The 21st Century Answer to “Burning their Crops and Salting their Fields”: Interdicting and Destroying The ISIS Financial Network
Greg Kleponis and Tom Creal
The enemy of terrorism has evolved particularly over the past decade in terms of organization, resourcing, public relations and above all tactics. I have written on several occasions that today’s terrorist organizations more resemble organized criminal organizations rather than the strictly political or military organizations they once were.
We have seen ISIS or the so called “Caliphate” organized in such a way that they keep organized records, have accountants, bankers and budget directors – all to keep track of the money which is the life blood of their organization. Their income, not unlike any other organized criminal element comes from the sale of commodities (in this case oil), protection rackets, human trafficking and out-right robbery. Sound familiar?
The point is that we are essentially fighting organized criminal gangs like we would be waging war on military insurgents and this is just the wrong approach. Instead of tasking just the military to deal with the problem as they will simply address it in the only way they know how, we should start thinking like crime fighters and like the FBI and other federal law enforcement in the US and in Europe, hit the terrorist and insurgents (criminal gangs) where the live and that’s at the bank.
Most criminal organizations do not have an apocalyptic ideology – this much is true. I would suggest that too much is made of this so called radical ideology. There is no doubt that it is the animating force behind some of their most obscene crimes carried out by the “true believers” but like the Taliban whose ideologically pure are estimated to be a number less than 10%, they are in most senses a criminal business enterprise run by and controlled by the cynical who control the most fanatical.
What most criminal enterprises want and cherish above all is money. Though it may not have been the motivating force at the beginning, it slowly corrupts the organization from within so that so called radical terrorists become nothing more than corrupt conflict entrepreneurs. Just check out the $7,000 Rolex Oyster on the wrist of Abu Bakr Al Baghdadi the self –styled leader of the new Caliphate.
While focusing on training, drones and airstrikes may be necessary and may degrade their abilities, the lifeblood of their organizations is money. For example, their jihadis don’t jihad for free – they get a monthly salary. Weapons, ammunition, salaries, and other overhead all cost money.
Where does the money reside and how to they access it? The simple answer is – the same as we do. They use banks and other financial intermediaries. Knowing this puts us a long way forward in using another arrow in our quiver toward defeating organized criminal terrorist groups. We must follow the money trails backwards and also forwards to every single set of hands that touches the movement of these funds. As with all legitimate businesses, in any monetary chain of custody there are individuals and organizations involved and all of these can be considered “aiders and abettors.”
Tracing the sources of money as well as those who act as conduits, agents and advocates and prosecuting them is just the start of the unravelling of the money web that finances them. This is not unheard of as, for example, under the former Bank Secrecy Act of 1970 (now the Patriot Act) has put in place requirements for banks currently to report monies that are dubious which can result in large fines or in some cases jail time for those who fail to report suspicious activity and are caught so in a way in the US, they have deputized, albeit unwilling financial institutions in the fighting of financial crimes. In Britain as an additional example, financial crimes have come to the attention of the authorities and similar requirements of made of financial institutions, broker dealers and money service providers all overseen by the Financial Conduct Authority. In each of these instances there are rules, regulations and authorities in place not only to prosecute those to "aid and abet", the actual criminals themselves but also to seize these funds under private forfeiture statutes.
The movement of money around the world by organized criminal terrorists and their enablers is what and where the focus needs to be. I am working with Tom Creal who is a Forensic Accountant and Panel Expert for the United Nations. His specialty is the tracking of ill-gotten monies and those who aid and abet the disposition of those monies. His efforts have led to the tracking of Charles Taylor, the former President of the Republic of Liberia monies from businesses he ran to fund what were deemed war crimes from the International Court of Justice. His bank dealings stretched from the British Virgin Islands to China to Citibank in New York. Through the civil forfeiture statute and other legal means his tens of millions were confiscated.
Creal was also part of Task Force 2010. This Task Force set up by the US DEA to combat corruption in contracting. While I was in Afghanistan with Tom he was able to uncover enormous corruption within the Host Nation Trucking Vendors contracts. Creal was the forensic accounting expert that dug deep into the finances, traced the fast movement of large sums of money using Hawaladars (a type of informal money transfer system used in the Middle East and Asia), and then through banks around the world. One of these conflict entrepreneurs was making $34 million a year funnelling money to the Taliban. In this perverse way the US Military was actually funding the very enemy they were combatting on the ground nearly every day!
One of the individuals we worked on together was a minor security contractor and low grade gang leader named Rohullah. A petty criminal and drug addict, he nevertheless managed to become the security contractor of choice among many of the trucking companies largely because by hiring him your loads would be not be attacked. Once we attacked his money, he changed teams and provided information then used for military operations. Thus, what was once a liability became an asset.
Fighting ISIS is something that will require not brute force only but a certain sublime cleverness that we in many ways have failed to do in the past. The idea “if it don’t fit get a bigger hammer” did not serve us well in Iraq nor Afghanistan and when we realized that and started to fight smarter rather than harder we made progress. I advocate that a significant part of the effort in fighting ISIS involve a counter- finance operation or directorate. It would include bank analysts, oil industry subject matter experts, organized crime subject matter experts, logisticians, web and social media experts and accountants. This organization would focus on the sources of IS income as well as tracing from the sources to the disposition of assets. For example, the logisticians and oil industry SME’s would focus on the current practice of ISIS transporters moving oil on the main road from Baihi to Mosul then north onto Turkey and elsewhere. Baiji is a major industrial center and is home to the most expansive oil refinery infrastructure in Iraq. We know from aerial photos, we are able to obtain the trucking companies names and track the monies to various end users and other financial sources from there. This is just one example of an IS income stream that can be traced and attacked from source to end asset state.
The other Subject Matter Experts on the team would be internet and social media professionals. We know that ISIS uses Twitter both to raise funds to support their acts of terrorism and recruit. Twitter accounts can be traced, the money raised through social media can be tracked and the data points along the movement of the monies can be identified and dried up. One example is Hajjaj bin Fahd al-Ajmi. He raises money via Twitter and funds ISIS and the al-Nusrah Front from his base in Kuwait, but the funds raised move through weapon dealers, suppliers, hawalas, money carriers or through trade routes.
Lastly a concerted effort must address what Creal has named the “aiders and abettors” These are, as have been mentioned, the banks, investment advisors broker-dealer institutions, money transmitter and real estate developers. In addition, as noted above they can be commodity suppliers, those in the service industry, local informal and formal power brokers and other. In short they all conspire to aid and abet organized criminal terrorist activity and should themselves all be targeted.
Many of the most nefarious international war criminals were only successful because they were served by quite literally an army of enablers from a multitude of different locations and service platforms. All of this was possible for two reasons, first the financial rewards for doing so were great, the second was that they were greater than the risk of being caught and prosecuted.
The international community has both the resources as well as the body of international law to support an cooperative effort to not only trace these tainted monies but more importantly to confiscate them. This international task force if you might call it that, could establish a financial command center to coordinate attacks on those providing, moving, and holding assets for ISIS. As mentioned not only could the alliance of nations opposed to ISIS put into action processes to check monetary transactions of ISIS but to freeze and ultimately confiscate those assets to be used to raise, train and sustain forces that are actively fighting ISIS on the ground at present. This would not be dissimilar to the US indirectly funding the Taliban as mentioned earlier -only this time in reverse!
The time has come for the US and its allies in the fight against terrorism to begin to think more creatively about how to degrade and ultimately defeat organizations like ISIS. The face of international terrorism is changing and they have proved that they are not only sophisticated, brutal and above all “wired.” Fighting a sophisticated 21st century enemy is going to take more than mid-20th century tactics. In other words we are not going to be able to bomb them into submission. Rather the fight we have on our hands now is going to require us to think less like soldier and more like crime fighters, bankers, logisticians, IT Geeks and Anthropologists. We must not only understand the enemy but also have a firm grasp of how the enemy not only operates but how it feeds itself. Throughout history, armies burnt the enemy’s crops and slaughtered their animals to literally starve them into submission. Now is the time to start starving organizations like ISIS by taking away their financial resources.
About the Author(s)
Sorry, I also most forgot the following link which is to an online news paper titled Terrorism and Threat Financing. You guessed it. A daily that posts feeds from around the world related to the ins-and-outs of money-laundering, terrorism financing, corruption and transnational organized crime. Indirect approaches work better and last longer:
Small Wars Journal posts to the site almost daily.
However...those who are responsible for the mechanism that teaches and monitors AML/CTF specialists have to improve their game and the countries that are infested with terrorism need to realize the link between terrorism and threat financing. In other words, non-Financial Action Task Force countries have to become members first.
Crime, corruption, instability, terrorism, insurgency, and transnational organized crime are one.