The money behind the method

Nov. 25, 2012

DefenceManagement. com

Shurat HaDin – Israel Law Center Director Nitsana Darshan-Leitner sheds light on terrorist funding, and how bankrupting the perpetrators can bring justice to victims…

The widely held assumption that terrorists are merely violent fanatics might be accurate for many of the terror organisations' low-level operatives. Nonetheless, a terror group's leader sees subsequent acts of terror as a way to impress their financial patrons and their ensnared populations. On a day-to-day level, terror groups are primarily financial organisations, expending the bulk of their efforts to raise, invest, allocate and transfer money. These violent groups are just like a drug cartel, and it is therefore a misunderstanding to believe that terrorists need funds just to make cheap bombs. The creation of a terrorist is a long and expensive process.

According to the Israeli Security Agency (Shin Bet), the standard profile of a suicide bomber is not someone who suffers from mental illness. Rather, it is a militant who has gone through long-term conditioning, with funding playing a decisive role at every turn: from his foreign-funded elementary school, where he was taught to idolise the 'Shahid', the martyr who kills as many civilians as possible; youth programmes and publicity campaigns promoting past suicide bombers; to health clinics, which convinced him that terrorists treat their people far better than official government institutions. In the end, it is only fitting that after the person is raised with visions of martyrdom, he is apt to become one himself, to both satisfy his ideology and provide a financial inheritance to his family.

One instance of the link between large amounts of funding and terrorism has been from within the Palestinian territories. Tens of thousands of documents, confiscated during a 2002 Israeli military operation, have provided a rare look at the inner working of this violence. The majority of correspondence between terrorists and the Palestinian government concerned transferring of funds, whether these were loans, letters of credit or payouts to terrorists. The letters discussed money raised from sources around the world, money transferred between departments and factions, and money given to terrorists' families, terrorist-run youth groups or to mid-level lackeys greasing the system.

Sensitivity to money is not limited to groups under the auspices of the Palestinian regime. Most of the world's major terror organisations work on a similar formula, whether it is Hezbollah, Hamas, FARC, Lashkar-e-Taiba, ETA, PKK, or the Taliban and al-Qaeda. Each organisation aims to influence a local population, sometimes by providing welfare services that outstrip those offered by corrupt national governments. Religious leaders are bought out and encouraged to spread a message of violence against the United States or its allies, and it is thus that major financial incentives are offered to individuals willing to make the ultimate sacrifice.

Local leaders are quickly led to accept the creation of training bases in their territory and the recruitment of locals by terror groups.

Apart from having yearly budgets of tens or hundreds of millions of dollars, usually coming from sympathetic governments, private donors and charitable organisations, there are other sources of funding available for terrorists. FARC, for example, gets much of its budget from ransom kidnappings, taxation on the Colombian drug trade and protection money from Western corporations operating in the territory it controls, while Hezbollah has developed a sprawling network of businesses, whether it be banking, consumer electronics, shopping centres in Latin America or contraband cigarettes.

Money, however, is not only a terrorist group's most important preoccupation, but their greatest vulnerability. The vast majority of terror funds are held, transferred and converted into usable currencies (dollars and euros) either through established money changers or international banks, both of which have long been under the watchful eyes of law enforcement agencies around the world in their efforts to fight, for example, drug trafficking. In the end, if you stop the money, a large part of the terrorism machinery would grind to a halt.

The role of private citizens in this fight against terror has also been debated. Historically, the holding of terrorists responsible for their actions has chiefly been thought of as the responsibility of the government, whether through covert military operations and diplomatic exchanges.

But this is not to say that ordinary citizens are helpless in this battle. Pressure from outside the government, in the form of litigation, is needed to ensure terrorists cannot act with impunity.

Thankfully, things have changed over the last decade in this regard. The idea of fighting terrorists through lawsuits is no longer seen by most westerners as ridiculous. One regularly hears about massive court judgments against states like Iran and North Korea, and about big banks like Lloyds and Barclays shutting down accounts of suspicious charities because of 'exposure' to 'liability'. Terror organisations nowadays have a difficult time when using the global banking system.

Fearing lawsuits, terror sponsoring regimes, such as the Islamic Republic of Iran, have pulled billions of dollars out of the US and Europe, and are having a much harder time finding banks willing to convert their money into the hard currencies terrorists desperately need to build their bases and buy their weapons. Boxed out by the banks, terrorists have had to resort to evermore risky methods of transferring ever smaller amounts of cash, such as in suitcases or through underground tunnels. Yet, even then, terrorists have often found their money corralled by Western courts. After decades of building their networks around the world, terror financing has today swung into heavy retreat, in large part due to a sweeping dragnet of increasingly creative international lawsuits.

One of the Shurat HaDin – Israel Law Center's central activities has been to challenge terrorists, as well as their financial patrons, in courts throughout the world. Governments have been exhorted to act against groups such as Hamas and the Islamic Jihad, and regimes such as Iran, North Korea and Syria, who have all been made to pay for their association with terrorism. We have been engaged in legal battles to ensure that terrorists are either indicted or extradited, and have pressured other states to properly act against terrorists located within their borders.

Terror-linked corporations and banks, even insurance and telecommunication providers for Gaza-bound flotilla ships or Iranian oil tankers, have also been targeted.

Tel Aviv-based Shurat HaDin continues to utilise numerous channels to pursue both legal and non-legal actions against terrorists and those who support or assist them, all while working together with western intelligence agencies and volunteer lawyers.

Such activities have assisted terror victims permanently injured or disabled, and who have an immense amount of physical or emotional pain. The mission provides victims with compensation, and takes away the means terrorists have to spearhead new attacks. Indeed, Shurat HaDin believes in using existing laws to attain its objectives.

By achieving more than $1bn in judgments, freezing more than $600m in terrorist assets and actually collecting more than $120m for terror victims, it has been proven that a private organisation can take part in the fight against terror. Fighting for the rights of hundreds of terror victims, Shurat HaDin's mission continues to be the bankrupting of terror groups – one lawsuit at a time.