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“Funding Evil: How Terrorism is Financed – And How To Stop It”
A Meeting with Dr. Rachel Ehrenfeld
Tuesday, September 16, 2003
The Nixon Center, Washington DC
Dr. Rachel Ehrenfeld spoke Tuesday, September 16th at a Nixon Center luncheon about her new book: Funding Evil: How Terrorism is Financed and How To Stop It. The book uncovers the clandestine and sinister ways that Islamic terrorist groups finance their global network. Zeyno Baran, director of International Security and Energy Programs at the Nixon Center, also commented on the book. Ehrenfeld and Baran came to the conclusion that more needs to be done by the United States and its allies in order to stop networks of terrorist funding around the world. Fritz Ermarth, director of National Security Programs at the Nixon Center, moderated the discussion.
Ehrenfeld, who has had an extensive career investigating international organized crime, recently began to focus her research on the complex networks involved in the financing of global terrorism. Ehrenfeld contends that the ease with which terrorists are able to finance their operations is one of the main reasons why terrorism has become so widespread around the world.
Financing Terrorism: Sources and Methods
Ehrenfeld argued that the United States is far from identifying all the sources and methods of financing terrorism. For example, she said that Saudi Arabia, by their own admission, has spent $87 billion on schools, mosques, and Islamic centers all over the world. Ehrenfeld asserted that these institutions constitute the breeding ground for foot soldiers in the global Islamist terror movement. While the Bush Administration, she stated, has pledged that the war on terror has made successful gains, political consideration and possibly oil are preventing the administration from holding our so-called allies responsible for their role in the creation and support of the global Islamic terrorist network.
For the past two years, Ehrenfeld stated, the media has emphasized the fact that the 9/11 terrorist attacks cost about $500,000 to finance (price of flight schools, rental cars, box cutters, etc.) In reality, she asserted, this operation was backed by a huge infrastructure that was put in place over many years and cost billions of dollars. Ehrenfeld emphasized that recruitment, training camps and bases, housing, food, equipment, explosives, forged I.D. and travel documents, intelligence gathering, communications, bribery, and day-to-day expenses of operatives awaiting command are all part of the financing of a single terrorist attack. Terrorism, she said, also requires lots of money for propaganda, TV ads, radio, print media, paid demonstrations, and compensation for the families of killed terrorists. She estimated that the total cost is in the billions of dollars.
According or Ehrenfeld, funding sources for terrorism are: governments such as Saudi Arabia and Iran, terrorist organizations, legitimate businesses operating as fronts (such cell phone distributors, travel agencies, and suppliers of medical equipment), exploitation of financial markets (especially the unregulated commodities market), and international trade. Criminal activies, such as extortion, smuggling, kidnapping, prostitution and human trafficking, have also played a significant part in funding terrorism.
Terrorism and International Organized Crime
Ehrenfeld contends that terrorist groups have created partnerships with international criminal organizations around the world. According to her research, the partnership is lopsided with terrorists invading the turf of the criminals and gaining the upper hand in the relationship. She admits that this was astonishing to her, because criminals practically expected this new relationship, an arrangement that sometimes cast them in a role of subordinance. Terrorists have helped the criminal groups extend their reach of activities, and in return, she stated, terrorists in turn take their cut of the profits. “The nexus is complex and frightening. It links money, geography, politics, arms, and tactics to create a mutually beneficial relationship.”
Discussion over the role of organized crime in terrorism led some participants to question whether the United States should perhaps act in collusion with criminal organizations in an attempt to fend off and subvert terrorists’ advances in the criminal world. While it was recognized that there may be some gains from such a relationship, Ehrenfeld responded that such collaboration would cause more harm than good.
Ehrenfeld considers drug trafficking to be one of the biggest dangers. She highlighted the fact that over a decade drug trafficking has doubled its revenues to close to $2 trillion. As the Bush Administration has asserted, terrorists use the drug trade to finance acts of terror. Ehrenfeld noted that drug trafficking is the best weapon for terrorists because it’s a triple pronged weapon; it helps terrorists to: finance activities; undermine targeted countries politically and economically and create crises in public health; and recruit new members by citing drug use as an example of western social degeneracy and arguing that such corrupt societies must be destroyed.
The UN and Terror
Ehrenfeld argued that there have been many instances in which the UN actually aided and abetted terrorism. She asserted that land-for-peace programs in Colombia and Palestine only further strengthened terrorist organizations in those regions. She also claimed that the UN is funding Palestinian terrorism. According to her research, the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) distributed $521.7 million to the Palestinian Authority for the Palestinian people in 2002. Noting that, despite this money, most Palestinians have to survive on 1-2 dollars a day, Ehrenfeld contends that UNRWA funding goes toward Palestinian terrorism. She explained that most UNRWA workers are known to be Hamas members, and refugee camps run by UNRWA are used to stockpile terrorist ammunition.
Europe’s Role in Funding Terror
Ehrenfeld argues that terrorism is also bank-rolled and facilitated by the Europeans. While most Hamas-related groups have been shut down in the United States, she notes they have continued to sprout up in Europe. In the United Kingdom, groups openly campaign and recruit members while being protected under British freedom of speech and religion laws. In one example Ehrenfeld cited, a group in London that supports Hamas celebrated the anniversary of the 9/11 attacks by handing out cards with the “magnificent 19” on them (the 19 hijackers involved in the terrorist attacks in New York and Washington). While the EU has finally outlawed Hamas, she notes there are still other organizations that pose a threat to U.S. security.
Some participants voiced their concern over Europe as a convergence zone for terrorists. Two main points were made during the discussion: it is very hard to work with Europe in tracking terrorist funding because European security agencies will only retrieve data (and not investigate its significance) for their U.S. counterparts; and, in pursuing individuals and corporations that abet terrorists by laundering money, investigators are sometimes met with political friction. Other participants suggested, especially with respect to the later point, that such problems are encountered in the U.S. as well.
While approximately $200 million in terrorist funds have been frozen by the U.S. and other governments, Ehrenfeld contends that such efforts haven’t hindered terrorist organizations’ ability to recruit new members, finance training and travel, and plan future terrorist activities. She emphasizes that to win the war on terror, the U.S. and its allies must focus on eliminating as many sources of terrorist funding as possible. In order to do this, the U.S. must treat all organizations associated with terrorism equally. In addition, she argued, a crack-down on government corruption in the Middle East and in organizations such as the UN and the World Bank is needed.
This program brief was prepared by Nixon Center intern Wylie Clark.
