Asia Times Online


	November 9, 2001	atimes.com

Front

Islamic terrorists' budgets

By Marc Erikson

The commitment, meticulous preparation and fierce determination of the suicide pilots and their accomplices was the key. But how much money did it take to bring down the New York World Trade Center and breach the Pentagon walls?

We'll probably never know. But contrary to some opinion that argues that September 11 was a low-budget operation, with terrorists supported by friends' and family funds and the proceeds from their own employment, there can now be little doubt that years of sophisticated preparation, covert international travel, secure communications and high-tech training cost millions, and that maintaining and efficiently controlling the highly compartmentized Al-Qaeda international network of cells, operatives and support personnel requires in the range of US$5 million a year.

And while the Al-Qaeda Afghanistan operation was not directly material to the New York and Washington missions, the recruitment, training, and propaganda efforts it carries out, the weapons and other equipment it purchases and maintains, and the funds it pays to the Taliban host government are essential to the Osama bin Laden jihad, and cost at least another $10 million a year - with payments to the Taliban the major unknown variable.

The annual Al-Qaeda budget of at least $15 million (not counting host government payments) is still a pittance, of course, compared to the combined $330 billion annual US defense and intelligence budget that is supposed to protect the US and its interests abroad. But that's, of course, also the wrong comparison.

More immediately relevant are the facts that the Central Intelligence Agency (CIA) spent little more than $10 million on the entirety of East Asian covert operations in the year 2000, that it deploys just over a thousand clandestine action officers worldwide; and that - though the US intelligence budget is in the $30 billion range - the CIA itself receives only about 10 percent of this. The rest goes to costly satellite surveillance and other technical means and to other intelligence outfits.

In sum, Al-Qaeda alone spends funds in the same general order of magnitude as the CIA and covert operations, and likely can avail itself of a similar or larger manpower pool as the CIA's Directorate of Operations responsible for clandestine actions.

In the week of October 22, the US government formally created a special team of 100 agents attached to the New York Customs Service (under the Treasury Department), the Foreign Terrorist Asset Tracking Center (FTATC) with an initial budget of $6.4 million, tasked to track and disrupt international terror networks' funding and financial transactions.

The team, composed of 70 customs agents formerly principally involved in tracking drug money transactions and money laundering and another 30 special Federal Bureau of Investigation (FBI) and Internal Revenue Service (tax agency) staff, is empowered by the October 26 Anti-Terrorism Act to conduct not only electronic surveillance, but also - if possible - to infiltrate suspect organizations.

Also involved in the identification and tracking of terrorist organizations and their funds is the Treasury Department's Office of Foreign Assets Control (OFAC), more generally charged with enforcement of economic and trade sanctions against targeted foreign countries, terrorism sponsoring organizations and international narcotics traffickers. The OFAC on its website (www.ustreas.gov) publishes a comprehensive and frequently updated list of targeted organizations and individuals - whose only drawback may be that it is easily as useful to the targets as to the trackers.

Michigan Senator Carl Levin said after the US Senate vote on the Anti-Terrorism Act that "Osama Bin Laden has boasted that he knows the gaps in the Western financial system better than the lines in his own hand. Now we are capable of preventing terrorists from using our own financial system against us". The FTATC and the OFAC are indeed now empowered with very much larger investigative and enforcement capabilities than the US government had previously been willing to grant them.

The US and Britain also claim that they have already frozen some 40 suspect bank accounts containing nearly $100 million. But according to Professor Friedrich Schneider of the economics department of Johannes Kepler University in Linz, Austria, an expert on black and shadow economies, that amount is still only a very small fraction of the total assets in Islamic terrorist organizations' and fronts' possession.

Schneider was on a Toronto to Miami flight on September 11 when the plane landed in Chicago after the attacks on the World Trade Center and was not permitted to continue on its scheduled journey. He spent his enforced sojourn in the US, as all air traffic remained grounded for days, to give some initial thought to applying sophisticated and specialized statistical methods developed in the study of black economies to the wealth of disparate data available on terrorist organizations.

Upon his return to Austria, he and several researchers went to work in earnest and produced a paper delivered on October 25 at a seminar at the Pullach, Bavaria headquarters of the Bundesnachrichtendienst (BND, the German foreign intelligence service). The paper, titled "The financial flows of Islamic terrorist organizations: Preliminary findings from an economic-scientific standpoint" and accompanying quantitative tables (all in German) are publicly available on Schneider's Linz University website (www.economics.uni-linz.ac.at) and contain some startling results that prompted BND chief August Hanning to simply gasp, "Well, we had no such information up till now."

According to the Schneider study, Al-Qaeda by itself has assets of at least $5 billion and can avail itself of an annual budget of between $20 million to $50 million. Existing funds of Al-Qaeda and other terrorist organizations are continually being replenished from dealing in illegal drugs (mainly "courier" services) (30-40 percent of total), donations from individuals and Islamic religious organizations (20-30 percent), "classical" criminal activities (ranging from blackmail to protection money to bank robberies) (10-20 percent), and private wealth and business activities of members (10-30 percent). The total annual budget of major Islamic terrorist groups (including Al-Qaeda, Hamas, Hizbullah, the Algerian Front Islamique du Salut, the Turkish Milli Gorus) is estimated by Schneider at $133 million to $163 million. In addition, some further 17 smaller organizations control about $150 million annually, a figure broadly confirmed by British intelligence.

Schneider acknowledges that his figures may be off by about 20 percent. But even at the lowest estimate, the major groups alone can spend well over $100 million per year. Schneider also warns that just as in the case of the underground economies of major countries (accounting from 10 percent to 15 percent of GDP in Europe), funding activities and financial transactions are extremely difficult to track as no very large amounts ever need to be raised or transferred at any one time.

The US trackers, he says, have a hugely difficult task on their hands - and, of course, Western intelligence services have to live with the fact that in both funds and manpower they may be well outgunned by the terrorist networks they are trying to shut down.

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