Following the Terror Funding Trail
Terrorism experts are warning that the killing of Osama bin Laden could result in an increase in funding for terrorism.
To get a closer look at the terror funding network I decided to speak to Jack Williams, a renowned professor of Middle East studies at Georgia State and a Senior Managing Director at Mesirow Financial Consulting.
LL: how will Bin Laden’s death impact terrorist financing?
JW: In the short term, bigger benefactors will slow down for fear that the US entry into the compound resulted in the seizure of documents and computers that may have their contact information. Of course, in a way, not giving now because of fear that something was seized in Pakistan yesterday is illogical, that is, the act was done.
However, it is human nature to hunker down when confronted with potential hostility directed at you! In the long term, say less than 6 months, the big donors will be back at it unless the raid resulted in our identification of them.
If we have identified them and ascertained their location, we may interdict or "watch and wait." Once you credibly identify a node in a terrorist organization, unless he or she poses a clear and present danger, it may be most fruitful to wait and see what you can see.
For modest and active (but not big) donors, expect a short term pick up in donations that may sustain itself for some time. This is where the world of terrorist financing is changing at a commercial pace.
A terrorist organization can now reach numerous potential donors in the small to moderate category, thus making these sources more financially viable. Think of technology as a force multiplier. Problem is that with more reliance on technology, the more likely it is that the USG and its allies can intercept, monitor, and interdict.
LL: How has al-Qaeda and al-Qaeda-like organizations attempted to solve this problem?
JW: They use modern technology but deliver it through a more primitive system. So, imagine a zakat solicitor visits a majid or Islamic learning center and asks for donations to support many causes, including those near to radical and militant Muslims.
Now, imagine that solicitor presents his iPhone and plays for his audience an appeal by OBL recorded months ago or recently released after his death (a canned video shot months or years ago just for this occasion—like the old Yule Brenner PSA against smoking after his death from cancer.) Now, multiply that encounter hundreds of times throughout the Middle East and Europe, and more recently, Indonesia. That is how the system works. High tech interface— low tech delivery systems.
LL: Are you seeing funding activity right now?
JW: Yes. We are already seeing activity on various jihadi websites soliciting support and funds, etc. We are also seeing those websites and influential Islamic religious authorities denouncing the actions of the USG. More importantly, three fatawa were issued that seek a resurgence of jihadi activity, including fundraising.
So in summary, there will be a significant short term spike in fundraising that may sustain itself for more than 18 months.
LL: How much is generated in terrorist funding?
JW: Estimates are notoriously inaccurate and grossly underestimate.
Historically, terror groups in the name of Islam are adaptive and opportunistic raising funds. Terrorist groups employ both legitimate and illegitimate fronts.
Legitimate fronts/sources include the abuse of charitable entities or legitimate businesses or self-financing by the terrorists themselves through the smuggling of contraband and the use of bust-outs. Illegitimate fronts/sources include a variety of criminal activities ranging in scale and sophistication from low-level crime to organized fraud or narcotics smuggling, or from state sponsors and activities in failed states and other safe havens.
Moreover, Islamist terrorists use a wide variety of methods to move money within and between organizations, including the financial sector, the physical movement of cash by couriers, and the movement of goods through the trade system. Charities and alternative remittance systems have also been used to disguise terrorist movement of funds.
LL: Even though the garbage was burned, now that the US has control of Bin Laden’s compound, do you think there is a high likelihood that we will find important financial information?
JW: Yes. He had clearly become comfortable in the environment. He is a collector of books and manuscripts. He is a collector of people and things. More importantly, people around him would have computers (although not connected to the internet) and other means of keeping the books and records.
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."