CIAO DATE: 12/02

Terrorist Financing

Executive Summary

Unlike other terrorist leaders, Osama bin Laden is not a military hero, a religious authority, or an obvious representative of the downtrodden and disillusioned. He is a rich financier. He built al-Qaeda's financial network from the foundation of a system originally designed to channel resources to the mujahideen fighting the Soviets.

Thanks to the leadership of President George W. Bush Jr., Congress, and the hard work of the Bush administration over the last year, that network has been disrupted. But it has certainly not been destroyed. And as long as al-Qaeda retains access to a viable financial network, it remains a lethal threat to the United States.

Al-Qaeda's financial network is characterized by layers and redundancies. It raises money from a variety of sources and moves money in a variety of manners. It runs businesses operating under the cloak of legitimacy and criminal conspiracies ranging from the petty to the grand. The most important source of al-Qaeda's money, however, is its continuous fundraising efforts.

Al-Qaeda's global fundraising network is built upon a foundation of charities, nongovernmental organizations, mosques, web sites, intermediaries, facilitators and banks and other financial institutions. Some, whose donations go to al-Qaeda, know full well the violent and illicit purposes their money will further. In other cases, donors believe their money will help fund legitimate humanitarian efforts, but the money is nonetheless diverted to al-Qaeda. For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda. And for years, Saudi officials have turned a blind eye to this problem.

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