Al Qaeda Finances Down, Panel Says

Financial support for Al Qaeda and the size of its operating budget have plummeted in the three years since the Sept. 11 attacks, but the network “continues to fund terrorist operations with relative ease,” according to new findings released Saturday by the commission that investigated the strikes.

The report from the panel also says that the Saudi government provided lackluster cooperation to stanch the flow of money to Al Qaeda for two years after the attacks, but began to respond more aggressively after several Al Qaeda strikes in the kingdom last year.

Al Qaeda’s annual budget appears to have shrunk from about $30 million a year before the Sept. 11 attacks to as little as a few million dollars a year now, the commission reported. Funding for the terrorist network has shriveled during that period, partly because of the more aggressive stance by Saudi Arabia in combating Al Qaeda financial support, the report said.

But the financial falloff has not caused a commensurate decline in Al Qaeda’s capabilities because the attacks it sponsors are relatively inexpensive. It has shed high-cost obligations, including its support for the Taliban in Afghanistan, and the network can still find ready funding from its most solid supporters, the report said.

The findings were released in an exhaustive study of Al Qaeda’s financing that was completed by the Sept. 11 commission’s investigative staff. The material served as a basis for several sections in the commission’s final report, released last month, that dealt with terrorist financing. But the study released Saturday was more lengthy and detailed than those sections of the final report.

The commission also released a comprehensive account of Al Qaeda’s exploitation of lax U.S. border and immigration security. The report, released late Saturday, documents the entry of the Sept. 11 hijackers into the country, including their acquisitions of visas, contacts with consular and immigration officials, and other details of their movements.

“These are additional findings of the staff that we thought would further inform people,” said Sept. 11 commission spokesman Al Felzenberg. He noted that the new findings were not voted on by the members of the bipartisan panel, which officially shut its offices Saturday after a 20-month investigation.

The 155-page document on financing, called a “monograph on terrorist financing,” examines Al Qaeda’s methods of raising and distributing money, the specific financing of the Sept. 11 plot, and the U.S. government’s often frustrated efforts to track terrorist funding in the years before and after the attacks.

Overall, the report concludes that choking off money to Al Qaeda and other terrorist groups is “essentially impossible” because of inherent delays and difficulties in tracking and freezing assets in complex global financial markets, as well as the impenetrability of the informal money-transferring networks terrorist organizations use.

Instead, the commission concludes it is more productive to monitor the flow of funds to learn more about Al Qaeda, including the identities and locations of its operatives.

The report said the United States and other governments had made substantial progress in investigating and curbing the flow of terrorist funds since the Sept. 11 attacks. Even so, three years later, “the U.S. government still has not determined with any precision how much Al Qaeda raises or from whom, or how it spends its money,” the report said.

Osama bin Laden’s network has seen its financial resources wither as part of an international crackdown and as a consequence of the ongoing war on terrorism. Indeed, Al Qaeda’s financial committee, which once carefully controlled the collection and disbursement of funds, is now either disbanded or so constrained by international scrutiny that it is unable to communicate or operate effectively, the report said.

But while Al Qaeda’s funds have declined, so have its expenses. The organization no longer pays out an estimated $10 million to $20 million a year to support the Taliban, or millions more running terrorist training camps and providing funds to affiliated organizations.

Without those obligations -- the equivalent of the terrorist network’s fixed costs -- it devotes its remaining resources to operations, which are relatively inexpensive, according to the report, which put a price tag on a series of Al Qaeda attacks over the years.

The 1998 U.S. Embassy bombings in Kenya and Tanzania cost about $10,000, according to the report. The October 2002 bombing in Bali cost $20,000. As previously reported, even the Sept. 11 attacks -- a much more elaborate plot that was years in the making -- were estimated by the commission to have cost between $400,000 and $500,000.

Some informal networks that Al Qaeda used to move money before Sept. 11 have been shut down, as have many groups that provided financial support while identifying themselves as charities.

But Al Qaeda “adapts quickly and effectively” to financial obstacles, and now relies on cash transactions and couriers to move money, the report said. And the network “can apparently still draw on hard-core donors who knowingly fund it and sympathizers who divert charitable donations to it.” Further, many intelligence experts believe Al Qaeda is splintering into a loose confederation of jihadist organizations, meaning “the very concept of Al Qaeda financing may have to be reconsidered,” the report said.

The report portrays U.S. efforts to attack terrorist financing before Sept. 11 as largely ineffective. The FBI gathered intelligence on organizations in the United States suspected of raising terrorist funds, but “could not turn these investigations into criminal cases” because of a lack of cooperation from other countries as well as cultural and bureaucratic impediments within the bureau.

U.S. intelligence agencies “largely failed to comprehend Al Qaeda’s methods of raising, moving and storing money,” mainly because few resources were devoted to the effort.

More than a year after the attacks, the Treasury Department was still groping for clues. The report includes an e-mail from the department’s top terrorist financing official lamenting that if pressed by Congress, the department still could not answer such basic questions as “Who finances Al Qaeda?” and “How?”

Among the most significant impediments to the efforts to attack Al Qaeda’s financing, according to the report, was poor cooperation from the Saudis. Before the Sept. 11 attacks, the kingdom was “ambivalent” about the problem and the United States did not make the issue a priority in its diplomatic relations with the country. But the problem also persisted after the hijackings.

“From the 9/11 attacks through spring 2003, most U.S. officials viewed Saudi cooperation on terrorist financing as ambivalent and selective,” the report said. The panel blames “Saudi recalcitrance” as well as a U.S. failure to make a clear and persuasive appeal to the Saudi government for assistance.

But “Al Qaeda operations within the kingdom in May and November 2003 focused the Saudi government’s attention on its terrorist-financing problem,” the report said, “and dramatically improved cooperation with the United States.” Key Saudi operatives, including one known as “Swift Sword,” have since been killed or captured.

The first of those attacks was a triple bombing in May that targeted apartment complexes in Riyadh that housed a large number of Westerners. The bombings left 23 dead, including nine Americans and 12 suicide bombers.

The strikes in Saudi Arabia also appear to have cost Al Qaeda support among once-sympathetic segments of the kingdom. The terrorist organization’s ability to raise funds there has fallen because of growing recognition among Saudis that “the fight has come to their homeland, and that they should be more cautious in their giving as a result.” Because of new cooperation and other advances, “the United States now has a far better understanding of the methods by which terrorists, raise, move and use money,” the report notes.

Some of the report’s principal findings were included in the Sept. 11 commission’s final report last month. That 567-page document devoted relatively little space to the issue of terrorist financing, but concluded that there was no evidence that money raised in the United States or provided by foreign governments -- including Saudi Arabia -- was used to support the Sept. 11 hijackers.

The final report also noted that contrary to a widely held belief, Al Qaeda leader Bin Laden did not bankroll the terrorist network with his personal fortune. The fugitive is a member of a wealthy Saudi family, and was widely thought to have inherited about $300 million when his father died. But the commission said the CIA learned several years ago that Bin Laden had never received such a vast sum, though he did get millions from his family over a 24-year period.

Nor did Al Qaeda rely substantially on money from the drug and diamond trades, as some have suspected.

Instead, the commission concluded, “Al Qaeda appears to have relied on a core group of financial facilitators who raised money from a variety of donors and other fundraisers, primarily in the Gulf countries and particularly Saudi Arabia.” Some donors “did know and even wanted evidence” that their money was going to Al Qaeda, the commission’s final report said.

But other donors apparently did not know they were supporting a terrorist network.