Rachel Ehrenfeld, PhD, director of the New York-based American Center for Democracy, is an expert on transnational organized crime, international terrorism, drug trafficking, and corruption. She has served as a research scholar at New York University School of Law, a visiting scholar at the Columbia University Institute of War and Peace Studies, and a fellow at Johns Hopkins's School of Advanced International Studies. She is the author of Evil Money, Narco-Terrorism, and the newly released Funding Evil. Additional information on Dr. Ehrenfeld may be viewed at her website, www.public-integrity.org. She spoke to the Middle East Forum in Philadelphia on September 19, 2003 and New York on September 23, 2003.

Terrorism consists of two components: ideology and money. Just as the United States must work to combat the ideology of militant Islam, it must work no less to destroy the flow of money to terrorist organizations. If this is not accomplished, terrorists will continue to be bankrolled by foreign governments, charitable organizations, the exploitation of financial markets, and a number of other sources. The consequences will be dire.

The True Price of Terrorism

Media sources have often stated that the September 11th attacks cost the Al-Qaida terrorists a mere $250,000 to $500,000. In reality, however, the few hundred thousand dollars used for flight training, reconnaissance, transportation, and box cutters represent only a small portion of the funds spent by Al-Qaida on terrorist activities. The attacks would not have been possible without the prior development of the group's global infrastructure, which cost perhaps billions of dollars to set up and maintain. Vast sums of money have been spent on recruitment, training camps, conventional and unconventional weapons, intelligence gathering, various forms of Islamist propaganda, and other activities.

The Many Sources of Income

The sources that feed these organizations are much more varied than one might assume. The Saudi government has admitted to spending more than $87 billion over the last decade in an effort to spread Wahhabism. This money has been spent on the creation of Mosques, schools, and other institutions that have constituted the breeding grounds for the foot soldiers of the global Islamic terrorist movement. Political considerations, and oil, have prevented Washington from holding the Saudis accountable for their role in promoting terrorism.

However, the Saudis are far from the only source of terrorism funding. Funding for terrorist organizations comes mainly from national governments, including but not limited to Iran, Saudi Arabia, and a number of other Arab states; charitable organizations like the Arab League and the International Islamic Relief Organization; "legitimate" business fronts, such as travel agencies and cell phone distributors; the exploitation of the unregulated commodities market and other financial markets; and various forms of international trade that convert cash into diamonds and gold. Terrorists also generate money from criminal activities such as extortion, prostitution rings, video pirating, and drug trafficking.

Furthermore, terrorist organizations have created links with the Russian Mafia, Colombian drug cartel, and a number of other international criminal organizations. These links of politics, money, geography, and arms create a mutually beneficial relationship that allows both the terrorists and the criminal organizations to prosper. Drug trafficking, an estimated $2 trillion market per year, has become the best weapon for terrorists. Beyond helping terrorists to finance their wide range of illegal activities, the drug market has also allowed terrorist organizations to undermine targeted countries both politically and economically, while at the same time creating a crisis in the targeted country's public health system. Furthermore, the illegal drug trade has helped Islamist terrorist organizations recruit new members by citing drug use as an indication of Western degeneracy, and a sign that such corrupt societies need to be destroyed.

Funding From Our Own Backyard

Terrorists also fund their campaigns by more direct channels, specifically through the complacency of Western governments, and more specifically, through the United Nations. In 2002, the United Nations Relief Works Agency (UNRWA) distributed $521.7 million to the Palestinian Authority. Most of this money did not make its way into the pockets of the Palestinian people, as the average Palestinian continued to live on one to two dollars a day. Rather, large portions of this money ended up in the pockets of the Palestinian leaders and their terrorist associates. While the Palestinian Arab refugees constitute 17% of worldwide refugees, they receive more than one third of the annual refugee funds allocated by the UN, with roughly 30% of this $350 million coming from the United States. The staff of UNRWA, the organization that oversees and facilitates the aid to Palestinians, is staffed by so many Hamas members that it is nicknamed the "Hamas Union." In the UN refugee camps themselves, large amounts of weapons and bomb materials have been found, including facilities to create rockets that can reach major Israeli cities. These weapons have been constructed under the watchful eye of the UN, and with money given to the UN under the guise of aiding impoverished refugees.

The Europeans, America's supposed closest allies, have done little to stop the funding of terrorists. The EU States have persisted in allowing various organizations that act as fronts for Hamas to continue to send funds to the West Bank and Gaza. While many of these organizations have been shut down in the US, they have sprung up in ever increasing numbers in the EU states. A militant Islamic group in the UK went as far as publicly distributing playing cards with the faces of the "magnificent nineteen" World Trade Center bombers to celebrate the anniversary of the 9/11 attacks. Furthermore, the Europeans continually rebuff the efforts made by the United States to freeze the assets of known international terrorist organizations. By refusing to comply with the United States' request to freeze identified funds in their own countries, the EU States have undermined efforts made in the United States to seize the worldwide funds held by known terrorists.

Conclusion

All Islamic terrorist organizations cooperate with each other, yet Western states remain unable to work in concert to stop the flow of money to terrorist organizations. Winning the war on terrorism requires cooperation to implement methods that end all funding to all terrorists from all countries. Every terrorist organization must be treated equally, and every state that supports terrorism must be dealt with equally. We must also use new technologies and new ideas to aid in the war on drugs. We must help countries to eliminate the corruption in their governments because corruption facilitates terrorist funding. We must implement a new standard to evaluate the recipients of U.S. taxpayers' money, and monitor how this money is spent. If it is not possible to stop every dollar from reaching the bank account of every terrorist organization, a large portion of the terrorist's funding can indeed be stopped. Not to do so may create a tragedy far worse than September 11th.

Summary account by Christopher Strong, research assistant at the Middle East Forum.