Why is the Bank of New York Collecting Donations for a Designated Foreign Terrorist Organization?
By Evan Kohlmann
As my colleague Victor Comras has written about below, this week, the U.S. State Department finally took the step of naming the Pakistani organizations Jamaat-ud-Dawa and Idara al-Khidmat-e-Khalq (IKK) as banned derivatives of the Specially Designated Global Terrorist (SDGT) entity known as Lashkar-e-Taiba (LET). Last January, the Danish Institute of International Studies published a paper I wrote on the role of Islamic charitable groups in terrorist financing--including a lengthy discussion of LET, Jamaat-ud-Dawa and IKK. These organizations have a militantly anti-American agenda--and according to the U.S. Defense Department--provided direct assistance to Al-Qaida members fleeing Afghanistan in 2001.
Americans might be surprised to learn that--all along--the IKK has been collecting donations from inside the U.S. via the Wall Street branch of the Bank of New York (only steps away from the former site of the World Trade Center). The IKK's website advertised this arrangement openly in English: "FOR TRANSFER OF FUNDS IN US DOLLARS... Please transfer the amount on the routing as follows: To: THE BANK OF NEW YORK. ONE WALL STREET, NEW YORK. NY 10286, USA." Any funds collected by the Bank of New York were then routed on to an "Islamic Banking Account" held at Bank Alfalah Limited in Karachi, Pakistan. For IKK donors in Europe, a corresponding Euro routing system was also established, care of "Bayerische Hypo – und Veriensbank AG" in Munich, Germany.
It remains to be seen whether the Bank of New York will finally close up shop in its dealings with Lashkar-e-Taiba as a result of the latest State Department designation. This case is a reminder that interdicting international terrorist financing remains a major ongoing challenge for U.S. banking institutions and regulators.
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