Terror Exacts High Price at Low Cost

Terrorists don’t need much money to carry out their attacks. And what they do need can often be moved through informal channels beyond the reach of U.S. law enforcement.

Experts say those realities pose serious problems for the Bush administration as it tries to disrupt the flow of funds to groups such as Al Qaeda, founded by accused terrorist Osama bin Laden and blamed for the Sept. 11 attacks on the World Trade Center and the Pentagon.

Experts said that although tracking the money may yield valuable leads and deprive terrorists of some funds, it would be naive to think the U.S. could put the groups out of business that way.

“If they’re thinking they can shut down Al Qaeda financially and therefore shut down Al Qaeda . . . it’s pie in the sky,” said Kenneth B. Katzman, a former Middle East specialist with the Congressional Research Service who formerly worked for the CIA.

Great destruction can be accomplished on a shoestring budget, analysts say. According to some estimates, the 1993 bombing of the World Trade Center, which killed six people and injured more than 1,000, cost the conspirators less than $50,000 for bomb materials and other expenses.

The recent suicide hijackings, believed to have killed more than 6,000, were not expensive to mount, either. Government officials and terrorism experts have estimated the total cost at $250,000 to $2 million--”chump change,” in one expert’s words.

Suicide bombers aren’t in it for the money, and the 19 hijackers lived frugally in cheap housing--their only significant expense being the flight training that helped them turn passenger jets into firebombs.

Credit card issuers will eat some of those costs, because the hijackers paid for plane tickets and other items with plastic.

Terrorists have shown enterprise in earning money, thereby limiting the need for financial support from outside sponsors. An example surfaced this year in the trial of four men who took part in the 1998 U.S. Embassy bombings in Kenya and Tanzania, for which Bin Laden also has been indicted.

According to testimony in the case, one of the conspirators was sent to the Kenyan coast in advance of the attacks to help run an Al Qaeda-owned fishing business there.

Separating Fact From Folklore

Other terrorists have supported themselves through criminal activities, such as the three men convicted in the millennium bombing case that involved a failed scheme to attack Los Angeles International Airport. The three men, members of a Montreal-based terrorist cell, supported themselves through bank and credit card fraud and by peddling forged documents, according to testimony at their trials.

But the ability of terrorists to do a lot with a little is only one obstacle on the money trail, analysts say. Another is that simply developing a precise understanding of Bin Ladin’s finances will be extremely difficult.

Historically, lax banking regulations and limited cooperation from other countries have hampered such investigations by the U.S. But even with more help from foreign governments, experts say tracking and shutting down Al Qaeda’s assets will be hard.

“He’s had years . . . to lay the groundwork for these terrorist operations, so I’m sure he’s taken great pains to camouflage his assets,” said Bruce Hoffman, an expert on terrorism with the Rand Corp.

Whatever Al Qaeda funds are in conventional banks and investment funds are almost certain to be in the names of people or entities that are not known to be linked with Bin Laden and may not be using their real names.

It will be “very hard to trace and identify what assets specifically belong to or are under the control of Osama bin Laden,” said Leonard Gumport, a Los Angeles lawyer who has served as a bankruptcy trustee and court-appointed assets investigator.

“If he’s trying to conceal his assets and has been doing it for years and years, you will have to penetrate a maze of shell entities, bank accounts in jurisdictions with secrecy laws and people who are willing to hold assets for him in their own names,” Gumport said.

Others believe Al Qaeda does not even primarily rely on banks, instead using individuals to ferry cash or moving money between countries by use of the hawala, or money broker system, that is widely used in the Middle East and Indian subcontinent.

“This money is all just moving in channels that are totally alien to the Western banking system,” Katzman said.

In its effort to trace Bin Laden’s money, the U.S. government is having trouble separating fact from folklore. Basic financial information, such as the extent of his holdings, remains largely a matter of conjecture.

Bin Laden’s father built a multibillion-dollar construction empire, and his family has been among the richest non-royalty in Saudi Arabia. Taking into account his many brothers, Bin Laden’s share of his father’s estate has been estimated at $300 million.

Some officials believe his current net worth is about one-tenth of that, as a result of his lavish support for the Afghan war against the Soviet Union and for terrorist causes. Other analysts suspect he is all but tapped out.

But whether Bin Laden still controls a personal fortune “doesn’t matter in the least, because he’s been able to raise so much from his ideological supporters,” said Jonathan M. Winer, who was deputy assistant secretary of state for international law enforcement during the Clinton administration.

Indeed, Al Qaeda is believed to get substantial support from wealthy Middle Eastern businessmen who either sympathize with his message or are giving protection money.

Authorities say Al Qaeda also receives money diverted from Islamic charities that ostensibly aid victims of poverty and war.

The testimony of a former Al Qaeda insider and defector is the biggest source of public information about Bin Laden, Al Qaeda and their finances. Testifying this year in the embassy bombing trial, Jamal Ahmed al-Fadl described the complex web of business ventures operated by Al Qaeda from 1991 to 1996, when the organization was based in Sudan.

Al-Fadl, who described himself as a member of Al Qaeda’s “money and business committee,” told of arriving in Sudan with $57,000 in cash to begin renting houses and farms.

He said Al Qaeda quickly established a mini-empire of at least seven businesses involved in such areas as trucking, heavy construction, produce, currency trading and export and import trade.

Negotiating for Enriched Uranium

Al Qaeda purchased farms, including one of about 50,000 acres. They were used for explosives and weapons training and to grow sesame, peanuts and corn, which were exported to Europe and to Cyprus, Al-Fadl said.

One of the companies, Khartoum Tannery, was acquired from the government as payment for a highway built by Al Qaeda’s Hijra Construction Co., Al-Fadl said.

Once, Al-Fadl said, he was sent to Croatia to look at investment opportunities in businesses the Croatian government was selling.

Another time, he said, he traveled to Jordan with $100,000 in $100 bills to give to Al Qaeda allies there. On two occasions, he bought strings of about 50 camels to smuggle rifles from Sudan to a militant Egyptian group.

At the time, Al-Fadl said, Bin Laden’s group was using a war relief organization in Baku, Azerbaijan, to smuggle Muslim fighters into Chechnya to fight for independence from Russia. He said it cost Al Qaeda about $1,500 for each fighter it sponsored.

Al-Fadl testified that in late 1993 or early ‘94, he tried to negotiate the purchase of enriched uranium, holding talks with a Sudanese government official and a middleman who were offering the canister of uranium for $1.5 million plus a commission for themselves.

Al-Fadl said that before the negotiations concluded, he was replaced by another Al Qaeda official. He said he never learned whether the deal was consummated.