AnalysisFollow the money: The value of tracking terrorist financing

Mark Felt, Watergate’s Deep Throat, just died at age 95. Thirty-five years ago, in his clandestine meetings with Bob Woodward and Carl Bernstein, he advised the two young investigative reporters: “Follow the money.” They did, following the hush money given to the Plumbers, who broke into the offices of the Democratic National Committee, to CREEP (the Committee to Reelect the President), and to Attorney General John Mitchel, Secretary of Commerce Maurice Stans, and a host of others (G. Gordon Liddy, Chuck Colson, Gordon Strachan — the list is long) associated with Richard Nixon’s reelection campaign. Talking of a long list: after the tumultuous 1968 Democratic national Convention in Chicago, the city’s prosecutors charged seven leftist activists — Abbie Hoffman, Jerry Rubin, David Dellinger, Tom Hayden, Rennie Davis, John Froines, and Lee Weiner — with conspiracy and inciting to riot. Left-leaning organizations raised money for the defense by selling buttons which read: “Free the Chicago 7.” In 1974 Washington, D.C. you could buy buttons which read: “Free the Watergate 500.”

Talking of following the money, Matthew Levitt and Michael Jacobson write that it would be a good idea to do the same when it comes to terrorist networks. They write that the terrorist attacks on the transportation system in London in July 2005 killed 52 people but only cost about $15,000 to carry out. The 2000 attack on the U.S. destroyer Cole in Yemen and the 2004 train attacks in Madrid set the terrorists back about $10,000 each. Even the 9/11 attacks — the largest-scale terrorist plot in history — cost less than $500,000, according to the 9/11 commission report.

“Although mounting a terrorist attack is relatively inexpensive, the cost of maintaining a terrorist infrastructure is high,” the two expert write. Terrorist networks need cash to train, equip and pay operatives and their families and to promote their causes. Recruiting, training, traveling, bribing corrupt officials, and other such activities also cost money. Limiting the terrorists’ ability to raise funds therefore limits their ability to function.

Levitt and Jacobson write that before 9/11, Al Qaeda’s annual budget was an estimated $30 million, according to the CIA — hardly an insubstantial sum. Documents seized by the U.S. military indicate that the group Al Qaeda in Iraq, or AQI, also has been expensive to run. For example, one of its branches spent about $175,000 over four months in 2007 — with only about half going to weapons. “Perhaps an even better indicator of the importance of money to these networks is how much attention finances command from the terrorist groups themselves,” Levitt and Jacobson argue. Sheikh Sa’id, the head of Al Qaeda’s finance committee in 2001, was “notoriously tightfisted,” according to a 9/11 commission report, even vetoing an expense for an operative’s trip to Saudi Arabia to obtain a U.S. visa for the 9/11 plot. Osama bin Ladin was forced to step in and overrule Sa’id (though it is not clear that Sa’id knew about the plot when he rejected the expense).

The two write that, unfortunately, cutting off all funding for terrorist organizations is next to impossible, making efforts to combat terrorism financing seem a fruitless exercise, particularly with devastating terrorist attacks being so cheap to mount.

The effort to disrupt terrorist financing is not fruitless, though. Seized documents show that disruption in the flow of funds does affect terrorist networks and their ability to function. “Perhaps even more important than cutting off funding to terrorist groups may be the benefits of financial intelligence — better known as ‘following the money.’” Linking people with numbered accounts or specific money changers is “a powerful preemptive tool, often leading authorities to conduits between terrorist organizations and individual cells,” Levitt and Jacobson write.

The conclude that “combating terrorist financing will not, in and of itself, defeat terrorism. But when employed with other counter-terrorism tools as part of a broader strategy, it represents a powerful weapon in tackling the terrorist threat facing the nation today.”