THE POLITICAL ECONOMY of MIDDLE EAST TERRORISM by Matthew A

THE POLITICAL ECONOMY OF MIDDLE EAST TERRORISM by Matthew A. Levitt* Political terrorism has long been a key feature of Middle Eastern politics given the high degree of conflict, relative ineffectiveness of direct military means, ideological rationalizations, and willingness of states to sponsor such activities. The aftermath of the September 11, 2001 attacks on the United States and the subsequent American war against terrorism have focused attention on the financing of such movements and operations. The lines of political influence follow those of economic assistance. This article analyzes the state of knowledge regarding this issue. Political terrorism, often sponsored by admitted that the terrorists were unable to states, has long been a major factor in purchase sufficient material to build as Middle East politics. Terrorist groups' large a bomb as they had intended because ability to act more frequently and they lacked cash. In fact, the operation effectively is closely linked to financing. itself was rushed and carried out earlier Such patronage today, however, is than planned because the cell simply ran proportionately less in the hands of state out of money. In the end, the terrorists' sponsors. While Iran and Syria continue to attempt to reclaim the deposit fee on the back international terrorism, groups rental truck used to transport the bomb increasingly finance their own activities provided a key break in the case.(3) through a network of charitable and The al-Qa'ida suicide hijackings humanitarian organizations, criminal underscored the post-blast, investigative enterprises, front companies, illicit and utility of tracking the money trail, but they unregulated banking systems, and the also drove home the critical need to personal wealth of individual militant preemptively deny terrorists the funds they Islamists. This article highlights the need to conduct their attacks. Early network of sub-state actors that, on their financial leads in the September 11 own and in concert with state and other investigation established direct links sponsors, finance such movements and between the hijackers of the four flights activities.(1) and identified co-conspirators, leading The synchronized suicide attacks of investigators to logistical and financial September 11 highlighted the critical role support cells in Germany and elsewhere in financial and logistical support networks Europe as well as in the Gulf. Financial play in the operations of international leads led investigators to key al-Qa'ida terrorist organizations. According to the operatives and moneymen such as Ramzi FBI, the attacks cost between $303,672 and Bin al-Shibh in Germany and Mustafa $500,000.(2) In contrast, after his capture Ahmed al-Hasnawi in the United Arab in 1995, Ramzi Yusif, the convicted Emirates. Financial analysis provided mastermind behind the 1993 bombing of some of the earliest evidence proving the the World Trade Center and other attacks, synchronized suicide hijackings were an al- Middle East Review of International Affairs, Vol. 6, No. 4 (December,2002) 49 Matthew A. Levitt Qa'ida operation, and linked the German funds to and among terrorist groups. cell, the hijackers, and Zakarias Mussawi. Combined with the unprecedented law Wire transfers between Mussawi and Bin enforcement and intelligence effort to al-Shibh played a crucial role leading to apprehend terrorist operatives worldwide, Mussawi's indictment for his role in the which constricts the space in which attacks. Financial investigation also terrorists can operate, cracking down on established links between Mussawi and terrorist financing denies terrorists the members of the al-Qa’ida associated cell of means to travel, communicate, procure Jama'a al-Islamiyya terrorists arrested in equipment, and conduct attacks. Malaysia.(4) Effective though it may be, stemming THE MATRIX OF INTERNATIONAL the flow of terrorist financing will not TERRORISM stamp out terrorism. In fact, unlike Polio Contrary to conventional wisdom-- or Small Pox, terrorism cannot be which pigeon-holes al-Qa'ida in one box eradicated. There will always be and Hizballah, Hamas, Iran and Syria in grievances, causes, conditions that, coupled boxes of their own--militant Islamic groups with a healthy dose of evil, will lead people from al-Qa'ida to Hamas interact and to target civilian noncombatants for support one another in a matrix of political purposes or even as a means in international logistical, financial and itself. The primary responsibility of all sometimes operational terrorist activity. states, however, is to protect their citizenry, State sponsors of terrorism, particularly and to that end it is incumbent upon all Iran and Syria, are similarly woven into the states to employ the full range of fabric of militant Islamist terrorism. For protective, deterrent, and preventive example, many of the patrons of al-Qa'ida counter-terrorism measures available in an fund the suicide bombings and Qassam effort to provide for the security of its rockets of Hamas as well. International populace. The fact that terrorism cannot be terrorist groups do not operate in solitude. eliminated does not absolve states of the A task force on terrorist financing, responsibility to fight it as much as sponsored by the Council on Foreign possible. Relations, recently highlighted this In this regard, tackling terrorist interaction, noting: "Other Islamic terrorist financing represents a critical and effective organizations, Hamas and Hizballah tool both in reacting to terrorist attacks and specifically, often use the very same engaging in preemptive disruption efforts methods-and even the same institutions-[as to prevent future attacks. Often, as was the al-Qa'ida] to raise and move their money. case in the investigation of the September And more recently, published reports 11 attacks, financial transactions provide suggest that al-Qa'ida has formed the first and most concrete leads for additional tactical, ad-hoc alliances with investigators seeking to flush out the full these terrorist organizations to cooperate scope of a terrorist attack, including the on money laundering and other unlawful identities of the perpetrators, their logistical activities."(5) In fact, while there is no and financial support networks, and al- shortage of examples of operational and Qa'ida links to other terrorists, groups and logistical links between disparate militant accomplices. Since September, the U.S. Islamist groups, these interactions are most government has spearheaded a pervasive in the realm of financing. groundbreaking and comprehensive disruption operation to stem the flow of 50 Middle East Review of International Affairs, Vol. 6, No. 4 (December 2002) The Political Economy of Middle East Terrorism THE NETWORK OF TERRORIST organization through which wealthy Saudis FINANCING send millions of dollars to al-Qa'ida. Terrorism in the Middle East is financed In another example, Israeli authorities by an array of states, groups, fronts, arrested Usama Zuhadi Hamid Karika, a individuals, businesses, banks, criminal Hamas operative, as he attempted to leave enterprises and nominally humanitarian Gaza via the Rafah border crossing in organizations. December 2001. Karika was found with Terrorist Groups. Realistically, terrorist documents detailing the development of groups tend not to open bank accounts the Qassam rockets, and admitted that he under their organization's name, especially was on his way to Saudi Arabia to brief in the West. Nonetheless, there are in fact people on the development of the rockets cases, such as Hizballah in Lebanon, where and to obtain their funding for the project. groups operate openly and have accounts in Before his arrest, Karika had already made their own or other known names. Other one successful trip to Saudi Arabia where groups may boast of their links to such he secured initial funding for Hamas' groups. The Islamic Action Front (IAF) in Qassam rocket program.(7) In an Jordan and the Muslim Brotherhood in indication of the significant role played by Egypt openly state their support for Hamas, individual wealthy financiers in sponsoring and the IAF called for Arabs and Muslims terrorist operations, Treasury Department to donate funds to finance Hamas suicide Undersecretary for Enforcement Jimmy operations.(6) As such, they could be Gurule traveled to Europe in October 2002 subject to U.S. financial penalties with a list of about a dozen of al-Qa'ida's themselves despite the fact that they are not principal financial backers, mostly wealthy listed in any of the terrorist lists published Saudis, to persuade European counterparts by the United States or others. to designate them financiers of terrorism Individuals. A few wealthy individuals and block their assets."(8) are able to sponsor much terror. For Legitimate Business. Investigation into example, Mustafa Ahmad al-Hasnawi, a al-Qa'ida sleeper cells in Europe in the Saudi national and Bin Ladin moneyman, wake of September 11 revealed the sent the September 11 hijackers operational widespread use of legitimate businesses funds and received at least $15,000 in and employment by al-Qa'ida operatives to unspent funds before leaving the UAE for derive income to support both themselves Pakistan on September 11. U.S. officials and their activities. According to say that Yasin al-Qadi, a prominent Jidda congressional testimony by a senior FBI businessman and head of the Muwafaq official, a construction and plumbing Foundation, has supported a variety of company run by members of an al-Qa'ida terrorist groups from al-Qa'ida to Hamas. cell in Europe hired mujahadin (holy According to U.S. court documents, in warriors) arriving from places like Bosnia 1992 al-Qadi provided $27,000 to U.S.- where they had fought what they based Hamas leader Muhammad Salah and considered a Jihad (holy war). Cell lent $820,000 to a Hamas front members ran another business buying, organization in Chicago, the Quranic fixing and reselling used cars, and in these Literacy Institute (QLI). Based on their and other examples cell members deposited connection to Hamas, the U.S.

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