20041007 In Hot Pursuit of Terrorist Funds

Terrorism is cheap. In the days after 11 September, the FBI said that the attacks cost USD6 million. Our analysts said USD250,000. That figure was published in a number of press reports and carried on a number of broadcast news and current affairs programmes around the world. Some six weeks later, the FBI revised its figure to USD300,000 and has since revised it to around USD270,000.

The reason that the bombers of the Jakarta Marriott were discovered so quickly was that they were naïve. They did not follow the basic rule of car-bombing: to buy with cash something that is very cheap and will not attract attention. Car bombs are traditionally in cars or vans that will just about creak to their target before being leant against the kerb pending detonation. The van used for the Marriott cost USD1,000 and that amount of money attracted attention in a country where many people are very poor.

We can compare approaches with the bombing in Bombay several months earlier where the bombers went to the opposite extreme: they did not even buy a car, they just hailed a taxi, put the bomb in the boot and told the driver to run away before he got blown up. In this way, their investment was a few rupees – if they did actually pay the fare.

The IRA model is that the entire bomb and vehicle should be constructed for little more than can be taken out of an ATM: the limit on ATM withdrawal in the UK is typically GBP200 per day.

The petrol bomb in KL cost almost nothing: a bottle and half a litre of petrol is about as cheap as one can get – yet if drive-by petrol bombings became a feature of life in Asian cities – where much life is conducted on the roadside in food stalls – there would be massive disruption to society within hours of the first attack.

Therefore as the nature of the terrorist threat mutates, we can see one major factor – the amount of money needed to commit the offences falls dramatically. The infrastructure needed to make such attacks is greatly simplified – especially if the nature of the tools of terrorism are simplified and there is little or no dependence on specialist bomb-makers.

How are these organisations funded?

First, they are networks, not organisations. They operate on a completely different command and control structure to the IRA model. Thus their costs structure is significantly lower. They do not have trained and heavily armed units on standby. They do have flying enforcers, and they do have sleeper cells and, of course, intelligence gatherers but there the similarity with the IRA model stops.

They do use legitimate businesses: there is a case of a company producing honey for export that was making substantial sums allegedly for the funding of al Qaeda.

They raise money by fundraising, pleas for funds to charities, and by alternative means of meeting liabilities and duties in ways that mean that cash is available for other purposes.

This paper is about chasing terrorist funds and I’ve hardly mentioned it. Or so it seems. In fact, it’s all been about the money: not about chasing it but about where it is, what it is used for and how it is raised.

So now the question is, how is it moved and where is it hidden? And does knowing the basic principles help us to intercept it?

It’s important to remember that the money is not generally attached to the offence until a very short time before the attack. The purchase of the vehicle for a car bomb may be only hours before the attack – although under the IRA model, it would usually be bought for cash one week or so before the event and often out of area, in some cases being towed to near the target because it was not capable of making the entire journey on its own.

In hot pursuit? No – we are trying to intercept funds that are going somewhere but we don’t know where to do something but we don’t know what.