THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume VI, Issue # 235, November 5, 2004
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
DRAINING TERROR'S FINANCIAL SWAMPS:
A BRIEFING
By Douglas Farah
ROGUE STATES, NON-STATE ACTORS, & THE FUNDING OF THE ISLAMIST INTERNATIONAL TERRORIST MOVEMENT -- THE
NATURE & PURPOSE OF THE INVOLVEMENT OF AL-QA'IDA OPERATIVES IN WEST AFRICAN DIAMOND ACTIVITIES:
IMPORTANT LESSONS TO BE LEARNED FROM WHAT HAPPENED IN LIBERIA UNDER CHARLES TAYLOR'S CORRUPT POLITICAL
REGIME
FULL STORY:
At a time when state control is diminishing or nonexistent across growing swaths of the world, non-state armed groups pose a
little-understood but important challenge to the United States of America and other nation-states. In order to meet this premier
security challenge of the modern age, we must gain a much deeper understanding of the ways in which criminal states and
non-state armed groups interact.
NON-STATE ACTORS
Non-state actors can be roughly divided into four types:
Insurgents engaged in a protracted political and military struggle aimed at weakening or
destroying the power and legitimacy of a ruling government;
Terrorists who spread fear through the threat or use of proscribed violence for political
purposes;
Militias made up of irregular yet recognizable armed forces operating within an
ungoverned area or a weak or failing state;
International criminal organizations engaged in one or more type of criminal enterprise
that operates across regions and national borders.
These non-state actors become particularly dangerous when they are hosted by or operate in conjunction with illegitimate states
functioning like criminal enterprises.
LIBERIA
In Charles Taylor's Liberia, this is precisely what occurred. Under Taylor's patronage, international arms dealers worked alongside
al-Qa'ida operatives, Israeli and South African mercenaries, Hezbollah diamond merchants, and Russian and Balkan organized crime
figures.
Diamonds from West Africa are a particularly attractive commodity to armed groups and criminals because they are alluvial and
require very little investment in order to exploit. Taylor had launched two bloody civil wars (one in Liberia and one in neighboring
Sierra Leone) in order to gain control of diamond fields.
The fact that the U.S. intelligence community had no agents on the ground monitoring the situation, developing human intelligence,
or studying the different networks explains why the threat was not understood or taken seriously for several years. It also helps
explain why the intelligence community dismissed out of hand the first revelations of Taylor's ties to al Qa'ida and other terrorist
organizations.
AL-QA'IDA
Perhaps the most intricate relationship between states and non-state actors involved operatives from al Qa'ida who were interested
in the diamond trade. There appear to have been at least two phases to al-Qa'ida's West African diamond activities. The first started
some time before 1996, when Osama bin Laden lived in the Sudan, and was aimed at helping finance the organization. This lasted
until the end of 2000.
The picture of al-Qa'ida operations in West Africa changed dramatically toward the end of 2000, when senior al-Qa'ida operatives
arrived in Monrovia to take control of the diamond buying operations. They set up a monopoly arrangement with the Revolutionary
United Front (RUF) in Sierra Leone for the purchase of diamonds through Taylor. This was in the months immediately prior to 9/11,
when the terrorists were moving their money out of traceable financial structures into commodities in preparation for the aftermath
of the attacks.
In the immediate aftermath of the 1998 attacks on two U.S. embassies in East Africa, the Clinton administration sought to punish the
Taliban and al-Qa'ida by freezing its assets. To the surprise of U.S. officials, the move netted some $240 million, mostly in the form
of gold on deposit with the U.S. Federal Reserve.
To convert cash assets into an untraceable commodity, al-Qa'ida operatives paid a premium of 10 percent to 20 percent over the
going rate for uncut stones, leaving regular buyers without any merchandise. The pace of the purchases picked up beginning in
January, 2001, and lasted until just before 9/11. The available evidence, compiled by the Belgian police, points to al-Qa'ida
purchasing some $20 million worth of RUF diamonds during the eight months prior to 9/11.
A combination of rebel forces, international pressure, and the guarantee of gilded exile caused Taylor finally to leave power in
August, 2003, and take refuge in Nigeria. But throughout most of his tenure – ruler of most of Liberia since 1992 and President
since 1997 – Taylor's massive criminal and terrorist ties went unstudied and were given a low priority by the intelligence community.
CONCLUSION
There are several important lessons to be learned from what transpired in Liberia under Taylor.
Terrorist groups are sophisticated in their exploitation of "gray areas" where states are weak, corruption is rampant, and the rule of
law is nonexistent. They have used areas like West Africa for many years to finance their activities. They correctly bet that Western
intelligence services did not have the capacity, resources, or interest to track their activities there.
Terrorist groups in these areas learn from their own mistakes as well as from each other. Al-Qa'ida lost a large amount of cash
following the 1998 Embassy bombings, but it moved to correct that weakness before the 9/11 attacks.
We need better intelligence (particularly human intelligence) and analysis if we are to trace terrorist funding and the use of
commodities. Relying on high-tech monitoring systems is not an effective way to gather intelligence in countries in which
telephones are rare, Internet access is very limited, and business deals depend largely on familial relationships.
Terrorist networks and criminal networks can overlap and function in the environments of failed states, like that of Liberia.
Commodities like diamonds are the currency of choice, as the different groups provide services to governments or rebel groups in
exchange for cheap and easy access to commodities.
The intelligence community does not react well to information that it does not procure on its own. The use of diamonds, along with
tanzanite and other commodities, was dismissed for years because newspaper correspondents, rather than intelligence operatives,
came up with the initial information. If it had not been for the dedicated work of a handful of members of Congress and the
intelligence community, the information would have been buried.
LINKS TO RELATED TOPICS:
Africa South of the Sahara
Islamism & Jihadism -- The Threat of Radical Islam
Page Three
Page Two
Page One
The Middle East & the Arabs
War & Peace in the Real World
Page Two
Page One
Islamist Terrorist Attacks on the U.S.A.
Osama bin Laden & the Islamist Declaration of War
Against the U.S.A. & Western Civilization
Islamist International Terrorism &
U.S. Intelligence Agencies
U.S. National Security Strategy
Douglas Farah uncovered the story of al-Qa'ida's involvement in West Africa's diamond smuggling while reporting on Africa for the
Washington Post and described the situation in detail in Blood from Stones: The Secret Financial Network of Terror
(New York: Broadway, 2004). Mr. Farah, now a consultant, freelance writer on terror finance and national security matters, and a
senior fellow at the Consortium for the Study of Intelligence, addressed the Middle East Forum in New York City on October 11, 2004.
Mr Farah's briefing can be found on the Internet website of the Middle East Forum.
Republished with Permission of the Middle East Forum
Reprinted from the Middle East Forum News
mefnews@meforum.org (MEF NEWS)
November 4, 2004
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THE PROGRESSIVE CONSERVATIVE, USA
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Dr. Almon Leroy Way, Jr., Editor
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