The Business of Terrorism and Paramilitarism

Bill Tupman

Unit for Research on Community Safety

University of Exeter

Terrorism or Paramilitarism?

• Terrorism implies illegitimacy• Paramilitary a more neutral term• Don’t want to get into arguments about the

legitimacy or otherwise of a particular organisation

• No organisation of this type can survive without being legitimate for someone somewhere.

The survivors

• IRA, UDA, UVF et al.

• ETA

• FLNC, Corsica

• FARC, Colombia

• Tamil Tigers

• Middle East groups, like Hezbollah

• Afghan veterans now Al Qaeda associates

How have they survived?

• By organising funding streams for:• Training• Weaponry• Food, shelter• Prisoner and prisoner family support• Publicity• Overground support groups and political parties

IRA PLC Company activities

A small international company providing executive and leisure services in the BritishIsles and North West Europe. Overseas offices in the United States and Australia.Courier services available to various parts of he world.

Subsidiary companies provide construction and demolition services. IRA PLC alsofranchises clubs and a “get you home” service. Private security services also providedfor housing estates. Insurance quotations against bomb damage can also be brokered.

The company has recently secured a niche in the import-export market, particularly oflivestock and CDs.

Statement of income

Contributions from overseas subsidiaries 1,500,000Shebeen subsidiaries: bar and machines 4,275,000Import-export business 2,250,000Fire and Bomb Damage Insurance [Protection plc] 6,150,000Construction 5,000,000Involuntary bank and post office contributions 1,250,000 Total Cash 20,425,000

Non-cash contributionsDemolition equipment and executive toys Too sporadic to

quantify

Statement of expenditureExecutives in UK [4] Salaries 80,000Warehouse and Support staff UK [20] Salaries 400,000Transport and accommodation 200,000 sub-total 680,000Executives in Northern Ireland 400,000Warehouse and Support staff 600,000 sub-total 1,000,000 BALANCE 1,680,000Pay-outs from executive family insurance fund 2,000,000Semi-retired staff in Eire [50] 1,000,000 BALANCE 4,680,000Demolition equipment and executive toys [depreciation] 1,500,000 BALANCE 6,180,000Investments 13,500,000 BALANCE 19,680,000Petty cash fund 745,000

TOTAL 20,425,000

Old and New sources of funding

• Armed Robbery• Extortion• kidnap ransom• Voluntary

contributions• Overseas diaspora• foreign state support• sale of literature

• Fraud• Drugs• Clubs• Gambling• counterfeit products• legitimate businesses• stock market

manipulation• franchising

Terrorism needs an economic base as well as weapons

• successful terrorist groups create a profitable business

• terrorist groups that survive turn their hands to crime: mafia, triads

• violence is itself a business, or at least a service that can be bought and sold

• As Howard Marks said to Jim McCann: “if you’re smuggling guns, you can smuggle drugs. You’re in the smuggling business”

ETA

• Picture now emerging as Spanish government prosecutes Herri Batasuna

• 10% tax

• Kidnapping

• Allegedly 30+ militants for hire in South America

The Narcotics question

• FARC most frequently accused

• But all groups have been accused at one time or another

• Is it just propaganda or is there evidence?

• Or does organised crime have to pay protection like any other business in order to operate in these guys’ area?

Osama bin Laden

• Danger of making him into a Superman

• Did he start with $300 million, or less?

• How many banks did he or his associates own?

• How many businesses?

• Did he make a profit?

• He funded governments

5 principle sources of funding [Senator Bayh]

• Own money

• Wealthy individuals in the Gulf

• Front companies run at a profit

• Illegal activities eg smuggling, money-laundering

• Charities, both directly and by “skimming”

In the Sudan

• El-Hijrah Construction and Development• Wadi al-Aqiq export-import• Taba investment [global stock markets]• part-owner el-Shamal Islamic Bank• farms [peanuts, sunflowers cattle-breeding]• Laden International export-import• Bakery, Furniture• International al-Ikhlar Co. [honey]

Elsewhere at same time

• Sanctions-busting for Sudan: to disguise product origin, used Cyprus and other countries

• Kenya: ostrich farms and shrimp boats

• Turkey: forests

• Africa [Sierra Leone?] diamond mines

• Tajikistan: agriculture

• minor projects as cover for terrorist ops.

Second Afghan period

• Al Barakat and al Taqwa

• Al Barakat is Somalia’s largest company and part owns the Somali Internet Company. It provides money transfer services for the Somali diaspora

• Al Taqwa also provides money transfer. Has offices in Lugano, Switzerland

Non-business sources of funding

• Private individuals contribute, either because they believe or because they wish to avoid trouble

• States, too, allegedly

• Charitable and relief organisations. US list includes Wafa Humanitarian Org.

• Was he smuggling Afghani Opium?

Charities

• US has designated 7 foreign charities as having links to al Q

• And closed two US-based ones as having links to bin Laden and the Taliban

• Holy Land Foundation, largest US-based Islamic foundation has had assets frozen because of links to Hamas

Al Qaida is more than bin Laden

• “Islamic World Front for the Struggle against the Jews and the Crusaders”

• included estimated 24 groups, all of which would have own funding set-ups

• Egyptians, Jordanians, Yemenis, Iraqis, Syrians, Algerians, Sudanese, Tunisians, Moroccans, Palestinians, Pakistanis, Uzbeks, Tajiks, Philippinos, Saudis,Chechens, Albanians, Bosnians

Difference between Al-Q and the IRA

• IRA is multistate operator: UK, Ireland, USA, Australia, Sweden, Netherlands

• May run [or have capitalised] some pub chains, a pizza chain and a baked potato chain

• BUT only makes £10-15 million per annum

• AND that’s a high percentage of turnover at 50-75%

Al-Qaida

• Bin Laden reckoned he lost $200-300 million on projects in the Sudan 91-96

• Bankrolled Taliban to tune of $100 million 1996-2001

• We have no idea what he spent in Chechnya, Somalia, Bosnia or elsewhere

• So the outgoings are much higher than the IRA example

Outgoings

• To be able to afford gifts of $20 million plus per annum to governments

• and to be able to bankroll his own private army of at least 5,000

• and to supply money to 23 other organisations [unless some of these are in profit]

• Annual income must be a lot more than IRA

Income?

• Personal funds: say 10% of $300 million would be $30 million

• Donations from individuals: $30 million?

• Zakat/ charities: say $10 million

• States: wouldn’t settle for less than $10m

• Businesses? Can this be separated from personal investment above?

• $80 million per annum?

Outgoings [2]

• September 11th operation alleged to have cost $700,000

• Money transferred through perfectly legal and open channels

• Are operations individually budgeted?

• And how are country campaigns budgeted?