September 19, 2001

1:59 PM

How To Launder Money If the "terrorism can't be overpowered, it can only be undermined" train of thought holds true, then the money funding terrorist activities needs to be cutoff, especially considering they may directly profit from it (and theoretically at least, it's easier to choke off funds than grass roots ideology). From what I've read Osama bin Laden's money comes from wealthy fundamentalist sympathizers, "rogue" governments and the heroin racket. Governments create, maintain and oversee the money apparatus, but if money laundering can't be stopped I don’t see how terrorism can either, um short of eradicating poverty, "the petri-dish for the culture of suicide bombing."
posted by kliuless (11 comments total)

From The Nation (and I'll link to this week's cover , because its simplicity is pretty damn moving):

When Treasury Secretary Paul O'Neill said after the February meeting of the top industrialized countries, known as the G-7, that a European initiative to clamp down on money laundering "is not about dictating to any country what should be the appropriate level of tax rates," it was clear that the game was over. For about eighteen months the United States had signaled that it was serious about joining the Europeans in modest efforts to deal with the tide of illicit money that washes around the world. Now, the Bush Administration was saying that it was backing off the US commitment to reform the offshore banking system. Instead, the "tough on crime" Republicans would stand shoulder to shoulder with the shady characters in Nauru, Aruba, Liechtenstein and elsewhere who offer state-of-the-art financial services for crooks.

"Slicker" in today's Private Eye also pointed out that the Islamic custom of hawala makes it extremely easy to transfer money without it ever leaving a single account.
posted by holgate at 3:04 PM on September 19, 2001

Kliuless: Actually, from what I read, bin Laden inherited 80 Billion from his dad, which he wisely invested, increasing his assets to approximately 250 Billion. In his case, I don't see it as a matter of money laundering, he is just filthy rich.
posted by Uncle Joe's Brother at 3:15 PM on September 19, 2001

Some of bin Laden's money may come from cola-loving Americans.
posted by kindall at 3:17 PM on September 19, 2001

Please tell me you meant "million," UJB? Or maybe we're talking about some non-USD currency? Because, well, if OBL has US$250 billion, his assets would be comparable to the annual US National Defense budget (about US$300 billion (source)).

Of course, US$250 million isn't an amount to be trifled with, either.
posted by whatnotever at 3:56 PM on September 19, 2001

UJB: bin Laden's Saudi assets have been frozen for a good few years. And even with what's left, there's still the matter of transferriing his wealth to his overseas associates...
posted by holgate at 4:11 PM on September 19, 2001

yeah i read about hawala in this AP article. do you know if it's part of islamic law that prohibits usury?

i also read in the wsj today that bush is stepping up plans to fight money laundering again. they said they were going to release a 50-page plan today. it also mentioned they had already frozen $254 billion in taliban assets in 1999.

uncle joe's brother: i don't know if it's that much. there was this frontline interview saying he only left saudi arabia with only $30-40 million. but i think the point is that it doesn't matter if they freeze all his assets, or even assassinated bin laden for that matter. terrorist cells can coordinate themselves without him, he's only the most visible aspect of the organization, tip of the iceberg kinda deal.

as long as there are people willing to fund terrorism, and as long as there are recruits willing to sacrifice themselves for "the cause," how are you going to stop it? after reading about money laundering, and how easy it is to do and how hard it is to investigate, then i think we're looking at a pretty fruitless war against terrorism. if you're going to change people's behavior and military action won't cut it and you can't starve them out, what alternative is there?
posted by kliuless at 4:14 PM on September 19, 2001

Hawala or Hundi is not part of any Islamic approach towards interest free financial system.
posted by adnanbwp at 5:04 PM on September 19, 2001

Use hackers to locate terrorist accounts and make them disappear.
posted by neuroshred at 5:42 PM on September 19, 2001

According to http://dailynews.yahoo.com/h/ap/20010919/ts/attacks_money_trail.html he has a number of "legitimate" businesses.
posted by ilsa at 6:00 PM on September 19, 2001

i guess it's kind of ironic that some of the oil revenue generated to maintain our standard of living is being channeled to fund attacks on the very heart of the way we live. maybe the best thing to do would be to adopt the islamic approach and take it full circle. imagine an interest free world. as it is, i feel like i'm living in somebody else's nightmare.
posted by kliuless at 6:25 PM on September 19, 2001

Eye opening accounts of the techniques of money laundering. A report from the United States General Accounting Office entitled "SUSPICIOUS BANKING ACTIVITIES Possible Money Laundering by U.S. Corporations Formed for Russian Entities" describes how easy it might be for people to launder money through the United States. I think that a lot of banks understand the voluntary "know your customer" policy of the Bank Secrecy Act a little better after the GAO's report in this tale of the transfer of over $1 Billion from Eastern Europe, to the United States, and then back.

Does bin Laden have money being laundered through the US? I guess that depends upon how well our banks know their customers.
posted by bragadocchio at 7:08 PM on September 19, 2001