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Qaeda, militants turn to crime

Some said to use funds for attacks

JOHANNESBURG -- Members of Osama bin Laden's Al Qaeda and other militants are turning increasingly to crime -- from dealing drugs to selling knockoff shampoos and pirated CDs -- to pay for attacks amid a crackdown on the movement of terrorist funds through world banks, security officials said.

As terrorist cells become more self-reliant, they are calling into question the notion they need an international financial support network to stage attacks, according to the independent commission that investigated Al Qaeda's deadliest assault yet on Sept. 11, 2001.

US Treasury officials, who have driven the global campaign to stem terrorist funding, acknowledge the shift and say it is a symptom of their success.

"Treasury's efforts have made it harder and costlier for terrorist groups like Al Qaeda to move and raise money," Molly Millerwise, a department spokeswoman, said. "However, as we strengthen our defenses against financial crimes and better safeguard the financial sector, Al Qaeda and like-minded groups will resort to other means -- such as petty crime, drug trafficking, and commodities fraud -- to raise and move money."

The warning follows weeks of heightened security in the United States after federal alerts that Al Qaeda was surveilling financial targets stemming from arrests in Pakistan and Britain.

US officials believe the 19 hijackers who participated in the Sept. 11 attacks were funded directly by Al Qaeda, either through wire transfers or cash handouts. They spent between $400,000 and $500,000 over two years to plan and execute the attacks, according to the 9/11 commission.

Since then, US officials have targeted the individuals and institutions that formed part of what they describe as a vast financial network originally set up in the 1980s to fund the "jihad," or holy war, against Soviet occupation of Afghanistan. These include wealthy individuals who contributed directly to Al Qaeda, as well as mosques and Islamic charities believed to have diverted funds to the terror network.

In all, the United States has identified 383 individuals and organizations believed to have bankrolled or otherwise supported terrorist activities, leading to the freezing of roughly $141 million linked to Al Qaeda and other groups worldwide.

At the same time, the United States and its allies have destroyed Al Qaeda's operational base in Afghanistan, forcing what had been a fairly centralized operation to reorganize into smaller, more autonomous units, US officials say.

Instead of relying on outside funding, these cells depend increasingly on their own community solicitations, tapping local charities, conducting small business operations, and often engaging in petty crime, according to a report submitted to the UN Security Council at the end of 2002.

Noting the development, the 9/11 commission report warned: "If Al Qaeda is replaced by smaller, decentralized terrorist groups, the premise behind the government's efforts -- that terrorists need a financial support network -- may become outdated."

There is plenty of precedent for Al Qaeda's move into ordinary criminal activities. Guerrillas in Colombia's Revolutionary Armed Forces traffic in cocaine and heroin to fund their organization. Paramilitary groups in Northern Ireland benefit from sales of counterfeit cigarettes. And the former Symbionese Liberation Army in the United States robbed banks.

Al Qaeda and its affiliates have been linked to the heroin trade in Afghanistan, credit-card fraud in Europe, and gem smuggling out of Africa -- though the 9/11 commission maintains there is no conclusive evidence to support claims the terror network laundered millions of dollars through diamonds before staging the US attacks.

Al Qaeda and others have also tapped into the lucrative trade in counterfeit goods, ranging from knockoff handbags to pirated music CDs, according to Interpol, the organization that coordinates information among law enforcement agencies in 181 countries.

Last year, Danish customs intercepted a container filled with counterfeit shampoos, creams, colognes, and perfume allegedly sent from United Arab Emirates by a member of Al Qaeda.

Interpol's secretary general, Ronald Noble, sounded the alarm at the first Global Congress on Combatting Counterfeiting, held in Belgium in May. He said pirated goods are an attractive source of revenue for terrorists because it is a low-risk, high-profit crime that is not a priority for most governments and police forces.

Spanish investigators believe Islamic militants accused in the March 11 train bombings in Madrid were involved in drug dealing. They are said to have traded 70 pounds of hashish and a relatively small amount of money -- perhaps a few thousand dollars -- for 440 pounds of stolen dynamite from a former miner in the northern Asturias region.

Several of them had had brushes with the police for years, and a parliamentary inquiry is investigating whether the attacks that killed 191 people could have been prevented.

The Madrid bombings were a wake-up call on the need for better coordination between efforts to counter terrorists and criminal syndicates around the world, security analysts say.

"It is no longer really appropriate to view issues of terrorism and organized crime as discrete areas," said Peter Chalk, a terrorism analyst with the US-based Rand Corp., an independent think tank. "They are increasingly interconnected, and you can't really separate one from the other -- which unfortunately is the tendency of governments these days."

US officials say they are taking the necessary steps, pointing to the FBI's joint terrorist task forces, which bring together representatives from federal, state, and local law enforcement agencies.

The United States is also working with other countries to confront the new modes of terrorist financing, including helping them monitor imports and exports, and identify the individuals who move drugs and other illegal commodities between nations.

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