Douglas Farah

The U.S. Treasury Department just designated Sulayman Khalid Darwish, a Syrian, as a terrorist financier. He is the first person to be designated for directly offering financial support to the Zarqawi network (Jama'at al Tawid al Jihad) in Iraq. What is interesting about the designation is that is clearly shows a separate financial pipeline to Zarqawi, one that operates independently of the Baathist elements who finance themselves with Saddam's cash. This separation has been the topic of some debate within the U.S. intelligence community, although my European friends had no doubt about the separation. There may even have been specific times when Zarqawi actually gave financial aid to the Baathists, when the Baathist money shipments were delayed. Darwish was responsible for sending $10,000 to $12,000 to Zarqawi every 20 to 25 days. He also is responsible for recruiting combatants for Iraq, and is an expert in forging documents. Replacing him in the latter operation may be the most difficult and most crucial for the network. While there are numerous replacements for bagmen and recruiters, a good document forger is hard to find.

The separate financial pipeline is important because it not only opens up another front that need to be dealt with in the efforts to cut off funding (as opposed to simply going after the Baathist money), but it also means that the financial needs of the Salafist/al Qaeda/Zarqawi network are growing. I have heard nothing to hint they are having any difficulty meeting these new needs, and that is bad news, indeed.

It is also interesting to note the link that Evan Kohlmann has here on the response of Algeria's Salafist Group for Prayer and Combat (GSPC). It seems, from my inexpert reading of the text, that, while al Qaeda, bin Laden and Omar are praised, Zarqawi comes in for the lion's share of the adoration. It may be interesting to see how their egos play out over time.

The designation itself is unlikely to have much impact. A designation allows the United States to freeze all Darwish's assets, and ask the United Nations to add him to its list of designated individuals, thereby obligating all U.N. members to take action against his financial assets and keep him from traveling. But I doubt Darwish has any assets in his own name that could be seized or frozen, and he is not likely to be traveling under his own name, with a legitimate passport. Moving money out of the most obvious, traceable accounts was lesson learned long ago by al Qaeda, and, one assumes, the Zarqawi network. Most of the money raised in these types of operations comes by courier from donors on the Arab peninsula. The money doesn't pass through bank accounts. One other interesting sideline: Since 9-11, the United States has now designated 397 individuals and entities as terrorists, their financiers or facilitators. Saudi Arabia has designated two, count them, two. And neither one has been punished, not even a slap on the wrist. A U.N. report issued more than a year ago found that the whereabouts of almost all of the designated individuals was unknown, and that no country had ever reported detecting any designated individual trying to travel. At least there is some range of consistency there!

Among those of us actively involved in covering the almost-forgotten Central American conflict, as well as policy makers and military officials, there has been a lot of buzz and debate over a recent Newsweek web exclusive saying the Pentagon was considering the "Salvador option" to improve the military situation in Iraq. The report says that the option "dates back to a still-secret strategy in the Reagan administration's battle against the leftist guerrilla insurgency in El Salvdador in the early 1980s. Then, faced with a losing war against Salvadoran rebels, the U.S. government funded or supported 'nationalist forces' that allegedly included so-called death squads directed to hunt down and kill rebel leaders and sympathizers."

Here is my two cents worth: If such a strategy were underway, it would be one of the biggest in the long line of mistakes the United States has made in Iraq. But it is a big if. The sources and/or authors of the story show a rather shocking lack of knowledge of El Salvador and the historic context of the work of the Salvadoran death squads. I covered the region extensively and won awards for my coverage of death squads there, was threatened by them and had friends killed by them. If there is one lesson to be learned, it is that such killings were what provided the rebel Farabundo Marti National Liberation Front (FMLN) with the vast majority of its recruits. The death squads were not primarily formed to hunt down and kill rebel leaders and sympathizers, although they did do that, with very limited success. They were formed to instill widespread terror in the civilian population to drive the civilian population away from the potential clutches of the rebels. The wholesale slaughter of teachers, priests, union workers, and students--coupled with the Salvadoran military's early penchant for burning villages and committing unspeakable abuses--drove tens of thousands of people with no natural affinity for the FMLN to the rebels for protection. The orphans and widows became the backbone of FMLN's army that, at its peak, numbered close to 10,000. In scores of interviews during my 10 years of living in El Salvador, almost every single rebel, regardless of rank or age, traced their path to the insurgency to some act of repression by government forces or the paramilitary death squads. This strategy would ensure the United States pays a horrendous price in Iraq because inevitably, the same thing would happen.

What is out of context in the story is that the United States, however belatedly, recognized this truth and sought to pressure the Salvadoran military and the far right to rein in the death squads. In 1983, then vice president George Bush and a young NSC aide named Oliver North visited El Salvador. They left a list of nine names with interim president Alvaro Magana, asking him to purge the 8 the military officers on the list from active duty and to arrest the one civilian. Little was done at that point, but from that time on the United States, while often unwilling to go after death squad activists and at times showing a distinct lack of interest in pursuing its leaders, did work to get the groups under control. By 1985 the U.S. ambassador was authorizing covert surveillance and actions against some of the more notorious death squad operatives. This does not mean U.S. policy was geared to stopping the death squads, but there was growing consensus, even in the Reagan administration, that death squad activities were undermining the entire concept of building a democracy in El Salvador that was attractive enough to undermine the appeal of the rebels. This was impossible when dozens of bodies a day were being dumped along the roadside or left at the notorious dumping grounds outside of the capital. Such would be the case in Iraq.

A final note; While elements of the Republican Party, led by Jesse Helms and others, actively promoted the Republican Nationalist Alliance (ARENA) in El Salvador, which included notorious death squad leaders among its leadership, there is no evidence that the U.S. government directly supported the death squads. While the U.S. helped fund and train the notorious ANSESAL intelligence center during the 1970s, and thus may bear some responsibility for its operation, the CIA station in San Salvador was shut down in 1977. The death squads were organized and trained initially by Guatemalans, who in turn had hired Argentine mercenaries to teach torture and interrogation techniques and intelligence operations. The World Anti-Communist League provided funding and support for these operations. The Guatemalans then brought in their Salvadoran allies to share in the training, and helped build a transnational "security apparatus" that operated with impunity in both countries. But this is far different from the implication of the article, either through sloppy writing or poor knoweldge from the sources, that the U.S. trained and armed the death squads. If the article meant to discuss the possibility of forming special units to track and hunt leaders of the insurgency, that is a policy that can be debated. But do not confuse that with a "Salavador Option," as the two would be unrelated. For those of you interested in following this debate more closely, see David Holiday's site here.

A little-noticed case in Conakry, Guinea has some in the U.S. and European intelligence community abuzz. Two South Africans, both arrested with Ahmed Ghailani in Pakistan and then deported to South Africa, were recently arrested in Guinea, reportedly on their way to Sierra Leone. The arrests of Zubair Ismael and Dr. Mohammed Nazzal, who real name appears to be Feroz Ganchi, just before Christmas, was noted in the West African press but not picked up elsewhere. These arrests add weight to the evidence that al Qaeda continues to operate out of West Africa, and remains involved in the diamond trade, despite the notable lack of interest of the U.S. intelligence community.

Both men left South Africa and traveled to Pakistan for training. Ganchi, a medical doctor who was given the alias "Umer" by his al Qaeda contacts, traveled often to Pakistan and had bragged to co-workers in South Africa of knowning senior al Qaeda members. Ismael, 16, was reportedly studying at a madrasa there, studies his family confirmed they had raised money for. Ganchi reportedly treated Ghailani for an unknown medical condition while in the house in Gujrat. Ghailani, Ganchi and Ismael, along with 10 other people, were arrested in that al Qaeda safe house in late July 2004. While Ghailani's capture garnered the most attention, the South Africans appear to have remained operational. They were both held for two days upon their return to South Africa, and then freed. According to South African press reports from the time, one of the suspects had an explosives vest strapped to his body when he was arrested. Shortly before he was arrested, he threatened to detonate the devise, whihc was filled with unknown chemicals and 10 kilos of plastic explosives, the press accounts said, quoting senior South African intelligence officials.

The connection to Ghailani is interesting, because he was one of the main al Qaeda operatives involved in the Sierra Leone-Liberia diamond mining in late 2000 until shortly before 9-11. He hung around Liberia and Burkina Faso for several weeks after the 9-11 attacks, enjoying the protection of Charles Taylor and Blaise Compaore of Burkina Faso.

The question European intel sources are asking is what the means about al Qaeda's current financial structure. Is the group still interested in the diamond trade, and if so, is it to hide financial assets, or is it an attempt to raise money? AQ has done both before in the region. No word yet on how long the two will be held in Guinea, what they could be charged with or what their fate will be.

Finally, there is a new counter-terrorism blog, to which I am a contributor, that is well worth checking out. It can be found here.

One of the striking aspects of the current policy debate, such as it is, over how to combat the terrorist threat, is the pervasive idea that terrorists don't need much money to operate. This conventional wisdom, a part of the 9-11 Commission Report and other prominent writings, is based on the assumption that, once bin Laden and al Qaeda were driven from Afghanistan, their operational costs decreased significantly because they no longer have to pay for camps or help keep the Taliban afloat. That, I believe, was true for a period after the U.S. occupation of Afghanistan. Certainly al Qaeda scattered, its financial structure was damaged and the ground shifted considerably. However, that assessment is outdated, although the official (and much of the unofficial) line has not kept up. The tone of the 9-11 Monograph on terror financing was that the amounts are so small it is hardly worth the effort to trace it. The AQ 2.0 conference, while extremely enlightening in some aspects, also essentially relegated the financial side to irrelevance because it is too hard to crack and the amounts, again, were said to be negligable.

The primary reason this assessment is wrong is Iraq. The "Arabs" fighting there, that is the foreign, radicalized Muslim jihadees, have grown in number, sophistication and access to weapons. While the real relationship between al Qaeda and Zarqawi is not clear, Zarqawi and bin Laden seem to have at least worked out a tactical alliance for the present time, and bin Laden has publicly recognized Zarqawi as the leader of the radical Islamist movement there. This movement now seems to be part of an insurgency, rather than a scattering of isolated groups. This means expenses for logistics, recruitment, movement, arms, communications, support networks outside Iraq, have grown enormously. The intelligence community believes much of the money is coming from Syria, where Saddam loyalists have accesss to part of his fortune. But those with whom I have talked are not convinced that the Baathists are willing to fully fund and share their logistical network with outsiders who are neither secular nor moderate. Money for the Zarqawi organization is often separate, channeled through more conventional AQ means (couriers, charities) and raised in the Gulf region from not only the traditional AQ donors, but thousands or millions of people who want to support the Jihad. This is an entirely new pipeline that did not exist prior to the Iraq war, and there are no indications that money is lacking. Rather, the rapid expansion of the jihad in Iraq indicates a rapid growth in the organization's funding and logistical capabilities.

U.S. intelligence estimates were that bin Laden's annual budget while in Afghanistan--including support for the Taliban and other groups, camps, etc.--was $50 million to $100 million a year. Clearly that is not the order of magnitude the Salafists need now. It is hard to determine how much is needed because so little is known about how the money is moving. But the financial architecture is strong and growing. As that money flows into to those in Iraq, it is also likely that some will be diverted to alleviate whatever shortfalls, if any, exist in the structure of the core AQ organization.

I don't believe such a shortfall exists, because of my own research and because of the widely-ignored but excellent work of of the UN Monitoring Group, until it was disbanded last year. The move was taken largely because the Group, led by Brit Michael Chandler, did such un-UN like things such as name names and carry out serious investigations around the globe. In 2003 the group traced some of the AQ front companies being set up in different parts of the world and estimated the value of AQ's portfolio of seemingly legitimate businesses at $30 million.

While occassional cash flow problems may arise, it seems unlikely that there is, ultimately, a shortage of resources. Despite digging up many solid leads in its field work by financial experts and former intelligence officers, the Group's work was seldom looked at seriously by the U.S. intelligence community. One U.S. government leader of the terrorist financial efforts told me recently that those reports contained so much information, delving into them would have forced him to divert resources to look into the issues raised. So, instead, he simply ignored them. A rather interesting way to look at all the information available!

My point is that while, for a brief snapshot in time the assessment of the strength of the Salafist/terrorist/al Qaeda financial network may have been correct, that time is past. There is still little work being done on kinship networks and other issues vital to understanding how money is raised and moved. Pretending there is not a huge financial component to what we are seeing now in the emerging terrorist structure is both wrong and dangerous.