U.S. AID for Terror

By Dr. Rachel Ehrenfeld and Alyssa A. Lappen
FrontPageMagazine.com | 2/8/2008

The Bush Administration’s search for partners to promote “peace” and “democracy” within the Palestinian Authority (PA) resembles Lord Charles Bowen‘s “blind man in a dark room looking for a black hat — which isn’t there.”

For the first time, the Bush Administration plans to give $150 million in cash directly to the Palestinian Authority (PA) Treasury, as part of a $496.5 million “aid” package, including $410 million for development programs. This added to the $86.5 million for CIA “security training,” which Congress authorized in April 2007.

The CIA has apparently assumed the Palestinian terrorist-training role previously held by the former Soviet Union. Since 1994, the CIA armed and trained thousands of Palestinian “security forces,” who subsequently joined every Palestinian terrorist organization.

CIA Palestinian training success is best described by a member of the PA’s Chairman own security unit, — Force 17, officer Abu Yusef: “The operations of the Palestinian resistance would [not] have been so successful and “would not have killed more than 1,000 Israelis since 2000, and defeated the Israelis in Gaza without [American military] trainings,” he boasted in August 2007.

Since the Oslo Accords, the PA received some $14 billion to $20 billion in international aid, according to a 2007 Funding for Peace Coalition (FPC) report to the British Parliament. Each Palestinian received $4,000 to $8,000 per year. In comparison, the U.S. Agency for International Development (USAID), provided $1 billion in humanitarian aid for 2.5 million Darfur refugees from 2003 to 2006 –only $100 per person annually. Moreover, of the $7 billion pledged international aid, only $5 billion were spent to assist more than 5 million Tsunami victims in more than 15 countries on two continents.

The PA received “the highest per capita aid transfer in the history of foreign aid anywhere,” according to former World Bank country director for Gaza and the West Bank, Nigel Roberts. Not surprisingly, hundreds of thousands of Gazans spent more than $300 million in less than two week shopping spree, after Hamas blew up the border with Egypt. Yet, the Palestinian economy is in ruins, Why?

In March 2007, PA Prime Minister and former World Bank official Salam Fayyad, told London’s Daily Telegraph: “No one can give donors that assurance” that funds reach their designated destinations. “Where is all of the transparency in all of this? It’s gone.” Controlling Palestinian finances, Fayyad concluded, is “virtually impossible.”

Palestinian violence has escalated since the 1994 PA establishment and PA officials have produced an unbroken record of unfulfilled promises and outright deception. Yet President George W. Bush in his January 28 State of the Union Address, reassured the Palestinians that “America will do, and I will do, everything we can to help them achieve…a Palestinian state by the end of this year.”

Nevertheless, U.S.-favored PA President Mahmoud Abbas, who in 1957 with Yasser Arafat co-founded the al Fattah terrorist group, assumed the role of his predecessor. Like Muslim Brotherhood, Marxist-trained jihadist Arafat, neither does Abbas “recognize that confronting terror is essential to achieving a state where his people can live in dignity and at peace with Israel,” as President Bush declared.

Abbas remains committed to the organization’s reason d’etre–destroying Israel and expelling the Jewish people from the region. Despite public Fattah-Hamas leadership disagreements, branding one another “murderers and thieves,” Abbas arranged on Jan. 30 to give Hamas $3.1 billion of $7.7 billion that international donor community pledged last December in Paris.

Abbas’ support for Hamas is not new. In Feb. 2007, He announced, “We must unite the Hamas and Fattah blood in the struggle against Israel as we did at the beginning of the intifada.” He stated this en route to Mecca to meet with the Saudi King, and Hamas terror chiefs Khaled Mashaal and Ismail Haniyeh. The Saudis pledged hundreds of millions of dollars in “humanitarian aid”–which, like previous pledges, they failed to deliver.

Rather than $660 million in annual aid the Saudis promised in 2002, the kingdom donated only $84 million since then, according to World Bank reports. Other Arab League members, who in 2002 promised $55 million monthly to foster PA economic development, gave even less.

Meanwhile, however, the Saudis and the Gulf states funneled hundreds of millions of petrodollars–some raised in government-sponsored telethons–to reward Al Aqsa Martyrs Brigades, Hamas and Palestinian Jihad suicide bombers and fuel the anti-Israel Jihad. Indeed, “Saudi Arabia remains a source of recruits and finances for …Levant-based militants,” said National Intelligence Director J. Michael McConnell, before the Senate Select Committee on Intelligence, on 5 February 2008.

McConnell should have included USAID on his terror-funding list. A Dec. 2007 USAID audit reported that the mission administering its funds gave money to groups and institutions affiliated with U.S. designated terrorist organizations, including Hamas and Islamic Jihad. It warned: “Without additional controls, the mission could inadvertently provide support to entities or individuals associated with terrorism.”

USAID “failure” to prevent funds from reaching Palestinian terrorist is not surprising given U.S. previous Administrations support for Arafat, and now for Abbas, who repeatedly claims: “We have a legitimate right to direct our guns against Israeli occupation,” while reiterating his desire for “a political partnership with Hamas.”

It is time for President Bush to remove his blinders and stop donating U.S.-taxpayer funds to this murderous partnership. It is also time for Congress to demand a proper monitoring program to oversee the legitimate use of U.S. aid to the Palestinians.

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Dr. Rachel Ehrenfeld is author of Funding Evil; How Terrorism is Financed and How to Stop It. She is director of the American Center for Democracy and member of the Committee on the Present Danger. Alyssa A. Lappen, Senior Fellow at the ACD, is a former editor for Forbes, Corporate Finance, Working Woman and Institutional Investor.

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Terror’s financiers

U.S. oversight needs to improve

By Rachel Ehrenfeld and Alyssa A. Lappen
Washington Times | Jan. 17, 2008

The antiquated Securities and Exchange Commission’s computer system prevents investigators from safeguarding U.S. market integrity. “It’s like working with one hand tied behind their backs,” Republican Sen. Chuck Grassley commented about the Dec. 17 release of the Government Accountability Office (GAO) report he’d initiated — “SEC: Opportunities Exist to Improve Oversight of Self-Regulatory Organizations.” Why can’t the government with the world’s most advanced computer technology and capabilities equip its agencies with state-of-the-art systems allowing them to better monitor markets and transactions, including illegal activities?

In response to the GAO criticism, SEC Chairman Christopher Cox acknowledged, “additional information-technology changes such as these may help the [SEC] enforcement staff to effectively analyze trends, manage current caseloads and focus areas of investigation.” But all federal officials — not just at the SEC — should worry about much more than insider trading.

Take terror financing. So far, no U.S. official at any level, including presidential candidates from both parties, has publicly addressed how radical Muslim groups and Islamic terror organizations raise major sums to facilitate the murder of Americans in Afghanistan, Iraq and elsewhere, among other things.

Two years ago, President Bush denounced “the murderous ideology of the Islamic radicals [which] is the great challenge of our century.” But U.S. dependency on Middle East oil made the Saudis and their Gulf neighbors rich beyond their wildest dreams. Saudi funding propagates global Islamist extremism that former CIA Director James Woolsey describes as “the soil in which al Qaeda and its sister terrorist organizations are flourishing.” The September 11 commission awarded the government an A- for its “vigorous efforts against terror financing,” both in 2003, and again in its October 2005 progress report.

In fact, government efforts thus far have apparently targeted the wrong funding sources. The vast Middle East sums feeding the global spread of radical Islam and jihad have not diminished. Yet, our government tells us, the Saudis and their neighbors are U.S. allies.

Such disinformation, combined with outdated monitoring technologies and systems, contributes to continuing government failure to secure U.S. financial institutions, economic stability and national security.

Government agencies have long warned of the federal failure to properly monitor and impede funds flowing to terrorist organizations. These include several GAO reports and a May 21 IRS report criticizing government ability to identify charities favored by radical Muslims to fund terrorism.

“The IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified,” it says. Furthermore, the report recommends that the IRS and other agencies “develop and implement a long-term strategy to automate the process… to identify potential terrorist activities related to tax-exempt organizations.” Another major issue slipping under the radar concerns the growing influence of petrodollars on U.S. economic institutions, banks, markets and government agencies.

Due diligence currently available identifies the routine and obvious risks associated with Western market participants. However, growing Islamic banking and Shariah-compliant industries promote themselves as hot new financial markets in which to invest. The attraction for U.S. and Western banks and investors is the $1 trillion and rising annual Saudi and Gulf state oil revenues.

Then again, like many other “innovative” products, the “ethical” and “socially responsible” Middle East and Islamic banking and investment market present many new risks not currently addressed either by their proponents or by regulatory agencies, much less due diligence services now available.

These markets and products lack transparency and Western accounting. Frequently, their documentation and offering statements do not disclose information required by federal laws and banking regulations. Furthermore, this market is increasingly governed by radical Islamic clerics whose provenance is unknown to the Federal Reserve Board, U.S. and international equities and bond ratings agencies, index providers and other insufficiently educated market participants and facilitators.

Data-mining software is available in the market today. But it lacks the ability to also analyze social and political networks and identify terrorist links. An important new program will shortly be available to fill that gap. It will also aid collection, processing, investigation, discovery, data-sharing and reporting intelligence.

The government needs this technology to stop terror financing. And businesses need objective consultants with regional expertise, language skills and access to the latest software to fully meet their “know you customer” and disclosure regulations.

Businesses that fail to take these extra precautions are liable to suffer major losses, market dislocations and possible prosecution for material support of terrorism.

Tithing for Terrorists

Financing Jihad
by Rachel Ehrenfeld and Alyssa A. Lappen
National Review Online | Oct. 12, 2007

“Governments have political considerations,” said senior N.Y. Senator Charles Schumer, upon learning in September that Bourse Dubai intends to buy 20 percent of NASDAQ. Republican Senator Bob Bennett of Utah countered, saying, “Dubai is making a purchase on the open market of an asset that’s for sale. What’s wrong with that?”

Senator Bennett is correct — buying portions or all of NASDAQ is perfectly legal. Moreover, no changes could be made to NASDAQ regulations without Securities and Exchange Commission (SEC) approval. But of concern is Bourse Dubai’s Islamic influence in the heart of the U.S. markets and economy. And the deliberate United Arab Emirates (UAE) devaluation of the dollar since December 2006 is vastly increasing their purchasing power.

Bourse Dubai began operating as the world’s first fully shar’ia-compliant stock exchange, in December 2006. Sharia compliance requires companies traded to also be sharia-compliant, and establishes a special tax on all the others to “purify” them.

The Islamic “purity” (Tazkiya) of Bourse Dubai was approved by the sharia board of the 1991-Bahrain-registered and based Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI). The AAIOFI laid the groundwork for the global Islamic financial network and regulates all Islamic financial organizations and products, including Bourse Dubai.

Like every Muslim country, the United Arab Emirates (UAE) collects mandatory Islamic charity (Zakat– the Third Pillar of Islam — an annual wealth tax), of about 2.5-percent from Muslim institutions and companies. Being non-Muslims, foreign banks and oil companies theoretically don’t pay Zakat. But foreign banks and oil companies in fact do pay 20 percent of their profits, but rather than Zakat, these mandatory payments are called “tax.”

Zakat we are told, is to help the needy. However, Muslim Brotherhood spiritual leader, Yusuf Qaradawi decrees, “Declaring holy war…is an Islamic duty, and fighting ….is the Way of Allah for which Zakat must be spent.” In his 1999 publication, “Fiqh az-Zakat,” Qaradawi adds,

The most important form of jihad today is serious, purposefully organized work to rebuild Islamic society and state and to implement the Islamic way of life in the political, cultural and economic domains. This is certainly most deserving of Zakat.

And as previously demonstrated time and again, Muslim jihadist-terror organizations are indeed prominent Zakat recipients.

In 2003, the UAE established an independent federal agency collecting Zakat on government tax revenues from “companies listed on the Dubai Financial Market and Abu Dhabi Securities Market…, oil-producing companies and branches of foreign banks.” In 2007 these revenues were estimated at $13.5 billion.

Saudi Arabia, for example collects $18 billion a year in Zakat — which includes the 20-percent flat corporation tax from foreign companies. The Saudis claim that the money collected develops their infrastructure. However, two thirds of Saudi men are unemployed and the infrastructure is crumbling. Yet, since the 1970s, the Saudi government has spent more than $100 billion to build thousands of mosques, Islamic centers and Islamic studies programs in universities worldwide.

On April 30, 2007 the Organization of the Islamic Conference (OIC) — which also initiated Muslim riots after the Danish Mohammed cartoon publications — established the clerical International Commission for Zakat. The ICZ replaces more than 20,000 organizations that previously collected the money. The Islamic clerics’ centralized “expert committee” in Malaysia now supervises and distributes Zakat funds globally. The new committee will shortly distribute roughly $2 billion collected over Ramadan this year to Muslim charities.

Historical Development
The origins of all Islamic economic and financial regulatory organizations, including the AAIOFI’s date back to the 1920s invention of Muslim Brotherhood (MB) founder Hassan Al-Banna, who designed political, economic, and financial infrastructures to enable Muslims to fulfill a key form of jihad mandated by the Koran (Al Jihad bi-al-Mal — financial jihad)—“you… should strive for the cause of Allah with your wealth and your lives….” 61:10-11.

He viewed finance as a critical weapon to undermine the infidels “and…work towards establishing an Islamic rule on earth.” To do that, he understood that Muslims must create an independent Islamic financial system to parallel and later supersede the Western economy.

Al-Banna’s contemporaries and successors (such as the late Sayed Qutb and current Yusuf Qaradawi) set his theories and practices into motion, developing sharia-based terminology and mechanisms to advance the financial jihad — “Islamic economics,” finance and banking.

Early 1930s MB attempts to establish Islamic banking in India failed. Egyptian president Gamal Abdul Nasser shut down the second attempt, in 1964, after only one year, later arresting and expelling the Muslim Brothers for attempts to kill him. Saudi Arabia welcomed this new wave Egyptian dissidents, as did King Saud bin Abdul Aziz earlier waves in 1954 and 1961. Their ideas so appealed to him and his clerics that in 1961, Saud funded the MB’s establishment of the Islamic University in Medina to proselytize their fundamentalist Islamic ideology, especially to foreign students.

In 1962, the MB convinced the king to launch a global financial joint venture, which became the cornerstone and engine to spread Islam worldwide. This venture created charitable foundations, which the MB oversees.

The first were the Muslim World League (MWL) and Rabitta al-Alam al-Islami, uniting Islamic radicals from 22 nations and spinning a web of many other charities with hundreds of offices worldwide. In 1978, the kingdom backed another MB initiative, the International Islamic Relief Organization (IIRO), which with all these “charities” are implicated for funding al Qaeda, the 9/11 attacks, Hamas and others.

These “charities” are used to advance the political agenda set forth by the MB. “I don’t like this word “donations,” Qaradawi told BBC Panorama on July 30, 2006.

“I like to call it jihad with money, because God has ordered us to fight enemies with our lives and our money.”

In 1969, the Saudis convened Arab and Muslim states to unify the “struggle for Islam,” and have, ever since, been the OIC’s major sponsor. The 56 OIC members include Iran, Sudan, and Syria. Based in Jeddah “pending the liberation of Jerusalem,” the OIC charter mandates and coordinates “support [of] the struggle of the Palestinian people…recovering their rights and liberating their occupied territories.”

The OIC charter includes all the MB principles. Its first international undertaking in 1973 was to establish the Islamic Development Bank “in accordance with the principles of the Shariah,” as prescribed by the MB, and launching the fast growing petrodollar-based Islamic financing market. The IDB, more a development than commercial bank, was established largely “to promote Islamic banking worldwide.”

“[A]n Islamic organization must serve God…and ultimately sustain ….the growth and advancement of the Islamic way of life,” writes Nasser M. Suleiman in Corporate Governance in “Islamic Banking.”

And so it has done — as noted in a 1991 U.S. Library of Congress report on Sudan’s Faisal Islamic Bank, established in 1977 under Sudan’s Faisal Islamic Bank Act, by Saudi prince Mohammed ibn Faisal Al Saud, and initiated and managed by local Muslim Brotherhood members and their party the National Islamic Front. Soon other political groups and parties formed their own Islamic banks. Together, Sudanese Islamic banks then acquired 20-percent of the country’s deposits — providing the financial basis to turn Sudan into an Islamic state in 1983, and promoting the Islamic governmental policies to date.

From 1975 to 2005, the IDB approved over $46 billion in funding to Muslim countries, ostensibly to develop their economic and educational infrastructures, but effected little regional economic impact. Their educational efforts, however, paid huge yields — via the rapid and significant spread of radical Islam worldwide.

Moreover, in 2001 alone, the IDB transferred $538 million raised publicly by Saudi and Gulf royal telethons to support the Palestinian Intifada and families of Palestinian suicide bombers. The IDB has also channeled U.N. funds to Hamas, as documented by bank records discovered in the West Bank and Gaza. And yet the IDB received U.N. observer status in 2007.

The IDB and other Islamic financial successes encouraged MB leaders to formalize al-Banna’s vision. In 1977 and 1982, they convened in Lugano, Switzerland to chart a master plan to co-opt Western economic foundations — capitalism and democracy — in a treatise entitled “Towards a Worldwide Strategy for Islamic Policy,” also known as the Project. MB spiritual leader Qaradawi wrote the explicit document, dated Dec. 1, 1982.

The 12-point strategy includes diktats to “establish the Islamic state and gradual, parallel work to control local power centers…using institutional work as means to this end.” This requires “special Islamic economic, social and other institutions,” and “the necessary economic institutions to provide financial support” to spread fundamentalist Islam.

Consequently, the IDB founded the AAOIFI in 1990. AAOIFI members include the Saudi Dallah Al-Baraka Group, al-Rajhi Banking & Investment Corporation, and Kuwait Finance House; each of its members were implicated in funding al Qaeda and other MB offspring according to Richard Clarke, former counterterrorism chief . The 18 AAOIFI members also include Iran and Sudan, both on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctions list; Iran is an U.S. State Department-designated terror sponsoring state, too. UAE banks wired half of the funding for the 9/11 attacks

In addition, the “de facto Islamic Central Bank,” the Islamic Financial Services Board (IFSB), was established in 2002 in Kuala Lumpur “to absorb the 11 September shock and reinforce the stability of Islamic finance.” Chairing the organizers’ meeting, then Malaysian Prime Minister Mohamed Mahathir stated, “A universal Islamic banking system is a jihad worth pursuing to abolish this slavery [to the West].”

IFSB members include the central banks of Iran, Sudan, and Syria (all designated state sponsors of terrorism) and the Palestinian Monetary Authority (PMA), which is widely documented since its inception as a terror funder.

According to DAG and Islamic Chamber of Commerce and Industry (ICCI) President Saleh Kamel, more than 400 Islamic financial institutions currently operate in 75 countries. They now hold more than $800 billion in assets — growing 15 percent annually. HSBC, UBS, J.P. Morgan Chase, Deutsche Bank, Lloyds TSB and BNP Paribas, are but a few that offer Islamic banking and sharia-based products to their Western clients — and promote them as “ethical investments.”

Rapidly rising oil prices fill the coffers of Islamic banks, the expansion of sharia economics and financial jihad — threatening the U.S. and entire non-Muslim world, in real-time.

Indeed, shortly after 9/11, Osama bin Laden called on Muslims “…to concentrate on hitting the U.S. economy through all possible means,” going on to say …. Look for the key pillars of the U.S. economy. Strike the key pillars of the enemy again and again and they will….”

The pending NASDAQ acquisition, purchases of over 52 percent of the London Stock Exchange (LSE) and 47.6-percent of OMX (Nordic exchange), and the vigorous expansion of sharia finance, all steadily implement al Banna’s plan to spread and ultimately impose sharia worldwide.

Yet, still unaware of the implications of importing sharia finance, hoards of American bankers will later this month convene at New York’s Islamic Finance Summit at the Helmsley (Oct. 29-30, 2007) — which will focus on “Innovations in Sharia compliant Finance.”

In view of the facts, Senator Schumer has a valid point.

— Rachel Ehrenfeld, author of Funding Evil, is director of the American Center of Democracy, and a member of the board of the Committee for the Present Danger. Alyssa A. Lappen is a senior fellow at ACD.