Standing Up to Terrorist Abuse of Charities

By Matthew Levitt

My colleague Mike Jacobson and I are not the only ones to recently highlight the connection between a prominent, designated charity (Jamaat u-Dawa, JUD) and the recent terrorist attacks in Mumbai. Yesterday's Saudi-owned Asharq Alawsat ran an editorial by the paper's editor-in-chief, Tariq Alhomayed, entitled "Charities...Again!" in which the author also notes this connection and decries the continued terrorist abuse of charities. Calling for "strict financial monitoring of charitable work," Alhomayed speaks truth to power when he writes, in the Arab press:

It is unfortunate that the exploitation of financial aid offered by charities, and the damage that is being caused to the concept of charity, is continuing, with reports of new scandals surfacing from time to time. The West certainly has its own problems regarding the abuse of charity work, but these problems are corrected through high levels of transparency and continuous efforts.

Transparency is indeed what is needed, especially given the evolutionary nature of illicit finance and the tendency for terrorist-affiliated charities shut under one name to reopen under other names.

As Jacobson and I noted in our recent study, "The Money Trail," charities are especially susceptible to abuse and, when abused, can serve as ideal money laundering mechanisms.

Evolution of terrorists’ financing methods have cut across the spectrum of raising, laundering, transferring, storing, and accessing funds. As authorities have cracked down, for example, on charities that were financing illicit activity around the globe, some of these charities have devolved decisionmaking to local offices and personnel. Some charities tied to illicit activities reportedly instruct donors to fund their regional offices directly, instead of going through central offices. They also hire local people as staff so as not to raise suspicion among authorities. Speaking of radical Islamist efforts to radicalize and recruit young Muslims in Zanzibar, Tanzania, a local Islamic leader noted that “there are some [charitable] agencies that sometimes use a native of the village [to recruit] because the others would be caught by the police.” Similarly, there has been a shift in funding from investment in specific programs to investment in large infrastructure projects. Such infrastructure is not only much needed but also provides effective cover for the transfer of substantial sums of money overseas. In the Philippines, for example, investigators found that terrorist financiers supporting the Abu Sayyaf Group and Raja Sulayman Movement facilitated the construction of mosques and schools under the supervision of Mohammad Shugair, a Saudi national linked by Philippine authorities to terrorist financing.

As I've written before, there can be no doubt that charity is a value of paramount importance to donors and recipients alike. Recognizing, as illicit actors already have, that the charitable sector is vulnerable to abuse and devising policies that protect charities from abuse even as they promote charitable giving is the true challenge. That a prominent columnist in a prominent Arab newspaper concurs is progress worth noting.

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