20041007 In Hot Pursuit of Terrorist Funds

But we had one significant advantage: the terrorism was, largely, conducted by the IRA. It had a command structure and it had leaders that were known. It had bank accounts, it ran businesses and we even knew where its funding was coming from – a very significant proportion of it was coming from open fundraising in the USA.

The IRA raised its money by extortion, by blackmail, by a wide range of crimes ranging from smuggling and other duty evasions to kidnap and ransom. And it invited contributions from supporters around the world.

The contributions from supporters were channelled through charitable donations: funds were raised on the premise that they were for the support of prisoners and their families.

Many prisoners were held in the notorious H Blocks and, for a period of time a policy of internment – that is imprisonment without trial – was followed. In the liberal USA, which has no history of terrorism in this context it was not merely acceptable but positively desirable for politicians to support the collection of funds for these charitable purposes.

With some 40% of the US electorate at the time being of Irish descent, there was a clear political imperative to pander to that constituency.

Bill Clinton may have been deeply flawed in many ways but in one respect he broke the mould with a brave step. Of course, he was able to do so because he was in his last term and so would not be standing for re-election. Clinton took steps to block the sending of funds to the charities set up for the benefit of IRA prisoners and their families.

Within months, there was a breakthrough and the IRA were at the negotiating table discussing how they would convert their armed conflict to a political approach.

There are many theories as to how the cease-fire was negotiated, and many heroic tales of both sides making concessions on a wide range of subjects but the fact is that there had been similar initiatives on many occasions over the previous decades. Yet it was only when the money supply was threatened that real progress was made.

So how did Americans send the money? And how did they get away with it when funding terrorism was, in the UK, a very serious offence?

First, they simply shipped it. The technology for identification of large cash sums was not very advanced and the money could be brought into Ireland in suitcase or aboard ships with relative ease.

Secondly, they wired it openly to an account for the benefit of a charitable entity. Amongst the favourite methods was for marching bands to travel to the USA to be present in the St Patrick’s Day parades. New York and Boston Irish communities paid extraordinarily high prices to the band companies even though the members were volunteers.

Thirdly, they made funds available in the USA for either the purchase of goods elsewhere, which may or may not be shipped to the IRA or for deposit so that funds could be borrowed in Ireland against the security of a cash deposit in the USA.

And they were able to get away with it because there was – indeed, there still is – poor enforcement by both the police and the regulators of the laws designed to combat terrorist financing.