2002 October 17 Thursday
CFR Report on Terrorist Funding

The Council on Foreign Relations has released an important report on efforts needed to reduce terrorist funding:

October 17, 2002 - After an initially robust attempt to curtail financing for international terrorism, the Bush administration's current efforts are strategically inadequate to assure the sustained results needed to protect U.S. security. This is the core finding of a bipartisan commission chaired by Maurice R. Greenberg, Chairman and CEO of AIG, and directed by two former National Security Council (NSC) officials who are experts in the field.

To regain momentum and give this issue the priority it requires, the Task Force urges the administration to take two key structural steps:

  • Designate a Special Assistant to the President with the specific mandate and prestige to compel the various diplomatic, law enforcement, intelligence, regulatory and policy agencies to work together to assure a sustained and effective U.S. response.
  • Drive other countries-whose efforts are woefully inadequate-to greater effectiveness and cooperation. To accomplish this, the U.S. should lead an initiative to create a new international organization dedicated solely to curbing terrorist financing.

In the aftermath of 9/11, President Bush said, "We will starve the terrorists of funding." The purpose of the report is to evaluate how the United States is doing in carrying out that mission. The Task Force, directed by former NSC officials William Wechsler and Lee Wolosky, commends the progress that the Bush administration and Congress have made in disrupting Al-Qaeda's financial network, both at home and abroad. It warns, however, that "as long as Al-Qaeda retains access to a viable financial network, it remains a lethal threat to the United States."

The Task Force describes the complex nature of the financial network sustaining Al-Qaeda and the obstacles to dismantling it, and it acknowledges that the only realistic goal is to curb rather than completely cut off terrorist funding. It finds that U.S. efforts to curtail terrorist financing are impeded not only by a lack of institutional capacity abroad, but, critically, by a lack of political will among U.S. allies. The Task Force notes, for example: "For years, individuals and charities based in Saudi Arabia have been the most important source of funds for Al-Qaeda. And for years, Saudi officials have turned a blind eye to this problem."

Confronted with this lack of political will, the Task Force finds that the Bush administration appears to have made a policy decision not to use the full power of U.S. influence and laws now on the books to pressure other governments to more effectively combat terrorist financing. It urges the Bush administration to reconsider the recently announced "second phase" of its policy to curb terrorist financing, which will rely more on foreign leadership and less on blocking orders-which the Task Force calls "among the most powerful tools the U.S. possesses in the war on terrorist finances."

The Council thinks the Bush Administration should be more frank about the lack of cooperation and effort other countries are providing:

Put issues regarding terrorist financing front and center in every bilateral diplomatic discussion with every "front-line" state in the fight against terrorism-at every level of the bilateral relationship, including the highest. Where sufficient progress is not forthcoming, speak out bluntly, forcefully, and openly about the specific shortfalls in other countries' efforts to combat terrorist financing. The Task Force appreciates the necessary delicacies of diplomacy and notes that previous administrations also used phrases that obfuscated more than they illuminated when making public statements on this subject. Nevertheless, when U.S. spokespersons are only willing to say that "Saudi Arabia is being cooperative" when they know very well all the ways in which it is not, both our allies and adversaries can be forgiven for believing that the United States does not place a high priority on this issue.

The report draws attention to the importance of Saudi Arabia as a source of terrorist funding:

However, it is worth stating clearly and unambiguously what official U.S. government spokespersons have not: For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda; and for years, Saudi officials have turned a blind eye to this problem.

This is hardly surprising since Saudi Arabia possesses the greatest concentration of wealth in the region; Saudi nationals and charities were previously the most important sources of funds for the mujahideen; Saudi nationals have always constituted a disproportionate percentage of al-Qaeda's own membership; and al-Qaeda's political message has long focused on issues of particular interest to Saudi nationals, especially those who are disenchanted with their own government.

Significant funds have also come from other pockets of wealth in the Arab world, such as the gulf states, Egypt, and elsewhere. Other moneys have been raised in South Asia, Europe, the Americas (including the United States), Africa, and Asia. Recent reports suggest that al-Qaeda may now be devoting increased resources to its fundraising activities in Southeast Asia, which would be a cause of significant concern. Additionally, in Asia and elsewhere, al-Qaeda has focused efforts in recent years on expanding its system of affiliates and surrogate organizations, such as Laskhar Jihad and Jemaah Islamiyah, many of which have independent financial support networks.

The report makes many other recommendations. You can download the PDF of the full report here.

You can also read the Financial Times coverage and the Washington Post coverage. The Post article has the best coverage I've found so far.

Share |      By Randall Parker at 2002 October 17 12:55 PM  Axis Of Evil


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