Corrupt government officials, drug traffickers and other global criminal networks are financially supporting terrorist groups like the Islamic State. Now lawmakers are looking for ways to end it.
“Groups like Hezbollah, the Islamic State and Boko Haram can no longer simply be considered terrorist groups. They’ve evolved into sophisticated global criminal conglomerates,” said Rep. Michael Fitzpatrick, R-Pa., chairman of a congressional task force investigating terrorism financing.
“In order to effectively combat such volatile threats, U.S. policy must evolve as well.”
The House on May 14 moved to tighten sanctions against the group, passing legislation by a 423-0 vote that would name Hezbollah as a “transnational criminal organization” and drug trafficker. The law would target financial institutions that conduct transactions on behalf of the group.
Experts say terrorists are better-financed than a decade ago, and illicit financing has gone global, with record profits for individuals and organizations.
Although U.S. and international efforts to disrupt the money flow have intensified since the Sept. 11 attacks, it’s a difficult problem to solve as perpetrators evolve to stay a step ahead of enforcement.
“You need almost like an ‘Untouchables’-type of approach to this stuff,” a staff of enforcers authorized to chase money flow globally, said David Asher of the Foundation for the Defense of Democracies.
Take U.S. efforts to stem financing of the Islamic State, the principal source being the estimated $1 million a day the extremist group earns from oil sales from captured refineries in Syria. U.S. and coalition airstrikes have targeted those refineries, and a raid by U.S. special operations forces on May 15 killed Abu Sayyaf, believed to be the mastermind of the group’s financial operations.
But the oil sales continue, even to the group’s nominal enemies such as the Syrian government, Turkey and Iraqi Kurds. That’s because the price is attractive and supply routes are difficult to choke off by aerial bombardment, said Celina Realuyo, a professor at National Defense University in Washington.
The problem extends to America’s borders. Drug trafficking networks in Latin America and corrupt governments hostile to U.S. interests, such as Venezuela, are enabling terrorists to raise millions of dollars, experts say.
An area of particular concern is the region where Argentina, Brazil and Paraguay meet, which has become a center of activity for Hezbollah, netting the Lebanese Shiite group an estimated $20 million a year.
Governments in the region, especially Venezuela and Ecuador, have given the group and its patron, Iran, access to their banking systems, and, by extension, the global infrastructure of international finance, said Douglas Farah, a national security consultant and a former journalist in Latin America.
“The new construct in Latin America is entirely state-protected and state-driven,” he said, which gives immunity from prosecution to illicit financing.
Hezbollah also has expanded its trade-based money-laundering operation in the United States, buying used cars legitimately, shipping them to west Africa for sale and pocketing the profits, Asher said.
Following the May 14 House vote, Asher said more needs to be done, including applying the Racketeer Influenced and Corrupt Organizations law against people raising money for Hezbollah and other terrorist groups.
“It’s a racket. Terrorism is against the law,” he said. “We really need law enforcement to get into gear and to build financial cases against these complex conspiracies.”
