to take over the reins of government so as to impose a religious order upon societies.57 While Islam has garnered most of the attention in the Western press, this wave has also included Sikh terrorism in India,58 a Buddhist-Hindu struggle in Sri Lanka,59 Jewish religious violence (such as in the case of the Gush Enumin), and Christian identity and white supremacist terrorists in North America and Europe.60 This fourth wave has continued to include state sponsored terrorism, particularly to push religious agendas, most notably the Iranian

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example. State sponsored religious terrorism took center stage with Iranian students taking American hostages in November 1979, which lasted 444 days.61 In 1982, 380 clergy and leaders of Shia revolutionary movements from all over the Arab and Western world met in Iran and agreed to facilitate the Islamic revolution, which resulted in Iran allocating 100 million USD immediately, and 50 million USD to be spent every year.62 Today, Iran still gives approximately 200 million USD per year to Hizbullah, another 22 million USD to Palestinian groups such as HAMAS, and an unknown amount to Shia insurgents in Iraq. It also provides training, diplomatic support, and propaganda assistance.63 For Iran, state sponsored terrorism is still a means to conduct covert warfare on a global scale for both geopolitical and ideological reasons.64 It was because of Iran’s role that the world witnessed the first successful strategic example of state sponsored terrorism: the 1983 suicide bombings on U.S. and French embassies and military facilities, which compelled the withdrawal of those forces from Lebanon in 1984.65 Iran has not been the only state to sponsor terrorism, however, during the religious wave: others include Syria, Sudan, and Afghanistan. One innovation characterizing this wave has been the widespread use of charitable organizations in order to both fund and facilitate terrorist groups. Support through charities, whether deliberate or unintended, has become a major means to channel diaspora funds to terrorist organizations.66 The use of charities began with PIR A in the 1970s when it established them in America for Catholic widows and orphans in Ireland,67 but it spread rapidly from there. For instance, a 1996 Central Intelligence Agency (CIA) report claimed that approximately a third of 50 Islamic nongovernmental organizations (NGOs) considered in the investigation had employed individuals with some sort of terrorist connections.68 Al Qaeda has been the most famous group to utilize charities, but certainly not the only one. Hizbullah controls the al Aqsa International Foundation, the Martyr’s Organization (Bonyad-e Shahid), and the Mabarrat Charity Organization, along with a host of other charities located worldwide.69 HAMAS controls the Orphan Care Society and the al-Islah Charitable Society, among others. There have also been a number of circumstances of Palestinian terrorists acquiring employment with the United Nations Relief Works Agency (UNRWA), the United Nations agency established in 1948 to address the needs of Palestinian refugees. At least one of these employees, Nahed Rashid Ahmed Attalah,

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used a United Nations vehicle to transport arms, explosives, and armed activists.70 Another innovation has been the use of the Internet, not only for radicalization and recruitment of potential sympathizers, fighters, and terrorists, but also for resourcing.71 The Sri Lankan Tamil Tigers was among the first terrorist groups to use the Internet, putting out a myriad of Web sites on Tamil history, news, information on Tamil and non-Tamil NGOs, profiles of terrorists, and merchandising. Another particularly Web-savvy terrorist group is that of HAMAS and its Palestinian Information Center. Presented in both English and Arabic, it includes photographs, communiqués of attacks, and messages from HAMAS’ militant wing. It has also been used explicitly for fundraising. For example, until 2002, the HAMAS site www. qassam.net solicited donations for purchasing AK-47 assault rifles (2,000 USD donation), dynamite (100 USD per kilogram), and bullets (3 USD each). Donors were provided instructions on how to transfer money to a Gaza-based bank account. By 1999, nearly all terrorist organizations on the United States State Department’s list of Foreign Terrorist Organizations had Web sites, whereas in 1998, only about a half did.72 Crime remains prominent in the fourth wave, but with some new twists. Drugs are still a common means of resourcing, not only for Latin American groups, but also for religious ones, such as the Islamic Movement for Uzbekistan, which was able to control lucrative Central Asian drug routes,73 and Hizbullah, which has resourced itself with the Beka’a Valley’s agriculture and production of heroin and hashish, as well as pseudoephedrine smuggling in North America.74 Other commodities have also come into the fore, including diamonds, gold, and tanzanite.75 Today, the nexus between crime and terrorism also includes counterfeiting, credit card fraud, and identity theft.76 For instance, an Afghan camp trained European supporters of al Qaeda in how to counterfeit money. Indeed, all the major terrorist groups have maintained substantial links to organized crime, regardless of their religious ideology, including al Qaeda and its associated movements,77 as well as Hizbullah78 and HAMAS.79 A further advance has been the rise of franchising. Some form of franchising had always existed. For example, Hizbullah and HAMAS are franchises, in that the bulk of their resourcing comes from Iran (and, to a lesser extent, Syria), but each also maintains considerable internal sources of funding, which enables them to maintain

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substantial autonomy from their state sponsors.80 Al Qaeda became the first terrorist organization to sponsor other terrorist organizations. It has been particularly known for providing “seed money” to a promising terrorist cell to get it established in a new environ, after which the group would be expected to “live off the land” while conducting operations on behalf of the larger al Qaeda movement.81 For instance, the so-called Millennium Bomber Ahmed Ressam was given 12,000 USD with which to bomb the Los Angeles International Airport on New Year’s Day in 2000, and any additional funding or resources he needed he would have to provide for himself. Yet another new aspect of resourcing in the fourth wave has been the unique case of state sponsoring terrorism. Al Qaeda was the first terrorist group in history to sponsor a state, and it managed to do so twice—in Sudan and in Afghanistan. In Sudan, Usama bin Laden was able to provide some desperately needed assistance to the Sudanese government in return for sanctuary, a location from which to run operations (including it resourcing institutions), a training base, and permission to conduct research into weapons of mass destruction. In Afghanistan, Usama bin Laden was able to trade assistance and fighters in return for sanctuary, training facilities, the use of the national airline Ariana, and free reign in the country.82 Finally, one is witnessing the reemergence of lone wolves. It emerged with the anarchists, though the term “lone wolf” and its strategy were not popularized until the 1990s, and a significant increase is evident in its use with groups that espouse radical Islam. Bruce Hoffman has described this as the rise of “amateur” terrorists, in contrast to the more professional forms of the past. With easily attainable information from the Iinternet and bookstores, along with the low cost and easy acquisition of weapons, as Hoffman notes, “Terrorism has thus arguably become accessible to anyone with a grievance, an agenda, a purpose or any idiosyncratic combination of the above.”83 These lone wolf organizations may be less sophisticated or technically competent, but they also have far fewer inhibitions than more traditional terrorist groups with viable chains of command.84 Subsequently, these amateurs are becoming just as deadly as their more professional counterparts.85

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Ch apter 5

Th e Mu lt i nat iona l s of Te r ror ism

O

ne of the foremost innovations in terrorist organizations has been a shifting resourcing strategy from an informal, hand-to-mouth process to a very formal, rule-based one. As James Adams has noted, “It is hardly a coincidence that all significant terrorist groups have evolved in exactly the same way: from a small group of gunmen to a much larger group of relatively sophisticated business executives who use guns and bombs as only one of many tools in their revolutionary kit bag.”1 Many terrorist organizations have realized that outside support is unreliable and unpredictable, leaving them short of cash and unable to plan policy or strategy from one year to the next.2 A small number have managed to break through this impasse and garnered diversified resources, especially of an internal nature, becoming reliant on no one but themselves. This chapter provides a profile of five of these groups. While the immediate cost of a terrorist act may be relatively low, conducting attacks over the long term requires a constant resourcing stream. As terrorism scholar Matthew Levitt has stated, “Terrorist organizations incur many long-term costs, including renting safe houses, buying loyalties, maintaining the physical infrastructure of their networks, paying members’ salaries, printing posters and banners, and other costs.”3 Those groups with a long-time horizon, good opportunities, and some luck have been able to reconfigure their resourcing to account for these difficulties, creating diversified resourcing portfolios of both legal and illicit assets that enable a relatively steady income. Creating such portfolios require the groups to develop very formal resourcing structures, making these groups akin to multinational corporations.

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These formal financing institutions have three roles: (1) generate resources, be it from front companies, fraud, or other sources; (2) preserve those resources and protect them from seizure; and (3) distribute them to operational cells.4 Groups using formal institutions must include specialized personnel such as chief financial officers (even if that is not their official job title) and finance committees, and some even attempt to audit their “employees.” While this institutionalization brings about the possibility of a more reliable resourcing chain, this also requires considerable skills, greatly adding to the complexity of the organization overall, and increasing operational security problems. In an attempt to create more efficiency and stability, terrorist groups sacrifice simplicity. The ability of terrorist organizations to achieve greater levels of resourcing and autonomy has been credited to the end of the Cold War. According to this hypothesis, the end of a formal rivalry between superpowers dramatically cut back state support for terrorist organizations. In addition, non–Warsaw Pact state sponsors such as Iran and Syria faced a less polarized environment and could decrease their levels of support for terrorist organizations. The problem with this theory is that it ignores the substantial levels of self-financing achieved by terrorist organizations, normally attained through crime. It also ignores that many groups, especially the Palestine Liberation Organization (PLO) and Provisional Irish Republican Army (PIR A), had already moved toward self-financing long before the end of the Cold War, as the case studies below will demonstrate.5 Though the end of the Cold War resulted in some changes in terrorism resourcing, this new institutionalization, with its emphasis on diversification, is not due to the end of superpower rivalry. Rather, the conclusion of the Cold War, and its commensurate expansion in globalization and new financial and trade regimes, offered more opportunities for moving personnel and greater ease in communications, expanding the options available.6 More formalized structures have brought on numerous problems, too. The first is the need to find people with the expertise to handle such complex resourcing and financing operations, which are skills not easy to master. As Jacob Shapiro has noted, “The best financiers are unlikely to be religious or ideological purists, as such individuals rarely spend time developing expertise in money laundering and covertly moving funds.”7 The second issue is the possibility of compromise. Terrorist financial officers know in-depth details of what resources come into

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the terrorist organization, how those resources are moved, who is involved in their movement, who can order a reallocation of assets, and so on: in short, most of the organizational and logistics chart of any terrorist group. Compromise of a financial officer, either due to interrogation or defection, can be extremely detrimental to the organization. For instance, a former payroll manager for al Qaeda, Jamal Ahmad al Fadl, defected from the organization in 1996 after embezzling 110,000 USD, and provided U.S. authorities with priceless insight.8 The third problem is that such resourcing requires much intricacy, including a complex communications infrastructure, which can make the organization more vulnerable to penetration by law enforcement. For example, actions to mitigate the principle-agent problem, with financial executives and other resourcing officers acting on behalf of a terrorist organization, can generate the need to keep records and audit the organization that could be exploited by counterterrorism forces. Such officers may not be working for purely ideological goals, and they may shirk their duties by padding their salaries, through misappropriation of funds, or by using operational resources.9 Nevertheless, large groups will eventually have to take on the additional complexity and risk required in order to ensure a steady stream of resources. This chapter will examine the most notable cases of institutionalized terrorist organizations: the PLO, PIR A, HAMAS, al Qaeda, and the Tamil Tigers. The PLO and PIR A are analyzed because they were the first to take advantage of the opportunities of an increasingly globalized world in the 1970s and 1980s to create formal resourcing institutions. Also in the 1980s, a group of Arabs who had fought the Soviets in Afghanistan, who would become known as al Qaeda, were deliberately creating formalized institutions that would allow them to support a global jihad, and which have enabled their group to survive the greatest ever onslaught against a terrorist organization. Meanwhile, two forward-thinking, newer organizations, HAMAS and Hizbullah, copied the PLO’s example and were able to grasp opportunities to diversify their own resourcing. HAMAS will be described in depth in this chapter, while Hizbullah will be highlighted in chapter 7. Finally, the case of the Tamil Tigers is illustrated because it represents the pinnacle of what an institutionalized terrorist organization can garner, especially given that it represented only a small diaspora.

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Palestine Liberation Organization The PLO has succeeded where many other groups with legitimate grievances have not for a number of reasons, one being early backing from Arab states and their oil money. An Arab League treaty granted the PLO 250 million USD per year (though most countries have long since ceased providing the PLO any such money). Moreover, the PLO has usually been able to work within some form of sanctuary, first in Egypt, then in Jordan, and from 1970 to 1982, in Lebanon, before being forced to move its headquarters to Tunisia—which resulted in many of its more daring terrorist operations curtailed.10 Later still, it moved back to areas originally part of Palestine and was elected as the Palestinian Authority (PA). Through all this, the group, and particularly its Fatah faction, continued to survive and remain relevant due to its ability to separate itself from the Arab governments that originally sponsored it, and instead build a bankroll that would grant it autonomy and a level of legitimacy with its constituency. The PLO was the first to create a formal, institutionalized means of resourcing with the creation of SAMED in 1970. Over the years, the PLO adapted its economic institutions to meet changing needs, though the main financial institution since the 1970s has remained the Palestine National Fund (PNF). Not unlike many states’ central banks, the PNF was designed to be at least somewhat independent from factional infighting, and its chairman is the only official elected directly from the Palestine National Council. Moreover, its directors have been technocrats, such as businessmen or bankers. Not unlike an independent “central bank,” the PNF was an early adopter of modern computer equipment and economic research bureaus, such as a department for economic affairs and a bureau for statistics, established in 1981.11 Today, the Fatah faction of the PLO is an elected representative of the Palestinian people, and its resourcing capabilities remain extensive. In 1999, computer hackers broke into the PLO computers and published their findings, which included £5 billion in bank accounts not officially registered to the PLO, shares on various stock exchanges, and property in London, Geneva, and New York. As of 2002, the Palestinian Authority (PA), through its Palestinian Commercial Services Company, still had monopolies in flour, oil, cigarettes, iron, and commercial sand and full ownership of a cement plant and a minority stake in a Ramallah Coca Cola bottler. In the late 1990s, the PA skimmed tens of millions of dollars from its workers’ pension

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funds, with more than 100 million USD discovered to have “disappeared” from the fund by 1997. Finally, the PA had access to foreign aid money, with an estimated 5.5 billion USD given to them by the international community as of 2003.12 Given the notorious corruption of the Palestinian Authority, it is unknown how much money actually went to resourcing terrorism, such as suicide bombers, as opposed to what lined the pockets of PA members. Moreover, it is unclear what assets remain since the death of Yasir Arafat, given that much of the PLO’s resourcing empire was controlled by him personally. Nevertheless, at least through 2004, it was paying members of the al Aqsa Martyrs’ Brigade monthly salaries,13 demonstrating that at least some resourcing was still supporting terrorism. Though substantially weakened, as the HAMAS elections and HAMAS’ taking of the Gaza Strip indicate, there likely remains at least some nascent terrorist resourcing capabilities.

Provisional Irish Republican Army (PIR A) Though not nearly as wealthy as the PLO, the PIR A has also demonstrated a significant degree of formal, institutionalized resourcing. Various media reports place PIR A’s yearly income between 1978 and 1998 at £6–10 million, while its expenditures were believed to be about £5 million.14 PIR A, like the Irish Republican Army (IR A) before it, was modeled on the British Army, with commands, brigades, and companies.15 It was led on a day-to-day basis by a 7-member Army Council, which was chosen by the 12-member Army Executive, which was in turn elected by the General Army Council (GAC).16 Geographically, PIR A consisted of a Southern and Northern Command. The Southern Command included 21 counties in the Republic of Ireland, while the Northern Command included all 6 counties in Northern Ireland, plus 5 border counties in the Republic of Ireland. The Southern Command acted in a “quartermaster role,” including volunteer training, funding, and storage and movement of armaments. Its command and control was considered less stringent than that of the north, and it had a lesser role in major decisions. Because PIR A relied on at least the passive support of southern Ireland’s population, PIR A operations were limited and murders of Irish police rare due to the possible severe repercussions.17 For most of its existence, the IR A, and later, PIR A, conducted resourcing rather informally. Since at least the 1930s, members had

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been required to contribute dues, but the group’s overall resourcing was disjointed and haphazard. In fact, one of the reasons for a ceasefire conducted by the IR A in 1962 was their inability to acquire the necessary resources, namely money, weapons, and personnel, into the organization.18 According to a statement made by a PIR A informer (believed to be Sean O’Callaghan) to British intelligence, the decision to conduct resourcing along professional, formalized lines came during a 1981 PIR A meeting held in a pub in Bundoran, in the county of Donegal in Northern Ireland. In that meeting, PIR A leadership discussed how the irregular resourcing of the organization was causing substantial difficulties for the group overall, and in order to fight a long war, a more formalized system would have to be put into place. Horgan and Taylor have published excerpts of that intelligence report, using initials rather than names to protect their sources: [D] said it was necessary to put the finances on a professional basis. He said that [B] had been taken from an important position in the Belfast brigade to put the finances on a professional basis. Monies in the past had simply been obtained but had not been invested to make more money. The southern command obtained finance through armed robberies but these often went wrong. The result was that it was costing PIR A to support the families of members imprisoned for armed robbery offenses.19

The birth of PIR A’s formalized financial infrastructure is traced from this meeting. As an Irish Republic Police detective who had investigated financial crimes noted, “The general assumption in place [by PIR A] was that the war was not going to go on as long as it has . . . in hindsight . . . but to ensure that there was a steady flow of money when it would be needed, it was . . . necessary to do some serious planning.”20 The detective continued, “Once Bobby Sands died, all this money poured into the IR A, but that kind of dried up after a while . . . It’s the need for regular, steady income that is necessary.”21 With this, PIR A’s formalized, financial empire in the Irish isle began. Reporter Veronica Guerin noted PIR A’s empire in the late 1990s: These activities include extensive property holdings, guest houses, pubs, taxi and hackney services, courier services and a number of video outlets . . . these businesses provide a regular cash income and are an ideal cover for laundering stolen cash. The true ownership of these businesses is concealed in a myriad of holding companies in a

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complex scheme devised by an accountant well known to the Gardai [Irish police]. The accountant operates from an office in Dublin’s northside. He is described as “extremely bright, with no convictions.” All of his work is legal, except that it is done on behalf of an illegal organization.22

Such enterprises can be quite lucrative. For example, PIR A owned as many as 30 pubs throughout Ireland (as well as at least one in Boston). An accountant who worked for PIR A noted that one can skim 3–7 percent of the profits from a pub for 3–4 years without being detected by the Revenue Commissioners. When an audit by the tax authorities does come up, the pub can either be sold, or if it is especially worth keeping, the venue acquires a new name on the ownership papers and a new license, so that it appears to be a new pub.23 PIR A was believed to have £30 million in assets in hotels, pubs, and other small businesses alone.24 Aside from its businesses, PIR A maintained extensive criminal rackets. Robbery appears to have been the most profitable form of funding. Extortion was also common, though it morphed from its earlier days, when PIR A members would demand protection money from local businesses in Northern Ireland, into “security companies.”25 Income tax fraud and false tax exemption certificates, which may have yielded PIR A as much as £28.5 million 26 and animal smuggling were also lucrative cash cows. Throughout the late 1970s and well into the 1980s, kidnap and ransom also brought in millions.27 In order to manage this multifaceted resourcing system, since that 1981 meeting, PIR A developed a formal finance department. While the organization overall remained a fluid one, its resourcing was entrusted to only a very small group of people. PIR A had a financing director who had overall responsibility, and a ring of advisors who handled financing for both PIR A and it associated political party, Sinn Fein. Money from a variety of sources, ranging from Sinn Fein fundraisers to PIR A armed robberies, would come in through the financing director, who in turn supplied cash to PIR A units for operations.28 The group also hired the services of an accountant (the one mentioned earlier in this chapter), who closely advised PIR A and worked for it nearly full time. This accountant, nicknamed “X” by Horgan and Taylor, was the front man for PIR A members purchasing businesses for money laundering, and owned a hotel and two pubs in his own name on behalf of PIR A. PIR A also used at least three “freelance”

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accountants, who worked for both PIR A and Sinn Fein, but only from time to time. All of these accountants conducted legitimate accountancy work, supplemented by work for PIR A. None of them formally occupied any role within the PIR A command structure, although one may have unwittingly worked for PIR A previously. Their work for the organization included advice to its firms, falsification of tax returns, and other documents for pubs. Furthermore, based on in-depth case studies of some PIR A resourcing, there appears to have been an additional ring of sympathizers, which promoted PIR A financing, including at least one bank manager and an auctioneer who were willing to provide services like false documentation.29 The PIR A resourcing structure included a combination of centralized and localized assets. Many PIR A active service units (ASUs) selffinanced their local activities, but a few ASUs specialized in armed robberies that redirected at least part of their proceeds back to the finance department to be distributed to other ASUs or used by PIR A to make further legitimate investments.30 Also notable was the significant diaspora support for PIR A (and its predecessor organizations), especially from the Irish-American community. The most famous was Irish Northern Aid, better known as NOR AID. Established by Michael Flannery in the Bronx, NY, in 1970, NOR AID directed approximately 200,000 USD per year into PIR A’s coffers, besides acting as a form of political action committee on behalf of PIR A, until a series of terrorist operations in the late 1970s and early 1980s began to reduce U.S. sympathy for the group.31 This remarkable amount of resources consisted primarily of money donated ostensibly for victims of violence in Northern Ireland.32 Parallel to it, but operated separately, was a weaponssmuggling ring run by George Harrison.33 Approximately 2,800 of PIR A’s 10,000+ weapons captured were from a U.S. arms trail to Ireland.34 Contributions from New York to Dublin or Belfast were brought overseas about twice per month, usually carried by retired New York police officers.35 The money was officially designated for use by the Green Cross, which was an organization supporting the dependents of IR A prisoners. While Michael Flannery originally denied that it had been used to buy weapons, later court testimony proved some of the donations to the Green Cross supplied the money with which George Harrison was purchasing weapons to ship to PIR A.36 The resourcing was critical to maintaining a substantial logistics base across the island of Ireland. As of 1999, PIR A was believed to

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have approximately 100 tons of weapons, including at least 500 rifles, 450 handguns, and over 2,500 kg of Semtex explosive. The group could count on at least five well-hidden, fortified bunkers used as bomb-making factories37 and approximately 400–500 members who received weekly payouts of £30–40. PIR A was probably allocating at least £12,000 per month just to pay the salaries of its active members. The organization may have been paying some members high salaries and “bonuses” to prevent dissent from its fighters and avoid violations of the cease-fire; in one case, an operative in Dublin received almost £6000 “to keep him happy.”38 Finally, PIR A also paid allowances for its operatives in British jails and subsidies to recently released members who have been incarcerated on long sentences and had little or no chance of finding employment.39 The PIR A resourcing structure also supported Sinn Fein. The flow of resources had to be sufficient to maintain the Sinn Fein Headquarters in Dublin and Belfast, regional offices in 32 Irish counties, election costs, traveling expenses, and payrolls. As part of their “bullet and ballot box” strategy, the 1988 PIR A revenue of £7 million was split 80–20 percent in favor of political activity carried out by Sinn Fein.40 PIR A had to maintain tight control over its resourcing, lest it alienate itself from its community. This has been particularly important for Sinn Fein, for a disgusted and alienated community would lead to few votes for its political activities. Therefore, PIR A/Sinn Fein eventually limited or halted altogether resourcing operations, such as kidnapping and drug smuggling, that would reflect negatively.41 In order to ensure that PIR A members were not enriching themselves at the cost of the organization, the group tried to maintain accountability of its resourcing goings-on, although with varied success.42 PIR A appears to have been meticulous in tracking its assets, and there were examples of punishment beatings and ridicule and scorn from other PIR A members for mishandling funds.43 Since 2005, PIR A has sworn off violence, ordering its members to lay down its arms and continue to fight for a united Ireland through peaceful means only.44 As the 2008 Independent Monitoring Commission Report by the British Government notes, the military structure of PIR A is being disbanded and membership moved from PIR A to Sinn Fein. The Commission no longer considers PIR A a viable terrorist entity. Moreover, the Independent Monitoring Commission asserts that PIR A has given up criminal activity, and though some members may still be engaged in criminal acts, this is

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not with the support of PIR A. It also notes that it is unclear what has happened to the illegal resourcing structures of PIR A.45 The PIR A/Sinn Fein resourcing structure represents a case of how a terrorist organization embedded in a larger community can find both advantages and disadvantages. The group can gather donations from its constituents (or failing that, resort to extortion), but especially in the case of an organization with a political wing and a role in the larger, legitimate government, it will find its resourcing constrained by what the population is willing to bear. For instance, though PIR A could acquire much resourcing from drug-related crimes, it is unlikely that the larger Catholic community would tolerate it. The evolution of this group constitutes a crucial case for other organizations trying to combine violence with legitimate political representation.

HAMAS The Sunni Palestinian group HAMAS, more than perhaps any other terrorist group, is particularly fastidious in keeping its resourcing for its terrorist, political, and public works organizations separate.46 It is formally divided into independent “wings” for its military campaign (under the Izz al-Din al-Qassem Brigades), political action, and social welfare. Because of this, it has been common for countries to ban outright support to HAMAS’ militant wing though allowing contributions to the political and social services wings, despite knowing that that money can be redirected to the militant one.47 In this regard, it was not until 2006 that the European Union banned all support to HAMAS. HAMAS activities are overseen by a Majlis al Shura (consultative council), which has its headquarters in Damascus, Syria. It is responsible for supervising a wide array of activities, including resourcing. Within the organization, there are four basic factions representing the Gaza Strip, the West Bank, HAMAS members living abroad, and those in Israeli jails. HAMAS’ administrative activities are broken down into four areas, which are then further categorized by region: the social and administrative branch, which handles recruitment, funding, and social services; the Izz al-Din al-Qassam Brigades (before 1991, known as the al Mujahideen al Filastinun) and the Murabitun (popular army); the Jehaz Aman (security branch) that is responsible for internal security, mainly collaborators; and the A’alam (publications and media branch) that handles press releases and distributes leaflets.48

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HAMAS is believed to have a budget of about 70 million USD per year, of which 85 percent comes from abroad,49 either through state or private donors, or through a variety of resourcing schemes undertaken throughout the world. HAMAS is a franchise organization, with the bulk of its money coming from Iran—about 22 million USD per year, much of it funneled through Hizbullah. The group also receives extensive training and other support from both Iran and Hizbullah.50 Other external resourcing sources have included Fatah operatives, who have provided weapons, and close ties with the Palestinian Islamic Jihad (PIJ), a much smaller Palestinian group. Moreover, HAMAS has received donations from non-Palestinian citizens, including private support from Saudi citizens.51 HAMAS also has numerous internally controlled sources of support, not only for financial purposes, but also for recruiting. In a speech given in 1993, HAMAS operative Muin Shabib stated that the group was tied to the Islamic University (in the Gaza Strip),52 a series of women and youth organizations, and institutions such as the al Tadhoman Charitable Association (which owns part of the Yasfa dairy company and the Nablus Mall), the al-Zakah Committee of Jenin (which runs a local hospital), and the association of Islamic Studies and Cultures in Jerusalem.53 HAMAS also controls the Beit el-Mal Holding company, a public investment company with its headquarters in East Jerusalem.54 In turn, the company holds a 20 percent stake in al Aqsa International Bank, which is the financial arm of HAMAS.55 Other alleged front companies include Sunuqrut Global Group and al Ajouli (a money changing firm), two companies accused of money laundering on behalf of the group.56 Through court cases and its open operations in many locales, much is known of HAMAS’ charitable arm. One of its largest branches was the Holy Land Foundation for Relief and Development, which allegedly collected 57 million USD between 1992 and 2001. This was so large that it had to use 80,000–120,000 USD per year just to maintain its Jerusalem bureau.57 In November 2008, after 15 years of investigations and two trials (the first ended in a mistrial), members of the Holy Land Foundation were found guilty on 108 charges of illegally funneling 12 million USD to HAMAS. The foundation was also tied to a telecommunications and computer company named Infocom. Like in the case of Hizbullah, HAMAS activists have been involved in numerous illegal activities for resourcing the organization, including pirated multimedia, drug smuggling, credit card fraud, and cigarette smuggling.58

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Such activities are all part of the extensive resourcing system necessary for maintaining this complex organization. Captured documents of the al Islah Charitable Society from November to December 2000, which were found in its Ramallah branch, indicated that this HAMAS-run charity had listed its funding priorities (in order) as aid to HAMAS “martyrs,” prisoners, and wounded militants; coverage of administrative costs for the charity; and support to HAMAS’ social welfare organizations. In 41 days, al Islah dispensed 5000 USD to families of “martyrs,” 16,000 USD to prisoners, 17,000 USD to prisoners’ families, and almost 4000 USD to wounded militants.59 This seven-week budget just for militants and their families indicates how expensive such support can be to a terrorist organization, and thus, the amount of resourcing that must be acquired, moved, and stored just for this one purpose. According to HAMAS founder (now deceased) Sheikh Ahmed Yassin in 2001, HAMAS distributed 2–3 million USD per month to the relatives of suicide bombers and other “martyrs” and those in jail. The complexity of maintaining this expense is also formidable, as it involves tracking the militants and their families, and ensuring that money and other resources coming in are moved to those the organization supports. To accomplish this in the case of prisoners, for instance, requires opening bank accounts for each inmate, into which HAMAS then places funds for “canteen money.”60

Al Qaeda Perhaps the best-known and most-studied terrorist resourcing institutions have been those of al Qaeda. Through both intentional design and trial and error, beginning with its infancy as the Service Bureau (Maktab al Khadimat) during the Afghan War with the Soviets in the 1980s, al Qaeda has created a number of innovations in terrorist resourcing. As terrorism finance expert Steve Kiser notes, “[. . .] while Al Qaeda’s financial empire is certainly impressive, it is more evolutionary than it is revolutionary. With the exception of the creative use of the internet, Al Qaeda’s methods of raising, storing, and moving money are typically not new, but rather more disciplined or imaginative methods previously used by other terrorist organizations.”61 Al Qaeda, more than any other terrorist group in history, has been compared to a transnational corporation and described using standard business terms, such an organization with “franchises”62 and “subcontractors,”63 the “Ford Foundation of Terrorism,”64 with

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Usama bin Laden as its “CEO,”65 and “al Qaeda” akin to a brand name. Much of this derives from the fact that al Qaeda was designed from inception along a business-oriented model, with much of the leadership of al Qaeda, including Usama bin Laden himself, with backgrounds in business and economics. Al Qaeda and Usama bin Laden themselves use business-oriented language, even in their code words. Usama bin Laden has been referred to as “the contractor.” Acts of terrorism are referred to as “trade,” with Mullah Omar and the Taliban as “The Omar Brothers Company.” The United States and Great Britain have been referred to as “foreign competitors.” When al Qaeda and the Egyptian Islamic Jihad joined together as one organization in 1998, it was labeled a “merger,” which might “increase profits.”66 Many of al Qaeda’s backers are wealthy businessmen, namely the notorious “Golden Chain” of 20 wealthy Saudi businessmen.67 Prior to 9/11, such business acumen both inside the network and within a close ring of sympathizers ensured that the core organization had a great deal of resourcing institutionalization, and there are indications that at least some of this formal structure has remained even after the fall of its safe haven in Afghanistan in 2002.68 Prior to 9/11, al Qaeda had established a chief financial officer and a professional financial committee that included bankers, accountants, and financiers,69 while another committee handled foreign purchases, including acquiring weapons and other equipment. There were regional money managers as well as a chief financial officer or financial operatives for each operation. There was also a specific bureau to handle passports and entry certificates and an office to obtain airline tickets and visas.70 According to the American court testimony of Usama bin Laden’s former payroll manager, Jamal Ahmed al Fadl, bin Laden’s financial network included up to 80 front companies around the world, plus bank accounts in Switzerland, Sudan, Hong Kong, Monaco, Pakistan, Malaysia, and London.71 With such extensive structure came meticulous record keeping, not only of his businesses, but also of his personnel and their families.72 Recognizing the importance of expertise and the development of a deep “bench,” al Qaeda established a financial “unity of command” system, for example, when the chief financial officer was captured shortly after 9/11, a second-tier financier was immediately available to take his position.73 To protect the financial aspects of resourcing institutions, al Qaeda had five security principles. First, funds for investment were separated from those for the rest of al Qaeda operations. Second, only a

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few members would know the location of these funds. Third, not all funds would be put in one place. Fourth, precautions would be taken if large amounts of money were to be transported. Finally, money was generally left with non-members and spent only when needed.74 Moreover, al Qaeda audited its cells to minimize the likelihood that the money or other resources would be misspent. For example, an e-mail found on a computer in Afghanistan composed by Ayman al Zawahiri on February 11, 1999, to an individual called “Ezzat” in Yemen highlights Zawahiri’s scrutiny of Ezzat’s finances, including why Ezzat had spent 470 USD on a new fax machine, why had the cell phone invoice amounted to 756 USD, and asking for a detailed accounting of 235 USD that Ezzat had labeled “general expenses.” Ezzat then responds to Zawahiri, justifying those expenses.75 And auditing for al Qaeda–associated groups did not end when al Qaeda lost its sanctuary in Afghanistan in 2002. The Islamic State of Iraq, an al Qaeda entity, kept at least four “Fighter Registry Reports,” which were essentially human resource files, on all incoming foreign fighters, including names, dates of arrival, work they would do (suicide bomber, etc.), and assets they brought with them. These registries were part of a trove of documents captured in October 2007 near Sinjar, Iraq, which also included blank standardized forms for everything from tracking weapons to receiving group funds to forms for swearing allegiance to the Islamic State of Iraq. Other captured documents included signed contracts by foreign fighters; managerial reports for personnel, equipment, and finances; receipts for funds dispersed to members; and policy memos. An individual identified in reports as “Shahin the Administrator” had the task of summarizing the group’s finances from March to September 2006, documenting accounts received and the total budget, though he writes of his concern for his inability to account for every last dollar. Administrative rules even required that for every amount paid out, a signature was required both from the receiver of the funds and another person to show how the money was spent—not an abnormal occurrence for a standard company, but not what one would expect from a clandestine insurgent and terrorist organization. Clearly, al Qaeda–associated organizations have found the need to document and audit their activities to be worth the significant operational security risk of having those documents captured.76 Because of these pre-9/11 precautions, many analysts believe that much of al Qaeda’s resourcing structure remains intact.77

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The Tamil Tigers Perhaps the most complex and sophisticated terrorist organization in diversity and formal institutionalization of terrorist resourcing was the Sri Lankan Tamil Tigers, a group that sought a homeland for Tamils in northern Sri Lanka ostensibly on behalf of their Tamil constituency.78 Until its very end in 2009, it was a complex, hierarchical group, and its resourcing was no exception. The Tamil Tigers were led by its founder, Velupillai Prabhakaran. Below him were two directorates, as well as a main financial controller with a subgroup of financiers. These were the Aiyanna Group, the “KP Directorate,” and the Sana Group, respectively. Moreover, the Tamil Tigers could count on individual country representatives in many states, who received orders, engaged in resourcing, and passed those assets back to the headquarters.79 Within Sri Lanka, the Tamil Tigers acquired resources mainly through sales taxes, approximately 10 percent on building materials, 7.5 percent on car parts, and 20 percent on cigarettes.80 Most resourcing, however, was accomplished outside Sri Lanka. This extremely complex, sophisticated, and institutionalized structure brought immense amounts of wealth and other assets into the organization, as well as enabled the Tamil Tigers to track the Tamil population throughout the world. This led the Tigers to accrue some 200–300 million USD per year, thus more than meeting the estimated 8 million USD per year budget the Tamil Tigers required for operations.81 One department that reported directly to Tamil Tiger leadership was the Office of Overseas Purchases, which was directed by Kumaran Pathmanathan (aka KP, which gave rise to the department’s nickname as the KP Department). This office was probably the procurement arm, which acquired and delivered weapons and other resources from around the world.82 The Sri Lankan Ministry of Defense assessed that, as of January 2009, KP had been put in charge of the entire international financing network as well.83 The weapons procured by the KP Department were some of the most modern ever in the arsenal of a terrorist organization, including surface-to-air missiles, surface-to-surface missiles, and light aircraft.84 Just as importantly, KP operated one of the Tamil Tiger’s most lucrative front companies: the Sea Pigeons. These were a fleet of deep sea vessels, normally registered in Panama, Honduras, or Liberia, which transported everything from hardwoods to human beings. Until the seizure of a Tamil

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Tiger ship in 1990, KP and his procurement branch used to operate out of Malaysia, then were assessed to be in Thailand, where they had a boatyard on the island of Phuket for the construction of minisubmarines to infiltrate divers, along with building other seacraft.85 This sea fleet had also been accused of using the Twawate Island off of the coast of Myanmar to ship narcotics to Tamil gangs in Toronto for distribution.86 The Sri Lankan Ministry of Defense claims to have sunk seven Tamil Tiger ships, and that the four remaining ships were commanded by operatives residing in the United Kingdom and Philippines.87 KP became the de facto head of the Tigers when other senior leaders died in their final stand in Sri Lanka in May 2009. In August 2009, KP was arrested in Thailand, leaving what will happen to the group overall, including its vast resources located overseas, as an open question. Another group that reported directly to the organization’s leadership was the Aiyanna Group, directed by Pottu Amman, who was the second in command of the entire Tamil Tigers group and may have briefly handled day-to-day operations for the group until his death in May 2009. The Aiyanna group was the Tigers’ clandestine intelligence and operations body,88 which included securing and monitoring the resourcing streams. Aiyanna had also overseen the global management of Tamil communities in Western countries,89 which was critical given the substantial support provided by the Tamil diaspora, both willingly and unwillingly, to the Tigers. The third group was the Sana Group. This included one “Principle Controller” and eight trust managers in Europe, North America, and Southeast Asia. Once the leadership in Sri Lanka had determined the financing levels of each country in which the Tamil Tigers had a representative, the trust managers ensured the appropriate transfers took place through banking institutions, human couriers, or misinvoicing of import-export goods. These transfers moved through a variety of means to avoid detection by law enforcement. The Principle Controller did not actually hold funds, but merely the books detailing where the funds were located. When a Tamil Tiger resources procurement team needed funding, the leadership informed the Principle Controller, who then informed one or more trust managers to transfer funds, generally to multiple locations in smaller blocks to avoid suspicion and detection. For example, in a 2006 Federal Bureau of Investigation sting operation, the Tamil Tigers, in an operation under the direction of Pottu Amman, sent a three-man team to Guam to inspect some weapons presented by undercover agents. The

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team then consolidated the 450,000 USD payment in Malaysia and transferred it to a Baltimore bank account.90 The Tamil Tigers made the most of the worldwide presence of the Tamil diaspora for cultivating money and other support, and this activity was considered the backbone of its global operations and its financial lifeline. The entire Tamil diaspora population is estimated to be 700,000–800,000, centered mainly in Canada, Europe, India, and Australia.91 The Tigers had a presence in at least 44 countries, with 12 of them considered “top-level contributing countries.” In each of these top countries, there was a national-level representative who received instructions from the leadership.92 One of the channels through which the leadership used to communicate with these representatives was a Tamil Tiger–owned satellite communications center.93 Many of the country representatives were ex-combatants or the relatives of key leaders and ran specialized units. In Germany, for instance, the country representative was Vijeyendran; under his control were four units: political, finance, intelligence, and procurement. The finance unit received collection targets directly from the Sri Lankan headquarters. Tamil Tiger cells located in different countries had different levels of institutionalization and sophistication, although most of them used a combination of several methods to achieve their resourcing targets.94 The underlying factor, however, was the need to maintain a low-profile during highly profitable financial operations. For this reason, as with many terrorist organizations such as the PLO and al Qaeda, often financiers never actually fought for the group, so that they were not on any counterterrorism watchlists.95 In particular, due to both environmental and structural advantages, the Swiss Tamil Tiger unit topped the list of collections.96 This extensive and institutionalized diaspora network allowed the Tamil Tigers to raise funds in one location, operate from another, and then fight in a third one.97 One aspect that made the Tiger’s resourcing so effective was its incredible mobility. For example, the Tamil Tigers had been able to establish a procurement cell in Europe for a few weeks, secure the needed supplies, and then dissolved the cell. Also, the group was flexible in resourcing tactics. For instance, it moved to transporting its goods on trawlers that hugged the coast, rather than using the large cargo ships favored in the 1980s and 1990s—one of which was sunk by Indian and Sri Lankan forces.98 The Tamil Tiger’s influence over the diaspora gave them particularly high procurement

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capabilities, for it allowed them to circumvent international arms control conventions99 and use smuggling routes to acquire and move the resources they needed. Procurement of weapons included sources from Afghanistan, tribal areas in Pakistan, Cambodia, the former Soviet Union, the Zimbabwe Defense Industries (diverted by allegedly bribing an Israeli subcontractor), and the state run China North Industries Corporation (the Chinese have supposedly launched an investigation into this).100 Diaspora support was critical to the group, with support coming both willingly and through coercion.101 The target base rate for the Tamil diaspora in Europe was believed to be one Euro per Tamil per day for every day they were outside of Sri Lanka, with surcharges based on income levels.102 Tamils were also asked to pay thousands of dollars for “special events,” with some told to borrow money, place contributions on their credit cards, or even remortgage their homes. Business owners claimed to have been asked for hundreds of thousands of dollars.103 Besides direct collections from individual émigrés and their families, much money was raised at various Tamil events worldwide. Such events used to be more ad hoc, but the headquarters implemented a calendar of fundraising appeals, and country representatives had to report back regularly on the progress of those fundraising events. They included cultural shows, sporting events, food festivals, and guest speakers, with a Tamil Tiger subgroup known as the Tamil Youth Organization often taking a lead role in their organization.104 Prabhakaran apparently set specific fundraising targets for countries, as in a letter he signed that was sent to Canadian Tamils to contribute 3 million USD, which was found by Canadian police in the Toronto office of the Tamil Tiger–controlled NGO in Canada called the World Tamil Movement.105 The Tamil Tigers created a distinctive means of ensuring Tamil diaspora support by conducting a survey of all Tamils living in Europe and providing each Tamil family a unique PIN number. The master database was believed to be in a Scandinavian country, but with the ability to transfer data to the headquarters in Sri Lanka. The database included lists of relatives in Sri Lanka, income status, their contributions to the Tigers, and their status regarding subscription to the satellite TV channel. This made it exceedingly difficult for Tamil individuals and businesses to escape the Tiger dragnet, lest those Tamils be threatened in their diaspora communities or their relatives back in Sri Lanka.106 Likewise, the Royal Canadian Mounted Police accused the Tamil Tigers, through the Canadian-based NGO

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the World Tamil Movement, of collecting “war taxes” from Tamils in Canada. In 2006, the Royal Canadian Mounted Police captured financial and other records in a raid of the World Tamil Movement headquarters in Toronto. Among those records were lists of Tamil Canadians and the amounts they had donated; preauthorized bank payment forms; lists of businesses who had made donations (in multiples of 10,000 Canadian dollars); and computer disks that suggested that donated money flowed from Montreal to Toronto and then on to other countries.107 Also, like the other terrorist groups profiled in this section, the Tamils were adept at using NGOs to advance their goals. The leading Tiger NGO was the Tamil Rehabilitation Organization, which coordinated the activities of all other Tamil NGOs. The Tamil Rehabilitation Organization was believed to be the lead conduit for funds from the U.S. Tamil diaspora community to the headquarters and facilitating Tamil Tiger procurement in the United States.108 Another was the International Medical Health Organization, which operated at least 15 Tiger medical centers, plus 4 mobile ones. Also, the Tamil Tigers took over various Tamil temples throughout the world, which besides being a collection point for legitimate Tamil donations, had a recognized charitable status. Funds from temples could thus be moved with a minimum paper trail, facilitating money laundering.109 The Tamil Tigers also gained immense assets through drug smuggling and other criminal rackets, with the country representatives taking on the role of Godfathers. Besides drug-related activities, the Tamil Tigers were also accused to taking part in credit card scams and human trafficking. For instance, a group of Tiger financiers was busted in 2007 for ATM and credit card fraud in New York, with the investigation linking back to Tiger members in the United Kingdom. The scam had yielded about 250,000 USD in New York and millions of dollars worldwide.110 Aside from these criminal proceeds, Godfather-like figures also acted as enforcers to ensure compliance from diaspora communities.111 As for legitimate economic activities, the Tamil Tigers operated a very diverse range of businesses, including jewelry, videos, restaurants, gasoline retail in Great Britain, a supermarket in France, a travel agency in Canada, and fruit canning.112 The group also operated several telecom retailers in Europe, which provided prepaid phone cards for those calling relatives back in Sri Lanka, as well as a Tamil Tiger satellite channel with 22,000 subscribers in Europe. The Tigers had

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found a unique way to ensure cash flow into the satellite channel, by forcing Tamil businessmen to provide a specific level of advertising commitment to the satellite channel at excessive premiums.113 The Sri Lankan Ministry of Defense reported that, as of March 2009, this channel had lost its broadcast license and was having difficulty finding another country willing to provide it one.114 To set up front companies, in most cases, the financial unit in a country provided the seed capital to a close associate of the Tiger leadership. The front company would then provide financial backing through a cut of the profits, as well as money laundering capabilities and employment for other Tigers.115 For instance, a café in Cambodia was used to provide employment for eight members of the local procurement unit. These front companies not only funneled profits to the group, but also enabled money laundering and other storage and movement of resources.116 All of this together earned an estimated 2.75 million USD per month to the organization.117 Moreover, the Tamil Tigers set up their own hawala using a cartel of Tamil jewelry shops in Switzerland and Canada. The books were balanced using falsely declared gold jewelry, imported to these stores from the Gold Market in Singapore, while human couriers and bank transfers were used to move the resulting cash.118 Even with all the institutionalization, diaspora funding still fluctuated based on military developments in Sri Lanka. Donations given willingly tended to increase after military successes and decrease after setbacks. In particular, in 2001, diaspora support was in decline given the poor military operations and stricter rules against support to terrorist organizations worldwide, which gave many Tamil expatriates an excuse to limit their contributions.119 The Tamil Tiger’s funding and the Tigers themselves underwent a worldwide crackdown at the same time that the Sri Lankans achieved increasing success on the battlefield.120 With the senior Tamil Tiger leadership dead and the de facto head now in jail, a number of issues remain. First, will KP, from his jail cell, be willing and able to negotiate a settlement for Tamils, and if he is, will he have enough control over the organization to bring about the die-hard Tamil leaders who remain? Even if can bring a settlement, will the Sri Lankan government be willing to make any concessions? And most importantly, what happened to the intricate resourcing system? While some aspects, like the network in Canada, were significantly degraded by government investigations and arrests, others throughout the world probably remain largely intact. Will a leader in Sri Lanka arise, take

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the reins of Tamil Tigers (or establish a new group), and reestablish those networks, as the PIR A did with the remnants of the old IR A? Will a Tamil in the diaspora become the new head of the organization and take over from afar? Or will individual Tamil leaders become, in essence, local mafia warlords, extorting “taxes” on his local Tamils? Only time will tell. Though the resourcing of al Qaeda may receive the most attention, it is likely outdone by a nationalist organization from the island of Sri Lanka. The Tamil Tigers, with perhaps the most sophisticated and complex resourcing institutions ever, demonstrated what a relatively small group with a limited supporting population could do if motivated and ruthless enough to both diversify its resourcing and ensure compliance from its “supporters.” The resourcing formalization of a few terrorist organizations enabled them to amass war chests that provided them substantial capabilities. In the past, terrorist organizations that sought to have high levels of capabilities had to trade some of their autonomy to states or to diaspora groups. Today, due to their resourcing expertise and opportunities brought about by increasing globalization, groups can achieve both—they can have high levels of capabilities while holding on to very high levels of autonomy. Nevertheless, though these groups have achieved very high degrees of expertise in meeting their resourcing needs through diversification, this should not be taken as evidence of ultimate effectiveness. These groups have not achieved perfection of efficiency and control over their members, nor are all members and associates marching forward to the same ideological drumbeat. As Giraldo, Trinkunas, and Shapiro have all noted, within large organizations there can be very high levels of inefficiency, with substantial principle-agent difficulties as leaders attempt to ensure they receive sufficient resources, and with financial intermediaries’ abilities to shirk, thereby not providing the maximum levels of resources to the parent organizations.121 Nevertheless, these complex terrorist organizations are “good enough,” in that, despite inefficiencies, they still manage to allocate resources efficiently enough and in sufficient quantities to maintain a high enough operational tempo. Although these groups are certainly a step ahead of more traditional organizations, there remains plenty of room for improvement within terrorist organizations in the future. These first six chapters have provided a background into defining terrorism, the needs of terrorist groups, the menu of choices available

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to groups to meet their needs, how that menu has evolved over time, and finally, how a very small number have achieved significant levels of resourcing institutionalization. Chapters 6–9 will now describe in detail each of the seven categories of terrorist resourcing, and will provide case studies of each while highlighting the pros and cons of each category.

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Ch apter 6

Stat e Sp onsor e d Grou ps

A

lthough nonstate supported terrorist groups such as al Qaeda often grab the headlines, state sponsored ones too remain important on the international scene. The extent of the ties linking a terrorist organization to a state is reflected by how integrated the group is into the state’s overall command and control (C2) structure, and what percentage of support the state provides to it. The most integrated examples are state proxies, which are state agencies and clandestine agents conducting attacks on behalf of that state.1 As these attacks, however, are considered to be carried out by states actors, they are not considered terrorist organizations for the purposes of this book. More loosely included in the C2 structure are those traditionally defined as “state sponsored.” These groups conduct their operations with the consent of a state sponsor, but are not formally integrated into its military, security, or intelligence establishments, and are thus not considered that state’s clandestine agents or special operations forces. Because they are reliant on the state for all or nearly all of their support, they have little to no autonomy. Terrorist groups capable of finding a state sponsor can see their capabilities substantially improved, in contrast to what an organization, especially a young one, might be able to provide for itself indigenously. For very young groups, such support can mean the difference between life and death. But this assistance comes with significant trade-offs that may allow the organization to survive in the short term, only to see its longterm viability and eventual survival jeopardized. As Daniel Byman has noted, In general, state support almost always increases the capabilities of individual terrorist groups. However, it often forces the group to restrain its activities in accord with the interests of the sponsoring state. In addition, the sponsor often seeks to control the terrorist

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Te r r or i s t F i n a nc i ng a n d R e s ou r c i ng group and the cause it represents, a desire that may lead the sponsor to support competing groups or otherwise weaken the opposition to a target state as a whole.2

Further down in the command and control structure are state franchises, in which the state provides a large proportion of the resourcing to the group, and may offer some limited sanctuary, but it does not entirely control it. The state has influence over the terrorist organization due to the high level of support it provides, but should the state decide to rescind this assistance, the terrorist group would not collapse. Because the organization is not solely reliant on the state sponsor, it preserves greater autonomy. This chapter specifically discusses states that intentionally support terrorist organizations, using such groups as warfare-by-proxy. Daniel Byman has defined four categories of state support. The first is when state capacity is sufficient to control its territory, and it chooses to actively support terrorists, using funds from the state treasury along with providing members of its own military and intelligence services to train them—Syria and Libya have been notable examples. The second category is made up by states unable to secure their own territory, but nevertheless supporting terrorists,3 such as in the cases of Taliban rule in Afghanistan prior to 9/11 and Sudan’s assistance to al Qaeda. Both categories are considered state sponsors of terrorism. The third group comprises states that generally are capable of controlling their territory and oppose terrorists, but nonetheless have a terrorist presence within their borders.4 For instance, al Qaeda– associated cells have been dismantled in Germany, Denmark, the United Kingdom, and the Netherlands—all states that adamantly condemn terrorism, but within which terrorists still managed to carve some operational space. These particular groups generally fall into the lone wolf, franchise, shell state, popularly supported, or TNC realm. Finally are states that oppose terrorism, but are incapable of stopping them from using their territory. These include failing and collapsed states, which Byman calls “unwilling hosts.”5 Examples include groups operating in Somalia and the Abu Sayyaf organization in the Philippines. Terrorist organizations operating in this context tend to belong to the franchise, shell state, state sponsoring, or TNC categories. Moreover, most countries will not knowingly allow terrorist organizations to operate within their borders; yet many states may allow

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some level of support functions to take place. For instance, many governments of liberal democracies allow fundraising from their territory or the maintenance of Web sites—even if they would not allow the group to actively and openly pursue its goals there—because of the freedom of speech and the respect of other civil liberties. There also remains a definitional problem—what one state terms a terrorist organization, another may consider an insurgent group. As many guerrilla organizations also use terrorist tactics, it can be difficult to find the dividing line between the two. For example, many states consider Hizbullah to be a legitimate political and guerrilla movement fighting the Israeli government, rather than a terrorist organization, so those states allow their citizens to support them. While these different perspectives certainly assist terrorist organizations, they stop short of providing them full support and hence these states are not considered to sponsor terrorism.6

The Pros and Cons of State Sponsorship States can provide money and tangible and intangible goods critical to a terrorist organization’s survival, with the most important of these being the availability of sanctuary. A sanctuary allows terrorists to rest, recuperate, train, and plan, while providing a staging area, as well as a possible venue for recruitment, propaganda, and fundraising. Sanctuary is also an important locale for logistics lines, allowing for the acquisition, movement, and storage of tangible resources.7 Without it, terrorist organizations are very vulnerable to law enforcement from the targeted state, and young groups without sanctuary run the risk of being crushed even before they can make any inroads.8 A foreign sanctuary is not absolutely critical for a terrorist organization—some groups have certainly survived without one or by creating their own. Nevertheless, the ability to use another state’s sovereign territory rather than attempting to create one’s own is less complex or costly for the organization9 Thus, sanctuary allows terrorists to maintain the initiative and to fight another day.10 Another intangible resource provided by states is training, such as in weapons, explosives, and basic military tactics. States also provide intelligence and operational or organizational assistance, which gives groups the expertise to effectively utilize recruits, training, and money. Such organizational support may also assist the group in establishing and maintaining its operational security, thereby

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minimizing the likelihood that the targeted state’s law enforcement will be able to roll up the organization entirely. Diplomatic backing and support in the media can help legitimize and publicize the terrorists’ cause in the international arena. Finally, states may provide ideological guidance, as in the case of Iran’s guidance and legitimization of Hizbullah.11 States also contribute tangible resources, including money, arms, and life’s necessities. As terrorist organizations, especially new ones, are usually small, even limited amounts of money and other resources can go a long way,12 and resources provided by states are resources that the terrorist organization does not have to find for itself.13 Terrorist groups, however, take on some potentially serious drawbacks when they accept such assistance. The most important of these is the lack of freedom of action. States will demand some measure of control in return for the resources offered.14 Especially when a terrorist organization receives sanctuary, as well as tangible resources, the state literally holds the key to the survival of the organization. Second, when groups become the pawns of states, they rely on a particularly unreliable form of support. States do not provide assistance to terrorist organizations for altruistic reasons—they do so because it serves their interests, so they will ratchet up or down their support, cease it altogether, or even switch sides when they deem it necessary.15 As David Rapoport has noted, “. . . to depend upon foreign support is to depend upon the undependable, upon more powerful bodies and states whose interests are distinctly different from those of the terrorists.”16 The state can thus determine what the terrorist organization will or will not do. In the worst case scenario for a terrorist organization, the state can turn on the terrorist group, forcing it off its territory or even rounding up its members for arrest or death.17 Third, should they become viewed as pawns of an outside power, terrorist organizations may lose legitimacy with their intended constituency, which can be especially problematic for nationalist ones.18 Moreover, terrorist leadership abroad will find it difficult to remain in steady communications with its members, and it comes as no surprise that terrorist leaders who reside outside the targeted state can be considered “out of touch” with their fellow group members who actually conduct the struggle and live among their communities.19 An example is the leadership conflicts in HAMAS between the overarching leadership in Damascus, Syria, and the actual fighters in the Palestinian Territories.

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Much of this could be alleviated if a terrorist organization used the state sponsorship only long enough to develop its own internal resourcing and alternative locations for sanctuary. While a few groups, such as the Fatah faction of the PLO, have done so, most have not. As Walter Laqueur asserts, Prolonged and substantial subventions by foreign governments usually had a demoralizing effect on both the leadership and the rank and file of terrorist movements, which became increasingly dependent on their sponsors. Sometimes, when the payments were stopped, the terrorists would turn against their paymasters—more often, the movement would simply collapse, as happened to the IMRO [Inner Macedonian Revolutionary Organization] after the Bulgarians withdrew their support.20

The Pros and Cons to States of Providing Sponsorship Using terrorism as warfare-by-proxy has a number of advantages for a state, insofar as it is a cost-efficient way of waging a war that, if executed well, would effectively engage a stronger foe relatively risk free. First, it can work in a role known as “the poor man’s air force.” Very few states have the capability of projecting coercive power much beyond their borders, and what assets they have may be too weak to challenge stronger powers. Terrorism gives states the ability to exercise violence anywhere in the world, and, if the right targets are struck, to cause significant pain to the targeted country. The use of terrorism can be easily ratcheted up or down, or sheathed entirely, should that be considered advantageous.21 Besides just projecting power, this warfare-by-proxy can also weaken or destabilize a neighbor, perhaps even to such an extent as to cause a regime change. In addition, by actively supporting a terrorist opposition group in another state, one can shape that opposition force into an instrument favorable to the sponsoring state.22 As the state is attacking through another group, rather than with its own agents, such attacks are generally considered less than outright acts of warfare, an important consideration given the use of terrorism by often weaker states. This also provides a level of plausible deniability when it comes to the terrorist attack, as the sponsoring state may be able to claim that the terrorists did not act explicitly on its behalf.23 Plausible deniability may be limited when a state actively

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supports a terrorist group, but can be more salient when it utilizes a franchise terrorist organization. Second, many states, especially revolutionary ones, strive to export their ideology, and terrorism can be a means to do so.24 For example, Iran’s support to Hizbullah has provided it the chance to export its revolutionary goals to an Arab state that conveniently borders its nemesis Israel with the help of the close, personal ties between the Iranian and Lebanese Shia clerical leadership.25 Likewise, in its efforts to boost its international image as a vanguard of a Sunni Islamic theocratic system, Sudan provided sanctuary and support to a number of terrorist organizations in the 1990s.26 Third, a state may have domestic considerations for supporting a terrorist organization. It can be a means of helping kin in an ongoing struggle against another government.27 Also, states may find that supporting some terrorist groups improves their popularity and legitimacy, such as many Arab regimes’ support to Palestinian terrorist groups like HAMAS. There are nevertheless some significant disadvantages for states. First, sponsors may find themselves the targets of reprisals or even direct military clashes. Given that state sponsors are generally seeking a means of furthering foreign policy objectives short of warfare, this could be damaging indeed. Second, states will invariably find their reputations damaged by supporting terrorism. Third, terrorist organizations are not necessarily trustworthy, and may engage in actions that hurt the sponsoring state’s foreign policy.28 States willing to sponsor groups must walk a careful tightrope—the sponsored group must be powerful enough to succeed in its given missions, and yet the sponsor must still be able to control the organization, lest the terrorists drive the state into unwanted foreign policy implications29 In the worst case, if it is strong enough, the terrorist group could even turn on its sponsor outright.30 Example: The Palestine Liberation Organization Perhaps no other group demonstrates better both the privileges and pitfalls of having state sponsors than the Palestine Liberation Organization (PLO). From 1968 until 1980, Palestinian terrorist groups were the most active international terrorists, and they provided a model for others with long-standing or forgotten causes.31 The PLO’s Fatah faction reinvested its initial state sponsorship, making itself independent of any particular sponsor. Most of the other

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various factions within the PLO, however, did not undertake such far-sighted investment, and the internecine battles that ensued provide a clear example of the limits of state sponsorship. The PLO was founded in Egypt with Gamal Abd al-Nasser’s support in 1964 as an umbrella organization of Palestinian groups fighting Israel. It was to be a method for Egypt to take a leading role in the Arab world; a way of confronting Israel through low-intensity conflict; and an attempt to draw Lebanon and Jordan into a conflict with Israel.32 Yassir Arafat’s Fatah faction joined the PLO in 1968, reorganizing it to ensure his Fatah faction or members of his family filled important positions, and in 1969, he was named the PLO’s Executive Chairman.33 The PLO has had advantages perhaps never accrued by any other terrorist organization in history. During its early decades, it had the backing of practically the whole Arab and Islamic world, which at the time was awash in oil money. According to the 1978 Baghdad Agreement, Arab states were supposed to contribute 250 million USD to the PLO’s budget.34 Governments would also pledge to some of its factions additional money and to exacting taxes from Palestinian workers in their states on behalf of the PLO.35 The organization had various state sanctuaries where it was allowed substantial autonomy, first in Egypt, then in Jordan, and finally in Lebanon, before the leadership was forced to flee to Tunisia in 1982.36 In addition, the PLO was recognized as the representative of the Palestinian people by over 100 states and was granted observer status at the United Nations,37 even though it had never set up a government-in-exile.38 Finally, the PLO garnered immense capabilities from this sanctuary and support. In 1980, the PLO had four brigades totaling 20,000 men, with an order of battle to rival most developing countries including T-34 tanks, SA-7 surface-to-air missiles, and Saladin armored cars.39 The PLO relied on state support for a number of reasons. One was that 60 percent of the PLO’s constituency was located outside of Israeli-controlled territories, with half of all Palestinians living in 10 different Arab states. This provided benefits, such as the ability to use the Palestinian diaspora for logistics, but also disadvantages, as a state could always use its Palestinian population as a form of hostage. Second, the PLO recognized that it would never be able to defeat Israel militarily on its own and Arab military intervention would be required, so the PLO had to maintain its involvement with Arab states.40 Finally, the PLO had to have a place outside Israelicontrolled territories from where to operate.

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The PLO is not one, coherent organization, but rather an umbrella group that contains a variety of nationalist Palestinian factions. Each Arab state undertook to fund their own upstarts or supported existing ones in an effort to gain influence over Palestinian politics.41 Arab governments had numerous cold, rational reasons to capitalize on the Palestinians’ nationalist cause, as David Schiller sums up: Thus, [Egyptian leader] Nasser used the Palestinian question as a political vehicle and rallying point to enhance his own image in the Arab world, and the Libyan leader, Gadhafi, views the Palestinians as an avant-garde of the overall Third World revolutionary movement he dreams of promoting. For Syria Palestinian nationalism is just a stepping-stone on the way to a Greater Syria . . . For conservative Arab regimes the Palestinian cause has functioned as a useful safety valve, focusing the revolutionary zeal of their own radicals towards some distant battlefield.42

Hence, Arab governments may have used the rhetoric of injustice or sympathy, but their reasons for supporting the Palestinian cause fell within the realm of realpolitik. Meanwhile, in the emerging world of international terrorism, generally considered to have begun with the 1968 hijacking of an El Al flight by Palestinian terrorists,43 even small factions had the opportunity to gain a big reputation far beyond their actual size and capabilities.44 These internal divisions have created havoc within the organization throughout its history, as Arab governments sponsored or promoted their favorite factions,45 which display a variety of philosophies, generally mimicking those of their sponsors, including Marxist revolutionaries, Syrian Baa’thists, Iraqi Baa’thists, and Islamic fundamentalists.46 Over the course of its 40-year history, these groups have seen an amazing level of disunion and reunion, both within each faction and within the overall PLO. Take, for instance, the Popular Front for the Liberation of PalestineGeneral Council (PFLP-GC), which split from its parent faction, the Popular Front for the Liberation of Palestine (PFLP), a Marxist organization, in 1968 with the sponsorship of Syria and Libya. The next year, the Organization of Arab Palestine split off from the PFLP-GC with the support of Egypt, and in 1976, the Palestine Liberation Front also split off from the PFLP-GC, this time with help from Libya. The PFLP, too, continued to suffer a myriad of defections: in 1969, the Democratic Popular Front for the Liberation of Palestine (DPFLP) split from the PFLP with the support of Yassir Arafat; in

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1972, the Revolutionary People’s Front defected; and in 1976, Wadi Haddad, second in command of the PFLP, split off and formed the PFLP-Special Operations with sponsorship from Iraq, Libya, and the People’s Republic of Yemen. And the above alphabet-soup of groups and defections only represents the activity that occurred within one group over the course of six years. As Schiller notes, “Ideological distinctions between these groups are hard to substantiate and cannot be seen as reason for divisions. The key to the emergence of splinter groups lies in shifting alliances, dependencies on sponsor states, and rivalries among the leading personalities.”47 States used these factions to pursue foreign policy actions that they would not want to be directly associated with. The actions, in turn, damaged the reputation of the overall PLO organization. As Salah Khalaf (better known as Abu Iyad), founding member and former intelligence chief of the PLO, noted in his memoirs: “. . . when an article offensive to Iraq is published in the Lebanese [press], it is the Arab Liberation Front, a mere puppet of the Baghdad regime, which takes the matter in hand by dynamiting the publication’s building and killing about a dozen people . . . But the press doesn’t accuse Iraq or even the ALF. It denounces the ‘terrorism of the Palestinians.’ ”48 The struggles and opposing agendas of the various PLO factions and splinter groups have led the Palestinians to be their own worst enemy. In 1978, a rejectionist front49 developed against Yassir Arafat’s “moderate” leadership, though those groups returned to the fold after the 1978 Camp David Accords. The bloody feud climaxed when a bomb destroyed a PLO headquarters building in Beirut, Lebanon, which was largely affiliated with the Palestine Liberation Front (a proIraqi group) just 30 minutes after Yassir Arafat had left the building. No definitive culprit was ever found, though suspicion has fallen on the PFLP-GC.50 In 1983, a new revolt developed in the wake of the PLO’s evacuation from Beirut after the Israeli invasion there, which was quelled only after new agreements were signed among the members in 1984.51 This time it is believed Syria and Libya financed the revolt, with the PFLP-GC, Palestine Liberation Front, and al-Saiqa attacking Fatah’s remaining troops in Tripoli, Lebanon. Though Syria tried to organize these groups into a new PLO organization, the typical intragroup struggles and splits meant no state actor was ever able to achieve a definitive takeover of the PLO.52 Two of the PLO’s splinter groups led to devastating wars between the organization and its hosts. The PFLP, an on-and-off member of the PLO, hijacked multiple aircraft and flew them to Dawson’s Field

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in Jordan in 1970, which was a catalyst to a civil war with Jordan that ultimately forced the PLO out of that country. Then, in 1975, various PLO factions negated previous agreements with the Lebanese government and the PLO leadership, engaged in clashes that helped spark the 1975 Lebanese civil war, which in turn led to an Israeli invasion in 1982 and to the PLO expulsion there.53 In addition, Arab states have proved their fickle support by turning on individual factions of the PLO, or at times, on the PLO as a whole. As Abu Iyad noted in his memoir, We concluded what we thought were strategic alliances with Arab regimes only to discover after, at our own expense, that they were extremely provisional. Such mistakes brought us profound disappointment and unexpected reversals. We thought, for example, that Egypt would be with us forever, that Syria would never, not even briefly, side with the Christian right against us in Lebanon. We never imagined that Iraq, whatever our political differences, would stoop to having our most eminent militants abroad assassinated.54

As Rapoport notes, “Sooner or later, the host state feels anxiety about autonomous armed bodies in its midst and/or experiences Israeli counteraction; and then the PLO suffers enormous setbacks.”55 In addition, states have had a tendency to turn on their Palestinian refugees, to the extent that a former PLO intelligence officer estimated that three quarters of Palestinian casualties actually came from Arab governments and not from the Israelis, their supposed enemy.56 In essence, the various Palestinian factions came to represent their sponsoring states and their own interstate quarrels. For instance, in this era, Egypt, Syria, and Iraq were fighting their own low-intensity conflicts with one another, even though all three were ostensibly leftists and both Syria and Iraq claimed their government policies originated from the same Ba’athist party.57 Yassir Arafat sought to maneuver the PLO as a whole, and the Fatah faction in particular, among the various, feuding governments, while maintaining the ability for the PLO to make independent decisions regardless of the changing sets of alliances.58 Syria has been a particularly antagonistic sponsor of terrorism, funding different groups, and then playing the groups off of one another. It has also been one of the most active sponsors, providing sanctuary, training, organizational aid, intelligence, diplomatic support, arms, and money to a variety of groups. It has used its support of terrorists to attack its domestic opponents; intimidate neighboring

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states, especially Israel and Jordan; bolster the regime’s legitimacy by portraying itself as the defender of the Palestinian people; and to ensure that its interests must be considered in any regional peace agreement. Syria has also been keenly aware of the risks of sponsoring terrorism, including that Palestinian attacks could escalate into a war with Israel, which Syria desperately wants to avoid, or that such support could inflame passions and lead to a popular revolt.59 As a result, Syria is careful to limit the abilities of the groups that it sponsors. Because the Fatah faction of the PLO under Yassir Arafat recognized early that the PLO relied on the benevolence of states at its peril, it sought to distance itself from Syria as much as possible, despite the fact that, from 1970 until 1982, it resided in Lebanon, a country under the regional hegemonic influence of Syria. Over time, states realized that, due to the internally generated resourcing within the PLO’s Fatah faction, they were garnering less influence over the PLO overall and, as a consequence, decreased their levels of assistance. What state support had remained almost completely disappeared in 1990 when Yassir Arafat sided with Saddam Hussein in the first Gulf War. Since then, Palestinian aid has generally gone to the Palestinian Authority.60 Meanwhile, since the late 1960s, Syria has countered Fatah’s autonomy and sought to hold on to a stake in the Palestinian cause. As Anders Strindberg has noted, . . . the ability to influence Palestinian issues has been crucial to Syria. Unable to control Arafat (and loath to deal with him due to personal animosity), [then Syrian leader Hafez] Asad has consistently connected with the Palestinian opposition. Also, Damascus has been eager to rein in the factions’ destabilizing potential in order to avoid repetitions of such events as Jordan’s Black September debacle. Furthermore, Syria’s ideological claim to being “the beating heart of the Arab homeland” and its insistence on a comprehensive peace have necessitated a Palestinian partner.61

Today, Syria still keeps many of the former PLO factions technically alive and capable of operations, but at mere shadows of their former selves. In 1993, it sponsored the establishment of the Alliance of Palestinian Forces, comprised of 10 Palestinian factions opposed to the Oslo Peace Accords and headquartered in Damascus to maintain all forms of struggle, including armed resistance.62 Of the 10 original factions of the Alliance, however, only 4 are engaged today in any level of active armed struggle—the Palestinian Islamic Jihad,

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HAMAS, the PFLP, and the Democratic Front for the Liberation of Palestine.63 These four groups all maintain a cell structure within the Palestinian territories and sources of support other than Syria. Three groups, the PFLP-GC, Fatah-Uprising, and Sa’iqa,64 claim some sort of reserve status, but none has engaged in any actual armed struggle against Israel for at least a decade. The other three65 have demobilized their armed wings.66 Moreover, Syria has not actually allowed a direct attack on Israel from its soil since 1970, significantly limiting these groups’ autonomy and ability to engage their supposed enemy.67 In short, individual PLO factions’ sponsorship by various Arab states has significantly impacted the organization’s freedom of action. As its splinter groups end up representing their sponsors’ interests, as long as the different sponsors fight among themselves, so too will the factions. State support for terrorism originally put the Palestinian refugee problem back on the international agenda, but since then, it has done the Palestinians more harm than good. It has hurt the overall reputation of the Palestinian cause, created significant infighting and bloodshed among the various Palestinian groups, and hampered any chance for a successful peace process to resolve their plight. Some scholars assess that state support has actually set back the cause of the Palestinian nationalist movement,68 and that, for decades, the Palestinians have been their own worst enemies.69 Groups wholly sponsored, or nearly wholly sponsored, by states are one of the rare cases in which cutting off the source of resourcing will almost certainly lead to the death of the organization in short order, especially if a new sponsor cannot be found very quickly. Destroying this category of terrorist organizations should, in theory, be as easy as ending any state support for terrorist organizations. This could be particularly advantageous for the counterterrorism community, given that state support is most valuable when a terrorist organization is young, and thus less or no state support at all should make it more difficult for effective terrorist organizations to form in the first place. Unfortunately, ending state support is not so easy because the sponsors can be highly committed. These sponsors recognize the punishment that will likely be directed at their state, and have nevertheless chosen to take on those risks because they expect valuable gains. States may see terrorism sponsorship as one of the few alternatives for achieving their foreign policy goals; they may fear a domestic backlash from ceasing their support to a popular terrorist cause; or they may believe that it is a means of exporting their ideology.70

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Nevertheless, there are situations in which states are most likely to end their support to terrorist organizations due to a changing cost-benefit analysis. The first case is when the state’s goals change. For instance, should Syria ever choose to make a peace treaty with Israel, its reasons for supporting a variety of Palestinian groups (plus Hizbullah) will probably decline significantly and so too should its support to terrorism. Moreover, ideological regimes can either find themselves less driven, and thus willing to cease assistance to those like-minded groups, or even fall, leading to the creation of entirely new goals for the state. For instance, when the Warsaw Pact governments fell in the late 1980s and early 1990s, those states were no longer willing to provide any support to leftist terrorist organizations.71 The second reason states may cease their support is outside pressure, which ratchets up the costs as compared to the benefits. For example, substantial stress was placed on Libya to cease its support for terrorism by the international community. Libya was the foremost sponsor of terrorism in the 1970s and 1980s, and may have contributed over 100 million USD to various terrorist and guerrilla groups.72 Due to its direct involvement in the 1988 bombing of Pan Am 103 and the 1989 bombing of UTA 772, Libya found itself subject to international condemnation and isolation.73 Not only was Libya subject to a U.S. air attack in 1986, but its diplomats were expelled from Europe and the United States. An international embargo limited Libya’s ability to acquire spare parts and foreign investment in its oil sector, its primary export, and the import of military equipment.74 The country also became isolated quite literally, due to sanctions against its air fleet flying or acquiring spare parts, limiting Libyan citizens’ ability to travel. Terrorism originally gave Libya an importance it could not acquire otherwise,75 and its leader Mohammar Gadhafi supported terrorism and other “liberation movements” with a goal of becoming a regional “elder statesman.” But international sanctions eventually prevented Gadhafi from realizing his goal, while at the same time causing him domestic problems.76 In 2002, Gadhafi rationally chose to renounce terrorism, disband his weapons of mass destruction programs, and cooperate with the international community on antiterrorism measures.77 While it is difficult to change the calculations state sponsoring groups make when deciding to engage in such activity, the 9/11 attacks, and the resulting attention the international community now pays to terrorism, have upped the ante. While some states, such as Syria and Iran, still find benefit to continuing their support, fewer

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states are willing to take such risks. Not only must states fear direct reprisals for their terrorism support, but also the possibility of substantial economic drawbacks from sanctions. Support to terrorism is also almost certain to hurt a state’s reputation, leading it to be viewed as a pariah in the international community. Increasing multilateral cooperation, such as the United Nations International Convention for the Suppression of the Financing of Terrorism means that sponsorship of terrorism conflicts with an increasingly common norm against the use of terrorism as a strategy toward foreign policy goals.78 Hence, state sponsored terrorism has a distinct possibility of being curtailed in the decades to come.

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Ch apter 7

M e di u m Au t onom y Grou ps — Fr a nc h ises a n d Bu n dl e d Su pp ort

T

wo types of organizations with greater levels of autonomy are examined in this chapter. The first are franchises, which are groups that receive much, but not all, of their resourcing from one or a very small number of sources. These are divided into state franchises, for which a state provides resourcing—although not at the same level as in the case of state sponsored groups—and terrorist-sponsored franchises. In the latter category, a terrorist organization takes on a role usually expected to be taken up by states and integrates another group into its own resourcing structures. The second type is bundled support groups. In this scenario, a terrorist organization receives numerous small donations from a large population of donors who are bundled together into larger tranches of donations. Because no single contribution is irreplaceable, losing a few donors will have no impact on the overall group. The donors can act in concert, however, and the collective population can have dramatic effects, increasing or decreasing its resourcing based on the terrorist group’s tactics and strategies, and perhaps transferring their allegiance and resources if a better alternative comes along. Hence, the terrorist groups described in this chapter are under the influence of external agents, but are not under any external organization’s outright control.

Franchises In business, franchising is “contractual arrangements under which an independent franchisee produces or sells a product or service under

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the brand name of the franchiser and to his specifications with marketing and other support.”1 The franchisee is legally an autonomous enterprise, but is nevertheless still highly dependent on the franchiser.2 Franchises have some degree of autonomy in their day-to-day operations, but a higher headquarters generally makes the strategic decisions on the overall conduct of the brand. The term “franchise” has been extensively used to describe al Qaeda–associated groups, in which terrorist organizations have made a formal or informal agreement to join the overall al Qaeda organization. This provides al Qaeda extra manpower, financing and logistics networks, while the smaller organization accepts the al Qaeda brand name and, at least prior to 9/11, would often benefit from some sort of resourcing deal, such as start-up money, as well. Here, the definition of franchise is modified to encompass any terrorist group that receives a large percentage of its resourcing—approximately a third to a half of total resourcing—from one source, but which is still diversified enough to remain somewhat autonomous, with the franchisee acquiring remaining resources on its own. The franchiser can be either a state or another terrorist organization. For example, HAMAS is a franchisee of Iran in that it receives much of its financing and training from that state, but it also maintains a complex network of charities, front companies, and criminal networks to supplement that income. There are many advantages to a terrorist group being a franchisee. Especially if it is franchised by a state, the terrorist organization might gain advantages very similar to those of state sponsored groups: some degree of sanctuary, training from the state, intelligence assets, propaganda support, and financing. Even if the franchisee is sponsored by another terrorist organization, it can still tap into the parent organization’s intelligence, logistics, training, personnel, financing, and propaganda networks. Because the terrorist organization maintains its own sources as well, should the franchiser pull its support, the group will weaken, but probably not collapse. The position of a franchisee also has its disadvantages. First, because the organization must be at least somewhat self-resourcing, it will have to have a complex structure capable of carrying this out— although it gains more autonomy, it loses simplicity. Second, while the organization has some autonomy in decision making, its menu of choices is narrowed because in the long term it must remain within the bounds that the franchiser sets for it. Finally, the franchisee will find itself associated with its parent organization, be that a state or

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another terrorist group, for good and for bad. This can be good if the parent organization is popular and can readily bring in resourcing, so that the franchisee also acquires some of the largesse, but can hurt the terrorists’ cause should the franchiser become unpopular or an outright pariah. The franchiser will also find its own advantages and disadvantages from the arrangement. This may be a less expensive means of conducting foreign policy than direct sponsorship, as it is only providing some of the resourcing needed. Because the organization has more autonomy, the franchiser has a higher degree of plausible deniability: it can claim with greater legitimacy that actions undertaken were due to the terrorist organization and not directly tied to the foreign policy of the franchiser. On the other hand, because the franchisee has resourcing outside that of the parent state or organization, the franchiser can only exert influence, and not full control. Thus, the likelihood that the terrorist organization may damage the interests of the franchiser is much higher than with state sponsored groups, and there is far less that the franchiser can do about it. If the franchiser is a state, that state can find itself possibly drawn into battle with an enemy it is ill-prepared to engage, or become the target of retribution by the targeted state. If the franchiser is a terrorist group, it, too, can find itself held responsible for those actions the franchisee has taken in its name. Terrorist scholar Jessica Stern has provided some examples of the pitfalls of states franchising terrorist organizations to conduct proxy warfare on their behalf when she argues that “. . . state[s] (or agencies within a divided state) fund insurgent groups in the belief that they will have total control over the groups’ activities. But if a group diversifies its revenue stream, the state may find itself losing control.”3 Typical is the case of the Taliban and Kashmiri and other groups formed or supported by Pakistan in order to fight on its behalf in Kashmir: The groups have often functioned as mercenaries for the Pakistani government, serving as a kind of second army, but one that also receives outside funding from Islamist charities abroad. That the groups are no longer beholden to a single sponsor has emboldened them to the degree that they are prepared publicly to threaten Pakistan’s leadership.4

Pakistan is realizing that it has reaped what it has sown: the groups it franchised have diversified and grown in such strength that they can

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now threaten the state itself, and the center of gravity of Islamist terrorist groups has shifted back from the Middle East—mainly Iraq— into Pakistan itself, resulting in it becoming once again a primary al Qaeda sanctuary.5 There is one notable difference between groups franchised by a government versus by another terrorist organization. In the case of state franchised groups, the state sponsor may still be considered responsible for the actions of the terrorist group and face retribution within the international state system. In the case of terrorist-sponsored groups, there is no responsibility that can be brought to bear on any specific state. Example: Hizbullah as a State Franchisee Hizbullah is a franchisee of Iran, although it also receives aid, especially logistic support, from Syria. Today Iran is the most active sponsor of terrorist groups, and its franchisees comprise some of the most deadly ones in the world: Hizbullah, HAMAS, the Palestinian Islamic Jihad, and various groups in Iraq. Since the Iranian Revolution in 1979, Iran has considered franchising a viable means not only to spread its vision of revolutionary Islam, but also to conduct asymmetric warfare against its rivals. State support began early in the Iranian regime. In March 1982, 380 clergy and leaders of various revolutionary movements met in Tehran. As a result, Iran agreed that it would set up terrorist training camps, provide 100 million USD immediately to support revolutionary activities, and then provide an additional 50 million USD per year. Moreover, Iran has since provided training to a number of groups in camps throughout the country, with instruction provided by the Iranian Revolutionary Guards Corp (IRGC, also known as the Pasdaran), as well as some Libyans, North Koreans, Pakistanis, and PLO guerrillas. Standard training has included instruction on American M-16 and Soviet AK-47 automatic rifles, grenade launchers, explosives, and the mechanics of automobiles (for car bombs).6 Iran’s motivations were summed up by the then Iranian leader Ayatollah Khomeini after 402 Iranian pilgrims were killed in skirmishes with Saudi security forces during the 1987 Haj in Mecca: “We will export our experiences to the whole world. The result of this exportation will certainly result in the blooming of the buds of victory and independence and in the implementation of Islamic teachings among the enslaved nations.”7

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Iran’s most powerful and successful franchisee is the Lebanese group Hizbullah, which receives 200 million USD per year from Iran.8 Hizbullah was founded in June 1982 as an umbrella group of Shia organizations. Though the Shia are the largest sectarian group in Lebanon, they have historically been the most marginalized in Lebanese society.9 Prior to the 1980s, the most prestigious schools for Shia clergy had been in Najaf, Iraq, and consequently, the Iranian and Lebanese clergy had trained there in the same institutions and under the same leadership. The close, personal ties, along with similar theological orientation, meant that Lebanese Shia were more willing to accept Ayatollah Khomeini’s vision of Islamic governance than Shia from other countries.10 Only three months after the June 1982 conference of Shia clergy, with the permission of Syria, the Iranians sent the first IRGC members to provide military and ideological training, organizational support, and funding to Shia organizations in the Bekaa’ Valley in eastern Lebanon, later expanding to the Beirut suburbs and southern Lebanon—a relationship that exists to this day.11 With this support, Hizbullah quickly burst upon the scene demonstrating some of the highest capability attacks ever witnessed, beginning in November 1982 when a Hizbullah suicide bomber drove into an Israeli headquarters in Tyre, Lebanon,12 and then achieving international fame with the October 1983 suicide bombings of the United States and French contingents of the Multinational Forces in Lebanon and the abductions of foreigners from 1984 to 1985.13 Hizbullah is more than a terrorist organization: it is a political party and a social net for Shia that assists them from cradle to grave. All this helps ensure Hizbullah’s legitimacy, a recruitment pool, and the means to ensure that its Shia constituency can withstand the retribution it receives from Israel following the attacks that Hizbullah carries out.14 The organization runs construction companies, schools, hospitals, dispensaries, and vocational schools, and provides microfinance loans.15 It also provides a salary for its militia men, medical care, and a stipend for those militia who have been wounded and pensions for martyrs’ families. Since 1985, Hizbullah has reconstructed houses destroyed in its battles with the Israeli Defense Forces (IDF),16 and more recently, after the summer 2006 war, it has offered 10,000– 12,000 USD to anyone who had lost a home, with as many as 15,000 families receiving assistance. In addition to monetary compensation, Hizbullah provided engineers and architects to plan the reconstruction of the homes, doctors to provide free medical treatment, and

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approximately 25,000 free meals per day.17 Accomplishing all this requires extensive and stable long-term resourcing structures. Besides millions of dollars per year and weapons, Iran provides a number of intangibles to Hizbullah, such as training, sanctuary for leadership, intelligence, and organizational support.18 Training conducted both in Iran itself and with Iranian trainers in camps in Lebanon provided the initial organizational support for Hizbullah to create an effective Shia organization. In addition, Iran improved Hizbullah propaganda by providing seed money for forming the al Manar satellite channel, a Hizbullah-run channel.19 As Michael Levitt has asserted, To a group like Hezbollah, which maintains parallel and intertwined terrorist, guerrilla, political, and social-welfare wings under the banner of one large movement, the multiple and varied forms of support that Iran (and to a lesser degree Syria) offers are at least as significant as the cash that Tehran deposits in the group’s bank accounts. Not only does such support provide Hezbollah with technical know-how and material it would otherwise be hard-pressed to find, it also frees up funds Hezbollah raises from other sources, including expatriate remittances, charities and front organizations, and criminal enterprises.20

Iran has a lot to gain from its support to Hizbullah. Iran initially supported a number of revolts and terrorist acts by Shia in Saudi Arabia, Kuwait, and Bahrain, but while Shia in those states chose some form of accommodation with their state regimes (usually along with high levels of government coercion), Lebanese Shia have remained willing to accept Iranian support. Hizbullah has given the Iranian Revolution an Arab face, while at the same time allowing Iran to project its influence in the Arab world at minimal cost. Iran has made opposition to the state of Israel a pillar of its foreign policy, and support to Hizbullah allows it a proxy force with which to attack Israel directly. It can thus insist that there be perpetual hostilities with Israel, but at the same time, it can avoid any direct confrontation. Although realpolitik has dictated that Iran no longer supports revolutionary movements in the Persian Gulf region (with the exception of current support to groups in Iraq), it is free to support such movements in the Levant.21 Hizbullah also receives some support from Syria, albeit at a much lower level. Syria has allowed Hizbullah to operate in Syriancontrolled areas of Lebanon, along with permitting training camps within Syria itself. Syria has also provided some weapons, but even

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more importantly, it has allowed Iran to transship weapons through its territory for use by Hizbullah.22 When IRGC units arrived in Lebanon to train the nascent Hizbullah, they could do so only with the permission of the Syrian government.23 Like Iran, Syria also derives a number of advantages from its support of Hizbullah. As Augustus Norton has stated, “Syria has neither eternal allies, nor perpetual enemies in Lebanon,”24 and Hizbullah has been no exception. In the early 1980s, Syria sought a force to replace the Palestinians, whose militants were defeated and largely forced out of Lebanon by the Israeli army, and the Shia militias seemed to fit this bill. Syria’s Baa’thist regime, like Iran’s religious one, had made fighting Israel a bastion of its foreign policy and overall legitimacy, but Damascus could ill-afford a direct confrontation with the might of the Israeli armed forces. Hizbullah provided them a proxy for doing so, while ensuring that no peace deal in the region would survive without Syria’s acquiescence.25 Nevertheless, this did not prevent Syria from turning on its terrorist ally, as when it killed 23 Hizbullah members in 1987 and supported its rival Shia militia AMAL in battles fought between 1988 and 1989 in order to keep Hizbullah from becoming too powerful—and hence, too much of a threat.26 At any rate, just as with Iran, Syria does not have absolute control over Hizbullah and its overreach, as in the case of the Summer 2006 kidnapping of an Israeli soldier and the ensuing HizbullahIsrael battles, which had the potential to embroil Syria in a war it could not afford. In addition, the group has its own indigenous means of support. Much is obtained, either freely or through coercion, from Lebanese Shia themselves, including the large expatriate communities throughout the world.27 For example, during Ramadan, Hizbullah can earn as much as 2 million USD per night from local Shia donations.28 Like so many other terrorist organizations, it directly runs a number of charities and receives support from sympathetic ones, including the Islamic Resistance Support Organization, the Martyrs’ Organization (Bonyad-e Shahid), and the al Mabarrat Charity Association (run by spiritual leader Sheikh Mohammed Hussein Fadlallah).29 Hizbullah also has extensive ties to criminal enterprises. Perhaps the most famous was a 2002 operation that moved cigarettes from low-tax North Carolina to higher tax Michigan, with Hizbullah pocketing the proceeds, netting about 13,000 USD per van load transported.30 Hizbullah, like the PLO before it, has also been involved in the drug trade from the Bekaa’ Valley, pseudoephedrine

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smuggling in the Midwest United States, and cocaine trafficking in South America.31 In the Tri-border area of South America (the border of Argentina, Paraguay, and Brazil), a free trade zone with an extensive history of smuggling and poor law enforcement, Hizbullah has been involved in counterfeiting, money laundering, black mail, and extortion, with over 50 million USD sent from one Hizbullah facilitator there from 1995 until 2002.32 It has also engaged in blood diamond smuggling from Sierra Leone through Liberia.33 The Canadian branch of Hizbullah even sought to take life insurance policies on Hizbullah terrorists in the Middle East.34 This is in addition to counterfeiting goods and money, marriage scams, and a variety of other money-making crimes. In the first years of its existence, Hizbullah openly claimed to repudiate the idea of a very formal structure,35 although it has more recently acknowledged that it uses a “hierarchical pyramid structure.”36 Its highest level of leadership is the 12-member Majlis al Shura (consultative council),37 which chooses the secretary general, his deputy, and five members of the Executive Committee. Under the Majlis al Shura are seven specialized committees for financial, ideological, military, political, juridical, informational, and social affairs.38 The Combat Bureau, which handles the “Islamic resistance” and the “holy war,” answers only to the Majlis al Shura. In 1989, an 11-member executive consultative council (Majlis al Shura al Karar) and a politburo (Maktab al Siyassi) were added. More recently, the Information Department, which controls Hizbollah’s radio, satellite TV, and newspaper, came directly under the control of Hizbullah’s secretary general.39 Hizbullah has three regional commands: the Bekaa’ Valley, Beirut, and southern Lebanon, with a specialized committee structure that mirrors that of the Majlis al Shura.40 As the group intentionally limits the amount of information on its structure, more details on the specifics are not available. In short, as Michael Levitt has asserted, “Unlike most terrorist groups, which need to focus much time and attention on raising, laundering, and transferring funds, Iran’s largesse provides Hezbollah with a sizeable and constant flow of reliable funding. By all accounts, Hezbollah operates under no revenue constraints . . .”41 The group, however, is fully aware that it owes many of its capabilities to Iran and, to a lesser extent, Syria. For this reason, Hizbullah maintains its own extensive resourcing networks, thereby ensuring its survival—even if

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the goals would have to become more modest—should circumstances change.42 As Levitt has summed up, But the group’s independent fund-raising, conducted alongside its generous subsidies from Iran is also intended to guarantee the group’s future independence through diversified funding no matter what happens to Iran. That is, Hezbollah likely wants to ensure that, even in the event that Iran were to ever strike a “grand bargain” with the West (trading its support for international terror, proliferation activities, and pursuit of a nuclear weapons for full economic and diplomatic relations with the West), the group would continue to be able to exist and function on its own.43

Example: Al Qaeda in the Islamic Maghreb as a Nonstate Franchisee One subset of the study of foreign direct investment is that of the joint venture, in which, rather than wholly owned subsidiaries, companies act more as allies than as competitors. The companies combine productive technology, global marketing, and labor economies of scale to create the greatest efficiency.44 In many ways, the nonstate franchises under the al Qaeda umbrella act as just such joint ventures, where organizations agree to accept the global goals of al Qaeda’s vision of Salafism (a subset of Sunni Islam) and attack targets accordingly, in return for a brand name, access to personnel, training, materiel, and financing. Prior to 9/11, organizations could also expect some monetary assistance, with Usama bin Laden providing funds for those groups and operations that he deemed most promising. As al Qaeda chronicler Lawrence Wright states, “In the same way that he ran multiple businesses under a single corporate tent, Bin Laden sought to merge all Islamic terrorist groups into one multinational consortium, with common training and economies of scale and departments devoted to everything from personnel to bomb-making.”45 Islamist terrorist groups can reap a number of advantages from agreeing to franchise with al Qaeda. First, such groups can tap into a larger resourcing network, which, even after 9/11 and the subsequent worldwide effort against the group, remains formidable. This resourcing network includes not only money and materiel, but also extensive training, intelligence, logistics, and personnel networks, enabling terrorist organizations to substantially expand their capabilities. Second, they acquire a brand name—being part of al Qaeda—which, while an

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anathema in most of the West, can still garner donations and other backing from some supportive individuals and NGOs throughout the world. Moreover, the group obtains increasing visibility, for not only can it tap into the larger al Qaeda propaganda machine, but media outlets that would otherwise never cover an obscure terrorist faction will provide extensive coverage when the same group is labeled part of al Qaeda. Because of this, between 2004 and 2007, 40 organizations announced their formation and pledged their allegiance to al Qaeda and its strategic objectives.46 Many scholars have viewed al Qaeda’s mergers as a sign of weakness, but alternatively, such alliances can be considered a sign of strength, in that joining al Qaeda still holds significant appeal. Indeed, since the disruption of his more hierarchical organization after 9/11, al Qaeda has come to rely even more on these franchises.47 There are, nevertheless, distinctive disadvantages to accepting al Qaeda support as well. First, groups must migrate from localized and nationalist goals to the global goals of al Qaeda, and their targeting must reflect such changes. Often groups split over an alliance with al Qaeda, as many members are motivated to overthrow their own governments and not necessarily interested in some sort of panIslamic vision. As a consequence, while the newly franchised organization might now be able to access al Qaeda’s resourcing networks, it may lose its prior indigenous support, as many associates move on to other organizations or quit the movement entirely. Second, such groups lose autonomy, in that their targeting and rhetoric must conform to al Qaeda’s broad strategy and dictates. Third, although the brand name of al Qaeda may provide groups instant “name recognition” and propaganda value, it garners the immediate response of counterterrorism forces worldwide. Fourth, there has been much discussion in the Islamic world over whether al Qaeda is acting in an Islamic manner. As the Iraqi Awakening Movement (a movement of tribal leaders who transferred their allegiance from supportive of al Qaeda to actively and violently opposing it) demonstrates, the extremism of al Qaeda may be becoming less popular. Those in support of instituting Shariah Law (Islamic Law), for instance, may look to less violent, and perhaps more local, alternatives to al Qaeda. Should al Qaeda’s popularity fall, groups aligned with it will likely lose some of their own popularity as well. One of the most notorious cases of franchising has been the relationship between Usama bin Laden and Ayman al Zawahiri, the second-in-command of al Qaeda and leader of the Egyptian Islamic

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Jihad (EIJ). Zawahiri always had problems finding enough money and manpower for his organization. Due to EIJ’s indiscriminate attacks against the Egyptian leadership and tourism targets, members who had remained there were rolled up by Egyptian security forces,48 the only survivors being those who were scattered outside the country. It was not only the attacks within Egypt that had been failures, but also a November 1993 car bombing missed the intended target (Egypt’s Prime Minister Atef Sidqi) and instead killed a schoolgirl and wounded 21, galvanizing the Egyptian public against his group. Hence, Zawahiri needed resources, particularly since some of his followers had turned to theft and other shakedowns to support themselves. He tried to acquire needed resourcing on his own, such as during his 1993 fundraising trip to mosques in California, traveling under his nom de guerre Dr. Abdul Mu’az of the Kuwaiti Red Crescent, and under the auspices of raising money for Afghan children injured by landmines. The fundraising tour, however, collected at most only a few thousand dollars, and Zawahiri faced a dilemma: he could ensure the survival of his group by joining forces with his rich ally bin Laden, but he would lose the independence of his organization.49 By joining bin Laden, the EIJ would have to take on his international goals, rather than maintaining the group’s strictly Egyptian ones. In the end, as one of Zawahiri’s assistants noted, “. . . joining Bin Laden [was] the only solution to keeping the jihad organization alive.”50 As a result, the group split, as many members accused Zawahiri of abandoning his nationalist goal of overthrowing the Egyptian government in favor of bin Laden’s fight against the United States, with even Zawahiri’s brother Mohammed defecting from EIJ. The franchising of EIJ progressed, so that by 1998, EIJ was formally linked to al Qaeda when it joined the International Islamic Front for Jihad Against Jews and Crusaders, the notorious fatwa declaring war on the United States and its citizens.51 In June 2001, EIJ was formally absorbed into al Qaeda.52 Another ongoing example of franchising by al Qaeda is al Qaeda in the Islamic Maghreb (AQIM), formally known as the Salafist Group for Preaching and Combat (GSPC), an Algerian group seeking to overthrow its government and install its vision of an Islamic one. Its origins date to 1992, when the Algerian Islamic Salvation Front (better known as FIS) was prevented from taking the seats it had won in Algeria’s first democratic election because of a military coup. In the first round of local elections in 1991, FIS had won 188 of 430

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contested seats, and was expected to win another 150 seats in the next round of voting. As a result, Algeria fell into disarray and civil war.53 After that coup, an al Qaeda emissary brought 40,000 USD from Usama bin Laden, which became seed money for the Armed Islamic Group (better known by its French acronym GIA) that was formed in October 1992. Augmenting that money were a number of Algerians who had volunteered to fight in Afghanistan against the Soviets in the 1980s and who formed a trained cadre.54 GIA was an exceedingly violent terrorist group that massacred foreigners, state employees, and civilians alike. It conducted its first attack in September 1993 by killing two Frenchmen, but its most famous attack was the December 1994 hijacking of an Air France flight with the intention of crashing it into the Eiffel Tower (the plane was stormed by French commandos in Marseilles during a refueling stop). Between July and October 1995, the GIA conducted a bombing campaign within France, killing 8 and wounding about 200.55 In Algeria, their hallmark attack was to enter a village in the night and slit the throats of everyone they could find, having asserted that because villagers, schoolteachers, or anyone else supported the regime, they, too, were legitimate targets.56 By 1999, when the Algerian government launched a general amnesty for most Islamists, an estimated 150,000 Algerians had been killed and there was 2 billion USD damage to Algeria’s infrastructure.57 Eventually, even bin Laden was disgusted by GIA’s violence against fellow Muslims in Algeria and withdrew his support.58 He instead backed the head of GIA’s European network, Hassan Hattab, and convinced him to split from his parent group.59 In 1998, Hattab’s group linked with the small, ideologically similar Salafist Group for Preaching and Combat (better known by its French acronym GSPC), and the group has maintained extremely close ties ever since (though GSPC was not one of the signatories to the aforementioned 1998 al Qaeda fatwa that declared war on the United States).60 Nevertheless, its attacks remained focused on the Algerian government and military, and it did not engage international targets.61 In September 2006, using then-al Qaeda in Iraq leader Abu Musab al Zarqawi as an intermediary, al Qaeda completed a formal merger with the GSPC, at which time, GSPC changed its name to al Qaeda in the Islamic Maghreb (AQIM) and took up the al Qaeda banner, launching attacks in Mauritania,62 Morocco, and Tunisia and conducting its first ever attacks against U.S. interests.63 Though AQIM leader Abu Mus’ab Abd al Wadoud (better known as Abdelmalek Droudkel) has denied there were economic reasons for the merger,

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former militants have said that AQIM was short of cash and having recruitment problems.64 A long-running government offensive had nearly crushed the GSPC, and the Iraq war was drawing away many of the best fighters. An alliance with al Qaeda would better enable it to raise money and legitimacy in the eyes of other radical Sunni Islamists. As former GSPC member Mourad Khettab stated, “We didn’t have enough weapons . . . the people didn’t want to join. And money, we didn’t have enough money.”65 The result was an immediate increase in AQIM’s capabilities, along with the media coverage of its attacks, enabling its shift from low-level attacks in the countryside to devastating suicide bombings in the heart of the capital. Only three months after the merger, in December, 2006, AQIM penetrated a protected military zone in Algiers and bombed a bus carrying foreign oil workers, killing 10, in an operation that utilized Google Earth to track the bus’ likely route. In April 2007, AQIM conducted the first suicide attacks in Algeria since the civil war in the 1990s when it bombed the Government Palace in Algiers, killing 33. In September 2007, it again penetrated a secure area, killing 37 members of Algeria’s coast guard during a flag-raising ceremony at their barracks, and a few days later, killing 20 more while trying to assassinate President Abdelaziz Bouteflika in the town of Batna. In December 2007, AQIM attacked the Algerian Supreme Court and United Nations agencies in Algiers. Indeed, there were at least eight vehicle-borne suicide attacks in Algerian in 2008, and continued attacks against police stations have been similar to tactics used by al Qaeda–associated groups in Iraq.66 This high number of suicide attacks against civilian and international targets demonstrates both increased capabilities and a new targeting strategy. Moreover, after the United Nations bombing, AQIM was able to use al Qaeda’s password-protected al Hisbah Islamic Network Internet site to announce its responsibility for the attack.67 More recent attacks in Mauritania and a plot foiled in Tunisia, as well as the discovery of non-Algerian members in AQIM, indicate that AQIM has grown from a local Algerian movement to one with a greater regional reach. AQIM is now reportedly running small training camps for its members in Morocco, Tunisia, and even Nigeria, while camps in Mali have been used for operations in Algeria and Mauritania.68 Like the EIJ before it, however, its formal alliance with al Qaeda has also caused it significant difficulties. When founding GSPC/AQIM, Hattab was adamant that it be run as an Islamist insurgency and not

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take part in civilian massacres, in contrast to GIA. He has spoken out against current leader Abdelmalek Droudkel’s suicide attacks and other indiscriminate methods, stating that AQIM had drifted from its original goals, and other former leaders have explicitly likened AQIM to the GIA. These attacks have also left it with little popular support, leading to protests against them by the Algerian citizenry. Moreover, the Algerian government and the international community have attacked AQIM with full force. In 2007, the Algerian government killed or captured about 1,100 members, and militant, financing, and logistics cells have been rolled throughout Europe and Africa. The organization is believed to have atrophied from 8,000 militants in 1999 to about 300–400 near Algiers and another 200 throughout the rest of Algeria.69 In essence, GSPC/AQIM have come full circle, in that, having developed as an alternative to the indiscriminate attacks of GIA, now that they are formally under al Qaeda, they have taken up the very types of attacks they originally wanted to avoid. Al Qaeda has certainly gained many advantages from this franchise. First, it is now formally tied into AQIM’s network of recruits, financing, and technology, as well as its false document capabilities, providing al Qaeda a power projection capability in North Africa. Moreover, as AQIM’s networks have been able to successfully exploit contraband networks that run through Libya, Mauritania, Mali, Niger, and Tunisia, so al Qaeda can now tap into these networks, too.70 AQIM also has extensive ties through the North African diaspora in Europe, thereby increasing al Qaeda’s capabilities on that continent as well.71 Given the large North African Muslim diaspora in Europe, AQIM, and hence, al Qaeda overall, will continue to expand its existing networks there.72 While its alliance with AQIM has mostly been a positive one for al Qaeda’s core leadership, some cracks are beginning to appear in the edifice. Most notably, the indiscriminate attacks made by AQIM, along with those of other franchises, are coming under increasing criticism even within the Salafist Islamic clerical community. For instance, in January 2008, five Muslim scholars from Algeria, Saudi Arabia, and Syria issued scathing fatwas (religious rulings) against AQIM and its tactics, which included denouncing the use of suicide bombings altogether as un-Islamic. Obviously, AQIM depicted those scholars themselves as un-Islamic.73 This is certainly not the first time, however, that respected Islamic scholars have criticized al Qaeda and its tactics. For example, in 2007, the former mufti (religious advisor) to EIJ and mentor to Zawahiri, Sayyid Imam ‘Abd al ‘Aziz Imam

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al Sharif (also known as Abd al Qadir Ibn Abd al Aziz or Dr. Fadl), contradicted his prior foundational works, which are a core for radical Islamists, and now argues that violence in the name of religion is not justified.74 Moreover, as the Combating Terrorism Center notes, “Lacking a broad command-and-control structure, al-Qa’ida Central finds itself unable to control the uses—and abuses—of its brand by self-starting ‘affiliate’ groups.”75 The same holds true for those that al Qaeda has formally affiliated with: now that they are joined through a formal treaty, anything AQIM does, for good or for bad, will reflect upon al Qaeda overall. As al Qaeda brings in more groups, there is the threat that the stronger ones, such as AQIM, might one day begin to compete for preeminence against the al Qaeda leadership, and that the increased numbers could create problems for group cohesion.76 The AQIM example demonstrates the advantages and pitfalls to both the franchiser and the franchisee. For the franchisee, though they will see increased capabilities, they must trade autonomy, and whatever happens to their sponsor will happen to them as well. Vice versa for the franchiser; although it, too, gains increased resourcing and capabilities, it can only influence its franchisee, and not control it outright—whatever the franchisee does will reflect back upon the franchiser.

Bundled Support Groups For terrorist organizations using bundled support for resourcing, rather than receiving the bulk of resourcing from one or a small number of donors, resources come from numerous, dispersed contributors who are gathered together into larger tranches. Within this category is the unique case of diaspora support77 to terrorist actions. The advantages for the terrorist group are that it receives funds from a nonstate entity; it may be able to tap into the resources of like-minded groups; and maintains more diversified funding sources. Moreover, it is the many small contributions bundled together that provide the support needed by the terrorist organization, and as a consequence, a decrease in donations by a few individuals will not have a great effect overall, giving the group more autonomy than a state sponsored one. In addition, donors can bring a number of tangible and intangible resources to a terrorist organization beyond just cash. Well-placed supporters may be able to provide political lobbying, legal advice, intelligence, financial advice, and safe houses. If supporters include members of security or military forces, they may be able to provide military-style

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training and perhaps resources such as explosives or weapons, thereby greatly increasing its capabilities. Nevertheless, the terrorist organization only receives resources as long as its actions satisfy their donors, or until donors transfer their support to other alternatives. The collective will of the population on which the terrorist organization depends can put substantial pressure upon it. The terrorist organization must always keep in mind what its population will bear, lest it continually conduct attacks and other operations that threaten popular support. Even if the terrorist organization moderates itself, there is still the possibility that a better alternative becomes available. For instance, a vibrant peace process hurt the popular support the Provisional Irish Republican Army (PIR A) received for its campaign of violence and its political wing Sinn Fein has done better at the ballot box since it has turned away from violence.78 Moreover, there are limits to what even the most stalwart supporters can provide a terrorist organization. Individual donors or supportive organizations can find themselves sanctioned by the United Nations, as well as specific countries, making them outlaws and freezing their access to bank accounts. Especially since greater scrutiny has been placed on terrorist resourcing worldwide, fewer individuals will rationally be willing to risk their property, much less their personal freedom, given the consequences of being caught. Also, although supporters can provide many of the resources a terrorist organization may require, they cannot provide one of the most needed: sanctuary.79 Because these terrorist organizations must be careful to moderate themselves, while theoretically capable of very high levels of violence, mass-casualty attacks, with their commensurate pictures of dead women and children, are likely to alienate large portions of support, so these groups will normally conduct low- to medium-level attacks. And because their supporters can give contributions or take them away as they collectively see fit, such groups can enjoy only moderate levels of autonomy. Example: NORAID and the Provisional Irish Republican Army PIR A developed an institutionalized resourcing structure when it realized that an ad hoc, informal system would be ineffective to support a long war against the British. PIR A has had a multitude of resourcing sources, and the U.S. diaspora was only one of many. It

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was crucial, however, for a number of reasons, the most important being that it provided a steady flow of cash and weapons. In the early 1970s, diaspora support through the Irish Northern Aid Committee, better known as NOR AID, and other such groups supplied more than 50 percent of PIR A’s budget.80 By the standards of a political movement, PIR A was never that large. At its high point in the 1970s, it had perhaps 500 full-time members, and by the mid-1980s, the British estimated that there were about 300 actual PIR A militants, who were, in turn, supported by thousands of sympathizers.81 Even their numbers at the ballot box were paltry: in the first local elections in which it participated in Northern Ireland in 1985, Sinn Fein, the political wing of PIR A, won only 12 percent of the vote, and this was its high point in electoral success; in 1992, Gerry Adams, the leader of Sinn Fein, lost his west Belfast MP seat in the United Kingdom Parliament (though he did win it back in later elections).82 Regardless of the rate of electoral success, PIR A constantly required resources, especially money and guns, and the Irish American diaspora provided a particularly ready and secure source. To fill this need, NOR AID was established by PIR A supporter Michael Flannery in 1970. Flannery had immigrated to the United States from Ireland in 1927 while on the run from the British for being against the 1922 partition of Ireland into an independent Republic of Ireland and the six Northern Ireland counties, which remained part of Great Britain. In the United States, Flannery went to work for Metropolitan Life Insurance Company, and in the 1930s, he became the head of the Clan na Gael, the American branch of the Irish Republican Brotherhood, itself a forerunner for the Irish Republican Army (IR A).83 In early 1970, Daithi O’Conaill and Joe Cahill, two veteran IR A men, met with Flannery and asked him to reestablish money and weapons smuggling networks that had atrophied in the 1950s on behalf of the newly founded PIR A. Fundraising would be kept separate from weapons smuggling, as it would have to be accomplished publicly and with a broad base, while weapons smuggling is by nature covert. Flannery used an existing organization, the Irish Action Committee, but changed the name to the Irish Northern Aid Committee (INAC, but better known as NOR AID) so there would be no connotation of violence associated with it.84 NOR AID’s mission, according to Flannery, “was to help and clothe the people of the North,”85 and he denied that the money went to PIR A, although he also claimed that he did not care how the money

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he sent was spent. NOR AID’s contributions were sent to the Green Cross, part of the Irish organization An Cumann Carbhrach, which provided for PIR A dependents. NOR AID soon had approximately 70 chapters around the United States, though its supporters were concentrated in New York. As it was ostensibly a charity, donations could be collected openly, including the support of some well-established Irish Americans. For example, a major publicity and fundraising event for NOR AID was the annual New York dinner held at the Astorian Manor. The 1979 dinner was attended by 1,800 people and raised 26,000 USD. Its guest list included Congressmen Peter Rodina, Lester Wolf, Hamilton Fish, Benjamin Gilman, and Mario Biaggi, as well as New York Attorney General Robert Abrams, President of the Transport Workers Union Philip Brennan, and chairman of the New York St. Patrick’s Day Parade James Comerford.86 Nevertheless, even if all of NOR AID’s financial contributions had gone directly to charities (and subsequent investigations clearly showed that was not the case), money is fungible, and NOR AID donations that provided for PIR A members’ dependents meant more money freed for its terrorist campaign.87 The Irish American diaspora also provided a crucial weapons pipeline to PIR A, for, as J. Bowyer Bell has noted, “. . . there was no possibility of an armed struggle unless there were arms.”88 When PIR A was founded in 1969, it suffered from a lack of weapons as firearms were very carefully restricted in Northern Ireland, and old IR A weapons dumps contained only some old weapons and questionable ammunition. The Quartermaster General of PIR A recognized that confiscations of weapons or theft from security forces would be both difficult and inadequate, so a means to import the necessary weapons would be required.89 In 1970, PIR A reestablished a dormant weapons pipeline via George Harrison, a gun runner in the United States since the 1950s,90 who, in turn, received weapons from George De Mao, a Corsican gun shop owner and neighbor of Harrison’s “on the fringe of mafia.” 91 Harrison ran this operation through a compartmentalized system of a coterie of friends, which never numbered more than 12 at any time. George De Mao received many of the weapons from his contacts at Camp Le Jeune, North Carolina. Soldiers would smuggle them out and sell them to local dealers; De Mao would buy them from dealers, put them in his trunk, and drive them to New York. Here, he would sell them to Harrison and his cohorts. The weapons would be cleaned and oiled, then handed over to the next in line for transshipment to Ireland. Harrison has claimed he did not know who

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was involved in that portion of the operation, though some weapons were captured on various ships.92 The money for these weapons came largely from Michael Flannery’s NOR AID, which, for reasons of secrecy, remained a “discreet distance” from Harrison’s operation.93 While American weapons were never the majority of those available to PIR A, they were a substantial share: from 1968 through February 1983, the British captured 2817 weapons, which had been smuggled from the United States of the roughly 8,000 weapons captured during that time.94 If the ratio of weapons captured approximates the overall weapons sources, then approximately one-third of PIR A’s weapons originated in the United States. Using the United States as a weapons pipeline had substantial advantages. First, there was a large Irish American population that could provide both money and arms. Second, the United States had rather lax gun laws, with many civilian versions of military weapons available legally as collectors’ items or hunting rifles.95 The United States–supplied weapons were some of PIR A’s most sophisticated, including the Armalite AR-16 and the AR-16 Colt Commander version (with folding stock for easy concealment), M-60 heavy machine guns, and even some bazookas (though they were rarely used due to their complexity).96 For instance, the Armalite, which became the symbol of the PIR A struggle, could be purchased legally as a deer rifle, but when broken down, would fit in a cereal box. It was relatively easy to use, even for a poorly trained gunman, and its cartridge could pierce the armored personnel carrier used by the British army.97 Third, some Irish Americans acted as a political lobby to rally U.S. support behind PIR A’s cause, in the hopes that the U.S. government would then pressure the British government to accede to PIR A’s demands.98 In 1974, the Irish National Caucus (INC) became active, founded by Reverend Sean McManus, Michael Flannery (the founder of NOR AID), Jack Keane (the president of the Ancient Order of Hibernians, an Irish American social club with over 100,000 members), and trade union leader Teddy Gleason. With this, PIR A was able to use existing Irish American social structures, such as the Ancient Order of Hibernians.99 Though lobbying and protests on behalf of PIR A were of minimal success in encouraging the United States to put political pressure on Great Britain, they did result in the end to visa restrictions for some PIR A members, such as Gerry Adams’ visit to the United States in 1994.100 To accomplish this, PIR A and its political arm, Sinn Fein, modified their message to suit U.S. audience. The Irish American private

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citizens and the trade unions that supported NOR AID tended to be conservative and anti-Communist.101 PIR A and Sinn Fein, however, had professed Marxist leanings, so NOR AID and similar organizations had to be careful with how they crafted their message. The campaign in the United States was designed to avoid any mention of socialism or attacks against the Catholic Church; instead, references were made to ancient grievances, such as the Potato Famine of the nineteenth century and the Irish civil war of the early 1920s.102 While the pro-PIR A newspaper in Ireland An Phoblacht reported regularly on Third World struggles, such as the one in South Africa (with its sympathies going to the Marxist African National Congress), El Salvador, and the Middle East (with sympathies to the PLO), the American pro-PIR A newspaper The Irish People would conveniently leave those subjects out. For instance, the 1985 speech by Sinn Fein President Gerry Adams was printed in full in An Phoblacht, where he identified PIR A’s struggle with that of Third World liberation struggles, and berated United States President Ronald Reagan’s administration. But when The Irish People ran the same speech a week later, it had been cut from 90 paragraphs to 76, with the more leftist passages deleted.103 NOR AID’s fortunes tended to rise and fall due to two external influences. First was PIR A’s militant actions against the British, with donations rising with perceived PIR A successes and falling when PIR A was viewed as too violent and indiscriminate. For example, the assassination of Lord Mountbatten and his family in August 1979 reportedly brought in substantially more income into NOR AID.104 On the other hand, a drop in donations to NOR AID corresponded to PIR A’s car bombing campaign in 1972, which had resulted in heavy civilian casualties.105 In 1983, PIR A bombed Harrods department store, which also alienated the terrorist organization from its American supporters.106 In 1987, 11 were killed when a PIR A bomb detonated at a war memorial ceremony at a community center in Enniskillen, which led to widespread revulsion and an unsuccessful attempt to blame the British for the explosion.107 The result was that support to NOR AID plunged. Second, and perhaps more importantly, was the level of perceived abuse or injustice perpetrated by the British against Irish Catholics.108 Beginning in 1980, NOR AID smuggled in two PIR A protestors involved in the “blanket protest,” where PIR A prisoners had refused to wear prison uniforms (and hence, had to wear their issued blankets) or wash themselves unless they were given political status,

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which saw NOR AID donations increase to 70,000 USD for that sixmonth period, versus 50,000 USD the prior six months.109 When inmates from PIR A and the Irish National Liberation Army (a more Marxist organization), led by PIR A prison leader Bobby Sands, went on a hunger strike in 1981, collections rose to 250,000 USD in six months, smashing the old NOR AID collection record of 172,000 USD in the same time frame, though the money distribution system was so inefficient that only 93,000 USD of that arrived in Northern Ireland, the rest being used for salaries and propaganda in the United States.110 Conversely, when politics were going well for Catholics in Northern Ireland or when the conflict was not in the headlines, donations tended to drop. As Jack Holland notes, “It was clear that the worse things were for Northern Ireland’s Catholics, the better it was for NOR AID’s fund-raising efforts.”111 Moreover, it became apparent that, while many were willing to give to humanitarian causes, as the pretense of NOR AID providing for widows and orphans rather than terrorists declined, so too did donations. The Federal Bureau of Investigation eventually rolled up the largest PIR A arms smuggling ring, run by George Harrison and his financier Michael Flannery, although they were acquitted. When Liam Ryan, another arms smuggler, was arrested for shipping arms from Boston to Ireland (the original boat was tracked in a rendezvous with the Irish trawler Marita Ann by American surveillance satellites), NOR AID’s publicity director paid 500,000 USD bail and NOR AID established a fund to defend those arrested.112 These court cases erased any plausible deniability that NOR AID money went to anything other than PIR A, and with it much monetary and political support. Eventually, the U.S. government cracked down on NOR AID’s activities. After the Mountbatten assassination, the Federal Bureau of Investigation created a six-man team whose sole mission was to conduct investigations aimed at cutting the flow of money and arms, which led to the aforementioned arms stings.113 After this, the United States was no longer a viable source of smuggled weapons. In 1985, President Ronald Reagan succeeded in having passed into legislation a supplementary law to the extradition treaty between the United States and the United Kingdom, which stated that terrorists would not be immune from extradition solely because their ultimate objective was political.114 This closed a major loophole, which had thus far kept many PIR A members who arrived in the United States from being prosecuted.

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The NOR AID case demonstrates a number of issues, particularly those relying on some form of diaspora support. First, while each donor may be insignificant, taken as a whole, their support, or lack thereof, can have a substantial impact on the resourcing available to the terrorist organization. In particular, if the diaspora no longer supports the terrorist organization or its goals, or finds another, better alternative to it, that line of resourcing can simply evaporate. While many U.S. supporters were willing to provide money to what they thought were legitimate charity causes and oppression by an evil British occupier, the money flowed in. As PIR A tactics became more brutal and more publicized, and as options such as peace talks became a more viable alternative, the money to NOR AID dried up. In addition, this case points to the role that host governments can play. For the first decade of NOR AID’s existence, the U.S. government turned a blind eye to most of its activities, and the organization received some rather powerful political support. Beginning in the 1980s, however, close relations between American President Ronald Reagan and British Prime Minister Margaret Thatcher, as well as heightened U.S. awareness to terrorism due its own victimization in such attacks as the 1983 bombing of the Marine barracks in Beirut, Lebanon, which killed 241, brought the United States to actively seek to shut down such networks. The combination of growing unpopularity with the public at large and greater law enforcement scrutiny meant PIR A would have to find new sources of cash and weapons.

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Ch apter 8

L on e Wol f Grou ps

L one wolf organizations are entirely autonomous, quite small

in size, and usually very limited in capabilities. This category was originally popularized under the term “leaderless resistance” by selfdescribed Ambassador-at-Large for the Aryan Nations Louis Beam.1 Beam had recognized that highly hierarchical organizations were easily penetrated and rolled by counterterrorism forces, so those who sought to oppose the state and its repression would have to find another mode for conducting operations. He thus describes groups he labels as “phantom cell networks” and “autonomous leadership units” (ALUs), in which . . . individuals and groups operate independently of each other, and never report to a central headquarters or single leader for direction or instruction, as would those who belong to a typical pyramid organization. Organs of information distribution such as newspapers, leaflets, computers, etc., which are widely available to all, keep each person informed of events, allowing for a planned response that will take many variations. No one need issue an order to anyone.2

The lone wolf category refers to individuals or small groups who are engaged in autonomous radicalization: identifying with a particular ideology or grievance, they take up actions in support of their beliefs with little or no outside direction or resourcing. They take their cues for conducting operations from their own ideas of how they fit into the overall ideology.3 The strategy of using lone wolf terrorist groups to forward a particular political or ideological view is referred to as “leaderless resistance.” For social movements that consider violence a must, the de facto initiation into “membership”—be it radical Islam, violent, radical environmentalism, or any other ideology—may very well be the conduct

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of an actual terrorist act, even if the attack has minimal impact for the movement overall.4 The possible targets of lone wolf groups are limitless: from state institutions or personnel to random targets of opportunity that have been selected because of their symbolic importance or vulnerability.5 The organization of the group may also take on any structure: it could be very hierarchical, a “bunch of guys,”6 or even simply one, disgruntled individual. What makes leaderless resistance particularly resilient is the distance that is maintained between the leaders of an ideological movement and the actual terrorists. Such leaders may provide inspiration, and perhaps a broad list of targets or types of targets they would like struck, but they are not actually a part of the command and control structure of the terrorist group. These leaders do not know about specific terrorist attacks and probably have not even heard of the perpetrators. Because of this, especially in societies with strong free speech protections, they may very well be able to encourage their flocks entirely openly, given the fact that they themselves have not actually broken any laws.7 Lone wolf terrorism developed under the anarchists in the nineteenth century, who conducted their attacks on behalf of an ideology but without leadership or associated hierarchy to organize their actions. The concepts of lone wolf terrorism rose again in the United States in the 1970s under Joseph Tommasi, leader of the neo-Nazi National Socialist Liberation Front. He, along with 3 other adherents (among approximately 40 total members of the group), noticed the bold action of such leftist groups as the Symbionese Liberation Army and decided that the radical right should also undertake similar tactics as, despite the lack of public support, a blow could still be struck against a hated state. Moreover, he recognized that, even considering the very strong government response arrayed against them, there would be little that law enforcement could do against one man acting alone. This strategy garnered the name “leaderless resistance” after the 1992 Randy Weaver and 1993 Waco incidents, when Klansman Louis Beam published his “Leaderless Resistance” essay in the report of a Christian Identity meeting.8 Though leaderless resistance originated with the anarchists and was formally theorized upon by American white supremacists, it exists in many ideological milieu today, including violent Islamist groups (Beam’s essay on leaderless resistance has been highlighted on radical Islamist Web sites),9 antiabortion groups,10 and radical environmental and animal rights groups.

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There are three situations where lone wolf groups predominate. The first is very new groups, which will usually begin independently and rely solely on their (limited) resources—unless they are established by a patron (such as a wealthy individual or a state). The second situation is what Jeffrey Kaplan describes as a “remark of despair,”11 when there is no mass base for the organization whatsoever. Whitesupremacist terrorists in the United States, the situation scenario which spawned the “leaderless resistance” concept in the first place, is a primary example of this. Many groups who formally were in different categories will find themselves returning to a lone wolf category as they decay toward the end of their lifespan. The third situation occurs when counterterrorism forces are too strong, and readily infiltrate or otherwise expose terrorist groups and roll them up. This is particularly true in states with extremely high levels of the monopoly on violence, such as police states, where any attempt to network with other groups will likely soon be infiltrated by law enforcement, and the only safe way to survive is to remain alone. The primary advantage for lone wolf groups is that, assuming they maintain a high level of operational security, they pose a challenge to law enforcement.12 Because there are few outside links, short of a mistake by the group, an accidental discovery by police, or a tip-off by someone in the know, counterterrorism forces may never know an attack was ever even being planned.13 Once compromised, however, the group will usually be relatively easy to eliminate. Their second advantage is their autonomy. They are entirely selfcontained; they are entirely free to choose their targets and tactics, and their only constraints are the resources they can acquire and the limits of their imaginations. Because of this lack of constraints, they may engage in far more dangerous targeting.14 This particular benefit can also be the greatest disadvantage for inspirational leaders of ideological movements. On the one hand, having a terrorist organization willing to undertake attacks in one’s name can be an excellent means with which to propagandize without having to expend a single resource. On the other, if the lone wolf group undertakes actions deemed by the audiences as indiscriminate or particularly cruel, they could alienate the public from that ideology’s message. Lone wolves’ small size and clandestine nature mean they can guarantee only very limited capabilities. Such organizations rely upon themselves for all manner of resourcing and highly complex attacks with very high casualty counts will be far less likely compared to the other typologies of terrorist groups.

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In theory, their lack of capabilities could be compensated for by “swarming.” As R AND’s Countering the New Terrorism states, Swarming occurs when the dispersed nodes of a network of small (and perhaps some large) forces converge on a target from multiple directions. The overall aim is the sustainable pulsing of force or fire. Once in motion, swarm networks must be able to coalesce rapidly and stealthily on a target, then disappear and redisperse, immediately ready to recombine for a new pulse.15 (emphasis in the original)

The Internet has the unique ability to enable such coordination, as do other social networking tools like cell phones and text messages. But swarming is not necessarily as easy as one would assume. Without excellent operational security, the more “chatter” regarding such an upcoming “swarm,” the more likely that counterterrorism forces could be forewarned. So far, preliminary attempts at this, namely by anarchists and others who have descended upon political conventions and world forums with both violent and nonviolent protests, have failed to ignite mass, violent movements.16 Some lone wolf groups sympathetic to al Qaeda have come remarkably close to using this method, such as Younes Tsouli, better known on the Internet as Irhabi 007, a leading al Qaeda–associated Web master.17 Before he was arrested in October 2005; two men who had chatted with Tsouli from Atlanta, Georgia, were planning to travel to Canada to link up with extremists they had apparently met online through Tsouli to plan for possible attacks on Washington, DC. Meanwhile, another man, Mirsad Bektasevic from Sweden, had traveled to Sarajevo to prepare for a suicide attack after posting a video on Tsouli’s Web site and further arrests related to this plot were made in Denmark.18 The al Qaeda network has used the Internet for operational planning, rather than for just communications or propaganda, a technique that makes swarming all the more possible. Even without swarming, the tactics of such groups are becoming more lethal. One reason is that globalization has made the ability to acquire weapons for attacks so much easier. For example, a common tactic of lone wolves has been a sniper-style attack—an easy, low cost action that requires little planning and can be accomplished by just one person. One such attack was by Pakistani immigrant Mir Aimal Kansi, who on January 25, 1993, used an AK-47 to shoot two Central Intelligence Agency employees as they waited to turn left into the headquarters’ complex in Langley, Virginia, during morning rush

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hour.19 Even explosives are relatively easy to acquire if a group has the expertise with which to create them. For instance, fertilizer, diesel fuel, and sugar—common bomb-making components—are easily available. The bomb used for the first World Trade Center attack in 1993, which was made from fertilizer, cost only 400 USD but caused 550 million USD in damages.20 The second reason for increased capabilities has been the amount of data available via the Internet, CD-ROM, and bookstores.21 Terrorists, or those who would like to become terrorists, can now download substantial information on everything from making constructing explosives to conducting intelligence on far-away targets. For instance, in the late 1990s, al Qaeda sympathizers produced a several-thousand-page instruction manual called The Encyclopedia of Jihad, which was originally passed to all participants in Afghan training camps on diskettes, was then saved to CD-ROM, and by 2000 was available on the Internet. The manual is a combination of translated pages from Western military manuals along with chapters by experienced mujahideen.22 Before the advent of the Internet, such capabilities would be much more costly to acquire in terms of time and money. To make a bomb, for instance, one would have to find someone knowledgeable in bomb-making and learn from them. Conducting intelligence could require extensive casing of a building and perhaps a trip to city hall to view the building’s plans. Now, all of these are available with a few keystrokes. This is not to argue that the Internet is the panacea to terrorist organizations’ lack of training camps, especially for high casualty attacks, which require a higher degree of complexity and expertise. Willingness to manufacture explosives or a bomb just from instructions downloaded from the Internet requires a great deal of faith in those instructions and much courage to even attempt the task. Many are the cases in which bombs manufactured from online tutorials have either been not powerful enough or have failed entirely. So far, mass casualty attacks conducted by “almost lone wolf” groups (meaning groups that had only minimal outside assistance), such as the first World Trade Center bombing in 1993 and the London 7–7 subway bombings, have had the assistance of experienced bomb-makers on site.23 Moreover, even though various groups loosely networked via the Internet may claim to espouse the same ideology, they will view their respective solutions quite differently. In the case of al Qaeda, Marc Sageman has noted, “In the West, we tend to believe that there is a

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single al Qaeda ideology. In fact, there is considerable disagreement among terrorists about the limits and types of operations they can carry out.”24 The same holds true for extremist environmental and animal rights movements, where there is considerable debate as to what constitutes legitimate targets and means of attack. Hence, “Each group lives in its own world, connected to the overall social movement through the internet. Their attempts are all ad hoc, each with its local internal logic and directed against it own local targets.”25 While this is very effective for maintaining the group’s particular ideology in the media spotlight, the various groups cannot mass to take territory nor conduct large-scale, coordinated campaigns. Nevertheless, modern technology, especially the Internet, can be an important radicalization tool. It can provide even the most extremist ideologies the “illusion of numbers,” wherein adherents to these ideologies seek out those with like-minded views via chat rooms and other media, and abandon those with which they disagree. Such forums can then act as an echo chamber, progressively radicalizing some members, possibly even to the level of being willing to conduct terrorist operations. Because these chat rooms connect people across the globe, they can provide the illusion of widespread social acceptance to radical ideas. This can be especially powerful if online groups are reinforced with offline relationships, allowing them to mutually influence one another.26 Even so, sorting through the true motives of terrorists can be difficult, as they often “act out of a mixture of ideology and personal grievance”27 or personal greed. For example, the “DC Sniper” John Allen Muhammad reportedly told a friend that he approved of the 9/11 attacks and disliked American policies toward Muslim states, but his actions seemed far more motivated by child custody issues with his ex-wife than by an actual political agenda.28 This case attests to one of the difficulties of assessing such lone wolves, which is where one should draw the line between political motivation and madness. It can also be difficult to ascertain what criminal acts have a political motive and which are merely criminal, with the politics added as an afterthought. For instance, Francois-Claudius Ravachol undertook a series of theft and large-scale bombings in the late nineteenth century, including murdering a rag merchant, murdering a hermit and stealing his savings, pillaging the grave of a dead countess, and in 1891, bombing the apartment blocks of judges who had sentenced workers from a May Day demonstration (for which there was only property damage). In 1892, he was executed, and only after

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his death did he become a cause célèbre to some anarchists.29 In all of these cases, whether the attacker was a common criminal, a criminally insane individual, or indeed acting on a political cause remains controversial today. Regardless of the debate on the motives of individual terrorists, lone wolf groups will continue to remain a constant threat in modern society, and with increased communications and globalization, their capabilities are becoming more significant. Many ideologies now assume that lone wolf organizations will conduct attacks on their behalf, and will create the infrastructure for this, whether by publishing “how to” documents on the Internet or providing a means for such groups to publicize and take credit for their attacks. Law enforcement’s ability to infiltrate these groups before they can engage in violence, while at the same time protecting society’s civil rights, will remain a constant challenge. While Islamist lone wolves understandably garner much attention to the concept of lone wolf terrorism, other potent organizations also use these tactics, as the example of environmental and animal rights groups given below demonstrates. Example: Ecoterrorism Ecoterrorists have relied almost exclusively upon a lone wolf structure within which to conduct and publicize attacks. The Federal Bureau of Investigation defines ecoterrorism as “the use or threatened use of violence of a criminal nature against innocent victims or property by an environmentally oriented, subnational group for environmentalpolitical reasons, or aimed at an audience beyond the target, often of a symbolic nature.”30 Though Islamist extremists may garner the headlines, ecoterrorism remains a high priority for the Federal Bureau of Investigation, given that they have conducted over 2,000 attacks and caused more than 100 million USD in property damage since 1979.31 Two organizations in particular that have relied on the strategy of leaderless resistance are the Earth Liberation Front (ELF) and its sister group, the Animal Liberation Front (ALF). As Stefan Leader and Peter Probst have stated, “They have no discernible organizational structure and rely on members who understand the organization’s goals and orientation to take action on their own initiative, making identification and prosecution of perpetrators difficult.”32 ELF and ALF from their inception have been nearly ideal types of lone wolf groups, with all the advantages and pitfalls thereof.

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Radical environmentalists, including the subset of ecoterrorists, usually espouse the philosophies of deep ecology and biocentrism, which believe that all organisms on Earth are of equal value and equally deserving of consideration. Deep ecology, posited by Norwegian philosopher Arne Naess, favors rolling back industrialization and civilization to an imagined pristine state that adherents believe has been spoiled by the human race. These groups stress that an environmental apocalypse is imminent and immediate, direct action is necessary, though not all direct action is violent. Adherents also believe that fundamental changes must be made in human values or that economic, social, and political structures must change to force mankind into living in harmony with nature. Some argue that the only hope for Earth is a drastic reduction in the human population; only then can utopia be born.33 Because of this belief that modern, industrial, capitalist society has destroyed nature, adherents frequently align themselves with antiglobalization, anticapitalist, and anarchist movements.34 ALF was established in 1976 in Great Britain as outgrowths of Greenpeace and the Sea Shepherds Conservation Society, appearing in the United States in 1979 (ALF has conducted criminal actions in 25 countries).35 Its mission statement, according to its Web site, is “to effectively allocate resources (time and money) to end the ‘property’ status of nonhuman animals.”36 On their Web site, they claim to be nonviolent, and further state, “The Animal Liberation Front [ALF] carries out direct action against animal abuse in the form of rescuing animals and causing financial loss to animal exploiters, usually through the damage and destruction of property,” with the longterm aim that such companies are forced out of business.37 Its normal tactics are vandalism, arson, and animal rescue missions at laboratories, meat processors, taxidermists, fur retailers, farms, zoos, circuses, rodeos, and fast-food outlets. It operates in cells of two to five members, and it encourages activists to start their own ALF cells rather than attempting to join existing ones.38 ELF was established in 1992 in Brighton, United Kingdom, by radical members of the Earth First! organization, whose members, though of similar ideology, have mostly focused on peaceful, nonviolent protests.39 According to a 2003 article, ELF’s Web site then espoused creating awareness and educating the public about atrocities committed against the Earth and the species on it, and to inflict economic damage on those profiting from such destruction and exploitation while taking necessary precautions against harming

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any animals (human or nonhuman).40 ELF usually targets soft, lowsecurity targets using arson, vandalism, and sabotage to property.41 Its most spectacular attack was in October 1998 when ELF members attacked the Vail, Colorado ski resort, destroying three buildings and four ski lifts and causing 12 million USD in damage.42 Their largest attack was in August 2003, when ELF burned down a condominium complex and construction equipment, resulting in 50 million USD in damage.43 Since 1993, ELF has declared its solidarity with ALF, and their membership, leadership, funding, and agendas often converge.44 The Federal Bureau of Investigation estimated that, from 1976 to 2004, there have been 1,100 criminal acts conducted by ALF, ELF, and associated groups causing over 100 million USD in damages.45 There are plenty of even more radical environmental groups. Often, these groups find the methods of even fringe environmental groups like ELF and ALF to be too passive and ineffective, so they break off to form more radical ones, such as the Animal Rights Militia and the Stop Huntington Animal Cruelty (SHAC, which as threatened employees with sexual assault and employees’ children by other means, and firebombed at least 11 privately owned cars).46 The most famous was Theodore Kaczynski (better known as the Unabomber), who, starting in 1978, used mail bombs to kill 3 and injure 23. His objective was to “bring about the collapse of technological civilization at the earliest possible moment” because he believed that the Industrial Revolution had been a disaster for the planet. Kaczynski’s diary highlights his desire to build ever more powerful bombs, and in one case in 1979, he even attempted to blow up an airliner using an altimeter-detonated bomb. Fortunately, the bomb was not powerful enough. After the New York Times and Washington Post agreed to publish the so-called Unabomber Manifesto in September 1995, his brother recognized it and turned him in; he was arrested in April 1996.47 Other potentially deadly attacks have occurred, such as when Daniel Andreas detonated a 10 pound shrapnel bomb in a biomedical research lab in California in 2003, with the other bomb set to go off an hour later, presumably to kill or injure first responders. It is this “fringe of a fringe” that most concerns law enforcement, for many radical environmentalists have espoused that the Earth would be much better off with far fewer humans or with the extinction of the human race altogether. For instance, Earth First! cofounder Dave Foreman has stated, “Humanity is the cancer of nature . . . The optimum human population of Earth is zero.”48 Such a radical who might

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be willing to put such thoughts into action and has the wherewithal could be quite dangerous indeed. ELF and ALF embody the concept of leaderless resistance. Leader and Probst state, “ELF’s website describes the organization as an ‘international underground movement consisting of autonomous groups of people who carry out direct action according to ELF guidelines.’ ”49 They continue quoting from ELF’s Web site, “By operating in cells (small groups that consist of one to several people), the security of group members is maintained. Each cell is anonymous not only to the public but also to one another. This decentralized structure helps keep activists out of jail and free to continue conducting actions.”50 According to law enforcement, the group maintains its operational security through the principle that members “know each other and don’t tolerate strangers.”51 Likewise, the ALF Web site claims, “Because ALF actions may be against the law, activists work anonymously, either in small groups or individually, and do not have any centralized organization or coordination.”52 ALF, like ELF, does not maintain membership lists. Wesley Jamison has used a pyramid to conceptualize the structure of the animal rights mass movement, though the overall pattern could apply to any leaderless resistance movement. At the top of the pyramid, perhaps the top 1 percent, are the “influential members,” which in the case of radical environmentalists are the likes of Peter Singer, Ingrid Newkirk, and Steven Best, the icons of the movement, who created and advanced its philosophical underpinnings. As Lyle Munro has noted, these individuals provide a small cadre lending legitimacy to the larger social movement. In the case of the radical environmentalists, these leading figures are all aboveground members (for instance, Ingrid Newkirk is a cofounder of People for the Ethical Treatment of Animals, better known as PETA), but in other movements, they may be living underground (such as Usama bin Laden and Ayman al Zawahiri in their role as “influential members” of the al Qaeda social movement). The next tier comprises 4–5 percent of the movement, which are “active members,” who, though perhaps not as ideologically informed as the “influential members,” are the ones to actually perpetrate crimes. The third tier includes “attentive members,” making up about 10 percent of the movement, who are very motivated and contribute money or other support, but who are not engaged in criminal activity. Finally are the “general members,” who constitute the 85 percent of the movement and are sympathetic, but must be motivated to contribute money or become involved.53

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Key to their utilization of the leaderless resistance strategy is the Internet. Both ELF and ALF have Internet sites, though both deny that the Web masters and owners of the sites are in any way engaged in illegal activities, claiming they are merely informing the public of the groups’ activities. These sites are used to publicize attacks, along with a variety of other nonviolent material of interest to sympathizers. For example, the January 2008 Animal Rights news portion of the ALF Web site published letters from Joyanna “Sadie” Zacher and Nathan “Exile” Block, described by the ALF Press Office as “unrepentant eco-warriors” and “courageous warriors” for arsons of an SUV dealership and tree farm in Oregon on behalf of ELF (that ELF members are publicized on the ALF Web page further highlights the cooperation between the two groups).54 ELF also issues press releases under the North American Earth Liberation Front Press Office (NAELFPO).55 Web sites for ALF and ELF have also published “how to” guides for conducting attacks, such as the ALF Primer: A Guide to Direct Action and the Animal Liberation Front, which includes tactics on security, intelligence gathering, vandalism, and arson, among a host of other topics.56 Aside from the official ELF and ALF Web sites, adherents can access a number of “how to” books via the Internet as well, such as Ecodefense: A Field Guide to Monkeywrenching originally by Dave Foreman, cofounder of Earth First!, which is a manual for lower capability ecoterrorism such as tree and road spiking, sabotage, and smoke bombs as well as how to conduct surveillance, counterintelligence, and other operational security concerns.57 Beyond the Internet, groups have sought other means to advance their ideologies. One of these has been to co-opt long-established organizations, allowing them to promote their agendas “under an umbrella of ostensible respectability.”58 PETA is perhaps the most famous organization to provide aboveground support of ALF and similar causes. After leaving PETA, one of its cofounders, Alex Pacheco, stated that the organization served as public relations for ALF. PETA has also distributed press releases and videos on behalf of ALF, for instance, after an ALF arson attack on a research facility at the University of Arizona. PETA has donated money to a number of ALF militants, like in the case of 60,000 USD in legal fees to ALF member Roger Troen.59 In 1995, PETA paid 45,200 USD to the legal fund of Rodney Coronado, an ELF activist convicted of an arson attack at Michigan State University, after it had already given a 25,000 USD loan to Coronado’s father the previous year. It has also given 1,500 USD to ELF itself.60

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As ELF and ALF attacks are generally very low capability, they are low cost and usually financed and resourced by the attackers themselves. The groups also have a number of sponsors, including some wealthy donors. Nevertheless, though their adherents may be amateur terrorists, many of their practices have been quite professional. As Liddick notes regarding ALF, “Direct actions tend to be well organized and preceded by careful surveillance of the target; members infiltrate facilities by cultivating friendships or even becoming employees. ALF cells often document their work on camera, and the videos usually show one or several individuals destroying property then posing in ski masks with the liberated animals.”61 One of the keys to the use of leaderless resistance by ecoterrorists is their ideological inclusion. Their belief system is broad enough to allow various proenvironmental individuals to identify with the movement, in essence to “believe what they will,” and then act on its behalf. It provides space for those with vague proenvironmental notions, but no true philosophical or ideological depth, to act on the movement’s behalf.62 For instance, the ALF Web site has extremely broad criteria for what constitutes a member, stating, “Any group of people who are vegetarians or vegans and who carry out actions according to ALF guidelines have the right to regard themselves as part of the ALF.”63 The groups’ inclusiveness is also enhanced by their measures of success. As Paul Joosse has stated, Radical environmentalists gauge the success of their movement not in terms of the number of adherents it is able to attract, or whether it manages to develop a cogent philosophy or “worldview,” or even whether it is able to successfully lobby governments to pass environmentally friendly laws. Rather, because the radical environmentalist goal is immediate change, its standard of success is gauged by the number of “direct actions” it can mobilize, and the efficacy of these actions in putting a halt to the ongoing degradation of the wilderness.64

Hence, the simple fact that a “direct action” was undertaken is considered a success, and not necessarily the amount of media attention generated or money or other resources brought into the organization. Because of this very basic standard used to measure success, and because the “membership” is so inclusive, a minimal level of command and control is sufficient. Because there is no formal structure, those who cannot or do not wish to find a space within this movement can break off to form alternative factions at any time. On the

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other hand, as there is no agreed upon definition of “direct action” among its adherents, there is nothing to stop some of them from engaging in violence in the name of ELF, ALF, or another group that does not correspond to the organization’s wishes. Lacking command and control, there is very little that the overriding group can do about this, other than not publishing the related information on their Web sites.65 Indeed, the inclusiveness and low criteria of success characterizing ALF and ELF are witnessed in other types of leaderless resistance groups, such as anticoalition insurgents in Iraq, for which a successful attack, no matter how small or by which particular insurgent group, can fit within the overall insurgency. Lone wolf attacks will continue as a robust category for the decades to come due to the rise of globalization, and particularly, communications technology. As Bruce Hoffman has asserted, Previously, terrorism was not just a matter of having the will and motivation to act, but of having the capability to do so—the requisite training, access to weaponry and operational knowledge. These were not readily available, and were generally acquired through training undertaken in camps known to be run either by other terrorist organizations or in concert with terrorists’ state sponsors. Today, however, information on the means and methods of terrorism can be easily obtained at bookstores, from mail-order publishers, on CD-ROM or even the internet.66

Groups such as the ones described thus far are ideally structured to withstand the so-called War on Terrorism. After all, the strategy and tactics of leaderless resistance were created for just such a situation.

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Ch apter 9

A l l t h e R est — Sh e l l Stat es, Stat e Sp onsor i ng Grou ps, a n d Tr a nsnat iona l C or p or at ion Grou ps

T

his chapter describes groups that are entirely, or almost entirely, autonomous because they have achieved such diversified resourcing that no one donor has much influence over them. First are shell states, in which the terrorist group has some sort of monopoly on violence over a geographic area within which they can resource themselves. Second are state sponsoring groups, a unique case in which the terrorist organization has very high capabilities and it can elect to trade some of them for a share of a state’s monopoly on violence. Finally are the most self-reliant of the seven categories of terrorist financing and resourcing: transnational corporation-like groups.

Shell States In the case of shell states, the terrorists gain a sufficient monopoly on violence in a particular geographic area that they can exploit it for sanctuary and resourcing by transferring local assets to themselves.1 The civilian population under their control can be compelled to provide support, as the terrorist group can levy various taxes on people and businesses within that territory and control the economy. Since in many of these shell states the market has collapsed and unemployment and poverty are high, there is a ready pool of recruits who will willingly join, or can be coerced into joining, the terrorist organization.2

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A shell state can be as small as a few neighborhoods or as large as substantial regions within a country. The group’s capabilities depend on the amount of resources it is willing and able to expropriate from the population and allocate to itself and its activities. Because the terrorists hold the territory on which they operate, no external group has control over them; hence their high levels of autonomy. Shell states generally fall into two classes. The first is represented by those terrorist organizations that are able to entirely take over a particular geographic area and its populace, usually because they managed to carve out an enclave for themselves in a failing or collapsed state. In a few instances, however, terrorist organizations have had populations and territory handed over to them, such as the case of the Palestine Liberation Organization (PLO). These groups act like quasistates, providing whatever level of law enforcement, bureaucracy, public services, taxation, and regulation they see fit, and they may even undertake some form of foreign relations.3 Yet, while the terrorist organization can use the territory as it pleases, if it is acting as the government, it will almost certainly be expected to take on the role of governance, such as providing for some type of law enforcement and courts, and possibly running economic, educational, and other facilities. These shell states tend to be predatory toward the populations under their control, as those living within them have no protection from the leadership,4 enabling the group to steal, loot, or otherwise prey upon the population. No matter what the rhetoric, it is rare that a terrorist group actually treats the population under its control with a high degree of beneficence, although they will usually do enough to maintain a minimal level of legitimacy. Finally, in order to further support their campaign, a terrorist organization controlling the “legitimate” economy of such locales can also engage in smuggling, narcotics production, and human trafficking.5 Narcoterrorism generally falls into this category, when a terrorist organization is able to either control territory outright (thus permitting the growth, production, and/or transportation of narcotics), or to protect those who do so and then take a share of the profits in return. A second variety of shell states are those located in so-called brown areas of established, viable states. These are realms in which the state still has at least some degree of control over the populace, but the terrorist organization is able to induce the locals, either through

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popularity or coercion, to provide it with support. After all, every first world city has a third world area in it.6 Northern Ireland in the latter half of the twentieth century was famous for such enclaves, for as J. Bowyer Bell noted, “Many areas in Northern Ireland have no real government presence—police arrive in armored vehicles, street lights have not worked for decades, no public transport exists, census takers are hesitant to ask questions, the only authority is what can be found at the Sinn Fein office.”7 Because of this, as David Galula has argued, “Which side gives the best protection, which one threatens the most, which one is likely to win, these are the criteria for governing the populations’ stand.”8 Nevertheless, throughout the Provisional Irish Republican Army’s (PIR A) campaign in Northern Ireland, the British government continued to assist its citizens, including welfare and unemployment benefits; it remained engaged in regulation of commerce and at least tried to provide for a reasonable level of law enforcement and security. Brown areas can allow for training complexes, larger scale recruitment, arms depots, housing, transshipment points, and communications facilities. They also enable the terrorist organization to control the territory it needs to be “left alone,” but in this particular scenario the group does not have to take on the de facto responsibilities that assuming complete control of a state, or part of a state, would entail—such as providing for education and welfare.9 Instead, they can use the existing state infrastructure to facilitate their own goals.10 For example, one type of “brown area” is refugee camps. States may choose not to patrol refugee camps, either because they are unable to exert their sovereignty there or because the government has agreed not to, as when a country delegates control over such camps to international organizations, thereby making it politically difficult for the local authorities to go in and root out terrorist groups.11 On the other hand, should the state become willing and able to patrol those areas, the terrorist group will lose both its sanctuary and the resourcing that has come from it. Having power over a population, however, requires a high level of manpower and the command and control networks needed to run the shell state and its various resourcing enterprises. Moreover, the hold on the area can be tenuous, as the organization remains in power only until some stronger group comes along, such as in the case of a rival terrorist faction or warlord, a newly invigorated state, or a foreign power.12

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Ex ample: The Palestine Liberation Organization in Lebanon, 1970–1982 One of the best illustrations of shell states is the PLO’s control over refugee camps in Lebanon from 1970 until it was expelled from the country by Israel in 1982.13 The PLO had the ability to create a shell state due to the autonomy provided to it by a 1969 agreement with the Lebanese government, brokered by the Arab League, which stated that the 16 United Nations Relief and Works Agency camps for Palestinians would be self-policing. Day-to-day policing of the camps fell to the PLO, as did its right to intervene in any dispute between its own various factions,14 with those areas becoming off-limits to the Lebanese government.15 The refugee camps provided significant advantages; most importantly, they gave the organization a locale from which to launch attacks on Israel with near impunity.16 Second, they provided a ready pool of potential recruits. Third, they afforded apt locations from which each faction within the PLO could carve up some territory on which to pillage resources or “tax” the population, especially by establishing roadblocks. Finally, the refugee camps had propaganda value. As James Adams noted in the 1980s, the resources of the PLO and various Arab supporters were more than enough to provide decent housing and a living wage to every Palestinian living in Lebanon at the time,17 but the refugee camps, with their overcrowding, squalor, and hopelessness, were ideal images to provide the media to highlight the Palestinians’ plight as a stateless, destitute people caught in an unjust situation. In 1970, the PLO founded the Palestine Martyr’s Work Society (SAMED) to provide training and employment to Palestinians while ensuring important consumer goods would be available to them at accessible prices, along with some level of Palestinian selfsufficiency.18 SAMED was under the control of the Fatah faction, the most powerful and wealthiest faction of the PLO, which was headed by Yassir Arafat.19 Having the monopoly on violence within the refugee camps allowed the PLO, and particularly Fatah, to establish a diversified industrial base that brought many resources into the organization, as well as engendering popular support through employment and social programs, including free medical care and schooling. In 1981, in Lebanon alone, the PLO controlled 46 factories, with at least one in each refugee camp. It employed more than 5000 full-time workers, 6000 part-time workers, and had 12,000 in

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training programs. It also controlled poultry and dairy farms, which brought in about 16 million USD per year in the 1980s. 20 The factories and farms produced not only for Palestinian consumption, but also for export. For instance, in 1981, SAMED exported 100,000 shirts and 50,000 pairs of pants to the Soviet Union.21 The PLO-run industries had ready access to imports, as well as ease of exporting those products, because the PLO controlled many of the ports, including those in Tripoli, Tyre, and Sidon, so that no goods came in or out without some form of bribe, fees, or other “tax.”22 In 1981, 35 percent of SAMED’s sales went to the PLO, 8 percent to the Lebanese market, 30 percent to other Arab countries, and 27 percent to other markets around the world.23 SAMED provided an additional benefit to the PLO, insofar as after Israeli forces expelled PLO fighters from Lebanon in 1982, SAMED was the only noncovert aspect of the PLO that Yassir Arafat could leave behind, so it provided a means to infiltrate operatives back into Lebanon. Nevertheless, SAMED still lost approximately 17 million USD in 1980s dollars due to the Israeli invasion and subsequent PLO upheaval. The blow to PLO finances was cushioned by the fact that SAMED had already been diversifying its industries outside of Lebanon, so that by 1986, it was bringing in 39 million USD per year, which was only 6 million USD per year lower than in 1982.24 Within the camps, each PLO faction controlled various neighborhoods and often various industries as well. For instance, the Popular Front for the Liberation of Palestine, a Marxist organization, established a near monopoly on iron and steel for buildings in southern Lebanon through its Modern Mechanical Establishment. The factory had the latest equipment, much of it provided by supportive Arab governments, and because the group could argue that the materials were necessary for the war effort, they could often receive them at a large discount from supportive Eastern Bloc countries, thereby undercutting any competition.25 Moreover, with its monopoly on violence, the PLO could tax the inhabitants. Each “civilian” was required to provide 5 percent of his salary to the PLO, so that the more successful businesses the PLO owned or controlled, the more Palestinians were employed, and hence, the more tax revenues could be accrued. This tax was known as the Palestinian Liberation Tax Fund. The collection began in 1968 or 1969, and was aimed to tax every Palestinian worker in the Arab world, which was later expanded to include every Palestinian in an Islamic country. The tax system tended to be a hit or miss, as various

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governments collected this tax with differing levels of efficiency.26 According to PLO and Palestinian National Fund figures published in 1988, this taxation system brought in 46 million USD that year. In addition, as salaries were generally paid in cash, expropriation of salaries and false employees were easily accomplished. Later on, especially with the advent of civil war in 1975, the PLO began to levy “fees” on businesses within its area of influence, as well as charge for various “permits.” As each local leader could raise funds as he saw fit, he could set up his own checkpoints or additional taxes for revenue, in addition to any looting or other means of resource acquisition.27 Under such circumstances, it should come as no surprise that corruption remains endemic among the PLO factions and the Palestinian Authority today. Many factions of the PLO were also able to profit from narcotics, thanks to hashish production in the Bekaa’ Valley. In particular, the Syrian government and its PLO proxies Saiqa and the Popular Front for the Liberation of Palestine-General Command were able to work various areas in the Valley. Rifaat Assad, the younger brother of then President Hafez Assad, provided security guards for the fields to prevent attack from other paramilitary groups. As 90 percent of the crop was for export, as it made its way to Lebanon’s ports, it could be taxed by a variety of militias, PLO-controlled or otherwise, along the way, with much of the Fatah proceeds alleged to have been funneled to the Chairman’s Secret fund, a secret PLO fund controlled only by Yassir Arafat.28 Drug smuggling also proved lucrative. As an example, in 1984, some members of the PLO sold 4.3 metric tons of Lebanese hashish (worth 12 million USD in 1980s dollars) to British drug dealers, who were subsequently caught in a British Customs Service sting. In 1985, 35 people were arrested in Australia in a scheme to buy hashish from the Bekaa’ Valley, estimated to be worth 40 million USD from the PLO.29 Keeping the system operating, however, was not a low-cost enterprise. The largest expense for the PLO was maintaining its conventional military forces, which cost about 100 million USD per year in 1988 dollars. This included the Palestine Liberation Army (PLA, also referred to as the National Palestinian Liberation Army) and the Lebanese National Movement, which were the PLO’s forces in Lebanon. The PLO had an estimated 14,000 men under arms, organized into three brigades, an armored corp, and even a few aircraft. The men received 125–225 USD per month plus food, clothing, and

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shelter (amounts varied if the fighter was married and had children). This apparently did not include the cost of various terrorist operations, many of which likely came directly out of the Chairman’s Secret Fund. To maintain its quasistate standing in the international arena, during the 1980s the PLO paid approximately 40 million USD per year for diplomatic activities such as embassies, salaries, and housing overseas.30 It also paid, through the Palestinian National Fund, about 40 million USD per year to fund Palestinian schools and universities, newspapers, a Palestinian Research Center, and the Palestinian Red Crescent.31 Finally, there was the PLO staff, which in the 1980s consisted of roughly 5,000, including secretaries, drivers, accountants, and so forth, whose wages were divided into at least eight pay grades.32 A group such as the PLO, able to acquire control over an actual geographic area, can accumulate amazing resources. If it believes it can run that territory for the long term—and organizes its networks accordingly—it can receive a relatively steady level of income over years or decades. Such control is manpower- and other resource-intensive, which entails that a group must have a relatively high level of capabilities to begin with. Maintaining those capabilities requires infrastructure and command and control networks, all of which can be targeted, just as Israel did in 1982 when it expelled the PLO from Lebanon. Hence, though an excellent long-term resourcing solution, any group with these opportunities will have to also effectively manage the pitfalls that come with them, lest the group eventually find itself vulnerable.

State Sponsoring State sponsoring terrorist organizations have achieved a sufficiently high level of resourcing and capabilities that they have something to offer a sympathetic country. In return, this country agrees to allow the terrorist organization to share its monopoly on violence. The term “state sponsoring” is not unique, and has been used previously to describe al Qaeda in Sudan and Afghanistan,33 although in theory it could apply to any future group who manages a similar deal with a state. A terrorist organization that can make such an arrangement will garner great advantage. First, having the actual monopoly on violence, or sharing it with a country, is a benefit few terrorist organizations can ever hope to enjoy, and leads to remarkably high levels

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of autonomy. It also offers the terrorist organization the possibility of increasing its capabilities, such as through the establishment of recruitment centers or training camps. Moreover, while the only examples of countries offering this trade have been failing ones— Sudan and Afghanistan34 —and though their de facto capabilities to control their territory may be low, these hosts still have all the trappings of a state in the international system. The terrorist organization may be able to tap into the country’s capability for such items as passports, diplomatic facilities, end user certificates for importing weapons, and the natural or other resources of the location. On the other hand, the terrorist organization will have to share some of its capabilities in return for this bargain, possibly degrading some of those capabilities, at least in the short term. Moreover, the country will be considered an international pariah because it sponsors a terrorist organization, and will subsequently become the likely target of some sort of retribution, be it economic, such as sanctions, or military, such as the invasion of the country by an outside force. Hence, the usefulness of the state’s infrastructure may be limited and possibly short lived. Example: Al Qaeda in Sudan and Afghanistan (1991–2001) Thus far, al Qaeda has been the only terrorist organization that has been state sponsoring: when Usama bin Laden resided in Sudan from 1991 until 1996, and then Afghanistan from 1996 until he was expelled with the fall of the Taliban in 2001. As terrorism scholar Jessica Stern has noted, “[. . .] Bin Laden went beyond cooperating with states and state agents. He made himself so indispensable to leaders willing to provide him sanctuary that the assets of the state became his to use.”35 In Sudan, al Qaeda exchanged money and the building of infrastructure for the opportunity to run training camps and extensive money-making concessions. Bin Laden worked closely with Hassan al Turabi, the Sorbonne-educated leader of the National Islamic Front, who sought to establish an Islamic state guided by Shariah (Islamic Law). Toward that effort, at one point, Turabi brought together 40 Islamist political parties and terrorist groups under the Popular Arab and Islamic Conference banner. Within this sanctuary, Bin Laden set up tens of companies employing thousands of workers, along with training camps, laboratories for the development of weapons of mass destruction, and a weapons smuggling network. By 1996, there

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were 23 training camps in Sudan, and government military facilities and instructors may have been used by al Qaeda.36 Bin Laden also received communications equipment, rifles, and fake passports from the National Islamic Front, in addition to having about 200 Sudanese passports for his operatives to use.37 As Ray Takeyh has stated, “Sudan became known as a way station for Bin Laden’s operatives, a place where terrorists could gather, train, and plan in relative safety and comfort.”38 Moreover, al Qaeda was gradually able to infiltrate the intelligence apparatus of the National Islamic Front, along with parts of the Ministry of Foreign Affairs, the Interior and Security Ministry, the Ministry of Defense, and the Military Intelligence Directorate.39 In return, Sudan received the desperately needed developmental assistance. Bin Laden was able to use his foothold in Sudan to spread his alliances, and it was during this period that he reached out to likeminded groups throughout the world. He managed to establish franchise relationships with groups in Saudi Arabia, Egypt, Jordan, Lebanon, Iraq, Oman, Algeria, Libya, Tunisia, Morocco, Somalia, and Eritrea. He was also able to make some cooperative agreements with groups in Africa, including in Chad, Mali, Niger, Nigeria, and Uganda as well as groups in Asia in Burma, Thailand, Malaysia, and Indonesia. Meanwhile, he expanded his resourcing empire outside of Sudan, which included a business enterprise in Cyprus, a branch in Zagreb, Croatia, a nongovernmental organization (NGO) in Baku, Azerbaijan, and NGO offices in Budapest, Hungary and Vienna, Austria. He even had branches in the United States under the name of al Khifa, which had originally been set up to support the Afghan mujahideen against the Soviet Union during the war there in the 1980s.40 It was also from Sudan that Bin Laden’s organization began to conduct attacks against U.S. interests, including providing assistance to Somali fighters against United States’ troops there in 1993, a car bomb at a training center in Riyadh, Saudi Arabia, in November 1995, and a truck bomb against a military barracks in Dhahran, Saudi Arabia, in June 1996. He was finally expelled in May 1996, after Sudan found itself under increasing international pressure and restricted by United Nations sanctions due to the 1995 assassination attempt on Egyptian President Hosni Mubarak in Ethiopia (undertaken by Ayman al Zawahiri’s Egyptian Islamic Jihad with Sudanese help), and after Sudan received pressure from Libya for providing sanctuary to antigovernment Islamic groups.41

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In Afghanistan, al Qaeda offered its men as troops to the Taliban in return for sanctuary and a free run of the country.42 As Lawrence Wright notes, “[the Taliban] had heard about the millions [Bin Laden] had poured into Sudan, and they assumed he was still a wealthy Islamic philanthropist. They hoped to use his money and expertise to rebuild their shattered country.”43 In particular, Bin Laden allowed the Taliban to utilize his 055 Brigade, his elite unit of Arabs to help them fight the Northern Alliance, supplying as many as 400 troops. From 1997 until 2001, they were integrated into the Army of Taliban–controlled Afghanistan. His operatives protected drug processing and transport on behalf of the Taliban, which in turn provided money to finance training camps and supported operatives elsewhere.44 Moreover, he had promised to build infrastructure such as mosques, schools, dams, and paved roads.45 He may have provided the Taliban as much as 100 million USD during the 5 years he lived there,46 including 3 million USD at a critical moment in 1996 when the Taliban were preparing to take Kabul.47 In return, al Qaeda had even greater freedom of movement in Afghanistan than in Sudan. According to The 9–11 Commission Report, “Al Qaeda members could travel freely within the country, enter and exit it without visas or any immigration procedures, purchase and import vehicles and weapons, and use official Afghan Ministry of Defense license plates. Al Qaeda also used the Afghan state owned Ariana Airlines to courier money into the country.”48 While there, Bin Laden reestablished both his resourcing networks (Sudan had confiscated his financial empire there when he was expelled) and created the pinnacle of his hierarchical organization. Moreover, the Taliban were very willing to allow training camps for Islamist guerrillas and terrorists on their territory, and in early 1997, they permitted the reopening of training camps for Arab volunteers, with their management entrusted to Bin Laden’s close associates, mostly Saudis and Yemenis.49 Some camps were maintained by Bin Laden himself, but he also provided support for other facilities throughout the country. In the end, the Afghanistan-based camps are estimated to have trained 10,000–20,000 men from 1996 to 2001, mostly for insurgent or conventional fighting skills, with only a small number of these ever explicitly trained for terrorist operations.50 Moreover, the Taliban-al Qaeda alliance was solidified through marriage ties, administrative functions, and financial support, with Bin Laden serving on the Taliban’s Council of Elders, while Taliban leader Mullah Omar was given an honorary position in al Qaeda’s Majlis al Shura.51

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This special case of al Qaeda as a state sponsoring terrorist group demonstrates the advantages terrorists can accrue if there is a sympathetic state willing to allow such a bargain. In the near future, however, state sponsoring groups are unlikely to reappear, as even the smallest hint that a state might be willing to come to such an arrangement would lead to international sanction, and quite possibly military action. This was demonstrated in December 2006 when the de facto government of the Islamic Courts in Somalia and its al Qaeda allies were driven from power (with American assistance) by Ethiopia.52 The Islamic Courts were an alliance of various Islamists, some of whom had ties to al Qaeda. The fear that these courts could allow al Qaeda or like-minded groups sanctuary was enough to garner international action in a collapsed state that had been all but ignored for more than a decade. A version of a state sponsoring organization still occurs, but on a substate level. Warlords, tribal leaders, and other substate actors have made similar alliances with terrorist groups. Most importantly, it is alliances with tribal groups that provide the sanctuary to the core of al Qaeda, especially Usama bin Laden and Ayman al Zawahiri, as well as their training camps, along the Pakistan-Afghanistan border.

Transnational Corporation (TNC) Model This type of terrorist group is based upon the model of a transnational corporation. In their study of globalization, Paul Hirst and Grahame Thompson have defined a transnational corporation (TNC) as one with “genuine footloose capital, without specific national identification and with an internationalized management, and at least potentially willing to locate and relocate anywhere in the globe to obtain either the most secure or highest returns.” These organizations can be neither constrained nor controlled by any individual country’s policies. This is in contrast to a multinational corporation (MNC), which also operates globally, but retains a clear home base, is subject to national regulation, and is by-and-large effectively regulated by that country.53 For instance, Coca Cola is defined as an MNC for, though it is one of the most globalized corporations in existence, it remains an American company, ultimately responding to the dictates of American laws. In short, MNCs are socially embedded in one state, whereas TNCs are not. Most scholars of globalization argue that no true TNC has existed so far; however, the model is useful for the study of some terrorist organizations.

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To borrow from the concept of the TNC, a terrorist group exhibiting this type of organization would ideally act on a global scale, utilizing cheap and easy communications and means of travel to connect its members worldwide. Like a TNC, this organization would exhibit a truly international membership and leadership. Due to its dispersion and redundancy, the actions taken by one country or a few countries against the terrorist group would yield few results. If one or more cells were to be discovered and rolled up, little impact would be made on the organization overall. As the group’s resources would be just as dispersed, attacking one or a few resourcing and financing nodes would also have little effect, as the terrorists would simply concentrate more heavily on those sources still available. Like a TNC, transnational terrorist groups are highly sophisticated and complex organizations that rely on a high number of personnel, especially skilled labor. They have a headquarters unit, as well as departments and specialists to handle a relatively sophisticated bureaucracy. As terrorist scholar Jessica Stern has stated, Maximizing capacity requires recruiting personnel with special skills, including in fundraising, acquiring and using weapons, collecting intelligence, and planning operations. It requires managers, cadres, public-affairs officers, recruiters, and diplomatic personnel responsible for coordinating with government agents, if necessary.54

They also must have cadres of unskilled labor—more “disposable” operatives, who can assist with logistics, blend with a local populace, act as a mule, or speak a particular language.55 All of this is linked together using complex, redundant, and secure systems of communication. To be able to maintain such skilled labor, as well as training centers, and research and development facilities requires the ability to bring in a high amount of resources on a predictable, regular basis. To do so, such groups exploit globalization, especially the revolution in communications and transportation—what is good for international business is good for them.56 Because they are very capable of accessing high quantities of resources, they have very high levels of capabilities. TNC-like terrorist groups are experts at money laundering and using the formal and informal international financial system to their maximum advantage, and they readily string together front companies, charities, international investments, smuggling, and other criminal activities. Thus, not only will the organization develop much of the needed skills and

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other resources internally, but at times, it may contract out to other groups or freelancers to enhance its own capabilities. Meanwhile, because there are so many bases of resourcing and financing, and because a number of the sources are entirely internal to the organization, the group has very high autonomy. No single donor determines the course of the group or has much influence over it. And given its multiple geographic nodes, no one country can entirely exercise its monopoly on violence over the group. This type of terrorist group is not beholden to any donor or necessarily embedded in any population, nor is it otherwise significantly constrained. The leadership is almost entirely free to determine its own destiny, with little or no outside interference. Example: Al Qaeda As an ideal type, no terrorist organization has ever entirely “gone global” to the theoretical extent of a TNC, but al Qaeda represents the closest manifestation so far. Like a hypothetical TNC, al Qaeda operates globally, with cells or supporters on all continents except Antarctica, including the most developed countries, such as the United States, and the most collapsed, such as Somalia. Not only is al Qaeda geographically dispersed, but also functionally dispersed. Resourcing across the spectrum of the organization—financing, tangible goods, training, recruitment, and logistics—occurs throughout the world and uses multiple nodes. Perhaps with the exception of some areas of the Pakistan’s tribal areas where the senior leadership hides, there is no single functional or geographic area that counterterrorism forces could strike and significantly disrupt it. Moreover, al Qaeda has remained flexible—if pressure is put upon one geographic or functional area, the organization morphs as needed to compensate; if one location has a particular comparative advantage, the group will use it. Even its message has changed as needed, from a group organized to fight the Soviet Union in Afghanistan to one that now claims to represent, at its broadest base, an alternative to the idea of a state system composed of liberal democracies and free trade under a Western model.57 Al Qaeda is not entirely stateless—its management still comes predominantly from Egypt and Saudi Arabia, and its leadership retains a tenuous base of operations in Pakistan—yet, it closely embodies the TNC model. Al Qaeda’s organization along corporate lines gives it exceptional resilience and survivability. According to terrorist expert Bruce

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Hoffman, “Benefiting from Usama bin Laden’s considerable experience in business, the organization is said to be structured like a modern corporation, reflective of management concepts of the early 1990s, including bottom-up and top-down networks, a common ‘mission statement,’ and entrepreneurial thinking even at the lowest levels. This makes it extraordinarily flexible, and many believe, able to survive serious blows.”58 It thus should come as no surprise that one of Bin Laden’s aliases is “The Director,” and terminology used by the group is often borrowed from the business world.59 Jessica Stern has described al Qaeda as a hybrid organization, which combines the best of a hierarchical organization with those of more networked ones. If al Qaeda were a purely hierarchical organization, it could be easily penetrated by law enforcement and unraveled as law enforcement arrested or killed its way up its chain of command.60 Instead, aspects of the movement operate under three different types at once. At the core is what Bruce Hoffman has called al Qaeda Central, which the professional, hierarchical hub containing the legacy leadership as well as those members who have been promoted to replace those captured or killed.61 Second are the various franchises, separate organizations formally bound to al Qaeda by formal treaties or due to the resources al Qaeda provides those groups. Finally are lone wolf groups, which are homegrown radicals with little or no connection to either al Qaeda or its franchises, but who nevertheless choose to operate in al Qaeda’s name. Al Qaeda Central is highly formalized and institutionalized. Usama bin Laden is the “emir” (leader) and below him is a Majlis al Shura to oversee various committees. These committees are the Islamic Study Committee, for fatwas and other religious rulings; the Media Committee; the Finance Committee, which oversees his various businesses and money laundering, as well as handling all travel-related concerns; and a Military Committee, which runs weapons procurement, recruitment, training, and weapons development (including weapons of mass destruction). Below the Majlis are agent handlers for the various networks of cells and agents around the world. Some of the higher level operatives are paid, but many are not, or come from wealthy families. Careful operational security is maintained with information passed on a need-to-know basis.62 Because of this, attempting to measure the size of al Qaeda is nearly impossible. Rough estimates of its committed, active membership are generally based on how many have attended al Qaeda training camps in Afghanistan, somewhere between 70,000 and

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110,000, though these numbers do not include those who attended camps in Sudan, Chechnya, Somalia, Yemen, or Indonesia. Of those, only a small minority were actually invited to join al Qaeda, which would leave a few thousand core members,63 but as no one is certain about how many camps have been operated by al Qaeda, even this estimate is suspect.64 Moreover, a new cadre of al Qaeda has never trained in any known camps. For example, those involved in the Madrid bombings in March 2004 had never been to Afghanistan.65 Estimating a budget for al Qaeda is also problematic, for while the core of al Qaeda and their families live underground and must be provided for by the organization, others toward the periphery are self-resourcing and are often lone wolves who have never even been in contact with the core. To accomplish their operations, at its height prior to 9/11, al Qaeda’s global terrorist empire required about 35 million USD per year.66 As al Qaeda is now more decentralized, no longer supports as many training camps, and is not propping up entire governments, it probably needs far fewer resources than it did before. Nevertheless, David Aufhauser, the Treasury Department’s general counsel, has testified that it still probably requires 5–10 million USD per year to survive and operate.67 Given Bin Laden’s business background, it should not be surprising that al Qaeda developed along a corporate pattern. He grew up in a construction and business-oriented family: his father, Mohammad Bin Awad Bin Laden, emigrated from Yemen to Jiddah, Saudi Arabia, and established one of the largest construction companies there. In the 1960s, Mohammad’s construction company received the prestigious contract to help rebuild the al Aqsa Mosque in Jerusalem along with the holy sites of Mecca and Medina.68 Bin Laden joined the Muslim Brotherhood in high school and studied economics at Saudi Arabia’s King Abdul Aziz University, graduating in 1981, where he continued to become more religious.69 Upon graduation, he worked in the family construction business.70 In 1984, Bin Laden began supporting the Afghan mujahideen, bringing in tons of construction machinery to Afghanistan for trench and road building and also set up a mine sweeping operation.71 With former university professor Abdullah Azzam, he operated the Maktab al Khadamat (the Services Bureau) in Peshawar, Pakistan, to funnel Arab money and fighters to fight the Soviets.72 It was here that Bin Laden built the financial and organizational underpinnings of al Qaeda with the original goal of channeling resources to the Afghan mujahideen.73

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Al Qaeda (its adherents named it al Qaeda al Askariya, the Military Base) was founded in 1988 with the goal of continuing the fight for their version of an Islamic government throughout the world once the Soviets had left Afghanistan. In 1989, the Farouk training camp was built near Khost, Afghanistan, to train Arab jihadists, and the al Qaeda bureaucracy began to develop. This was the same year that Bin Laden would return to Saudi Arabia. In 1992, he moved to Khartoum, Sudan under pressure from Saudi Arabia, though Sudan had been courting him since 1990, offering him the opportunity to operate freely in the country. In 1996, al Qaeda was forced to leave Sudan for Afghanistan due to pressure from Egypt and the United States to expel the organization,74 and Bin Laden remained in Afghanistan until his forces were scattered in October, 2001. Today, he, his deputy Ayman al Zawahiri, and most of his core leadership reside in the tribal areas of Pakistan.75 Just like its terrorist actions, al Qaeda’s resourcing operations span the globe and are remarkably complex. The initial core of al Qaeda’s resourcing came from his inheritance and yearly stipend, as well as the contributions of some like-minded donors, which Bin Laden wisely invested.76 His investment portfolio reportedly has included interests in the Mauritius, Singapore, Malaysia, the Philippines, and Panama, plus real estate in Europe and elsewhere under the names of intermediaries.77 Al Qaeda uses charities, such as the now-shut down Benevolence International Foundation, an Illinois-based charity located in Bosnia-Herzegovina and run by a Syrian holding both U.S. and Bosnian citizenship. The charity allegedly included everything from running an orphanage in Azerbaijan and a tuberculosis hospital in Tajikistan to assisting in the attempted acquisition of uranium and providing cash for the 1998 bombing of two American embassies in Africa.78 Al Qaeda may even have dealt in “blood diamonds,” from the conflict in Sierra Leone. These would be smuggled through Liberia using a Senegalese rebel based in Burkino Faso as a middle man between the organization and Sierra Leone’s Revolutionary United Front. The diamonds would then make their way to Europe.79 Al Qaeda has also been particularly adept at manipulating the international banking system. Bin Laden once remarked to a Pakistani journalist that his financial backers “are as aware of the cracks inside the Western financial system as they are of the lines in their hands.”80 It used the international banking system regularly, and millions of dollars in accounts suspected connected with al Qaeda have been frozen. Al Qaeda understood the limits due to the regulations of the

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banking business, and it allegedly used the regional banking systems of the Middle East, including the United Arab Emirates, Kuwait, Bahrain, and Lebanon, as they had been notoriously underregulated. While in Afghanistan, Pakistani banks were frequently used for the same reason. Al Qaeda also appears to have resorted frequently to offshore banking services known for their strict bank secrecy, especially those in Liechtenstein and the Bahamas. Even Islamic banking institutions were not immune. These banks, designed to abide by Shariah (Islamic) law, usually have a great degree of autonomy and are known to commingle the funds of many depositors and place them in group investments, contributing to the anonymity of the accounts. Finally, al Qaeda has extensively used the hawala system of alternative banking, generally centered in Dubai, which is also known for being unregulated, anonymous, and very efficient.81 A good deal of Bin Laden’s financing came from the estimated 80 companies he owned around the world, the highest number of which existed when he lived in Sudan. While there, his businesses included construction, manufacturing, currency trading, importexport, and agriculture. Many of these businesses and tracts of agricultural land were given to Bin Laden by the government of Sudan in return for payment on construction projects; the profits were then funneled into al Qaeda to support its operations.82 One of these companies was Wadi al Aqiq, a trading company with a dispensation from the Sudanese government to ship anywhere. Another was al Hijra Construction, which was jointly owned with the Sudanese government and employed more than 600 people building bridges and roads; these companies built the 800 km road from Khartoum to the Red Sea port of Port Sudan. The al Themar agricultural company had 4000 employees working on its one million acres; al Damazine farms manufacturing sesame and peanut oil; and Taba Investment, Ltd. which “secured a near monopoly over Sudan’s major agricultural exports of gum, corn, sunflower, and sesame products,”83 along with trading in sugar, bananas, canned goods, and soap. Quite likely, most of the thousands of employees of these companies had no idea of what al Qaeda even was; only al Qaeda members knew of its existence and that it controlled this financial empire.84 All Bin Laden’s businesses were run with corporate management techniques and good wages (by local standards) were provided to employees along with free housing and medical care.85 It is estimated Bin Laden lost as much as 150 million USD when he was forced to leave Sudan.86

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Al Qaeda used its businesses and other economic assets to do more than just bring money into the organization—they also provided cover for operations and logistics. For example, in the early 1990s, a plane loaded with sugar flew to Afghanistan, returning to Sudan loaded with guns and rockets.87 Sugar is still apparently used as both a cover and a means of acquiring money in that sugar is being smuggled by various militias in Somalia to Kenya as a means of making money and smuggling weapons, including by al Shabaab, an al Qaeda–associated terrorist group there.88 Another favorite tactic has been to use fishing businesses for both financing and cover. One of al Qaeda’s leading operatives in the Horn of Africa, Mohamad Abdullah Fazul, a Comoros-born terrorist leader, has used this type of front company for at least three operations. In 1995, a Palestinian al Qaeda member from Jordan, Mohammed Saddiq Odeh, moved from Pakistan to Mombasa, Kenya, and set up a fishing business. At roughly the same time, a Tanzanian named Khalfan Khamis Mohammed also opened a fishing business in Dar Es Salaam, Tanzania, which regularly traveled along the coast up to Kenya and Somalia. These fishing businesses provided a cover to explain the odd hours and shipments coming and going, as well as a discreet logistical capability for the cells. These fishing companies were part of the 1998 al Qaeda operation, which destroyed the American embassies in Kenya and Tanzania, an operation under the overall command of Fazul.89 Fazul then used a lobster fishing business as part of his cover to plan and conduct the 2002 al Qaeda attacks against a tourist hotel in Mombasa, Kenya, and the attempted downing of an El Al airliner taking off from Mombasa using a surface-to-air missile. As part of the meticulous planning undertaken, a planning meeting was held in Mogadishu, Somalia, and a number of boats stashed for a postattack escape back to Somalia.90 Just like any corporation, al Qaeda’s organizations have had their financial difficulties. In the 1990s, it reportedly suffered cash flow problems due to the strong dollar, particularly compared to the weak Sudanese pound, while Sudanese inflation ran at 150 percent annually. Usama bin Laden had to cut costs by reducing wages, which created tensions within the jihadist groups under the al-Qaeda umbrella.91 In general, al Qaeda engages in what military doctrine calls “centralized control and decentralized execution,” where Bin Laden will decide on targets, select leaders, and provide some level of funding, but leave the details to those leaders.92 Much of the control he has been able to assert has been through his resources and ability

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to allocate them to those he chooses.93 How much decentralization takes place has depended on the individual operation. For very large, important actions, resourcing is likely to come entirely from al Qaeda coffers, such as in the case of the 9/11 attacks. For less expensive operations, however, small cells may be self-financing, using front companies, credit card scams, identity theft, or any other means to make the money they need.94 In many cases, financial support has been a hybrid of central funding augmented by the local terrorist cells’ assets.95 Finally, operations may be undertaken in al Qaeda’s name, or later claimed by al Qaeda, but with little or no contact or resourcing from the parent organization. This flexibility is what enables the continued existence of the organization, in spite of it bearing the full brunt of the so-called Global War on Terrorism. With the core al Qaeda leadership under significant stress, it has had to rely more on its alliances and sympathetic groups than before.96 When one aspect of the operation appears vulnerable, al Qaeda is extremely adept at switching its modus operandi. For instance, when the organization senses one geographic location is about to be compromised, it uses its geographically diffuse structure to move the operations to a safer venue. If one commodity normally used to move resources is under the microscope by law enforcement agents, terrorists will switch to another.97 This amoeba-like existence is the key to the organization’s survival. When we look at the state of al Qaeda today, we find that there is both good and bad news. No doubt al Qaeda has suffered significant losses since 9/11: numerous senior leaders, along with thousands of their foot soldiers, have been captured or killed, and al Qaeda has lost the freedom of maneuver it once enjoyed in Afghanistan. For three years, al Qaeda waged war against a variety of targets in Saudi Arabia, which, in turn, motivated Saudi counterterrorism forces. “By the end of 2006 they [the Saudis] had killed or captured over 260 terrorists including all but one of the most wanted top 26 in the country. According to the Saudis, they foiled more than 25 major attacks.” 98 In 2007, security forces interfered with yet another al Qaeda–linked plot to attack oil facilities in Saudi Arabia by arresting over 172 individuals operating in 7 cells and seizing numerous weapons caches and over 5 million dollars.99 Al Qaeda has also suffered setbacks in other key locations. The severe missteps made by Fatah al Islam in Lebanon in May 2007 stopped the coalescence of al Qaeda in that country; the resultant conflict in the Palestinian refugee camps between Fatah al Islam and Lebanon’s security forces limited

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the use of Lebanese territory and its Palestinian refugee camps, at least in the near-term, as a training ground and strategic reserve for other Islamist conflicts.100 Despite repeated attempts, al Qaeda has also failed to establish any meaningful presence in Egypt. A series of attacks in October 2004 and July 2005 focused on Egypt’s tourist industry, but, “The Egyptian security apparatus successfully confined the threat to the Sinai and away from the center of the Egyptian political life. A cadre of terrorists and sympathizers almost certainly still exists in Sinai but it does not threaten the regime.”101 Finally, al Qaeda–associated groups in Iraq have suffered several setbacks, and while they still engage in a significant number of terrorist attacks there, the amount has decreased, while sizeable numbers of tribes, many of whom were formally aligned with al Qaeda, have abandoned it to work with American forces.102 At the same time, though, al Qaeda has expanded its base of operations, forged alliances with new organizations, and increased its worldwide operational tempo, so that even with the eventual defeat of its subsidiary in Iraq and continued setbacks in other locations, the outlook for the organization is far from bleak. This is due primarily to four trends in al Qaeda. First has been the depth of its “bench,” so that the mere fact that Bin Laden’s brainchild has survived for the past nine years is a testament to its strength and resilience. This alone represents a substantial setback for governments and an immeasurable moral victory for al Qaeda and its followers. Second, al Qaeda has expanded its global presence and influence through franchises with like-minded groups. Al Qaeda is the first organization to franchise another terrorist organization, and this continues unabated since 9/11. Third, the organization has incorporated existing technologies into new tactical applications, namely, its utilization of the Internet to create “imagined communities” within which it can seek to recruit, train, raise funds and other resources, and plan operations.103 This use of the Internet complements existing person-to-person contacts.104 Fourth, the relative sanctuary that al Qaeda enjoys in both the developed world and failing states has provided the organization the critical breathing room it needed to recover. For instance, al Qaeda–associated cells in Europe continue to be uncovered, while al Qaeda still has sanctuary in parts of Pakistan and Afghanistan, along with Yemen and Somalia, which has allowed the reestablishment of training camps for foreign fighters.105 While this safe haven may not remain indefinitely, it presently is an important factor in the organization’s continued resiliency

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and success, as well as its ability to reassert itself as an organization and not simply serve as an inspiration for jihadists around the world. Moreover, much of al Qaeda’s resourcing infrastructure appears to have remained intact. It still apparently utilizes bulk cash shipments.106 The cash, along with other commodities, likely follows long-established smuggling routes of drug traffickers, arms dealers, and the like. For example, when Saudi police raided a terrorists’ safe house in Riyadh in May 2003, among the 830 pounds of explosives and 55 hand grenades they also found tens of thousands of American dollars and Saudi riyals stuffed in duffel bags and piled on closet floors. Despite the confiscation of the pile of cash, the terrorists still had sufficient funds to organize and execute other terrorist attacks in Saudi Arabia.107 Even before the 9/11 attacks,108 al Qaeda probably began shifting resources away from the legitimate international banking system to more practical and harder to detect methods.109 As a result, terrorists have been changing tactics, and are now believed to be buying gold, jewelry, real estate, stocks and bonds, vehicles, furniture, antiques, and any other expensive items,110 which will maintain their value and liquidity.111 These commodities are then converted to cash only as needed.112 In addition, many individual donors and charitable organizations remain sympathetic to al Qaeda and may still be providing resources, while many of the front companies probably remain intact. Thus, it has been the hybrid organization, which includes formal hierarchy, franchises, and lone wolves motivated by similar ideological visions, that has enabled al Qaeda to endure the largest onslaught in history against a terrorist organization. Through a combination of luck, good organizational skills, and a message that has resonated with a sufficiently large audience, al Qaeda has created a structure where there is no one critical node upon which one could organize their forces against, thus bringing the end of the whole organization. Instead, as a TNC-type group, its cells exist throughout the world, and pressure on one geographic or functional area will simply lead the organization to morph into a new one. Given the current situation, while al Qaeda will likely survive for at least the coming decade, it will not be able to move forward toward its goals. To do so, it must find a source for the one critical resource it lacks—a sufficiently sized sanctuary to move from a cluster of terrorist organizations into an organized insurgency. At a minimum, al Qaeda’s leadership requires a location where they can find safety from the worldwide manhunt. The sanctuary found in Pakistan

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for the senior leadership is far from ideal. As Daniel Benjamin and Steven Simon note, “A core tenet of al-Qaeda’s strategy is that radical Islamists must gain control of a nation, from which they can then expand the area controlled by believers. Holding a state, in their view, is the prelude to knocking over the dominoes of the world’s secular Muslim regimes.” No global insurgency can progress beyond its earliest stages (as defined by Mao Tse-tung’s levels of insurgency warfare), as long as there is no sizeable, secure territory from which to launch and support that insurgency. Eventually, holding a larger portion of territory will be critical if al Qaeda ever hopes to advance its goals toward a global caliphate.

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C onc lusions

Terrorist groups have developed a myriad of means to secure the

resourcing they need to survive, from the earliest bank robberies to today’s highly sophisticated identity theft and money laundering scams. Successful terrorist groups are learning organizations, taking the talents inherent within the group and the menu of choices available and adapting them on the basis of their own experience and that of other groups to continue to survive and operate. Terrorist outfits that hope to grow in size and remain a long time will best posture themselves to do so if they deliberately and thoughtfully create multiple, redundant resourcing streams that provide a long-term steady source of assets. An open-minded leadership will recognize the need for concrete plans and will institutionalize certain structures, including reinvestment and diversification, to best equip and preserve itself, as the Palestine Liberation Organization, Tamil Tigers, and Provisional Irish Republican Army did. Their leaders realized that they would have to move beyond donations from their ethnic base or from sympathetic states and deliberately created a diversified resourcing stream. This feature gave them a better opportunity to transform themselves into high autonomy groups and enabled them to survive for decades through the inevitable hard times brought on by the death and capture of personnel, dips in popular support, and government countermeasures.

The Future of These Seven Categories of Terrorist Organizations Out of the seven categories of terrorist groups, state sponsored, state sponsoring, and state franchised groups have the bleakest future. As terrorism has transformed from a nuisance into an element that can

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threaten the existence of some governments, more states have agreed to international norms against it. As civilian populations continue to bear the brunt of political violence, they, too, may be less inclined to cheer on the perpetrators. A growing body of international law, including those against aircraft and ship hijacking, attacks on diplomatic facilities, the taking of hostages, terrorist bombings, and terrorism finance demonstrate this growing international consensus.1 Overt sponsorship is now undertaken by states only at the greatest risk. There are still some states that provide overt support to terrorist organizations due to a combination of realpolitik and ideology, especially Iran, but new state sponsored terrorist organizations are not regularly created anymore, and few states seem willing to accept the risks of sponsorship today. More likely, some type of covert state franchising or passive support 2 (where a government looks the other way as groups traverse territory, conduct planning, recruitment, or propaganda) will constitute the main form of state involvement. Moreover, given the risk that the state could lose control of its terrorist groups, as has occurred with groups created or supported by Pakistan, it is more likely that any covert support will be for organizations located far away from the sponsoring state. With a decrease in state sponsorship, groups have naturally turned to private donors for support. There seems to be no shortage of supporters for a variety of causes, yet individual donors now find themselves under pressure. The United States has criminalized the resourcing of terrorism,3 and many states have followed suit, either because they fear falling afoul of the United States, or because they, too, do not wish to see resourcing occur within their borders. With American pressure, the international community has also made the resourcing of terrorism illegal, and the World Bank and International Monetary Fund both encourage the use of best practices to limit resourcing within states’ borders.4 Nevertheless, popular support will continue to provide at least a baseline of resourcing. Terrorism finance specialist Steve Kiser conducted simulations of donors’ financial support of terrorism given various types of counterterrorism legislation and penalties, and he found that, “No set of policies resulted in an end to terrorist funding; even the most extreme set of policies resulted in a donor base capable of funding some form of attacks.”5 Donations by individuals may be curtailed but not eliminated. Kiser found that state policies curbing large donations were more effective than those intended to stop the small ones, but at the same time, very harsh punishments could

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have the opposite effect by creating a backlash against the government, resulting in increasing money to terrorists.6 Though this type of resourcing may be constrained, it will never be eliminated. The category today most likely to see rapid growth is lone wolves. In the presence of a strong degree of law enforcement and no easy sanctuary, groups will form spontaneously and attack according to how they believe they can best support an ideology or cause. This has been the way of anarchist groups for over a century and of right-wing groups (at least in the United States) for decades. Now, it is becoming a primary mode of operation for religious groups as well. As Marc Sageman has stated, The threat from Al Qaeda and its local affiliates is rapidly changing. The Islamist terror networks of the twenty-first century are becoming more fluid, independent, and unpredictable entities than their more structured forebears, who carried out the atrocities of 9/11. The present threat has evolved from a structured group of al Qaeda masterminds, controlling vast resources and issuing commands, to a multitude of informal local groups trying to emulate their predecessors by conceiving and executing operations from the bottom up. The “homegrown” wannabes form a scattered global network, a leaderless jihad. Although physically unconnected, these terrorist hopefuls form a virtual yet violent social movement as they drift to Internet chat rooms that connect them and provide them with inspiration and guidance. As that has migrated from outside to inside Western countries, the challenge for governments lies in detecting and neutralizing these groups before they become violent.7

Even as lone wolf groups may begin to predominate, they will find their ability to achieve actual political goals limited. Lone wolf groups can be an effective means for keeping an ideology in the headlines, but eventually, the movement must create the impression of visible progress toward a goal if they are to encourage new recruits to risk their lives conducting terrorist activities. To accomplish this, they must become more hierarchical and formalized and gain greater capabilities, including the ability to maintain some sort of territory, but in doing so, they also offer a better target for law enforcement or military operations.8 Lone wolf groups, therefore, will remain a nightmare for governments and their citizens, but cannot present an existential threat to governments. Shell states, too, will remain viable options for terrorist organizations. So long as there are areas lacking law and order, be they

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neighborhoods in normally strong states or in corrupt, failing, or collapsing ones, terrorist organizations will find the space to continue to operate. Terrorist groups can establish shell states by taking and holding territory, bribing corrupt officials into looking the other way, or perhaps even taking control of areas such as refugee camps. It is within these that groups are best able to grow and diversify, become state sponsoring (or more likely, tribe- or warlord-sponsoring), and even move into the realm of a TNC-like group. Those with great capabilities may even mange to establish themselves as a full-fledged insurgency, along the lines of Mao Tse Tung’s doctrine: from small, clandestine cells to quasi- or fully conventional forces, able to attack government forces through a more regular warfare strategy. Another category of organization that will expand is the transnational corporation-like (TNC) group. Globalization has enabled this category to become a more viable one, even for smaller groups. In the past, most terrorist interaction was face-to-face, but with modern technology, once a trusted social network is established, new forms of communication like the Internet allow for two-way interaction on a regular basis regardless of geographic location, often at very low cost.9 Other communications innovations, such as cell phones, make such links all the more efficient, and the movement of resources (especially money), cheaper, easier, and more available to amateurs. In addition, technology better enables one to recruit operatives and supporters both on a regional and global level. As a result, all sorts of criminal activities, be they mafias, youth gangs, or terrorism, achieve much greater capabilities with fewer tradeoffs in autonomy than ever before. Commensurate with the growth of TNC-like terrorist groups will be that of terrorist franchised organizations. Under a TNC structure, terrorists create an alliance network of sympathetic groups that provide the parent organization its true regional or global reach. TNCs can use their high level of material assets and intangible assets, such as ideology, brand name, and propaganda networks, to entice other organizations under their umbrella. This was a tactic first developed by al Qaeda, and it remains its primary means to maintain a high operational tempo, even while its leadership has limited mobility and communications on the Pakistan-Afghanistan border. Globalization, especially ease of communications and transportation, have made terrorist franchising feasible, and it will continue as a viable strategy for the foreseeable future.

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There is a particular irony to the emergence of TNCs and terrorist-franchised organizations. These are the most embedded in international trade and monetary regimes, as well as most reliant on communications and modern transportation. Thus, theoretically, it should be relatively easy to stop their operations via international regimes like the International Convention on the Suppression of the Financing of Terrorism and protocols such as the Financial Action Task Force’s Special Recommendations, which cover money laundering and terrorism financing.10 Because TNC-like groups have a seemingly endless number of possible network paths, however, they can morph their resources as needed. For instance, more pressure on the international banking system may force the terrorist organization to move to hawala or commodities as a means of acquiring, moving, and storing cash and assets. Regardless of how deeply embedded in the formal, international system, they are also the most difficult to target. Likewise, certain types of states or regions are more likely to lead to the development of specific categories of terrorist organizations. Notably, in states with very strong governments and with few constraints, mainly police states, the only form of terrorist organization likely to emerge is that of lone wolves. As Kiser’s analysis indicates, strong counterfinancing regimes may make smaller terrorist groups like lone wolves more viable. In his simulation of terrorism financing, he finds that groups will adjust their donation portfolios to ensure that they remain below a perceived risk threshold, and when that threshold is reached, they will attack. As the risk threshold lowers, there will be more terrorist groups, but they will be smaller and will attack sooner using a lower amount of funds.11 Too much resourcing and infrastructure creates clear targets for law enforcement to track, penetrate, and ultimately destroy the group, so remaining small minimizes these risks. In states with very strong control over their territory, the risk threshold will be very low, for attempting to organize or network will almost certainly be detected and penetrated by law enforcement, so lone wolf networks will be almost the only ones to exist in such locales. Ironically, encouraging nonfree states to establish democratic institutions, while normatively good, will not necessarily curb terrorism, and could even increase its incidence, as those formally too repressed to even consider organizing now find they can conduct terrorist attacks. With the rule of law come limits on a state’s powers and, with that, the ability for terrorist groups to communicate and

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network with other organizations or supporters, transforming themselves from lone wolves to those supported by donations, franchises, and perhaps eventually even TNCs. Moreover, charismatic, populist leaders may emerge who can act as social entrepreneurs, mobilizing grievances into terrorist violence. Just as lone wolves will predominate in police states, shell states will predominate where law and order are lacking. Even with the increased attention to terrorism, there are still plenty of failed locales, from refugee camps to whole countries, in which to organize and operate. And as more of these locales are in urban areas, targeting the members of such groups while keeping civilian casualties to a minimum will be an increasing challenge. In sum, though the international environment is far less friendly today to various forms of state supported groups than it was two decades ago, there are still plenty of other means for terrorist groups to resource themselves, and plenty of space for them to do so.

Applicability to Other Types of Political Violence This book has focused solely on terrorism resourcing, and it should be noted that many of the underlying concepts also apply to other forms of political violence. In particular, protracted popular warfare requires very similar considerations. This type of political violence was articulated by Mao Tse-Tung as a means to overcome the Chinese government and later, Japanese invaders during World War II. These struggles are expected to last a long time, and the leadership must be prepared to organize and institutionalize their resourcing accordingly. Even if the movement begins with a small, autonomous clandestine cell conducting low-level violence, its members cannot hope to achieve their ultimate goals of mass mobilization to topple the government and assert their control if they do not evolve from a lone wolf organization into some other, more capable form. Insurgent groups must aim to become shell states, eventually holding and controlling territory from which to launch quasiconventional and conventional attacks against government forces. Holding such territory demands a complex organization that can recruit, feed, clothe, and house troops, run logistics lines, and defend territory, all of which requires significant resourcing.12 Moreover, Mao Tse-Tung’s doctrine requires that military struggles be subordinate to the political process, so a parallel process of

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shadow governments must be established in opposition to the state to provide alternative structures for social services such as education, law enforcement, and a judiciary. Running a quasistate, while at the same time waging a war against the state, requires extremely high levels of diversified resourcing, as well as a secure base of support from which to operate. Many terrorist organizations have considered themselves to be in the first phase of just such a form of insurgent warfare, conducting hit-and-run, low-level attacks against government forces while seeking to mobilize the masses and other resources, planning to eventually move to a more robust insurgent stage—though in reality, most terrorist groups will never achieve any higher stage.13 Also, very short-term expressions of political violence will require at least some level of resourcing, such as coup d’états, where a small, elitist group of individuals, acting as the supposed vanguard of the people, attempt to seize the major organs of state power and establish their rule. Coups are organized with the intent of conducting a short, very coordinated burst of political violence; classic is the case of Vladimir Lenin and the November 1917 Bolshevik Revolution. The coup per se may require little resourcing, but it certainly entails extremely high levels of planning and organization in order to devise the operation, stockpile the weapons and other resources, and train personnel. Moreover, the conspirators will have to ensure the support of military or other security forces because such small groups may be able to take over the organs of power, such as government buildings or media outlets, but they cannot hold them or impose their will on the population over the long term. In essence, while the actual period of violence may be short lived, the planning period leading to it must be quite extensive. The Leninist model worked in Russia in 1917 because the government was weak and chaotic, government forces were sympathetic, and a sufficient amount of the population acquiesced—an environment not too many other conspirators have come across.14 In addition, even though an actual coup is short, holding on to the gains made during it will almost certainly be difficult, and large quantities of diversified resourcing will be required in the aftermath. In the case of the Bolshevik Revolution, once St. Petersburg was taken, other cities also had to be taken and subdued. This led to the Russian Civil War, which would not be quelled for five years. In that time, rather like the insurgent forces noted above, the Bolsheviks had to establish a new form of government while at the same time mobilizing and arming a population for war. Hence, even with a quick and

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decisive coup, the ability to rapidly expand one’s core organization into a large and highly complex bureaucracy able to establish and conduct domestic policy as well as fight a war requires high levels of diversified resourcing. Short of this critical factor, the battle may be won, but the overall war will be lost by the conspirators.

Counterterrorism Considerations There is no one-size-fits-all solution to preventing terrorist attacks. As Paul Pillar notes, “Sound policy towards a terrorist group requires an understanding of what is and is not important to it, what drives its leaders and members, what its hot buttons are, what would stimulate it to attack, and what would lead it to give up terrorism.”15 Some have implied that, if the money and other resources are dried up, terrorist attacks will no longer occur. There is no way to end all terrorism resourcing, however, because terrorists have access to highly diversified resourcing and most attacks are relatively inexpensive. In rare cases, such as in state sponsored terrorism, where all or almost all of the funding comes from one or a very few sources, cutting off the money will indeed kill off the terrorist group. Few terrorist groups, however, with a long-term outlook rely on such fickle financing. Effective counterterrorism strategies will require an in-depth analysis of each terrorist group, and perhaps even an analysis of individual cells, to uncover their vulnerabilities. With nuanced analysis of individual terrorist groups comes a greater gamut of weapons than the traditional military and law enforcement methods. States have more in their quiver than simply pressuring state sponsors or trying to further increase know-your-customer laws for banks. For states, particularly the United States, to fight with their full repertoire of weapons, an increased level of coordination within the bureaucracy, and between private citizens, businesses, and the government, will be required. This is not to argue that “following the money” is unimportant. As the think tank R AND notes, “ ‘Following the money’ will help to identify sponsors and terrorists themselves in this murkier environment. Understanding and severing the funding links between international crime and drug organizations and politically motivated terrorists will interrupt a major source of support for some of the most violent terrorist movements and make the most expensive and lethal technologies more difficult to acquire.”16 It may also help deter potential donors in the first place, if they believe they are likely to be

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caught and face the consequences.17 Yet, although this strategy represents a critical asset in the fight against terrorism, contrary to some experts’ opinion, utilizing this tool by itself is insufficient to substantially decrease the number or severity of terrorist attacks. Finding and destroying key hubs within an organization—the analysis of any network will likely identify influential individuals, even within an ostensibly flat group—is particularly effective as this puts significant strain on the operational capabilities of terrorists. Adapting to a few blows is relatively easy for the organization— coping with multiple attacks on different nodes within a short time span may stress the group beyond its ability to adapt.18 Ideally, as the result of a well-coordinated counterterrorism campaign, tangible resources and access to money become more difficult to secure, move, or store. Over time, intangible resources also begin to become less available. When individual terrorists are arrested, the expertise they represent is no longer available to the organization, nor can those individuals pass on their skills to new recruits. Recruitment pools may also shrink, as individuals no longer see the terrorist organization as the best path to choose, or as the terrorist organization is less capable of compelling one to join or otherwise support it. Other, rising alternatives may develop separate from the terrorist organization, especially like-minded but more moderate voices that do not promote violence. Finally, the ideology itself may begin to degrade, as schisms, disagreements, and new factions move to the fore. Fighting a terrorist network is not hopeless, but it does require a multipronged approach that maintains pressure over long periods of time. Moreover, while international regimes may only be as strong as their weakest link, they nevertheless have an important role to play. By setting common standards and best practices, they put “sand in the wheels” of terrorist organizations, as well as other criminal actors. For instance, the standards proposed by the Financial Action Task Force and endorsed by international financial institutions have sought to limit not only terrorism, but also money laundering, capital flight by corrupt government officials, and other crimes, while creating a more transparent system less open to abuse. Today, criminals trying to use the international monetary system, both formal, such as standard banking, and informal, like hawalas, find that the costs have increased, not just monetarily, but also in complexity as they must better hide the source and ultimate destinations of the resources they are moving. This can make terrorist operations more costly and

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difficult to conduct, and perhaps drive some planning and operations into the open where they can be exploited or destroyed. Such considerations also speak to the importance of training, equipping, and empowering local law enforcement. Most terrorist organizations fall within the lone wolf realm—so small and clandestine that their mere detection, much less preemption, by counterterrorism forces can be exceedingly difficult. Because these groups are autonomous and usually operate on a local level, it is more likely that local law enforcement, rather than national security forces, will become aware of their presence. Moreover, it is the first responders who, by definition, react to an attack, and if this is indeed local, they will likely conduct the investigation and, hopefully, arrest the perpetrators. Meanwhile, organizations such as franchises, TNCs, and groups with varying forms of state support will require national and international assets in the form of diplomacy, intelligence, and perhaps even “alliances of the willing” to combat them. Information exchange and coordination will be required between local, regional, state, and perhaps even international levels for such groups to be detected, tracked, and hopefully, preempted. Thus, to ultimately defeat terrorist organizations requires a multilateral, multinodal assault. There is no single center of gravity that, if destroyed, will significantly impair the organization, but multiple nodes can be pressured until the system can no longer regenerate and begins to decline.19 A combination of local, national, and multilateral approaches will be necessary.20 In essence, the counterterrorism battle is one of inflicting “death by 1000 cuts,” rather than by waging a traditional decisive battle or targeting one critical center of gravity. This book highlights the importance of analyzing terrorist organizations beyond their goals or stated grievances—attention must also be paid to their overall resourcing and how groups adapt it to meet a changing environment. As multiple forms of terrorist resourcing are occurring at any one moment, one should not become preoccupied with what Paul Pillar calls, “the bête noire of the moment.”21 Focusing on one particular means of resourcing (such as hawala activities or banking transactions) will allow other most forms of resourcing to escape the intelligence and law enforcement net. By the same token, concentrating only on the strategy of one category of terrorist group, such as lone wolves or TNCs, will limit the ability to predict and respond to the inevitable new ways that terrorists find to ensure a steady flow of resources. Finally, looking exclusively at the ideology of

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the moment (currently the one associated with violent Salafist Islam) will result in counterterrorism forces missing the next “-ism” that comes about, whether that be a resurgence in leftist groups emboldened by antiglobalization, a revival of radical environmentalists determined to respond in their own violent way to global climate change, or some other, currently un-imagined ideology. The long history of terrorism suggests that this phenomenon will never cease entirely, for there will always be someone who believes violence is the only solution and for whom the asymmetries in power between them and the state will grant the “right” to attack civilian targets. Making matters worse, there exist an infinite number of targets upon which to inflict harm.22 More finesse in predicting terrorists’ rise, understanding the institutional dynamics that keep them going, and what policies eventually lead to their demise will improve chances of destroying such groups quickly, or maybe even preempting them entirely.

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1

Introduction

1. James Adams, The Financing of Terror: Behind the P.L.O., I.R.A., Red Brigades, and M-19 Stand the Paymasters: How the Groups That Are Terrorizing the World Get the Money to Do It (New York: Simon and Schuster, 1986), 4. 2. Rohan Gunaratna, Inside Al Qaeda: Global Network of Terror (New York: Columbia University Press, 2002), 19. 3. Friedrich Schneider, “Macroeconomics: The Financial Flows of Islamic Terrorism,” in Global Financial Crime: Terrorism, Money Laundering, and Offshore Centres, ed. Donato Masciandaro (Aldershot, Hants, England; Burlington, VT: Ashgate, 2004), 102. 4. C. Boucek, “The Battle to Shut Down Al-Qaeda’s Finances” (Jane’s Terrorism Intelligence Centre, 2002). 5. Bruce Hoffman, Inside Terrorism (New York: Columbia University Press, 2006), 229–40. 6. Paul Pierson, “Increasing Returns, Path Dependence, and the Study of Politics,” American Political Science Review 94, no. 2 (2000): 261. 7. Joshua Sinai, “New Trends in Terrorism Studies: Strengths and Weaknesses,” in Mapping Terrorism Research: State of the Art, Gaps and Future Direction, ed. Magnus Ranstorp, Cass Series: Political Violence (London: Routledge, 2007), 33. The closest the international community has come with regards to a consensus on a definition of terrorism is the one found in the International Convention for the Suppression of the Financing of Terrorism (1999). It makes it illegal for a person to provide or collect funds to be used in prosecution of any of the international conventions pertaining to specific terrorist attacks (hijacking and so forth) as well as “Any other act intended to cause death or serious bodily injury to a civilian, or to any person not taking any active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing an act.” Paul Allan Schott, Reference Guide to Anti-Money Laundering and

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8. 9. 10.

11. 12. 13. 14. 15. 16. 17. 18.

19.

20. 21.

No t e s Combating the Financing of Terrorism, 2nd ed. (Washington, DC: World Bank: International Monetary Fund, 2006), 1–4. Daniel Byman, Deadly Connections: States That Sponsor Terrorism (Cambridge: Cambridge University Press, 2005), 9. Ibid., 7. Title 22 of the US Code, Section 2656f(d) defines terrorism as “premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents, usually intended to influence an audience.” This definition is contained in Title 22 of the US Code, Section 2656f(d). Paul R. Pillar, Terrorism and U.S. Foreign Policy (Washington, DC: Brookings Institution Press, 2003), 13. The first difference between my definition and that of the original is the addition of the word “individuals.” Its inclusion is explained in the following paragraphs. The second change is that this book will not consider acts committed by clandestine agents of a state to be terrorist attacks. Instead, I restrict the definition to only encompass nonstate actors. Ibid. Bard E. O’Neill, Insurgency and Terrorism: From Revolution to Apocalypse, 2 ed. (Washington, DC: Potomac Books, 2005), 34. Pillar, Terrorism and U.S. Foreign Policy, 14. Hoffman, Inside Terrorism, 43. Pillar, Terrorism and U.S. Foreign Policy, 14. Hoffman, Inside Terrorism, 25. See, for example, Walter Laqueur, The Age of Terrorism (Boston, MA: Little, Brown, 1987), 146, Hoffman, Inside Terrorism, 25. Jessica Stern, “The Protean Enemy,” Foreign Affairs 82, no. 4 (2003): 34. Language has been added to some aspects of U.S. Law stating that terrorism can be conducted by individuals, but the State Department definition has not changed. For example, Section 6001 of the Intelligence Reform and Terrorism Prevention Act of 2004, PL 108–458 amended the Foreign Intelligence Surveillance Act to add the category of a lone wolf to its statutes. According to this law, a lone wolf is “a non-United States person who engaged in international terrorism or activities in preparation for international terrorism.” Elizabeth B. Bazan, “Intelligence Reform and Terrorism Prevention Act of 2004: “Lone Wolf” Amendment to the Foreign Intelligence Surveillance Act” (Library of Congress Congressional Research Service, 2004). Bonnie Cordes, “When Terrorists Do the Talking: Reflections on Terrorist Literature,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 154. Hoffman, Inside Terrorism, 199. Cordes, “When Terrorists Do the Talking,” Pillar, Terrorism and U.S. Foreign Policy, 13, Hoffman, Inside Terrorism, 199.

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22. Daniel Byman, Peter Chalk, Bruce Hoffman, William Rosenau, and David Brannan, Trends in Outside Support for Insurgent Movements (Santa Monica, CA: R AND Corporation, 2001), 3. 23. Not all terrorist groups necessarily seek to establish themselves over the long run. For example, the perpetrators of the London subway bombings in 2005 only intended to organize themselves for that one suicide mission. In such cases, obviously, long-term resourcing support will not be sought. 24. These four categories are based upon a five-category classification of capability created by R AND. Kim Cragin and Sara A. Daly, The Dynamic Terrorist Threat: An Assessment of Group Motivations and Capabilities in a Changing World (Santa Monica, CA: R AND, 2004). 25. Byman, Deadly Connections, 15. Situations where a terrorist organization is able to compel compliance from a population in a failing of collapsed state will generally fall under the category of shell state, though in rare circumstances, it could also be the case of a state sponsoring group. 26. The most integrated are state-proxies, which are state agencies and clandestine agents conducting attacks on behalf of that state. Because these attacks are carried out clandestinely by government personnel, they are probably best considered as a type of special operations, a more traditional military operation that is beyond the scope of this book. 27. Bruce Hoffman, Inside Terrorism (New York: Columbia University Press, 1998), 188. 28. Loretta Napoleoni, Terror Incorporated: Tracing the Dollars Behind the Terror Networks (New York: Seven Stories Press, 2004), 66–80. 29. Bruce Hoffman, “Redefining Counterterrorism: The Terrorist as C.E.O.,” RAND Review 28, no. 1 (2004): 15, Peter. L Bergen, Holy War, Inc.: Inside the Secret World of Osama Bin Laden (New York: Simon & Schuster, 2002), 83–4. 30. Byman, Deadly Connections, 187–218, Ahmed Rashid, Taliban: Militant Islam, Oil and Fundamentalism in Central Asia (New Haven, CN: Yale University Press, 2000). 31. Paul Hirst and Grahame Thompson, Globalization in Question, 2nd ed. (Malden, MA: Polity Press, 1999), 11. 32. Audrey Kurth Cronin, “Behind the Curve: Globalization and International Terrorism,” International Security 27, no. 3 (2002/3): 46–51.

2

Terrorism Cannot Live on Idealism Alone

1. Adams, Financing of Terror, 251. 2. On August 11, 2001, three PIR A members, James Monaghan, Martin McCauley and Neill Connolly, were arrested in Bogata, Colombia with

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3. 4.

5.

6. 7. 8.

9. 10. 11.

12. 13.

No t e s false passports and traces of explosives in their belongings. They were charged by Colombia with training FARC. James “Mortar” Monaghan is believed to have designed the PIR A homemade mortar, and McCauley and Connolly are believed to be some of PIR A’s best explosives experts. Neither Sinn Fein nor PIR A have admitted that the three individuals were sent to Colombia to train the FARC. After the capture of the PIR A members, FARC tactics, especially those involving urban warfare, improved markedly, including the use of car bombs, secondary devices (explosive devices used to ambush responding personnel) and longer range mobile mortars, all which bore striking similarities to PIR A weapons and tactics. Mark Burgess, “Globalizing Terrorism: The F.A.R.C.-I.R.A. Connection” (CDI Terrorism Project, June 5, 2002). Laqueur, The Age of Terrorism, 99–101. For instance, Islamist fighters in Chechnya reportedly provide no death benefits to the families of their suicide bombers. Napoleoni, Terror Incorporated, 185. For example, al Qaeda members were paid salaries of 500–1200 USD per month while located in Sudan. Such a salary was substantial in a country as poor as Sudan. The Irish Republican Army has reportedly paid £12,000 per year and higher to members to maintain the cease fire. Hizbullah, by its own accounting, provides aid to 1,284 families of Hizbullah members who were “martyrs” through their Philanthropic and Social Martyrs’ Institution. Bergen, Holy War, Inc., 83, Naim Qassem, Hizbullah: The Story from Within, trans. Dalia Khalil (London, UK: SAQI Books, 2005), 85, Nick Kochan, The Washing Machine: How Money Laundering and Terrorist Financing Soils Us (Mason, OH: Thompson, 2005), 81. Benjamin J. Cohen, The Geography of Money (Ithaca, NY: Cornell University Press, 1998), 11. Byman et al., Trends in Outside Support, 87. Cohen, The Geography of Money, 14–16. Cohen’s “currency pyramid” contains seven categories, ordered from most dominant and widely accepted to least dominant. Depending on a terrorist organization’s geographic location and specific needs, other currencies are certainly used. Napoleoni, Terror Incorporated, 56. “National Military Strategic Plan for the War on Terrorism” (Washington, DC: U.S. Defense Department Joint Chiefs of Staff, 2006), 16. Phil Williams, “Warning Indicators and Terrorist Finances,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 81. Hoffman, Inside Terrorism, 200. Though the FMLN were terrorists in the 1980s, today, they are a legitimate political party in El Salvador. Michael Moss and Souad Mekhennet, “An Internet Jihad Aims at U.S. Viewers,” New York Times (October 15, 2007),

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14.

15. 16. 17. 18. 19. 20. 21. 22.

23. 24. 25. 26.

27.

28. 29. 30.

31. 32. 33. 34. 35. 36. 37.

173

ht tp://w w w.ny t imes.com/20 07/10/15/us/15net.h . . . 8470 a8aqID3BQkeSI0xrLjqALQ&pagewanted=print. Hoffman, Inside Terrorism, 207–9, Weedah Hamzah, “Hezbollah Launches Another Anti-Israel Computer Game,” EUX.TV (August 15, 2007), http://www.eux.tv/article.aspx?articleId=12774. “National Military Strategic Plan for the War on Terrorism,” 17–8. Cragin and Daly, Dynamic Terrorist Threat, 42–5. Williams, “Warning Indicators and Terrorist Finances,” 80. Cragin and Daly, Dynamic Terrorist Threat, 45, Byman, Deadly Connections, 65. Cragin and Daly, Dynamic Terrorist Threat, 45–6. Ibid. Ibid., 47–8. Abdul Bakier Bakier, “G.I.M.F. Develops Defensive and Offensive Software for Jihadi Operations,” Terrorism Monitor 5, no. 18 (September 27, 2007), http://www.jamestown.org/terrorism/news/article. php?issue_id=4243. Cragin and Daly, Dynamic Terrorist Threat, 50–1. “National Military Strategic Plan for the War on Terrorism,” 17. Ibid. Clancy Chassay and Bobbie Johnson, “Google Earth Used to Target Israel,” Guardian (October 25, 2007), http://www.guardian.co.uk/ technology/2007/oct/25/google.israel/print. Ideology is “the consensus of grievances and objectives that a terrorist group is trying to address through violence.” Cragin and Daly, Dynamic Terrorist Threat, 30, “National Military Strategic Plan for the War on Terrorism,” 18. Cragin and Daly, Dynamic Terrorist Threat, 37. O’Neill, Insurgency and Terrorism, 439. See, for example, Muhammad Haniff Bin Hassan, “Key Considerations in Counterideological Work against Terrorist Ideology,” Studies in Conflict and Terrorism 29, no. 6 (2006), Bruce Hoffman, “A Review of ‘The War for Muslim Minds’,” Studies in Conflict and Terrorism 29, no. 3 (2006), Frank Scott Douglas, “Waging the Inchoate War: Defining, Fighting, and Second-Guessing the ‘Long War’,” Journal of Strategic Studies 30, no. 3 (2007), “National Military Strategic Plan for the War on Terrorism.” Bin Hassan, “Key Considerations,” 533–4. Gunaratna, Inside Al Qaeda, 232. “National Military Strategic Plan for the War on Terrorism,” 14–5. Cragin and Daly, Dynamic Terrorist Threat, 32. “National Military Strategic Plan for the War on Terrorism,” 15. Cragin and Daly, Dynamic Terrorist Threat, 42. “Resilience refers to a dynamic process encompassing positive adaptation within the context of significant adversity.” Adaptation results from

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38. 39. 40.

41. 42. 43. 44.

45. 46.

No t e s both proactive measures taken by an organization and organizational responses to exogenous shocks. Suniya S. Luthar, Dante Cicchetti, and Bronwyn Becker, “The Construct of Resilience: A Critical Evaluation and Guide for Future Work,” Child Development 71, no. 3 (2000). I wish to thank Reid Sawyer for providing this definition and concept. David Rohde, “Foreign Fighters of Harsher Bent Bolster Taliban,” New York Times, October 30, 2007. Ibid. “Bombers, Bank Accounts, and Bleedout: Al-Qa’ida’s Road in and out of Iraq,” ed. Brian Fishman (West Point, NY: Combating Terrorism Center, 2008), http://www.ctc.usma.edu/harmony/pdf/Sinjar_2_ July_23.pdf. Cragin and Daly, Dynamic Terrorist Threat, 34–7. Cordes, “When Terrorists Do the Talking,” 154. Cragin and Daly, Dynamic Terrorist Threat, 48–50. Adams, Financing of Terror, 49. The PLO conducted training for a total of about 10,000 personnel. According to Ray Cline and Yonah Alexander based on information from press reports, the PLO trained 4 members of the German Red Army Faction, 6 from the Italian Red Brigades, 4 members of the Japanese Red Army Faction, 3 from ETA, 130 Turkish Armenian extremists, 170 Iranian terrorists, 28 members of the Argentine Montoneros, and 12 terrorists from the Philippines. The PLO also provided training to the Nicaraguan army. Ray S. Cline and Yonah Alexander, Terrorism: The Soviet Connection (New York: Crane Russak, 1984), 62–3. Williams, “Warning Indicators and Terrorist Finances,” 80. Paul Cruickshank and Mohannad Hage Ali, “Abu Musab Al Suri: Architect of the New Al Qaeda,” Studies in Conflict and Terrorism 30, no. 1 (2007).

3

Terrorist Groups’ Resourcing Menu

1. Robert O. Keohane, International Institutions and State Power (Boulder, CO: Westview Press, 1989), 6. 2. Pierson, “Increasing Returns,” 252–3. 3. This framework is inspired by and based heavily upon that created by Steve Kiser. For that framework, see Steve Kiser, “Financing Terror: An Analysis and Simulation for Affecting Al Qaeda’s Financial Infrastructure” (R AND, 2005), 25–7. 4. Ibid., 26–7. 5. Ibid. 6. Andrew Black, “Lebanon Another Waypoint for North Africans Headed to Iraq,” Terrorism Focus 4, no. 17 (June 5, 2007), http://jamestown. org/terrorism/news/article.php?articleid=2373446, Lorenzo Vidino, “Current Trends in Jihadi Networks in Europe,” Terrorism Monitor 5,

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7.

8.

9.

10.

11. 12. 13. 14.

15. 16. 17. 18.

19.

175

no. 20 (October 25, 2007), http://jamestown.org/terrorism/news/ article.php?articleid=2373743. “Lebanon: Fighting at Refugee Camp Kills Civilians,” Human Rights News (May 23, 2007), http://hrw.org/english/docs/2007/05/23/ lebano15992.htm. This framework of needs is based on Picarelli and Shelley’s framework of the three criteria that terrorist organizations use with regard to entering specific criminal enterprises: capabilities, opportunities, and entry costs. I have added “needs” to this framework. While “needs” was not a part of their framework, it was implied elsewhere in their chapter. John T. Picarelli and Louise I. Shelley, “Organized Crime and Terrorism,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007). Nikos Passas, “Terrorism Financing Mechanisms and Policy Dilemmas,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 32. Raymond W. Baker, Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System (Hoboken, NJ: John Wiley & Sons, 2005), 120. Byman, Deadly Connections, 21, 59–66. Byman et al., Trends in Outside Support, 10, 17. Byman, Deadly Connections, 49–51, 75–8. David C. Rapoport, “Introduction,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 4. Picarelli and Shelley, “Organized Crime and Terrorism,” 40. Rachel Ehrenfeld, Funding Evil: How Terrorism Is Financed—and How to Stop It (Chicago: Bonus Books, 2003), 3. Picarelli and Shelley, “Organized Crime and Terrorism,” 41. Jeanne K. Giraldo and Harold A. Trinkunas, “The Political Economy of Terrorism Financing,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 18. There is at least one scenario when coming to the attention of law enforcement for criminal activity might bring long-term benefits for the group. If a terrorist is arrested for a petty crime (and law enforcement are unaware of his terrorist affiliations), he may be able to use his time in prison for recruitment to his organization, as well as the possibility of making new resourcing contacts with other criminals. Picarelli and Shelley, “Organized Crime and Terrorism,” 50. For this reason, some scholars and analysts are concerned about prison populations as potential breeding grounds for terrorists. Giraldo and Trinkunas, “The Political Economy of Terrorism Financing,” 18.

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No t e s

20. Lawrence Wright, The Looming Tower: Al-Qaeda and the Road to 9/11 (New York: Vintage Books, 2006), 217–8. 21. Giraldo and Trinkunas, “The Political Economy of Terrorism Financing,” 19. 22. Napoleoni, Terror Incorporated, 178. 23. Kiser, “Financing Terror”, 36. 24. Ibid., 96. 25. Daniel Benjamin and Steven Simon, The Age of Sacred Terror: Radical Islam’s War against America (New York: Random House, 2003), 112–3. 26. Maurice R. Greenberg, William F. Wechsler, and Lee S. Wolosky, “Terrorist Financing: Report of an Independent Task Force” (New York: Council on Foreign Relations, 2002), 11. 27. In particular, see Financial Action Task Force (FATF) Special Recommendation 9: Cash Couriers in Schott, Reference Guide, Annex 6, 34–6. 28. Kimberly L. Thachuk, “Terrorism’s Financial Lifeline: Can It Be Severed?,” Strategic Forum 191 (2002): 2. 29. “Report to Congressional Requesters on Terrorist Financing: U.S. Agencies Should Systematically Assess Terrorists’ Use of Alternative Financing Methods” (General Accounting Office, November 2003). 30. Karen Deyoung and Douglas Farah, “U.S. Agency Turf Battles Hamper Hunt for Untraceable Commodities,” Washington Post, June 18, 2002. 31. Adams, Financing of Terror, 157–8. 32. Thomaz G. Costa and Gaston H. Schulmeister, “The Puzzle of the Iguazu Tri-Border Area: Many Questions and Few Answers Regarding Organised Crime and Terrorism Links,” Global Crime 8, no. 1 (2007): 31–37. 33. Bernadetta Berti, “Reassessing the Transnational Terrorism-Criminal Link in South America’s Tri-Border Area,” Terrorism Monitor 6, no. 18 (September 22, 2008), http://www.jamestown.org/terrorism/news/ article.php?articleid=2374428. 34. Kim Bolan, “For Hezbollah: Cheap Smokes, Fake Viagra,” Vancouver Sun (September 21, 2007), http://www.canada.com/components/ print.aspx?id=70dfb2cd-83ff-4f0f-b6db-f49f8c8b0228. 35. Adams, Financing of Terror, 167–8. 36. Douglas Farah, Blood from Stones: The Secret Financial Network of Terror (New York, NY: Broadway Books, 2004), 161, Ehrenfeld, Funding Evil, 137–9. 37. Brian Krebs, “Three Worked the Web to Help Terrorists,” Washington Post (July 6, 2007), http://www.washingtonpost.com/wp-dyn/content/ article/2007/07/05/AR2007070501945_pf.html,—–—, “Terrorism’s Hook into Your Inbox,” Washington Post (July 5, 2007), http:// www.washingtonpost.com/wp-dyn/content/article/2007/07/05/ AR2007070501153_pf.html. One of those captured in the UK was

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No t e s

38. 39.

40. 41.

42. 43. 44. 45. 46.

47. 48.

49. 50.

51.

52. 53. 54.

177

Moroccan-born Younes Tsouli, age 23, who was better known as Irhabi007 (Irhabi means “terrorist” in Arabic). Irhabi007 had been considered the de facto administrator of the Muntada al-Ansar al-Islami jihadist forum, which had been the main internet forum for Abu Musab al Zarqawi, the now-dead leader of Al Qaeda in Iraq. Farah, Blood from Stones, 163 and 66–7. Jen Haberkorn, “Retailers Target Online Sales,” Washington Times (October 29, 2007), http://washingtontimes.com/apps/pbcs.dll/ article . . . 071029/BUSINESS/110290042/1006&template=printart. Adams, Financing of Terror, 93–4. In this circumstance, kidnap and ransom has a primary goal of acquiring resources for the group, along with possible political goals. This is separate from hostage taking when the goal is to try to coerce governments into some policy change, or is done with the sole intent of killing the hostage and publicize it, such as is tragically the case in Iraq, Afghanistan (such as the Daniel Pearl murder), and Chechnya. Adams, Financing of Terror, 192–200. Ibid., 199–201. Ibid., 191–9. “Al-Qaeda Turns More to Extortion, Abductions to Fund Fight, United States Says,” Associated Press (July 30, 2008). Massoud Ansari, “Taliban Use Hostage Cash to Fund Uk Blitz,” London Daily Telegraph (October 15, 2007), http://www.telegraph.co.uk/ core/Content/displayPrintable.jhtml?xml=/news/2007/10/14/wtaliban114.xml&site=5&page=0. Adams, Financing of Terror, 216–8. Rachel Ehrenfeld, Narcoterrorism: How Governments around the World Have Used the Drug Trade to Finance and Further Terrorist Activity (New York: Basic Books, 1990), 124–5. Ahmed Rashid, Jihad: The Rise of Militant Islam in Central Asia (New Haven, CN: Yale University Press, 2002), 165–7. “Opium Winfalls Fuels Afghan Insurgents: U.N.,” Reuters (November 16, 2007), http://news.yahoo.com/s/nm/20071116/ts_nm/afghan . . . dc_ 1&printer=1;_ylt=AupzFG9t3_QdNwA2Q2MhSyRg.3QA. Thomas Schweich, “Is Afghanistan a Narco-State?,” New York Times (July 27, 2008), http://www.nytimes.com/2008/07/27/ magazine/27AFGHAN-t.html. Robert D. Kaplan, Balkan Ghosts: A Journey through History (New York: Vintage Books, 1993), xxvii, 66. Ibid., 66, Laqueur, The Age of Terrorism, 68, 97. Abu Nidal’s real name was Sabri al Banna. He is believed to have been motivated by anger that his family, a well-to-do family from Jaffa, was displaced by Israeli in 1948. “Terrorism Knowledge Database” (Memorial Institute for the Prevention of Terrorism, 2007).

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No t e s

55. At that time, he had about 200 supporters, mainly young Palestinians resident in Iraq or related to him through family ties. Laqueur, The Age of Terrorism, 286. 56. Carl Anthony Wege, “The Abu Nidal Organization,” Terrorism 14 (1991): 61–3. 57. Napoleoni, Terror Incorporated, 57. 58. Syria provided diplomatic support (such as identity papers and passports) as well as access to training facilities in Lebanon; Libya provided about 15 million USD per year. The Libyan subsidy appears to have ceased in 1989 after an internal coup within the Abu Nidal Organization. Wege, “The Abu Nidal Organization,” 61–4. 59. Laqueur, The Age of Terrorism, 286–8, Napoleoni, Terror Incorporated, 57–9. 60. Wege, “The Abu Nidal Organization,” 61. 61. Many believe that Saddam Hussein ordered him assassinated, and some believe he is not really dead. The group remains on the U.S. State Department’s list as a foreign terrorist organization. “Terrorism Knowledge Database.” 62. Adams, Financing of Terror, 1. 63. Byman et al., Trends in Outside Support, 105. 64. There are numerous accounts of how much Usama bin Laden inherited and what his yearly stipend was. Early estimates put his inheritance at 300 million USD, but a more current and accurate estimate provided by the 9/11 Commission is about 20–30 million USD. Lawrence Wright gives the most conservative estimate. He argues that Usama bin Laden inherited only about 7 million USD, and his stipend was only 266,000 USD per year. Nevertheless, starting an organization with millions, as well as a substantial yearly allowance, will certainly give a nascent terrorist organization a much stronger start than one that must live hand-to-mouth. Wright, Looming Tower, 165 and 65n, Peter. L Bergen, The Osama Bin Laden I Know (New York: Free Press, 2006), 10, National Commission on Terrorist Attacks upon the United States., The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States (New York: W.W. Norton, 2004), 169–70. 65. Kiser, “Financing Terror,” 35. 66. Peter Heller, “The Whale Warriors,” National Geographic Adventure, May 2006, 63. 67. Scholar Yossi Shain has defined a diaspora as “a people with common national origin who reside outside a claimed or an independent home territory. They regard themselves, or are regarded by others, as members or potential members of their country of origin (claimed or already existing), a status held regardless of their geographical location and citizen status outside their home country.” Yossi Shain, “Ethnic Diasporas and U.S. Foreign Policy,” Political Science Quarterly 109, no. 5 (1994–5): 814.

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No t e s 68. 69. 70. 71.

72. 73. 74. 75. 76. 77. 78.

79.

80. 81. 82. 83.

179

Byman et al., Trends in Outside Support, 3, 57–9. Kiser, “Financing Terror”, 35, 54. Napoleoni, Terror Incorporated, 33. Though charities came to the forefront of criminal financing with the examination of al Qaeda’s funding, charities have been used for ill purposes for decades before. For instance, former Indonesian President Suharto had foundations set up which received donations that he used to enrich himself and his family. These included funds ostensibly for scholarships, orphans, the homeless, poverty alleviation, disaster relief, and the building and maintenance of mosques. Benjamin and Simon, Age of Sacred Terror, 144–5. Farah, Blood from Stones, 130. Byman, Deadly Connections, 255. Douglas Frantz, “Possible Link Seen to U.S.-Based Charity and Al Qaeda,” New York Times, June 14, 2002. Kiser, “Financing Terror,” 73. Frantz, “Possible Link Seen to Us-Based Charity.” Jessica Stern, Terror in the Name of God: Why Religious Militants Kill (New York: Harper Collins, 2003), 273. This was not the only time an al Qaeda–affiliated group used a charity as cover. When Ayman alZawahiri travelled in the United States in order to try to raise funds for his Egyptian al Jihad terrorist organization in 1993, he posed under his nom de guerre, Dr. Abdul Mu’iz, as a representative of the Kuwaiti Red Crescent. Wright, Looming Tower, 140–1, 203–4. This is not to argue that only terrorists have utilized legitimate businesses or financial institutions to acquire, move, or store their resources. Corporations evading tax laws, criminal syndicates, and corrupt leaders also utilize such opportunities, sometimes with the connivance, or at least benign neglect, of these legitimate institutions. The most investigated and publicized of these are the various bank scandals involving mafias and corrupt politicians, such as the Russian mafia’s money laundering activities with the Bank of New York, Mexican banks laundering drug money, and the Bank of Credit and Commerce International (BCCI) scandal, where a large, international bank was involved in seemingly every illicit activity possible including drug money (cocaine, etc.), corrupt politicians (Nigerian military rulers, Panama’s Manuel Noriega), and terrorism (Abu Nidal’s front companies used BCCI, for example). Information on these scandals is in Kochan, Washing Machine, Wege, “The Abu Nidal Organization,” Napoleoni, Terror Incorporated. Kiser, “Financing Terror,” 95–6. Ibid., 36. Baker, Capitalism’s Achilles Heel, 124–6. Hawalas are explained in greater detail below.

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84. Lucy Komisar, “Shareholders in the Bank of Terror?,” Salon.com (March 15, 2002), http://archive.salon.com/tech/feature/2002/03/15/al_ taqwa/print.html. 85. Hugh Williamson and Philipp Jaklin, “Far-Right Has Ties with Islamic Extreme,” Financial Times (2001), http://specials.ft.com/theresponse/ FT38ZL6ZSTC.html. 86. Komisar, “Shareholders in the Bank of Terror?.” 87. Craig Whitlock, “Terrorism Financing Blacklists at Risk,” Washington Post (November 2, 2008), http://www.washingtonpost.com/wp-dyn/ content/a r t icle/20 08/11/01/A R 20 08110102214.ht m l?nav % 3Drss_world/europe&sub=AR. 88. According to a raid of the Benevolence International Foundation charity branch in Bosnia, which yielded some of the best records ever regarding not only al Qaeda’s finances but also its overall structure, Suleiman Abudul Aziz al Rahji was a member of this “Golden Chain.” Also, when the SAAR Foundation was dissolved in 2000 and the Safa Group established, it was established at the same address as the SAAR Foundation and with many of the same board members. Farah, Blood from Stones, 142–55. 89. See, for example, “Milan Imam Convicted for Promoting Jihad,” Reuters (December 20, 2007), http://africa.reuters.com/wire/news/ usnL20112390.html, Damir Kaletovic and Anes Alic, “Al-Qaida’s Bosnian War Move,” International Relations and Security Network (October 3, 2008), http://www.isn.ethz.ch/isn/Current-Affairs/ Security-Watch/Detail/?lng=en&id=92320, Gunaratna, Inside Al Qaeda, 171, 74, Sebastian Rotella, “14 Terrorism Suspects Held in Europe,” Los Angeles Times (November 7, 2007), http://www. latimes.com/news/nationworld/world/la-fg-terror7nov07,1,4484478. story?ctrack=6&cset=true. 90. In November, 2007, Nasreddin was quietly taken off the U.S. and UN lists. The U.S. Department of Treasury stated that Nasreddin no longer fit the criteria for designation because he had submitted signed statements to the U.S. Department of Treasury’s Office of Foreign Asset Control that he had terminated his relationship with his former partner Nada and with Bank Al Taqwa. The Swiss government froze the companies’ accounts in 2001, but in 2005 they suspended their operation. Baker, Capitalism’s Achilles Heel, 124–6, Josh Meyer, “When Is a Terrorism Figure No Longer One?,” Los Angeles Times (November 28, 2007), http://www.latimes.com/news/nationworld/nation/la-nafinancier28nov28,1,2685130,print.story?ctrack=1&cset=true. 91. Kiser, “Financing Terror,” 86. 92. Thachuk, “Terrorism’s Financial Lifeline,” 2. 93. For an excellent overview of international regulation and attempts to limit money laundering and terrorism finance, see Schott, Reference Guide.

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94. Ehrenfeld, Funding Evil, 85, 88–9. 95. “Commodities” have been placed under legitimate businesses because there is nothing inherently illegal about holding commodities such as gold or diamonds. As many commodities which have been used by terrorist organizations are smuggled out in violation of sanctions (i.e., “blood diamonds” from Sierra Leone), commodities could, in some cases, also be considered a form of criminal resourcing. 96. Farah, Blood from Stones, 5–18. 97. “Expert and Newspaper Says Diamonds Fund Terrorists,” Jewelers Circular Keystone (July 10, 2002) and (June 6, 2001), http://www. jckgrop.com/index. 98. Ibid. 99. Farah, Blood from Stones, 23 & 55. 100. Thachuk, “Terrorism’s Financial Lifeline,” 4. 101. Farah, Blood from Stones, 109–13. 102. Ibid., 113–4. 103. Kiser, “Financing Terror,” 90. A similar, U.S.-Colombia informal system used by drug traffickers is the Black Market Peso Exchange. Kochan, Washing Machine, 137–41. 104. Farah, Blood from Stones, 114–5. One of the most common reasons for normally legitimate persons and companies to use hawala services is to avoid a state’s capital controls or taxation on foreign exchange. Given India’s strong trading ties to other countries, and at the same time, strict capital controls, hawala has flourished there. 105. What information is required depends on that specific merchant system, whether the hawala is licensed or operating illegally, and the laws regulating hawalas in different countries. 106. Baker, Capitalism’s Achilles Heel, 25. 107. Kochan, Washing Machine, Baker, Capitalism’s Achilles Heel. 108. Kiser, “Financing Terror”, 93. 109. Kochan, Washing Machine, 269–71. 110. “E-Gold, Ltd.” designates the company that is the market leader and originator of this type of online commodity exchange. “E-gold” (lower case) designates gold moved through such a commodity system. E-Gold, Ltd. is now only one of many companies buying and selling e-gold accounts. An offshoot of this concept is the “e-dinar.” The e-dinar is advertised as a halal (Islamically permitted) form of exchange, as gold dinar and silver dirham (akin to “cents”) coins were struck under the caliphate of Umar, one of the four Rashiduun (first four caliphs after the death of the Prophet Mohammad). E-Gold, Ltd. and E-Dinar, Ltd. were part of the same umbrella company until they were formally separated in 2004. E-Dinar, Ltd. advertises the same ease of use and universality as e-gold. As with e-gold, there are no specific cases tying e-dinars to terrorism financing, but such an anonymous system is highly susceptible to such uses. All information on e-dinars

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182

111.

112.

113.

114. 115. 116. 117.

118. 119.

120. 121. 122.

4

No t e s above is from the E-Dinar, Ltd. Web site, “E-Dinar: The Company,” https://www.e-dinar.com/html/3_0.html#oben. Ltd. E-gold, “E-Gold: Better Money since 1996,” http://www.e-gold. com/. This company also advertises that it owns subsidiaries in e-silver, e-platinum, and e-metal on its Web site. “Digital Currency Business E-Gold Indicted for Money Laundering and Illegal Money Transmitting” (April 27,2007), http://www.usdoj. gov/opa/pr/2007/April/07_crm_301.html. A recent U.S. indictment argues that E-Gold, Ltd. knowingly allowed its systems to be used as a preferred means of payment by operators of “investment scams, credit card and identity fraud, and sellers of online child pornography.” Ibid, “Digital Currency Business E-Gold Pleads Guilty to Money Laundering and Illegal Money Transmitting Charges,” Department of Justice Press Release (July 21, 2008), http:// www.usdoj.gov/opa/pr/2008/July/08-crm-635.html. “Gold Rush,” Business Week (January 9, 2006), http://www.business week.com/magazine/content/06_02/b3966094.htm. Thachuk, “Terrorism’s Financial Lifeline,” 1–2. Kochan, Washing Machine, ix. For a list of possible predicate crimes, as well as an excellent overview of the status of international laws and standards as they pertain to money laundering and terrorism financing, please see Schott, Reference Guide. Kochan, Washing Machine, 245. Some terrorist resourcing is neither laundered nor reverse laundered. If the terrorist acquires resources by illicit means, and then spends that money on illicit means (such as a terrorist attack), then no laundering will be required. For instance, if a terrorist organization uses petty crime to pay for the purchase of explosives on the black market, they will not need to launder that money from petty crime, unless for some reason the terrorist organization is hiding its sources of resourcing from other illicit organizations. Williams, “Warning Indicators and Terrorist Finances,” 85. Thachuk, “Terrorism’s Financial Lifeline,” 1–2. Kochan, Washing Machine, 271–3. Ibid., 284.

The Evolution of Terrorism Resourcing

1. Adams, Financing of Terror, 53. 2. David C. Rapoport, “The Four Waves of Rebel Terror and September 11,” Anthropoetics 8, no. 1 (2002). The life cycle of waves does not correspond to that of the organizations within them, so some organizations survive longer than its associated wave. For instance, the Irish Republican Army (IR A) began in the anticolonialist wave in the 1920s and went dormant in 1998.

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3. Hoffman, Inside Terrorism, 83–4. 4. The period from 1892 to 1901 is considered the “Decade of Regicide” in that more monarchs, presidents, and prime ministers were assassinated during than in any other time in history. The 1890s also saw the expansion of nonregicide-related terrorism, as anarchists set off explosives in cafés, opera audiences, and the French stock exchange with about 150 killed and 460 injured from 1880 to 1914. In the United States, there were at least three major attacks attributed to anarchists: the 1886 Haymarket bombing in Chicago, the 1892 attempt to kill the manager of Carnegie Steel, and the September 1901 successful assassination of President McKinley by Leon Czolgosz. The United States also saw smaller attacks attributed to anarchists in 1908. Martin A. Miller, “The Intellectual Origins of Modern Terrorism in Europe,” in Terrorism in Context, ed. Martha Crenshaw (University Park, PA: Pennsylvania State University Press, 1995), 28, Richard Bach Jensen, “Daggers, Rifles and Dynamite: Anarchist Terrorism in Nineteenth Century Europe,” Terrorism and Political Violence 16, no. 1 (2004), Richard Bach Jensen, “The United States, International Policing and the War against Anarchist Terrorism, 1900–1914,” Terrorism and Political Violence 13, no. 1 (2001). 5. The International a.k.a. the International Workingmen’s Association had been an umbrella organization for the followers of Karl Marx and Bakunin to link together, which began in the 1860s. James Joll, The Anarchists (London: Eyre & Spottiswoode, 1964), 124, Jensen, “Daggers, Rifles and Dynamite,” 119. 6. Lindsay Clutterbuck, “The Progenitors of Terrorism: Russian Revolutionaries or Extreme Irish Republicans?,” Terrorism and Political Violence 16, no. 1 (2004): 163. 7. Besides being one of the first to discuss the importance of resourcing, Most was also one of the first to recognize the importance of the media and modern communications to terrorist actions, as well as having pioneered the letter bomb. Laqueur, The Age of Terrorism, 56. 8. As paraphrased from Most’s anarchist newspaper Freiheit of January 12, 1884, and September 13, 1884. Ibid., 57–8. A predecessor to Most, Karl Heinzen, while not writing about the importance of resourcing to terrorist action, nevertheless recognized that the resourcing of terrorism could be used as a source of intelligence by law enforcement. In 1848, he wrote that “the head of the assassins” (the terrorist cell leader in today’s language) will receive considerable sums of money without knowing the source so that if discovered or arrested, he cannot betray others even if he wishes to do so. Benjamin Grob-Fitzgibbon, “From the Dagger to the Bomb: Karl Heinzen and the Evolution of Political Terror,” Terrorism and Political Violence 16, no. 1 (2004): 109. 9. Miller, “Intellectual Origins,” 44. 10. Laqueur, The Age of Terrorism, 96. 11. Ibid., 112.

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No t e s

12. Ibid., 96–7, Gerard Chaliand and Arnaud Blin, “The ‘Golden Age’ of Terrorism,” in The History of Terrorism from Antiquity to Al Qaeda, ed. Gerard Chaliand and Arnaud Blin (Berkeley, CA: University of California Press, 2007), 191. 13. The Social Revolutionaries were a political party with a militant wing, and hence, that wing had access to more resourcing than other contemporary terrorist groups. Yves Ternon, “Russian Terrorism, 1878–1908,” in The History of Terrorism from Antiquity to Al Qaeda, ed. Gerard Chaliand and Arnaud Blin (Berkeley, CA: University of California Press, 2007), 145–73. 14. Laqueur, The Age of Terrorism, 100. 15. Ibid., 51. Given the nature of anarchism, with its view of all hierarchies as oppressive, anarchists by definition will rarely engage in an international structure. Even today, most anarchist gatherings, such as those at the 2004 Republican and Democratic national conventions, are coordinated via posting notices, with strategic or tactical decisions made through exhaustive consensus processes. Randy Borum and Chuck Tilby, “Anarchist Direct Actions: A Challenge for Law Enforcement,” Studies in Conflict and Terrorism 28, no. 3 (2005). 16. David C. Rapoport, “Terrorism,” in Encyclopedia of Government and Politics, ed. Mary Hawkesworth and Maurice Kogan (New York: Routledge, 2004), 1064. 17. To assist in leaderless resistance, the first Do-It-Yourself terrorism manuals were published during the anarchist wave. Hoffman, Inside Terrorism, 7. 18. Rapoport argues that the first wave begins with the conclusion of World War I and the breakup Germany, Austria and Turkey’s empires, but I find clear evidence that this nationalist wave had begun prior to World War I. The assassination of Archduke Franz Ferdinand, the immediate precipitating event for World War I, was accomplished by a nationalist terrorist organization with state sponsorship, as I note above. 19. Hoffman, Inside Terrorism, 47–64. 20. Narodna Obrana had been forced by Serbia to disarm in 1909, at which point it switched to cultural activities. The Black Hand (officially, the Ujedinjenje ili Smrt, Union of Death) was formed in 1911 by hardline nationalists who had disdain for what they considered the Serbian capitulation when Austria-Hungary annexed Bosnia and Herzegovina in 1908. Tim Judah, The Serbs: History, Myth and the Destruction of Yugoslavia, 2nd ed. (New Haven, CN: Yale University Press, 2000), 95–6. 21. John R. Lampe, Yugoslavia as History: Twice There Was a County, 2nd ed. (Cambridge: Cambridge University Press, 2000), 90–1. 22. Hoffman, Inside Terrorism, 11–14. 23. Rapoport, “Terrorism,” 1055.

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24. Rapoport, “Four Waves of Rebel Terror.” NOR AID was certainly not the first U.S.-based group to fund and supply Irish separatists. By the late 1840s, many Irishmen seeking independence from England were located in the United States. In the 1860s, the Fenian Brotherhood (also known as the Irish Revolutionary Brotherhood, IRB) was well established in the United States. For instance, in 1867, it sent rifles and volunteers on the ship Erin’s Hope, but they arrived after a local rebellion had already been quenched. In 1873, the group Clan na Gael (United Irishmen) was established in the United States to use physical force against the United Kingdom to establish an Irish state. Clan na Gael has the notoriety as the first to bomb the London Underground in October 1883 with seven bombs (three detonated in or close to carriages full of passengers; four in the left luggage office). It also had the distinction of one of the first modern cases of smuggling weapons via the international trade regime, when in June 1881, the steamer SS Malta arrived from New York to Liverpool ostensibly with a cargo of cement. In each of the casks marked with a crossed “t” they found an improvised explosive device (IED) with a timed detonator. Other IEDs were found on other ships from the United States in subsequent days. Clutterbuck, “Progenitors of Terrorism,” 159–60, 69–72, Jack Holland, The American Connection: U.S. Guns, Money, and Influence in Northern Ireland (New York: Viking, 1987), 13. 25. Kochan, Washing Machine, 85. 26. Adams, Financing of Terror, 151–5. 27. Rapoport, “Four Waves of Rebel Terror.” Besides tangible support and money, Jewish terrorist groups also received intangible support, such as the diplomatic support of the passage of resolutions in the U.S. Congress condemning “British oppression” and reaffirming U.S. support for a Jewish state in Palestine. Hoffman, Inside Terrorism, 51. 28. Rapoport, “Four Waves of Rebel Terror.” 29. The age of modern international terrorism is generally agreed to have begun on July 22, 1968, when the Popular Front for the Liberation of Palestine (PFLP) hijacked an El Al flight en route from Rome to Tel Aviv. This was by far not the first hijacking, but in this one, the nationality of the hijacked plane—that of El al, the Israeli national airline— had symbolic importance, as was the goal of trading the passengers for Palestinian terrorists held in Israeli jails. It also forced the Israeli government to deal directly with the terrorists, lest the passengers and plane be destroyed, and the entire event was designed to be a major media event. Algeria provided sanctuary to the terrorists and their hostages throughout the ordeal, providing an example of state sponsorship. Hoffman, Inside Terrorism, 63–5, Walter Enders and Todd Sandler, The Political Economy of Terrorism (Cambridge: Cambridge University Press, 2006), 41–4.

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30. This includes DM115,000 seized in Kassel, DM158,000 in Munich, DM19,000 in Hanover, DM237,000 in Kiel, DM134,000 in Kaiserslautern, and DM315,000 in Berlin. Laqueur, The Age of Terrorism, 97. 31. Ibid. 32. Rapoport, “Terrorism,” 1056, Adams, Financing of Terror, 187–214. 33. Rapoport, “Four Waves of Rebel Terror.” 34. Adams, Financing of Terror, 187–8. It is possible that the Irish Republican Army (IR A), or its later successor, the Provisional Irish Republican Army (PIR A), was actually the first organization to form an alliance with organized crime. In the 1950s, then-IR A member George Harrison established a smuggling network to supply arms to the IR A from the United States. His weapons supplier was a Corsican-American named George DeMeo, who was described as “on the fringe of the Mafia.” It is unclear how involved DeMeo was with the Mafia, though he was Harrison’s main weapons supplier through the 1980s, so it is unclear what relationship the IR A had with the Mafia at that time. This network fell into disuse in the early 1960s, only to be revived by PIR A in 1970s. In 1976, a joint Irish-Italian Mafia operation robbed an armory in Danvers, Massachusetts. The weapons were somehow acquired by George Harrison, and by 1977, they were on their way to PIR A in Ireland. Harrison acquired six M-60 machine guns from this robbery, which became “prestige weapons” for PIR A, such as in propaganda posters. It is unclear what sort of relationship George Harrison had with the Irish and Italian mafias involved, and thus, how closely tied he was to organized crime, though certainly, there must have been some very close ties for him to receive these weapons. Holland, American Connection, 71–91. 35. While narcoterrorism is associated with Latin America, its first use to fund political violence was in 1952, when communist rebels facing a cash shortage in Laos confiscated Laos’ opium crop and sold it in Thailand, using the profits to buy arms from China. Napoleoni, Terror Incorporated, 14. 36. Laqueur, The Age of Terrorism, 293. 37. Adams, Financing of Terror, 217. 38. Ibid., 218, Ehrenfeld, Narcoterrorism, 98–9. 39. Laqueur, The Age of Terrorism, 98. While the estimated 10 million USD per month is derived from information in the 1980s, a 2008 United States Department of Justice press release states that FARC members had been sentenced in the United States, in part, for laundering as much as 5 million USD per week for the group, so clearly, the groups still reap tremendous profits from narcoterrorism. “Foreign Nationals Sentenced to Alien Smuggling and Conspiracy to Support the F.A.R.C.” (February 29, 2008), http://www.usdoj.gov/opa/pr/2008/ February/08_crm_156.html. 40. Laqueur, The Age of Terrorism, 204, 74–5.

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41. Rapoport, “Terrorism,” 1065. 42. Laqueur, The Age of Terrorism, 275–6, 80–4, Cline and Alexander, Terrorism: The Soviet Connection, 45–9. 43. On a few occasions, the Soviet-bloc countries cooperated with the West in apprehending terrorists, and the bloc signed some antiterrorist resolutions at the United Nations during the same era. Laqueur, The Age of Terrorism, 276–7. 44. Hoffman, Inside Terrorism, 259–61. 45. Ibid., 79. 46. Adams, Financing of Terror, 86–7. The Fatah faction is not the only business-oriented faction. The Popular Front for the Liberation of Palestine established the Modern Mechanical Establishment as a front company providing a near monopoly on iron and steel for building construction in southern Lebanon, as well as becoming a major supplier of forged documents. The fact that this faction has been so successful in capitalism is particularly ironic given that it is ostensibly Marxist. Adams, Financing of Terror, 97–8. Another Palestinian group that has done well is business is the Abu Nidal Organization. In addition to state support as a terrorist-for-hire, it has also became a weapons broker, including Polish T-72 tanks that were supposed to be delivered to Iraq before then-Iraqi president Saddam Hussein changed his mind. Prior to the eastern European revolutions of 1989, it operated the SAS Trade and Investment firm, which acted as a middleman in trading goods from Eastern Europe to Iraq and Iran. The Bank of International Credit and Commerce (BCCI) was also responsible for its three front companies, and it moved money on behalf of the terrorist group. Napoleoni, Terror Incorporated, 57–8, Wege, “The Abu Nidal Organization,” 60–1. 47. Adams, Financing of Terror, 88–9, 93–104,19–22, 230–3. 48. Laqueur, The Age of Terrorism, 99. The actual yearly income of the PLO remains in dispute, with 300 million USD per year as a more conservative figure. For instance, Bruce Hoffman has estimated the annual income flow as about 600 million USD per year. Hoffman, Inside Terrorism, 79. 49. Laqueur, The Age of Terrorism, 99. 50. Kiser, “Financing Terror”, 49. 51. Ibid., 38. 52. Ibid., 54–6. 53. Though al Qaeda developed an extensive corporate-like structure with an extremely high degree of complexity and organization, unlike groups such as HAMAS, Hizbullah, and the IR A, it has never engaged as extensively in social work to gain support. While it has supported some charitable works, such as its original Maktab al Khadimat (Services Bureau), which funneled Arabs into the fight against the Soviets in Afghanistan in the 1980s, and that some of its associated charities have used at least some funds for charitable work, this has never been to the same level

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54.

55.

56.

57. 58.

59.

60. 61. 62. 63.

64. 65. 66. 67. 68. 69. 70. 71.

72. 73. 74. 75.

No t e s as that of, for example, HAMAS. Instead, al Qaeda has relied more on sympathetic (or sometimes, unsympathetic) Islamic political parties to engage in propaganda, recruitment, and fundraising on its behalf. Gunaratna, Inside Al Qaeda, 226. Unlike the PLO, PIR A was not nearly as effective at turning a profit due to mismanagement, and the co-op was probably always a drain on resources. Adams, Financing of Terror, 175–7. While Hizbullah has its own substantial internal resourcing, much of these social projects have been underwritten by Iran, and its logistics lines run through Syria. Judith Palmer Harik, Hezbollah: The Changing Face of Terrorism (London: I.B. Tauris, 2004), 81–90. For example, though only 6 percent of all terrorist attacks in 1998– 2004 were religiously oriented, they caused 30 percent of the casualties. Hoffman, Inside Terrorism, 86–8. Rapoport, “Four Waves of Rebel Terror.” Paul Wallace, “Political Violence and Terrorism in India: The Crisis of Identity,” in Terrorism in Context, ed. Martha Crenshaw (University Park, PA: Pennsylvania State University Press, 1995). Cecile Van de Voorde, “Sri Lankan Terrorism: Assessing and Responding to the Threat of the Liberation Tigers of Tamil Eelam (L.T.T.E.),” Police Practice and Research 6, no. 2 (2005). Hoffman, Inside Terrorism, 97–118. Ibid., 258. Adams, Financing of Terror, 73. Matthew Levitt, “Hezbollah Finances: Funding the Party of God,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 137. Hoffman, Inside Terrorism, 258. Rapoport, “Four Waves of Rebel Terror.” Rapoport, “Terrorism,” 1065. Napoleoni, Terror Incorporated, 173. Farah, Blood from Stones, 140. Levitt, “Hezbollah Finances,” 142–4. Matthew Levitt, Hamas: Politics, Charity, and Terrorism in the Service of Jihad (New Haven, CN: Yale University Press, 2006), 80–106. The first use of the Internet by an insurgent group was the Zapatista National Liberation Army (EZLN) in the early 1990s. It became a model for all sorts of insurgent and terrorist organizations. Hoffman, Inside Terrorism, 202–4. Ibid., 204–6, 10–2. Napoleoni, Terror Incorporated, 91. Levitt, “Hezbollah Finances,” 146–7. Napoleoni, Terror Incorporated, 187–9.

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76. Rapoport, “Terrorism,” 1065, Krebs, “Three Worked the Web to Help Terrorists,” Rapoport, “Terrorism’s Hook into Your Inbox.” 77. Gunaratna, Inside Al Qaeda. 78. Levitt, “Hezbollah Finances,” 145–8. 79. Levitt, Hamas, 70–2. 80. Levitt, “Hezbollah Finances,” 149, Palmer Harik, Hezbollah, 94. 81. Kiser, “Financing Terror,” 77, Napoleoni, Terror Incorporated, 164. 82. Gunaratna, Inside Al Qaeda, 40, 61–2, 157, United States of America, Plaintiff-Appellant v. Ahmed Ressam, Also Known as Benni Antoine Noris (2006). 83. Hoffman, Inside Terrorism, 203. 84. Ibid., 271. 85. Ibid., 203.

5 1. 2. 3. 4.

5. 6. 7. 8.

The Multinationals of Terrorism

Adams, Financing of Terror, 244. Ibid., 16. Levitt, Hamas, 53–4. Jacob N. Shapiro, “Terrorist Organizations’ Vulnerabilities and Inefficiencies: A Rational Choice Perspective,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 61. Giraldo and Trinkunas, “The Political Economy of Terrorism Financing,” 19. Ibid., 7–8, 10. Shapiro, “Terrorist Organizations’ Vulnerabilities,” 69. Jamal al Fadl, in court testimony, claims he took extra commissions from Al Qaeda companies. When caught, he was told to pay back the money, which he claims he could not. He then left Sudan (where al Qaeda was based at the time), approached an unnamed U.S. consulate, stood in the visa line, and when he came to the front of the line, offered information on Usama bin Laden and the al Qaeda group. Information he provided was used in the court case United States of America v. Usama bin Laden et. al in 2001 for the 1998 bombings of the U.S. Embassies in Nairobi, Kenya, and Dar Es Salaam, Tanzania. Benjamin Weiser, “How to Keep an Ex-Terrorist Talking,” New York Times (December 9, 2007), http://www. nytimes.com/2007/12/09/nyregion/09qaeda.html?th=&emc=th& pagewanted=print. The original transcripts of this testimony regarding his embezzlement of al Qaeda funds (as well as al Qaeda’s relationship with the Sudanese government, Usama bin Laden’s interest in uranium, and some information on front companies) can be found at United States of America v. Usama bin Laden et al. (2001).

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9. Shapiro, “Terrorist Organizations’ Vulnerabilities,” 65–6. 10. Laqueur, The Age of Terrorism, 218. 11. Adams, Financing of Terror, 108–16. Also, because of the PLO’s quasistate status, it has been a member of international economic institutions, has had delegates attend economic conferences and so forth. 12. Ehrenfeld, Funding Evil, 75, 85–7. 13. Anthony H. Cordesman, Arab-Israeli Military Forces in an Era of Asymmetric Wars (Santa Barbara, CA: Preaeger Security International, 2006), 319–20. 14. John Horgan and Max Taylor, “Playing the ‘Green Card’—Financing the Provisional I.R.A.: Part 1,” Terrorism and Political Violence 11, no. 2 (1999): 10. 15. The IR A was created in 1919 with the goal to fight for Irish independence, and after the partition of the island for the Republic of Ireland (an independent country) and Northern Ireland (the six counties still part of the United Kingdom) to be rejoined under their rule. In 1969, the bulk of the IR A split off from its parent organization, becoming the Provisional Irish Republican Army (PIR A), also known as the “Provisionals.” In 1970, the IR A’s political wing Sinn Fein moved its support from the IR A to PIR A, and in that same year, the arms and money smuggling lines from the United States also moved their allegiance to PIR A. The original IR A gradually faded from existence in the 1970s. Richard English, Armed Struggle: The History of the I.R.A. (London, UK: Pan Books, 2004), 106, 16. 16. In theory, GACs should be held yearly, but due to security considerations, no GACs were held from 1970 to 1986. Ibid., 114. 17. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 19–20. 18. As senior IR A leader Peadar O’Donnell is quoted in a directive in the 1930s, “That each unit shall as a minimum be responsible for an amount equal to one penny per week per member, arrears not to exceed three months without special sanction of Army Council.” As English notes, in 1962, “Funding had dried up, they were short of weapons and there were not enough Volunteers coming through to replace those who had been imprisoned or killed.” English, Armed Struggle, 51, 83. 19. John Horgan and Max Taylor, “Playing the ‘Green Card’—Financing the Provisional I.R.A.: Part 2,” Terrorism and Political Violence 15, no. 2 (2003): 3–4. 20. Ibid., 4. 21. Ibid., 5. PIR A member Bobby Sands was in prison for the October 1976 bombing of the Balmoral Furnishing Company (it was his second time in jail for PIR A activities). He later became the PIR A commander in the Long Kesh prison, and in April 1981 (while in prison and on a hunger strike) was elected to the British parliament. On March 1, 1981, he began a hunger strike to protest PIR A prisoners being treated as criminals, rather than given special status as political prisoners (such

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22. 23. 24. 25.

26. 27.

28.

29.

30. 31.

191

status had recently been revoked because British authorities felt it provided legitimacy to PIR A). Sands died on May 5, 1981. PIR A was able to propagandize on Bobby Sands’ death, claiming that it was the British intransigence that killed him, leading to worldwide demonstrations and additional money and support pouring in to PIR A and its associated charities (such as NOR AID). Nine others would also die in their hunger strike before PIR A eventually had to call off the strike on October 3, 1981, without achieving their demands, though on October 6, 1981, the Secretary of State for Northern Ireland did make some concessions. English, Armed Struggle, 193–203. Horgan and Taylor, “Playing the ‘Green Card’ Part 2,” 5. Ibid., 34–5, Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 8. Horgan and Taylor, “Playing the ‘Green Card’ Part 2,” 36. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 12–3, 21. Until 1994, the United Kingdom Inland Revenue authorities used to consider extortion payments “legitimate expenses,” and up to 40 percent of the money paid to paramilitaries could be claimed back as a tax allowance. Andrew Silke, “In Defense of the Realm: Financing Loyalist Terrorism in Northern Ireland—Part One: Extortion and Blackmail,” Studies in Conflict and Terrorism 21 (1998): 349. Silke, “In Defense of the Realm,” 349. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 8–12. There is considerable disagreement over whether PIR A took part in drug dealing. It seems against Sinn Fein’s interest to conduct drug-associated resourcing while at the same time trying to garner votes. Moreover, Sinn Fein has taken part in a number of urban antidrug campaigns, and ambushed a splinter group, the Irish People’s Liberation Organization (IPLO), which was involved in drug dealing, kneecapping 16 members and killing one. PIR A members were caught in drug smuggling. For instance, Joseph Paul Murray pleaded guilty in a Boston court of “riding shotgun” on the ships Marita Ann and Valhalla, which were smuggling arms to PIR A and smuggling marijuana to the United States. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 25–30, Andrew Silke, “Drink, Drugs, and Rock’n’roll: Financing Loyalist Terrorism in Northern Ireland—Part Two,” Studies in Conflict and Terrorism 23, no. 2 (2000): 116–7. Horgan and Taylor, “Playing the ‘Green Card’ Part 2,” 8–9. The fact that one finance director controlled finances for both PIR A and Sinn Fein belied any formal separation between the two. The information on PIR A’s accounting comes from one of the three aforementioned accountants, nicknamed “W” by Horgan and Taylor from their personal interviews with him. Ibid., 11–6, 40. Ibid., 37–8, Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 16. Adams, Financing of Terror, 135–6. This included the arrest of NOR AID members for arms smuggling by the FBI in 1983. The arms smuggling

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32. 33. 34.

35. 36. 37.

38.

39. 40. 41. 42.

43.

No t e s convictions ended any pretense in the United States that NOR AID was a charity providing support to the underprivileged in Ireland. Adams, Financing of Terror, 138–40, 51–3. Holland, American Connection, 27–62. English, Armed Struggle, 117, Holland, American Connection, 30–1. Adams, Financing of Terror, 143. This was the primary source for PIR A’s favorite weapons, the Armalite (better known as the AR-15, a civilian version of the M-16). George Harrison only acquired the weapons and shipped them to a middle man in the United States who would then arrange transportation. He claims he did not know who took care of transportation, nor did they know who he was. His entire operation was never more than five–six at a time. This weapons smuggling ring largely fell apart after an FBI sting in the early 1980s. Holland, American Connection, 63–113. Adams, Financing of Terror, 142–3. Holland, American Connection, 31–2, 98, 106. This is despite the fact that the Gardai (Irish Police) are believed to have recovered 45–60 percent of the weapons acquired from Libya in the 1980s, and given that the U.S. supply lines have decreased dramatically since the 1980s. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 5–6. Ibid., 6–7. These salaries were far too low to sustain a family; such payments were designed to supplement social welfare payments (full-time members were often required to claim unemployment benefits) or to supplement full or part-time salaries from legitimate jobs. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 16. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 6. Ibid., 7, 23. Horgan and Taylor, “Playing the ‘Green Card’ Part 2,” 50. Ibid., 54. The case study involved PIR A’s primary accountant (Accountant X) possibly enriching himself through his ownership of a hotel. Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 17. In contrast, the loyalist terrorist organizations such as the Ulster Defense Association (UDA, with attacks claimed under its Ulster Freedom Fighters, UFF) and Ulster Volunteer Forces (UVF) had much looser controls on its members and their means of resourcing, to the point where they were considered little more than gangsters. This was especially true in the realm of drug dealing, which was seen as a means of fund raising far more by loyalists than PIR A. The two exhibited some levels of formal institutionalization, but not nearly to the level of PIR A. Of the two, the UVF was considered the smaller, but more disciplined group due to its recruitment of ex-military personnel. Like PIR A, as these organizations became more political, they sought to “clean up” their resourcing sources, at least rhetorically. For an in-depth study of loyalist terrorist

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44. 45.

46. 47. 48. 49. 50.

51.

52.

53. 54.

193

resourcing structures (or lack thereof), please see Silke, “In Defense of the Realm,” Silke, “Drink, Drugs, and Rock’n’roll.” Part 1 of Silke’s study also provides an excellent explanation into the various means of extortion conducted by terrorist organizations, and different means that the victims (who can, at times, also act as perpetrators) can respond. “I.R.A. Statement,” Guardian (July 28, 2005), http://www.guardian. co.uk/politics/2005/jul/28/northernireland.devolution. “Nineteenth Report of the Independent Monitoring Commission,” ed. U.K. Secretary of State for Northern Ireland (Office of Public Sector Information, September 2009), 6–8. Napoleoni, Terror Incorporated, 74–5. Levitt, Hamas, 3. Ibid., 9–13. Napoleoni, Terror Incorporated, 73. Levitt, “Hezbollah Finances.” Iran tends to employ “a performance-based approach,” providing funding based on the success of a group’s terrorist attacks. Iran demands proof of successful attacks, such as videotapes of the attacks. Also, unlike other external sources of income, much Iranian support goes directly to operational HAMAS units, and not through charities or other forums. Levitt, Hamas, 172–4. Iran also has backed the HAMAS-led Palestinian Authority government that was elected in January 2006. Iran had pledged 250 million USD to the Palestinian authority if Israel and the United States cut it off from funding. Aaron D. Pina, “Fatah and Hamas: The New Palestinian Factional Reality” (Library of Congress Congressional Research Service, 2006), 3. The importance of this private Saudi funding is indicated by the financial problems HAMAS encountered since the Saudi government cracked down on Islamic charities and private donations in 2004. A Saudi government–run committee, the Saudi Committee for the Support of the al Aqsa Intifada, has provided over 5000 USD to the families of Palestinians killed in the Intifada, regardless of how that person died (i.e., whether as an innocent bystander or a suicide bomber) using accounts at the Arab Bank. Officially, the Saudi government ended all support HAMAS in 2002. Levitt, Hamas, 15, 173, 91–2. The speaker may have based this claim on the fact that the dean of the Islamic University was Ismail Haniya, until he was expelled to Lebanon in the early 1990s. Haniya was the Palestinian Prime Minister in the HAMAS-led government that was elected in January 2006 until forced out in a showdown with Fatah’s Mahmud Abbas in June 2007. He remains HAMAS’ political leader in the Gaza Strip. Pina, “Fatah and Hamas: The New Palestinian Factional Reality,” 2, “Has Hamas Split?,” Economist, November 10, 2007. Levitt, Hamas, 81–2, 119. Napoleoni, Terror Incorporated, 74. This holding company was incorporated in the United States under the name Beit al-Mal, Inc. (aka BMI,

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55. 56. 57.

58.

59.

60. 61. 62. 63. 64. 65. 66.

No t e s Inc.) in 1985 in New Jersey, and it operated subsidiaries such as BMI Leasing, Inc., BMI Real Estate Development, Inc., and BMI Trade and Investment, Inc. Levitt, Hamas, 165. Napoleoni, Terror Incorporated, 74, Levitt, Hamas, 165. Levitt, Hamas, 69, 78. In October 2007, a mistrial was declared in the trial against the Holy Land Foundation and five of its backers. The trial included 197 counts, but the foundation was not accused of paying directly for suicide bombings, but rather, for sending contributions to the social arm of HAMAS. Leslie Eaton, “U.S. Prosecution of Muslim Group Ends in Mistrial,” New York Times (October 22, 2007), http://www. nytimes.com/2007/10/23/us/23charity.html?_r=1&th=&emc=th& pagewanted=print. Matthew Levitt, the author for whom much of this HAMAS data is derived, testified in the court case against the Holy Land Foundation. Jason Trahan, “Prosecutors: Holy Land Foundation Key in Hamas Effort,” Dallas Morning News July 25, 2007. Because one of the original leaders of HAMAS, as well as much of its resourcing arm located outside Israel, began under Musa Abu Marzuk (now the deputy head of HAMAS’ politburo and residing in Damascus, Syria) in the early 1980s when he resided in the United States, HAMAS has had a large resourcing presence there. In the early 1990s, Marzuk ran the international funding efforts and provided oversight for the Qassam Brigades from the United States. His resourcing from the United States included not only money, but also weapons. Levitt, Hamas, 40–3. Levitt, Hamas, 70–2, 165, Jason Trahan and Tanya Eiserer, “Holy Land Foundation Defendents Guilty on All Counts,” Dallas Morning News (November 25, 2008), http://www.dallasnews.com/sharedcontent/ dws/dn/latestnews/stories/112508dnmetholylandverdicts.1e5022504. html. Levitt, Hamas, 56–7. Al Islah is mandated by HAMAS to handle central West Bank distribution. The al Tadhoman organization in Nablus coordinates distribution in the northern West Bank and the southern West Bank is serviced by the Hebron Islamic Charity Society. Levitt, Hamas, 163. Levitt, Hamas, 47, 59. Kiser, “Financing Terror”, 63. Bergen, Holy War, Inc. Don Van Natta, “Running Terrorism as a New Economy Business,” New York Times, November 11, 2001. Benjamin and Simon, Age of Sacred Terror, 242–3. Hoffman, “Redefining Counterterrorism.” Alan Cullison, “Inside Al-Qaeda’s Hard Drive,” Atlantic Monthly 294, no. 2 (2004): 60, 67.

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67. Farah, Blood from Stones, 142. A subset of the “Golden Chain” is the “Jeddah Five,” five Saudi businessmen who have funded al Qaeda and assisted in setting up its resourcing empire. The members of the Jeddah Five overlap with those of the larger Golden Chain. The Jeddah Five is documented in Napoleoni, Terror Incorporated, 125–6. 68. Don Van Natta, “Terrorists Blaze a New Money Trail,” New York Times, September 28, 2003, “Suspected ‘100 Million Dollar Al-Qaeda Financier’ Netted in Iraq” (Agence France-Presse, October 4, 2007), Craig Whitlock and Robin Wright, “Saudis Say They Broke Up Suicide Plots,” Washington Post (April 28, 2007), http://www.washingtonpost. com/wp-dyn/content/article/2007/04/27/A R 2007042700649. html?hpid=topnews 69. Gunaratna, Inside Al Qaeda, 68–9. This is not to argue that all terrorists with some tie to al Qaeda are part of a monolithic group. Indeed, part of al Qaeda’s strength has been its ability to operate on at least four levels: the central core of al Qaeda, al Qaeda’s affiliates and associates, local groups with a loose affiliation with al Qaeda, and homegrown radicals with no identifiable links to al Qaeda. The institutionalization noted above is for that first, core organization. While other aspects of al Qaeda have also demonstrated a strong degree of resourcing institutionalization, namely Jemaah Islamia (JI) in Indonesia, it is the core of Al Qaeda which is by far the most institutionalized. Bruce Hoffman, “The Global Terrorist Threat: Is Al-Qaeda on the Run or on the March?,” Middle East Policy 14, no. 2 (2007). 70. Gunaratna, Inside Al Qaeda, 61–68. 71. Napoleoni, Terror Incorporated, 168–9. In a 1996 interview, Usama bin Laden himself claimed his economic and financial establishment was present in 13 countries: Albania, Pakistan, Malaysia, the Netherlands, Great Britain, Romania, Russia, Turkey, Lebanon, Iraq and various Gulf States.—–—, Terror Incorporated, 130, United States of America v. Usama bin Laden et al. 72. Gunaratna, Inside Al Qaeda, 33. 73. Kiser, “Financing Terror”, 67–9. 74. Gunaratna, Inside Al Qaeda, 63. 75. This e-mail exchange was found in a computer bought by Wall Street Journal reporter Alan Cullison, which is believed to have come from al Qaeda’s (now deceased) military commander and senior 9/11 planner Muhammad Atef, from his Kabul office. Cullison, “Inside Al-Qaeda’s Hard Drive.” 76. Jacob N. Shapiro, “Bureaucratic Terrorists: Al-Qa’ida in Iraqi’s Management and Finances,” in Bombers, Bank Accounts, and Bleedout: Al-Qa’ida’s Road in and out of Iraq, ed. Brian Fishman (West Point, NY: Combating Terrorism Center, 2008). Scans of all of the original Sinjar documents in their original Arabic as well as translations into

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77. 78.

79.

80.

81. 82.

83.

84.

85.

86. 87. 88.

No t e s English can be found at http://www.ctc.usma.edu/harmony/Sinjar2. asp. Gunaratna, Inside Al Qaeda, 67. Some authors, such as Nick Kochan, have argued that the LTTE’s complex front company activity predates that of the PLO. The LTTE, however, was not formally created until 1975, while, as noted above, the PLO had already formally institutionalized much of its resourcing in the late 1960s, so the PLO still holds the record as the first terrorist organization to formalize its resourcing institutions and create front companies. Kochan, Washing Machine, 98, Shanaka Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” in International Conference on Countering Terrorism (Colombo, Sri Lanka: Centre for Policing, Intelligence and Counterterrorism, 2007), 12. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” Omar Karmi, “Feeding the Tiger: How Sri Lankan Insurgents Fund Their War,” Janes Intelligence Review (August 10, 2007), http://www. janes.com/news/security/jir/jir070810_1_n.shtml. Matthew Rosenberg, “Sri Lanka Rebel Arms-Buying Goes Global,” Associated Press (November 5, 2007), http://news.yahoo.com/s/ ap/20071105/ap_on_re_as/sri_lanka_tiger_inc__abridged. Karmi, “Feeding the Tiger: How Sri Lankan Insurgents Fund Their War.” Ibid., Kochan, Washing Machine, 97–9. The Sri Lankans claimed to have sunk the Tiger’s last gun-running vessel. Peter Foster, “Tamil Tiger Suicide Squad in Audacious Strike,” London Telegraph (October 24, 2007), http://www.telegraph.co.uk/core/Content/displayPrintable. jhtml . . . CFF4AVCBQYIV0?xml=/news/2007/10/23/wlanka123. xml&site=5&page=0. Shanaka Jayasekara, “L.T.T.E. International Network: The Next Major Challenge,” Sri Lanka Ministry of Defense, http://www.defence.lk/ new.asp?fname=20090326_02. Iqbal Athas, “The L.T.T.E. And the ‘K.P. Factor’,” The Hindu (October 15, 2003), http://www.hindu.com/2003/10/15/stories/ 2003101511111000.htm. Rohan Gunaratna, “The Transformation of Terror?,” Asia Times (September 25, 2002), http://www.atimes.com/atimes/South_Asia/ DI25Df05.html. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 4. Jayasekara, “L.T.T.E. International Network.” While analysts agree that the Aiyanna Group was in charge of intelligence, there is some disagreement as to how involved it was in the financing and other resourcing. For instance, Jane’s Intelligence Review considered them as a critical conduit, while Shanaka Jayasekara of the Center for Policing, Intelligence and Counterterrorism considered the evidence not yet strong enough to make the assertion. According to

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89. 90.

91.

92. 93.

94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105.

106.

197

a Human R ights Watch report, at least some LTTE representatives have collected money claiming to be under Pottu Amman’s orders, so the Aiyanna Group is considered here to have been at least marginally involved in direct funding. Pottu Amman was not just in charge of resourcing; he also ran the intelligence branch and the Black Tigers, which was the portion of the LTTE that conducted suicide missions and extremely dangerous missions such as assassinations. “Pottu Amman’s Safe House Captured—Mullaittivu,” Sri Lankan Ministry of Defense, http://www.defence.lk/new. asp?fname=20090324_10. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 10, “Funding The ‘Final War’: L.T.T.E. Intimidation and Extortion in the Tamil Diaspora” (Human Rights Watch, 2006), 21, Karmi, “Feeding the Tiger: How Sri Lankan Insurgents Fund Their War.” Karmi, “Feeding the Tiger: How Sri Lankan Insurgents Fund Their War.” Four defendants pled guilty in January 2009. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 11–2, “Four Defendants Plead Guilty to All Charges, Including Conspiring to Acquire AntiAircraft Missiles and Provide Material Support to the L.T.T.E., a Foreign Terrorist Organization,” U.S. Department of Justice, http:// newyork.fbi.gov/dojpressrel/pressrel09/nyfo012709b.htm. C. Christine Fair, “Diaspora Involvement in Insurgencies: Insights from the Khalistan and Tamil Eelam Movements,” Nationalism and Ethnic Politics 11, no. 1 (2005): 139. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 1. “Air Force Destroys Tamil Tigers’ Satellite Communications Center, Military Says,” International Herald Tribune (November 25, 2007), http://www.iht.com/bin/printfriendly.php?id=8466546. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 1–2. Rosenberg, “Sri Lanka Rebel Arms-Buying Goes Global.” Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 2. Fair, “Diaspora Involvement in Insurgencies,” 144. Gunaratna, “The Transformation of Terror?.” Fair, “Diaspora Involvement in Insurgencies,” 144. Rosenberg, “Sri Lanka Rebel Arms-Buying Goes Global.” “Funding The ‘Final War’,” 1. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 10. “Funding the ‘Final War’,” 2. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 3. Stewart Bell, “Tigers Sought $3m from Canada,” National Post (Canada) (May 6, 2008), http://www.nationalpost.com/news/story. html?id=494174. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 10.

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107. Stewart Bell, “Tamil Movement Held to Account,” National Post (Canada) (April 14, 2008), http://www.nationalpost.com/news/ canada/story.html?id=443518. 108. “Treasury Targets Charity Covertly Supporting Violence in Sri Lanka,” (November 15, 2007), http://www.treas.gov/press/releases/hp683. htm. 109. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 5, 8–9. 110. Barbara Ross, “Sri Lankan Terror Gang Busted in A.T.M. Heist Plot,” New York Daily News (October 16, 2007), http://www.nydailynews. com/news/crime_f ile/2007 . . . an_terror_gang_busted_in_atm_ hei-2.html?print=1. 111. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 4. 112. Kochan, Washing Machine, 97–9, Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 6. 113. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 8–9. 114. Jayasekara, “L.T.T.E. International Network.” 115. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 6. 116. Kochan, Washing Machine, 97–9. 117. Ibid., 99. 118. Jayasekara, “Terrorist Fundraising and Money Transfer Operations,” 7. 119. Fair, “Diaspora Involvement in Insurgencies,” 141–5. 120. As evidence of a crackdown against the LTTE, not only did Canada crack down on the group and its associated NGOs, as noted above, but in April 2008, the LTTE representative in the United States, Karunakaran Kandasamy, nicknamed Karuna, was arrested by New York’s Joint Terrorism Task Force. (Note that this is a different “Karuna” from the former LTTE member with the same name who is now a minister in Sri Lanka) http://www.fbi.gov/page2/ jan08/tamil_tigers011008.html , http://www.usdoj.gov/usao/nye/ pr/2007/2007Apr25.html 121. Giraldo and Trinkunas, “The Political Economy of Terrorism Financing,” 16–7, Shapiro, “Terrorist Organizations’ Vulnerabilities.”

6

State Sponsored Groups

1. In contrast to this book, for statistical purposes, the United States Department of State does consider such clandestine agents to be terrorists. 2. Byman, Deadly Connections, 5–6. 3. Ibid., 10–15. 4. Ibid. 5. Ibid., 13.

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6. In international law, a state is considered to have acted with due diligence if it attempts to use the means at its disposal to prevent and suppress terrorist activity on its territory. The conditions under which a state has acted with due diligence must be considered (such as if the stated is a failed state). Tal Becker, Terrorism and the State: Rethinking the Rules of State Responsibility, ed. Craig Scott, Hart Monographs in Transnational and International Law (Oxford: Hart, 2006), 132–3. 7. Byman, Deadly Connections, 69–70. 8. Byman et al., Trends in Outside Support, 17, 84–5. 9. O’Neill, Insurgency and Terrorism, 146. 10. Byman, Deadly Connections, 65–6. 11. Ibid., 59–64. 12. Byman et al., Trends in Outside Support, xvii. 13. Byman, Deadly Connections, 60–1. 14. Byman et al., Trends in Outside Support, 100. 15. O’Neill, Insurgency and Terrorism, 148. 16. Rapoport, “Introduction,” 4. 17. Byman, Deadly Connections, 75–7. 18. Byman et al., Trends in Outside Support, 100. 19. Byman, Deadly Connections, 75–8. 20. Laqueur, The Age of Terrorism, 268. 21. Hoffman, Inside Terrorism, 258–9. 22. Byman, Deadly Connections, 36–40. 23. Ibid., 22. 24. Ibid., 41–7. 25. Magnus Ranstorp, Hizb’allah in Lebanon: The Politics of the Western Hostage Crisis (New York: St. Martin’s Press, 1997), 30. 26. Byman, Deadly Connections, 42–3. 27. Ibid., 47–9. 28. Ibid., 50–2. 29. Grant Wardlaw, “Terror as an Instrument of Foreign Policy,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 253. 30. Byman, Deadly Connections, 51–2. 31. Hoffman, Inside Terrorism, 68–9. 32. David Th. Schiller, “A Battlegroup Divided: The Palestinian Fedayeen,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 95. 33. The Fatah faction itself was founded in October 1959 by Yassir Arafat (his real name was Mohammad Abd Ar-Raouf; he was also known as Abu Amar), Salah Khalaf (aka Abu Iyad), Khalil al Wazir (aka Abu Jihad) and Faruq al Qaddumi in Egypt. Fatah received assistance and training from Algeria; once the country had gained its independence in 1962. After the Syrian Ba’athist coup in 1966, Syria began supporting Fatah with

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34. 35. 36. 37.

38. 39.

40.

41. 42. 43. 44. 45. 46. 47. 48. 49.

50. 51. 52.

53. 54. 55. 56. 57.

58.

No t e s military training, facilities, and arms. Ibid., 96, Kenneth Katzman, “The P.L.O. And Its Factions” (Library of Congress Congressional Research Service, 2002), 1, Rami Ginat and Uri Bar-Noi, “Tacit Support for Terrorism: The Rapprochement between the U.S.S.R. Adn Palestinian Guerrilla Organizations Following the 1967 War,” Journal of Strategic Studies 30, no. 2 (2007): 264. Laqueur, The Age of Terrorism, 217–8. Kiser, “Financing Terror”, 42. Laqueur, The Age of Terrorism, 218. The PLO was officially recognized by Arab governments as the sole representative of the Palestinian people in the Rabat Arab summit of 1974. Ginat and Bar-Noi, “Tacit Support for Terrorism,” 269. Laqueur, The Age of Terrorism, 216. The bulk of the training for these weapons took place in the USSR, though some also occurred in other Warsaw Pact countries. Ibid., Ginat and Bar-Noi, “Tacit Support for Terrorism,” 278–9. David C. Rapoport, “The International World as Some Terrorists Have Seen It: A Look at a Century of Memoirs,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 47–8, 53. Schiller, “Battlegroup Divided,” 97. Ibid., 93. Hoffman, Inside Terrorism, 62. Schiller, “Battlegroup Divided,” 91. Rapoport, “International World,” 49. Schiller, “Battlegroup Divided,” 98. Ibid., 99. Rapoport, “International World,” 49. Its official name was the Front of Palestinian Forces Rejecting Capitulationist Settlements. Anders Strindberg, “The Damascus-Based Alliance of Palestinian Forces: A Primer,” Journal of Palestinian Studies 29, no. 3 (2000): 61. Schiller, “Battlegroup Divided,” 102. Laqueur, The Age of Terrorism, 220–1. Nevertheless, Arafat met with Syrian and Libyan officials in 1986 at a Non-Aligned Movement meeting in a move to mend their relationship. Schiller, “Battlegroup Divided,” 103–5. Ibid., 97–8. Rapoport, “International World,” 48–9. Ibid., 53. Byman, Deadly Connections, 142. Nevertheless, these countries came together to fight the 1973 Yom Kippur War, demonstrating their own realpolitik with one another as well as through their terrorist proxies. Schiller, “Battlegroup Divided,” 100.

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59. Byman, Deadly Connections, 117–8, 25, 32–3. 60. Kiser, “Financing Terror”, 41. Money still comes in from states to fund the Palestinian Authority, which in the West Bank is run by Fatah. This has enabled some funds to be diverted to terrorism. Moreover, states such as Iraq under Saddam Hussein have donated money to the families of suicide bombers, some of whom belonged to PLO factions. These payments, however, are a fraction of the state support the PLO used to receive. Ehrenfeld, Funding Evil, 75–6, 93–4, 107. 61. Strindberg, “Damascus-Based Alliance,” 63. 62. Ibid., 60. 63. Neither PIJ nor HAMAS has ever been a part of the PLO, and neither of them has significant other sponsors. Iran provides funding and other resources to both groups, and HAMAS has its own substantial resourcing sources. The PFLP launches occasional mortar attacks against Israeli towns through its militant wing, the Abu Ali Mustafa Brigades. Its last major attack was in October 2001, when it killed Israeli Minister Rehavan Zeevi. The DFLP has conducted limited mortar and rocket attacks against Israeli targets from Palestinian Authority territory, sometimes working with the PLO-associated Al Aqsa Martyr’s Brigade. “Terrorism Knowledge Base.” 64. The MIPT Terrorism Knowledge Base listed the PFLP-GC’s last attack as July 1993; Fatah-Uprising’s as May 1990; and Sa’iqa’s as November 1985. Ibid. 65. These three factions are the Palestinian Revolutionary Communist Party (PRCP); the Palestine Liberation Front (PLF, though confusingly, the organization shares a name with the PFLP-GC’s pre-1967 name); and the Palestine Popular Struggle Front (PPSF). National Consortium for the Study of Terrorism, “Damascus-Based Alliance” (College Park, MD), “Terrorism Knowledge Database.” 66. Strindberg, “Damascus-Based Alliance,” 62. 67. Byman, Deadly Connections, 142–3. 68. Ibid., 141. 69. Schiller, “Battlegroup Divided,” 91–2. 70. Byman, Deadly Connections, 6, 259–60. 71. Pillar, Terrorism and U.S. Foreign Policy, 42–3. 72. Byman, Deadly Connections, 291. 73. The United States State Department placed Libya on its list of state sponsors of terrorism in 1979 and imposed economic sanctions. These sanctions were strengthened in 1982 and again in 1986. Such sanction, however, was largely unilateral, though European states did generally maintain a “gentlemen’s agreement” to prevent their companies from taking advantage of the departure of U.S. ones. International sanctions generally began after the aircraft bombings, and the United Nations Security Council imposed sanctions in 1992. Meghan L. O’Sullivan, Shrewd Sanctions: Statecraft and State Sponsors of Terrorism (Washington,

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74. 75. 76. 77. 78.

No t e s DC: Brookings Institution Press, 2003), 174–82, Stephen D. Collins, “Dissuading State Support of Terrorism: Strikes or Sanctions?,” Studies in Conflict and Terrorism 27, no. 1 (2004). Byman, Deadly Connections, 294–5, Collins, “Dissuading State Support.” Laqueur, The Age of Terrorism, 285. O’Sullivan, Shrewd Sanctions, 204, Collins, “Dissuading State Support.” Byman, Deadly Connections, 296–7. Pillar, Terrorism and U.S. Foreign Policy, 78–9. For an in-depth explanation of the various international counterterrorism treaties related to terrorism, please see Schott, Reference Guide, “Legislative Guide to the Universal Anti-Terrorism Conventions and Protocols” (United Nations Office on Drugs and Crime, 2004).

7

Medium Autonomy Groups—Franchises and Bundled Support

1. Graham Bannock, R.E. Baxter, and Evan Davis, The Penguin Dictionary of Economics, 6 ed. (New York: Penguin Books, 1998), 162, Andrew Black, “The Ideological Struggle over Al-Qaeda’s Suicide Tactics in Algeria,” Terrorism Monitor 6, no. 3 (February 7, 2008), http://www. jamestown.org/terrorism/news/article.php?articleid=2373953. 2. Bannock, Baxter, and Davis, The Penguin Dictionary of Economics, 162–3. 3. Stern, Terror in the Name of God, 268. 4. Ibid., 108. 5. Imtiaz Ali and Craig Whitlock, “Al-Qaeda Commander Moved Freely in Pakistan,” Washington Post (February 4, 2008), http:// www.washingtonpost.com/wp-dyn/content/article/2008/02/03/ AR2008020303147_pf.html, “Militants Gaining Ground in Pakistan,” New York Times (November 1, 2007), http://www.nytimes.com/aponline/world/AP-Pakistan-Militants-Gain.html?_r=1&oref=slogin, Mark Mazzetti, “Intelligence Chief Cites Qaeda Threat to U.S.,” New York Times (February 6, 2008), http://www.nytimes.com/2008/02/06/ washington/0 . . . l?_r=1&th=&oref=slogin&emc=th&pagewanted=print. 6. Most attendees represented Shia groups, but there were also some Sunni groups there. Adams, Financing of Terror, 73, Robin Wright, Sacred Rage: The Wrath of Militant Islam (New York: Simon & Schuster, 2001), 26–36. 7. Sandra Mackey, The Iranians: Persia, Islam and the Soul of a Nation (New York: Plume, 1998), 313. 8. Levitt, “Hezbollah Finances,” 137. Other authors argue that Hizbullah receives less money from Iran, though all agree that Hizbullah receives substantial amounts. For instance, Norton asserts than Iran provides Hizbullah about 100 million USD per year, rather than double that

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No t e s

9.

10.

11. 12. 13.

14. 15. 16. 17.

18. 19.

20. 21.

22.

203

amount which Levitt asserts. Augustus Richard Norton, Hezbollah—a Short History, ed. Dale F. Eickelman and Augustus Richard Norton, Princeton Studies in Muslim Politics (Princeton: Princeton University Press, 2007), 110. Though Hizbullah was founded in 1982, it was not until the mid-1980s that it was a consolidated, coherent group. Ranstorp, Hizb’allah in Lebanon, 25, Norton, Hezbollah, 34. Due to the variety of sectarian groups in Lebanon—Shia, Sunni, various Christian groups, Druze, and so forth—Hizbullah as a political party remains ambivalent in its desire to establish an Islamic state in Lebanon. While its founding documents and manifesto have stated as such, Hizbullah leadership also recognizes the impossibility of such a task in this multicultural state and participates in the political process and creates governing alliance with other sectarian groups. Hizbullah’s willingness to work within the larger Lebanese political and sectarian structures has caused considerable tensions with Iran. Palmer Harik, Hezbollah, 57–69, “How Nasrallah Survived an Overthrow Attempt in Lebanon,” YaLibnan (October 11, 2007), http://yalibnan.com/ site/archives/2007/10/how_nasrallah_s.php, Ranstorp, Hizb’allah in Lebanon, 26–30. Mackey, The Iranians, 303, Ranstorp, Hizb’allah in Lebanon, 33–40. Norton, Hezbollah, 80. The suicide attacks and some abductions were conducted under the nom de guerre of Islamic Jihad and Islamic Amal, but most scholars today consider them to be a mere cover name for those early Hizbullah operations. Hizbullah is credited with at least 12 suicide bombings. Ranstorp, Hizb’allah in Lebanon, 38, 62–3. Palmer Harik, Hezbollah, 81, 111–2. Norton, Hezbollah, 109. Qassem, Hizbullah, 83–5. Norton, Hezbollah, 140. The money is meant to pay for rent and furniture while Hizbullah builds new homes. Jeremy M. Sharp et al., “Lebanon: The Israel-Hamas-Hezbollah Conflict” (Library of Congress Congressional Research Service, 2006), 14. Levitt, “Hezbollah Finances,” 137, Ranstorp, Hizb’allah in Lebanon. A January 2006 Zogby International poll found that Al Manar was the sixth most popular satellite channel in the Arab World. Levitt, “Hezbollah Finances,” 139, Norton, Hezbollah, 93, Ranstorp, Hizb’allah in Lebanon, 39. Levitt, “Hezbollah Finances,” 141. Ray Takeyh, Hidden Iran: Paradox and Power in the Islamic Republic, ed. Council on Foreign Relations (New York: Times Books, 2006), 70–1, 206–7, Ranstorp, Hizb’allah in Lebanon, 50, 114. Levitt, “Hezbollah Finances,” 139–41, Palmer Harik, Hezbollah, 39, Matthew Levitt, “Iran and Syria: State Sponsorship in the Age of Terror

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204

23. 24. 25.

26. 27. 28. 29.

30. 31.

32.

33. 34. 35. 36.

No t e s Networks,” in Confronting Terrorism Financing (Lanham: University of America Press, 2005), 54. Ranstorp, Hizb’allah in Lebanon, 116–9. Norton, Hezbollah, 35. Palmer Harik, Hezbollah, 29–40. The relationship between secular, Ba’athist Syria, and Shia Iran is purely a marriage of convenience. The relationship allows Iran an Arab ally and access to the Arab world, especially the border with Israel. Syria, also a pariah state, receives an ally as well, plus oil and other economic assistance. Nevertheless, spats between the two occur regularly as each pursues its own foreign policy interests in the region. Ranstorp, Hizb’allah in Lebanon, 110–16. Norton, Hezbollah, 72. Levitt, “Hezbollah Finances,” 141. Norton, Hezbollah, 109. Levitt, “Hezbollah Finances,” 142–3. Though Fadlallah was generally recognized as the spiritual leader of Hizbullah, he did not claim that title for himself. Martin Kramer, “The Moral Logic of Hizballah,” in Origins of Terrorism: Psychologies, Ideologies, Theologies, States of Mind, ed. Walter Reich (Washington, DC: Woodrow Wilson Center Press; distributed by the Johns Hopkins University Press, 1998), 140, Sharp et al., “Lebanon: The Israel-Hamas-Hezbollah Conflict,” 24. Farah, Blood from Stones, 163. John L. Lombardi and David J. Sanchez, “Terrorist Financing and the TriBorder Area of South America: The Challenge of Effective Governmental Response in a Permissive Environment,” in Terrorism Financing and State Responses, ed. Jeanne K. Giraldo and Harold A. Trinkunas (Stanford, CA: Stanford University Press, 2007), 234, Ranstorp, Hizb’allah in Lebanon, 71, Levitt, “Hezbollah Finances,” 146–7. Lombardi and Sanchez, “Terrorist Financing,” 232–3. The Tri-Border Area (also known as the TBA) consists of the areas around the cities of Ciudad del Este in Paraguay, Foz do Iguaca in Brazil, and Puerto Iguazu in Argentina. Farah, Blood from Stones, 19–24. Levitt, “Hezbollah Finances,” 145. Kramer, “The Moral Logic of Hizballah,” 132–4. Qassem, Hizbullah, 60. Qassem was a founding member of Hizbullah in 1982 and is currently its deputy secretary general. It is interesting that while his account admits to this hierarchical structure and provides information and statistics on Hizbullah’s social networks, he does not discuss its financing or other resourcing networks, nor does he provide an overall budget for the organization. The work describes the close relationship between Iran and Hizbullah and that Iran trains Hizbullah fighters; however, it does not explicitly state that Hizbullah receives a high level of monetary support from Iran.

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37. Ranstorp, Hizb’allah in Lebanon, 45. Most are clerics who have been on the council since its formation in 1982. Palmer Harik, Hezbollah, 53–4. 38. Ranstorp, Hizb’allah in Lebanon, 45. Demonstrating the extensive influence Iran has over Hizbullah, one or two Iranian military of diplomatic representatives from the Pasdaran or from Iran’s embassies in Beirut or Damascus are also represented on the committee. 39. The Majlis al-Shura al-Karar is headed by Sheikh Muhammad Hussein Fadlallah, and handles all strategic planning. Palmer Harik, Hezbollah, 54, Ranstorp, Hizb’allah in Lebanon, 45. 40. Ranstorp, Hizb’allah in Lebanon, 45. 41. Levitt, “Hezbollah Finances,” 148. 42. Palmer Harik, Hezbollah, 94. 43. Levitt, “Hezbollah Finances,” 149. 44. Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987), 254–5. 45. Wright, Looming Tower, 208–9. 46. Michael Scheuer, “Al-Qaeda and Algeria’s G.S.P.C.: Part of a Much Bigger Picture,” Terrorism Focus 4, no. 8 (April 3, 2007), http://www. jamestown.org/terrorism/news/article.php?articleid=2373295. 47. Jonathan Schanzer, Al-Qaeda’s Armies: Middle East Affiliate Groups and the Next Generation of Terror, ed. Washington Institute for Near East Policy (New York: Special Press International, 2005), 22. 48. Zawahiri had maintained a blind-cell structure on his group inside Egypt, where members of one cell would not know the identities of those in other cells. Egyptian forces captured the EIJ’s membership director—the only man with all the names—in the early 1990s. An estimated 800 members of EIJ were arrested in Egypt as a result. Wright, Looming Tower, 209–10. 49. Though Zawahiri’s attacks were generally failures, his tactics are notorious. A 1993 suicide bombing introduced the use of suicide bombings by al Qaeda-affiliated groups (the attack killed only the bomber and his accomplice). He also began taping suicide bombers before their operations for use of propaganda. Ibid., 207–10. 50. Stern, Terror in the Name of God, 266. 51. Besides Bin Laden (who signed as an individual) and Zawahiri (signing on behalf of the EIJ), the Egyptian Islamic Group (the representative, Rifai Taha, later rescinded his group’s endorsement), Pakistan’s Jamiat Ul Ulema, Pakistan’s Harakat al Ansar, and Bangladesh’s Harakat al Jihad also signed it. The name “al Qaeda” did not appear on the document. Wright, Looming Tower, 294–6. 52. Egyptians make up much of the inner circle of al Qaeda. Bin Laden says he trusts the Egyptians because they, like him, cannot go home without being arrested, and thus they are men without a country. Ibid., 380.

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No t e s

53. Schanzer, Al-Qaeda’s Armies, 98–9. 54. Rashid, Taliban, 135–6. 55. Gunaratna, Inside Al Qaeda, 121–3, Schanzer, Al-Qaeda’s Armies, 106. 56. Benjamin and Simon, Age of Sacred Terror, 116. 57. Schanzer, Al-Qaeda’s Armies, 100–1. 58. Wright, Looming Tower, 216–7, Schanzer, Al-Qaeda’s Armies, 104–5. 59. Hattab was apparently able to facilitate the transfer of GIA’s European networks to GSPC. Schanzer, Al-Qaeda’s Armies, 107, Andrew McGregor, “Leadership Disputes Plaque Al-Qaeda in the Islamic Magreb,” Terrorism Focus 4, no. 30 (2007), http://www.jamestown. org/terrorism/news/article.php?issue_id=4240. 60. Gunaratna, Inside Al Qaeda, 124–5. 61. Schanzer, Al-Qaeda’s Armies, 95–6. 62. While this is not the first time the Mauritania has had problems with Islamist violence (a bomb plot was foiled in the late 1990s, for instance), the Islamist attacks in 2007 were specifically ascribed to AQIM. Anouar Boukhars, “Mauritania’s Vulnerability to Al-Qaeda Influence,” Terrorism Focus 4, no. 24 (July 24, 2007), http://jamestown.org/terrorism/ news/article.php?articleid=2373570, Souad Mekhennet et al., “A Threat Renewed: Ragtag Insurgency Gains a Lifeline from Al Qaeda,” New York Times (July 1, 2008), http://www.nytimes.com/2008/07/01/ world/africa/01algeria.html?ref=africa#, Rashid, Taliban, 137, Naomi Schwarz, “Suspected Terrorists Flee Mauritania after Allegedly Killing Tourists,” Voice of America (December 26, 2007), http://voanews. com/english/2007–12–26-voa30.cfm?renderforprint=1. 63. McGregor, “Leadership Disputes Plaque Al-Qaeda in the Islamic Magreb.” 64. Nevertheless, it is unclear how much money AQIM actually raised by formally allying with al Qaeda, as there is little evidence of much support coming from the core group. Instead, AQIM is mostly selffinanced. In North Africa, AQIM garners income from kidnap and ransom, muggings, and the narcotics trade. Algerian Minister for the Interior Noureddin Yazid Zerhouni has stated that 115 terrorism-related kidnappings netted AQIM about 20 million USD, while blackmail and robbery netted another 3.3 million USD. In Europe, AQIM gathers money from drug trafficking, immigrant smuggling, and document forgery, though much of the network has apparently been rolled up in Europe, with arrests of AQIM financiers as recently as June 2008. Nevertheless, the leadership of AQIM may be short of funds because of its decentralized funding structures. Local emirs (leaders) control their own financing, and it is unclear how much of that is passed up the chain of command. “Illegal Tender: Funding Al-Qaeda in the Islamic Maghreb,” Jane’s Intelligence Review (September 16, 2008), http://jir. janes.com/public/jir/terrorism.shtml.

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207

65. Mekhennet et al., “A Threat Renewed: Ragtag Insurgency Gains a Lifeline from Al Qaeda.” 66. “Not Again, Please,” Economist (August 23, 2008), http://www. economist.com/world/mideast-africa/displaystory.cfm?STORY_ ID=11975470, Souad Mekhennet, Michael Moss, Eric Schmitt, Elaine Sciolino, and Margot Williams, “A Threat Renewed: Ragtag Insurgency Gains a Lifeline from Al Qaeda,” New York Times (July 1, 2008). 67. Craig Whitlock, “Algiers Attacks Show Maturing of Al-Qaeda Unit,” Washington Post (December 13, 2007), http://www.washingtonpost. com/wp-dyn/content/article/2007/12/12/AR 2007121202441_ pf.html, Fiona Govan, “Al-Qa’eda Admits to Algerian Bombings,” London Daily Telegraph (September 10, 2007), http://www.telegraph.co.uk/ core/Content/displayPrin . . . ?xml=/news/2007/09/10/walgeria110. xml&site=5&page=0. 68. Schwarz, “Suspected Terrorists Flee Mauritania after Allegedly Killing Tourists,” Mekhennet et al., “A Threat Renewed: Ragtag Insurgency Gains a Lifeline from Al Qaeda,” Andrew Black, “Recasting Jihad in the Maghreb,” Terrorism Monitor 5, no. 20 (October 25, 2007), http:// www.jamestown.org/terrorism/news/article.php?articleid=2373742. 69. Hattab was forced out of the GSPC leadership in 2001 and he is currently on the run, though he insists that he is still a member of the group. Though inactive with regard to terrorist violence since 2004, he continues to voice his concerns with AQIM via Internet and other communications means, and he is at odds with AQIM’s current leader. McGregor, “Leadership Disputes Plaque Al-Qaeda in the Islamic Magreb,” Mekhennet et al., “A Threat Renewed: Ragtag Insurgency Gains a Lifeline from Al Qaeda,” Black, “The Ideological Struggle over Al-Qaeda’s Suicide Tactics in Algeria,” Andrew Black, “A.Q.I.M. Employs Martyrdom Operations in Algeria,” Terrorism Focus (September 18, 2007), http://www.jamestown.org/terrorism/news/ article.php?articleid=2373656. 70. Schanzer, Al-Qaeda’s Armies, 102. 71. Gunaratna, Inside Al Qaeda, 124–5, Schanzer, Al-Qaeda’s Armies, 96. 72. Alison Pargeter, “North African Immigrants in Europe and Political Violence,” Studies in Conflict and Terrorism 29, no. 8 (2006). 733–5. 73. Black, “The Ideological Struggle over Al-Qaeda’s Suicide Tactics in Algeria.” 74. That this document was published from an Egyptian prison has led to speculation that his renouncing of violence was made under duress. He has not been the first EIJ member to renounce terrorism—two other leaders in Egypt did so in 2004. Nevertheless, Dr. Fadl’s statement led to a condemnation of his new position from Zawahiri in a video released in July 2007. Jarret Brachman, “Leading Egyptian Jihadist Sayyid Imam Renounces Violence,” Combating Terrorism Center Sentinel 1, no. 1 (2007): 12–14.

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No t e s

75. “Cracks in the Foundation: Leadership Schisms in Al-Qa’ida from 1989–2006,” Harmony Project, Combating Terrorism Center (September 2007), http://ctc.usma.edu/. 76. Michael C. Fowler, Amateur Soldiers, Global Wars: Insurgency and Modern Conflict (Westport, CN: Praeger Security International, 2005), 33. 77. Diasporas are “immigrant communities established in foreign countries.” Byman et al., Trends in Outside Support, xiv. 78. English, Armed Struggle, 297–302. 79. Byman et al., Trends in Outside Support, 59. 80. Adams, Financing of Terror, 136. 81. Ibid., 131, English, Armed Struggle, 344. 82. Sinn Fein candidates fared worse in the Republic of Ireland. For instance, in the 1994 general election, Sinn Fein won 2.4 percent of the vote, but that was better than 1.6 percent it had won in 1992. English, Armed Struggle, 227, 77–8, 94–5. The U.S. diaspora was the only Irish diaspora to give substantial support. There was some cash provided by Irish-Canadians, but these were very small sums compared to those of the American diaspora, and they were apparently funneled through the U.S. NOR AID. Also, there were at least 3 intercepted arms shipments from Canada, but the total of all 3 combined were only 49 guns, 18,000 rounds of ammunition, and 10 hand grenades. Moreover, the Canadian authorities worked closely with Irish authorities to minimize any such resourcing. M. McKinley, “The Irish Republican Army and Terror International: An Inquiry into the Material Aspects of the First Fifteen Years,” in Contemporary Research on Terrorism, ed. Paul Wilkinson and Alasdair Stewart (Aberdeen, UK: Aberdeen University Press, 1987), 301–2. 83. Adams, Financing of Terror, 135. 84. Cahill was a member of PIR A’s Army Council, the leading body of PIR A. Holland, American Connection, 29–32. 85. Ibid., 32. 86. For the first few years, money was sent to the Belfast Northern Aid Committee. Though NOR AID registered as a foreign agent in support of the Northern Aid Committee in Belfast in 1971, the American government finally succeeded in coercing NOR AID to register as an agent of PIR A in 1984 in the hopes that this would discourage American citizens from giving donations to a group formally linked to a terrorist organization. It did not become illegal for American citizens to monetarily support most foreign terrorist organizations until the 1990s. There was also a parallel funding system that went directly to PIR A’s General Headquarters rather than taking a detour through the Green Cross. Adams, Financing of Terror, 137, J. Bowyer Bell, The I.R.A. 1968–2000: Analysis of a Secret Army, ed. David C. Rapoport and Paul Wilkinson, Cass Series on Political Violence (London, UK: Frank Cass, 2000), 187.

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No t e s 87. 88. 89. 90. 91. 92. 93. 94.

95. 96. 97. 98.

99.

100. 101. 102. 103. 104.

209

Holland, American Connection, 61. Bell, The I.R.A. 1968–2000, 168. Ibid., 171. English, Armed Struggle, 115. Holland, American Connection, 71. Ibid., 43, 72–3, 83, 110. English, Armed Struggle, 117. Adams, Financing of Terror, 143. Another primary source of PIR A arms was Libya, who saw supplying PIR A as a means to burnish its anti-imperialism, proliberation movement credentials, while at the same time, using PIR A as a proxy to attack its foe the United Kingdom. Libyan weapons were first shipped to PIR A in the 1973 (at least 5 tons of weapons were shipped), but became the most substantial smuggling route upon the closure of the American arms smuggling pipeline in the mid-1980s. In the 1980s, 45–60 percent of weapons recovered by the Gardai (Republic of Ireland police) originated in the Middle East, especially Libya. Brendan O’Brien, The Long War: The I.R.A. And Sinn Fein, ed. Sanford Sternlicht, 2nd ed., Irish Studies (Syracuse, NY: Syracuse University Press, 1999), 133–53, McKinley, “Irish Republican Army,” 194–5, Horgan and Taylor, “Playing the ‘Green Card’ Part 1,” 5. Bell, The I.R.A. 1968–2000, 183. Adams, Financing of Terror, 143–4, Holland, American Connection, 72–3. Bell, The I.R.A. 1968–2000, 183–4. This was not an entirely irrational goal, as lobbying by Irish-Americans is credited with the American government putting pressure on Great Britain in the early twentieth century—one of the reasons Great Britain gave statehood to the Republic of Ireland in 1922. Chaliand and Blin, “The ‘Golden Age’ of Terrorism,” 186. This caucus suffered serious internal disputes and splits throughout its history. While helpful to the Irish overall, though not the PIR A cause, Irish-American lobbying by various groups and politicians led to various aid packages and other American support toward peaceful settlement of the conflict. Adams, Financing of Terror, 136–7, Holland, American Connection, 114–51. English, Armed Struggle, 273. Adams, Financing of Terror, 141. McKinley, “Irish Republican Army,” 305. Holland, American Connection, 57. Lord Mountbatten had been the last Viceroy of India. He was assassinated by a 50 pound bomb that had been hidden among gear on his boat as he went for a fishing outing. With him were his daughter, her husband, her 80-year-old mother-in-law, their twin 14-year-old sons, and a 15 year-old local boy. Lord Mountbatten, the mother-in-law,

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105. 106. 107.

108. 109. 110. 111. 112. 113.

114.

No t e s one of the sons, and the local boy were killed and the rest were seriously wounded. On the same day, a British army truck was destroyed by an improvised explosive device consisting of 1200 pounds of explosives hidden beneath hay in another truck, killing 18 soldiers. Bell, The I.R.A. 1968–2000, 186–7, Adams, Financing of Terror, 138–40, McKinley, “Irish Republican Army,” 315. Holland, American Connection, 34–5. Adams, Financing of Terror, 141. PIR A claimed the radio-controlled bomb was set off by the British Army’s countermeasures, but in reality, the bomb was not a radio-controlled one, but a time bomb, and the bomb had gone off at the wrong time. As Sinn Fein leader Gerry Adams admitted, “In my view the IR A are freedom fighters. They made a terrible mistake at Enniskillen.” Bell, The I.R.A. 1968–2000, 186–7, English, Armed Struggle, 255. McKinley, “Irish Republican Army,” 307, Holland, American Connection, 58. Holland, American Connection, 48. Adams, Financing of Terror, 142. Holland, American Connection, 44. Adams, Financing of Terror, 143–53. PIR A still continued to attempt to ship weapons from the United States from time-to-time. In 1999, the FBI uncovered yet another PIR A weapons plot in Florida. Ibid., 145, English, Armed Struggle, 328. Adams, Financing of Terror, 153.

8

Lone Wolf Groups

1. Beam also pioneered such terrorism innovations as the use of computer bulletin boards for communication among members, and was one of the early users of the Internet for similar purposes. Stern, “The Protean Enemy,” Hoffman, Inside Terrorism, 115. 2. Stern, Terror in the Name of God, 151. 3. The term “autonomous radicalization” was coined by Dutch security forces to describe terrorist organizations such as the Hofstad Group, in which a group of young men and women apparently radicalized themselves based on the Internet and other media, a process the Dutch domestic security service AIVD (Algemene Inlichtingen en Veiligheidsdienst) has noted among radical violent Islamist groups in the Netherlands. A member of the Hofstad Group killed artist Theo Van Gogh in 2004. Jessica Stern, “The Protean Enemy,” 134, Lorenzo Vidino, “The Hofstad Group: The New Face of Terrorist Networks in Europe,” Studies in Conflict and Terrorism 30, no. 7 (2007): 585.

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4. Marc Sageman, Leaderless Jihad: Terror Networks in the Twenty-First Century (Philadelphia, PA: University of Pennsylvania Press, 2008), 136, Douglas Long, Ecoterrorism (New York: Facts on File, 2004), 45–6. 5. Jeffrey Kaplan, “Leaderless Resistance,” in Inside Terrorist Organizations, ed. David C. Rapoport, Cass Series on Political Violence (London: Frank Cass, 2001), 260. 6. The term “bunch of guys” refers to a self-organized network of friends who spontaneously organize themselves from the bottom-up. They may have no formal leadership positions, and may not even have a name (though names may be given to them by others such as law enforcement. For instance, the so-called Hofstad Group, which killed artist Theo Van Gogh, had no name; the nickname “Hofstad Group” was given to it by Dutch police). The Royal Canadian Mounted Police first used the term to describe the group of like-minded individuals who supported Ahmed Ressam, the so-called “Millenium Bomber” who was caught trying to cross the U.S.-Canadian border on his way to attack Los Angeles International Airport on December 31, 1999. Since then “bunch of guys” is becoming a recognized, established term for such groups. Sageman, Leaderless Jihad, 69, Vidino, “The Hofstad Group.” 7. Stern, Terror in the Name of God, 141, 65. 8. Beam credits the term “Leaderless Resistance” to Colonel Ulius Louis Amoss in a 1962 essay on tactics against a communist invasion and conquest in the United States. Beam’s essay caught the attention of watchdog groups at a time when the American government was studying what had gone wrong at Waco, as well as neo-Nazi and militia-type antistate terrorism. Kaplan, “Leaderless Resistance,” 264–6. 9. Stern, “The Protean Enemy,” 34. 10. Stern, Terror in the Name of God, 147–71. 11. Kaplan, “Leaderless Resistance,” 260. 12. Stern, Terror in the Name of God, 173. 13. Walter Laqueur, “Postmodern Terrorism,” in The War on Terror, Foreign Affairs Editors’ Choice (New York: W.W. Norton, 2002), 11. 14. Ian O. Lesser et al., “Countering the New Terrorism” (R AND Project Air Force, 1999), 21. 15. Ibid., 53. 16. Borum and Tilby, “Anarchist Direct Actions.” 17. Tsouli is also highlighted in Chapter 3 for his use of identity theft to forward money and other resources to al Qaeda–associated operatives 18. Gordon Corera, “Al-Qaeda’s 007,” Times of London (January 16, 2008), http://women.timesonline.co.uk/tol/life_and_styl . . . ticle3191517.ece ?print=yes&randnum=1200596833531, “A World Wide Web of Terror,” Economist (July 12, 2007), http://www.economist.com/world/displaystory.cfm?story_id=9472498.

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19. Stern, Terror in the Name of God, 173. 20. Lesser et al., “Countering the New Terrorism,” 29. That bomb was made by an experienced bomb maker: Ramzi Youssef. It was not designed by amateurs. 21. Ibid., 20. 22. Philippe Migaux, “Al Qaeda,” in The History of Terrorism from Antiquity to Al Qaeda, ed. Gerard Chaliand and Arnaud Blin (Berkeley, CA: University of California Press, 2007), 326. 23. Sageman, Leaderless Jihad, 113–4, 40–1, Lesser et al., “Countering the New Terrorism,” 29. 24. Sageman, Leaderless Jihad, 39. 25. Ibid., 144. 26. Ibid., 116–7, 21. 27. Stern, “The Protean Enemy,” 34. 28. Stern, “The Protean Enemy,” 34. 29. Joll, The Anarchists, 133–5. 30. Though ecoterrorist groups are usually leftists, there are right-wing ecoterrorists as well. Ecoterrorists are either classified according to their group’s political leanings (left versus right) or as single-issue or specialissue terrorism. An example of right-wing ecoterrorism was an April 2000 sabotage on oil wells in Alberta, Canada, by Wiebo Ludwig, an ultraconservative former Christian Reformed Church minister. Long, Ecoterrorism, 3–4, Paul Joosse, “Leaderless Resistance and Ideological Inclusion: The Case of the Earth Liberation Front,” Terrorism and Political Violence 19, no. 3 (2007): 363. 31. “Putting Intel to Work against E.L.F. And A.L.F. Terrorists,” Federal Bureau of Investigation, http://www.fbi.gov/page2/june08/ ecoterror_063008.html. 32. Stefan H. Leader and Peter Probst, “The Earth Liberation Front and Environmental Terrorism,” Terrorism and Political Violence 15, no. 4 (2003): 37. 33. Arne Naess and George Sessions, “Platform Principles of the Deep Ecology Movement,” in The Deep Ecology Movement: An Introductory Anthology, ed. Alan Drengson and Inoue Yuichi (Berkeley, CA: North Atlantic Books, 1995). 34. Leader and Probst, “Earth Liberation Front,” 39–40. 35. Ibid., 38, Donald R. Liddick, Eco-Terrorism: Radical Environmental and Animal Liberation Movements (Westport, CN: Preaeger, 2006), 6. 36. Ann Berlin, “Animal Liberation Front: Worldwide News and Information Resource About the A.L.F.,” Animal Liberation Front, http://animal liberationfront.com/index.html. 37. Ibid. 38. Liddick, Eco-Terrorism, 41–2. 39. ALF’s name was created by explicity copying that of the Earth Liberation Front. Noel Molland, “A Spark That Ignited a Flame: The Evolution of

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40.

41. 42. 43. 44. 45. 46. 47.

48. 49. 50. 51. 52. 53.

54. 55.

56. 57.

213

the Earth Liberation Front,” in Igniting a Revolution: Voices in Defense of the Earth, ed. Steven Best and Anthony J. Nocella II (Oakland, CA: A.K. Press, 2006), 49–51. Leader and Probst, “Earth Liberation Front,” 40. A personal view of the Web site on February 15, 2008 did not provide goals for the organization. It did confirm, however, that, as the Web site stated, “There is no ELF structure; ‘it’ is non-hierarchical and there is no centralized organization or leadership.” There was also quite a large disclaimer on the homepage that there is no “membership” to ELF, and that the Web site is merely to inform. Finally, it provided the disclaimer that “this web site’s management, webmasters, affiliates, or other participants are not to be considered spokespersons, members, or affiliates of the Earth Liberation Front.” “Earth Liberation Front,” Earth Liberation Front, http://www.earthliberationfront.com/index.htm. Leader and Probst, “Earth Liberation Front,” 41–2. “Eco-Terror Indictments: ‘Operation Backfire’ Nets 11,” Federal Bureau of Investigation, http://www.fbi.gov/page2/jan06/elf012006.htm. Liddick, Eco-Terrorism, 66. Leader and Probst, “Earth Liberation Front,” 38. “Eco-Terror Indictments.” Liddick, Eco-Terrorism, 40–8. Kaczynski was not a proponent of radical environmental movements or their causes; rather, his interest was in the collapse of “the technoindustrial system” as soon as possible. Long, Ecoterrorism, 49–56, Liddick, Eco-Terrorism, 105–7. Kaczynski’s “Industrial Society and Its Future,” better known as “The Unabomber Manifesto,” can be viewed on a number of Web sites, including http://en.wikisource.org/wiki/ Industrial_Society_and_Its_Future. Liddick, Eco-Terrorism, 11, 113. Leader and Probst, “Earth Liberation Front,” 38. Ibid., 39. Ibid. Berlin, “Animal Liberation Front.” In the United States, providing financial or material support to terrorist organizations is itself a crime, even if that supporter himself is not engaged in terrorist activity. Liddick, Eco-Terrorism, 70–1. Berlin, “Animal Liberation Front,” “Earth Liberation Front.” Liddick, Eco-Terrorism, 64, “Frequently Asked Questions about the Earth Liberation Front (E.L.F.),” North American Earth Liberation Front Press Office, http://www.animalliberationfront.com/ALFront/ ELF/elf_faq.pdf. Liddick, Eco-Terrorism, 42, Anonymous, “The Animal Liberation Primer,” http://www.animalliberationfront.com/ALFront/primer3.pdf. “Ecodefense: A Field Guide to Monkeywrenching,” http://www.omnipresence.mahost.org/inttxt.htm.

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58. Liddick, Eco-Terrorism, 11. 59. Ibid., 50–1. 60. Leader and Probst, “Earth Liberation Front,” 44, Jamie Doward and Mark Townsend, “Beauty and the Beasts,” Guardian (August 1, 2004), http://www.guardian.co.uk/uk/2004/aug/01/animalwelfare.world. 61. Liddick, Eco-Terrorism, 41. 62. Joosse, “Leaderless Resistance,” 352, 61. 63. Berlin, “Animal Liberation Front.” 64. Joosse, “Leaderless Resistance,” 356. 65. The use of ELF tactics can even provide a good cover for common insurance fraud, as someone can commit arson and spray paint “elves were here” at the site, leading authorities to believe the motive was ecoterrorism. Ibid., 361. 66. Hoffman, Inside Terrorism, 203.

9 All the Rest—Shell States, State Sponsoring Groups, and Transnational Corporation Groups 1. Napoleoni, Terror Incorporated, 66–80, 181. 2. Mary Kaldor, New and Old Wars: Organized Violence in a Global Era (Sanford, CA: Stanford University Press, 1999), 90–2. 3. Napoleoni, Terror Incorporated, 67, 75, 145–6. 4. Ibid., 77. 5. Ibid., 147. 6. Stern, Terror in the Name of God, 288. 7. Bell, The I.R.A. 1968–2000, 192. 8. David Galula, Counterinsurgency Warfare: Theory and Practice (New York: Frederick A. Praeger Publishers, 1966), 14. 9. Ray Takeyh and Niklas Gvosdev, “Do Terrorist Networks Need a Home?,” Washington Quarterly 25, no. 3 (2002): 98. 10. Fowler, Amateur Soldiers, 46. 11. Byman, Deadly Connections, 66. 12. Napoleoni, Terror Incorporated, 75. 13. The PLO was not the only entity to erect shell states in Lebanon during that time. Lebanon was essentially carved up into warlord fiefdoms during its civil war, which began in 1975. Though most of the PLO’s fighting forces were located in Lebanon, and though it had control over refugee camps, Lebanon did not contain a majority of Palestinians. According to 1982 estimates, there were 400,000–600,000 Palestinians living in Lebanon, comprising 9 percent (American figures) or 13 percent (PLO figures) of the total Palestinian population. By far the largest concentration lived in Israel and what is now the Palestinian Authority, which included 38–39 percent of the Palestinian population. The rest were scattered mostly throughout the Arab world. Ibid., 71–2, Helena

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14. 15. 16. 17. 18. 19.

20. 21. 22.

23. 24.

25. 26.

27. 28. 29. 30.

31. 32.

33.

215

Cobban, The Palestinian Liberation Organisation: People, Power and Politics (Cambridge: Cambridge University Press, 1984), 9. Cobban, The Palestinian Liberation Organisation, 14, 47–8. “Lebanon: Fighting at Refugee Camp Kills Civilians.” Laqueur, The Age of Terrorism, 218. Adams, Financing of Terror, 83–5. Napoleoni, Terror Incorporated, 51, 68. Neil Livingstone and David Halevy, Inside the P.L.O.: Covert Units, Secret Funds, and the War against Israel and the United States (New York: William Morrow, 1990), 173. Adams, Financing of Terror, 89, Napoleoni, Terror Incorporated, 68–9. Napoleoni, Terror Incorporated, 68–9. SAMED’s interests were also substantial outside Lebanon, including duty free stores, investments in airlines and agricultural holdings and factories outside Lebanon. Adams, Financing of Terror, 96, Livingstone and Halevy, Inside the P.L.O., 191–2. Livingstone and Halevy, Inside the P.L.O., 175. The evacuation of PLO fighters from Lebanon involved 8,000 fighters leaving the city and embarking for about 6 countries. All of the major PLO offices in Lebanon, which had been the PLO’s unofficial headquarters since 1971, were badly damaged or destroyed. As Jordan, Egypt, and Syria would not permit Palestinian guerrilla activity, this ended any contiguous zone with Israel that the PLO had for conducting operations. Ibid., 175–8, Cobban, The Palestinian Liberation Organisation, 3–6. Adams, Financing of Terror, 96–7. Ibid., 98–9, Adam Zagorin, “Auditing the P.L.O.,” in The International Relations of the Palestine Liberation Organization, ed. Augustus Richard Norton and Martin H. Greenberg (Carbondale, IL: Southern Illinois University Press, 1989), 202, Livingstone and Halevy, Inside the P.L.O., 165. Adams, Financing of Terror, 99, 105, Livingstone and Halevy, Inside the P.L.O., 170, 91. Adams, Financing of Terror, 229–32, Livingstone and Halevy, Inside the P.L.O., 191. Adams, Financing of Terror, 232–3. In 1988, the PLO and Palestinian National Fund published some broad budgeting numbers, but unfortunately, they do not break the budget into specifics, nor does it specify what was spent on its area of control in Lebanon versus in other locales. Livingstone and Halevy, Inside the P.L.O., 171–2, 84–95, Zagorin, “Auditing the P.L.O.,” 199. Livingstone and Halevy, Inside the P.L.O., 172. Yassir Arafat and other high officials’ pay at this time was officially about $900 per month plus a cost of living allowance. Zagorin, “Auditing the P.L.O.,” 199. Greenberg, Wechsler, and Wolosky, “Terrorist Financing,” 5.

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34. The Taliban government of Afghanistan was recognized only by Saudi Arabia, Pakistan, and the United Arab Emirates (UAE). Even without official recognition, however, Afghanistan could still offer many trappings of recognized states, such as the use of the national airline. 35. Stern, Terror in the Name of God, 253. 36. Rohan Gunaratna alleges that, in addition to Bin Laden’s funding, other funding for these camps came from Iran. Gunaratna, Inside Al Qaeda, 158–9. 37. Stern, Terror in the Name of God, 253, Steve Coll, Ghost Wars: The Secret History of the C.I.A., Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001 (New York: Penguin Books, 2004), 271. 38. Takeyh and Gvosdev, “Do Terrorist Networks Need a Home?,” 101. 39. Gunaratna, Inside Al Qaeda, 157. 40. National Commission on Terrorist Attacks upon the United States, 9/11 Commission Report, 58–9. 41. The first World Trade Center attack occurred in 1993, and though the mastermind, Ramzi Youssef, was a nephew to Khalid Sheikh Mohammed, it is unclear if al Qaeda actually had anything to do with this original attack. The Dhahran attack actually occurred right after Usama bin Laden was forced to leave Sudan, but most of the planning had taken place while Usama bin Laden was still in Sudan. Ibid., 59–62. 42. Byman, Deadly Connections, 187–218, Gunaratna, Inside Al Qaeda, 61–2, 40, Rashid, Taliban. 43. Usama bin Laden did not immediately set up an alliance with the Taliban—he actually sent out feelers to a number of groups, including that of Gulbuddin Hekmatyar, at the time a staunch opponent of the Taliban. He did not begin to cement his relationship with the Taliban until September, 1996. Also, at the time, Usama bin Laden was rather short of money, having had all his assets in Sudan confiscated by the Sudanese government when he left, though he apparently had other funding pipelines available. Wright, Looming Tower, 260, National Commission on Terrorist Attacks upon the United States., 9/11 Commission Report, 65. 44. Though it appears that al Qaeda protected drug production and processing areas, it probably did not directly profit from their production and sale. Stern, Terror in the Name of God, 273, Gunaratna, Inside Al Qaeda, 58–61. 45. Rashid, Taliban, 139. 46. Stern, Terror in the Name of God, 253–4. 47. Bergen, Holy War, Inc., 165. 48. National Commission on Terrorist Attacks upon the United States, 9/11 Commission Report, 66. 49. Migaux, “Al Qaeda,” 321. 50. National Commission on Terrorist Attacks upon the United States, 9/11 Commission Report, 66–7.

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217

51. Migaux, “Al Qaeda,” 321. 52. Jeffrey Haynes, “Islam and Democracy in East Africa,” Democratization 13, no. 3 (2006): 498. 53. Hirst and Thompson, Globalization in Question, 9–11. 54. Stern, Terror in the Name of God, 143–4. 55. Ibid., 248. 56. Kurth Cronin, “Behind the Curve,” 46–51. 57. Stern, Terror in the Name of God, 274–7. 58. Bruce Hoffman, “The Leadership Secrets of Osama Bin Laden: The Terrorist as C.E.O.,” Atlantic Monthly 291, no. 3 (April 2003): 26–27. 59. Bergen, Holy War, Inc., 31. 60. Stern, Terror in the Name of God, 144–5. 61. Hoffman, “Global Terrorist Threat,” 45–6. 62. Stern, Terror in the Name of God, 250–5, Gunaratna, Inside Al Qaeda, 57–8. 63. Stern, Terror in the Name of God, 259–60. 64. Audrey Kurth Cronin, “Al Qaeda after the Iraq Conflict” (Congressional Research Service, May 23, 2003), 3. 65. Heraldo Munoz, “First Report of the Analytical Support and Sanctions Monitoring Team Appointed Pursuant to Resolution 1526 (2004) Concerning Al-Qaeda and the Taliban and Associated Individuals and Entities” (UN Security Council, August 25, 2004), 7. 66. Boucek, “The Battle to Shut Down.” 67. Van Natta, “Terrorists Blaze.” 68. Bergen, Holy War, Inc., 47–8. 69. Wright, Looming Tower, 90, Bergen, Holy War, Inc., 51. Most sources researched noted Bin Laden graduated with degrees in economics and public administration. Some sources, however, claim he graduated with degrees in economics and engineering instead. Benjamin and Simon state Bin Laden claimed his engineering background helped him predict the damage the 9/11 attacks would do to the World Trade Center. Benjamin and Simon, Age of Sacred Terror, 98. 70. Hoffman, “Redefining Counterterrorism,” 14. 71. Usama bin Laden has claimed that he went to Afghanistan within days after Soviet troops invaded in 1979, but his brother-in-law and former best friend (who later denounced Bin Laden) Jamal Khalifa stated that Bin Laden did not go until 1984. Bergen, Holy War, Inc., 53–4, Wright, Looming Tower, 109. 72. Bin Laden offered a place ticket, residence, and living expenses for Arab fighters and their families, which amounted to about 300 USD per month per household. Even with this offer, there were never more than 3,000 Arab volunteers. Bergen, Holy War, Inc., 54, Wright, Looming Tower, 117–21. 73. Greenberg, Wechsler, and Wolosky, “Terrorist Financing,” 5.

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74. In 1998, Bin Laden swore a pledge of loyalty to Taliban leader Mullah Omar, acknowledging him as “the leader of the faithful.” Wright, Looming Tower, 152, 62–5, 86–7, 250–2, 326. 75. Mark Mazzetti and David Rohde, “Terror Officials See Al Qaeda Chiefs Regaining Power,” New York Times (February 19, 2007), http://www.nytimes.com/2007/02/19/world/asia/19intel.html?_r= 1&oref=slogin. 76. There are numerous accounts of how much Usama bin Laden inherited and what his yearly stipend was. Early estimates put his inheritance at 300 million USD, but a more current and accurate estimate provided by the 9/11 Commission is about 20–30 million USD. Lawrence Wright gives the most conservative estimate. He argues that Usama bin Laden inherited only about 7 million USD, and his stipend was only 266,000 USD per year. Nevertheless, starting an organization with millions, as well as a substantial yearly allowance, will certainly give a nascent terrorist organization a much stronger start than one which must live handto-mouth. Wright, Looming Tower, 165 and 65n, Bergen, The Osama Bin Laden I Know, 10, National Commission on Terrorist Attacks upon the United States, 9/11 Commission Report, 169–70. 77. Rensselaer Lee, “Terrorist Financing: The U.S. And International Response” (Congressional Research Service, December 6, 2002), 8. 78. Frantz, “Possible Link Seen to Us-Based Charity.” 79. “Expert and Newspaper Says Dimaonds Fund Terrorists,” http://www. jckgrop.com/index 80. Kevin McCoy and Daniel Cauchon, “The Business Side of Terror: Al Qaeda Network Runs Like Fortune 500 Firm,” USA Today, October 16, 2001. 81. Greenberg, Wechsler, and Wolosky, “Terrorist Financing,” 9–10. 82. Hoffman, “Redefining Counterterrorism,” 15, Wright, Looming Tower, 190–2. 83. Bergen, Holy War, Inc., 83–4, United States of America V. Usama Bin Laden, Et Al, United States of America,Plaintiff-Appellant V. Ahmed Ressam, Also Known as Benni Antoine Noris. Bin Laden’s company controlled roughly 80 percent of the world’s supply of gum arabic. Loretta Napoleoni, “Money and Terrorism,” Strategic Insights 3, no. 4 (2004). Lawrence Wright argues that only about 500 people worked for Bin Laden while he lived in Sudan. This book uses the higher number provided by Peter Bergen because this seems a more reasonable number of employees, given the number of businesses and the size of various projects. For Wright’s estimate, see Wright, Looming Tower, 191–2. 84. Bergen, Holy War, Inc., 83. 85. Wright, Looming Tower, 191. 86. Bergen, Holy War, Inc., 105. Lawrence Wright contends that Bin Laden was not very interested in his businesses. Other authors, however,

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87. 88.

89.

90.

91. 92. 93. 94. 95. 96. 97.

98. 99. 100.

219

describe him as very business savvy. Nevertheless, most scholars agree that he left Sudan with few or no assets from there. For Wright’s contention, please see Wright, Looming Tower, 222–5, 53–4. Bergen, Holy War, Inc., 84. Ken Opala, “Dreaded Somali Terrorist Group Taps into Sugar Racket,” Daily Nation (Kenya) (April 10, 2009), http://www.nation.co.ke/ News/-/1056/559404/-/view/printVersion/-/vke76t/-/index.html. The Embassy bombings not only shared a modus operandi for financing and cover businesses, but also shared the same Egyptian technician to build the bombs. Bergen, Holy War, Inc., 113–5. William Rosenau, “Al Qaida Recruitment Trends in Kenya and Tanzania,” Studies in Conflict and Terrorism 28, no. 1 (2005): 3. Fazul is linked with Al Shabaab, the militia group associated with al Qaeda that is smuggling sugar. The sugar is apparently being shipped into the Somali port of Kismayo before being further transported to Kenya across the land border. Opala, “Dreaded Somali Terrorist Group Taps into Sugar Racket.” United States of America V. Usama Bin Laden et al., 353. Wright, Looming Tower, 359, Marc Sageman, Understanding Terror Networks (Philadelphia: University of Pennsylvania Press, 2004), 48. Sageman, Understanding Terror Networks, 55. Lee, “Terrorist Financing: The U.S. And International Response,” 3, Boucek, “The Battle to Shut Down,” 2. Sageman, Understanding Terror Networks, 38. Stern, Terror in the Name of God, 269. “Report to Congressional Requesters on Terrorist Financing: U.S. Agencies Should Systematically Assess Terrorists’ Use of Alternative Financing Methods,” 30. Bruce Riedel, “Al-Qaeda Five Years after the Fall of Khandahar” (Brookings Institution, January 18, 2007). Whitlock and Wright, “Saudis Say They Broke up Suicide Plots,” “Saudi Arrests Suspects Planning Oil Attacks” (Reuters, April 27, 2007). There has been some disagreement over how closely Fatah al Islam is related to al Qaeda. Rebecca Bloom, “Backgrounder: Fatah Al-Islam” (Council on Foreign Relations, June 8, 2007). Even if Shakir al Absi, leader of Fatah al Islam, never actually swore bayat to Usama bin Laden, it is clear given the close affiliations of those he trains, as well as his relationship with Abu Musab al Zarqawi, that he has had extremely close ties with the al Qaeda network. For information on European recruits training in Lebanon, see Vidino, “Current Trends in Jihadi Networks in Europe.” For information on North African-affiliated terrorists (such as those of al Qaeda in the Islamic Mahgreb) using Fatah al Islam training centers, see Black, “Lebanon Another Waypoint for North Africans Headed to Iraq.”

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101. Riedel, “Al-Qaeda Five Years after the Fall of Khandahar.” 102. Mohammed M. Hafez, “Al-Qa’ida Losing Ground in Iraq,” CTC Sentinel 1, no. 1 (2007). 103. For a discussion of the use of the Internet by Islamic extremists and jihadists, see, for example, Gabriel Weinmann, “Virtual Disputes: The Use of the Internet for Terrorist Debates,” Studies in Conflict and Terrorism 29, no. 7 (2006), Chassay and Johnson, “Google Earth Used to Target Israel,” “A World Wide Web of Terror,” Evan F. Kohlmann, “The Real Online Terrorist Threat,” Foreign Affairs 85, no. 5 (2006), Michael Moss, “What to Do about Pixels of Hate,” New York Times October 21, 2007. 104. The use of the Internet for recruitment should not be overblown. Though the Internet can certainly provide an underlying foundation or interest in Islamic extremism, and even jihad, an individual is rarely recruited solely through Internet or similar communications. As Michael Tarrnby has noted, “Reading and sending messages about the Jihad on the Internet may make these individuals receptive to its appeal, but direct involvement requires interaction.” Thus, personto-person contact remains critical. Michael Taarnby, “Recruitment of Islamist Terrorists in Europe: Trends and Perspectives” (January 14, 2005), http://www.justitsministeriet.dk/fileadmin/downloads/ Forskning _og _dokumentation/ Rekruttering _ af_ islamistiske_ terrorister_i_Europa.pdf, Stern, Terror in the Name of God, 265. 105. Mazzetti and Rohde, “Terror Officials See Al Qaeda Chiefs Regaining Power,” “National Intelligence Estimate: The Terrorist Threat to the U.S. Homeland” (Office of the Director of National Intelligence, July 2007), Dirk Laabs and Sebastian Rotella, “Terrorists in Training Head to Pakistan,” Los Angeles Times, October 14, 2007, Souad Mekhennet and Michael Moss, “Europeans Get Terror Training inside Pakistan,” New York Times, September 10, 2007, Hassan Abbas, “Increasing Talibanization in Pakistan’s Seven Tribal Agencies,” Terrorism Monitor 5, no. 18 (September 27, 2007), http://jamestown.org/terrorism/ news/article.php?articleid=2373679. 106. Josh Meyer, “Cutting Money Flow to Terrorists Proves Difficult,” Los Angeles Times, September 28, 2003. 107. Van Natta, “Terrorists Blaze.” 108. Deyoung and Farah, “Us Agency Turf Battles.” 109. Van Natta, “Terrorists Blaze.” 110. Thachuk, “Terrorism’s Financial Lifeline,” 2. 111. “Report to Congressional Requesters on Terrorist Financing: U.S. Agencies Should Systematically Assess Terrorists’ Use of Alternative Financing Methods.” 112. Deyoung and Farah, “Us Agency Turf Battles.”

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10

221

Conclusions

1. The international treaties include Convention on Offenses and Certain Other Acts Committed on Board Aircraft (1963); Convention for the Suppression of Unlawful Seizer of Aircraft (1970); Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1971); Convention on the Prevention and Punishment of Offenses against Internationally Protected Persons, Including Diplomatic Agents (1973); International Convention against the Taking of Hostages (1979); Convention on the Physical Protection of Nuclear Material (1980); Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation (1988); Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (1988); Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf; Convention on the Marking of Plastic Explosives for the Purpose of Detection (1991); International Convention for the Suppression of Terrorist Bombings (1997); and International Convention for the Suppression of the Financing of Terrorism (1999). For a complete discussion of these international treaties, see “Legislative Guide to the Universal Anti-Terrorism Conventions and Protocols” (United Nations Office on Drugs and Crime, 2004). 2. For a description of passive support, see Daniel Byman, Deadly Connections: States That Sponsor Terrorism (Cambridge: Cambridge University Press, 2005), 219–58. 3. The first American act specifically criminalizing financial support to terrorist organizations in the United States was the Providing Material Support for Terrorists Act (Title 18 US Code § 2339A) in 1994. These measures have been strengthened with the Antiterrorism and Effective Death Penalty Act (AEDPA), enacted in 1996; Executive Order 13224 “Blocking Property and Prohibiting Transactions with Persons Who commit, Threat to Commit, or Support Terrorism; and the USA PATRIOT Act” (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism). Steve Kiser, “Financing Terror: An Analysis and Simulation for Affecting Al Qaeda’s Financial Infrastructure” (R AND, 2005), 111–20. 4. Paul Allan Schott, Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism, 2nd ed. (Washington, DC: World Bank; International Monetary Fund, 2006). 5. Kiser, “Financing Terror,” 168. 6. Ibid., 170–6. 7. Marc Sageman, Leaderless Jihad: Terror Networks in the Twenty-First Century (Philadelphia, PA: University of Pennsylvania Press, 2008), vii. 8. Ibid., 145–6.

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9. Marc Sageman, Understanding Terror Networks (Philadelphia: University of Pennsylvania Press, 2004), 158–62. 10. For an explanation of these and other terrorism resourcing related protocols, see Schott, Reference Guide. 11. Kiser, “Financing Terror,” 185–9. 12. Bard E. O’Neill, Insurgency and Terrorism: From Revolution to Apocalypse, 2nd ed. (Washington, DC: Potomac Books, 2005), 49–55. 13. Ibid. 14. Ibid., 46–9. 15. Paul R. Pillar, Terrorism and U.S. Foreign Policy (Washington, DC: Brookings Institution Press, 2003), 130. 16. Ian O. Lesser et al., “Countering the New Terrorism” (R AND Project Air Force, 1999), 137. 17. Pillar, Terrorism and U.S. Foreign Policy, 94. 18. These concepts and components of regenerative capacity were originally developed by Reid Sawyer, Director of the Combating Terrorism Center, and the concepts above are based on communications with him in 2006 and 2007. 19. Sageman, Understanding Terror Networks, 141. 20. Rohan Gunaratna, Inside Al Qaeda: Global Network of Terror (New York: Columbia University Press, 2002), 221. 21. Pillar, Terrorism and U.S. Foreign Policy, 56. 22. Ibid., 217.

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I n de x Note: Page numbers ending in “f” refer to figures. Page numbers ending in “t” refer to tables Abrams, Robert, 116 Adams, Gerry, 115–18 Adams, James, 13, 38, 51, 63, 138 al Aziz, Abd al Qadir Ibn Abd, 113 al Fadl, Jamal Ahmad, 31, 65, 75 al Qaeda acquiring resources, 26–8 and bin Laden, 75, 142–5, 148–54 and charities, 60, 150 and commodities, 44–5 as evolutionary group, 1–2 and ideology, 21–2 and multinationals, 65, 74–6 as nonstate franchisee, 107–13 personnel, 16 and “seed money,” 62 and state sponsoring, 8, 142–5 and transnational corporations, 147–56 al Sharif, Sayyid Imam Abd al Aziz Imam, 112–13 al Suri, Abu Musab, 23 al Turabi, Hassan, 142 al Wadoud, Abu Mus’ab Abd, 110 al Zarqawi, Abu Musab, 110 al Zawahiri, Ayman, 76, 108–9, 112, 130, 143, 145, 150 al Zawahiri, Mohammed, 109 Alexander II, Tsar, 52 ALF Primer: A Guide to Direct Action and the Animal Liberation Front, 131 al-Nasser, Gamal Abd, 91 Amman, Pottu, 78 An Phoblacht, 118

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Anarchist Wave, 51–4 Andreas, Daniel, 129 Anticolonialist Wave, 51, 54–5 Arafat, Yassir, 37, 44, 57–8, 67, 91–5, 138–40 Argentine Monteneros, 23 Assad, Hafez, 140 Assad, Rifaat, 140 Aufhauser, David, 149 autonomy, 4–7, 9f, 10f, 28, 166 autonomy groups, 99–120 Azzam, Abdullah, 149 Bah, Ibrahim, 45 Baker, Raymond, 46 Bakunin, Mikhail, 52 Bale, Christian, 39 bank robberies, 28, 34–5, 53–6, 58 banking institutions, 42–4 Beam, Louis, 121, 122 Bektasevic, Mirsad, 124 Bell, J. Bowyer, 116, 137 Benjamin, Daniel, 156 Best, Steven, 130 Biaggi, Mario, 116 bin Laden, Mohammad Bin Awad, 149 bin Laden, Usama and al Qaeda, 75, 142–5, 148–54 and al Zawahiri, 108–9, 130, 145, 150 businesses of, 149–52 providing funds, 107, 110 trading assistance, 62 wealth of, 1, 26, 31, 38, 42

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I n de x

Block, Nathan “Exile,” 131 “blood diamonds,” 44–5, 106, 150 Bouteflika, Abdelaziz, 111 Brennan, Philip, 116 Brosnan, Pierce, 39 bundled-support organizations, 7, 8, 105, 113–20 business holdings, 41–7, 149–52 Byman, Daniel, 5, 14, 85, 86 Cahill, Joe, 115 Carlos the Jackal, 57 Carnot, President, 52 cash smuggling, 31–3 Cassella, Stefan, 49 categories of organizations analyzing, 166–7 description of, 7–10, 9f, 10f future of, 157–8 see also organizations charities, 38–41, 60–1, 73–4, 81, 150 Chouinard, Yvon, 39 Comerford, James, 116 command and control structure, 18, 21–2, 85–6, 113, 122 commodities, 32, 42–5, 61, 106, 150 see also resourcing communications, 15–23, 40, 55, 64–5, 160–1 Coronado, Rodney, 131 cost of terrorist attack, 14–17, 63 Countering the New Terrorism, 124 counterterrorism considerations, 3, 158, 164–7 counterterrorism forces, 21, 30, 65, 108, 121–4, 147, 166 criminal activities, 30–8, 61, 105–6, 165–6 De Mao, George, 116 DeJoria, John Paul, 39 diamonds, 44–5, 106, 150 diasporas, 39–40, 78–83, 113–15

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donations, 38–41, 158–9 Droudkel, Abdelmalek, 110, 112 drug smuggling, 49, 61, 71, 73, 81, 105–6, 136, 140 drugs, 36, 61 see also narcoterrorism Ecodefense: A Field Guide to Monkeywrenching, 131 ecoterrorism, 127–33 Encyclopedia of Jihad, The, 125 extortion, 35, 37, 69, 72, 106 Fadlallah, Sheikh Mohammed Hussein, 105 Fazul, Mohamad Abdullah, 152 Ferdinand, Franz, 54 financial institutions, 42–4 Fish, Hamilton, 116 Flannery, Michael, 70, 115, 117, 119 “following the money,” 164–5 Foreman, Dave, 129, 131 franchise organizations, 7–8, 74–5, 99–120, 157, 166 fraud, 29, 33–4, 58, 61, 69, 81, 106 Gadhafi, Mohammar, 92, 97 Galula, David, 137 Gilman, Benjamin, 116 Giraldo, Jeanne, 31, 83 Gleason, Teddy, 117 goal-based typologies, 2–3 gold, 45, 48 Gramm, Phil, 1 Guerin, Veronica, 68 HAMAS and financial institutions, 42–3 multinationals, 72–4 smuggling operations, 32 and state-sponsored terrorism, 55, 60–2 Harrison, George, 70, 116–17, 119 Hattab, Hassan, 110 hawalas, 45–7

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I n de x Hirst, Paul, 145 Hizbullah and communications, 17 smuggling operations, 32–3, 45 as state franchisee, 102–7 and state-sponsored terrorism, 55, 60–2 Hoffman, Bruce, 3, 62, 132, 133, 148 Holland, Jack, 119 Horgan, John, 68, 69 Huber, Ahmed, 42 idealism, 13–23 ideology, 20–3, 158, 165–7 import-export firms, 45–7 intangible resources, 13–14, 18–20, 26–8, 27t “inverse money laundering,” 48–50 investments in businesses, 41–7 Irish People, The, 118 Irish World, 53 Iyad, Abu, 93, 94 Jamison, Wesley, 130 Joosse, Paul, 132 Kaczynski, Theodore, 129 Kansi, Mir Aimal, 124 Kaplan, Jeffrey, 123 Keane, Jack, 117 Khalaf, Salah, 93 Khettab, Mourad, 111 Khomeini, Ayatollah, 102, 103 kidnappings, 35–6, 56, 71, 105 Kiser, Steve, 74, 158, 161 Kochan, Nick, 48 Kroptkin, Peter, 52 Laqueur, Walter, 53–4, 89 Leader, Stefan, 127, 130 Lenin, Vladimir, 163 Leninist model, 163–4 Levitt, Matthew, 63, 104, 106–7 Liddick, Donald R., 131

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225

life necessities, 15–16 lone wolf groups, 7, 14, 54, 62, 121–33, 159 McManus, Sean, 117 medium autonomy groups, 99–120 message, broadcasting, 20–3 message generation infrastructure, 15–23 see also communications Mitchell, Paul, 39 Mohammed, Khalfan Khamis, 152 money, following, 164–5 money laundering and autonomy groups, 106 as financial instrument, 41–2 and multinationals, 64, 69–70, 73, 81–2 and resourcing, 9–10, 26–9, 157, 161, 165 role of, 48–50 and transnational corporations, 146–8 money needs, 13–15, 26–8, 27t Moro, Aldo, 35 Most, Johann, 53 Mu’az, Abdul, 109 Mubarak, Hosni, 143 Muhammad, John Allen, 126 multinationals and al Qaeda, 65, 74–6 and HAMAS, 72–4 and money laundering, 64, 69–70, 73, 81–2 and Palestine Liberation Organization, 64–7 and Provisional Irish Republican Army, 64, 67–72 and Tamil Tigers, 65, 77–83 Munro, Lyle, 130 Mussolini, Benito, 37 Nada, Youssef Mustafa, 42 Naess, Arne, 128 narcoterrorism, 8, 36–7, 56, 136

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226 Nasar, Mustafa Setmariam, 23 Nasreddin, Ahmed Idriss, 42 Nechaev, Sergei, 52 needs of terrorist groups, 13–28 New Left Wave, 51, 55–9 New York Times, 37, 129 Newkirk, Ingrid, 130 Nidal, Abu, 37, 57 9–11 Commission Report, The, 144 nongovernmental organizations (NGOs), 40–1, 60, 80–1 NOR AID, 39, 70, 114–20 Norton, Augustus, 105 O’Callaghan, Sean, 68 O’Conaill, Daithi, 115 Odeh, Mohammed Saddiq, 152 Omar, Mullah, 75, 144 operational resources, 17–18 operational security, 19–20 operational space, 18–19 organizations analyzing, 166–7 capabilities of, 4–7, 9, 10f categories of, 7–10, 9f, 10f defeating, 166–7 future of, 157–8 see also specific organizations Pacheco, Alex, 131 Palestine Liberation Organization (PLO) costs for, 14 and multinationals, 64–7 and New Left, 57–8 personnel, 16 preserving, 157 and robberies, 35 and shell states, 138–41 and state-sponsored terrorism, 90–8 training courses, 23 wealth of, 1 Pathmanathan, Kumaran, 77–8 patrician currencies, 15

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I n de x personnel, 15, 16 Pillar, Paul, 3, 164, 166 plausible deniability, 89–90, 101, 119 political narrative, 20–3 political violence, 162–4 Prabhakaran, Velupillai, 77 Princip, Gavrilo, 54 Probst, Peter, 127, 130 propaganda networks, 16, 34, 54, 60, 87, 100, 104, 160 propaganda value, 108, 119, 138 Provisional Irish Republican Army (PIR A) and Anticolonialist Wave, 55–6 income source for, 32 and multinationals, 64, 67–72 and New Left, 57–9 and NOR AID, 114–20 preserving, 157 and training, 14 Rahman, Omar Abdul, 34 R AND, 124, 164 ransoms, 35–6 Rapoport, David, 51, 52, 88, 94 Ravachol, Francois-Claudius, 126 Reagan, Ronald, 119, 120 realpolitik, 92, 104, 158 recruitment pools, 22, 103, 165 Religious Wave, 51, 59–62 resourcing acquiring resources, 26–8, 47–8 criminalizing, 158 evolution of, 51–62 explanation of, 1–3 means of, 166–7 menu for, 25–50 and money laundering, 9–10, 26–9, 157, 161, 165 and technology, 47–50, 124–6 typology of, 7–10 variations in, 27t, 28–9 Ressam, Ahmed, 62 “reverse money laundering,” 29, 41–2, 49–50

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I n de x robberies, 28, 34–5, 53–6, 58, 69 Rodina, Peter, 116 Rossa, Jeremiah O’Donovan, 53 Ryan, Liam, 119 Sageman, Marc, 125, 159 sanctuary, 18–19, 23, 87 Sands, Bobby, 68, 119 Schiller, David, 92, 93 “seed money,” 62, 104, 110 Shabib, Muin, 73 Shapiro, Jacob, 64, 83 Sheen, Martin, 39 shell states classes of, 136–7 establishing, 160 example of, 138–41 explanation of, 7, 8, 135–41 future of, 159–60 growth of, 159–60 Sidqi, Atef, 109 Simon, Steven, 156 Singer, Peter, 130 smart cards, 47–8 smuggling of cash, 31–3 of diamonds, 44–5, 150 of drugs, 49, 61, 71, 73, 81, 105–6, 136, 140 of weapons, 70–1, 115–17, 119, 142 Special Forces, 17 Special Forces 2: Tale of the Truthful Pledge, 17 state resourcing, 29–30 see also resourcing state sponsoring organizations example of, 142–5 explanation of, 7, 8, 141–2 future of, 157 pros and cons of, 89–98 and Religious Wave, 62 state-sponsored groups explanation of, 7, 85–7 future of, 157

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227

HAMAS, 55, 60–2 Hizbullah, 55, 60–2 Palestine Liberation Organization, 90–8 pros and cons of, 87–98 Stern, Jessica, 101, 142, 146, 148 Strindberg, Anders, 95 Sunder, Shad, 39 Takeyh, Ray, 143 Tamil Tigers and commodities, 42 and diasporas, 39–40 and multinationals, 65, 77–83 and New Left, 58 personnel, 16 preserving, 157 tangible resources, 13–18, 26–8, 27t Taylor, Charles, 45 Taylor, Max, 68, 69 technology and resources, 47–50, 124–6 terror networks, 159 see also specific networks terrorism defining, 3–4 financial support of, 158–9 multinationals of, 63–84 war on, 52, 133, 153 waves of, 51–62 terrorism resourcing criminalizing, 158 evolution of, 51–62 explanation of, 1–3 means of, 166–7 menu for, 25–50 typology of, 7–10 variations in, 27t, 28–9 see also resourcing terrorist attack costs, 14–17, 63 terrorist needs, 13–28 terrorists, hiring, 37–8 Thatcher, Margaret, 120 Thompson, Grahame, 145 Tommasi, Joseph, 122

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I n de x

training tactics, 14, 23, 38, 87, 166 transnational corporations (TNCs) example of, 147–56 explanation of, 7–9, 145–7 future of, 160–1, 166 growth of, 160–1 and money laundering, 146–8 Trinkunas, Harold, 31, 83 Troen, Roger, 131 Tse-tung, Mao, 156, 160, 162–3 Tsouli, Younes, 124

War on Terrorism, 52, 133, 153 Washington Post, 129 Watson, Paul, 39 waves of terrorism, 51–62 weapons smuggling, 70–1, 115–17, 119, 142 Weaver, Randy, 122 Wolf, Lester, 116 Wright, Lawrence, 107, 144 Wynn, Steve, 39 Yassin, Sheikh Ahmed, 74

variations in resourcing, 27t, 28–9 Veneremos, 17

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Zacher, Joyanna “Sadie,” 131

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