There are experts who claim that terrorism does not require large
amounts of money; when you "kill one, [you] frighten ten thousand,"
as the old Chinese proverb suggests. Individual terrorist acts do
not in fact cost much-the attack on the World Trade Center is estimated
to have cost only $500,000.(1)
But today's global terrorism requires money for much more than individual
attacks. An expanding terror network must have enough funds to support:
camps and bases
explosives, and conventional and unconventional weapons
and travel documents
among organizational components
maintenance expenses of members awaiting commands to launch operations(2)
Terrorism also requires money for television, radio, print media,
videos, and paid demonstrations to advance incitement against the
Funding is needed to maintain the families of terrorists who are
deployed as "sleepers"-who live undercover and do not
support their dependents-as well as to compensate families of terrorists
who are killed. The total cost of maintaining the global Islamist
terror network is estimated to be in the billions of dollars.
To sustain these operations, sophisticated, multifaceted worldwide
funding networks have been set in place over the past two decades.
Funding sources for terrorism are:
such as Saudi Arabia, Iran, and North Korea
organizations such as the Muslim World League (MWL) and the International
Islamic Relief Organization (IIRO)
businesses operating as fronts
of financial markets, especially the unregulated commodity markets
trade, which converts cash into precious commodities such as diamonds
Funding also comes from criminal activities such as:
rings and trafficking in people
fraud, identity theft, and counterfeiting.
of videos, compact discs, tapes, and software Unacknowledged is
a major source of funding that comes from trade in illegal drugs
such as heroin, hashish, cocaine, and methamphetamines.
While we know, in general, how terrorists fund themselves, no serious
attempts have been made to shut down terrorist financing, despite
warnings from both CIA and FBI directors of immanent attacks by
Al-Qaeda and other Islamists. The recent attacks in London illustrate
that fact all too well.
"The terrorists aren't waiting for us to get our enforcement
act together. While we struggle over how to restructure our agencies,
they're squirreling away money to fund their attacks. Shutting down
terrorism financing must be an urgent and high priority," warned
Senator Chuck Grassley in March 2004 (3). However, not everybody
shared his logic. Both the 9/11 Commission and the Treasury Department
have, according to Treasury Under Secretary Stuart A. Levey, "recognized
that the U.S. Government's campaign against terrorist financing
must be viewed as but one of many fronts in the global war on terror,
rather than an as an end in itself" (4). However, Levey admitted
that "our counter-terrorism financing efforts are a vital part
of the overall war. Terrorists require money to train, travel, communicate,
indoctrinate, procure weapons, carry out attacks, and conceal themselves.
Starving them of money debilitates every aspect of their operations
and, ultimately, their ability to survive" (5).
Testifying before the Senate Committee on Banking, Housing, and
Urban Affairs on July 13, Under Secretary Levey states that:
"Still, we have a long way to go in the battle against terrorist
financing in the
both in terms of robust implementation of"
the anti-terror financing laws, "and in responding to specific
threats and circumstances."
He went on to say that the "Adoption of legislation and regulations
is meaningless without strong and effective implementation."
As an example he mentioned that "some countries, eager to curry
favor with their neighbors or the international community, may believe
that adopting an anti-money laundering and counter-terrorist financing
law will keep observers at bay. Such half-steps will neither fool
nor satisfy the United States and the international community."
He promised that the United Sates "will continue to press for
effective implementation, including investigations, prosecutions,
designations, and other demonstrable actions," to stop terror
However, among the many difficulties we are facing is the fact that
terrorist groups like to exploit charities. They do so because:
activities of charities, such as operating schools, religious institutions,
and hospitals, can - if abused - create fertile recruitment grounds,
allowing terrorists to generate support for their causes and to
propagate extremist ideologies.
attract large numbers of unwitting donors along with the witting."
Thus increasing the amount of money available to terrorists.
extent that charities provide genuine relief, which nearly all of
them do, they benefit from public support and an attendant disinclination
by many governments to take enforcement action against them.
funds are meant to move in one direction only; accordingly, large
purported charitable transfers can move without a corresponding
return of value and without arousing suspicion.
International charities naturally focus their relief efforts on
areas of conflict, also prime locations for terrorist networks.
Such charities provide excellent cover for the movement of personnel
and even military supplies to and from high-risk areas."
Four years after September 11, the United States has designated
more than 400 entities as terrorists or supporters of designated
terrorists and frozen only $147 million dollars in terrorist-related
assets, $37 million dollars of which has been frozen in the United
States. In addition, the U.S. Government has identified and frozen
over $4.5 million dollars in al-Qaeda-related funds, while $72 million
dollars of al-Qaeda's money has been frozen by other governments
worldwide. Eighty countries have also introduced new terrorism-related
legislation, and 94 have established Financial Intelligence Units.
Altogether, more than 170 countries and jurisdictions have issued
freezing orders, however, many frozen accounts have since been "defrosted"
and the money returned to the account holders (6).
The mechanisms of terror financing include "donations to charities,
use of shell companies and otherwise legitimate businesses, and
narcotics trafficking." In addition to wire transfers through
commercial banks, money is moved via trade mispricing, credit and
debit cards, informal value and underground banking systems, and
bulk cash smuggling, including through cash couriers and containers,
which by nature, are difficult to identify and stop.
"The emergence of trust-based money transfer systems such as
Hawallah for cross-border funds transfers creates even more enforcement
difficulties, as those networks lie outside the regulatory system
covering financial markets and clearing systems. The worldwide growth
of bearer instruments in the capital and commodities markets also
makes tracing the ownership of the value embodied in those instruments
extremely difficult. In addition, the use of portable commodities
such as diamonds and gold, rather than direct money transfers, requires
that attention be paid to merchant markets outside the financial
community. Techniques such as over- or under-invoicing, which convert
a legitimate sales transaction into a device for illicitly transferring
value, compound the challenges" (7).
A major source of terror financing for terrorist organizations and
terrorists states alike, is the illegal trade in illegal drugs.
North Korea, a dictatorship and a member of the "axis of evil,"
commenced heroin production and trafficking on a large scale in
the early 1990s after the collapse of its major sponsors, the Soviet
Union and the Communist Bloc.
It was only after the 9/11 attacks on the U.S., however, that information
about North Korea's "heroin for nukes" business became
public. In August 1992, according to U.S. intelligence sources,
Kim Jong-il, ordered the Central Party's 39th Office to oversee
opium cultivation and heroin production and traffic with which to
raise money for the North Korea's empty coffers. Since then, those
who sell heroin for more than $1 million dollars are awarded with
the title "Hero of White Bellflower."
Since the late 1990's North Korea is reported to have produced at
least 50 tons of heroin annually, which it smuggles, along with
counterfeit currency, through its diplomatic missions around the
world. In December of 2004, the State Department's International
Narcotics Control Strategy Report states that the "North Korean
Government was involved in the global drugs trade as a matter of
State trading of narcotics is a conspiracy between officials
at the highest levels of the ruling party/government and their subordinates
to cultivate, manufacture, and/or traffic narcotics with impunity
through the use of, but not limited to, state-owned assets."
Moreover, "Law enforcement cases over the years have not only
clearly established that North Korean diplomats, military officers,
and other party/government officials have been involved in the smuggling
of narcotics, but also that state-owned assets, particularly ships,
have been used to facilitate and support international drug-trafficking
ventures." Over the last 20 years, there have been more than
50 well-documented incidents where North Korean diplomats have been
caught trafficking in illegal drugs. The late incident in December
2004, involved two North Korean diplomats, who were stationed in
Bulgaria, were arrested by Turkish authorities for smuggling $7
million dollars worth of narcotics pills into Turkey.
While North Korea's revenues from legitimate exports was estimated
by South Korea's central bank to be approximately $650 million dollars
for 2001, U.S. military officials in South Korea estimate that its
profits from the illegal drug trade are between $1-2 billion dollars
On April 20, 2003 in the middle of the international crisis regarding
North Korea's development of nuclear weapons, and as Secretary of
Defense Rumsfeld called for "regime change" in Pyongyang,
Australian Special Forces raided a North Korean ship off New South
Wales, containing "110 pounds of heroin, worth an estimated
$48 million dollars." North Korea has also forged alliances
with international crime syndicates, such as the Chinese Triads,
the Japanese Yakuza, and the Russian Mafia, to distribute both the
heroin and the counterfeit currency it produces - activity that
is said to generate at least $100 million dollars in hard currency
To generate more money, enabling North Korea to advance its nuclear
weapons program, it also engages in illegal arms sales, especially
missiles and related technology. Secret shipments of missiles are
sent from North Korea to Iran, Syria, Egypt, Yemen, Libya, Pakistan
and Vietnam - generating at least $560 million dollars in the year
And, of course, North Korean is not alone in the selling of illegal
drugs to fund its illegal activities. The Taliban and al-Qaeda in
Afghanistan, the Abu-Sayyaf Organization in the Philippines, and
almost every and all terrorist organization, including the insurgents
in Iraq, are using illegal drugs to fund their operations. The U.S.
failure to identify and to take action against narco-terrorism -
and its flooding of the U.S. and the rest of the world with illicit
drugs by terrorist organizations and states - is particularly troubling
since similar failures in the past are precisely what has helped
the terrorists to operate so successfully, independently, and globally
Finally, the wide spread all Islamist terror organizations today
is the result of at least $90 billions spent by the Saudis to spread
Wahhabism and train armies of ready Jihadists. The Saudis are the
ones that with their money and oil-power lead the efforts to destroy
the West, and first and foremost Israel. Please do everything in
your power to stop that from happening. Remember, Jerusalem is the
1. "North Korea: Another Outcropping of Terrorism,"
Forbes.com, September 18, 2001.
2. "Special Warfare," Foreign Military Studies Office,
The Professional Bulletin of the John F. Kennedy Special Warfare
Center and School, PB 80-94-4, October 1994, Vol. 7, No. 4.
3. Ward, Andrew, "North Korea: US Accused N. Korea of links
to Narcotics Trade," Financial Times, December 3, 2002.
4. Jay Solomon and Jason Dean, "Heroin Busts Point to Source
of Funds for North Koreans," The Wall Street Journal, Page
1, April 23, 2003.
5. Barbie Dutter, "North Korean heroin ship is seized by SAS,"
The Daily Telegraph, April 21, 2003, http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2003/04/21/whaul21.xml;
Also, "North Korean sailors caught smuggling heroin."
May 6, 2003
6. Ward, Andrew, ibid.
7. Lintner, Bertil and Steclow Steve, "Trail of Paper Illuminates
North Korea's Arms Trading," The Wall Street Journal, February