What’s the sense of sending $2 million missiles to hit a $10
tent that’s empty?
George W. Bush, private Oval Ofce meeting,
September 13, 2001
Weve got to go after the guts of this. This could be like a pla-
naria. If you just cut off its head and it regenerates another head,
that’s not going to be very helpful. So, while, of course, Osama
bin Laden and his lieutenants are part of the story, the real part
of the story is to choke off the bloodline of this network.
Condoleezza Rice, Fox News Sunday, September 23, 2001
The bloodline of terrorist networks is money. You can have
all the fanaticism and motivation in the world, but it’s no good
unless you can get out of that $10 tent and put it to some bad
use. In the case of Osama bin Laden and his 9/11 plotters, they
had plenty of money; they had enough to get all the way from
Kabul to New York and Boston, where their fanaticism could
play itself out in a spasm of horror that shook the world.
Theres a tendency to think of people like bin Laden as
leaders of a sort of ragtag, irregular version of armed forces,
and there are some similarities. al Qaeda, like most terror-
ist groups, has organization; a command structure; military,
political, and other wings; and, of course, lots of armed men
(though not as many as it used to).
Certainly a terrorist network, however extensive, is far
less costly to operate than a “conventional” military force.
The American juggernaut that overwhelmed Afghanistans
Taliban regime and then toppled Saddam Hussein spends
more money in 5 minutes than Osamas bunch had in its entire
existence. The British, in their seemingly endless war against
the Irish Republican Army and its fellows, outspent their
rivals probably by a factor of thousands, if not millions.
Still, terrorists can get a lot of bang for their buck, as
Mohammed Atta and his crew demonstrated on September
11, 2001. And achieving maximum impact at the lowest pos-
sible cost has always been the goal of terrorist groups, which
are, after all, microscopically small organisms on the body
politic. They will always be forced to economize, but this
doesnt stop them from attempting to raise enough money to
pay for all the mayhem they want.
What does terrorist nancing have to do with money laun-
dering? Why is this chapter even in the book? The two best
reasons are that there are an awful lot of similarities between
terrorist nancing and money laundering and that we can use
the same investigative techniques and procedures against this
criminal activity.
After 9/11, Congress and governments all over the world
made a startling discovery: It walked like a duck, quacked
like a duck, and did a few other things like a duck, but terror-
ist nancing wasnt a duck. At least, not the money laundering
duck everybody was used to. The most important difference
related to the source of the money. Money launderers, as we
know, can only be convicted of laundering money that comes
from some illegal source—a Specied Unlawful Activity
(SUA). But terrorists dont always nance their operations
with money earned in some illegal activity. In fact, terror-
ists traditionally have obtained their funding from four main
sources, three of which, though not exactly legitimate, dont
t the denition of an SUA by a long shot.
In this chapter we will look at a couple of groups involved
in terrorism, examining their funding needs, sources, and
methods of operation. It will be useful to compare the two
groups—the Provisional Irish Republican Army (PIRA) and
Osama bin Ladens al Qaeda—to see whether there are any
common characteristics or vulnerabilities.
As noted, terrorist nancing comes from four main sources:
Criminal activity
Charitable contributions or donations
Legitimate or semilegitimate business
Government or state sponsorship
Keep in mind that only the rst could constitute an SUA under
federal money laundering law, and then only if the offender had
one of the four “intents” prescribed by 18 U.S.C. §1956 (a) (1).
See Figures 24.1 and 24.2 for two important documents
relating to international efforts to suppress the nancing of ter-
rorism: the United Nations International Convention for the
Suppression of the Financing of Terrorism and the FATF 8
Special Recommendations on Terrorist Financing, respectively.
It seems sometimes that the Irish have been ghting the
British for approximately forever, which is why the nancing
activities of one of the leading Irish groups, the Provisional
Irish Republican Army (PIRA), make a good case study for us.
Born in 1969 as a descendant of the original Irish Republican
Army, itself founded in 1919, PIRA is best known for its
paramilitary campaign in Northern Ireland in the 1970s and
1980s. Closely coupled with a “political wing, Sinn Fein,
PIRA provided the armed combatants, the “provos,in the
long conict with Great Britain in the North.
Some in Ireland and elsewhere would dispute the British
characterization of PIRA as a terrorist organization (certainly
the IRA and Sinn Fein would object), but it cannot be denied
that some of the group’s tactics, notably car bombings and
attacks on civilian targets such as subways and department
stores, t the denition. PIRA argues that most of its actions
Terrorism Financing

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