The Terrorism Business by Ran Dagoni Washington Globes November 6, 2003 Dr. Rachel Ehrenfeld claims that the ideologies of terrorist groups are a cloak for thriving criminal activity on a huge scale. For narco-terrorism researcher Dr. Rachel Ehrenfeld, an associate of hawkish circles in Washington, terrorism is first and foremost big business. Ideology is, at best, the handmaiden of Terror Inc.: a tool for recruiting cannon fodder, and in the Palestinian case, suicide bombers. According to the figures Ehrenfeld presents , "Inc." is not facetiousness. Although al-Qaida and Hizbullah might not be registered as corporations in Delaware, they turn over billions of dollars, and are established, thriving businesses, based in the capitals of corrupt regimes. They are supported by the proceeds from drug trafficking and organized crime, and are tolerated by supposedly upright regimes in enlightened Western countries. Corruption, says Ehrenfeld, is fertile soil for terrorism, and drugs are the compost fertilizer. "The war against corruption is the war against terrorism," declared former Czech President Vlaclav Havel in 2001. It is also Ehrenfeld's motto and that of her book "Funding Evil: How Terrorism is Financed and How to Stop It", published in September in the US. What is the common denominator between Colombian narco-terrorists and Hamas? Ehrenfeld answers: predatory cupidity, a total lack of restraint, and an absence of idealism. Ehrenfeld is an Israeli and has a Ph.D. in criminology from the Hebrew University in Jerusalem. Her credo is "in" among right-wing circles in the US and Israel, and she has enthusiastic supporters. It is a credo that fits the outlook of the neo-conservatives in Washington. The neo-conservatives are a group of Republican conservatives who were the main driving force behind the Iraq War and are identified with senior US defense establishment officials, such as Deputy Secretary of Defense Paul Wolfowitz; Under Secretary of Defense for Policy, Douglas Feith, the number three man at the Pentagon; and James Woolsey, Director of the CIA in the period 1993-95. Ehrenfeld's working assumption is that international terrorism camouflages itself with ideology, conforming to the neo-conservative view that the US is entitled to, indeed must, take preventive action on a global scale against terrorism and its abettors. Woolsey was an honored guest at the Washington party to mark the publication of Ehrenfeld's book last week; he wrote its introduction. Woolsey wrote, " Rachel Ehrenfeld has done all serious students of this long war a great service - by following the money." He thus summed up Ehrenfeld's ramified activities. She runs the Center for International Integrity in New York. She is also a regular participant in the public debate in the US about terrorism. She does not study terrorism per-se, but its financial infrastructure. "Go after the money and you'll get to the heart of the terrorist organizations," she told "Globes". "The bottom line is that without money, there is no terrorism, and without corruption, there is no money for terrorism." "Globes": How much money are we talking about? "Terrorism has surpassed all the Fortune 500 companies in size. The businesses of terrorist organizations, including al-Qaida, amounts to $1.2 trillion a year. I'm not talking about assets, only business: trafficking in drugs, arms, and women; smuggling cigarettes and other goods; and money laundering." Loretta Napoleoni reached a similar conclusion in her book "Modern Jihad", also recently published in the US. Napoleoni states that the new economy of terrorism is an international economic system with high growth and a turnover of $1.5 trillion a year, double the GDP of the UK. What is done with all this money? "The inbuilt purpose of every terrorist organization is to win political power at the expense of the legitimate authorities. The objective of the Islamic terrorist organizations is to undermine US hegemony in the world. They think that US power highlights their own weakness and the helplessness of Muslims in general. But on the way to achieving their ideological goals, the terrorist organizations have made so much money that its further accumulation has become their paramount objective, just as in any business. "Terrorist organizations make their money the same way any other businesses do. They invest to generate more income, in legitimate businesses, or in initiating terrorist attacks that will generate more business opportunities. Under their ideological camouflage the terrorist organizations operate well-oiled money-making machines. In other words, we're dealing with criminal enterprises for all intent and purposes, like the mafia or yakuza; only the methods are different, and apparently more successful. On the criminal stock exchange, terrorist shares bear the highest return. That's one of the reasons why ordinary criminal organizations tend to enter into joint ventures with terrorist organizations, such as the cooperation agreements between the South American drug cartels and Palestinian terrorists." How does this business model apply to Palestinian terrorism, for instance? "The Palestinian Covenant contains articles that deal with funds for martyrs relatives. These provided the legal basis for the acquisition of legitimate businesses alongside criminal enterprises such as the smuggling and marketing of drugs. In the 1960s, '70s, and '80s, [Palestinian Authority chairman] Yasser Arafat had sole unsupervised control over these funds, becoming one of the world's biggest billionaires. It's still true today." A US Department of Justice report states, "The PLO acquired 40% of its light arms for its forces from revenue from heroin, hashish, and morphine base made by the PLO at labs in Syria or in Lebanon's Baqaa Valley." Ehrenfeld cites a CIA report from 1990 that, prior to the 1993 Oslo Accords, the PLO had accumulated $14 billion from drug and arms smuggling, forging documents, and money laundering. The British National Crime Intelligence Service (BNCIS) estimated that in 1993-94, the total (of PLO assets - R.D.) was about $10 billion, with an annual income of $1.5 to $2 billion. The British report also noted that PLO was, in fact, the wealthiest of the world's terrorist organizations. Ehrenfeld claims the situation is no different now. At the time, she says, the PLO claimed it was on the verge of bankruptcy in order to obtain donations from countries with deep pockets and closed eyes as a reward for its good behavior at Oslo. Ehrenfeld's basic public complaint is that the PLO and other terrorist organizations do not weave their criminal webs in a vacuum. She claims that the terrorists can be deprived of their oxygen, but corruption on a global scale from the West, through Africa, Asia, the Middle East to Latin America plays an essential role in abetting terrorist organizations. Ehrenfeld claims that some South American countries are a classic example of the tendency of government officials to bury their heads in the sand or hold out their hands for terrorist bribes, and not only in the famous Argentina-Brazil- Paraguay border area. Colombian narco-terrorists and Islamic terrorists also collaborate. However, Islamic terrorist organizations, like other criminal organizations, know that the easiest and safest money is stashed in bank accounts. A legitimate cover for terrorists' financial transactions is a sought-after goal. Hamas, an organization that maintains a social network alongside its terrorist one, was a pioneer in the organized penetration of the banking sector. Why try to opportunistically embezzle from a bank, if you can own it instead? In the interview and in her book, Ehrenfeld relates that, in 1998, Hamas chiefs received $20 million from Abdullah Kamal, an owner of the Saudi el-Baraka Bank and the Islamic Bank of Jordan to establish the Bank al-Aksa in the Palestinian Authority. Kamal has also provided a solid financial infrastructure for Osama bin-Laden in Sudan since 1983. Ehrenfeld claims that Bank al-Aksa entered into a number of joint ventures with Citigroup (NYSE:C), the world's largest financial corporation, and within a short time managed to wrap its tentacles around Citibank's Israeli branch, sharing with Citigroup its database on Israel. The result was that Hamas members could withdraw money deposited in Bank al-Aksa accounts in Europe or the Middle East through Citibank branches. Until Citibank severed its relationship with Bank al-Aksa on the basis of information supplied by Israel and the US Department of Justice, as reported by "Globes" at the time, at least $1 million of Hamas money was transferred through Bank al-Aksa. Ehrenfeld says this is small change compared with the sums sent to Hamas from Islamic charities across the Islamic world and outside it, mainly from the Holy Land Foundation, an Arab-American foundation with branches in Illinois, New Jersey and Texas, and which claimed to be the largest Islamic charity in the US. The Bush administration estimates that the Holy Land Foundation raised $30 million in 2000 in the US alone. The US Department of Justice ordered it closed a few months after September 11, 2001, hurting Hamas' sources of revenue, but by no means drying them up. Compared with Hamas, Hizbullah is a Goliath. Ehrenfeld claims on the basis of Western intelligence sources that Hizbullah's operating budget is $220-500 million a year. At least $120 million is sent every year from Teheran. A much smaller amount comes from Syria. The rest of the budget comes from charitable organizations, individual donations, and from legitimate and illegitimate businesses, including arms deals, cigarette smuggling, money forging, fraud, robbery, providing illegal telephone services, and drug smuggling. Ehrenfeld claims that Hizbullah's financial network straddles the globe, from Colombia to Canada, from Europe to Africa. In the US, Hizbullah maintains a complex money-raising network, not all of which has been uncovered by the authorities. An Iranian "charity", the New York-based Alawi Foundation, has $100 million in assets in the US, and annual revenue of $10-15 million. The FBI has set its sights on the foundation. The little that is known about it merely hints about what is not known, says Ehrenfeld. The fact that the US authorities have not yet entirely decoded the mechanisms by which Hizbullah transfers money to Lebanon is more astonishing. The mechanisms are found virtually everywhere, even in the most respected place in the New York. "People who buy fake Gucci bags and Swiss watches sold by Nigerians on the sidewalks of Fifth Avenue in Manhattan contribute to terrorism," says Ehrenfeld. "The Nigerians are only the tip of the iceberg of the criminal mechanism that finances Islamic terrorism. In fact, Nigerian criminal gangs are the world's largest criminal corporation. There are Nigerian gangs that have managed to buy legitimate businesses in the US, fronted by local whites. I know of a case in which a Nigerian gang took over a factory making blank identification documents for state authorities." Although Ehrenfeld has no illusions about the Palestinian Authority or Hizbullah, and little hope about the Third World, she pours out her wrath on the West for its passivity in the best case and political corruption in the worst, which frustrates what she considers the Herculean American effort to fight terrorism. "There is a general trend in the world, including Europe, to challenge the US's world standing, and in this respect, the Europeans and Arabs have a common interest," she says. "That is why most European countries won't wholly cooperate with the US effort to strangle the cash flow to Islamic terrorism." Ehrenfeld says the root of the evil is the absence of international legal standards that could do wonders in closing the international pipelines sending money to al-Qaida and its cohorts in the Middle East. In the absence of such a standard, some Western European countries - the "enlightened" ones in Ehrenfeld's ironic phrase - ought to be included in the Financial Action Task Force (FATF) blacklist of countries abetting money laundering. France, for example, the UK, too, and most Eastern European states. Ehrenfeld says the problem is not the lack of enlightened laws of the kind filling the Western statute books, but the lack of political will to implement them. She says the bottom line is that so long as the war against corruption is not a paramount goal on a global scale, especially in Europe and the Middle East, terrorism will continue to exist amongst us, regardless of the number of terrorists captured and sent to prison at Guantanamo Bay. Published by Globes [online] - www.globes.co.il