Terrorist Financing and Resourcing Initiatives in Strategic Studies: Issues and Policies James J. Wirtz General Editor Jeffrey A. Larsen T.V. Paul Brad Roberts James M. Smith Series Editors INITIATIVES IN STRATEGIC STUDIES provides a bridge between the use of force or diplomacy and the achievement of political objectives. This series focuses on the topical and timeless issues relating to strategy, including the nexus of political, d iplomatic, psychological, economic, cultural, historic, and military affairs. It provides a link between the scholarly and policy communities by serving as the recognized forum for conceptually sophisticated analyses of timely and important strategic issues. Nuclear Transformation: The New U.S. Nuclear Doctrine Edited by James J. Wirtz and Jeffrey A. Larsen Proliferation of Weapons of Mass Destruction in the Middle East: Directions and Policy Options in the New Century Edited by James A. Russell The Last Battle of the Cold War: The Deployment and Negotiated Elimination of Intermediate Range Nuclear Forces in Europe Maynard W. Glitman Critical Issues Facing the Middle East: Security, Politics and Economics Edited by James A. Russell Militarization and War Julian Schofield Global Politics of Defense Reform Edited by Thomas Bruneau and Harold Trinkunas Perspectives on Sino-American Strategic Nuclear Issues Edited by Christopher P. Twomey Strategic Culture and Weapons of Mass Destruction: Culturally Based Insights into Comparative National Security Policymaking Edited by Jeannie L. Johnson, Kerry M. Kartchner, and Jeffrey A. Larsen Terrorist Financing and Resourcing Jodi Vittori Terrorist Financing and Resourcing Jodi Vittori TERRORIST FINANCING AND RESOURCING Copyright © Jodi Vittori, 2011. Softcover reprint of the hardcover 1st edition 2011 978-0-230-11188-2 All rights reserved. First published in 2011 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-29410-7 ISBN 978-0-230-11771-6 (eBook) DOI 10.1057/9780230117716 Library of Congress Cataloging-in-Publication Data Vittori, Jodi. Terrorist financing and resourcing / by Jodi Vittori. p. cm.—(Initiatives in strategic studies: issues) Includes bibliographical references. ISBN 978–0–230–11188–2 1. Terrorism—Finance. I. Title. HV6431.V5814 2010 363.325—dc22 2010035160 A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: February 2011 10 9 8 7 6 5 4 3 2 1 Transferred to Digital Printing in 2015 With Love to Pasquale and Marcus Contents List of Illustrations and Table ix Acknowledgments xi 1 Introduction 1 2 Terrorism Cannot Live on Idealism Alone 13 3 Terrorist Groups’ Resourcing Menu 25 4 The Evolution of Terrorism Resourcing 51 5 The Multinationals of Terrorism 63 6 State Sponsored Groups 85 7 Medium Autonomy Groups—Franchises and Bundled Support 99 8 Lone Wolf Groups 121 9 All the Rest—Shell States, State Sponsoring Groups, and Transnational Corporation Groups 135 10 Conclusions 157 Notes 169 Index 223 Illustrations and Table Illustrations 1.1 Capability versus Autonomy 9 1.2 Capability versus Autonomy for Individual Terrorist Groups 10 Table 3.1 Variations in Terrorism Resourcing 27 Acknowledgments I am deeply indebted to my colleagues throughout academia, the Department of Defense, and the Intelligence Community for their time, insights, and numerous discussions. At the United States Air Force Academy, David Sacko, Frances Pilch, Douglas Murray, Brenda Vallance, Kristin Bremer, and all my colleagues in the Department of Political Science have been immensely helpful in their support—in time, patience, and funding—in completing this project. Likewise, the mentorship of Jonathan Adelman and Joseph Szyliowicz at the University of Denver were invaluable from the earliest outlines through the finished book. Jim Smith at the Air Force’s Institute for National Security Studies provided not only the initial impetus to rigorously study terrorism financing, but also continuous and gener- ous support along the way. The Combating Terrorism Center’s Reid Sawyer’s impressive knowledge of terrorism and analytical insights were crucial to this project, without which this book could not have been researched nor written. I am also grateful to those who made the publication of the book possible, including Jim Wirtz and Jeff Larson for their support as part of the series Initiatives in Strategic Studies. Finally, I could not have undertaken writing this book without my family’s unceasing love and encouragement. Most important has been the support of my husband (and chief editor) and my son, as well as my parents and brother. Nevertheless, the responsibility of this book and the opinions therein are solely my own. The views expressed herein do not necessarily rep- resent the U.S. Department of Defense nor the U.S. government. Chapter 1 Introduction F ormer Texas Senator Phil Gramm once quipped that “ready money is the mother’s milk of politics,” and what is true for legitimate politi- cal campaigns is just as true for terrorist groups using violence for political goals. The most successful, long-lasting terrorist groups have amassed tremendous war chests. For example, in the 1980s, the Palestine Liberation Organization used clever investments—both within its own population and internationally—to acquire 5 billion USD in assets. In turn, these yielded an annual income of 1.25 bil- lion USD, used to maintain popular support, pay for leaders’ affluent lifestyles, and conduct worldwide guerrilla and terrorist operations.1 More recently, Usama bin Laden took a roughly 25–50 million USD fortune2 and, through donations and investments in construction companies, multinational agricultural firms, and securities, acquired a 5 billion USD economic empire3 to run a terrorist operation with global expenditures of approximately 35 million USD per year before 9/11.4 How do terrorists obtain the financing and resourcing they need? And how are these used to conduct actual terrorist campaigns? The study of how these groups acquire financing and resources to sustain themselves, conduct operations, and then live to fight another day has been sorely neglected. This book offers a primer on how terror- ists have acquired assets throughout history and analyzes the overall effects of their resourcing strategies on their capabilities and target selection. Henceforth, the term “resourcing” will be used to describe three types of assets: (1) money or other readily liquid assets; (2) tan- gible goods, such as life’s necessities and the items needed to conduct attacks; and (3) intangible goods such as operational space, security, intelligence, and some level of training and expertise. The history of terrorism resourcing demonstrates that while groups such as al Qaeda have been considered revolutionary because of their