Timothy Wittig Financing Terrorism

Understanding Terrorist
Finance
Timothy Wittig
Understanding Terrorist Finance
This page intentionally left blank
Understanding Terrorist
Finance
Timothy Wittig
Palgrave
macmillan
© Timothy Wittig 2011
Softcover reprint of the hardcover 1st edition 2011 978-0-230-29184-3
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6-10 Kirby Street, London EC1N 8TS.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The author has asserted his right to be identified
as the author of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First published 2011 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-33212-0 ISBN 978-0-230-31693-5 (eBook)
DOI 10.1057/9780230316935
This book is printed on paper suitable for recycling and made from fully
managed and sustained forest sources. Logging, pulping and manufacturing
processes are expected to conform to the environmental regulations of the
country of origin.
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Wittig, Timothy.
Understanding terrorist finance / Timothy Wittig.
p. cm.
Includes index.
1. Terrorism—Finance. I. Title.
HV6431.W5664 2011
363.325—dc22 2011013819
10 9 8 7 6 5 4 3 2 1
20 19 18 17 16 15 14 13 12 11
To Sarah
This page intentionally left blank
Contents
List of Tables and Figures viii
Acknowledgments ix
List of Abbreviations x
1 Understanding Terrorist Finance: Challenges and Issues 1
2 Terrorist Finance: Myth and Reality 43
3 Asking the Right Questions about Terrorist Finance 97
4 Understanding Terrorist Finance as Interaction with

Value Chains 112
5 Understanding Terrorist Finance as a Continuum of

Material Support 141
6 Terrorist Finance and International Relations 159
Conclusion 188
Notes 192
Bibliography 220
Index 230
vii
List of Tables and Figures
Tables
1.1 Who finances terrorism? Actors and actor types involved
in financing Chechen terrorism, Georgian–Chechen
border, 1999–2002 18
1.2 How is terrorism financed? Activities involved in
financing Chechen terrorism, Georgian–Chechen border,
1999–2002 24
1.3 The counter-terrorist financing community of practice
(US government) 34
2.1 Estimated relevance of the counter-terrorist financing
regime to the economic activities of Foreign Terrorist
Organizations 48
2.2 How cheap is terrorism? Estimated total costs of selected
major al-Qa’ida terrorist operations 63
2.3 A preliminary lexicon of critical resources used by
terrorists 66
4.1 Local prices of vehicles in regular use by the Pakistani
Taliban, 2009 125
Figures
1.1 Value transfer in Pankisi Gorge, Georgia 1999–2002 12

2.1 The relationship between economic success and terrorism
(notional) 68
viii
Acknowledgments
I would like to express my appreciation to the many people who helped

make this book possible, beginning with my academic colleagues in
Scotland and the Netherlands for their support and assistance, especially
Ali Watson, John Anderson, Ian Taylor, Michael Wintle, and Maaike
Waarnar. I owe debts of gratitude to Adham Saouli, Brandon Gentry,
Chris Zambelis, Amanda Shandor, Matt Conway, and Aleko Kupatadze
for their valuable insights regarding particular sections of the book; and
to Chris Lamont, Neil Carrier, and Marieke de Goede for their thought-
ful comments and feedback. In addition, my sincere thanks go to Joe
Hanvey, John Cassara, Mike Moore, Kimo Quaintance, Ian Conway, and
Marissa Fenech for sharing their professional knowledge and experience
as well as their encouragement to think about this topic originally and
creatively. Thanks also to my editors at Palgrave, Alexandra Webster,
Renée Takken, and Christina M Brian, for their confidence in and assis-
tance throughout this project. I wish to thank my mother, father, and
sister, who have given me so much unconditional support throughout
my life and career. And to my wee son, who is a reminder of all that is
good in the world, thank you. Finally, my greatest and deepest gratitude
is due to my wife, Sarah. For her wisdom, strength, and confidence in
me, I dedicate to her this effort: a humble token of my enduring love
and gratitude.
This book contains material adapted from two scholarly articles I have
previously published, in Chapter 1 (“Financing terrorism along the
Chechnya–Georgia border, 1999–2002,” Global Crime 10, no. 3 (2009):
248–260) and Chapter 3 (“Terrorist finance: asking the right questions,”
Politics 29, no. 2 (2009): 145–153). This material is reprinted, courtesy of
Taylor and Francis Ltd and John Wiley and Sons, respectively.
ix
List of Abbreviations
9/11 the terrorist attacks on the United States on September

11, 2001
AHIF Al-Haramain Islamic Foundation
AML anti-money laundering
ANC African National Congress
AQIM al-Qa’ida in the Islamic Maghreb
ATM Automated Teller Machine
ATTA Afghan Transit Trade Agreement
BIF Benevolence International Foundation
CEO chief executive officer
CFT combat(ing) the financing of terrorism
CHF Swiss franc
CIA Central Intelligence Agency
CTF counter-terrorist financing
CTS Critical Terrorism Studies
FARA Foreign Agents Registration Act
FATA Federally Administered Tribal Areas
FATF Financial Action Task Force
FBI Federal Bureau of Investigation
FfC Foundation for Chechnya
FinCEN Financial Crimes Enforcement Network
FIU Financial Intelligence Unit
FTO Foreign Terrorist Organization
GE General Electric
HAMAS Harakat al-Muqāwamat al-Islāmiyyah, (Islamic Resistance
Movement)
HIG Hizb-e-Islami Gulbuddin
ICU Islamic Courts Union
IMF International Monetary Fund
IPE International political economy
IRA Irish Republican Army (can refer also to PIRA)
Kr Danish Kroner
KYC know your customer
LeT Lashkar-e-Taiba
ML money laundering
x
List of Abbreviations xi
NATO North Atlantic Treaty Organization

NGO Non-Governmental Organization
NORAID Irish Northern Aid Committee
NWFP Northwest Frontier Province
OECD Organization for Economic Cooperation and
Development
PIJ Palestinian Islamic Jihad
PKK Partiya Karkerên Kurdistan (Kurdish/Kurdistan
Workers’ Party)
PLO Palestine Liberation Organization
SDGT specially designated global terrorist
SOCOM Special Operations Command
TF Terroris(t)(m) Financ(e)(ing)
TFG Transitional Federal Government (Somalia)
TTP Tehrik-e-Taliban Pakistan
UK United Kingdom
UN United Nations
UNODC United Nations Office on Drugs and Crime
US United States
USA PATRIOT Act Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001
USC US code
USD US dollar
USS US ship
1
Understanding Terrorist Finance:
Challenges and Issues
This book is about how to understand the financing of terrorism. It aims

to demystify the economic activities of terrorist actors—or, as they are
collectively known in common parlance, “terrorist finance”—and to
present an approach for understanding these activities that is logical,
systematic, and also useful to lay and academic readers alike.
This book is necessary because there is widespread recognition—if
not a consensus—in spheres of both thought and practice that terrorist
financing is poorly understood. In the years since the terrorist attacks of
September 11, 2001, the so-called financial war against terrorism has pro-
duced, in the words of economists Peter Reuter and Edwin Truman, “an
elaborate system of laws and regulations that affects the lives of millions
of people and imposes several billion dollars in costs annually,” and
which, they write, “has been based to a substantial degree on untested
assumptions that do not look particularly plausible” [emphasis added].1
One such flawed assumption is that Western societies comprehend
the financial and economic dynamics of terrorist actors to a level at
all proportional to the various efforts meant to counter them. Brown
University’s Thomas Bierstecker and Sue Eckert remark of this remark-
able disconnect that it is “humbling . . . how little we know”2 and that
despite years of attention and huge amounts of resources dedicated to
fight it, terrorist financing remains “inadequately researched.”3 In prac-
tice, the consequences of these analytic deficiencies amount to, as Nikos
Passas puts crisply, “fighting terror with error,”4 a situation reflected in
the following comments from those in government and the financial
sector responsible for tracking and countering terrorist finance:
We don’t know what to look for. (Chief of Financial Crime and Intel-
ligence of a major global banking group)5
1
2 Understanding Terrorist Finance
Regulations meant to combat terrorist finance are based on

“quite a few myths.” (Senior official in the International Mon-
etary Fund’s Anti-Money Laundering/Counter Terrorist Financing
(AML/CTF) section)6
Efforts by the financial industry to detect and stop terrorist financ-
ing are “elaborate theater.” (Senior compliance officer at a major
global banking group)7
We need all the help we can get. Most of what we know [about
terrorist financing] is from news reports. (Intelligence analyst, US
Department of the Treasury)8
A generally accepted model for terrorist financing would provide a
clear and common strategic understanding of how terrorist financing
operates and a sound basis for deciding how to respond to it. Cur-
rently, no such model exists. (Canadian Secret Intelligence Service
(CSIS))9
It is impossible to point to . . . objective criteria for making deci-
sions. (Managing Director for AML/CFT compliance of a major global
banking group, referring to the regulatory requirement to judge the
risk that banking activity is linked to terrorist actors)10
We have been looking in the wrong places. (John Cassara, retired
senior US Treasury official)11
This book attempts to address this problem not by providing final

answers about the financial and economic dynamics of terrorists but
by presenting a more coherent and systematic approach to understand-
ing them. I argue that the activities typically represented as “terrorist
finance” (for example, donations, criminal activities, weapons procure-
ment, and so on) ought to be understood in terms of how terrorists—as
socio-political actors—access and interact with particular—and often
legitimate—political-economic communities; rather than as elements of
some vast, mysterious and entirely illicit financial edifice supposedly
underpinning global terrorism.
Most significantly, this represents an advancement beyond—and
importantly not a mere critique of—the deeply flawed but nevertheless
dominant orthodoxies about terrorist finance that focus on uncovering
the secrets of “who finances terrorism and how they do it,” and toward
more contextualized understandings that subordinate the answers to
such questions to the socio-political meaning of both terrorist financ-
ing activity and our attempts to understand it. By emphasizing the
socially contingent, geographically specific, “everyday” ways that ter-
rorist actors interact with local and global political economies and social
Understanding Terrorist Finance: Challenges and Issues 3
movements, the book also helps to better situate knowledge of terrorist

financing into the distinct but related literature on extra-legal politi-
cal economies,12 something which to date has not been done. Third,
the book addresses several key gaps in the critical discourse on terrorist
financing, which in aggregate has so far failed to provide viable alterna-
tive theoretical perspectives about terrorism-related financial activity to
accompany its trenchant critiques of existing orthodoxies. In particular,
the book’s focus on value chains and a more specified understanding
of material support helps resolve the implicit and intellectually stifling
levels-of-analysis debate in terrorist financing discourse; which is caught
between, on the orthodox side, pretentions of objectivity, despite the
inherent politicized and contested nature of both terrorism and finance,
and, on the critical side, a failure to present any alternative set of
proper objects of analysis and scope of inquiry for terrorist financing
research. This serves to move understandings of terrorist finance into the
“more mature phase of research” called for by Bierstecker and Eckert.13
This book thus aims to provide new insights into the material real-
ity of the financial and economic activities of terrorist actors; to dispel
certain popular myths about these activities; and to present a coher-
ent framework for conducting systematic research on terrorist finance
that is more analytical, more nuanced, and ultimately more practically
useful than existing thinking on the topic. Consequently, the book
presents an important step forward in our understanding of not only
terrorist finance but also more generally of the place terrorism and ter-
rorists occupy in the contemporary world, however one defines these
contested terms.
Within this context, this opening chapter outlines a more systematic
and analytic approach to researching—and thus also ultimately under-
standing and even responding to—terrorist finance. It begins by offering
a case study of terrorist financing activity in order to introduce and illus-
trate the empirical realities common—if not often inherent—to cases of
terrorist financing, and thus also the key epistemic and methodolog-
ical challenges that research into terrorist finance must address. The
study, based in part on field research, focuses in particular on the financ-
ing of Chechen separatists and the foreign “al-Qa’ida” jihadist fighters
allied to them in the Republic of Georgia, from 1999 to 2002. This case
was chosen because it illustrates numerous social, political, economic,
cultural, cognitive, and discursive complexities that are significant to
understanding terrorist finance, and which are explored more deeply
later in this book. Following this case, the chapter outlines and dis-
cusses the major epistemic and methodological issues of researching
both this case in particular and terrorist financing in general. First, the
chapter examines the levels of analysis, that is, the core epistemological
question of “what to look for?” when conducting research and analy-
sis into terrorist finance. Second, and following from this, the chapter
discusses the purpose of inquiry into terrorist financing activity, focus-
ing especially on, respectively, the demand, supply, and governance of
knowledge about both this particular case and of terrorist financing
activity in general. Third, the chapter examines the key methodological
issues of terrorist financing research, looking especially into the major
research questions, problems to be solved, systems to be challenged, and
appropriate research methods.14 The chapter concludes by calling for an
approach to researching terrorist financing that is both critically minded
and systematic, and capable of simultaneously solving problems within
current terrorist financing paradigms and questioning the political and
ethical foundations of these frameworks.
Financing terrorism along the Chechnya–Georgia border,

1999–2002: an indicative case
The border between Chechnya and the Republic of Georgia lies in

a remote high-mountain region in the Central Caucasus. Completely
impassable during the winter months,15 the border at other times can
only be crossed on foot or horseback, or by four-wheel drive vehi-
cle solely via the 300-km road from Tbilisi to Shatili. The region is
(sparsely) inhabited by the Kist, Tush, and Khevsur peoples, among
others,16 and although distinct from one another, all of these ethnic
groups are characterized by strong social, cultural, and linguistic tra-
ditions that have changed little since the Middle Ages.17 For example,
similar to the Pashtun institutions in Afghanistan and Pakistan,18 these
groups have strict traditions of hospitality and honor, are only nom-
inally governed by the central national government, and are largely
egalitarian in how they govern themselves and settle disputes, relying
on a complex mixture of social and familial customary law blended
with religious beliefs.19 These beliefs combine ancient pagan traditions
with Orthodox Christianity (or Sufi Islam in the case of the Kists) and
play both significant spiritual and nationalistic roles. Although austere,
these beliefs are, as Sanikidze and Walker described, part of a “tradi-
tion of religious tolerance and eclecticism,”20 an observation confirmed
by a period of field research among Khevsur villagers and elders.21 All
inhabitants of the border region identify themselves as Georgian for
official purposes, although the Kists are descendents of the Chechen
and Ingush peoples (who collectively are referred to as Vainakhsi), and

during Soviet times it was common for Kists to move to Chechnya for
employment.22 Most of the Kist population lives in the Pankisi Gorge, a
remote broad valley (not a gorge, in fact) about 85 km from the Chechen
border. Beginning during the first Chechen conflict, Chechen militants
established a relatively large base of operations in the gorge in order to
train personnel and raise funds to support its operations. It is believed
that many of the terrorist attacks committed by Chechen forces had a
connection to Pankisi Gorge, either as a supply point, training centre,
or planning base.
From 1999 to 2002, Georgia was by almost any measurement a poor
and corrupt country. In 2002, the World Bank estimated its per capita
GDP as $2,220 (just richer than Mauritius and Angola, but poorer than
Papua New Guinea)23 while Transparency International ranked it as the
17th most corrupt country in the world,24 an assessment shared by an
overwhelming majority of Georgian citizens.25 Exacerbating this were
large numbers of displaced persons, both from the 1992–93 conflict
in Abkhazia (300,000)26 and the wars in Chechnya (4170).27 Most of
the Chechen refugees migrated to Kist (ethnically Chechen Georgian)
villages in Pankisi Gorge where most of them took shelter with local
families.28
Expenditures
Terrorist expenditures in the region primarily focused on weapons pur-
chases, the cross-border smuggling of people to fight with Chechen
terrorist groups, training, and day-to-day needs. The day-to-day needs
of Chechen fighters in Georgia, or boeviks, included food, medicine,
and clothing. As will be discussed later, this was acquired in a number
of ways, including receiving donations from Islamic and international
charities, the black market, theft, as well as the hospitality of local
civilians.
Available evidence shows that the weapons materiel purchased ranged
from relatively cheap and available handguns, bullets, Kalashnikovs,
and detonators29 to expensive and harder-to-get weapons, such as
9M111 Fagot anti-tank missiles, PΠΓ handheld anti-tank grenade-
launchers, and Strela surface-to-air missile systems.30 Often, corrupt
Georgian officials facilitated these purchases. For example, Akaki
Kegoshvili, the commander of the Georgian peacekeeping battalion in
the Tskhinvali district, and Major Kornel Lazashvili, chief of finance of
the same battalion, were both caught in 2001 smuggling a full carload of
weapons into Chechnya.31 Tskhinvali was a major transhipment point

for weapons smuggled into Chechnya throughout the period.32
A large amount of money also went to smuggling foreign (non-
Chechen) fighters into Georgia and across the border to join various
Chechen armed groups, as well as training and indoctrinating them.
In the case of smuggling, sometimes this involved purchasing for about
$400 the assistance of a Georgian guide to show them “weak points”
in the border where crossing was possible.33 Alternatively, these fight-
ers could purchase more guaranteed passage by directly bribing relevant
Georgian police and border officials to facilitate the border crossing.34
Although many belonged to separate networks with different par-
ticular agendas, the foreign fighters going to Chechnya were most
generically motivated by a desire to join a global “jihad” against those
seen to persecute Muslim peoples—in this case Russia—and came pre-
dominantly from Saudi Arabia, Kuwait and other Arab countries, but
also occasionally from European countries such as the United Kingdom
and France.35 Many of these foreign nationals—herein referred to as
foreign fighters36 —were later involved in terrorist attacks or al-Qa’ida-
related cells around the world after their experiences in Chechnya,
including for example, the Moscow and Beslan attacks, as well as the
2003 “Ricin Plot” in London.37 In many instances, corrupt Georgian
law enforcement and intelligence personnel also facilitated the smug-
gling of people later involved in terrorism. According to several sources,
the going rate of such transport was about $10,000 per head, paid in
either US dollars or Deutsche Marks.38 Much of this activity occurred in
Pankisi Gorge, where Georgian police demanded bribes of about 10 lari
(approximately $6) to enter or leave the Gorge.39
Some of the approximately 6040 foreign fighters resident in the Gorge
also apparently received indoctrination and training in military and ter-
rorist operations while in Pankisi. Few details are available about the
specific expenses of the training camps. One clue may be in contem-
porary press sources that reported that multiple mosques were built in
Pankisi Gorge, including one in the valley’s administrative centre Duisi,
which taught the strict Wahhabist interpretation of Islam promulgated
by Saudi Arabia that is not only common among foreign fighters but
also considers the Sufi beliefs of the indigenous Kists and Chechens to
be heretical.41 Although no information could be found about the exact
activities of these mosques, it was widely reported that large numbers
of Arab and Turkish men frequented them.42 As Wahhabi beliefs are
largely antithetical to local interpretations of Islam and benign visitors
would be highly unusual in this remote region, especially considering
the larger context of events there during this period, this may indicate
expenditures on methods of radicalization and indoctrination via the
mosque.
Sources of funds
The money used to purchase the aforementioned goods and services
had a variety of ultimate origins, including direct, intentional funding,
criminal activity, and legitimate commerce. In the first instance, it is well
known that substantial funding for Chechen terrorist groups originated
from benefactors in the Middle East and Islamic world, primarily from
Saudi Arabia, but also Pakistan, Qatar, and Yemen.43 Typically, these
funds were given as fulfillment of the sacred duty of zakat, or almsgiv-
ing, one of the five pillars of Islam.44 According to the Qur’an, money
given as zakat could be used, among other purposes, for humanitarian
aid to the poor as well as to works that sustain “Allah’s Cause.”45 This
latter purpose has in some more radical interpretations of Islam been
equated to justify the financial support for acts of war and terrorism
under the banner of holy struggle, or jihad.
Zakat can be given in the path of Allah. By this is meant to finance a

Jihad effort in the path of Allah, not [only] for Jihad [but] for other
reasons. The fighter (mujahid) will be given as salary what will be
enough for him. If he needs to buy arms or some supplies related to
the war effort, zakat money should be used provided the effort is to
raise the banner of Islam.46
In several cases, fundraising revolved around lobbying efforts and

fundraising events planned by a small cadre of well-connected salafist
activists, apparently including two prominent veterans of the Soviet War
in Afghanistan: influential al-Qa’ida ideologue, author and internet pro-
pagandist Yousef al-Ayyri in Saudi Arabia,47 and in Yemen Mohammad
Hamdi al-Ahdal, who prior to his 2003 arrest allegedly administered the
finances of al-Qa’ida in Yemen and participated in the 2000 attack on
the USS Cole.48 Perhaps reminiscent of a Western political party ben-
efit dinner, these events often involved propaganda material (such as
literature and combat films), motivational speeches by the returned
mujahedeen, and direct pitches for funding.49
Chechen militant groups allegedly have also received direct financial
support from an unlikely source: the US Government. Accord-
ing to contemporary Georgian newspaper accounts and corrobo-
rated by interviews with a former senior Georgian Ministry of State
Security counterterrorism official,50 in March 2002 American person-

nel apparently made contact with a Chechen militant leader—probably
Ruslan Gelayev51 —to discuss the transfer of Arab fighters associated with
al-Qa’ida into American custody. In exchange for these Arabs—one of
whom may have been al-Qa’ida shura (consultative council) member
Saif al-Islam al-Masri—the American officials reportedly “promised to
help financially in the ‘holy war’ against Russia.”52 In late April 2002,
representatives of Gelayev received a shipment of weapons allegedly
from a courier arranged by the US officials.53 Such a deal had prece-
dent during the Soviet War in Afghanistan where US officials gave
weapons and cash to various militant leaders in exchange for assistance
against US enemies.54 According to these accounts, this led to conflict
within the Chechen groups over the division of the spoils, particularly
between Jaber, field commander of Khattab’s55 group, and Abu-Amer,
representative of the Muslim Brotherhood in Georgia.56
Chechen terrorists also engaged in a number of criminal schemes to
generate money for their cause, both independently and in concert with
the local population. A particularly lucrative enterprise was the pro-
duction and trafficking of heroin. Owing to a confluence of factors,57
Georgia during the period was a major transhipment route for heroin
smuggled from Afghanistan and Central Asia to Europe. A significant
portion of this trade occurred in Pankisi Gorge, where heroin was both
processed (from imported morphine base) and repackaged (from whole-
sale shipments of processed heroin from the east into “retail” packages
that could be distributed more widely throughout Europe).58 In addi-
tion, Pankisi served as a point of entry for smuggling heroin in and out
of Georgia,59 sometimes using traditional handicraft containers carried
by couriers to smuggle the drugs to Tbilisi and into Eastern and Western
Europe, where it was sold.60 At the time, heroin in Pankisi sold for the
equivalent of $200–300 per gram, although it could be sold in Tbilisi
and Europe for double that price.61 The price of opium decreased over
the period,62 which would have had an effect on the revenues generated
by Chechen boeviks in Pankisi. In 2001, Chechen militants also estab-
lished two heroin production laboratories among their training facilities
in Pankisi Gorge to replace one that had recently been destroyed in
Shatoi, Chechnya.63 The heroin produced by these labs is likely to have
joined the same trafficking routes mentioned above.
Chechens also engaged in other criminal activity in Georgia as a
means of raising funds. One such method was counterfeiting, specif-
ically the importation of high-quality US dollars from Iran, Iraq, and
Lebanon, which replaced lower quality notes that had been produced
in the Chechen cities of Argun and Groznyy. Much of this fake cur-
rency was smuggled into Chechnya via Georgia or was used to purchase
goods and services in Georgia.64 Chechen militants also generated
funds through the kidnap and ransom of businessmen, journalists,
local civilians, humanitarian workers, and others. In one case, two kid-
napped Spanish businessmen were reportedly ransomed for ¤300,000.65
In another case, two women working for the International Committee
of the Red Cross were kidnapped in Pankisi Gorge and held for a ransom
of many thousands of dollars, although they were eventually released
after the local population of Kists (ethnic Chechens living in Georgia)
vigorously protested to their captors.66
In addition, some funds used by Chechens in the Chechnya–Georgia
border region originated from ostensibly legitimate sources. For exam-
ple, Koj-Akhmed Nukhaev, former chief of foreign intelligence and later
deputy prime minister of Chechnya, so-called godfather of the Chechen
mafia in Moscow, and supposed model for the Frederick Forsythe film
“Icon,”67 created several organizations and businesses for both profit
and aid to Chechen militants. In the late 1990s, Nukhaev founded the
Caucasian-American Chamber of Commerce in Washington DC and
the Transcaucasian Energy Consortium to, among other things, pro-
vide a commercial vehicle to sell oil from Chechnya.68 Nukhaev also
allegedly owned a 39 percent stake in the St Petersburg branch of the
large car-producing Russian company LogoVAZ.69 The profits from these
enterprises not only made Nukhaev wealthier but also allowed him
to establish organizations such as Chechen House, which produced
pro-Chechen propaganda, organized holidays for Chechen boeviks, and
conducted fundraising appeals.70 Ideologically, Nukhaev subscribed to
militant Chechen nationalist and Islamist views, but apparently actively
opposed al-Qa’ida. In 2000–2001, he had publically campaigned for the
separation of Chechnya into two sectors; a “pro-Russian” North (the
plains), and a “South Chechnya” (the mountains), the latter of which
was to be “transformed into a fierce opponent both of the heretical
Wahhabi tendency within Islam and of the ‘Great Satan,’ the United
States of America.” ’71
Transfer and flow of value

Financing terrorist actors involves not only methods to raise and spend
money, as described above, but also the capacity to move and store
acquired resources until they could be spent. To understand the complex
processes by which this occurred along the Georgian–Chechen border,
it is useful to think of money as simply an instrument of value, and

that the intermediate steps between revenue and expenditure are in fact
simply the repeated transfer and conversion of value. For example, in
a modern society, a typical person deposits cash into a bank, which
stores its value according to regulations until she decides to transfer
money to meet an expense, at which time the cash is converted into
other equivalent forms of value through a variety of instruments, such
as back into cash (for example, via an Automated Teller Machine (ATM)
withdrawal), or directly into goods and services (for example, payment
by check or credit card). Therefore, it is important to remember that the
transfer of value may or may not take the form of actual cash or any cash
equivalent.
Islamic charities and their local agents

As described earlier, significant funds from wealthy benefactors in the
Middle East made their way to the Georgian–Chechen border to buy
weapons, build mosques, transport volunteers, and establish training
camps, often under the guise of charitable and pious Zakat donations.
The ways in which this money reached its ultimate end use of financing
jihad in Chechnya can be complicated. The following describes some of
the activities in the region related to two global Islamic charities that
have since been officially designated by the United Nations as terrorist
financing organizations.
The Al-Haramain Islamic Foundation (AHIF), a large charitable orga-
nization based in Saudi Arabia, was founded in 1998 to “provide relief
and aid to Muslim people and groups wherever they are, should they
face disasters endangering their being, their religious beliefs, or their
freedom.”72 AHIF served as a conduit for primarily Saudi donors who
wished to give to various needy recipients, primarily the poor and
dispossessed, but also including those engaged in jihad. Those wish-
ing to give could simply deposit money into one of two designated
bank accounts administered by the Saudi Royal Family for this pur-
pose. The money from these accounts—#6/98998 and #2/929273 —was
then transferred to the foundations’ 50 offices around the world, osten-
sibly for the construction of mosques, schools, literature, Web sites,
and other da’wa74 activities. In the case of Georgia, some of these
funds were wired directly into the accounts of the Tbilisi-based “Muslim
Protection Organization” at the Bank of Georgia.75 Another more sig-
nificant channel was through the “Foundation for Chechnya (FfC),” a
25-employee AHIF affiliate based in nearby Baku, Azerbaijan. Accord-
ing to several sources, the FfC regularly sent couriers to Georgia to carry
cash and supplies to the boeviks in both Pankisi Gorge and Chechnya
proper.76 Contemporaries described one of the leaders of FfC (and mem-
ber of the majlis al-shura (consultative council of al-Qa’ida)), Abu Omar
Mohammed al-Serif (a.k.a. Abu Serif), as the primary “conduit through
which the financing of the Chechen fighters was exercised.”77
Chicago, US-based Benevolence International Foundation (BIF) is
another Islamic charity that facilitated the transfer of funds to Chechen
terrorist groups via Georgia during the period 1999–2002. Similar to
AHIF, BIF funds were centrally collected and then transferred to a local
affiliate, “Madli” (a.k.a. Georgian Relief Association, a.k.a. MADLEE),78
which then distributed the funds by courier to boeviks in Pankisi and
Chechnya.79 Madli was a Georgian-registered charity that had received
a total of $850,000 by 1999,80 and $685,560 between January and
April 2000,81 primarily via wire transfer.82 According to statements to
the Georgian government and the United Nations, Madli supposedly
was engaged in various medical and health-related humanitarian aid
projects in Pankisi Gorge.83 The indictments in the United States of sev-
eral employees of BIF for providing material support for terrorism in the
United States claim that Madli was in fact a conduit for funds going to
Chechen terrorism.
Although no hard evidence is publicly available proving Madli’s
involvement in terrorist financing, several pieces of contextual evidence
demonstrate that this claim is almost certainly true. First, the total of
$1.53 million that Madli received in 1999 and 2000 is considerably
more than could have been spent on its stated humanitarian aid mis-
sion, which consisted primarily of providing free food and medical care
through a small clinic in Pankisi Gorge.84 For comparison, the entire
2000 aid budget of the International Federation of the Red Cross and
Red Crescent, which had a similar but much more comprehensive man-
date in the region, was CHF 260,000 ($156,157), or one-tenth of what
Madli received.85 Second, Saif al-Islam al-Masri, one of the al-Qa’ida
members turned over to the American government in Pankisi Gorge86
(see above), had served as BIF’s liaison to Chechnya in the mid 1990s.87
This lends credence to the allegation as it fits a pattern identified in
other cases of charities transferring value to terrorist groups of having
facilitating agents at various stages of the transfer process, especially
close to the end recipients. Third, interviews of native Georgian UN staff
who were present in Pankisi Gorge in 2000 and who were personally
familiar with Madli and its humanitarian work confirmed that the per-
ception at the time was that Madli “was already involved in terrorism
financing.”88
Pankisi Gorge: arms, cars, drugs, and corruption

In 1999–2002, an estimated 100 foreign “jihadist” fighters and 2000
Chechen boeviks lived and operated along the Chechen–Georgian
border.89 These terrorist actors employed a different system of value
transfer, governed by a combination of the market, the state, and social
principles, and involving a variety of financial instruments, only one
of which was cash. This section examines anecdotally this system as it
evolved in Pankisi Gorge between 1999 and 2002.
Figure 1.1 depicts some of the ways in which value was transferred
among the major actors in Pankisi during the period. The complexity of
the value transfer processes is immediately evident, and the figure in fact
simplifies the activity by grouping some diverse collections of people
together (for example, “other organized crime” and “civilians”) and by
ignoring the diversity in what methods and motivations occurred in
the transfers (for example, willing vs. unwilling transfer). But in order to
simplify the discussion to fit this space, our discussion will focus only on
the intermediate transfer of value that resulted in two of the important
operational expenditures mentioned above: weapons and safe passage.
Foreign
Refugees Charities
Jihadists
SECURITY
POLICE BOEVIKS SERVICES
Other Org.
crime
Civilians Drug traffickers

Addicts Drug traffickers
(Central Asia)
(Europe)
Cars Cash Food & Medicine Heroin (finished) Heroin (raw)

Passage Transport Weapons Misc suppliers
Figure 1.1 Value transfer in Pankisi Gorge, Georgia 1999–2002

Small arms are virtually ubiquitous among the population along the
Georgian–Chechen border;90 however during 1999–2002, military scale
weapons were available in the region for sale to Chechen boeviks and
foreign jihadists. Some of these weapons originated from the armories of
the Georgian security, police, and military establishments,91 while oth-
ers were sent via courier from Turkey, the Middle East, Afghanistan, and
even Russia. For example, in January 2000 Georgian security forces dis-
covered a large shipment of weapons near Pankisi Gorge that apparently
originated from the Russian military base at Vaziani. Georgian author-
ities accused corrupt Russian security services of facilitating the theft,
an accusation lacking direct evidence but with historical precedent.92
Russian authorities counter-charged, however, that Georgian author-
ities worked with Russian organized crime to smuggle the weapons
to Chechen militants in order to undermine Russian influence in the
region.93 This explanation is also plausible, as there had been great
geopolitical enmity between Tbilisi and Moscow since the dissolution
of the Soviet Union. In addition, federal-level Georgian security ser-
vices were known at the time to control the trade in weapons along
the Georgian–Chechen frontier.94
Regardless of the truth of this specific case, members of the Georgian
security services did indeed facilitate or at times even personally con-
duct (see above) the transport and sale of weapons to Chechen boeviks,
either via Pankisi Gorge or directly at the border.95 These weapons were
often paid for in cash raised either from Middle Eastern charities or
the sale of heroin, smuggled or stolen goods, or fraudulently obtained
humanitarian aid,96 or were exchanged for non-cash direct barter of the
same.97
The use of stolen cars, for either raising cash or barter, was an espe-
cially common instrument of transferring value. Georgian criminals and
drug addicts stole cars in Tbilisi and took them to Pankisi to either sell
to the boeviks or to exchange for heroin. The owners of the stolen cars
were then obliged to go to Pankisi and pay ransom to a middleman who
would in turn get their car back. If the police facilitated the negotiation,
which was common, then the potential ransom amount increased.98
The stolen cars also served as an instrument to store value for longer
periods. Reportedly, there were up to 2500 stolen vehicles in Pankisi
Gorge during the period, often with Chechen and local Kists having
8–10 cars per family.99 These cars served as virtual bank accounts for
many desperately poor residents of the Gorge, as they could be sold,
rented, or bartered to others if necessary, including of course to Chechen
or foreign militants.
In other cases, weapons were exchanged for other instruments of

value, including shares in lucrative business ventures. One such case
was the apparent cooperation between Levan Kenchadze, deputy min-
ister for Georgian State Security and chief of its anti-terrorism unit, and
Khizri Aldamov, the unofficial “ambassador” of the Chechen separatists
to Georgia. Evidence suggested that these two influential men used their
personal and professional networks to in effect invest in one another’s
financial interests. For example, Kenchadze was implicated in another
suspected shipment of several truckloads of weapons into Chechnya in
May 2002. At the time, Russian news sources reported that the shipment
was smuggled under the guise of humanitarian aid provided person-
ally by Aldamov.100 Kenchadze and Aldamov also cooperated to meet
another significant expense for Chechen terrorist groups in the region:
safe passage.
In December 2000, an officer in the Ministry of State Security of
Georgia spoke anonymously about this cooperation to the Georgian
newspaper, Alia:
Concerning the [Ministry of State Security], they are involved in

arms smuggling. The roles are distributed and the security service,
Georgian police and Russians do not interfere in each other’s affairs.
The employees of regional and district security department work very
well but the anti-terrorist center (under Kenchadze) is a real obstacle
on the way of fighting against all this. The people who appointed
Kenchadze do not want to fight terrorism.
The [Ministry of State Security] also controls the inflow of
Chechen refugees and boeviks. Khizri Aldamov is a frequent guest
of Kenchadze. Chechens pay and [the Ministry ensures that] a cor-
ridor for them on Georgian territory is ready. Aldamov meets the
refugees after they cross the border. It is impossible for the refugees
to sit in the bus and go to Pankisi: there are many checkpoints on
the way. Aldamov tells these people how much they have to pay.
There is no differentiation between who is a boevik and who is
not. Aldamov contacts security service people and they escort the
Chechens.101
According to reports, Kenchadze personally drove or escorted an esti-

mated 150 Chechen and foreign fighters to the Chechen border at
Shatili, sometimes all the way from the Georgian-Turkish border, during
the period.102 As mentioned above, the rate for this service was $10,000
per head.
The motivations behind involvement in value transfer for terror-

ist financing activity are complex. In the case of official corruption,
evidence shows that Georgian government officials, depending on their
background and level of authority, solicited bribes for reasons as var-
ied as profit, economic survival, geopolitical calculation, or even simply
fear.103 Similarly, Chechen fighters and those helping finance them were
often bound to codes of honor and social bonds to the local popu-
lace. For example, Christian Georgians in Khevsureti would regularly
shelter and feed passing Chechen fighters, and provide them guidance
through the high mountain passes as required by their strict customs
of hospitality.104 Furthermore, many of the Chechen militants were
in fact blood relatives of those local Georgian Kists native to Pankisi
Gorge.105 This obligated certain codes of conduct among the actors in
the region, regardless of their political or economic goals. On the one
hand, this greatly facilitated the transfer of value into and through
Pankisi Gorge to Chechen terrorist groups. For example, female relatives
of Vepkhia Margoshvili, a criminal leader in Pankisi Gorge responsible
for smuggling large quantities of money (including counterfeit US dol-
lar banknotes included), arms, military uniforms, computers, and food
from Arab countries into the region, married Arab jihadists who trained
in Pankisi.106 Such familial ties would be significant in this region,
particularly because any betrayal of his brothers-in-law would carry con-
sequences and to swear blood revenge on those who hurt him and his
family. On the other hand, violation of these codes by some of the Arab
salafi-jihadists,107 for example the teaching of intolerant Wahhabi doc-
trines, actually encouraged local Kist elders to cooperate with Georgian
military forces in their successful campaign to expel all Chechen boeviks
in Pankisi in 2002–2003. In the Georgian highlands, the word of the
elder is still “regarded as law,” above even inter-family blood feuds.108
Understanding terrorist finance: problems and challenges
Terrorist financing is difficult to research and, in many ways, difficult to

understand. Empirically, terrorist financing, when seen at the individ-
ual level of detail at which it actually occurs, is complex and nonlinear,
and, conceptually, intrinsically a contested and subjective issue gov-
erned most of all by the complex dynamics of human agency and
the competition for power. The preceding case illustrates some impor-
tant generalizations about the realities of “terrorist finance” and also,
importantly, how it is best understood. The following section attempts
to problematize terrorist finance and provide a generic baseline for
understanding the financial and economic dynamics of terrorist actors.

It discusses the relevance of these themes to improving the analysis of
terrorist financing, which then serves to illuminate what an improved
analysis of terrorist finance “needs” on a conceptual level; providing a
baseline for the reader.
Levels of analysis: what to look for?

Perhaps the most immediate challenge to researchers and analysts of ter-
rorist finance is epistemological: how does one appropriately distinguish
precisely what information is important and relevant and which is not?
In the above case, for instance, truly understanding terrorist financing
along the Chechnya–Georgia border during 1999–2002 would demand
both perfect knowledge of every possible operational, economic, social,
political, cultural, and institutional nuance of every actor, every occur-
rence, and every pertinent context involved, as well as the consideration
of each nuance from every possible analytic and normative perspective
in order to fully account for one’s own bias. Naturally this is not possi-
ble, but then where should the line be drawn? Restricting analysis even
in a seemingly commonsense way, for example, to only monetary trans-
actions of officially designated terrorist groups would in fact exclude
much of the activities in the above case and, we shall explore below,
would also unjustifiably privilege certain perspectives about who is to
be considered a “terrorist” and what is to be considered “finance” over
other equally plausible views. In other words, while complete under-
standing of terrorist finance requires knowing in essence everything
about everything, it is thus immediately evident that terrorist finance
research requires not only working with imperfect knowledge but also
involves making explicit and subjective or even politicized choices, the
first of which is simply “what to look for.” This section attempts to
make some generalizations about how to answer this question. More
precisely, it develops a basic understanding of the levels of analysis of
terrorist finance, that is the particular objects, actors, social phenomena,
social processes, and favored outcomes which ought to be considered
most important within this particular topic of social inquiry. As we will
see, “what to look for” when researching terrorist finance may seem
somewhat obvious, but is much less straightforward.
Actors: looking for who finances terrorism

Often the questions people ask about terrorist finance are “Who does
finance terrorism? and “How do they do it?” Most basically, these ques-
tions can be answered simply: terrorists, their supporters, and those that
do business with them, in the first instance, and, secondly, by virtu-

ally whatever means seems to work, just like any other socio-political
enterprise with economic needs to meet. Beyond this superficial level,
however, these questions are extremely difficult to answer in any kind of
systematic, rational way, given that “terrorism,” “support,” “business,”
“finance,” and nearly everything else relating to terrorist finance are
deeply contingent on relevant localized societal realities and one’s own
analytic perceptions.
The first challenge is that terrorist finance involves a bewildering array
of actors and activities. Table 1.1 lists all those from the case who directly
or indirectly engaged in economic transactions with terrorist actors in
the above case.
The complexity of “who finances terrorism” should be immedi-
ately evident—including, if one remains logically consistent, not only
wealthy ideological extremist from the Middle East, but also corrupt
Georgian officials, owners of stolen cars, Chechen refugees, and even
the US Government. Ultimately, even though there seems to be no sin-
gle or consistent profile of who finances terrorism, let us at least begin
to sketch out a coherent idea of “what to look for” regarding actors
involved in terrorist finance.
Terrorists The first category of actors involved in terrorist finance is, of

course, terrorists; in the sense that terrorist actors both are, by defini-
tion, the ultimate recipients of terrorist finance, and can be assumed to
directly participate in one way or another in their own economic well-
being. Defining who is and is not a terrorist however is an inherently
subjective and problematic analytic judgment. Historically, terrorism
has been described as a tactic of war that is intended to provoke fear
beyond the physical target of a particular violent attack, with “terrorist”
referring to those individuals, groups, or even governments that perpe-
trate such violence. But today “terrorist” is also widely used simply as a
pejorative epithet against non-state actors who use violence or intimi-
dation against a state or a society; a duality succinctly captured by Alex
Schmid in his seminal meta-definition of terrorism as the “peacetime
equivalent of a war crime.”109 Given that terrorist finance deals with
observable economic realities that nevertheless have meaning only rela-
tive to terrorism and thus one’s subjective perception of what counts as
a terrorist, it is important to examine how this subjectivity shapes and
limits any analysis of the financing of terrorism.
To illustrate this paradox let us for the sake of argument limit analy-
sis of terrorist finance to merely the economic activities of those groups
Table 1.1 Who finances terrorism? Actors and actor types involved in financing
Chechen terrorism, Georgian–Chechen border, 1999–2002
Individuals (names known)
Akaki Kegoshvili (district commander Major Kornel Lazashvili (district chief

of Georgian peacekeeping battalion) of finance of Georgian peacekeeping
battalion)
Abu Omar Mohammed al-Serif (FfC) Saif al-Islam al-Masri (BIF)
Khizri Aldamov, (“ambassador” of Levan Kenchadze (deputy minister,
Chechen separatists to Georgia) Georgian State Security chief of
counterterrorism)
Organizations (names known)
Al-Haramain Islamic Foundation Benevolence International Foundation
Foundation for Chechnya Georgian Government
Madli Muslim Protection Organization
Russian Government Saudi Royal Family
US Government
Actor type
Arms traffickers Charities, facilitating agent for
Charities, benefactors Charities, leader of
Charities, international Charities, national liaison for
Charities, locally based Government officials,
counterterrorism
Civilians, local Government officials, local law
enforcement
Government officials, intelligence Government officials, national law
enforcement
Government officials, military Heroin traffickers, local
Heroin traffickers, transnational Organized criminals, Georgian
Heroin, buyers of Organized criminals, other
Organized criminals, Russian Refugees, representative of
Refugees Stolen cars, owners of
Actor nationality/ethnicity
American Chechen
British Georgian
French Kist
Khevsur Qatari
Pakistani Russian
Saudi Yemeni
and individuals designated as terrorist via some kind of official process

(such as inclusion on the US State Department’s list of Foreign Terrorist
Organizations (FTO), the US Treasury list of specially designated global
terrorists (SDGT), or the United Nations’ so-called Consolidated or 1267
list of actors associated with al-Qa’ida, Osama bin Laden, and the
Taliban). In some contexts, such as a financial institution meeting its

legal obligation to verify that it holds no accounts by legally desig-
nated terrorists, this may be analytically sufficient. In others however
it would not, by unduly focusing analytic attention onto actors of ulti-
mately secondary importance while at the same time excluding other
actors that may be of greater analytic significance. For example, in the
above case, if one were to define who counts as a “terrorist” based exclu-
sively on official US Government designations, then the only “terrorists”
would actually be two charities (AHIF and the BIF), neither of which
has ever even been accused of committing a terrorist act (regardless of
their involvement or lack thereof in supporting such acts), and there-
fore neither of which should logically be any more than of secondary
analytic significance. Put much more simply, it seems logical that analy-
sis of terrorist financing should somehow ultimately revolve around the
economic activities of those that commit terrorism (however defined), a
standard that would not be met in the above case.
Paradoxically, employing such a looser definition of terrorism—
aligned with Bruce Hoffman’s observation that “most people have a
vague idea or impression of what terrorism is but lack a more precise,
concrete, and explanatory definition”110 —actually enables a more log-
ical examination of terrorist financing as it allows one to consider all
manner of economic interactions revolving around two amorphously
defined “terrorist” actors (defined on the basis at least that both have
carried out terrorist acts against civilians): the foreign, “al-Qa’ida”
fighters and the Chechen separatist militants.
But this in turn raises other serious analytic problems. When viewed
through other ontological lenses, for instance, members of these col-
lectives are not only “terrorists” but also “holy warriors” (to Salafists),
“combatants in a secessionist conflict” (to academic analysts), and “free-
dom fighters” (to Chechen nationalists). Furthermore, such ambiguity
also casts doubt about when one can logically define when one can
consider such a foreign fighter a “terrorist”—and thus when financing
him becomes terrorist financing. Does a newly arrived fighter become
a terrorist only when he himself commits a terrorist act? Or when he
receives training for how to commit one? Or perhaps when he “joins”
a group that commits terrorist acts (let alone that such joining pro-
cesses are often informal)? Or even when he simply expresses a wish
or intent to commit a terrorist act? As one can see, the difficulty in
drawing these lines was reflected above in my own writing through the
interchange among the words “terrorist,” “militant,” “boevik,” “fighter,”
and “jihadist,” depending on which word was most illustrative of the
point at hand. Such nuance is not only important to contextualize and

give meaning to the actors’ motives and the larger significance of terror-
ist finance, but also which more broadly underscores the impossibility
of employing settled perspectives of who is a terrorist without explicit
or implicit subjective judgments. The point for our purposes here is not
that it is necessary to choose the one “right” term, but to realize that all
these terms are true at the same time but vary according to one’s analytic
perspective.
The analytic implications of this complexity, subjectivity, and ambi-
guity are twofold. First, and most simply, a priori ontological and
epistemological points of view are unavoidably central to the analysis
of terrorist finance, and identifying implicit or explicit perspectives of
the analyst is thus crucial. Ideally this would be done explicitly and
transparently by the researcher, for example, by specifying the aca-
demic, official, or other definition of terrorism being employed. Given
the ambiguity that is often required (as even evident above), such sign-
posting is useful for no other reason than to demonstrate recognition
of an important and inherent analytical caveat, and thereby also as a
means by which the genuine analyst of terrorist finance can separate
him or herself from the polemicist and propagandist.
Second, there is a clear epistemological hierarchy in “what to look
for” relating to terrorist finance. This is because the defining character-
istic of terrorist actors relates to their violent activities, even if and when
they engage in other social, political, and other non-violent activities.
This in turn implies that research on terrorist finance should privilege
knowledge about the financial and economic interactions that impact
terrorists’ violent (and defining) activities (assuming of course that infi-
nite knowledge is not possible, and epistemological prioritization is
thus necessary). More simply, “what to look for” regarding the financ-
ing of terrorists—however one defines them—logically ought to focus
primarily on the economic interactions that impact violent, terroristic
operations, and only secondarily on other, non-terroristic activities.
Supporters of terrorists The second category of actors involved in terrorist

finance can be considered to be supporters of terrorists. For the sake of
simplicity, supporter can be defined semantically, namely as those who
“give assistance to” terrorists and “enable [them] to function or act.”111
This implies a number of points.
The first is that support to terrorists does not necessarily need to be
financial. For example, in the above case Levan Kenchadze, then-deputy
minister for Georgian State Security and chief of its anti-terrorism unit,
certainly assisted and enabled the actions of both Chechen and for-
eign jihadist fighters by running what was in essence a cross-Georgia
taxi service. However, it would also be logical to claim that by charg-
ing $10,000 per trip he actually diminished the economic well-being of
al-Qa’ida. The point here is not to engage in sophistry, but to high-
light a key contradiction between a limited logic of terrorist finance
limited to terrorist actors’ monetary wealth, and the virtually bound-
less perspective that any interaction that supports or assists a terrorist
actor in any way can properly be considered as terrorist finance (and
thus of course also subject to counter-terrorist financing (CTF) action).
Significantly, these contradictory perspectives form the ideational basis
of, respectively, international CTF efforts in the financial industry; and,
secondly, the primary US law against terrorist finance, which defines
terrorist financing in terms of direct or indirect provision of any of the
following forms of value:
. . . currency or monetary instruments or financial securities, financial

services, lodging, training, expert advice or assistance, safehouses,
false documentation or identification, communications equipment,
facilities, weapons, lethal substances, explosives, personnel, trans-
portation, and other physical assets, except medicine or religious
materials.112
Regarding the latter, the US Supreme Court ruled in 2010 that even
advice to a terrorist actor about how to give up violence would consti-
tute material support of a political nature. As discussed throughout this
book, this tension between the monetary/limited and value/expansive
views raises some of the most difficult research problems for the analyst
of terrorist finance.
Furthermore, secondly, is that support to terrorist actors does not neces-
sarily imply support for terrorist actions. For example, the fact that money
raised in the Middle East ended up funding terrorist actors in Georgia
and Chechnya does not necessarily imply terroristic intent on the part
of the donors, the existence of a global “infrastructure” of Chechen
financing, or indeed anything in particular. Such claims must be eval-
uated on their own merits. In the first instance, for example, making a
judgment about these donors—such as whether they “willingly financed
terrorism”—depends on assessing a host of localized contextual factors,
including for example the precise nature of their motives, which could
have ranged from intending to fund “terrorism,” “jihad,” “Chechen
resistance,” or even just simply “humanitarian aid.” This is important
not only analytically (in that it provides a more nuanced and ultimately
accurate explanation of what really occurred), but also because it pro-
vides the basis for better responses to such activity. However, even if one
assumes that the wealthy Middle Eastern benefactors were motivated by
an explicit intention of enabling the violent (defining) activities of ter-
rorists, the same cannot be said of, for example, those who paid the
ransom for the kidnapped Spanish businessmen (who intended only
to free them from captivity) or the Khevsur tribesmen who gave food,
shelter, and directions to Chechen units passing through their territory
(who were motivated primarily by their indigenous traditions of hospi-
tality), even though in a purely functional sense each of these examples
constituted support to terrorists.
The issue here thus is not whether or not these actors should be
included in analysis of terrorist finance—logically they should—but
what meaning and significance should be attached to their actions given
that people participate in terrorist finance for a near-infinite number of
reasons. Although this largely depends on various a priori judgments,
later chapters will examine some of the many levels of nuance necessary
to give proper meaning to the behavior of those who provide support
for terrorism. It is this nuance that empowers the analyst of terrorist
finance to avoid overly simplistic deterministic views of the issue and
to more fully account for the multi-layered dynamics of individual and
collective choice that lie at the core of terrorist finance.
Those who do business with terrorists The third generalized type of actors
involved in terrorist finance—again using plain language—are those who
do business with terrorists. In addition to supporters of terrorists, there are
many actors who, functionally speaking, participate in financing terror-
ism in the sense that they conduct economic transactions with terrorist
actors. In the above case, for example, this included a range of legitimate
and illicit actors, including allegedly heroin addicts, owners of stolen
automobiles, displaced people who traded humanitarian aid for other
things of value, corrupt Georgian officials, and even US intelligence offi-
cers. Just as with supporters of terrorists, the analytic challenge is to
determine ways to observe and give meaning and significance to these
activities. Leaving discussion of the former to the following section,
regarding the latter it seems reasonable if not obvious to attach greater
importance to certain business transactions over others. For example,
given that weapons more directly enable the violent (that is, defining)
activities of terrorist actors than, say, food, it seems logical to privilege,
for instance, analysis of actors such as arms traffickers or those that
fund the purchase of weapons over local grocers or farmers that also do
business with terrorist actors. As we shall see throughout the book, deter-
mining ways to systematically attach different meanings to functionally
similar actors and actions is a key analytic problem in the analysis of
terrorist finance.
The other analytic challenge is that the meaning of different transac-
tions will change depending on differences in the nature of terrorist
actors. For example, while the US Government transacted business
with Chechen separatists (by in essence purchasing the foreign, al-
Qa’ida fighters), the meaning and significance of this activity and those
involved in it will largely depend on a priori judgments about them.
To illustrate this, take for example the apparent financial interaction
between agents of the United States Government and Chechen mili-
tants. If one’s political perspective includes viewing Chechen boeviks
to be “terrorists” then this transaction should strictly be considered
to be “terrorist financing” activity. Labeling this interaction as terror-
ist finance, however, provides little analytic insight. Instead, I argue, if
analysis of terrorist financing is to increase actual and useful understand-
ing of the issue, it must—ironically perhaps—dispense with the pretense
of being either “objective” or “scientific” and embrace the inherent
political nature of the topic. In practice this means primarily explic-
itly defining and working toward one’s analytic purpose, whether that
be related to academic understanding, counterterrorism, international
politics, or any other. For instance, given that one main objective of
this book is to illuminate and explain the empirical and conceptual
realities of terrorist finance, it is thus far more analytically profitable
to view the US—Chechen interaction as a context-specific political-
bureaucratic choice of the “lesser evil,” rather than descending into
inherently politicized debates about whether or not the US “financed
terrorism.” The same point holds for all other instances of “terrorist
finance,” in that evidence-based, systematic, contextualized analysis ori-
ented toward one’s objectives will always lead to greater analytic insight
than self-limiting debates about how and when to apply the politicized
“terrorist finance” label. Again, it seems clear that while motive is an
important factor to analyze, it seems that consequences of choice are
more centrally relevant to the analysis of terrorist finance.
Activities: looking for how terrorism is financed

A similar challenge is evident in the complexity and diversity of activi-
ties involved in the above case. As demonstrated in Table 1.2, the actions
that directly or indirectly “financed terrorism” in the Chechen case
Table 1.2 How is terrorism financed? Activities involved in financing Chechen

terrorism, Georgian–Chechen border, 1999–2002
Bank Accounts, wire transfers Bank Accounts, withdrawals
Barter Black market

Bribes Business shares, barter of
Cash couriers (cross border) Cash couriers (internal)
Counterfeiting US dollars Crime
Donation of weapons Fundraising meetings
Heroin, production Heroin, protection of smuggling
Heroin, sale Heroin, smuggling
Hospitality of locals Humanitarian aid, barter of
Humanitarian aid, fraudulently obtaining Humanitarian aid, theft of
Humanitarian aid, use of Kidnap and ransom
Stolen cars, barter of Stolen cars, rent of
Stolen cars, sale of Stolen cars, use of
Theft Zakat donations
Bank accounts, deposits from individuals
ranged from complicated criminal schemes to politically inspired dona-

tions from foreigners to bartering, hospitality provision, and a variety of
other local everyday activities that are remarkable only because in this
particular place and time they proved useful and accessible to terrorists.
This implies several points.
First, and as touched on above, terrorist finance encompasses activi-
ties that do not involve monetary exchange. For instance, only some of
the financial instruments used to finance terrorism in the Chechen case
were actual cash or its equivalents (for example, checks, banks accounts,
and so on). Cars, food and medicine, drugs, and even less tangible things
like business interests, training, and religious duties all served as vehi-
cles of exchange.113 This means that the definitional boundaries of what
activities constitute finance are blurry, and that the distinctions among
what is finance versus that which is logistics, supply, support, and so on are
both inherently unclear and in fact will inevitably change depending on
a variety of social, political, economic, and operational realties, as well
as one’s own analytic perspective. Some analysts incorrectly attribute
this to the supposed adaptability, financial brilliance, or sophisticated
diversification strategies of terrorists, even though there is no com-
pelling evidence that terrorists are any better at economics than any
other comparable organization.114 Instead, I argue that the truth is much
simpler: terrorists, as socio-political actors, engage in economic activity
in ways that suit whatever relevant economic, social, cultural, political,
and institutional contexts they understand and in which they can

operate. One can assume, therefore, that any apparent devious sophis-
tication of terrorist financiers only means that they are familiar with
and can do business within both Western commercial sectors as well
as their own local economies (the latter of which may be entirely alien
to most Western analysts of terrorist finance). To avoid such myopia,
I argue it is necessary to view terrorist financing as revolving around the
generation, movement, storage, and expenditure of value in support of
terrorism, rather than a definition that focuses exclusively on money.
Understanding terrorist finance as a function of value rather than
money also challenges the idea that “money doesn’t lie.” Expressing this
view, a former director of the Financial Crimes Enforcement Network
(FinCEN—the US national financial intelligence unit) stated in 2008,
“What 9/11 taught us is the value of financial information . . . Money
doesn’t lie. Money leaves a footprint.”115 This conception underpins the
investigative approach to obtain evidence of a suspect’s relationships
and actions by monitoring and interpreting his financial and economic
activities, or more simply by “following the money.”
However, analytically, the problem is that money—that is, the
exchange of value—cannot lie, in that the meaning and significance of
flows of economic value can be interpreted in a variety of different—
and even opposing—ways, largely depending on one’s a priori analytic
objectives and perspectives. In particular, analysis of terrorist finance
can suffer what can be termed a “Western bias,” or in other words
the assumption that terrorists—despite in most cases originating from
societies culturally, politically, and economically different than the
West—think and behave in ways identical to Westerners. This in turn
often results in inaccurately viewing the financial and economic inter-
actions of terrorists through the lens of the contemporary Western
consumer society, in which social and political identities are largely
formed and expressed through what one consumes, rather than via eth-
nic, religious, or family ties, for example.116 For instance, in a wealthy
Western country:
Transactions may reveal the purchase of goods and services that may
be shunned even when they are legal (for example, pornography or
prostitution; talk-show host Jerry Springer’s forced resignation from
the Cincinnati local government after paying for a prostitute with a
personal cheque standing as a cautionary tale). Financial data could
expose behaviour that falls into the same category: maintenance to
an unacknowledged child; adultery; or the relative warmth of feelings
towards different family members expressed in a will. In general,

for most people in rich Western countries, the list of an individual’s
financial transactions would probably be far more revealing than, for
example, the list of phone numbers called or received, or the contents
of letters sent and delivered.117
Practically speaking, if one applies the same standard to people who

formulate and express their identities and their priorities primarily via
social, political, or other actions and relations (such as tribesmen or
religious extremists), then analysis based on such presumption will be
deficient at best and at worst counterproductive or even destructive. This
becomes relevant in terms of terrorist finance in cases when one seeks to
“follow the money” but in doing so only finds the expression of some
kind of social relationship. If one is to understand the meaning and
significance of this relationship, then one will need to go beyond the
overly simplistic idea that money “doesn’t lie.”
Conceptually, this accords with post-structuralist views of political
economy, which hold that notions of money, capital, and economic
value are diffuse and very much contingent on continual, context-
specific social and ideational negotiation. Capital has a fundamen-
tally “contested and contingent nature” and therefore “cannot be
assumed as an unproblematic empirical starting point to academic
enquiry”:118
Financial practices do not exist prior to, or independently from, ideas

and beliefs about them, a point powerfully illustrated by the social
and discursive nature of money and credit. Money, whether in the
form of coin, paper, stock or electronic transfers, takes on value only
through a social and discursive network which underpins the expec-
tation that the monetary instrument retains its value over time and
space.119
Notions of money as some magical font of truth thus are at best oversim-
plified and pseudo-scientific, because ultimately whatever “truths” are
extant within the monetary transactions of terrorists depend completely
on our own subjective interpretations of not only what should count as
terrorism and finance but also what particular analytic outcomes we are
after. For example, if a hypothetical charity provides food, clothing, and
other material supplies to a terrorist organization in exchange for guar-
antees of security in a war zone, this exchange of value would likely carry
much more meaning and relevance than would the flows of money from
around the world to the charity.
The second point is that terrorist finance is often, if not mostly, banal.
This banality indicates first of all that terrorist financing activity is not
only diverse and complex but also in many cases functionally identi-
cal to perfectly innocent—or at least politically neutral—behaviors. For
example, the collection and distribution of funds by the AHIF and BIF
in the above case would not differ functionally whether the money
ultimately ended up going toward terrorism or humanitarian purposes.
On the one hand, this provides a basis of logically arguing that it is
unjust to tar all those who support or do business with terrorists as
being “involved” in terrorist finance, given that their motives are likely
to be just as banal and that the ultimate impact of these activities is
uncertain. The analytic problem, however, is that the opposite is just as
logical; that is that the banality of terrorist finance in fact implicates a
huge variety of everyday economic activity as a security threat, and thus
justifies action against this activity. This means that it is vital to be able
to distinguish with high levels of specificity “good” from “bad” activity.
In turn, this implies that what should be considered terrorist finance is
entirely dependent on one’s judgments about the context and ultimate
consequence of this activity. This means that the meaning we attach to
terrorist financing activity will vary in accordance with our own a priori
judgments.
Ultimately all this implies that the analysis of terrorist financing is
itself a political project, which in turn indicates that a core analytic ques-
tion is not whether analysis of terrorist finance serves certain interests,
but which particular interests it serves (for example, narrow and local
ones like the career prospects of individuals working within organiza-
tions with CTF mandates, or broad normative ones like securing liberal
democracy). The result is that drawing the line between what economic
activities ought to be included as terrorist finance and which should
not, and on what basis, is an exercise just as subjective and problem-
atic as defining terrorism, and that, in practice, research into terrorist
finance must be highly sensitive to the local historical, ethnographic,
institutional, and political contexts and drivers of relevant economic
and financial behaviors.
As the above indicates, determining what activities constitute terrorist
finance (vs. those which do not) is challenging and extremely value-
laden and context specific. To illustrate these challenges more, let us
attempt to answer with some certainty what should be an easy question:
Do I, the author, finance terrorists?
In some ways, I certainly do, and while not a terrorist, I am at least an
indirect supporter of terrorists and someone who indirectly does busi-
ness with them. Over the course of every year, I—along with many
others like me—willingly hand over thousands of dollars to a large well-

known not-for-profit institution that, via a complex web of subsidiary
units, intermediaries, and partners, provides funding to the Taliban,
and, given their close association, also probably to al-Qa’ida. My money
is ostensibly meant to be used for humanitarian purposes, but given
that money is fungible—that is, it can easily be used for purposes other
than that for which it was originally intended—it nevertheless ends up
financing these terrorist groups, as well as their criminal and corrupt
accomplices. Despite all this, and even with this published confession,
I am confident that I will not be arrested, have my assets frozen or seized,
or be monitored by Western intelligence agencies, despite the raft of
post-9/11 legal and regulatory measures meant to stop the financing of
terrorism.
Why? Because the above paragraph describes not some mysterious
global conspiracy, but a simplification of the process by which my tax
payments, as an American citizen, unintentionally fund groups desig-
nated by the United States and other countries as terrorist organizations.
It is an “open secret” that the Taliban reap significant profits from the
numerous engineering, construction, and other aid projects funded by
the United States in Afghanistan,120 typically by running simple but
effective intimidation-protection rackets to extort money from the con-
tractors, subcontractors, and vendors working on and supplying such
development projects, as well as from Afghan civilians for whom the aid
is intended.121 Given that this is a widespread problem in Afghanistan,
it is clear that by paying my taxes, I do indeed finance terrorists, at least
from a certain, strictly functional perspective. It is also clear, however,
that recognizing so is in practical and analytical terms, to say the least,
problematic.
This is because the above reductio ad absurdum illustrates many of
the core philosophical, analytic, and practical challenges of drawing
lines between activity that is terrorist financing and that which is not.
For starters, just trying to define what makes a particular economic
transaction terrorist finance versus one that is not raises a long list of
insufficient, albeit individually necessary, conditions. If we say that a
terrorist financing transaction is simply any economic transaction that
leads to a terrorist attack, we leave out all sorts of activity that would
normally be seen as relevant, such as fundraising for the political activi-
ties of terrorist groups, or even more basically, the purchase of weapons
or supplies in preparation for a terrorist attack. In other words, is it really
not “terrorist financing” if the bomb doesn’t go off? So, maybe it’s suf-
ficient to say that the distinguishing factor of terrorist finance is that
its constituent transactions materially support terrorists. This is the def-

inition used in US law—recently upheld by the Supreme Court—and
appears logical prima facie. However, analytically, while it is necessary,
this characterization is also insufficient. This is because material support
categorizes economic interactions with those deemed to be terrorists in
odd ways. For example, it would include such innocuous “support” as
selling groceries to a member of a terrorist group, as well as activities,
such as advising terrorist groups on how to embrace non-violence as
an alternative means to addressing whatever their grievances are, that
most would deem to be an important part of any counterterrorism cam-
paign. Finally, it all, obviously, depends on one’s perception of who is a
terrorist, and what is terrorism. Without repeating the terrorist/freedom
fighter debate, the point is that it is well established that defining ter-
rorism, and terrorists, is a political act, and therefore, analytically, we
must strive for an understanding of terrorist financing that as much as
possible is actually independent of particular—that is, applicable to var-
ious and even competing—definitions and interpretations of terrorism.
Therefore, we see that we are looking for a universally applicable under-
standing of terrorist finance that is logical, and while including analysis
of factors like support, intent, outcome, definitions of terrorism, and so
on, is not bound or wholly determined by them.
Purpose of inquiry: why research terrorist finance?

Terrorist finance is a subjective and intrinsically problematic issue rather
than a “scientific” one. Although terrorist finance involves a “knowable”
reality (hypothetically at least), specifically “what to look for” in any
particular case of terrorist finance depends largely on why one is look-
ing, that is, on the analytic purpose. This is because terrorist finance is an
inherently and unavoidably politicized topic tied not only, as discussed
above, to the intrinsically unsettled meanings and implications of “ter-
rorism” and “finance,” but also to the processes by which knowledge,
meaning, and ultimately action are derived about the issue.
Marieke de Goede succinctly describes this situation, remarking that
terrorist finance is “a cultural imaginary and political problem in need
of (security) intervention.”122 She argues that the topic of “terrorist
finance” originated from and remains driven by how it is “mediated”
as a security concern, and as such is at core a topic of politicized
representation.123 In particular, how terrorist financing is understood
and how it is acted upon relates closely, she says, to how it has been rep-
resented across various “media” (for example, academic discourse, think
tank, private sector and governmental analyses, journalistic reporting,

and popular culture) in ways that have produced potent images of
“terrorist money” as a securitized problem.124 She notes:
It is important to understand that “terrorist finance” is itself not

necessarily a phrase that pre-dated the security practices developing
in its name—it is not an issue that existed with much significance
in relation to, for example, corruption, fraud or money launder-
ing, after which it became securitized . . . Indeed . . . the problematiza-
tion of “terrorist finance” serves primarily to widen the scope of
possible security action. [Emphasis added]125
More simply, this means that how we understand terrorist finance is in

many ways governed by the (intrinsically politicized) needs and goals
of those who produce and consume knowledge of it. The following
sections explore those communities of thought and practice that medi-
ate knowledge of terrorist finance and thus also to which this book will
contribute.
Spheres of practice
Understanding of the economic and financial activities of terrorist actors
is tied closely to the vast and truly global political, legal, and regulatory
regime to counter the perceived threat of terrorist finance (hereafter
referred to as the CTF regime) that emerged initially in the late 1990s
but greatly and expanded in the wake of the 2001 terrorist attacks on
the United States. On September 24th, 2001, President George W. Bush
declared this “Financial War,” announcing in the White House Rose
Garden that,
At 12:01 a.m. this morning, a major thrust of our war on terrorism

began with the stroke of a pen. Today, we have launched a strike on
the financial foundation of the global terror network.126
This strike froze the assets of 27 “terrorist organizations, individual

terrorist leaders, a corporation that serves as a front for terrorism,
and several nonprofit organizations,”127 and was in fact the first pub-
lic response to the al-Qa’ida attacks on the United States not quite
two weeks prior. President Bush, flanked by Treasury Secretary Paul
O’Neill and Secretary of State Colin Powell, used the symbolism of the
moment to emphasize that such financial “strokes of the pen” would be
a major component of a long battle by the United States and its allies to
fight both al-Qa’ida specifically and “terrorism” in general. He stated at

the time:
Make no mistake about it, I’ve asked our military to be ready for a
reason. But the American people must understand this war on terror-
ism will be fought on a variety of fronts, in different ways. The front
lines will look different from the wars of the past . . . We will lead by
example. We will work with the world against terrorism. Money is
the lifeblood of terrorist operations. Today, we’re asking the world to
stop payment.128
The President and his cabinet officials made clear that the financial front
would be a wide-ranging campaign not confined to targeting simply the
assets of those directly financing terrorist attacks, but also aimed at any
state, individual, business, or organization that facilitated, supported, or
in any way interacted with the “financial infrastructure” of terrorism.
Secretary O’Neill stated clearly,
This order is a notice to financial institutions around the world, if you

have any involvement in the financing of the al-Qa’ida organization,
you have two choices: cooperate in this fight, or we will freeze your
US assets; we will punish you for providing the resources that make
these evil acts possible.129
Similar financial “strikes” to the ones immediately after 9/11 continued

apace for several years following, resulting in the freezing or seizure of
hundreds of millions of dollars worldwide.130 In addition, several thou-
sand individuals have been designated by the United States, European
Union, United Nations, and other official bodies for their known or sus-
pected role in financing terrorism, effectively blacklisting them from
any dealings with any bank or other financial institution within the
legitimate global financial system. This Financial War has also expanded
to include a vast surveillance apparatus for monitoring the financial
transactions of individual people and organizations by national and
international intelligence and law enforcement agencies, either using
their own capabilities or via required reporting of “suspicious activity”
by financial and charitable sector actors.131
Overall, the Financial War mobilized a huge array of governmental
and non-governmental actors against the perceived threat of terrorist
finance, including law enforcement and intelligence agencies, regula-
tors, legislators, and policymakers in virtually every government in the
world; banks, broker-dealers, money service businesses, remittance ser-

vice operators, jewelers, insurance companies, travel agencies, and other
businesses believed to be attractive venues for terrorism-related finan-
cial activity; international organizations such as the United Nations,
World Bank, International Monetary Fund (IMF), Financial Action Task
Force (FATF), and FATF-Style Regional Bodies (FSRBs); as well as a broad
archipelago of interested advocacy groups, think tanks, and individ-
ual personalities. Strategically, the Financial War closely reflects former
US Secretary of Defense Donald Rumsfeld’s vision that “the uniforms
of this conflict will be banker’s pinstripes and programmers grunge just
as assuredly as desert camouflage.”132 In one of many possible exem-
plars, the following 2004 statement by then-United States Secretary of
Treasury John Snow illustrates this concerted response to the perceived
threat of terrorist finance:
The work to track and shut down the financial network of terror is
one of the most critical efforts facing us today, and we have achieved
important successes in the mission to bankrupt the financial under-
pinnings of terrorism. Raising and moving money is now harder,
costlier, and riskier for al-Qaeda and like-minded terrorist groups.
We have frozen and seized terrorist assets, exposed and dismantled
known channels of funding, deterred donors, arrested key facilita-
tors, and built higher hurdles in the international financial system to
prevent abuse by terrorists.
...
A robust international coalition is currently working to combat ter-
rorist financing and to focus the world’s attention on previously
unregulated, high-risk sectors such as charities and hawalas [sic].
We have begun to focus our collective attention on our growing
concern about the use of cash couriers by terrorists groups. In these
efforts, we have enlisted the private sector worldwide—banks, money
service businesses, broker-dealers, and the charitable community—to
serve as the frontline in this battle. These efforts are contributing to
our success.133
The “Financial War” thus became not only an important component of

the so-called Global War on Terror, but also as the prime driver of the
norms and ideas underpinning the CTF regime. In particular, knowl-
edge of terrorist finance is primarily mediated via spheres of practice;
in particular national financial intelligence units (FIUs); anti-money
laundering/counter-terrorist finance (AML/CTF) compliance sections

of financial institutions; military or intelligence terrorist finance or
threat finance analysts; law enforcement agents and attorneys; national
government regulators; legislators and executive administrators; and
international standard setting bodies and regulatory forums (most espe-
cially the FATF and similar regionally focused bodies). In addition,
members of social, political, or cultural communities that are perceived
to be more likely to be involved in or supportive of terrorist financing
(for example, diaspora groups who belong to the same identity group as
a terrorist organization) also can mediate our understanding of terror-
ist finance by, for instance, legitimizing certain flows of support (such
as to social or political organizations associated with a terrorist group)
and challenging oversimplified perceptions of what types of support
or economic interaction should count as terrorist finance (such as by
publicizing what is “normal” within a relevant socio-political context).
Similarly, interested oppositional social and political communities (for
example, groups opposed to the political or territorial objectives of a
particular terrorist group) also mediate our understanding of terrorist
finance by, for instance, influencing public opinion to focus on the
financial dimensions of certain terrorist actors over others. The com-
plexity of CTF practice is evident in Table 1.3, which provides a sketch
of the CTF community within only the US Government, accurate as of
mid 2010.
Each of members of the community of CTF practice necessarily comes
to the issue with different analytic objectives and priorities. For exam-
ple, while a law enforcement will likely focus on illicit behaviors within
specific cases of terrorist finance, military or intelligence analysts of the
same government may seek out ways to exploit terrorist financing infor-
mation to identify individuals to target, regardless of the legality of the
financial activity being monitored.134 Interestingly, the regime therefore
not only mediates understanding of terrorist finance but also simulta-
neously demands knowledge about it (especially specific information
about the economic interactions of terrorist actors, as well broader com-
prehension of trends such as levels and origins of monetary and other
support to terrorist groups), and supplies it (such as through specific
transactional details and more general intelligence assessments).
Spheres of thought
Terrorist financing is also mediated through academic thought, but for
two reasons to a much smaller extent than through fields of prac-
tice. First, terrorist finance research is dichotomous. On the one hand,
34
Table 1.3 The counter-terrorist financing community of practice (US

government)135
Department of Treasury
Internal Revenue Service (IRS)
IRS-Criminal Investigation (IRS-CI)
IRS Tax Exempt and Government Entities
Office of Technical Assistance (OTA)/Enforcement Policy and Administration Program
Office of International Affairs
Financial Attaches
Liaison Officers to Geographic Combatant Commands (Department of
Defense)
Office of Terrorism and Financial Intelligence (TFI)
Financial Crimes Enforcement Network (FinCEN)
Office of Foreign Assets Control (OFAC)
Office of Intelligence and Analysis (OIA)
Office of Terrorist Financing
Office of Terrorist Finance and Financial Crime (TFFC)
Treasury Executive Office for Asset Forfeiture and Treasury Forfeiture Fund
(TEOAF)
Department of State
Bureau of Economic, Energy, and Business Affairs (EEB)
Office of Terrorism Finance and Economic Sanctions Policy (TFS)
Bureau of Intelligence and Research (INR)
Bureau of International Narcotics and Law Enforcement Affairs (INL)
Bureau of International Organization Affairs (IO)
Diplomatic Security Service (DSS)
Office of Antiterrorism Assistance Program
Office of the Coordinator for Counterterrorism (S/CT)
Counterterrorism Finance Unit
US Embassies (each)
Terrorism Finance Coordinating Officer
Department of Justice
Anti-Terrorism Advisory Council, US Attorney District Offices
Asset Forfeiture and Money Laundering Section (AFMLS)
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)
Criminal Division
Drug Enforcement Administration (DEA)
Federal Bureau of Investigation (FBI)
National Security Branch (NSB)
Counterterrorism Division (CTD)
Terrorist Financing Operations Section (TFOS)
National Joint Terrorism Task Force (NJTTF)
Foreign Terrorist Tracking Task Force (FTTTF)
Joint Terrorism Task Forces, Field Offices (JTTFs)
National Security Division (NSD)
Counter Terrorism Section (CTS)
Terrorist Financing Unit (TFU)
Office of Overseas Prosecutorial Development, Training, and Assistance (OPDAT)

US National Central Bureau of the International Criminal Police Organization
(INTERPOL)
Department of Homeland Security
Bureau of Customs and Border Protection (CPB)
Bureau of Immigration and Customs Enforcement (ICE)
Trade Transparency Unit (TTU)
Financial Operations Unit
Counter Terrorism Intelligence Center
Office of Intelligence and Analysis
US Coast Guard
US Secret Service
Department of Defense
Defense Intelligence Agency (DIA)
Joint Intelligence Task Force-Combating Terrorism (JITF-CT)
Geographic Combatant Commands (GCCs) (each)
Threat Finance Exploitation Units (TFEUs)
National Security Agency (NSA)
US Special Operations Command (USSOCOM)
Threat Finance Exploitation Branch (TFEB)
Interagency and Other
Afghan Threat Finance Cell (ATFC)
Central Intelligence Agency (CIA)
Office of Transnational Issues (OTI)
Counterterrorism Center (CTC)
Crime and Narcotics Center
Financial Systems Assessment Team (FSAT)
International Law Enforcement Academies
Iraq Threat Finance Cell (ITFC)
National Counterterrorism Center (NCTC)
Office of Director of National Intelligence (DNI)
Terrorism Financial Review Group (TFRG)
Terrorist Finance Working Group (TFWG)
National Security Council
Counterterrorism Security Group (CSG)
Sub-CSG on Terrorist Finance
Directorate for Combating Terrorism
Combating Terrorism Information Strategy (CTIS) Policy Coordination Committee
there is research into terrorism- and terrorist actor-related financial and

economic activity, and on the other hand studies of state, international,
and other responses to the problem, often in context of the CTF regime.
For sake of example, this book, as well John Horgan’s and Max Taylor’s
two-part examination of the financial activities of the Provisional Irish
Republican Army (IRA) would fall into the first category,136 but Marieke
de Goede’s critical examination of CTF regulation in context of the “War

on Terror” would fall into the latter.137 In some cases, individual authors
or for that matter individual works will be relevant to both the study
of the financial dimensions of terrorist actors, and the study of state,
international, and other responses to the problem. For example, John
Cassara’s work on how poor conceptualizations of terrorist financing
have caused the “Financial War on Terror” to “stall” would be relevant
to both.138 Similarly, while most of the literature by de Goede con-
centrate on CTF efforts, these works also carry important explicit and
implicit theoretical insights that help explain the realities of terrorism-
related financial activity.139 The point here is to distinguish works that
only pertain to CTF efforts and which do not add any new research or
insights about the realities of terrorist financing. This is important to do
from the outset because—as explored throughout the book—efforts to
counter terrorist financing do not necessarily reflect—and in fact often
have little or nothing to do—with the complex ground realities of ter-
rorist financing. Literature that focuses only on examining CTF efforts
necessarily will mediate their own analyses through the mediation per-
spective of their object of study. In but one of many similar examples, in
her examination of the evolution of the AML regime, Eleni Tsingou sum-
marizes several established critiques concerning the (in)appropriateness
of incorporating CTF into AML efforts, but in the process uncritically
repeats and accepts certain myths about terrorist finance, namely that it
concerns primarily money and that not enough data exist to understand
it systematically (see Chapter 2 for discussions of these myths).140 There-
fore, in order to avoid unduly privileging the assumptions about these
realities upon which literature that focuses exclusively on CTF efforts is
necessarily based, this book is explicitly focused on using and contribut-
ing to the literature that relates to understanding the actual material
realities of terrorist finance.
The second is that terrorist finance has not yet been definitively
located within the International Relations or in fact any other aca-
demic discipline or discourse. Returning to de Goede’s conception
of terrorist finance as an object of study, she observes that terror-
ist financing was not originally and is not currently problematized
in context of other political-economic issues of international society
such as corruption, money laundering, or fraud, but instead exists
as a problem of international relations “only in relation to fighting
‘terror’ and especially relating to the assertion that ‘money is the
lifeblood of terrorism.’ ”141 Interestingly, however, the study of terror-
ist finance has also not benefited much from the terrorism debates.
This is largely because evolution of terrorist financing discourse has

primarily focused simply on increasing the sophistication with which
one can “uncover” the ostensibly “hidden” financial “networks” and
“infrastructures” of terrorist groups, and thus has largely failed to inves-
tigate the demonstrable problems with how terrorism-related finan-
cial activity is represented, mediated, acted upon, and fundamentally
conceptualized.
More simply, terrorist financing has not—until this book at least—
been definitively “mediated” within any particular field of intellectual
endeavor. This stems in part from the fact that the International Rela-
tions literature that actually explicitly addresses the topic is severely
limited, especially when compared to the high levels of attention the
topic has engendered both within the media and among governments
and the financial industry. For example, the Watson Institute at Brown
University periodically publishes a “Terrorist Financing Bibliography,”
which—while not entirely comprehensive—somewhat represents the
terrorist financing “canon.”142 In its 2007 iteration, this bibliography
included 168 scholarly, journalistic, and official publications, but only
eight of which were published in IR journals.143 While several other
works listed were indeed the work of IR scholars (that is, members of
International Relations, Political Science, or similar faculties) presented
in other venues (such as journals in other disciplines, non-scholarly
publications, or conference papers), this statistic nevertheless clearly
illustrates that terrorist financing has to date received scarce attention
within academic International Relations discourse proper.
This is perhaps to be expected to some extent, considering that, intel-
lectually, terrorist financing crosses many complex and unsettled areas
of thought and practice, including not only the terrorism debates but
also discourses on political economy, the extra-legal and the illicit,
AML, financial regulation, inclusion, and exclusion, criminology, law
and international regimes, security studies, global governance, the role
of non-state actors in the international system, politics, globalization,
conflict, insurgency, radicalization, and economic anthropology, among
others. Unfortunately, however, virtually all of these areas of discourse
are highly unsettled and, in many cases, under-researched.
Governing our understanding of terrorist finance

As an inherently politicized issue of international security, understand-
ings of terrorist finance must be to some extent comprehensible and
useful in and to both spheres of practice and thought. This means that
understanding terrorist finance is intrinsically a political project, in that
it is inherently tied to the practice and the consequences of power,

to which knowledge is closely related. Broadly, this book holds that
knowledge and power—and thus understanding and governance—are
more intimately related than the former merely being an instrument
of the latter (that is, solely “knowledge is power”), but rather that,
in accordance with Foucault’s account, “the goals of power and the
goals of knowledge cannot be separated: in knowing we control and
in controlling we know.”144 In particular, and also in order to avoid the
“Foucaultian trap where all social relationships are seen in the same rela-
tivistic light and where all—dominated and dominant alike—are subject
to the same power of structural relations and so all subject to the same
moral opprobrium,”145 it is useful to use Steven Lukes’ “three dimen-
sional” view of power to help articulate how spheres of thought and
CTF practice generally influence understandings of terrorist finance, at
least in general terms.146
A three-dimensional view shows that analysis of terrorist finance is
governed by the power to draw lines, the power to set the agenda,
and the power to shape thinking, respectively. Lukes defines a one-
dimensional view of power as focusing on decision-making power, or in
particular “behavior in the making of decisions on issues over which there
is an observable conflict of (subjective) interests” [emphasis original].147
Regarding terrorist finance, the analytic decisions revolve around issues
such as defining terrorism, what economic activity counts as terrorist
finance and which does not, what is the significance of a particular inci-
dence of terrorist financing, and what can and should be done about
it. All involve conflicts over a near-infinite range of interests, ranging
from the one-man’s-terrorist-is-another-man’s-freedom-fighter debates,
to overt national, identity, or institutional-bureaucratic politics, to aca-
demic and ideological disagreements. A two-dimensional view of power
adds a focus on the power to limit discussion and set research agen-
das, or “the ways in which decisions are prevented from being taken
on potential issues” [emphasis original].148 In our case, this refers to, for
instance, the exclusion of the financing of state terror from our analysis,
exclusive focus on the financing of terrorist organizations officially des-
ignated by Western governments, or the privileging of monetary over
non-monetary economic transactions. Lukes’ third dimension of power
adds consideration of the power to shape how people think about (and
thus act in response to) an issue, and how the internalization of and
acquiescence to particular ideas helps determine “which potential issues
are kept out of politics, whether through the operation of social forces
and institutional practices or through individuals’ decisions.”149 This
is significant to terrorist financing because, as is detailed in the next

chapter, current understandings of terrorist finance are based on a num-
ber of myths, particularly about the nature of extra-legal economies and
the realities of non-Western political economies.
This three-dimensional perspective indicates that understanding ter-
rorist finance requires most of all an analytic approach that can
simultaneously:
1. enable systematic determinations of what activities should count as

terrorist financing versus which should not;
2. provide guidance about how to attach meaning and significance to
particular actors and activities involved in terrorist finance;
3. allow for different perspectives and definitions of intrinsically con-
tested issues (especially “terrorism” as well as “finance”);
4. be used as a basis for regulating behavior and taking action in regards
to terrorist finance.
More simply, understanding terrorist financing requires an approach

that can remain systematic and applicable regardless of how it is medi-
ated, the particular analytic objective, or whatever a priori assumptions
the analyst brings. This means that the challenge for the analyst of ter-
rorist finance is to develop an approach to analyzing the issue that is
not just systematic but can remain so within different and even com-
peting social, security, and institutional realities and contexts, and the
epistemological and ontological paradigms that shape them.
Methodological issues
Terrorist finance is extremely difficult to research, or perhaps more
precisely, difficult to research in a systematic and non-polemical man-
ner. Unsurprisingly, primary documentary evidence of the financial and
economic activities of terrorist organizations is acutely rare,150 and inter-
views with members of terrorist organizations about financial matters
or those that are known to or could plausibly economically interact
with them are typically difficult to arrange (although by no means
impossible, as demonstrated by authors such as John Horgan, Gretchen
Peters, Nikos Passas, and Carolyn Nordstrom151 ). In this way, one unfor-
tunate reality of non-polemical, evidence-based research into terrorist
finance is that it can aspire, at most, to the logical and systematic
analysis of anecdotes. The above case study illustrates these immedi-
ate methodological challenges. The research was based in large part on
fieldwork conducted in the Republic of Georgia in July and August 2006,

during which more than 20 people were interviewed—both formally
and informally—from government agencies, academic research insti-
tutions, and non-governmental organization (NGOs), as well as from
those communities that participated in the events described. In many
instances, these interviews led to either further interview subjects or
documentary sources, and at times these interviews were followed up
later, either in person or via electronic means. Most interview subjects
agreed to be interviewed only on the condition of anonymity, and
thus in lieu of names, a relevant description of their position has been
provided when possible. The study also includes evidence and interpre-
tation gained from my own personal observations, and data from open
sources, especially local news reports.
Secondary source evidence tended to be much more readily avail-
able, either in the form of news reports, or through interviews of
government officials, journalists, or others with knowledge of primary
evidence of terrorist financing activity (for example, via their own
contact with and/or surveillance of participants), although it can
be problematic, especially if these reports are based on uncorrobo-
rated sources.152 Therefore, this case research adopted a commonsense
and pragmatic method to generalize about the reliability of informa-
tion drawn from secondary sources, namely that its reliability can
be assumed to be a function of both the general reliability of the
source in question, and the veracity of the original data. Assessment
of the latter is usually not possible for academic researchers given that
journalists, officials, and other secondary sources are normally ethi-
cally, professionally, or legally prohibited from divulging their original
sources. This means that judgments about the efficacy of collected
data are largely a function of the general reliability of the secondary
sources in question, which, one can assume, can be evaluated in two
general ways.
First, for interviews, this chapter follows an accepted standard used in
organized crime and corruption research,153 which, to summarize, holds
that information from government officials, NGO employees, and oth-
ers in positions of authority or trust can be presumed to be reliable if no
other evidence disproves or discounts it and it can be independently cor-
roborated, for example, by another interviewee or a published account.
Second, in the case of published materials, this research operates on the
commonsense assumption that published evidence deserves a presump-
tion of accuracy if it was published in a source that would be reasonably
considered to be an established, professional (that is, non-tabloid), and
generally respected publication.154
Such reliance on secondary sources can raise methodological prob-

lems, particularly if a wide variety of secondary sources are not available,
or if the researcher is unable to independently corroborate events men-
tioned in a particular source. This problem is evident in the above case,
which used the newspaper Alia for a large portion of its empirical data.
For reference, Alia is an established, well-known independent Georgian-
language newspaper published in Tbilisi. The US State Department
indicates that it is considered to be a reputable and serious journalistic
source. According to the State Department, Alia was Georgia’s “lead-
ing independent daily newspaper” during the period covered by this
article, and had the highest circulation of any Georgian newspaper in
1999 and in 2003, with nearly 20 percent more subscribers than the
state-controlled newspaper.155 Alia is regularly cited by other major news
sources, including in Russia, such as Izvestia and others.156 In addition,
while ideally a broader range of secondary sources would be desir-
able, informal interviews by the author with knowledgeable Georgian
researchers and journalists from other publications indicate that Alia
has a reputation for investigative reporting, which may explain why so
much information relevant to this case has been published there and
not independently elsewhere, and consequently why in this case, I was
compelled to rely comparatively heavily on its reporting.
This chapter, through in-depth examination of an indicative case of

terrorism-related financial and economic activity, explores the empirical
realities of terrorist finance, and demonstrates that, empirically, terrorist
finance is complex in the activities, motives, context, and consequences
involved; tied primarily to individual and non-state level actions, actors,
communities, and social dynamics; inherently a subjective or “con-
tested” issue for which objectified definitions or pseudo-scientific anal-
ysis is inappropriate; ultimately a product of human agency, within
structural contexts; and seems to be governed by power structure which
constrain, condition, and influence the political-economic decision-
making at the core of all terrorist financing activity.
This implies, epistemologically, several things. First it implies that
systematic and politically, technically, and ethnographically nuanced
understanding of terrorist financing is indeed possible, but will need
to account for almost infinite complexity in the processes and dynam-
ics by which individuals and collections of individuals interact with
various aspects of international society, including but not exclusively
states. Second, it means that analysis of the specific methods of—or even
the particular individuals involved in—terrorist financing is irrelevant
unless placed within the context of the dynamics of political-economic
decision-making that lead to the choice of those techniques or the

involvement of that person. Third, it is clear that the analysis of terrorist
financing is itself a political project and therefore that a core question
is not whether it serves certain interests (it will, necessarily), but exactly
what interests it serves, and how well it does so.
These conclusions are important because viewing terrorist financing
as the complex and nuanced product of various socially, historically, and
ideationally contingent empirical and epistemological realities directly
challenges the pseudo-scientific studies of “networks,” “infrastructures”
and “nexuses” so prevalent in current research on terrorist financing and
indeed terrorism in general. This chapter thus helps specify the often
discussed disconnect157 between the reality of terrorist financing and
how it is currently analyzed, and demonstrates that this gap is probably
much wider than imagined. In other words, we see that the problems
with terrorist financing analysis almost certainly stem from the fact that
we are to date simply asking the wrong questions.
2
Terrorist Finance: Myth and
Reality
This chapter confronts some common misconceptions about and

misrepresentations of terrorist financing activity by discussing six com-
monly held “myths” and the corresponding “realities” that challenge
these myths, as well as the implications such challenges hold for existing
discourse.
Myth 1: terrorist financing is primarily about money
Terrorist finance is commonly represented as an issue of money, or,

more precisely, of the movement, storage, and expenditure of money
by or for the benefit of terrorist actors. This conception underpins
the global regime to combat terrorist finance with the seemingly com-
monsense reasoning that since terrorists need to obtain, move, and
spend money in order to operate, and the global financial system is
the primary mechanism through which money flows, then terrorists
will suffer if domestic and international laws and norms are adjusted
in ways that will exclude “terrorist money” from the financial system.
However, the economic dynamics and activities typically encompassed
by the term “terrorist finance” are much more accurately about the
exchange of value in any form, with money and its equivalents only one.
As we will see, wide acceptance of this myth has produced understand-
ings of terrorism-related economic activities that are too narrow and
ensured that the powerful, costly, and intrusive regime to combat ter-
rorist financing likely has had, at best, only marginal impact on terrorist
actors.
43
David S. Cohen, US Assistant Secretary of Treasury for Terrorist Financ-

ing, expressed concisely the logic of fighting “terrorist money” in a 2010
speech to the Council on Foreign Relations:
It is now well-understood that [terrorists] rely heavily on finan-

cial support networks. Money is an essential ingredient in their
operations, every bit as important as fighters, weaponry and extrem-
ist ideology . . . The financial support these groups require goes far
beyond the sums spent on a specific attack. These groups need
sustained and substantial funding to pay operatives, support their
families, indoctrinate and recruit new members, train, travel, and
bribe officials . . . The key idea underlying [the US Treasury’s counter
terrorist financing] work is this: If we can deter those who would
donate money to violent extremist groups, disrupt the means and
mechanisms through which they transmit money, and degrade their
financial support networks, we can make an extraordinarily valuable
contribution to our national security.
This perspective that emphasizes the existential importance of money

to terrorist groups emerged primarily—but not exclusively—within the
context of the historical moment following the terrorist attacks on the
United States on September 11, 2001, and the accompanying evolution
of the counter-terrorist financing (CTF) regime and the parallel waging
of a “Financial War” against terrorism. To review, the CTF regime aims
above all to establish and enforce mechanisms by which the financial
and economic activities of terrorist actors can be legally and effectively
tracked, disrupted, and, when possible, excluded from the legitimate
global financial system; an objective that is to be accomplished via
actions and exercises of state power such as asset seizures, targeted
sanctions, designations, blacklisting, travel bans, laws and regulations
that oblige—under penalty of multimillion dollar fines or criminal
prosecution1 — providers of financial services to identify and report ter-
rorist financing activity. Underlying all this is the logic that, to combine
several clichés present in recent parlance, since “money is the lifeblood
of terrorism,” then if we “cut off,” “fight,” “combat,” “counter,” “crush,”
or “disrupt” the flow of “terrorist money,” we will thus “starve” terror-
ists of the financial “oxygen” they need to operate. The US National
Security Strategy describes this strategy in the following terms:
Our priority will be first to disrupt and destroy terrorist organizations

of global reach and attack their . . . finances. This will have a disabling
effect upon the terrorists’ ability to plan and operate.2
Terrorist Finance: Myth and Reality 45
Following from this line of reasoning, those who financially interact

with terrorists or help sustain the broader organizations or movements
from which they draw support are to be seen as just as guilty as those
who train or lead terrorist groups, whether or not the “terrorist money”
actually is ever used for terrorism.
The problem, however, is that money—that is, cash, checks, bank
deposits, and other equivalent monetary instruments—often plays only
a secondary and sometimes even no role in the economic interactions
of terrorist actors. For instance, the al-Qa’ida cell that bombed the
US embassies in East Africa, according to court records, financed its oper-
ations through the trade in a wide variety of goods ranging from animal
hides to fava beans to tractor parts.3 The analytic result is not only an
important intellectual deficiency in how terrorist finance is currently
researched but also a fundamental challenge to the foundational logic
of the CTF regime and thus also to the efficacy of contemporary CTF
efforts. Succinctly illustrating both points, former senior US Treasury
official John Cassara has written:
From my new vantage point within the Department of State,

I increasingly viewed with concern and frustration many of the
government’s programs, politics, and priorities in respect to terror-
ist finance. My feelings crystallized after talking to a South Asian
businessman who reportedly had contacts within the South Asian
underworld of illicit finance and value transfer. In a damning state-
ment he told me, “Don’t you know that the terrorists are moving
money and value right under your nose? But the West doesn’t see
it. Your enemies are laughing at you.” [Emphasis added]4
To emphasize, what is “laughable” is that while terrorist financing coun-

termeasures focus on regulating flows of money, the reality of terrorist
finance is much more about the flow of value.
The reality: terrorist finance is about the exchange of value

The realities of terrorist finance are much more accurately represented
as relating not to the movement or expenditure of money, but rather the
exchange of value, in all its forms. Terrorists—again, however defined—
are socio-political actors, and thus necessarily interact with relevant
local, regional, and global political economies. Therefore, it can be
assumed that terrorist actors who exist within and interact with politi-
cal economies—such as those in the Middle East, South Asia, and North
Africa—in which the exchange of economic value is conducted via
not only money but also commodities, trade goods, and other forms
of non-monetary value would conduct their own economic activities

within these systems rather than only the Western commercial financial
system.
The Taliban in Afghanistan also illustrates well how terrorist finance
revolves around the exchange of value in diverse forms. On a micro
level, for example, the Taliban has proven adept at converting develop-
ment aid to Afghan civilians into economic value for itself. In one such
case, between 2003 and 2010 the United States spent over $100 million
modernizing the Kajaki hydropower plant in Afghanistan’s Helmand
province, an upgrade that extended electricity service to, among other
places, the districts of Musa Qala, Kajaki, and Sangin, where the Taliban
controlled a significant portion of the land across which the plant’s
power lines run.5 This proved valuable to the Taliban not only because
it created an easy source of money (the local civilians who were charged
a flat monthly fee of 1000 Pakistani rupees (about $11) to access
the plant’s power) but also because the electricity itself was used to
power irrigation systems which boosted the yield of Taliban-controlled
opium poppy plantations.6 In this way, the Taliban were able to exploit
development aid not just to extort a moderate amount of money but
also—and probably more operationally significant to the group—to
obtain a key item of non-monetary economic value (electricity) in order
to produce another (opium), which as discussed below is itself often
exchanged for still other non-monetary forms of value.
On a macro level, the great material benefit derived from the
opium trade is also not necessarily in monetary form. The United
Nations Office on Drugs and Crime (UNODC) estimated that in 2009
Afghanistan produced 79 percent of the global supply of opium, 99
percent of which was cultivated in the provinces of Helmand, Kandahar,
Uruzgan, Diakondy, Zabul, Farah, and Badghis, where the Taliban is
both most operationally active and socially and politically influential.7
The Taliban profits enormously from the opium trade by controlling
much of the poppy production in these Afghan provinces, directly trans-
porting or providing armed protection to those transporting opium
out of Afghanistan into Pakistan or Iran, and, less commonly, actu-
ally refining opium into heroin.8 However, in what amounts to what
is in essence a large and complex barter system, these profits are often
earned in commodities, trade goods, and other non-monetary forms
of value.
Most goods that enter Afghanistan are actually imported initially
into Pakistan in accordance with the terms of the 1956 Afghan Tran-
sit Trade Agreement (ATTA), which guarantees duty- and tax-free
transit of goods between the two countries.9 While the ATTA is a

long-established macroeconomic asset for land-locked Afghanistan, it
also provides a handsome vehicle by which merchants can, with min-
imal risk of sanction, not only avoid Pakistan’s high customs duties
but also gain access to the lucrative trade in Afghanistan’s primary
productive commodity—opium. In the first instance, the ATTA can
be easily exploited for so-called U-Turn trade-based money laundering
schemes, in which traders evade import duties by redirecting goods
ostensibly meant for transit into Afghanistan for sale in Pakistan or
sometimes re-exportation to a third country. In such schemes, often
the only thing actually imported into Afghanistan via the ATTA is
trade-related paperwork.10 In the second instance, the ATTA pro-
vides a mechanism through which opium can be purchased from
Afghanistan and then exported worldwide. This massive and com-
plex goods-in/opium-out barter system enables the Taliban—often in
cooperation with local warlords, tribal chieftains, businesspeople, and
government officials in both Afghanistan and Pakistan—to sell opium
it controls in exchange for not only cash but also valuable trade
goods and commodities such as vehicles, electronics, construction sup-
plies, refrigerators, fuel, clothing, and hypothetically anything else
traded in the region, all of which can be resold, re-bartered, or simply
used.11
The point here is not that money is irrelevant to terrorist financ-
ing, but simply that the activities commonly represented as terrorist
finance actually concern the exchange of value, which may, but also
might not, be monetary. In this way, terrorist finance is, semantically,
a misnomer in that it actually revolves about the exchange of value
rather than money. Value comes in many forms, including various types
of both material value (for example, cash, non-cash monetary instru-
ments, value-added commodities, and raw materials) and non-material
value (for example, services, profit- or route-sharing agreements, and
even simply feelings of contributing to a cause, and so on).
Implications
This carries several important implications. First, representing terrorist
finance as an issue of value exchange rather than monetary exchange
implies that the CTF regime’s often elaborate and extraordinary mea-
sures to exclude “terrorist money” from the Western commercial finan-
cial system are often only marginally relevant to the realities of terrorist
finance. Illustrating this gap, Table 2.1 estimates the relevance of the
CTF regime on all US State Department-designated Foreign Terrorist
48
Table 2.1 Estimated relevance of the counter-terrorist financing regime to the

economic activities of Foreign Terrorist Organizations
Foreign Terrorist Primary Percentage of Estimated

Organization area(s) of population relevance of
operation12 with access to CTF regime to
formal terrorist
financial group14
services (%)13
1. Abu Nidal Lebanon 79

Low
Organization Iraq 17
2. Abu Sayyaf Group Philippines 26 Low
3. Al-Aqsa Martyrs’ Brigade Palestine 14 Negligible

(al-Aqsa)
Afghanistan 515
4. Al-Qa’ida Negligible
Pakistan 12
Saudi Arabia 62
5. Al-Qa’ida in the Arabian Low
Peninsula (AQAP) Yemen 14
6. Al-Qa’ida in Iraq (AQI) Iraq 17 Negligible
Algeria 31
7. Al-Qa’ida in the Islamic Low
Maghreb (AQIM) Mali 22
8. Al-Shabaab Somalia −16 Negligible
9. Ansar al-Islam Iraq 17 Negligible
10. Asbat al-Ansar Lebanon 79 Moderate
11. Aum Shinrikyo Japan –17

High
Russia 63
12. Basque Fatherland France 96
and Liberty (ETA) High
Spain 95
13. Communist Party of the Philippines 26 Low

Philippines/New People’s
Army (CPP/NPA)
49
14. Continuity Irish Ireland 88

Republican Army High
(CIRA) UK 91
15. Gama’a al-Islamiyya Egypt 41 Low

(Islamic Group)
16. HAMAS (Islamic Palestine 14 Negligible

Resistance Movement)
17. Harakat-ul Jihad Islami Pakistan 12 Negligible

(HUJI)
18. Harakat Bangladesh 32 Low

ul-Jihad-i-Islami/
Bangladesh (HUJI-B)
19. Harakat ul-Mujahidin Pakistan 12 Negligible

(HUM)
20. Hizbullah (Party of God) Lebanon 79 Moderate
Germany 97
21. Islamic Jihad Union
Pakistan 12 Low
(IJU)
Uzbekistan 16
Afghanistan 518
Iran 31
Kyrgyzstan 1
22. Islamic Movement of
Pakistan 12 Negligible
Uzbekistan (IMU)
Tajikistan 16
Kazakhstan 48
Uzbekistan 16
23. Jaish-e-Mohammed (JEM) Pakistan 12 Negligible

(Army of Mohammed)
24. Jemaah Islamiya Indonesia 40 Low

organization (JI)
25. Kahane Chai (Kach) Israel –19 Moderate-high

50
Table 2.1 (Continued)
Foreign Terrorist Primary Percentage of Estimated

Organization area(s) of population relevance of
operation12 with access to CTF regime to
formal terrorist
financial group14
services (%)13
26. Kongra-Gel (KGK, formerly Turkey 49

Kurdistan Workers’ Party, Low
PKK, KADEK) Iraq 17
27. Lashkar-i-Jhangvi Pakistan 12 Negligible
28. Lashkar-e-Tayyiba (LT) Pakistan 12 Negligible

(Army of the Righteous)
29. Liberation Tigers of Sri Lanka 59 Moderate

Tamil Eelam (LTTE)
Libya 27
30. Libyan Islamic Fighting Moderate
Group (LIFG)
UK 91
France 96
31. Moroccan Islamic
Combatant Group (GICM) Morocco 39 Moderate
Spain 95
France 96
32. Mujahedin-e-Khalq
Moderate
Organization (MEK)
Iraq 17
33. National Liberation Colombia 41 Low

Army (ELN)
Palestine 14
34. Palestinian Islamic Jihad
Negligible
(PIJ)
Syria 17
Lebanon 79
35. Palestine Liberation Front
Low
(PLF)
Syria 17
36. Popular Front for the Lebanon 79

Liberation of Palestine
(PFLP) Syria 17
Low
Palestine 14
37. PFLP-General Command Lebanon 79

(PFLP-GC) Low
Syria 17
38. Real Irish Republican Ireland 88

High
Army (RIRA)
UK 91
39. Revolutionary Armed Colombia 41 Low

Forces of Colombia
(FARC)
40. Revolutionary Greece 83 High

Organization
17 November
41. Revolutionary People’s Turkey 49 Low

Liberation Party/Front
(DHKP/C)
42. Revolutionary Greece 83 High

Struggle
43. Shining Path (Sendero Peru 26 Low

Luminoso, SL)
44. Tehrik-e-Taliban Pakistan 12 Negligible

Pakistan
45. United Self-Defense Colombia 41 Low

Forces of Colombia
(AUC)
Average relevance of the CTF regime to all designated Low

Foreign Terrorist Organizations
Organizations (FTOs) according to how much of the population of the

countries in which these groups operate have access to formal financial
services. It can be assumed that in countries where access to the formal
financial sector is high the CTF regime will have a greater impact on
terrorist groups operating there than on groups operating in countries
where access is low, given both that the CTF regime is primarily focused
on the exchange of money through formal financial institutions, and
that people without access to the formal sector are generally able to
utilize various locally specific non-formal (sometimes called “shadow,”
and “parallel”) financial systems, including but limited to the hawala
system that is popular throughout South Asia and the Middle East.
As shown, over 70 percent of FTOs operate in locations where the major-
ity of people do not have access to formal, highly regulated financial
services, and, even more damning, the CTF regime is of only negligible
relevance to almost a third of all designated terrorist organizations. And
since terrorist groups are socio-political actors, one can further assume
that terrorist actors can readily access whatever indigenous financial and
value transfer systems are in these locations, thus likely deeply under-
mining the intended impact of much of the CTF regulatory and policy
regime.
Illustrating the deficient thinking which can result from adherence to
this myth, Assistant Secretary of the US Treasury for Terrorist Financing
David S. Cohen remarked the following in the wake of a 2009 attack on
Afghanistan’s Central Bank:
Why would the Taliban and al-Qaeda target the Central Bank?
What about a financial regulator so threatens them that they would
dispatch a suicide squad to attack it?
My belief is that the Taliban and al-Qaeda understand the critical
role that a strong, sound and transparent financial system plays in
safeguarding a nation’s security. A strong Afghan Central Bank pro-
motes economic growth and enables the Afghan government, rather
than the Taliban, to provide services to the Afghan people. Crucially,
it also promotes the financial transparency and regulatory structure
necessary to prevent illicit finance – the very kind of financial activ-
ity the Taliban relies upon to support its violent and destabilizing
campaign in Afghanistan.
We deplore this cowardly attack on a civilian target, and extend
our condolences to the Afghan police officers and innocent civilians
who were killed. Nonetheless, I think we can see in the attack on the
Central Bank some evidence of success in our efforts, and the Afghan
government’s efforts, to tackle terrorist financing in Afghanistan.20
In other words, Assistant Secretary Cohen states that al-Qa’ida and the
Taliban believe that the Afghan financial regulator suddenly, by virtue of
Afghanistan’s new adherence to global regulatory standards for formal
financial institutions, struck directly at the core financial infrastructures
of these terrorist groups, and furthermore that as such, this attack thus
actually should be perceived as a sign of success for the CTF regime.

However, in context of reality this claim is rather bizarre. Afghanistan
has only 17 banks in the entire country (including the local branches
of foreign banks), and only 5 percent of Afghans even use banks.21 One
can therefore assume both that neither al-Qa’ida nor the Taliban makes
much use of Afghanistan’s tiny banking sector, and thus also that their
attack on the Central Bank was motivated by something other than fear
of enhanced banking regulation. And, as such, it seems neither logical
nor reasonable to claim, as Cohen does, that this deadly attack somehow
marks a success of US or Afghan efforts to combat terrorist finance or
terrorism.
John Cassara, retired senior US Treasury agent, has extensively docu-
mented such illogic, stemming mostly from the twin analytic deficien-
cies of privileging specifically monetary transactions over any relevant
exchange of value, and widespread lack of understanding of—or even
attempts to understand—non-Western financial and economic systems.
One significant consequence is that many ways of exchanging value that
are common in the Middle East and South Asia—and thus one could
assume are also mainstays of the financial activities of terrorist groups
from those regions—are completely ignored by the CTF regime. The
irony, Cassara writes, is that while Western governments seem incapable
or at least unwilling to construct CTF laws and policies that reflect the
financial realities of their adversaries, terrorist actors are well aware and
adept at avoiding these laws and openly exploit what Osama bin Laden
himself has dubbed the “cracks in the Western financial system.”22
This irony is also echoed by anthropologist Carolyn Nordstrom, who
observed in Angola that the war orphaned children selling black mar-
ket cigarettes she interviewed often were more aware than Western
political officials or economists of the local and even global political-
economic realities that govern Angolan society, a situation that implies
that Western governments, academics, and societies are poorly posi-
tioned to not only understand and research such realities but also—and
more importantly—act on and change them.23 To emphasize, although
the CTF regime justifies vast surveillance of everyday financial activ-
ity and necessitates enormous expenditures in the private and public
sectors, it seems largely deaf and blind to the realities of the problem
the regime is designed to address.
This in turn implies that analysis of terrorist financing should focus,
as objects of analysis, on flows of value (or, more precisely, value chains,
as discussed later in this book) and how they are accessed for effect
by terrorist actors. In the Chechen case of Chapter 1, for example,
only some of the items of value were actual cash or its equivalents (for
example, checks, banks accounts, and so on). Cars, food and medicine,
drugs, and even less tangible things like business interests and training24
all served as vehicles of exchange. This means that the definitional
boundaries of what activities constitute “funds” and thus “financing”
are blurry, as the case study indicated. For example, if financing is the
provision or collection of funds, then the distinctions among what is
financing versus that which is logistics, supply, support, and so on
are both inherently unclear and in fact change depending on a vari-
ety of social, political, economic, and operational realties. Therefore,
as hinted above, understanding terrorist financing as revolving around
the exchange of value in support of terrorism, rather than a definition
that focuses exclusively on money, provides the terrorist financing ana-
lyst both greater precision and more clarity regarding this complex and
difficult to research issue.
Ultimately therefore non-monetary forms of value not only play an
important role in terrorist financing exchanges, but are in fact I argue
the objects being exchanged. Of course, this is a conceptual device to
incorporate consideration of these non-monetary forms of value into
analysis, rather than an argument that people involved in the exchanges
explicitly draw up bills of sale for “cultural legitimization.” Nevertheless,
reorienting analysis toward value rather than money enables a richer
and more comprehensive account of the dynamics of terrorist financ-
ing activity, but one that also can potentially complicate analysis of it.
For some intellectual context, this broad conception of value also corre-
sponds roughly to the notion of “capital” used in economics and, to a
lesser extent, sociology. Capital in its most generic sense refers to items
of value used to produce goods or services. As mentioned earlier, cap-
ital is a contested concept that is contingent on both perceptions and
societal contexts.25 While economics discourse develops various classi-
fications of capital such as not only “physical” and “financial” capital,
but also in “social,” “human,” and “individual” forms,26 one can most
generically understand capital as simply a socially and cognitively con-
structed expression of value; implying that it is the job of the researcher
and the analyst of terrorist finance to determine precisely the meaning
and importance any particular exchange of value carries for a particular
terrorist actor.
It indicates a need for greater understanding and intellectual engage-
ment with the political-economic realities of the societies in which
terrorists—again, however defined—live and operate. The chapter
challenges it on the basis that terrorists necessarily interact with rele-

vant local, regional, and global political economies; and most terrorist
actors active today only minimally interact with Western, neoliberal
financial institutions that are oriented toward monetary exchange
and instead seem to mostly interact with non-Western and extra-
legal economies that revolve around the exchange of value in all
forms. Terrorists are socio-political actors, who interact with societies on
multiple levels, including socially, politically, culturally, and econom-
ically. Furthermore, terrorist actors today mostly originate specifically
from within and interact with societies in South Asia, the Middle
East, and Africa, in which economic value is often not transacted
via money or monetary instruments, but via trade in various other
forms of material (for example, goods), non-material (for example,
services), or even cognitive (for example, maintenance of kinship bonds)
value; it is therefore illogical to assume that they would conduct
their own economic activity primarily via monetary mechanisms, let
alone through the Western financial system. This implies that terror-
ist financing research must be focused on understanding the various
ways economic activity actually occurs in the places under study.
Therefore, the arena in which terrorist financing occurs seems to be
not one particular political “space”—such as “the criminal world” or
“the community of terrorist sympathizers”—but rather as simply the
relevant political-economic society. This means that analytically, we
must focus on how terrorists interact with these political-economic real-
ities, and be careful to not project Western perspectives on non-Western
contexts.
Myth 2: terrorists have unified, coherent financial

structures
In the 2006 film Casino Royale, James Bond must foil the evil designs of
Le Chiffre, the pitiless blood-weeping banker for terrorists and warlords.
Le Chiffre, the financial villain, appeals to the popular imagination
because of the widely held but little examined assumption that ter-
rorist groups typically have vast, unified, and often quite sophisticated
financial infrastructures (not to mention ruthless financial geniuses to
mastermind their finances). This assumption most commonly emerges
in terrorist financing discourse in depictions of the financial activities of
terrorist groups as the output of coherent and unified finance-oriented
organizational components. The US Treasury, for example, regularly
makes reference to “al-Qa’ida’s finance section,”27 and controversial ter-

rorism researcher Rohan Gunaratna states that al-Qa’ida possesses a
so-called finance and business committee that is, he claims, “comprised
of professional bankers, accountants, and financiers” and represents
“the most complex, robust and resilient money-generating and money-
moving network yet seen.”28 Similarly, terrorism analyst Bruce Hoffman
wrote the following comparing Osama bin Laden to a chief executive
officer (CEO), remarking:
. . . in the 1990s he did what the executives of transnational com-

panies did throughout much of the industrialized world—namely,
design and implement a flexible new organizational framework
and strategy incorporating multiple levels and both top-down and
bottom-up approaches. In his top-down mode bin Laden has defined
specific goals, issued orders, and ensured that they are carried out.29
Still other discourse emphasizes the high levels of wealth and eco-
nomic diversification supposedly enjoyed by terrorist actors, and their
ability to organize and maintain vast financial and business empires.
In 2007, Tony McNulty MP, the UK’s then-Minister of State for Secu-
rity, Counter-Terrorism and Police, remarked that although the 7 July
2005 bombings of the London Underground that killed 52 people
“cost less than £5000 . . . the infrastructure that supports the terrorist
organisations themselves costs millions.”30 In the same vein, Matthew
Levitt asserts that HAMAS shrewdly amalgamates its internal finan-
cial and procurement operations with a global archipelago of charities,
mosques, schools, orphanages, summer camps, and sports leagues into
a single unified “overarching apparatus of terror.”31 Loretta Napoleoni
goes even further and claims that the financial infrastructures of all
terrorist groups are in fact interconnected in a mysterious “New Econ-
omy of Terror” that is apparently precisely $500 billion in size, “of
which as much as one third is represented by legal businesses and
the rest comes from criminal activities, primarily the drug trade and
smuggling.”32
In practice, characterizing diffuse actors and activities as necessarily
parts of unified and coherent terrorist financial structures helps oppo-
nents of terrorist organizations represent their own actions as attempts
to “stop payment”33 and cease “doing business”34 with terrorists. This
logic is manifested through various actions to find, attack, and destroy
these terrorist financing structures—such as through prosecution, finan-
cial blacklisting, and other actions against a fuller range of actors linked
to terrorists and even campaigns for “terror free investing.”35 It is,

however, deeply problematic.
First, it assumes away much of the complexity and nuance of the
economic and financial dynamics of terrorist actors, and provides no
coherent basis to consistently assess the meaning and significance of
diverse kinds of economic interaction. Second, it expands the scope
of individuals and groups who are to be considered threats and ene-
mies to such an extent that systematic analytic—rather than polemic or
propagandistic—distinction is nearly impossible. Conflating, in other
words, the donor, the collector, the distributor, the seller, the buyer, the
merchant, the middleman, the facilitator, the gofer, for instance, into
some larger, unified whole diminishes one’s capacity for exactly the ana-
lytic specificity and nuance that is needed for both substantive research
into the economic dimensions of terrorist actors and effective, precise
counterterrorism action.
Illustrating these problems, the US Treasury stated in its press release
announcing their designation as specially designated global terror-
ists (SDGT) that Bayt al-Mal and the Yousser Company “function as
Hizballah’s unofficial treasury, holding and investing its assets and
serving as intermediaries between the terrorist group and mainstream
banks.”36 The above logic calls for—and in fact does37 —emphasize the
importance of defining terrorist actor-linked providers of money services
like Bayt al-Mal and the Yousser Company as part of the “network” or
“infrastructure” of terrorist groups, in this case Hizbullah. But again, the
perspective presented here offers a much richer analytic approach. For
example, it provokes questions such as:
• What interactions do Bayt al-Mal and the Yousser Company have

with legitimate Lebanese social, political, and economic actors?
• What do these intersections tell us about the place of Hizbullah in
Lebanese society?
• Are these interactions structured along any particular social, cultural,
political, or economic lines, such as sectarian, religious, ideological,
or geographic?
• How easily can Hizbullah access the services provided by Bayt al-Mal
and the Yousser Company through another provider? What alterative
services or service providers are available, and how would changing
providers impact the behavior and capabilities of Hizbullah?
• What impact did these services have on Hizbullah’s military versus
political versus social capabilities, in the short, medium, and long
term?
Ultimately, answering such questions helps shift the emphasis away

from conjectures about the larger significance and relationships about
which there is no evidence, and focus analysis on actual terrorism-
related economic transactions and activities and their meaning for
terrorists and significance to the analyst.
The reality: terrorist finance is a compendium of individual

exchanges
Despite Hollywood-ready images of vast, nefarious, and unified terrorist
financial “sections”, “committees,” or “infrastructures,” “apparatuses,”
or even an entire “economies,” the reality of terrorist finance is that
the financing of any terrorist group, any terrorist attack, any ter-
rorist movement is a product of dozens, hundreds, or thousands of
individual, often ad hoc economic, socio-economic, and political-
economic interactions. Terrorist financing is thus more precisely and
more productively represented as, to borrow a phrase from Carolyn
Nordstrom’s work on the anthropology of “extra legal” political
economies, a “compendium of individual exchanges.”38 In the case
study of Chapter 1, for example, the raising and transfer of funds from
the Middle East to Chechnya consisted of many distinct individual
interactions from the original fundraising appeal to the international
wire transfer of funds to the bribery of corrupt border officials to
ultimate purchase of weapons or supplies, each of which occurred
according to its own unique and complex dynamic of human agency.
I argue therefore that it is at the level of these individual choices
in which the empirical reality of terrorist financing can—and indeed
must—be best observed. Even though this raises certain methodologi-
cal difficulties discussed below, this premise represents the cornerstone
of the new epistemic foundation of terrorist financing analysis pre-
sented in this book. In many ways, this premise is obvious. For
example, one can assume that formulations such as “Iran funds
Hizbullah” or referring to those who participate in economic or finan-
cial transactions on behalf of a terrorist group as part of a “finance
cell” or “finance section” are simplistic shorthand for a huge vari-
ety of individual interactions and exchanges. It should also be logical
to recognize that each of these individual exchanges occurs accord-
ing to its own logic, in its own context, and producing its own
result.
Ultimately, understanding terrorist finance as a compendium of indi-
vidual exchanges enables the analyst to untangle reports of terrorist
financing that may contain kernels of empirical truth, but which lack
the necessary specificity to support grander conclusions. For instance,
media reports often make the unjustifiable analytic leap of assum-
ing that if a terrorist group is involved in profit-making commercial
enterprises, then any activity linked to this enterprise is “terrorist
finance.” This is particularly true if the commercial enterprise is illicit.
For instance, one online news outlet reported that al-Qa’ida, “appar-
ently learn[ing] from the Taliban,” are using the cocaine trade in West
Africa in general, and Guinea-Bissau in particular, as a “new source of
income,” not only to earn money but because “If al-Qaeda can make
themselves sufficiently useful to the cocaine gangs operating there, the
country could become a new base for the terrorist organization.”39 The
problem is that the evidence supporting this line of reasoning is so
unjustifiably conflated and grossly underspecified as to make the con-
clusions extremely misleading, and possibly even untrue. First of all,
characterizing the terrorist actor involved in the West African drug trade
as simply “al-Qa’ida” (implying, of course, direct connection to the
late Osama bin Laden and his core cadre of followers) is specious, as
other reporting indicates that it is the distinct group al-Qa’ida in the
Islamic Maghreb (AQIM) that services the drug trade in the region.40
This nuance, presumably lost on many lay readers, is important because
AQIM is a small, reportedly fragile organization that is very much
regionally focused and operationally is only marginally connected to
the al-Qa’ida active in Afghanistan and Pakistan. The most analytically
relevant factors are thus most generally related to AQIM’s influence on
various political, social, and economic dynamics of the trans-Sahara and
Sahel regions, and in particular on their ability to use the cocaine trade
to expand their already extensive and profitable smuggling operations
throughout the region. Therefore, understanding this case of terror-
ist finance at even this basic level of specificity leads to different, and
much more useful, conclusions. For example, any burgeoning relation-
ship between drug traffickers in Guinea-Bissau and al-Qa’ida (that is,
AQIM) is unlikely to have any impact on al-Qa’ida in Afghanistan or
Pakistan, although, hypothetically at least, such a commercial alliance
could help strengthen AQIM’s operational capabilities.
Implications
In The Practice of Everyday Life, Michel de Certeau argues that while
social science has methods for observing and cataloging the various
instruments and dynamics of politics, economics, society, and culture,
it has few formal ways to evaluate how or why individual people use,
alter, and are affected by them.41 Greater engagement with “everyday”

realities would lead to an approach to represent and conceptualize
terrorist financing as a product of people’s behavior within particular
contexts, and therefore that understanding terrorist finance requires
comprehending the meaning of these behaviors, not just the details of
their execution. This represents a clear alternative to current orthodox-
ies that are written to imply that understanding terrorist finance requires
one to uncover dark secrets about the global “infrastructures” and
“mysterious”42 networks that supposedly finance terrorism. Engagement
with these everyday realities means that these realities can be observed,
analyzed, interpreted, and acted upon, just like any other manifestation
of human behavior. In other words, terrorist finance is very much an
“everyday” activity in which certain individuals make certain decisions
that lead to particular outcomes that in different ways and for a variety
of reasons result in enabling certain opponents—terrorists—of liberal
democratic societies.
This implies in turn three things. The first is that terrorist financ-
ing activities thus mirror the everyday relationships terrorists have with
wider societies, and understanding terrorist finance means understand-
ing these relationships. For example, Hizbullah’s financing mirrors its
role as a state proxy within the greater Middle East; HAMAS and Pro-
visional Irish Republican Army (PIRA) financing mirrors their role as
a religiously based national liberation movement; and al-Qa’ida mir-
rors its role as a radical grassroots socio-religious movement.43 This
assumption embeds terrorist financing into societal and historical reali-
ties rather than the personal or political agendas of analysts, and as such
acts as a hedge against undue analytic bias, thus forcing deeper under-
standing of the role of information and how externalities influence
terrorist financing activity. It also embeds terrorist financing research
into ethnographic knowledge as well as social scientific debates about
agency and structure.
The second is that it diminishes the relevance of intent in the analysis
of terrorist finance. Intent is often portrayed as the most reliable indica-
tor of involvement in terrorist financing, perhaps because it promises to
solve one of the most difficult analytic problems in terrorist financing—
how to distinguish between terrorist financing activity and that which is
not when the underlying actions are identical. For example, while both
Florida-based SunTrust Bank (which unwittingly held bank accounts
for the 9/11 hijackers) and the Arab Bank (which allegedly knowingly
transferred payments to the families of HAMAS suicide bombers) both
were, strictly speaking, involved in financing terrorism, the latter was,
because of their alleged villainous intent, subject to US sanctions while

the former was not, even though their actual behavior was virtually
identical. Intent, therefore, is extremely problematic analytically.44 It is
first of all complex and multi-layered, and especially so in context of
financial and economic exchange related to terrorist actors. For exam-
ple, donations of money or bartering for a needed resource may be
motivated by, for instance, the desire to enhance the capability of
a terrorist actor for violence, socio-political sympathy for the terror-
ist actor’s wider objectives (but not necessarily their use of violence),
a sense of social, cultural, or even personal obligation that may be
entirely unrelated to the aims or tactics of the terrorist, self-interest or
self-preservation, some combination of the above, or other factors. For
example, in the Chechen case of Chapter 1, the Khevsur tribesmen gave
material goods and services of significant value to someone involved
in terrorist acts. While their exact thinking is unknown (and in many
ways unknowable), it can be assumed that their intent in providing
such material support was primarily to be true to their local customs
of high-mountain hospitality rather than to support terrorism, and also
probably included some sympathy for their involvement in “fighting
Russia,” a cause with which many Georgians would be sympathetic.
Looney captures the analytic and practical implications of this:
When it comes to charities suspected of terrorist involvement, at

what point can a series of independent actions be said to indicate
coordinated and malevolent intent? And if they do in fact indicate
such intent, what should be done about it? In all cases, further inves-
tigation would be needed in order to support the case for an arrest
warrant or subpoena that eventually could be used to put the charity
out of business.45
Understanding someone’s intent for being involved in financing ter-

rorism serves two very limited purposes, one analytical and the other
political. On the one hand, the intent of someone involved in a ter-
rorist financing interaction can provide one of many useful fields of
data with which an analyst could use to determine the exact mean-
ing and significance of the interaction in question (for example, to
determine the nature of a relationship between a terrorist actor and
others, or perhaps the likelihood such interactions are to continue).
Information about motive, however, can also be used by the unscrupu-
lous analyst to further particular political agendas and do so at the
expense of analytic truth. To illustrate, let us return to the comparison
of SunTrust Bank and the Arab Bank. In July 2000, SunTrust Bank in
Florida opened a joint account for two of the 9/11 hijackers, issued
them debit cards, and over the next 10 weeks accepted $109,000 in
transfers from bank accounts in Dubai into which members of al-Qa’ida
had previously deposited significant amounts of money. These funds
maintained those who carried out the September 11 attacks, with the
unused remainder transferred back to al-Qa’ida operatives overseas.46
In the case of Jordan-based Arab Bank, the institution allegedly admin-
istered accounts of Saudi donors from which the families of dead
HAMAS and Palestinian Islamic Jihad (PIJ) suicide bombers could with-
draw up to $5300; activities that resulted in an $875 million lawsuit
against the bank by families of victims of Palestinian terrorist attacks.47
When set side by side, these two cases underscore the limitations of
intent and motive in the analysis of terrorist finance. While both banks
have publicly stated that they had no intention to aid terrorists, the
judge presiding over the lawsuit wrote in a 2007 opinion that, “Arab
Bank provided practical assistance to the organizations sponsoring the
suicide bombings and helped them further their goal of encouraging
bombers to serve as ‘martyrs.’ ”48 However, from a strictly analytical
sense, something similar could be said—but rarely if ever is—about
SunTrust (and indeed the financial services SunTrust provided al-Qa’ida
were far more consequential in terms of actual terrorism compared to
that which Arab Bank was accused). The problem is that arguments
about and judgments of whether or not these banks intended to inter-
act financially with terrorist groups are only of narrow (legal) relevance.
But if one seeks to systematically understand the financing of terrorist
actors (presumably with an eye to controlling and diminishing terror-
ism), then motive is nothing but one of many details to be considered.
As an object of analysis, therefore, motive is a Siren, luring analysts
with promises of easy (and usually self-serving) judgment. It is thus
not a viable analytic anchor for systematically understanding terror-
ist finance, but instead simply a sometimes useful waypoint on a long
odyssey of discovery.
The third implication is that it is not logical to necessarily incor-
porate the finances of all those socially, politically, or commercially
related to a terrorist group into a supposed unified overall economic
structure. Compare, for the sake of argument, HAMAS and General
Electric (GE). The latter has a vast network of associated indepen-
dent businesses and individuals that provide it with goods and services
that range from the glass for its light bulbs to contracted advice for
its government lobbying, each of whom interacts with GE according
to various objective-, relationship-, context-, time-, and place-specific

dynamics. The same can be said of HAMAS, although of course the
goods, services, and forms of value will be different, as will the dynamics
and outputs of the exchanges. But, analytically, although GE’s suppli-
ers would rightly be worthy of mention in a comprehensive analysis of
the company’s economic activities, it would be nonsense to conclude
that such interaction either makes them part of GE itself or necessarily
beholden to GE. The same is true of those who economically interact
with HAMAS or other terrorist groups: such interactions may be rele-
vant to certain analysts for particular reasons, but it simply does not
imply they necessarily “are” HAMAS or even part of some kind of unified
“financial infrastructure.”
If the reverse were true after all, then this would mean that ter-
rorists are perhaps the most economically inefficient and financially
foolish actors in existence. Actual terrorist attacks tend to be rela-
tively cheap, as illustrated in Table 2.2 and discussed further below
(Myth 3). Given this, why then would terrorist groups such as al-Qa’ida
raise “millions” of dollars to commit attacks that only cost tens of
thousands of dollars? And why would people give so much money
Table 2.2 How cheap is terrorism? Estimated total costs of selected major
al-Qa’ida terrorist operations
Al-Qa’ida operation49 Estimated total

expenditure (USD)
US Embassy bombings (Kenya and Tanzania)

50,00050
August 7, 1998, 223 dead (approximate)
Attack on USS Cole (Yemen)
10,00051
October 12, 2000, 17 dead
September 11 attacks (USA)
500,00052
September 11, 2001, 2,977 dead
Bali nightclub bombings (Indonesia)
50,00053
October 12, 2002, 202 dead
Jakarta Marriott hotel bombing (Indonesia)
30,00054
August 5, 2003, 12 dead
Madrid transport bombings (Spain)
70,00055
March 11, 2004, 191 dead
London transport bombings (UK)
15,00056
July 7, 2005, 52 dead
Average al-Qa’ida operational expenditure per victim killed 197.33
to something that cost so little? Indeed, if terrorists are so grossly

inefficient, is it plausible that they manage expansive illicit business
empires or represent an existential threat to anyone other than the
actual victims of their attacks? Of course, two common but rationally
tortuous answers to these questions are that terrorist groups either
squirrel away the difference somewhere (such as the once-common
but now discredited belief about “Osama bin Laden’s millions”57 ), or
they cunningly launder these vast sums through arrays of social, polit-
ical, and economic front institutions, including schools, charities, and
businesses (as discussed above). The far simpler and much more likely
answer, however, is that terrorism is simply an inexpensive tactic of
violence used within and for the benefit of particular militant socio-
political movements. In other words, while terrorism may be cheap,
social and political movements are not, and thus while there may be
political utility in rebranding the economic activities of certain socio-
political movements as “terrorist finance,” a significant portion—but
not all—of what is currently understood to be “terrorist finance” is more
precisely the financing of social and political movements that are in
some way related to actors that use terrorism. It is the challenge of
the analyst therefore to determine the nature of such relationships,
their meaning and significance, and eventually what responses such
conclusions imply.
In the end, understanding terrorist finance is therefore about under-
standing ad hoc interactions between terrorist actors and local, regional,
and global political economies, and analyzing the topic implies analy-
sis of how terrorism-related economic transactions and activities shape
and condition the activities of terrorists, and what meaning and sig-
nificance this has to the analyst. This implies that analysis of terrorist
financing should revolve around analysis of not only the individual
political-economic decisions involved (for example, intent, ideology,
links with terrorist groups, and so on) but also and in many cases
more importantly how terrorism-related politics are limited (or not) by
economic exchange within given contexts (for example, the actual con-
sequences of agency—which may lead to uncomfortable conclusions or
more difficult sociological analysis).
Myth 3: more/less financing always equals more/less

terrorism
Contemporary CTF efforts are in large part based on the idea that there
is a strong correlative—if not causal—relationship between financial
activity and terrorism, or, more simply, that the more economically
successful a terrorist organization is, the more terrorism it will carry
out. Springing from the idea that money is—combining several clichés
present in recent parlance—the “lifeblood” of terrorism, which can
be “cut off,” “fought,” “combated,” “countered,” “crushed,” and “dis-
rupted” in order to “starve” terrorists of their financial “oxygen,” this
assumption underpins CTF policies that aim to degrade the operational
capabilities of terrorists, for instance, by freezing their bank accounts,
seizing their assets, or putting those from whom they receive support
out of business.
In many ways, this assumption is common sense. First of all, eco-
nomic wealth can indeed enhance the capabilities of a terrorist group
by enabling the group to obtain material and non-material resources
it requires. In one major example, journalist Gretchen Peters has doc-
umented how the lethality and operational tempo of the Taliban
increased in direct proportion to the level of profits the group was
believed to be making from involvement in the Afghan opium trade.58
In particular, one can assume that at least the Taliban’s increased
wealth enabled it to recruit and pay more foot-soldiers and to acquire
more and more sophisticated weaponry, communications, and other
equipment. Generally speaking, economic success positively impacts
terrorist groups by enabling them to acquire—either through direct pur-
chase or via more socially embedded exchanges of value—material and
non-material resources. Therefore, understanding this impact, and by
extension an important part of terrorist finance, requires knowledge of
the resources used by terrorist groups. Table 2.3 provides a preliminary
lexicon to describe the major categories of resources used by terrorist
actors.
Second, economic success can enhance the capabilities of a terrorist
group by opening up new opportunities. On a tactical level, this may
manifest itself in larger, more lethal attacks, or possibly increased ability
to strike targets of higher value. Al-Qa’ida’s decision sometime in the
late 1990s to shift its operational attention from only the Middle East
and Africa to targets within the continental United States can presum-
ably be attributed at least in part to its ability to raise enough money
to do so. Strategically, accumulation of wealth may empower terror-
ist groups to pursue and eventually achieve larger political objectives,
as illustrated especially by the Palestine Liberation Organization (PLO)
under Yasser Arafat. During the 1970s and 1980s, the PLO became a
wealthy organization, reportedly earning up to $600 million per year
by the mid 1980s (an annual product higher than at least 21 countries
Table 2.3 A preliminary lexicon of critical resources used by terrorists
Category Selected examples

of resource
Material resources Non-material resources
Military Small arms, explosives, Technical expertise, training

resources ammunition, dual-use services, “outsourced”
explosive components operations, intelligence
(vehicles, cell phones, etc.)
Logistical Vehicles, computers, Transport, internet access,
resources telephones, radios, SIM cards telephone service
Human Fighters, supporters (donors, Loyalty, obligation, inter-group
resources facilitators, middlemen), relationships
service providers (accountants)
Financial Cash or its equivalents, Money services, banking
resources marketable goods and services, influence over
commodities markets, business intelligence
Political Propaganda material, Web sites Propaganda material
resources development and distribution,
relationships, ideological
support
at that time).59 This also corresponded, not coincidentally one can

assume, with a sharp rise of the PLO’s international stature and influence
in Middle East politics, including on November 10, 1975 becoming
the first non-governmental organization (NGO) to be granted perma-
nent observer status in the UN General Assembly. Ultimately, therefore,
more money does often equate to either more terrorism or at least
greater capability to both carry out terrorist attacks and gain advantage
from them.
However, the analytic problem is that this is by no means necessar-
ily the case. In reality, the idea that if terrorists have more (or less)
money there will generally be more (or less) terrorism is far more com-
plex and nuanced than is often assumed. Because terrorists are social,
political, cultural, and institutional actors (that is, they serve functions
on all these levels), therefore—and as is born out in the evidence—the
meaning and impact of these interactions are similarly varied, and often
not related to terrorism. More financing thus might mean more poli-
tics, not more terrorism, or less financing actually might mean more
terrorism as the group has actually fewer capabilities to secure its inter-
ests through territorial, social, political, economic, or other non-violent
means. As discussed below, the unavoidable point is that no universal
claims can be made, no shortcuts are possible, and that the relationship
between economic success of a terrorist group and terrorism must be
determined on a case-by-case basis (and naturally within the confines of
one’s knowledge).
The reality: the relationship between economic success

and terrorism depends on context
More/less financing does not necessarily lead to more/less terrorism.
Instead the impact economic and financial success has on the behav-
ior and capabilities of a terrorist actor depends completely on a myriad
of interdependent factors that are highly actor- and context-specific;
all of which must be analyzed, not just assumed away. Unfortunately,
at present our knowledge of the precise geometry by which these fac-
tors are interdependent is extremely limited. There is no comprehensive
study of the impact of how terrorist actors are impacted by economic
factors, as economists and economic anthropologists have done very
little research on terrorist and other armed groups, and the terrorism
literature heavily privileges the social, psychological, legal, and other
non-economic dimensions of terrorism.60 However, aside from simply
highlighting a significant knowledge-building opportunity that exists,
it is possible for our purposes here to make two very general assump-
tions about the precise relationship between economic success and
terrorism.
The first is that economic success will likely enable terrorist capa-
bilities, but will do so also in ways tied closely to at least the actor’s
internal structures and dynamics, their political, strategic, tactical,
and other objectives, and the societal context in which they operate.
As mentioned, capabilities of terrorists generally seem to increase with
greater wealth, and such economic success can open up various strate-
gic and tactical opportunities for the terrorist actor. But, much more
importantly, we must answer, capability to do what exactly, and by
what geometry are these capabilities impacted. Terrorist organizations—
especially successful and resilient ones—often operate more like “rad-
ical altruists” than profit-seeking corporations,61 and therefore are
likely to use additional resources for social, political, cultural, and
other purposes, in addition to—or even at times instead of—terrorist
violence.
To illustrate these important differences, Figure 2.1 depicts visually
both the most common perception of the relationship between eco-
nomic success and terrorism, and a commonsense estimate of the actual
Popular view Al-Qa’ida Hizbullah

Capabilities
Capabilities
Capabilities
Economic success Economic success Economic success
Capabilities for violent operations

Capabilities for socio-political success
Figure 2.1 The relationship between economic success and terrorism (notional)
relationship for two particular terrorist groups, al-Qa’ida and Hizbullah.

In the graph labeled “Popular view,” we see a directly proportional
relationship between the capability of a generic terrorist group and
the amount of economic success they enjoy (with economic success in
this context meaning, for example, increased monetary wealth, access
to markets or donor flows, possession of marketable commodities, or
anything similar); in other words that more/less terrorism will follow
from more/less economic success. This graph thus is a visual represen-
tation of the foundational perspective of much (but not all)62 CTF law,
policy, and state action.
The “al-Qa’ida” and “Hizbullah” graphs show a far different and more
complex reality. In the al-Qa’ida graph, the line labeled capabilities for
violent operations (for example, weapons procurement, training, recruit-
ment, and other capabilities related to the group’s violent activities) rises
similarly to our generic group, but not so for the line labeled capabili-
ties for socio-political success (for example, to obtain support from wider
constituencies, gain influence over government officials, and engage in
humanitarian aid, school construction, education, propaganda and pub-
lic relations, and other non-violent activities), which actually is shown
to decline. This depicts the reasonable assumptions that not only is
al-Qa’ida much more likely to spend additional resources it acquires on
increasing its capability—and also propensity—to carry out violent ter-
rorist attacks (here using Schmid’s definition of terrorism63 ), but also
that by increasing their levels of violence the group will actually lose
popularity and otherwise see their ability to affect social and political
change diminish almost to zero; an arc analogous to the rise and fall of
al-Qa’ida in Iraq.64 Conversely, the Hizbullah graph depicts a very dif-
ferent relationship between a terrorist group’s economic well-being and
its behavior and capabilities, with the operational capabilities and socio-
political capabilities lines increasing sharply at first but then settling into
a slightly rising plateau, indicating that Hizbullah will use additional
resources to strengthen its social and political influence as well as its
military capabilities; neither of which, it should be noted, necessarily
equates to more actual terroristic violence.
These differences are not random.65 Al-Qa’ida is a decentralized vio-
lent revivalist takfiri (those who excommunicate other Muslims for
apostasy), salafist (those who seek a return to the ways of devout
ancestors) Islamist movement dedicated to achieving primarily symbolic
“victories” against the West and “apostate” governments of predomi-
nantly Muslims countries through spectacular terrorist attacks.66 Their
only true constituencies are themselves and an intensely romanticized
version of the ummah, the worldwide community of Muslims. As such,
economic success for al-Qa’ida is almost certain to equate primarily to
increased capabilities to carry out attacks spectacular in their scale or
brutality and actual attempts to do so, and secondarily to greater atten-
tion for propaganda, recruitment, and public relations efforts, which
will have at best uncertain effects given that historically al-Qa’ida’s
brutality has alienated even many of those whom otherwise would
be sympathetic to the movement. Hizbullah, on the contrary, while
it does conduct terrorist operations from time to time and is con-
sidered to be a terrorist group by many countries, also encompasses
a political party with 13 seats in the Lebanese parliament and is in
essence the de facto government in some parts of southern Lebanon,
where it provides a variety of social services to residents. To condense
a complex topic within the even more intricately complicated con-
text of both Lebanese and Middle Eastern politics, Hizbullah seeks
above all to become an important social, political, and economic player
in Lebanese society. As such, it is reasonable to assume that with
greater economic well-being Hizbullah will focus on solidifying its
social and political position in Lebanon and thus spend any additional
resources on increasing its socio-political more than its military capa-
bilities (although the latter would benefit as well, as depicted in the
graph).
The second logical assumption is that, contrary to popular thought
and contemporary CTF practice, economic success can actually limit
terrorist capabilities and behaviors. For example, in the Chechen case,
the US funding apparently had the effect of sowing dissension in the
ranks of the Chechen separatists, and thus actually negatively impacted
their operational capabilities. As this shows, economic success/failure
can especially impact relationships within the group, with other groups,
with true believers, with local constituencies, and with global con-
stituencies. For example, Loyalist groups in Northern Ireland have over
time become wealthier through various criminal enterprises but have
diminished as a political threat and lost much of their support among
the local Protestant population, who view them no longer as protec-
tors of their community but as simple criminals. Economic success can
also constrain strategic and tactical choices as well, such as was evident
in the PIRA’s decision to avoid attacking high-value targets in London
where American tourists were likely to become victims, and thus under-
mine a key fundraising source. Conversely, one can even assume that
the PIRA may have actually given up violence because of economic suc-
cess, in effect acquiring “rainy day” and retirement funds through the
infamous Northern Bank robbery (see below discussion).
Implications
The most significant implication of the under-researched but unques-
tionably highly context-dependent relationship between terrorism and
economic and financial welfare relates to the so-called fungibility of ter-
rorist finance, in that when a terrorist actor obtains more resources this
then “frees up” resources for violent uses.
Let us consider whether one extra dollar to a terrorist group truly does
free up a dollar that can be spent on violence. If this is true, then this
implies either (a) that terrorist actors’ exclusive goal is not just terror,
but as much of it as possible, or (b) that all non-violent activities of a
terrorist group exist only to support their perpetration of violence. Let
us call this the Terminator view of terrorism, in that terrorists single-
mindedly pursue killing their enemy as their prime objective and that
all internal functions of a terrorist organization are thus oriented to
that single pursuit, which indeed means that the more money goes into
any part of a terrorist organization it will eventually equate to more
violence.
However, if this was true, then terrorism would be one of the most
economically inefficient enterprises ever. For instance, while HAMAS is
estimated to have an annual budget of somewhere around $50 million,67
according to the University of Maryland’s Global Terrorism Database the
group between December 14, 1990 and November 14, 2008 nevertheless
only carried out 289 terrorist incidents (lethal and non-lethal, against
persons and property).68 One conclusion is that HAMAS is so poorly
managed that, despite its $50 million “apparatus of terror,”69 it man-
ages only to average slightly more than 16 terrorist attacks per year, not
all of which are even lethal. In other words, if one believes that “ter-
rorism is expensive” (that is, that one should count all operational and
non-operational activities as part of one unified whole), then it is extraor-
dinarily expensive—specifically, for HAMAS, to the tune of $3.1 million
dollars per attack, using the numbers above.
More likely, however, is that HAMAS’s various social, political, chari-
table, and other activities are not mechanisms to launder funds for use
in violent operations, but are indeed actual social, political, and char-
itable enterprises that exist alongside and are distinguishable—if not
wholly distinct—from its violent activities, even if both the violent and
non-violent component obtain advantage from each other. Naturally,
one may be opposed to the social, ideological, or political objectives of
HAMAS and argue (correctly) that funding these non-violent activities
does end up supporting these (social, ideological, or political) aims, but
this then becomes an issue of material support of politics, rather than of
terrorism.
Moving beyond simple critique, this raises two crucial points for anal-
ysis of terrorist finance. The first is that determining a fungibility ratio
for a terrorist group (that is, how much support for non-violent activ-
ity makes its way toward or frees up other resources for violent activity,
or alternatively, the marginal utility for violence of resource inflows) is
much more important analytically than whether or not resources simply
could be hypothetically moved around for different purposes. Thus
while the Terminator perspective implies a fungibility ratio of 1:1 (that
is, one marginal dollar to non-violent causes equals one dollar freed up
for violent uses), in reality different terrorist groups have different orga-
nizational strategies and priorities (especially their views on the utility
of violence) and thus fungibility ratios will vary group to group. For
instance, al-Qa’ida, which effectively has no direct constituency to
serve, is much more likely to put additional resources to violent use,
but Hizbullah, a much more deeply socially embedded group, is just
as likely to promote its diverse social, economic, political, and insti-
tutional interests above and before its military capabilities. In other
words, al-Qa’ida’s fungibility ratio would notionally be something like
1:0.9 while Hizbullah’s would be closer to, say, 1:0.4. To emphasize,
these are notional ratios, and more research is required to determine
evidence-based ratios for particular terrorist groups.
The second implication of this more nuanced and analytic perspective
of the fungibility of terrorist finance is that even if a terrorist group’s
fungibility ratio approaches 1:0 (that is, donations to non-violent
components do not free any extra resources for violent operations),
these resources nevertheless still do support the overarching organiza-

tional structure of a terrorist group. In other words, even if it does not
increase their capability or inclination for violence, material support
to a terrorist group will nevertheless impact its social, political, and
other capabilities, thus potentially making the group stronger, more
influential, and more popular, even if it doesn’t make it more vio-
lent. More simply, terrorist financing needs to be analyzed not only in
an operational context but also on political, social, institutional, and
other non-violent action contexts. Consequently, subjective judgments
of what constitutes “good” and “bad” social, political, institutional,
humanitarian, and other related outcomes are unavoidable and, in order
to avoid covert politicization of analysis, should be in some way made
explicit. To do otherwise would inherently pervert analysis of a terrorist
group’s political, social, and other non-violent behavior, which could
potentially lead to not only intellectually inaccurate if not dishonest
analyses but also ineffective or even counterproductive counterterrorism
and CTF actions. For instance, a terrorist group that engages in only
sporadic small-scale attacks but has a large and influential social and
political apparatus could actually be encouraged to give up violence via
a strategically wise policy of material support to the non-violent com-
ponents in exchange for the decrease and eventual elimination of the
groups’ armed wing. This essentially describes the long-term policy of
the UK and Irish governments toward the PIRA, a terrorist group that
in part through material support of its non-violent components ulti-
mately agreed to give up violence. In fact, one might even surmise that
a major factor in the PIRA finally agreeing in September 2005 to decom-
mission its military and terrorist apparatus was a huge influx of material
resources, namely the £25. 5 million ($42.1 million) stolen from the
Belfast headquarters of the Northern Bank apparently by PIRA members
10 months before the group disarmed. It is not unreasonable to presume
that acquisition of such a large “rainy day fund” might have convinced
the leadership of the group that it could give up violence and enter the
mainstream political process, especially if, as has been rumored, that
at least some of these funds were used in effect as pensions for former
militants.
Ultimately, all this demonstrates that while material support for a
terrorist group does generally impact its behavior and enhance its
capabilities—nevertheless it is not necessarily the case that increased
wealth will enhance a group’s capacity to commit violence. This means
that analysis of terrorist finance must focus above all on analysis of
how economic dynamics impact outcomes, especially relating to terrorist
capabilities, behaviors, and relationships. Furthermore, analysis should

assess the meaning and significance of these outcomes for terrorist actors
on all relevant levels, including military/operational, political, social,
cultural, ideological, institutional, legal, and organizational. And finally,
since accomplishing this requires subjective, politicized judgments from
the analysts, these should simply be made as explicit as possible so any
analytic conclusions or findings can be then systematically evaluated.
Unfortunately, such an appropriately systematic and nuanced approach
is difficult if not impossible using current approaches to understand-
ing terrorist finance, which may be a contributor to why “financial
intelligence” may have been, in the words of the former head of the
US National Counterterrorism Center, “oversold” as a tool for respond-
ing to terrorism;70 and why two International Monetary Fund (IMF)
economists have stated, “it is difficult if not impossible to establish
connections between terrorism averted and any specific element of the
regime [to combat terrorist financing].”71 The analytic frameworks pre-
sented in Chapters 4 and 5 seek to address this problem, and offer at the
least the foundations of a better way forward for all analysts of terrorist
finance.
Myth 4: terrorist finance is illicit
Is terrorist financing activity necessarily and always illegal? Popularly

this is often assumed to be the case, in two ways. First, terrorist organiza-
tions are often simplistically assumed to be nearly identical functionally,
if not existentially, to organized criminal groups. Prominent neocon-
servative Michael Leeden, for example, states that Osama bin Laden is
the “CEO of a multinational terrorist corporation,” and that “the best
way to think of the terror network is as a collection of mafia families.”72
Similarly, Loretta Napoleoni repeatedly references a so-called illegal/terror
economy, in which businesses in the “terror economy” “interpenetrate”
with both criminal and legitimate economies.73
Second, it is often assumed that terrorist financing is, in essence, the
same as money laundering. Money laundering is generally defined as the
act of concealing or disguising the nature, location, source, ownership
or control of illegally gotten money, or more simply the “cleaning” of
“dirty” money. Throughout the literature, there is a consistently implied
and explicit conflation of money laundering and terrorist financing.
For example, the Financial Action Task Force (FATF) regularly refers to
“ML/TF” methods, and the IMF, World Bank, and others just as often
refer to joint “AML/CFT” efforts.74 According to Warde, this conflation
arose in context of liberal and neoliberal actors’ concerns about the neg-
ative effects of financial globalization and deregulation, particularly the
ease by which illicit actors could exploit the technological, efficiency,
anonymity, and wealth-generating effects of the changes in global capi-
tal markets.75 Terrorist financing is often seen as simply the “reverse” of
money laundering.76 In this conception, the former involves the “dirty-
ing” of clean money, rather than the latter’s cleaning of dirty money; an
interesting contrast in that while money laundering typically involves
a financial flow from the many and the small (for example, from street-
level drug transactions) to the few and the big (for example, to the
leaders of the drug cartel), the flow of terrorist financing, however, gen-
erally continues back down to the many and the small (that is, diversity
in both originators and recipients).77
These popular conceptions equating terrorist financing with illicit
activity are supported by—or perhaps reflected in—juridical perspec-
tives. In 2001, the FATF established nine “Special Recommendations”
for governments regarding the control of terrorist finance. The second
of these recommendations states that each state government ought to
“criminalise the financing of terrorism, terrorist acts and terrorist orga-
nizations,” and furthermore “ensure that such offences are designated
as money laundering predicate offences”;78 measures that by 2006 every
country in the world had adopted.79 Therefore terrorist finance can be
understood as being necessarily illicit simply because, circularly, it is
illegal to finance terrorists in every country.
The problem, however, is that understanding terrorist finance as a
necessarily illicit activity requires some logical contortions, which if
nothing else hinder systematic analysis of the core material realities
at hand. First of all, the conflation of money laundering and terrorist
finance is problematic because the activities are nevertheless concep-
tually “exact opposites.”80 Money laundering operates on a crime for
profit basis, while the “ultimate benefit”81 of terrorist financing activ-
ity revolves around how instrumental it is for particular desired political
effects. In other words, terrorist financing by definition has no intrinsic
significance outwith the context of those political objectives. Given that
“reverse money laundering” implies that the defining de-legitimizing
activity occurs only in the future, it raises a significant normative problem
in that it requires one to base analytic conclusions (for example, that
an actor is a terrorist financier) not on systematic evaluation of empir-
ical evidence and contextualizing concepts, but on analytic deductions
grounded in an uncertain mix of a priori character judgments and predic-
tions of future behavior. But using this template ensures that financial
activity becomes (ex post facto) illicit or at least illegitimate if it even-

tually benefits a terrorist group, either by assuming they are the same
(when they are actually the reverse), or, even worse, by engaging in the
logical gymnastics necessary to make ex post facto judgments based on
where the money “ends up,” which is not only unscientific but also
ethically questionable. The result is that legitimate financial activity—
that is, to say it more plainly, financial activity that is perceived to be
legitimate by people who are neither terrorists nor criminals—is often
made illegitimate by one-size-fits-all counter terrorist financing legisla-
tion based on this myth. In legal and policy terms, such “framing of the
guilty”82 can lead to anti-democratic consequences, including what has
been termed “crystal ball justice” and the prosecution of “pre-crime”
(that is, control of and punishment for behavior that has not actually
yet occurred).83
Terrorist finance is often assumed to be illicit because it happens
in the shadows, sometimes to avoid detection by the authorities, but
also often simply because in many parts of the world business prac-
tices (such as trade-based value exchange or heavy use of cash or gold)
that are everyday there nevertheless often encompass activity that is
illicit or at least suspicious in Western contexts. Therefore, we see that,
second, the universal illegality of terrorist finance is a tautology that is
largely useless analytically, given that terrorists, as socio-political actors,
interact with many different communities and in many different ways,
many or perhaps even most of which are perceived as legitimate, if not
legal. The roots of this tautology lie in contemporary efforts to sep-
arate out—intellectually and in practice—“good” money from “bad,”
which in the case of terrorist finance is often formulated in terms of
“protecting” the world (but most especially Western and liberal states,
their societies, and their financial systems) from “terrorist money.” How-
ever, as many scholars have noted, the line between illicit and legal,
or even legitimate (good) and illegitimate (bad) economic activity, is
difficult to draw even within highly transparent economic contexts,
and even more so within the economies in which contemporary ter-
rorist groups most often exist. In particular, de Goede and others have
argued persuasively that what is referred to here as orthodox discourse
perceives terrorist financing as a way itself of understanding and there-
fore addressing contemporary risks, many of which were not terrorism.84
In particular, the argument goes, “terrorist finance” was conceptualized
and represented in ways that, although demonstrably deficient for actu-
ally understanding and confronting financial activity of and related to
terrorist actors, were nevertheless useful (because as a securitized issue, it
had greater potency) for identifying and governing perceived risks from
globalization and the political-economic power of non-state actors.85
Simply put, this was accomplished by representing “terrorist financ-
ing” using an analogous strategy as was used for other “bad” financial
activity, namely as an undesirable element that can be identified and
ultimately separated from desirable economic activity, if not stopped
outright. In this way, “terrorist finance” is to terrorism as “money laun-
dering” is to crime, “kleptocracy” is to corrupt national leaders, and, at
times, “black market” or “illicit finance” is to unregulated, unrecorded,
informal, extra-state, or even just non-Western economic activity.86 The
problem, however, starts with the fact that, as many authors have noted,
segregating “good” from “bad” economic activity is—conceptually and
practically—ultimately an illusion, albeit at times a useful one. For
example, Amoore and de Goede (quoting Coutin) observe,
the legitimate and illegitimate spaces of globalization are more

“mutually constituting and interdependent” than is normally
assumed.
. . . In the field of money laundering and terrorist finance, there is
increasing evidence that the “upper worlds” and “underworlds” are
more closely linked and difficult to separate than is assumed in much
policy literature.87
For example, in line with recommendations from the FATF, many coun-
tries have tried to regulate hawala and other “informal value transfer
systems” out of fear that they could be used by terrorists to move money
and that, unlike Western style banks, they “leave no paper trail.” The
USA PATRIOT Act, for example, calls for money exchangers to record
their transactions, abide by know-your-customer (KYC) rules similar to
those for banks, and report any suspicious activity’ to the authorities.88
As de Goede points out:
These requirements seem reasonable. But although informal

remittance operators in all probability know their clients on a more
personal level than high street banks do, producing the official docu-
ments specified under KYC regulation may be problematic, especially,
of course, for undocumented migrants. While informal money trans-
fer networks have been widely vilified for “leaving no paper trail,” it
is more accurate to say that they do engage in extensive record keep-
ing and KYC practices, but in manners that are not recognised by
Western regulatory requirements.89
As discussed previously, terrorist actors are also socio-political actors,

and thus the economic interactions of terrorists (that is, “terrorist
finance”) involve much activity that is banal within the local con-
text, and some of this banal activity can be illicit. For example,
purchase of supplies; interaction with locals; engagement in politi-
cal and civic action; expenditure on social, religious, cultural, and
social—as well as military—resources. In other words, because the eco-
nomics of terrorist groups is often very banal, and often no different
than other socio-political actors within their particular societal con-
text, then what purpose does it serve to think of terrorist financing
activity as illicit or even illegal? Surely the impact on a particular
terrorist in question is more important than any such legalistic deter-
mination. Even the use of violence to resolve economic disputes can
be banal in certain societal contexts, for example Afghanistan. The
interaction between drugs, organized crime and terrorism is simply a
function of the political-economic dynamics of the particular region,
and empirically for any kind of useful insight it must be analyzed
on those terms. And because this line is almost impossible to draw
within the political-economic contexts within which most of today’s
“terrorists” exist and within which they interact, and in many cases
is irrelevant. For example, suppliers of circuit boards to the Taliban
may also be suppliers of medicine for local villagers, primarily because
he is a trader and is simply in the business of acquiring anything
that anyone might buy. Similarly, the charities and schools associ-
ated with Lashkar-e-Taiba (LeT) are indeed conduits for support to
militant operations, but they were also one of the most effective char-
ities in responding to the Kashmir earthquake; and their schools offer
opportunity and empowerment for many poor but educated Pakistanis
who are largely excluded from professional employment in Pakistan
because they lack family connections or come from the “wrong” ethnic
group.90
Another contributing factor to this tautology is that it is often
assumed that the law is unchanging, when in fact it changes often
over time and across place, meaning that assuming terrorist financing
to only occur within the criminal “world” excludes many activities that
should be included. In fact, given that law, generically, is at base an
institutional codification of norms and power structures within a soci-
ety, terrorist financing activity that falls within the bounds of law is
likely to illuminate many interesting but hidden insights about how
terrorists interact with wider society and vice versa. For example, until
early 2004 the United Arab Emirates had no law prohibiting financial
interaction with a terrorist or terrorist group.91 This is largely because

the local perception was that financial services implied no more agency
or responsibility for their ultimate use than would be true for any other
service, in the same way that Americans generally would not consider
the flight schools at which the 9/11 hijackers learned to fly planes to
be supporters of terrorism, even though they provided something of
great value to the terrorists.92 Analytically, therefore, assuming that ter-
rorist financing has to be illegal results in complicated if not tortured
epistemological formulations of what should properly count as terrorist
finance.
The above should not be mistaken for an argument against attempts
to make terrorist finance illegal, or more generally to de-legitimize eco-
nomic interaction with terrorist actors. Quite the opposite, aligning
one’s definitions of terrorist finance with the law is very much in line
with liberal democratic principles. Counting as terrorist financing only
those activities that are illegal insulates actions from the subjective
whims of those in power, as their definitions of terrorism and financial
support of it can be very different than what could be upheld as law.
And given that liberal democratic societies are meant to be “empires of
laws not men,”93 this formulation well serves the objectives of liberal
democratic societies. Regardless, however, it fails to be very useful ana-
lytically because it makes it impossible to see common elements among
epistemologically similar activities, such as when a terrorist actor receiv-
ing money from a charitable foundation versus from a state welfare
program. Ultimately, therefore, the legality of terrorist financing activity
is an important issue for society, but not so much for the serious analyst
of the topic.
The reality: terrorist finance is extra-legal

The legality of terrorist finance may be of limited relevance analytically,
but the process of exploring its place in context of legal norms, struc-
tures, and practices is nevertheless very useful. What is referred to as
“terrorist finance” exists at the intersection between legal and illegal
behaviors, “good” and “bad money,” and the strategic and the every-
day. It may be illegal everywhere, but the unavoidable fact is that unless
we are prepared to completely ignore the range of everyday legal and
illegal economic transactions that materially contributes to terrorists, it
cannot be entirely illicit. Carolyn Nordstrom addresses this conundrum
in her book Global Outlaws:
Perhaps we can’t predict economies’ trajectories because we don’t

know what an economy is.
Legal. Regulated. Formal. Legitimate. Recorded.
Illegal. Informal. Illicit. Unregulated. Extra-state. Extra-legal.
Parallel. Second Economy. Gray market. Brown market. Illegitimate.
Underground. Subterranean. Clandestine. Shadows.
What words apply to the intersections of il/legal? Power? State?
Chaos? Invisible empires? Formal published analyses generally fail
here. The answer is perhaps most evident in everyday experience . . . 94
This goes to the heart of both why terrorist finance is difficult to ana-
lyze and how it can be better understood. Terrorists are socio-political
actors and necessarily interact with the societies in which they exist on
multiple social, political, cultural, and economic levels. The financing
of terrorism, even leaving aside its subjectivity and politicization, exists
at the intersection between legal and illegal activities, “good” and “bad”
economic behaviors, and the violently intentional and entirely banal,
and thus also in between—but not completely of—studies of terrorism,
security, politics, economics, society, and culture. Systematically under-
standing terrorist finance therefore requires thinking of it not as simply
illicit, illegitimate, or even just “bad,” but as existing in extra-legal space
in which various cultures, even those that in other contexts may seem
in opposition or even irreconcilable, can merge:
. . . From premodern to postmodern times, what we call culture is no

more and no less than a core existential informational system: fluid,
flexible, and profoundly multifaceted. When [convicted drug king-
pin] Howard Marks does business with a person—whether from his
hometown in Wales or a city in South Asia—each negotiates mul-
tiple cultural universes in constant states of flux, being defined as
circumstance and necessity suggest. For example as criminal orga-
nizations globalize, so too do norms of extra-legal association, of
money laundering, of resolving conflict.
Culture—habits of knowledge—also shapes how we are accustomed
to thinking of crime. The definitions of legal society and criminal net-
work have traditionally been oppositional. What is criminal is non-
legal. Full stop. Yet what happens at the points of merger? What
modes of thought and action hold sway here? What of legal-
ity bleeds into illegality? What of illegality enters mainstream
society? [Emphasis added]
Admittedly, this blurs the definition of terrorist finance, but only to

helpfully underline the extent to which it is inherently blurry. Answer-
ing questions such as those emphasized in the quote above in terms of
terrorist actors are ultimately far more relevant and useful than either
uncovering the supposed mysteries of terrorist finance or engaging in
inherently futile attempts to distinguish good (non-terrorist) from bad
(terrorist) finance.
Analytic implications
Two conceptual implications arise from asserting terrorist finance as
extra-legal rather than illicit activity. First, it is that the legality of ter-
rorist finance is of limited analytic relevance, primarily only in terms of
specific policy objectives (for example, prosecution, counterterrorism,
and so on), which challenges an important pillar of existing ortho-
dox representations of terrorist finance. It also implies that assessments
of legality should be left to law enforcement or analysts of the legal
aspects of terrorist finance. This is because the lines and definitions
of legality constantly change over time, place, social position, cul-
tural norms, and so on; and therefore, it is vital to analyze these
changes and how they impact the economic behaviors and interac-
tions of terrorist groups. However, one common perspective that needs
correction is that currently it is popular to view participants in ter-
rorist finance that are otherwise legitimate (for example, charities,
businesses, and individuals) as “fronts,” implying that they undertake
legitimate activity in order to obscure their threat finance—and perhaps
also other illicit—activity. While naturally there are many examples of
such overtly fraudulent activity, the inconvenient reality is that most
of these entities are both legitimate and also involved in threat finance
activity.
The second implication is that just as analysis of legality and motive
are less important, the significance of legitimacy is also perhaps less
than currently imagined. Terrorist financing actors exist on all sides of
legitimacy, however such lines are drawn. Terrorists and non-terrorists
regularly interact in the financial sphere, just as interaction between
drug traffickers and Mexican law enforcement, Russian soldiers and
Chechen fighters, and Palestinian militants and Israeli companies is a
fact of the everyday life in those contexts, whether cataloged in the liter-
ature or not.95 For example, must we exclude consideration of SunTrust
from analysis of the 9/11 attacks, just because they are a legitimate
business whose behavior broke no laws? Whether intentional or not,
criminal or not, accidental or not, it is still participation in “financing of
terrorism.” Surely, the “legitimacy” of particular actors should not force

us to delete them from the record—although it may lead us to condition
our analysis of it.
Basing analysis on assessments of legitimacy is dangerous because
they change so often and are easily manipulated, making analysis rely-
ing on such judgments similarly so. For example, several authors have
observed that much analysis in context of terrorism is conducted by
making initial, a priori judgments about actors (such as their legitimacy)
and then both presenting such subjective judgments as objective reality
and ultimately using this evaluation to judge any further evidence of
the actions of that actor. Sometimes this initial judgment is made nearly
a priori, for example, in some cases of members of diaspora groups or
involvement in other illicit behavior (for example, a hawaladar arrested
for not registering his remittance business). Therefore, the actions of a
person giving money to HAMAS, once judged to have done so, are seen
in that light. Thus protestations of innocence become “denials,” and
lack of evidence becomes skill at “deception.” This also works the other
way. Legitimate actors involved in financing terrorism, once judged
to be legitimate, become exempt from being judged as financiers of
terrorism. The point here is not that legitimacy is epistemologically irrel-
evant or incorrect, but that it must only be applied for particular uses
within particular contexts, namely when politics and self-interest dic-
tate. In other words, legitimacy deserves a much less important place in
analysis than it is typically accorded. Such a demotion of legitimacy in
the analysis of terrorist financing is likely to be controversial, because it
ignores or even challenges many political positions about the financing
of terrorism.
Myth 5: terrorist finance is a threat to international

security
Terrorist financing is often portrayed as—and more importantly

responded to as if it were—a dire threat to international and national
security. In particular, terrorism-related financial activity is most com-
monly represented as a significant international security threat that
must be countered in order to fight terrorism and safeguard the legit-
imate financial system. This is the foundational perspective upon
which most existing approaches to dealing with the financial activities,
contexts, and dimensions of terrorist actors rest.
This perspective has manifested itself in primarily two ways, both
of which have influenced how terrorist finance is understood more
broadly. This first, called here the “financial war” perspective, reflects the
emergence in the post-9/11 moment of a securitized concept of finan-
cial activity related to terrorism that engendered a transformation of
ideas about terrorist financing and the consequent creation and hard-
ening of certain ideas about the issue. Efforts to “combat” the financing
of terrorism (CFT) were thus framed in terms that could be presented as
apolitical efforts to “secure” the financial system against terrorist money,
even though, as this book and the critical works below demonstrate,
doing so is intrinsically and unavoidably a political project involving
the promotion of certain actors and interests against and instead of
others.
Even though terrorism is not new (and one can assume neither would
terrorist engagement in economic transactions), the idea that terrorist
financing is itself an international security concern is. In fact, terror-
ist financing was not explicitly seen as a security issue until relatively
recently. Prior to the expansion and formalization of the CTF regime
in the post-9/11 period,96 the international community and individual
states had weaker regimes against money laundering, drug trafficking,
criminal finance, and other finance-related “public bads,” including ter-
rorist financing.97 None of those issues, however, were considered an
issue of national or international security, even if that which the finan-
cial activity supported was, as with terrorist acts. This began to change
after the 1998 bombings of the US embassies in Kenya and Tanzania,
and accelerated greatly after the terrorist attacks in the United States on
September 11, 2001. After the 1998 bombings, the United States pushed
the international community to recognize that both “assisting” terror-
ism, including through its financing, as well as “acquiescing” to such
activity are on par with actually “organizing, instigating . . . or partici-
pating” in terrorism.98 In 1999, this principle was further codified by
UN Security Council Resolution 1269, which called on states to “pre-
vent and suppress in their territories . . . the financing of any acts of
terrorism,” and to “deny those who plan, finance or commit terror-
ist acts safe havens.” This marked a significant change to the previous
representation of terrorist finance as one of many forms of illicit finan-
cial activity, and can be explained by the concept of securitization.
Securitization occurs when the perception of a policy or political issue
evolves into being seen as essential to survival, that is, a threat to one’s
“security,” which “is dependent on both the status of the actor pro-
moting the securitization of the issue, and on whether similar issues
are generally perceived to be security threats.”99 Once an issue has
become securitized, this legitimizes otherwise or previously illegitimate
acts as “necessary” and “extraordinary” means to resolve the security

problem.
Under the regime in the late 1990s, financial activity would be consid-
ered a security issue if it “assisted” terrorism. In effect, this securitized
“terrorist money,” and thus broadened the scope of actors that could
be considered to be involved in terrorism—that is, not just those that
planted the bombs but also those who paid for them to do it—and
also therefore those that could be subject to counterterrorism efforts.
In other words, previously legitimate acts (providing financial support
for those deemed to be terrorists by the United Nations) became not
only illegitimate but also a threat to international security. This pro-
cess of securitization accelerated in the historical moment following the
September 11, 2001 terrorist attacks.
In parallel to and very much a complement to the Financial War
has been a great expansion of a second approach, that which is often
termed “financial intelligence” or more pithily “following the money.”
Whatever the term, it refers to the exploitation of knowledge of the
financial activities of terrorists as a tool against them, specifically to
identify, monitor, and ultimately act against terrorist actors. Financial
intelligence is therefore a lens through which other terrorist threats can
be better understood and confronted. In practice, it is a difficult and
resource-consuming combination of extensive investigations, research
and analysis of the various social, cultural, political, economic, and
financial complexities relevant to the particular case, and decision-
making reliant on subjective judgment calls as much as, or even more
than, objective fact.
The strategy is based, however, on the belief that the value of finan-
cial intelligence often outweighs the value of actually stopping the
terrorism-related financial activity being monitored. For example, in a
complex operation the US Central Intelligence Agency (CIA) success-
fully deployed Pakistani-American case officers to infiltrate a money-
services business in Pakistan to such an extent that the Agency was able
to essentially “run” al-Qa’ida’s bank100 for over a year, collecting a host
of valuable information about the operations of those who used its ser-
vices. It was reported that this financial intelligence operation helped
lead to the arrest of Khaled Sheik Mohammad and played a role in pre-
venting several terrorist attacks.101 The financial intelligence approach
has also led to intensified governmental efforts to track, monitor, and
analyze potential terrorist financing activity, including the establish-
ment of “Financial Intelligence Units (FIUs)” in nearly every country
in the world and other governmental organizations with this explicit
mission.102 The value of the financial intelligence strategy in the larger

counterterrorism context has been widely recognized, here described
by former CIA Executive Director Busy Krongard in terms of the ini-
tial inter-agency group tasked to combat terrorist financing with the
US government in the wake of 9/11:
The financial area was the most successful, coordinated area in the
entire government in the war on terror. From what this group did,
we got enormous benefits from it. It was the best example of real
coordination of any, I think. They worked quietly, under the radar.
Everyone benefited.
Compared to “financial warfare,” the financial intelligence approach in

many ways represents a more nuanced and contextualized securitiza-
tion of the financial activities of terrorist groups. It forces responses to
terrorist financing to be set firmly within broader operational, political,
and other contexts, and thus forces at least some understanding of these
contexts. Financial intelligence also rests on the assumption that finan-
cial activity is a security issue—and thus also “securitizes” the activity
itself—but largely does much more directly in the context of actual ter-
rorist actors, instead of just in context of “terrorism” in general. This
implies that a more nuanced, contextualized way of understanding ter-
rorist financing is not only possible, but desirable, especially if it could
be tied to a more explicit awareness of and engagement with one’s own
intellectual, political, and operational goals.
The problem however is, as mentioned at the start of the book,
that there currently exists no coherent conceptual framework to sup-
port such a nuanced and contextually sensitive approach. For instance,
there is—surprisingly given the political, institutional, and techni-
cal attention given to terrorist finance—still no consistent concept
of what activities constitute terrorist financing versus which do not;
no coherent explanation for how or why certain actors and behav-
iors are involved in financing terrorism, but similar ones in similar
times and places are not; and even no viable framework to system-
atically identify, contextualize, and otherwise give meaning to global
and localized trends and variations in terrorist financing. Address-
ing all these would be vital to any systematically successful effort
to collect and exploit financial intelligence against terrorist actors,
not to mention, as Sharman writes, justify the exponential growth
in size, scope, and power of the “specialized bureaucracies” that do
not seem very capable of “countering” terrorist finance but which
nevertheless “usurp democratic control in the name of administrative

efficiency.”103
First, this de-problematized understandings of terrorism. Surely, if one
is to view terrorist finance as a threat, then one must be able to define
terrorism. But the perspective that terrorist money is a threat is necessar-
ily based on only a partial and unjustifiably depoliticized perspective of
terrorism and terrorists. In his discussion of the inherent difficulties in
defining terrorism, Hoffman observed that “most people have a vague
idea or impression of what terrorism is but lack a more precise, concrete,
and explanatory definition.”104 In most terrorist financing literature,
“terrorist” generally refers to designated FTOs, but these of course are
political designations. Therefore, unless we are willing to accept a single
definition of terrorism—which none but the most brazenly ideological
are—then we must accept that we cannot conclude that the financial
activities of terrorists are necessarily a threat to international or national
security, given that there is and will never be any consensus on how
exactly to define the terrorist threat. The only alternative to this is to
understand and act against the threat of terrorist financing using defi-
nitions of terrorism with which one may disagree. For example, many
whites in Apartheid-era South Africa referred to Nelson Mandela and the
African National Congress (ANC) as terrorists, although for most in the
world Mandela and his political party represented justifiable resistance
to repression. Thus until there is a universally accepted definition of ter-
rorism (or unless one claims there is one), then analytic allowances for
different political interpretations of what terrorist financing is and is not
must be made, which in turn implies that no universal claim that the
financing of terrorism is a threat is possible.
Second, the securitization of terrorism- or terrorist-related financial
transactions on one hand served to decouple terrorist financing concep-
tually and practically from other financial public bads like corruption or
money laundering, which remained an issue of financial sector gover-
nance, rather than national and international security.105 This had the
effect of de-problematizing terrorist financing, in that it engendered cer-
tain universalizing assumptions about financial and economic activity
that could be linked to terrorists or terrorism, namely that such asso-
ciated activity represented a security threat and must be countered.106
As the critical literature and this book shows, however, terrorist financ-
ing is an inherently “problematic” issue that relates to many intrinsi-
cally contestable issues of international relations, and thus such assump-
tions simply must be nuanced within a coherent representational
framework (like that which is proposed in this book). Paradoxically,
the securitization of terrorist money also led directly to the applica-

tion of certain concepts and policies designed for financial crime issues,
especially money laundering, to the issue of terrorist finance. The con-
cepts so applied can be summarized by the common belief that terrorist
financing is in essence “reverse money laundering,”107 in that terrorist
financing involves obscuring the illegitimate end use of money, whereas
traditional money laundering is the process of obscuring the illegitimate
origin of money. However, as the critical literature on terrorist finance
and this book observe, this occurred not because such conceptualiza-
tions were appropriate for terrorist financing, but because it allowed
terrorist finance to be presented as a depoliticized issue that could be,
with only relatively minor modifications, understood via existing con-
ceptual frameworks and addressed via existing regulatory and policy
approaches.108
Third, it made it much more difficult to systematically analyze what
economic activity should be counted (for example—all, by what level of
separation, that with intent, that with negative outcomes, and so on),
and just as importantly, what activity should not be counted. For exam-
ple, a supposedly reliable indicator of involvement in terrorist financing
is that a positive “link,” “association,” or “relationship” with a known
or suspected terrorist actor indicates involvement in terrorist financing.
Used throughout the literature as well as extensively by law enforcement
and intelligence agencies,109 this indicator generally operates according
to a two-step reasoning process. First, the analyst determines who is a
terrorist, via for example official lists of designated terrorists, defendants
in terrorism-related court cases, or information that the actor overtly or
covertly supports a terrorist group or associated socio-political cause.
Second, any money that flows to and from this actor is thus either
financing terrorism (if it goes to something somehow associated with
the terrorist group or its cause), or part of the laundering process (layer-
ing, placement, integration), or other criminal deception. This method
of finding meaning in “links” to terrorists is extremely problematic,
however. For example, the 9/11 Commission Report took to task those
that acted on such spurious linking:
These initial designations [of suspected terrorist financiers in the

wake of 9/11] were undertaken with limited evidence, and some were
overbroad, resulting in legal challenges. Faced with having to defend
actions in courts that required a higher standard of evidence than was
provided by the intelligence that supported the designations in the
first place, the United States and the United nations were forced to
“unfreeze” assets. The difficulty, not completely understood by the

policy makers when they instituted the freezes was that the intelli-
gence community “linked” certain entities of individuals to known
terrorist groups primarily through common acquaintances, group
affiliations, historic relationships, phone communications, and other
such contacts. It proved far more difficult to actually trace the money
from a suspected entity or individual to the terrorist group, or to oth-
erwise show complicity, as required in defending the designations in
court.110
In practical terms, this myth makes it difficult if not impossible for CTF
efforts to adapt to different situations or evolve over time. For exam-
ple, monitoring financial and economic transactions involving terrorist
actors—that is, exploiting financial intelligence—is an underutilized
tool, and is so because of this popular myth. Given that “financial activ-
ity” can encompass any number of actors and actions—from charitable
donations, to logistics and weapons procurement, to generic support for
a larger social or political cause linked to a terrorist or insurgent group—
viewing all such activity as a threat creates serious practical problems
for counter-threat finance professionals. First, it hugely expands the
subjects that an analyst must look out for, so much so in fact that
it can be—and often is—overwhelming to the extent that CTF efforts
become ad hoc and almost random. Second, this greatly raises the possi-
bility of targeting the wrong person or organization. For example, when
the US Treasury designated al-Barakaat as a terrorist financier, it also
destroyed with the stroke of a pen the primary means by which expa-
triate Somalis sent money back home, which had the effect of further
impoverishing Somalia and thus enhance the alienation and despair
that terrorist groups like al-Shabaab are able to exploit. This designation
occurred because the assumption was that since al-Qa’ida had appar-
ently used al-Barakaat in some way, that this financial activity was a
threat and should be destroyed, without noticing not only that al-
Barakaat is an organization, but also that such a CTF action actually
became counterproductive in relation to the actual threat.
The reality: terrorism is a threat, and understanding its

economic dimensions is a means to analyze and address
this threat
Terrorist financing is not a threat to international security. Instead,
the reality is that terrorist actors are the threats, and that exploiting
information about their financial activities is simply a defined and lim-

ited means by which this threat can be addressed. Clarifying means
and ends as such implies in turn that “terrorist finance” is bet-
ter represented as a set of political-economic interactions that both
impact the dynamics of and reflect information about threats to
international security. In summary and for a combination of rea-
sons (most especially the post-9/11 Financial War), the emergence
of the strategy of financial warfare led to the deproblemization
and depoliticization of the intrinsically problematic and politicized
issue of terrorist finance. This in turn exacerbated existing and pro-
duced new concepts and assumptions about terrorism-related finan-
cial activity that, as will be discussed later, have proven to be
misapplied, empirically or conceptually deficient, and even tangibly
destructive.
Even though it is common to think so, nevertheless terrorism-related
financial activity cannot logically be a threat, because thinking that it
is leads us into logical contradictions. Terrorists are, logically, viewed
as a threat (to the West at least). Furthermore, as we have seen, given
that terrorist actors are socio-political actors that interact with societies,
communities, and individuals in many different ways and for a num-
ber of different factors, and financial/economic interaction is a subset
of these multi-level/context/factor social interactions and can take vir-
tually any form, or in other words that capital is indeed “contested and
contingent” as de Goede claims;111 therefore, the financial interactions
of terrorist actors should not be considered a threat, but instead a set
of socio-economic activities that condition, shape, and otherwise affect
the threat (terrorists).
For example, if terrorist-related financial activities are a threat, then
what if they lose all their money? Or even make a lot of money, but
then in doing so give up terrorism (as may have been the case with the
PIRA and its alleged robbery of the Northern Bank, as discussed above)?
In these cases terrorist financing actually diminished a threat. If terrorist
financing is a threat, then it is inherently impossible to counter terrorist-
related financing activity in a just way, because—given that terrorist
financing activity is in many instances banal and identical to legitimate
financial activity—and in theory can lead to positive outcomes—we
must therefore wait until it has occurred (to make sure it is actually ter-
rorist financing activity) and seen the consequences (to make sure it has
negative outcomes). This means that we are left with a choice of either
being just but also ineffectual, or being effective but also inherently
unjust.
Therefore, the view that terrorist financing is a threat is wrong because

it ignores outcomes of this financial activity, and leads us down a slip-
pery slope in which justice and effectiveness are in conflict. This is
because if the state deems that any activity can potentially be involved
in financing terrorism, then potentially any activity in which one is
involved can be deemed terrorist financing by the state. In other words,
because “terrorist financing” cannot be defined by actual conduct (that
is, other than via a tautological formulation like “financial activity
related to terrorism”), it must be defined by some sort of political
judgment about the economic behaviors involved. This is not neces-
sarily contradictory with liberal principles, but can become so if those
political judgments—and thus determinations of terrorist financing
activity—become arbitrary.
Given that the myth that terrorist financing is in itself—that is, sep-
arate from terrorism—a threat is the ideational basis of most efforts to
combat the financing of terrorism, this orthodoxy has manifestly failed
to produce knowledge about terrorist finance that is coherent, compre-
hensive, or particularly useful. Representing terrorist financing in these
terms has also therefore manifestly failed to achieve the intellectual,
policy, or operational goals toward which this representation was origi-
nally directed at achieving. For instance, although there is not currently
a consistent understanding of which activities and behaviors consti-
tute terrorist financing versus which do not, nevertheless potent laws
and regulations oblige banks across the world to develop and deploy—
at great cost—methodologies and policies to calculate the “risk” that
a specific financial transaction constitutes terrorist financing activity,
even though without such understanding such “calculations” naturally
are almost certain to be inadequate. Similarly, intelligence and law
enforcement agencies in many countries have taken legal and lethal
action against people determined to be “financing terrorism,” despite
the fact that no coherent explanation currently exists for either how
or why certain actors and behaviors are involved in financing terror-
ism but similar actors and behaviors are not, or a viable framework to
identify, contextualize, and otherwise give meaning to global and local-
ized trends and variations in terrorist financing currently exist. This
is significant to the international system because, in the above and
other ways, the orthodox representation of terrorist finance has not
only been used to produce knowledge used by governments, the private
sector, and academia to comprehend and research terrorist financing,
but also which has provided potent justification of and explanation for
various coordinated exercises of state and private sector power against
those individuals, charities, socio-political movements, and others that

are—or at least are perceived to be—involved in “financing terrorism.”
Analytic implications
The reality that terrorists are threats and their financial activities are
not threats in themselves but instead shape and influence the nature
and consequences of whatever threat is posed by the particular terror-
ist actor carries two main implications. First, conceptually, this embeds
understandings of terrorist finance into the so-called liberal problematic
of security. Terrorist financing is embedded within a “liberal problematic
of security,” which, to review, means that even successfully securitizing
terrorism-related financial activity does not produce “more” security,
but instead simply changes the conditions in which certain (desir-
able) actors and actions achieve gains relative to their undesirable
counterparts.112 For example, as discussed above, just because a terrorist
group has more (or less) money, it does not necessarily mean that it will
commit more (or less) terrorism. Conceptually, the reason for this is that
the impact the acquisition and exchange of value has on the capabilities
and behaviors of terrorist actors depends on a host of other factors that,
depending on the actor in question, could include anything from moral
considerations to cultural traditions to social practices to the psychology
or strategic calculations of group leaders. This is exactly why, as argued
above, the “right” questions to ask about terrorist finance relate to how
the exchange of value impacts terrorist actions, and what such exchanges
reflect about terrorist actors’ wider relationships. Thus, the reframed
conceptualization of terrorist finance presented here remains an issue of
international security, but one in which a complex of other factors deter-
mine exactly how political-economic activity is securitized. Ultimately,
the eponymous “problem” arises in that whether these changed condi-
tions are sufficiently beneficial—and to whom they are beneficial—are
highly contestable and by no means objective. This matches closely
with de Goede’s existing conceptualization of terrorist financing as
a problem of politicized representation of certain securitized (that is,
terrorism-related) financial activity.113
Second, and more practically, this limits the focus of terrorist financ-
ing research and analysis and implies a more limited and focused
conceptualization of terrorist financing that is oriented toward under-
standing the precise instrumentality of financial success or failure on
terrorist behavior and on seeking out what can be learned about terror-
ism’s larger contexts from its financial underpinnings. This latter point
complements and adds to similar socially embedded and contextualized
turns in both terrorism and conflict debates. It also implies that CTF
efforts are simply a means to defined, limited, and specific strategic and
tactical ends.
Myth 6: systematically understanding terrorist finance

is unrealistic
While terrorist finance, as discussed throughout this book, is complex,

the issue is often perceived to be so difficult that systematic under-
standing of it is unrealistic. For instance, within spheres of CTF practice
distinguishing individual terrorist financing transactions from those not
related to terrorist actors has been compared to finding a specific nee-
dle in a stack of identically looking needles.114 Dennis Lormel, retired
chief of the US Federal Bureau of Investigation (FBI)’s Terrorist Financing
Operation Section, has stated similarly that terrorist finance “is com-
plex and difficult to understand, let alone identify,” and thus simply
“cannot be viewed from a generic or all encompassing standpoint.”115
Within the financial services industry, an unstated consensus exists that
is “all but impossible” to determine in any systematic way what finan-
cial behaviors might indicate involvement in terrorist financing, in large
part because of the issue’s inherently politicized nature.116
These doubts are echoed in academic discourse. De Goede, for exam-
ple, compellingly argues that what is generally meant by the term
“terrorist finance” is not an “unproblematic reality” but at core a secu-
ritized, “mediated” way of imagining certain (namely, terrorism-related)
political-economic interactions. However, she goes further and implies
that research into terrorist financing can never involve identifying any
“prior material reality” about the economic interactions of terrorists,
and at best we can only understand terrorism-related economic inter-
actions as “artefacts” and in terms of their “institutional and technical
effects.”117 The implication, in other words, is that because research into
terrorist financing is inherently subjective, it must in essence be a slave’s
errand, in which attempts to understand the “material realities” at hand
are destined to serve the analyst’s particular master. Levi too repeats rea-
sonable perhaps, but ultimately, false assumptions about the feasibility
of systematic research on terrorist finance, writing:
It is difficult, perhaps impossible, to conduct much publicly falsifi-

able research on these issues, partly because most of the data are
highly classified and therefore not open for inspection, partly because
of counter-intelligence risks that flow from explicit analysis of tech-

niques of detection/suspicion and partly because there is little official
thirst for informing the public about results, especially where the
results are modest.
Our failure to systematically understand terrorist finance cannot how-

ever be excused away by conveniently claiming that “most of the data
are highly classified”—given that, as has been extensively documented,
governments actually collect very little intelligence or other official
data on non-Western, informal, and extra-legal economic activity, espe-
cially in the parts of the world in which most terrorist organizations
operate.118 Instead, our analytic shortcomings have much more to do
with the simple fact that very few in government, academia, or journal-
ism have bothered to collect data on the localized, ad hoc social, polit-
ical, and economic realities of terrorist finance, or, if they have, would
even know how to properly analyze and interpret this information.
Given the above, it is worthwhile to ask, why bother? If analysis of
terrorist finance is not only so subjective that intellectually and ethi-
cally sound research is impossible but also so complex, difficult, and
politically problematic that those in the world of practice cannot real-
istically expect to ever use it—let alone comprehend it in any coherent
way—then there seems to be little point in trying to untie this Gordian
knot. I argue, however, that terrorist finance has proven difficult to
understand because practitioners and scholars alike have failed to appre-
hend that the central puzzle for understanding terrorist financing is
how to conceptualize the material realities of terrorist finance in a way
that can be used simultaneously by analysts from multiple political and
research perspectives. More simply, terrorist financing is poorly under-
stood not because current knowledge of it reflects power structures, but
because it reflects only certain power structures. Nordstrom observes
a similar problem regarding extra-legal economic activity in general.
Huge swaths of global economic—and crucially therefore also social and
political—activity, she notes, are in effect “deleted” from our collective
understanding:
Leaving illegal economic activities out of the globalization

debate . . . is part of a much larger process. While there are excellent
studies of extralegal activities in the world, none are incorporated
into formal governmental and international organization economic
indices. . . . Deleting the illicit from formal economic analyses is not
mere happenstance: it is linked to political and economic control.
Such control . . . require that the figures on the extrastate and practices
that underlie them are neither transparent nor accountable.119
I argue thus that those who desire and can utilize nuanced, systematic
understandings of terrorist finance more than they seek and can use nar-
row or self-serving polemic should construct and apply an approach to
understanding this topic that serves that purpose. As such, this book
wades into much more philosophically important—and turbulent—
waters where ideas and action, philosophy and politics, and knowledge
and power intermix. As we have seen, terrorist finance is often under-
stood in ways to imply that understanding it requires one to uncover
dark secrets about the global “infrastructures” and “mysterious”120 net-
works that supposedly finance terrorism. However, as has been dis-
cussed, while the world of terrorist finance is indeed often invisible and
inaudible, it is very much knowable and comprehensible. This section
argues that in general terms this can be accomplished by terrorist financ-
ing research that is interdisciplinary, systematic, and explicitly goal-
oriented. Ultimately, even though how one understands terrorist-related
economic activity is politicized, such research can indeed be logical,
rational, and useful. After all, while objectivity may be impossible in
this topic, being systematic is not.
The reality: analysis of terrorist finance can be systematic,

albeit not objective
The reality is that terrorist financing can be understood systematically,
if structured appropriately. I propose the following way to structure
terrorist financing research, which represents at least the initial contours
of an approach to building knowledge and understanding of terror-
ist finance that is generalizable and applicable throughout all fields of
intellectual endeavor.
One must thus first become explicitly aware of, if not state outright,
one’s general analytic outlook regarding the analysis of terrorist financ-
ing activity. This will help frame the research and provide a way to judge
the significance and virtue of the research. For instance, one can assume
that differences in profession and probably to some extent also nation-
ality, experience, and other personal characteristics will mean that the
analytic focus of a US law-enforcement official will differ considerably
from, say, an European academic researcher. It is important to be con-
scious of how one’s objectives changes which particular activity should
be included in analysis, so as to not ignore legitimate or banal activ-
ity that runs counter to one’s political perspectives. For instance, a law
enforcement official may reasonably “delete” law-abiding actors from

his or her understandings of terrorist finance; it would be irresponsible
to do so for an academic or an intelligence analyst.
Second and third, analysts of terrorist finance ought to, in parallel,
seek to build knowledge of both the material and cognitive aspects of
both the terrorist actor and the social, political, economic, cultural,
and institutional space(s) with which one is concerned, respectively.
Of course if one begins with a terrorist actor in mind, then the soci-
etal spaces to be analyzed would be those with which the chosen actor
interacts; while if vice versa, then the terrorist actors would simply be
those existing within the chosen space. For example, if one wishes to
understand the financing of the IRA, one must explore at least Northern
Irish society, Irish American communities in the United States, and the
various extra-legal linkages and flows with which IRA members inter-
act, among others; and conversely, if one wished to examine terrorist
financing in the United Kingdom, then one would need to expand
the focus to include the societal spaces relevant to all terrorist actors
active in the United Kingdom. Doing so requires examination of the
fullest range possible of political-economic dynamics, such as local sup-
ply chains, known trafficking routes, charities, and others, as well as,
when examining terrorist actors, to privilege especially analysis of the
material and non-material needs of the actor and how they meet them,
more than the ideological or other makeup (except how it pertains
to that prior). This helps ensure better understanding of both familiar
and unfamiliar political economies, as well as the true place of radi-
cal communities, armed groups, and terrorist movement within these
contexts.
Fourth, the analyst should investigate any interesting overlaps and
relationships, as well as any unexpected gaps or anomalies between
how terrorist actors behave economically and what would be considered
“normal” in the relevant societal context. This step, critically, serves to
limit analysis to only those aspects of terrorism-related economic behav-
ior that is relevant to the analyst, judgment of which is obviously up to
him or her.
Fifth, the analyst should return to their foundational analytic purpose
and assess more explicitly his or her analytic objectives and make judg-
ments about how exactly he or she will utilize the knowledge developed
in step four. For example, a scholar specializing in security studies might
highlight specific points of interest about a particular terrorist group,
while an anthropologist interested in illicit economies might seek to
conduct further research into particular avenues in order to contribute
to relevant discursive debates.
In some ways, understanding terrorist finance thus requires knowing

everything about everything—not only how a terrorist group functions
and acquires resources, but also about the various local political, social,
and economic dynamics all along their supply chain, as well as about
all the nuanced ways of monitoring, investigating, and countering such
activity. However, with the approach described above and throughout
this book, I argue that systematic research on terrorist financing may
not be easy, but is entirely possible.
This chapter built on Chapter 1 and confronted certain common mis-

conceptions and misrepresentations about terrorist financing activity
via a discussion of six commonly held “myths” and the corresponding
“realities” that challenge these myths. We saw that terrorist finance in
fact concerns the exchange of value in all its forms, rather than simply
money, and that the phenomenon is much more accurately conceived
as a compendium of individual, often ad hoc, exchanges rather than in
terms of vast, mysterious terrorist financial infrastructures and networks.
This implied, first, that meaning and importance of specific terrorism-
related exchanges of value are thus similarly subjective, and, second,
that the meaning and importance of research on terrorist finance there-
fore varies with the circumstances and one’s objectives and priorities;
and helps shift the emphasis away from conjectures about the larger sig-
nificance and relationships about which there is no evidence, and focus
analysis on actual terrorism-related economic transactions and activities
and their meaning for terrorists and significance to the analyst.
We also saw that terrorist finance activity is not always illicit activ-
ity, and that more or less financing does not necessarily equate to more
or less terrorism. Terrorists, as socio-political actors, interact with differ-
ent communities and in different ways, many or perhaps even most of
which are locally perceived as legitimate, if not legal. This demonstrated
that the legality of terrorist finance is of limited analytic relevance,
primarily only in terms of specific policy objectives (for example, pros-
ecution, counterterrorism, and so on), and that analysis of terrorist
finance must actively consider the often great differences in the eco-
nomic, socio-cultural, political, and institutional realities that drive and
give significance to terrorist financing activity.
Finally, the chapter challenged notions that terrorist finance both is
too complex and subjective to research systematically, and represents in
and of itself a threat to international security. In the first instance, the
chapter discussed that while terrorist financing research can be complex
and difficult, it can be successfully researched and understood with sys-
tematic and coherent methodologies that can be used by analysts from
multiple political and research perspectives. In fact, it was argued, doing

so is the central puzzle for terrorist financing research—how to concep-
tualize the activity without privileging certain positions. The chapter
then outlined a new approach to terrorist financing research that is
interdisciplinary, systematic, and explicitly goal-oriented. In the second
instance, the chapter demonstrated that in fact terrorism is the security
issue, not its financing; and that therefore “terrorist finance” is better
represented as a set of political-economic interactions that both impact
the dynamics of and reflect information about threats to international
security.
3
Asking the Right Questions about
Terrorist Finance
This chapter finds that the term “terrorist financing” is a misnomer

in that much of the activity encompassed by that term more accu-
rately relates to either the flow of economic and material value to
“terrorist” actors or specific material expressions of support to “ter-
rorism,” however that contested term is defined. This conclusion not
only directly challenges the dominant ways terrorist finance is now
conceptualized but also provides the first unified coherent conceptual
framework capable of supporting systematic analysis of the topic. This
chapter arrives at this conclusion by “asking the right questions” about
terrorist finance, which enables one to reframe analysis of the topic on
how financial activities influence the behavior of terrorist actors, and
what financial activities tell us about how terrorist actors relate to wider
local, national, and global societies. Building on this book’s previous
chapters, this alternative representation of terrorist finance develops the
epistemic foundations for an alternative and ultimately superior concep-
tual framework for representing and conceptualizing terrorist finance.
In particular, it concludes that terrorist financing is better represented
dichotomously as either terrorist interaction with “value chains,” or
material expressions of support for socio-political movements or com-
munities somehow associated with terrorism; the subjects of Chapters 5
and 6, respectively.
The right questions about terrorist finance
This section presents the foundations for an alternative and ultimately

superior conceptual framework for representing and conceptualizing ter-
rorist finance. It begins in the first section by arguing that, given the
intrinsically contested, intersubjective, and complex nature of terrorist
97
financing, it is more salient to focus analysis explicitly and exclusively

on how financial activities influence the behavior of terrorist actors,
and what financial activities tell us about how terrorist actors relate to
wider local, national, and global societies. This represents an alternative
epistemic starting point for the analysis of terrorist finance that, this
book demonstrates, is both more accurate and more useful than focus-
ing analysis around the commonly asked—but “wrong”—questions of
“who finances terrorism and how do they do it.” The “right” questions,
I propose are as follows:
1. How do financial activities influence the behavior of terrorist actors?

2. What do financial activities tell us about how terrorist actors relate
to wider local, national, and global societies?
Question 1: how do financial activities influence the behavior

of terrorist actors?
This first question relates to what terrorist financing tells us about ter-
rorists—especially their capabilities and behaviors—and thus in essence
focuses on understanding the instrumentality of financial activity to ter-
rorist actors. Answering this question lies at the heart of any effort
to understand how terrorist actors are influenced by their economic
circumstances, including for example financial intelligence efforts,
counterterrorism policies, or academic research into the actions of
terrorist actors.
It is common sense to state that financial activities are in some man-
ner instrumental to terrorist activity. Many analyses in the literature,
however, assume that the instrumentality of terrorist financing is merely
a reflection of the capability of terrorist groups. In this conception,
terrorism is portrayed as a simple “motivation + capability” equa-
tion, with financial activity being a, if not the, key determinant of
the latter variable.1 This claim is somewhat obvious. As we have
already discussed, financial dynamics do indeed generally influence
the capabilities of terrorist actors, as well as their short-term tactical
decisions and long-term strategic directions.2 However, the discourse
provides little to no insight into exactly by what geometry financial
activity is instrumental to terrorist activity, leading to the mistaken
impression that terrorism-related financial activity is simply the prod-
uct of functional calculations, even though the evidence clearly
indicates that on both tactical and strategic levels financial activity
is as much a product of social, political, and economic contexts.3
Asking the Right Questions about Terrorist Finance 99
Financing is thus an instrument of terrorists’ capabilities, but—

importantly—one that appears to function primarily according to
the particular political-economic dynamics in which terrorist actors
operate.
One important implication of orienting analysis to how financing
affects terrorist behavior is that it shifts the focus to the diverse set of
individual choices that in reality comprise the so-called financial net-
works and infrastructures of terrorist actors. More precisely, given that
terrorism is a form of political violence, asking this question implies that
terrorist financing is at core an issue of political-economic decision-making
within certain contexts. This limits analysis of terrorist finance to specify-
ing the relationship between terrorist behavior, the political-economic
contexts in which terrorists operate, and the purpose of analysis. Once
so disciplined, analysts can systematically identify the social, cultural,
economic, psychological, normative, ideological, and political dynamics
of terrorist-related financial activity in terms that explicitly serve their
particular analytic goals; thus creating more useful datasets specifically
of terrorist capabilities and the multi-dimensional factors influencing
those capabilities, which would of course offer a much more potent
body of knowledge upon which to base policy and action than is
currently available.
Underlying this question, however, is the conclusion that the realities
of terrorist financing are fundamentally relational, in that they have
no meaning except in relation to either other realities (for example, the
military capability of a terrorist group) or one’s purpose of analysis (for
example, to identify associated law-breakers). This in turn means that
defining, specifying, and analyzing those relational elements, whether
the cultural context of terrorist financing activity or the biases of an
analyst, must be at the core of any analysis. This matches with under-
standings of finance and money from poststructural and economic
sociological approaches to international relations and political econ-
omy. For example, Dodd observes that the value ascribed to money, in
whatever form, exists only in relation to the various social networks and
discursive constructions upon which rest people’s expectations about its
value over time and space.4
Given that accepting that terrorist financing is meaningless except in
relation to something else may seem hopelessly “postmodern” and thus
useless to many, especially perhaps in the counterterrorism and financial
intelligence communities. However, the intrinsic relationality of terror-
ist finance is crucial to achieving a systematic—and therefore practically
applicable—conceptual basis for understanding the issue. In order to
further specify the dynamics by which financial activity is instrumental

to terrorist activity—and also to counter any claims that this is sim-
ply soft-minded relativism—it is useful to incorporate the neoclassical
economic conception of “flow.”
Economists uses the term “flow” to describe problems in which the
analytic objective is not to measure variables in an absolute sense (which
is termed a “stock” problem), but to assess the importance of each
variable relative to something else.5 The most common example of a
“flow” problem in economics is economic growth, a product of many
variables, including, for example, the production and consumption of
financial, material, human, and social capital, the efficiency of institu-
tions, technological progress, each affecting positively or negatively the
others. These variables are incorporated into one predominant metric
of growth—Gross Domestic Product (GDP), which measures not abso-
lute economic wealth, but economic wealth relative to certain specified
variables, in this case time (per annum), and also often population
(per capita).
Terrorist financing is a similarly structured problem. Although it is
also the product of many distinguishable variables, such as motive, ide-
ology, economic desire, cultural obligations, and so on, nevertheless the
important metric depends on the relative relationship among these vari-
ables. However, researchers, governments, and the media often frame
terrorist financing as a stock problem—that is, how much money do ter-
rorists have, and how do they produce, move, and spend it—resulting
in analysis that largely revolves around determining which actors and
actions should or should not be stuck with the “terrorist financing”
label. The problem, however, is that even if the variables of terrorist
financing were identified (for example, by more accurate behavioral
profiling, perhaps aided by modeling and simulation or other informa-
tion technologies), current epistemological formulations prevent any
thorough analysis of how they relate to one another, and thus hin-
der systematic assessment of how financial activities are or are not
instrumental of actual terrorism-related behavior.
This is because the financing of terrorism is demonstrably an issue of
flow—how much resources do terrorist use per relevant unit. For exam-
ple, it is obvious that it is less important to know the absolute size of
the stock of wealth possessed by a specified terrorist group, and more
important to know exactly where, when, how, why, and for what they
use this wealth. In her examination of the global extra-legal economy,
Nordstrom offers an anthropological explanation of “flow” that is very
useful for its application to terrorist financing:
Modernists have a long tradition of taking “place” very seriously and

assuming its centrality in shaping identity. The state is about the
static. The defined and the bounded. It has borders that are set and
inhabitants that have sovereign identities that are equally set. . . . Flow
carries a set of cultural realities shaped by the people creating it
is (rather than merely being composed of) political, economic,
philosophical, and poetic forces. [Emphasis added]6
Thus, just as economic growth concerns the relationship between

income, time, and population, applying the concept of “flow” to our
understanding of terrorist finance points us toward analysis of the
political-economic relationships, interactions, and movements within
the global system that produce power, value, identities, motives, behav-
iors, and even actors that relate to those we deem to be “terrorists.”
Interestingly, while this concept of “flow” is conceptually similar to soci-
ological perspectives of “markets”—which hold that markets are “fully
social institutions, reflecting a complex alchemy of politics, culture,
and ideology”7 —the concept of flow or any similar conceptualization
that is capable of being used to systematically understand and research
relational political-economic exchanges cannot be found in either Inter-
national Relations or International Political Economy (IPE) discourse.
Regardless, it nonetheless superbly articulates the constant interplay
among forms and practices of power, the exchange of value, and indi-
vidual political-economic decision-making within varied social orders
that lies at the heart of the financing of terrorists as well as our under-
standing of it.
Question 2: what do financial activities tell us about how terrorist

actors relate to wider local, national, and global societies?
The second “right” question relates to what terrorist financing tells us
about society, specifically about terrorists’ relationships with and within
it. This implies that in reality the financial activities of terrorists are
not just instruments of specific terrorist objectives but also reflections of
their complex relationships with various members of and trends in rel-
evant societies. This may not seem like a new insight, as observers as
diverse as Paul Wolfowitz8 and Ibrahim Warde9 have argued that terror-
ist financing is in large part a function of the level of popular support
for a terrorist group. However, “popular support” only captures one
aspect (popularity) of how terrorist actors relate to wider societal con-
texts. Instead, the above question compels one to explicitly consider the
full range of social, political, economic, cultural, normative, and cogni-

tive factors that influence and are influenced by the interactions that
make up terrorist financing. More simply, asking this question allows,
and indeed compels, analysts to engage more deeply with the everyday
realities of terrorist finance than is currently possible. As with the first
“right” question, these issues are to date grossly underspecified.
The following congressional testimony about the financial activities
of Hizbullah contains a common but analytically counterproductive
view common in current terrorist financing discourse, and can thus
be used to illustrate the beneficial implications of orienting analysis
of terrorist financing toward analysis of its place within larger societal
contexts:
While some of [the social service] funds undoubtedly paid for

Hizbullah’s military and terrorist operations, other funds enable the
group to provide its members with day jobs, to drape itself in a
veil of legitimacy, and to build grassroots support among not only
Shia but Sunni and Christian Lebanese as well.[Emphasis added]10
This representation is based on an assumption that Hizbullah relies on

a financial “network” or “infrastructure” to fund its operations, compo-
nents of which include the social service organizations mentioned in
the testimony, as well as various donors, legitimate and criminal busi-
ness ventures, and financial middlemen and facilitators. Again, while
this may seem like a commonsense way to describe the financing of
Hizbullah, given that Hizbullah no doubt cynically exploits its social
welfare activities to further its political and military objectives, I argue
that characterizing this as “a veil of legitimacy” summarily excludes
much that is important, and includes too much that is largely irrelevant.
For example, the analytic perspective represented in the above state-
ment obscures the multi-dimensional reasoning behind popular support
for Hizbullah, and the equally complex and nuanced dynamics by
which otherwise legitimate actors (such as businesspeople or even state
governments) choose to interact financially with Hizbullah. To summa-
rize a large and complex topic, Hizbullah arose from, and exists firmly
within, the complicated contexts of Lebanese social, political, and cul-
tural life.11 The group, as one of the two major Shiite movements in
Lebanon, is very much a product of the country’s multi-sectarian soci-
ety, comprised of 18 different sects, the largest and most important of
which are the Sunni Muslims, Shiite Muslims, and Maronite Christians.
To understand its financing, it is unavoidably important to understand
that Hizbullah has evolved from one of many armed factions to become
simultaneously a regional actor (for example, as an armed force that acts
independently and on behalf of its allies Iran and Syria), an influen-
tial socio-cultural player in Lebanese society (for example, as a political
party and media provider), and to a large extent a state-within-a-state
(that has replaced the country’s central government in fulfilling many
aspects of the social contract). Within this context, it is thus significant
that Hizbullah draws large amounts of funds not only from Lebanese
Shia but also from Lebanese Christians, non-Lebanese Shia, and Sunnis
from Lebanon and elsewhere, as well as from Iran and Syria, because this
means that Hizbullah represents the resentments and aspirations of not
only its members (for example, in intra-Shia politics) but also of all Shia
(for example, in Lebanese sectarian politics), and at times all Lebanese
or even all Arabs (for example, during the 2006 war with Israel).
When placed into this general context, it is clear that, for example,
specifying the nature and dynamics of popular support for Hizbullah—
in all its normative, societal, political, and analytic complexity—is far
more intellectually sound and practically applicable than determining
who or what lurks behind the “veil” of Hizbullah’s financial network.
For instance, the US Government would have a different set of policy
options available if financial support reflected actual support for the
group’s political objectives compared to if such support simply reflected
(more temporary) appreciation of Hizbullah providing reconstruction
aid after the 2006 war with Israel (which was more efficient and effective
than that from the Lebanese government).12
In other words, once one shifts focus away from inevitably politicized
debates on who and what should count as part of Hizbullah’s financial
infrastructure or not, and toward a systematic evaluation of what its
financial activities tell us about the group’s place in local and interna-
tional society, a much deeper and more productive understanding of the
terrorist group can be achieved. The practical implication is that such
systematic, societal-oriented analysis of its financial activities could pro-
vide the foundation of knowledge to devise sets of policies to address
these aspirations and resentments and thus undermine Hizbullah and
diminish its capabilities. More generally, by granting significant insight
into both the political economy of Lebanon and Hizbullah’s true place
within it, it provides a basis for outside actors (such as opposing gov-
ernments) to monitor, influence, or undermine both Hizbullah and
its donors (including Iran). In other words, asking the above question
leads to more nuanced assessments that should be crucial components
of liberal democratic responses to terrorism because they provide a
foundation and structure of knowledge upon which rational, effec-

tive, and principled action can take place. The same cannot be said of
current policies that focus robotically on endless, and ultimately irrele-
vant, debates about whether a specific business, charity, or wire transfer
should count as “in” or “out” of Hizbullah’s financial “infrastructure.”
Asking the wrong questions
These common myths—and the dysfunctional thinking about the topic

that they reflect—are rooted in a consistent tendency to ask and
answer the “wrong” questions about terrorist finance, namely “who
finances terrorism and how do they do it.” This section argues that the
dominant representations of terrorist financing, exemplified by these
questions, assume that terrorist financing can be analyzed objectively
and (pseudo-) scientifically, separate from and unconscious of the sub-
jective political objectives and realities such analysis is meant to and
actually does serve. In other words, focusing on the “wrong questions”
produces a discourse that is simply not capable of systematically and
simultaneously assessing the political and normative realities of terrorist
finance, as well as its empirical content. Instead representations of ter-
rorist financing would be both more analytically sound and of greater
practical use were they to center—as is argued in the following chapter—
on how financial activity impacts terrorists’ conduct and capabilities,
and what it reflects about their relationships with wider communities.
I posit that asking these questions is “wrong” because they privilege
knowledge that is secondary to the objectives of terrorist financing anal-
ysis. First, these questions imply a surety and objectivity in the answers
that is simply not warranted given that both terrorism and finance
are inherently contested issues, and consequently diminish the cen-
trally important role of the normative, political, and social contexts of
both the “terrorist financing” activity in question and the analysis of
it. In other words, problem with these questions, on their face, is that
the answer to the who, what, where, when, and how of terrorist finance
is always “it depends.” Who finances terrorism depends not only on
how one defines terrorism but also on conceptions of “financing” (for
example, does only money count, or all forms of value exchange, and
how many degrees of separation from origin to terrorist?), both of which
depend not only on one’s normative and political outlook but also on
one’s analytic purposes. For example, if Iran’s government does not con-
sider Hizbullah to be a terrorist group, should Iranian fund transfers to
the group count as terrorist financing? The answer of course depends on
what one believes about Hizbullah (that is, that it is “terrorist”), as well
as one’s purpose of analysis (for example, a bank will only be concerned
with the funds transfer if and when it is made illegal, while governments
opposed to Hizbullah will be regardless). The same is true of analyzing
“How” terrorism is financed.
Second, analysis of the actors and methods involved in terrorist
finance is in fact secondary to understanding the instrumentality of
financial activity and what such activity tells one about a terrorist actor’s
place in wider communities. This is also because terrorist financing—
as a contested and political issue—is closely tied to the objectives
of the analyst, whether they be from academia, government, or the
financial industry (or from a terrorist group, for that matter). In other
words, “what to look for”—that is, determining the who’s, what’s,
how’s, where’s, and when’s—depends entirely on the purpose and per-
spective of the analyst. For example, “who finances al-Qa’ida” will be
answered differently by a political economist, an anthropologist, an
intelligence analyst, and a bank compliance officer. In fact, because
every analyst of this contested topic necessarily brings different norms,
objectives, and priorities—and thus different ontologies, epistemologies,
and methodologies—to the analysis of terrorist finance, such questions
will be answered differently by a Federal Bureau of Investigation (FBI)
special agent (who would likely be primarily focused on evidence of law
breaking) as by an FBI intelligence analyst (who would likely be inter-
ested in the larger universe of financial support for radicalized social
movements, much of which may actually be legal). However, shifting
and narrowing analysis of terrorist finance to the questions proposed
herein enables analysts from all professional and disciplinary perspec-
tives to analyze the issue on the same plane, without requiring them to
adopt the same perspective or purpose.
To resolve these problems, asking the “right questions” implies that
the epistemic focus of analysis—or the “variables,” if one prefers posi-
tivist language—of terrorist financing should be the dynamics and con-
sequences of political-economic decision-making and its consequences,
rather than the “who” and the “how.” In other words, the “right ques-
tions” to ask about terrorist financing concern the instrumentality of
economic activity for terrorist actors and what such activity tells one
about the relationship terrorist actors have with wider societies. Answer-
ing these questions shows that financial activity is a conditioning—
rather than determining—factor of terrorist behavior, and that the
relationships terrorists have with those that support either them or the
causes for which they fight are as complex and multidimensional as
any other socio-economic interaction. Furthermore, given that terrorist

financing is tied directly and exclusively to the beliefs and objectives of
those analyzing it—that is, the issue’s politics—analysis of the financial
activities requires explicit recognition of one’s purpose of analysis, as
well as enough critical distance so as to not let one’s analysis become
slavishly obedient to specific political whims and ideologies. As we shall
see, only by thus explicitly focusing analysis of terrorist financing on
the impact and the “reflection” of such financial activity can any gov-
ernment or financial institution ever hope to systematically understand
the financing of terrorism, let alone develop successful legal, regulatory,
or political responses to it.
Re-representing terrorist finance
To review and as discussed previously, this book fundamentally con-

ceives terrorist financing to be, again quoting de Goede, “a cultural
imaginary and political problem in need of (security) intervention,”13
which, because it is “mediated” as a security concern, is at core a topic
of securitized socio-political representation.14 From this starting point,
the book has developed the idea that terrorism-related financial activ-
ity is not in itself a threat to international security, but rather a set
of political-economic interactions that both impact the nature of and
reflect information about threats to international security (as this book’s
argues). This subtle but profound difference in how one should concep-
tualize terrorist finance has equally significant impact on understanding
the security dimensions of terrorist finance, and thus also the place
terrorist financing most appropriately occupies within international
security thinking and discourse.
Terrorist financing, as discussed in Chapter 2, is embedded within
a “liberal problematic of security,” which, to review, means that even
successfully securitizing terrorism-related financial activity does not pro-
duce “more” security, but instead simply changes the conditions in
which certain (desirable) actors and actions achieve gains relative to
their undesirable counterparts.15 For example, as discussed above, just
because a terrorist group has more (or less) money, it does not neces-
sarily mean that it will commit more (or less) terrorism. Conceptually,
the reason for this is that the impact the acquisition and exchange of
value has on the capabilities and behaviors of terrorist actors depends
on a host of other factors that, depending on the actor in question,
could include anything from moral considerations to cultural traditions
to social practices to the psychology or strategic calculations of group
leaders. This is exactly why, as argued above, the “right” questions to
ask about terrorist finance relate to how the exchange of value impacts
terrorist actions, and what such exchanges reflect about terrorist actors’
wider relationships. Thus, the reframed conceptualization of terrorist
finance presented here remains an issue of international security, but
one in which a complex of other factors determine exactly how political
economic activity is securitized.
It should be noted that reframing terrorist finance in this way matches
closely with similar turns in thinking on both terrorism and con-
flict debates, both of which have evolved more socially embedded
and contextualized thinking about their respective topics. For exam-
ple, understandings of conflict have evolved well beyond approaches
that view security and violence only in state versus state or military-
centric terms,16 and terrorism debates have also undergone a similar
development to now include much work that not only encompasses
wider and more “critical” perspectives, but also just as importantly more
research on the social, cultural, psychological, historical, political, and
other contingent contexts of terrorism.17
Returning to the liberal problematic of security, the eponymous
“problem” arises in that whether these changed conditions are suffi-
ciently beneficial—and to whom they are beneficial—are highly con-
testable and by no means objective. This matches closely with de
Goede’s existing conceptualization of terrorist financing as a problem
of politicized representation of certain securitized (that is, terrorism-
related) financial activity.18 Furthermore, given that both research into
and efforts to combat terrorist finance relate closely to this liberal prob-
lematic of security, the conceptual representation of terrorist finance
presented in this book implies a shift in how terrorist financing is
imagined and mediated as a threat, and ultimately used as a jus-
tification for action against security threats. As such, it also offers
an approach that can be used to develop more nuanced outcomes
within this liberal problematic of security, and thus also outcomes
of counter-terrorist financing (CTF) actions more in line with liberal
principles.
This is because the conceptualization of terrorist finance presented
herein indicates that the anti-politics that currently mediate terrorist
finance discourse and action could be replaced by an approach grounded
in biopolitics. De Goede has observed that underlying both discourse
and action relating to terrorist finance is what Foucault conceived of
as “anti-politics,” that is, an affirmative form of power that “fashions,
observes, knows and multiplies itself on the basis of its own effects,” in
order to undermine and forbid undesirable actors and actions.19 In terms
of terrorist financing, de Goede observes that the anti-politics of terrorist
financing is evident in how the issue is presented as unproblematic,

uncontested, and indeed uncontestable, which ultimately results in,
marginalizing and repressing particular financial practices, but always

with the effect of allowing and securing the circulation of what
are coined as normal financial spaces of western markets and reg-
istered money transfers . . . [in order to] produc[e] governable spaces
and secur[e] continued circulation.20
However, the representation of terrorist financing presented in this book

undermines such anti-politics because it forces the analyst of terror-
ist finance to not only be conscious of his or her own subjectivity
but also simultaneously to incorporate the societal context of whatever
particular actor or activity is the object of study. For example, it is impor-
tant to understand how “normal” a terrorist actor’s economic behavior
is within a particular socio-economic environment, which of course
implies the necessity to understand the realities of this context. From
this analytic position—and indeed only from this analytic position—can
one then ascribe meaning and significance to the behavior in ques-
tion, which after all is the ultimate objective of analysis of terrorist
finance. Conceptually, this implies that the representation of terrorist
finance presented herein actually replaces the dominant anti-politics
of terrorist financing analysis with an approach rooted in bio-politics.
This term, also from Foucault, is a form of politics that deals with “how
groups, communities and people are acted upon in order to support
and promote collective life,”21 and is characterized by a form of regu-
latory power “to foster life or disallow it to the point of death.”22 This
embeds terrorist financing into the “world of peoples,” and in terms of
the liberal problematic of security, Duffield observes that biopolitics is
the mechanism by which liberal societies obtain knowledge about and
rationalize what processes are “best” for a given group, community, or
population,23 and, echoing Dean,24 states that biopolitics is distinct from
but a necessary condition of liberal systems of governance.25 As such—
and again given that terrorist financing is intrinsically a politicized
topic—the representation of terrorist finance presented in this book is
much more attuned to being grounded in biopolitics than anti-politics,
which in turn makes it more amendable to being used to support actions
in response to terrorism-related financial activity that are more aligned
with liberal principles of governance than CTF efforts have been to date.
The conceptual representation presented in this book rejects an anti-
political and is aligned with a biopolitical approach to the liberal
problematic of security, in three primary ways. First, by beginning

with an assumption that terrorist finance is intrinsically contested and
problematic, it undermines any attempt to represent the issue as any-
thing other than this. This implies that understandings of terrorist
financing should be tied closely with understanding of the everyday
political-economic realities of those societies in which terrorists con-
duct economic activity and with which they interact on economic and
financial levels.
Second, by, as demanded by asking the above “right questions,”
tightly focusing analysis on those political-economic interactions that
either impact the behavior or capabilities of terrorist actors, or tell
us about terrorist actors relationships with wider communities, this
book explicitly rejects the need to marginalize or repress any partic-
ular financial or economic practice, as is done in an “anti-political”
discourse. This is simply because any such practice or activity—
including legitimate, legal, or otherwise “desirable” ones—may be
relevant to understanding terrorism-related economic activity. This
enables future terrorist financing research to engage more fully with
many contemporary IR debates, such as with a growing terrorism
discourse that applies a diversity of disciplinary approaches (such as
anthropology, psychology, social movement theory, and peace studies,
among others) to understand the behaviors and socio-political con-
texts of terrorism,26 and with relevant area studies (especially those
that focus on political-economic issue of the Middle East and South
Asia), which in turn produces more comprehensive and contextually
sensitive depictions of these communities. This helps analysts over-
come the “Western-bias” and begin to consider the financial and eco-
nomic interactions of terrorist actors in the terms that they actually
occur.
Third, by emphasizing explicitly the need to frame terrorist finance
research in terms of the objectives and purposes of the analysis, it
encourages research that engages with both specific relevant com-
munities of power (for example, official/governmental, private sector/
financial industry, charitable sector, the citizen public) as well as com-
munities impacted by how terrorist financing is mediated and rep-
resented (for example, ethnic and religious groups considered to be
“involved” in terrorist financing). This helps ensure that these often
competing perspectives are represented in how terrorist financing is
mediated and conceptualized. This enables future research on terror-
ist financing to be more than simply “useful” to these communities,
but to equate to nuanced knowledge that can contribute to how the
liberal problematic of security, in terms of this issue, is addressed and

resolved.
The above “right” questions, when viewed as the basis for an alternative
epistemological foundation of how terrorist financing is represented,
may appear to be an awkward conceptual fit to on the one hand focus
on the structural aspects of terrorist financing behavior, and on the
other hand exhibit a theoretical emphasis on the importance of agency
and reasoning. In particular, it raises the related question of whether
a conceptual focus on the instrumentality of finance is appropriate,
especially since the reasoning behind one’s engagement in terrorism-
related financial activity would be central to any conceptualization of
terrorist finance that focused on seeking to understand related political-
economic decision-making. However, given that terrorist financing is
a product of not only human reasoning but also the relationship this
reasoning has to both decisions based on these reasons as well as the
consequences of these decisions, this section argues that by reorient-
ing conceptualizations of terrorist financing and thus also research on
the issue around the above two questions, this potential awkwardness
is resolved. In particular, it is resolved because an epistemic focus on
these questions and their answers implies that the structural dynamics
of terrorist financing depends on human choices (agency) about terrorist
group values, objectives, and goals, which are themselves a product of
rationality and freedom and the place of the individual in global society.
In this way, the above section provided the first step beyond the
deficient understandings of terrorist finance, and beyond also the cri-
tiques surveyed in Chapter 6. Asking the “right questions,” if nothing
else, locates terrorist finance in the larger dynamics of how terror-
ists participate in wider political-economic communities, and what
this participation means for these communities. In this way, terror-
ist finance is, importantly, a security issue, albeit one with that is
strongly informed by various political, economic, social, cultural, insti-
tutional, ideational, and other knowledge, and closely tied to the precise
nature, relationships, and behaviors of the group of people deemed to
be “terrorist.”
In particular, asking the “right questions” indicates that, analytically,
terrorist financing activity can in fact be split into two distinct modali-
ties, value chain exchanges and material expressions of support for terrorism.
Chapters 4 and 5 examine each of these modalities of terrorist finance,
each of which we discover has a distinct analytic logic.
Re-representing terrorist financing in these terms reflects, in one
respect, simple acceptance of the full epistemological consequences of
recognizing that the analysis of terrorist finance is itself a political

project meant to serve specific interests of liberal democratic society.
More precisely, it provides a viable alternative to dominant analytic
approaches that require one to uncover dark secrets about the global
“infrastructures” and “mysterious” networks that supposedly finance
terrorism. However, while the world of terrorist finance is indeed often
invisible and inaudible to the casual observer, it is very much knowable
and comprehensible—if one asks the right questions. Thus we see that
what is referred to as “terrorist finance” is at core simply a certain subset
of political-economic activity about which liberal democratic societies
are currently concerned. It can thus be observed, analyzed, interpreted,
and acted upon, just like any other manifestation of human behavior.
This subtle but important epistemological shift subordinates normative
debates about “bad” (that is, terrorist) versus “good” financing, and
replaces them with a foundation of analysis that is not only closer to
the specific (liberal democratic) interests and objectives it is supposed
to serve, but also enables access to more analytic tools required to meet
those objectives.
More specifically, this chapter argued that the focus of analysis—or
the “variables,” if one prefers positivist language—of terrorist financ-
ing should be the dynamics and consequences of political-economic
decision-making and its consequences, rather than the “who” and the
“how.” In other words, the “right questions” to ask about terrorist
financing concern the instrumentality of economic activity for terror-
ist actors and what such activity tells one about the relationship terrorist
actors have with wider societies. Answering these questions shows that
financial activity is a conditioning—rather than determining—factor of
terrorist behavior, and that the relationships terrorists have with those
that support either them or the causes for which they fight are as com-
plex and multidimensional as any other socio-economic interaction.
Furthermore, given that terrorist financing is tied directly and exclu-
sively to the beliefs and objectives of those analyzing it—that is, the
issue’s politics—analysis of the financial activities requires explicit recog-
nition of one’s purpose of analysis, as well as enough critical distance so
as to not let one’s analysis become slavishly obedient to specific politi-
cal whims and ideologies. Only by thus explicitly focusing analysis of
terrorist financing on the impact and the “reflection” of such finan-
cial activity can any government or financial institution ever hope to
systematically understand the financing of terrorism, let alone develop
successful legal, regulatory, or political responses to it.
4
Understanding Terrorist Finance as
Interaction with Value Chains
This chapter continues our journey toward a more unified and coherent
understanding of terrorist finance, and argues that much activity cur-
rently represented as “terrorist financing” can be more accurately rep-
resented as the dynamics by which terrorist actors (however defined)
access, influence, control, or otherwise interact with flows of value
within existing local, regional, or global political economies. As such,
the chapter examines how terrorist actors access and interact with
particular value chains. It intends both to provide insight into the par-
ticipation of terrorists with local and global political economies (many
of which would typically be considered legitimate and legal) and to
demonstrate the theoretical benefits of reorienting research toward this
end. This latter point emphasizes the book’s larger claim that it con-
tributes a superior way of representing and giving meaning to those
activities now encompassed by the term “terrorist finance.”
The chapter’s first section argues that, in one sense, “terrorist financ-
ing” is epistemologically similar to a commercial value chain, and that
therefore part of what is now referred to as “terrorist financing” can
be more precisely defined as the compendium of individual transactions
in which various items of material and non-material value are exchanged
that result in terrorist actors acquiring something of value. The section
also examines that, as such, terrorist financing is a function of the
“everyday” political-economic interactions of a terrorist group, and
it thus can be largely assumed to be attuned to the ground politi-
cal, social, and cultural realities of the societies in which it occurs.
The second section provides two extended explanatory examples of
how terrorists (in this case US Government-designated Foreign Terror-
ist Organizations—FTOs) interact with value chains, focusing on how
al-Shabaab in Somalia, and Tehrik-e-Taliban in Pakistan interact with
112
Terrorist Finance as Interaction with Value Chains 113
value chains for trade goods and the hawala system, and automobiles,
respectively. These explanatory examples are based on a combination
of existing scholarly literature, published news accounts, and interviews
of knowledgeable sources. The third and concluding section explores
some key controversies and apparent gaps in knowledge of how terror-
ists access which value chains, along with suggestions for future research
that may help fill these gaps.
Terrorist finance as interaction with value chains
Those activities now encompassed by the term “terrorist finance” are in

aggregate similar epistemologically to a commercial value chain. Value
chain is somewhat an unsettled term, defined variously yet similarly as:
the shifting governance structures in sectors producing for global

markets;1
the process by which technology is combined with material and
labor inputs, and then processed inputs are assembled, marketed, and
distributed;2 and
the sequential set of primary and support activities that an enter-
prise performs to turn inputs into value-added outputs for its external
customers.3
Using the latter formulation, terrorist “enterprises” thus turn “inputs”

(for example, volunteer labor, training, ideological or religious rad-
icalism, weapons, donated money) into “value-added outputs” (for
example, attacks, political power, social welfare, territorial governance,
advantageous changes in state policy) for their “external customers” (for
example, social, religious, ethnic, ideological, or other constituencies),
via a “set of primary and support activities” (for example, the various
financing and logistical methods often referred to in existing literature
as “terrorist financing techniques,” such as money laundering, hawala,
or engagement in crime). Therefore part of what is now referred to as
“terrorist finance” can be more precisely defined as the compendium of
individual transactions in which various items of material and non-material
value are exchanged that result in terrorist actors acquiring something of value.
Conceptually, reframing “terrorist finance” as the above is a logical
consequence of the arguments of the previous chapters. As discussed
earlier, the term “terrorist financing” is a misnomer in that if one is to be
precise much of the activity encompassed by that term involves neither
terrorism nor money. Instead, terrorist financing more accurately refers
to the flow of economic and material value to “terrorist” actors, how-

ever that contested term is defined and represented. This helps distance
understandings of “terrorist finance” from the narrow normative, legal,
and political contexts that dominate orthodox thinking on terrorism
and terrorist finance, and places the issue more in context of the every-
day realities of how global and local political economies impact and are
impacted by contemporary issues of international security. Although
further research is necessary to fully understand the implications of
doing so, understanding terrorist financing in terms more aware of and
sensitive to both local and global realities is likely to significantly impact
perceptions and actions related to terrorist finance.
For example, let us return to the comparison of HAMAS with General
Electric (GE) from Chapter 2, in which I discussed how both orga-
nizations interact with large networks of economic actors according
dynamics, and that such interactions, even if they are frequent or sig-
nificant, do not in fact imply, as many claim, that those distinct actors
should be considered part of the organization’s mysterious “financial
infrastructure.” It is important to emphasize here that this epistemic
reformulation is an analytic claim, not a normative one. Naturally, it
is reasonable for a politician, for example, to try to dissuade economic
interaction with terrorist actors with these terms, or for legislators to
pass laws to outlaw certain interactions with HAMAS that would be legal
with GE, for instance. I argue simply that it is unreasonable for system-
atic analysts of terrorism and terrorist financing to base their epistemic
frameworks on such normative claims. Analysis of how both organiza-
tions are “financed” would thus focus on understanding the dynamics of
its relationships with its value chain. GE, for instance, typically engages
in formal written contracts to govern its relationships with its suppliers,
while HAMAS relies more on shared religious or ideological commit-
ment, and both value strong personal relationships. Analysis of their
“financing” would thus focus, in part, on how these relationships and
interactions affect the instrumentality of these organizations. For GE,
this means shareholder value,4 but for HAMAS it means its various social
and political goals such as revenge and resistance against Israel, con-
solidation of power over the Palestinian territories, and international
recognition.
In general terms, the analytic implications of this redefinition are sig-
nificant. As discussed in Chapter 3, focusing on instrumentality shifts
the analysis of terrorist financing away from static descriptions of actors
and methods and toward evaluation of more context-dependent flows,
processes, and outcomes. For example, a hypothetical car manufacturer

would prioritize maximizing the efficiency (a process) of its assembly
line (a flow) in order to increase profit (an outcome) over sticking to
any individual machine, laborer, or customer. Analogously, one could
hypothesize that HAMAS (or any terrorist actor) is likely to place a
higher priority on context-dependent processes such as recruitment or
flows such as income generation than on any specific person to be
recruited or method of generating income. To emphasize, both static
descriptions of actors and actions and analysis of their instrumentality
within given specific contexts are important. The Israeli government,
for example, is likely to want to not only identify what is being smug-
gled to HAMAS and by what means but also understand the various
relationships that make such smuggling possible and significant for
HAMAS operations. Characterizing terrorist finance (in part) as a value
chain thus reverses the epistemological polarity of analysis of it.
In particular, reconceptualizing terrorist finance as an issue of
how certain political actors—“terrorists”—access, influence, and are
impacted by economic exchanges of value carries the implication that
better approaches to understanding and responding to terrorist finance
lie in understanding how terrorists interact with and influence particu-
lar local and global political economies. Specifically—given, as described
in Chapter 3, that one of the two “right” questions one should ask of
terrorist financing activity concerns the extent to which such so-called
financial activity is instrumental to violent terrorist operations—the sig-
nificance of terrorist financing lies not in the “financial” activity itself,
but in the activity that is ultimately benefited by that financial activ-
ity. Conceptualizing terrorist finance in terms of terrorist access to value
chains implies that for analysis of terrorist finance to measure and assess
this instrumentality, it must understand and engage with the local and
global political-economic realities with which terrorists themselves are
interacting as part of these value chains.
In another example, from the case described in Chapter 1, foreign
jihadist fighters were able to access flows of donated cash that flowed
from donors in the Middle East through various branch offices of the
Benevolence International Foundation (BIF) or Al-Haramain Islamic
Foundation (AHIF) and ultimately to the militants themselves (and of
course onto corrupt Georgian officials and others beyond this). Rep-
resenting this activity in terms of how “terrorists” (in this case the
foreign jihadists going to Chechnya) access “value chains” (in this
case the flow of cash described in the previous sentence) is likely to
yield far richer analysis than orthodox depictions of BIF and AHIF as
terrorist “fronts” that “funnel” money to terrorists or more generally

“underwrite” terrorism.5 This is because the former immediately raises
important issues about the dynamics of this value chain and the realities
and implications of access to it by specific terrorist actors. The following
indicates just some of the significant areas of knowledge that could be
illuminated by reframing this activity as value chain access:
• The identity and background of all participants in each element of

the value chain, from, for instance, the donors and organizers of
the fundraising events that led to their donations to the corrupt
Georgian officials who ultimately received payment for transporting
the “terrorists” to the Chechen border.
• The motives, social, cultural, and moral beliefs and practices, and
other individual contexts that informed individual decisions about
interacting with this value chain, the charitable foundations, or the
terrorist actors (for example, how exactly did theological factors, such
as inclusion of jihad within the justifiable bases for zakat donations,
impact the decision-making of the donors).
• The acts and practices of power that influenced the outcomes of these
interactions, including physical (for example, armed force or threat
thereof), social (for example, kinship bonds), cultural (for example,
communication traditions), economic (for example, command or
control of resources), political (for example, formal or institutional
authority), or cognitive (for example, influence over the production
or acceptance of ideas or norms), among others.
• The local business, social, and cultural practices and customs that
influenced the context, conduct, and outcomes of these interactions,
as well as the meaning one might attach to them (for example, do any
cultural factors, such as Kist hospitality traditions, alter judgments
about the legality or morality of certain decisions).
• The general criteria for entry and exit of this flow of value, and how
readily other terrorist actors might meet these criteria (for example,
what criteria was considered—and considered by whom—to be suf-
ficient for a recipient to receive funds donated to support jihad in
Chechnya).
• The specific ways in which access to this value chain has in fact
served (or not) the interests of particular terrorist or other actors
(for example, how exactly did this money impact the behaviors and
capabilities of Chechen separatists, or any other relevant given actor).
The following sections provide examples of some of the global and

local value chains accessed by terrorist actors, and, as much possible
with the evidence available, describe the processes by which terror-

ists achieve this access. Further research is required to provide greater
empirical and analytical depth to these discussions, particularly in terms
of the individual-level dynamics of political-economic decision-making
evident in these activities, as well as the various consequences and
meanings these findings would have for different audiences.
Common sense would tell us that it is likely that much—but, as
emphasized earlier, by no means all—activity usually termed “terrorist
financing” relates to how terrorist actors acquire and use money and its
equivalents. As discussed in Chapter 2, orthodox approaches to terrorist
finance promote a notion that terrorists squirrel away money in some
sort of vast and secret infrastructure of bank accounts, hidden stores of
cash, and various sophisticated financial vehicles. Applying the lexicon
of a value chain to these activities puts this mistaken conception of ter-
rorist financing to rest. Terrorist actors, like anyone else, need cash to
purchase goods and services. This means therefore that terrorist actors
simply access existing market flows for cash, and engage in various indi-
vidual exchanges of value in order to acquire the monetary instruments
that they require to purchase other items of value, such as weapons,
transport, labor, or long-term capability. In other words, the flow and
the market for money, cash, currency, and their equivalents are epis-
temologically no different than flows and markets for any other form
of value.
In existing, orthodox, discourse on terrorist finance, the dynamics of
how terrorist actors’ access to flows of global or local market flows in the
supply of cash and its equivalents—or in other words their acquisition
of money—is described as in terms of how terrorist actors “generate”
money, for example, through crime or charitable or business “fronts.”
In most cases, this is a misnomer, as terrorist groups, strictly speaking,
rarely “generate” money (unless of course they are printing counter-
feit currency). More accurately—and in line with the conceptualization
and representation of terrorism-related financial activity presented in
this book—money is simply one form of value for which value-added
products are exchanged, and terrorist actors engage in various actions
and interactions to access market flow for this particular form of value.
The following sections explore the dynamics of two cases of terrorist
interaction with value chains.
Al-Shabaab’s access to trade and hawala

Al-Shabaab (properly Harakat al-Shabaab Mujahideen—the Youth
Mujahedeen Movement) is a violent Sunni Islamist extremist group
committed to the expulsion of foreign (primarily Ethiopian) forces from

Somalia and the establishment of Islamic law throughout their native
country. The group, believed to be associated with al-Qa’ida and offi-
cially designated by several countries as a terrorist organization,6 was
originally one of the most powerful and radical armed factions within
the Islamic Courts Union (ICU) movement, which swept through much
of southern and south-central Somalia in early 2006 and earned much
popularity among average Somalis for restoring a modicum of order to
Mogadishu and expelling many of the warlords that had for years rav-
aged Somalia.7 After the defeat of the ICU by Ethiopian forces in late
2006 and its subsequent dissolution, al-Shabaab established adminis-
trative control over large swaths of the capital Mogadishu and much
of the Lower Jubba region that borders Kenya and includes the port
city of Kismaayo. The group has engaged in several terroristic attacks in
this region and Mogadishu, as well as in Kampala, Uganda, its first tar-
get outside of Somalia.8 According to the limited information available,
al-Shabaab is able to meet its material needs by accessing several inter-
linked chains of economic value, all of which, it should be noted, almost
entirely bypass the legal and regulatory influence of contemporary
counter-terrorist financing (CTF) efforts.
First, and presumably by far most significantly, al-Shabaab earns
exchangeable economic value through “taxation” of trade into, out of,
and through the geographic areas the group controls in Lower Jubba.
Somalia is in many ways the most radically deregulated economy in
the world; “one of the purest laboratories for capitalism,”9 but the ben-
efits of which go almost exclusively to those with power and control
over territory, people, and resources.10 Anthropologist Peter Little has
observed that since the country’s collapse in 1991, Somalia’s “admin-
istrative and even international boundaries assume secondary roles to
the ‘real’ demarcations enforced by different militia and clan-based
factions,” which in turn empowers these armed groups to collect pay-
ments for allowing goods or people to transit their territory.11 Given
available information about the major flows of economic value within
Lower Jubba, this implies that al-Shabaab probably earns significant
rents from (at least) the exportation of Somalia-reared livestock to neigh-
boring Kenya; the transit of goods through Somalia into Kenya and
other countries in Africa; and sea piracy, especially that originating from
Kismaayo.12 In the middle case, raw commodities, clothing, electron-
ics, weapons, and other goods are imported, often from Dubai, into
“duty-free” Somalia for re-exportation into Kenya and other countries
beyond.13 Participants in these extra-legal but not necessarily entirely
illicit flows of value benefit by avoiding standard importation duties in

exchange only for providing the controlling armed group a compara-
tively small transit payment, which may be made either in cash or in
trade goods that the group can then resell or barter. The profitability
of this trade appears to have in part led to both the re-emergence in
Somalia of abbaan (a pre-colonial traditional societal role of “respected
individuals who guaranteed safe passage for traders and their cara-
vans through their subclan’s area”), as well as the establishment, at the
behest of the business community which had no reliable way to resolve
commercial disputes, of Sharia (Islamic law) courts in Mogadishu.14
Regarding piracy, available evidence indicates that while al-Shabaab
is ideologically and religiously opposed to piracy, it does indeed materi-
ally benefit from the trade.15 The group apparently taxes the earnings of
independent piracy networks operating within their territory at a rate of
about 5–10 percent (which can equal $75,000–$150,000 for the group
per pirated vessel16 ), and in addition employs experienced pirates to
both help the group obtain contraband from abroad as well as allegedly
develop their own maritime capability.17 From a terrorist finance per-
spective, however, given such cooperation seems at best opportunistic
and “fragile,” al-Shabaab coordination with pirate networks can be seen
simply in terms of the group exploiting shifts in the value chains (in this
case, for particular specialized services and labor) available to them
within their area of operations.18
Second, al-Shabaab reportedly receives donations of money from
Somali diaspora communities in Europe, North America, Kenya, and
the Middle East. In Scandinavia, for example, networks of individuals
linked to al-Shabaab allegedly regularly solicit donations from mem-
bers of the Somali communities of Odense, Copenhagen, and Malmö,
many of whom originate from the southern Somali regions where al-
Shabaab is influential.19 According to European Union investigators,
such fundraising typically revolves around “older, manipulative Islamic
extremists” who are able to motivate potentially sympathetic business
owners as well as those attending mosques, public venues, family gath-
erings, and charity events to donate to al-Shabaab; apparently typically
using narratives that confirm that donations to al-Shabaab not only sat-
isfies zakat, the Islamic requirement for charitable giving, but also will
be used to fight against Ethiopia, the Somali Transitional Federal Gov-
ernment (TFG), and Western states, including the United States.20 While
only a tiny minority of Somalis in Scandinavia support al-Shabaab (as in
the rest of Europe and North America), Somalis in diaspora communi-
ties throughout the world do have a tradition of mobilizing to donate
money to support social, economic, and political ventures back in

Somalia, which historically have included hospitals and schools as well
as armed militia movements.21 Research indicates also that such remit-
tances increase in volume during times of perceived need, including in
response to intensified conflict.22
Third, the trafficking in khat has received considerable attention as a
revenue source for al-Shabaab, although these claims appear to deserve
heavy skepticism. Grown year-round, khat—also known as qat, miraa,
Catha edulis, African salad, and Bushman’s tea—is a mild narcotic
extremely popular in the Horn of Africa and the Arabian Peninsula, as
well as among Somali diaspora communities throughout the world.23
In Europe, khat is legal in the Netherlands and the United Kingdom,
and several tons of the drug are flown from Kenya, where much of
it is grown, into Schiphol and Heathrow airports every day, where it
is then transited to large consumer communities in the United King-
dom, the Netherlands, and Scandinavia.24 According to press reports,
one kilogram of khat imported into the Netherlands costs US$5–US$8
(¤4−¤6) in Amsterdam, but can be sold for US$20–US$24 (kr 120–140)
in Denmark and close to US$30 (kr 200) in Sweden.25
Significant debate exists however as to what extent, if at all,
al-Shabaab is able to materially benefit from the khat trade. Danish
media, for example, have reported that the khat trade is largely orga-
nized by Somali businessmen in Amsterdam, Copenhagen, Malmö, and
Odense sympathetic to al-Shabaab,26 and Dutch media cite one esti-
mate stating that an average smuggling ring can generate as much as
¤20, 000 (US$25,600) per week.27 This, plus some potentially suspi-
cious coincidences (namely that al-Shabaab is known to recruit members
of the Somali diaspora communities in which khat is consumed, and
that most khat exported originates in areas of Kenya adjacent to al-
Shabaab-controlled areas of Somalia), has led to claims that the khat
trade is, in the words of a Swedish Police official, “a mega-industry”
and “a choice option for al-Shabaab to get money.”28 However, sev-
eral realities indicate that these claims are probably heavily exaggerated.
First, whereas the trafficking of heroin, cocaine, and other narcotics
is typically controlled by relatively organized, sophisticated, and often
extremely violent cartels, the trade in khat is generally far more frag-
mented and small scale; reflecting the dispersed, cross-border social and
familial relationships of the participants, as well as the entrepreneurism
common among members of the Somali diaspora in Kenya and in
Europe and North America.29 The same is apparently true of interna-
tional movements of cash related to the khat trade, which tend to be
far more “informal and personalized” than cash courier arrangements
relating to other trade goods.30 Second, as discussed above al-Shabaab

is apparently able to earn far more through the taxation of the transit
and piracy trades through its territory and to a lesser extent fundraising
within Somali diaspora communities. For these two reasons, it is there-
fore unlikely that al-Shabaab’s involvement in the khat trade extends
much beyond individual sympathetic khat traders who for whatever
motivation choose to donate a portion of their own earnings to the
al-Shabaab cause.31
Key to each of these examples is al-Shabaab’s apparent ability to
access and interact with a particular locally rooted value chain for
money services, which in the case of Somalia refers almost exclusively
to the hawala system (more commonly known in the Somali con-
text as xawilaad or, in some cases, hawilaad).32 Hawala is an informal
value transfer system that is a core component of the economic iden-
tity of the Horn of Africa, South Asia, and the Middle East, but which
has also been the subject of much public controversy and misunder-
standing, particularly in the wake of the September 11, 2001, terrorist
attacks.33 In Somalia, xawilaad (again, that is, Somali-specific hawala) is
not only by far the most common mechanism by which money moves
into, out of, and around within the country, but with hawaladars in
almost all Somali towns and villages also the cheapest, simplest, and
most secure method of doing so.34 The global Somali diaspora uses it
extensively to invest in local communities back home (for example,
by funding specific construction projects or favored social/religious pro-
grams), to finance trade and commercial activity by Somalis both within
and outside of Somalia, and to remit funds to support family mem-
bers remaining in Somalia.35 Somali remittance scholar Anna Lindley
remarks that xawilaad is “more formal than often acknowledged” and
“defies pithy one-line definitions.” She writes that xawilaad is
a matter of local survival, facilitating infusions of funds on which

millions depend, saving lives, and furnishing modest livelihoods,
while relying on the careful leverage of intricate social ties in its
organizational logic. But it is also a profitable industry, rapidly assim-
ilating technological advances, lining the pockets of a transnational
elite, becoming an integral part of the emerging political complexes
that it navigates in the Somali regions.36
An interesting note is that the economic interests of larger, pan-Somalia

xawilaad companies—or those that aspire to become large—closely coin-
cide with some of the key socio-political objectives of al-Shabaab. His-
torically, most xawilaad operators in Somalia have pursued profitability
by seeking to monopolize service to a particular clan or subclan niche

(within both Somalia and the Somali diaspora).37 However, larger
xawilaad companies, such as Dahabshiil, Amal, and al-Barakaat (now
defunct), have sought business advantage by providing services across
clan lines.38 They accomplish this primarily by employing people from
different clans (in roles that range from executive and management to
local operators and security guards) and by actively negotiating with
influential people within the various clans and subclans, often via a
combination of sharia (Islamic law) and xeer (Somali customary law).39
This cross-clan, pan-Somali, religion- and culture-based strategy of the
larger xawilaad companies aligns closely with a core ideological tenet
of al-Shabaab, which believes strongly in the preeminence of Islam
over clan differences.40 This alignment of interests was evident, for
example, in the popularity of the radical ICU among much of the busi-
ness community in Somalia.41 In 2006, this popularity translated into
active material support of the ICU by certain unnamed xawilaad com-
panies, which allegedly diverted cash for and delivered large amounts
of diaspora donations to the group, and even directly purchased and
donated weapons to them.42
Because of this centrality in Somali society, combined with the fact
that in Somalia armed groups are the de facto “governments” over
territory they control, it is extremely likely—although not explicitly
documented in available sources—that xawilaadars (that is, xawilaad
operators) for their part directly cooperate with armed organizations
in Somalia, including, in Lower Jubba and Mogadishu, al-Shabaab.43
The precise nature of this cooperation is unclear, especially in terms of
al-Shabaab, but historically xawilaadars have arranged to receive protec-
tion from their local clan militia (in particular against robbery or attack
by either bandits or, in the case of nonpayment, the militia itself) in
exchange for either a fee or perhaps an agreement to facilitate the deliv-
ery of revenues gained from trade within or outside Somalia.44 Given the
apparent normality of such arrangements, it would be logical to assume
that al-Shabaab is interested in and able to make similar agreements.
At the same time, however, such likely cooperation also implies that
xawilaadars exert some measure of influence over armed groups, includ-
ing al-Shabaab. Al-Shabaab must be sensitive to the business and social
demands of xawilaadars, because the importance of their service to the
local population means that any significant disruption to their opera-
tions would quickly and inevitably turn Somali civilians (both in the
affected regions of Somalia and among the potential donors of the
Somali diaspora communities) against the group. In 2009, al-Shabaab
apparently briefly upset this delicate balance in Kismaayo when the

group provoked widespread popular anger in the city by forcibly clos-
ing seven xawilaad businesses for refusing to pay additional protection
fees demanded by the group, again.45 And in 2010, al-Shabaab declared
mobile telephone banking “un-Islamic” and banned its use in areas the
group controls, presumably at least in part to protect its access to and
influence over xawilaadars, with whom mobile banking competes.46
For the above reasons, claims that al-Shabaab exploits the various
trade flows that cross through its territory in Somalia and that the group
uses xawilaad to transfer money within and outside of the country are
not only plausible but indeed extremely likely. However, it should also
be evident that assigning meaning and significance to these value chain
interactions (and those that participate in them) are only appropriate if
done through nuanced, systematic analysis.
The Tehrik-e-Taliban Pakistan’s access to automobiles

Tehrik-e-Taliban Pakistan (TTP, or the “Movement of the Taliban in
Pakistan”—also known as simply the Pakistani Taliban) is a loose
conglomeration of an estimated 27 tribally rooted ethnic Pashtun mil-
itant groups based in Pakistan’s Federally Administered Tribal Areas
(FATA) and Khyber-Pakhtunkhwa Province (formerly Northwest Fron-
tier Province—NWFP), particularly in North and South Waziristan.47
Ideological cousins to its Afghan counterpart, the Pakistani Taliban is
dedicated to establishing the same severe Sunni Islamic fundamental-
ist rule as previously existed in neighboring Afghanistan through the
physical control of territory, intimidation of the local population, and
military operations against Pakistani military in Pakistan and North
Atlantic Treaty Organization (NATO) forces in Afghanistan. The group
was designated by the United States as a “Foreign Terrorist Organiza-
tion” on September 1, 2010.48 This section offers a snapshot of how
the TTP interacts with local value chains in order to procure vehicles, a
critical material resource.
The TTP almost exclusively uses commercially available vehicles, the
particular type of which seems to vary according to the status of its
owner or user within the group’s hierarchy. Toyota Corollas are gener-
ally used by low level, rank-and-file fighters for day-to-day transport,
often in groups, while the highest Taliban commanders favor Toyota
Land Cruisers, a full size four-wheel-drive vehicle.49 However, the Toyota
Hilux, an extremely sturdy and easy-to-repair four-wheel-drive com-
pact pickup truck, is perhaps the most ubiquitous make and model,
and is the favored personal vehicle of mid-ranking unit commanders.50

The Hilux—which has been dubbed “the vehicular equivalent of the
AK-47” for its popularity in conflict zones around the world—can easily
carry about 20 armed men and is often also mounted with a 50-caliber
machine gun, making it into “a modern version of light cavalry,” albeit
one that is entirely and widely available on the open market.51
Regardless of the make, to obtain vehicles the Pakistani Taliban inter-
acts with largely pre-existing value chains for this particular item of
economic value, and does so in ways that do not significantly differ from
how anyone else in that time and place would do the same. To explore
how precisely, let us examine a hypothetical but generically realistic sce-
nario regarding acquisition of automobiles by a component of Pakistani
Taliban based in the North Waziristan agency of Khyber-Pakhtunkhwa
Province.52
In order to acquire a vehicle at a fair market price, the intended recip-
ient in North Waziristan must typically recruit a native of Peshawar,
the nearest commercial center, to act as a facilitator of the purchase.
The facilitator—who may be either a trusted confederate of the Waziri
recipient or simply a professional middleman—first identifies a dealer
in Peshawar from whom the desired vehicle can be bought on behalf
of the ultimate recipient, and then arranges with the dealer a mutually
agreeable price and a suitable time and place for the dealer to deliver
the car to the facilitator. As indicated in Table 4.1, the price depends
not only on the model and age of the vehicle but also on whether it
has proper documentation. Illicitly acquired vehicles are common and
tend to be considerably less expensive. In many cases, retail-level dealers
apparently acquire vehicles from businesses and at times religious insti-
tutions, who have themselves purchased them from corrupt wholesalers
in Dubai or Kuwait who have fraudulently imported the vehicles into
Pakistan, often by exploiting the Afghan Transit Trade Agreement (see
Chapter 1 for discussion).53 Importantly, stolen vehicles can effectively
be “laundered” by purchasing them along with legitimate documenta-
tion, obtained from corrupt Pakistani officials in exchange for relatively
small bribes.54 Other factors that can affect the price of a vehicle are the
distance or difficulty of the intended delivery location (especially if it
requires going through several police checkpoints, as discussed below),
and certain vehicle quality markers, such as in the case of the Hilux the
presence of a Canadian flag sticker. Regarding the latter, the popularity
of the Toyota Hilux in Afghanistan and Pakistan combined with poor
regulation of imports into the countries55 resulted in an influx, probably
from China, of poor quality counterfeit vehicles, including the Hilux.56
Table 4.1 Local prices of vehicles in regular use by the Pakistani Taliban, 200957
Vehicle Conditions Approximate

price in
Pakistan (USD)
Toyota Corolla Late model, with proper 30,000

documentation
Late model, without documentation 25,000
Older model, without 15,000
documentation
Stolen vehicle, with proper 15,000
documentation
Toyota Hilux Late model, with proper 30,000
documentation
Older model, with proper 25,000
documentation
Older model, without 15,000
documentation
Toyota Land Cruiser Late model, with proper 45,000
documentation
Older model, with proper 35,000
documentation
Around the same time, however, the Canadian government exported a

large number of legitimate Hilux trucks to the countries, all of which
were adorned with a Canadian maple leaf, which soon became the most
reliable indicator of vehicle legitimacy and thus also quality. The indi-
cator was so strong in fact that not only have Taliban fighters been
observed to have maple leaf tattoos out of respect for the most reli-
able variety of their most favored vehicle, but also vehicle counterfeiters
have even started to put maple leaves on their own fake versions in
order to appropriate the very quality marker that undermined their own
substandard product.58
Regardless of the particular details of the transaction, the facilitator
pays the dealer in cash about 75 percent of the final purchase price once
the terms are settled, using either money previously advanced by the
Waziri recipient or the facilitator’s own money, which the recipient will
later reimburse with cash or the equivalent in other forms of tradeable
value. The dealer then estimates when exactly he will be able to deliver
the vehicle to the prearranged location, which for our hypothetical pur-
poses here we can assume to be Bannu, an important trading city in
the district of the same name that borders North Waziristan. Successful
delivery of the vehicle will depend largely on the ability of the dealer
to pass through the numerous police and military checkpoints that reg-
ulate movement into and within Khyber-Pakhtunkhwa Province. This
means that the dealer must himself be able to acquire sufficient informa-
tion about the placement and the staffing of these checkpoints in order
to either bribe his way through them (in the case of police checkpoints
staffed by officers friendly to him or people he knows or is related to),
or avoid them (in the case of checkpoints staffed by the Pakistani army,
who are considered immune to such bribery attempts). Once the dealer
is confident that he will be able to reach Bannu within about a day, he
calls the facilitator with a specific time and location of delivery, infor-
mation the facilitator then conveys to the North Waziri recipients. Upon
arrival, the dealer abandons the car (with the keys) at the prearranged
place and time, to be picked up by the Taliban recipients or someone
sent by them (who in either case would typically be a native Waziri
since in general only locals are currently allowed into North Waziristan).
After receipt of the car is confirmed, the facilitator pays the remaining
25 percent to the dealer through whatever means already negotiated.
This hypothetical case raises several important themes about terror-
ist finance. The first is that terrorist finance encompasses the exchange
of many different forms of value, from vehicles to money to informa-
tion to trade goods, and that the process by which terrorist actors are
able to acquire the material resources are much more coherently repre-
sented as a “compendium of individual exchanges” of value rather than
as some kind of sophisticated “financial infrastructure” ripped from a
Hollywood script. The second is that the flows and chains of value
with which terrorist actors and those working on their behalf interact
are often pre-existing and often depend on already established social
or business relationships, underlining the reality that terrorist actors
are, unsurprisingly, very much embedded into the local economic fab-
rics of the societies in which they exist, as well as, indirectly, into the
global trade and value flows that feed into these local economies. Third,
the above case illustrates clearly that both the legality of economic
behavior and the ideological, political, and religious motives of the par-
ticipants are at most only tangentially relevant to analyzing terrorist
financing activity. For example, the ideology of the facilitator could
be anything, and even serving a key role in accessing this value chain
does not necessarily imply anything about his politics or attitude toward
terrorism or anything else for that matter. Finally, the above case illus-
trates that the CTF regime is largely irrelevant to the above realities,
which in turn implies that successfully understanding terrorist finance

thus requires systematic and nuanced analysis of these social, political,
and economic realities specifically in terms of how they impact terrorist
capabilities, conduct, and relationships with wider communities.
In summary, the above case demonstrates that if one seeks to
use knowledge about the economic activities of terrorist actors to
understand and potentially impact their capabilities, behaviors, and
relationships, one must look beyond only monetary flows, and system-
atically analyze the compendium of individual exchanges that comprise
time- and space-contingent interaction with particular value changes
of interest. However, given that this could in theory imply a need to
know in essence everything about everything, the next sections exam-
ine how analysts with imperfect knowledge of terrorist actor interaction
with value chains can successfully analyze these interactions.
Analyzing terrorist interaction with value chains
The central hypothesis rising from a focus on “value chain” activity

is that terrorist actors likely access existing market flows for things of
value (such as weapons, people, materiel, cash, and other goods and
services) rather than create and manage their own closed “infrastruc-
tures” or “networks” to produce, move, and spend (solely) money. One
can hypothesize that terrorist actors, like any actor, therefore seek out
market flows that help them meet their objectives. In order to explain
how this likely occurs—and thus where future research could best be
focused—we must, as discussed in Chapters 2 and 3, start at an individ-
ual level of analysis, examining the individual exchanges that provide
terrorist actors access to such market flows. In this reframed perspec-
tive, these individual exchanges can be represented as being governed
by essentially two variables: desire and ability to interact with particular
value chains.
Free and rational: analyzing the desire to interact with value chains
The first variable is, using plain English, the desire of terrorist actors to
access a particular value chain, which is essentially a function of the per-
ception that such access will meet certain pre-existing objectives. This
refers to the extent to which a terrorist actor would like to obtain the
forms of value available within a given societal and economic context,
and is primarily a function of the terrorist actor’s rational assessment
about how instrumental a particular form of value would be in assisting
his objectives. In other words, terrorist actors access largely pre-existing
markets for reasons tied to their own objectives, meaning that, most
basically, terrorist financing is a set of numerous individual human
choices, each of which are rationally chosen.
Before going on, however, it is important to explain precisely what
is meant by rationality in this context. Rational choice is a contentious
idea throughout social scientific scholarship, referring often to a stilted
discourse that, resting on prespecified but empirically unsupported
axioms like absolute internal consistency of motive, intelligent pur-
suit of self-interest, and various categories of maximization, assumes
people to be “rational fools,” who must—“by the analytical force of non-
distinction”—adhere to universal orderings of human behavior.59 Such
“authoritarian”60 conceptions of rational choice represent a “theoretical
and methodological straightjacket,”61 as they regiment understanding
of human choice according to context-independent (and likely self-
serving) axioms or “the need to conform to some canonical specification
of ‘proper’ objectives and values,” which ultimately arbitrarily narrow
“permissible ‘reasons for choice.’ ”62 In International Relations this has
manifested itself in the belief that people are bound to act in a cer-
tain way, for example, to maximize either self-interest (neo-Realism)
or welfare (neoliberalism), or in reaction to oppression, deprivation,
or so-called ancient hatreds.63 Such thinking manifests itself in terror-
ist financing literature that assumes that those involved in financing
terrorism are “rational fools,” deterministically acting for particular
ideological, evil, criminal, or other pre-specified ends.
The Nobel laureate economist and philosopher Amartya Sen provides
a very different idea of rational choice as “reasoned scrutiny,” or the
broad “need to subject ones choices to the demands of reason,”64 a con-
ception that is much more aligned with the realities of terrorist finance
explored throughout this book. According to Sen, “reasoned scrutiny”
simply means that people have reasons for acting, not all of which
are self-interested or maximizing or particularly logical to an outsider.
This is a much richer conception of rationality that also proves highly
applicable to understanding the contextualized choices that comprise
terrorist finance. This helps explain the choices that comprise terrorist
financing, which are influenced not by some set of universal factors,
but by different reasons and pressures, some of which may change the
actor’s behavior, and some of which may not, all for a variety of reasons.
According to Sen, “seeing rational choice as choice based on rea-
soned scrutiny has far-reaching implications on decisional complexity
precisely because of the extensive reach of reason, which cannot be cap-
tured by a priori axioms or by very general admonitions.”65 In other
words, assuming that the choices going into terrorist financing are ratio-
nal naturally focuses attention on the rationales driving these choices.
Sen points out that his conception of rationality does not require
centrality of oneself in individual decision-making. This is important,
especially for issues such as terrorist financing and terrorism, because it
is typically on behalf of a group, real or imagined, that people make
decisions to engage in, for example, terrorist financing activity. This
implies, in other words, that someone involved in financing terrorism
can make a “reasoned” choice that in fact conflicts or competes with
other choices, moral values, or objectives, as the rationales informing
individual choices are not just a product of context-independent norms
or objectives, but also of the environment. Agent thus meets structure.
However, systematically analyzing terrorist finance for meaning and
significance requires understanding not just the individual choices
involved but also the contexts that influence and are influenced by
them. Returning to Sen, intrinsically related to reasoned choice is the
idea of free choice. Sen argues, in brief, that people are existentially
autonomous and that their reasoned choices are conditioned by their
environment and experiences, which restrict and open up different
“menus” of choices.66 More simply, rationality and freedom go hand
in hand, explaining both the core dynamic of the individual decisions
that lead people to engage in conduct that helps finance terrorism, the
processes by which such choices interrelate with the contexts in which
they occur.
Analytically, then dynamics by which a terrorist actor chooses to
interact with a particular value chain or vice versa are relatively straight-
forward to understand, although not always easy to observe and mea-
sure. In general, they can be measured by assessing what influences
constricted or enlarged the menu of choices available. Such factors
included social pressures, such as a kinship bond, moral norms, such as
belief against terrorism, ideological beliefs, such as support for a terrorist
group, among others. The key factor here however is not the presence
of these influences, but how they affect the actor in achieving his objec-
tives, that is, in achieving what he has chosen to do. This ties analysis of
actual financing choices made to actual terrorist goals, which helps clar-
ify many complexities that are typically conflated in terrorist financing
analysis. For example, it is common for the literature to state that some-
one is “linked” to or “associated” with or in the “network” of an actor
that is either a terrorist or a terrorist supporter. These links are usually
grossly underspecified, negatively impacting analysis of terrorist financ-
ing, not to mention the actor “linked” to terrorism if that link is spurious
or irrelevant. Another example is to clarify intent. In every interaction,

people have various intentions. For example, the Khevsur villagers who
gave food and shelter to passing Chechen terrorists did so more as a cul-
tural expression of hospitality rather than some political or operational
act. Similarly, those benefactors who donated money to the Chechen
jihad may have done so in an honest, if perverted in many people’s
eyes, interpretation of the religious duty of zakat giving. Thus this is a
fruitful avenue by which one can determine the meaning, importance,
and ultimate relevance of any financial activity connected to terrorism.
Measuring rationality is slightly more problematic. One problem,
as Sen observes, is that there is no set criteria for determining what
should be considered reasoned scrutiny/rationality. Rationality depends
on actors’ own reasoning and thus measuring rationality means record-
ing the reasoning by which actors arrive at their decisions without
a priori judgment. To do otherwise would deny recognition of indi-
viduals’ freedom to choose what motivates their decisions, which in
turn would prejudice analysis of rationality toward our own norms and
interest. To some this might imply legitimization of choices that vio-
late fundamental values and preferences of others, but it is simply an
analytic necessity to maintain a systematic analytic method. In prac-
tice, this would most likely be achieved either by collecting data from
interviews, statements, or observation/surveillance on rationales used
in choice that lead to involvement in terrorist financing, or deduction
from contextual clues such as known cultural patterns of rationality in
particular circumstances (for example, hospitality traditions). Doing so,
as this section demonstrates, enables systematic analysis of how terrorist
financing activity influences and is influenced by the contexts in which
it occurs.
Given that many subsidiary factors influence a terrorist’s assessment
of both his own objectives (including, as discussed previously, ideology,
tactical assessments, political, social, or cultural values, or perceptions
about ones capabilities), as well as how a particular item of value would
instrumentally serve them (such as, one could estimate, perceived qual-
ity, reliability, worth, or other information available about the desired
item of value), this places terrorism-related financial activity in a richer
conceptual context, for example, by helping highlight, nuance, and
specify important differences among different terrorist actors.
A useful example relates to how differences in how terrorist
actors’ interactions with charities are represented. Using al-Qa’ida and
HAMAS as examples, orthodox conceptualizations of terrorist finance
tend to represent the differences between these groups’ use of charities
to fund their activities as at core a difference in technique, with al-Qa’ida
using a vast charitable “infrastructure” to fund its activities67 and

HAMAS instead using a more sophisticated network of charitable “front
organizations.”68 However, by applying this book’s alternative concep-
tualization of terrorist finance, such differences can be re-represented in
terms of these groups’ desire to access a particular value chain; in this
case the flow of ideologically sympathetic charitable donations. Repre-
senting this activity in these terms immediately highlights important
nuance and specificity. For instance, although they both receive finan-
cial support from charitable organizations, available evidence indicates
that whereas al-Qa’ida appears to regularly misappropriate funds toward
militant operations meant for humanitarian purposes (as illustrated in
Chapter 1), HAMAS makes concerted efforts to ensure all such donations
are accounted for transparently and go toward the group’s political,
social welfare, and other non-military activities, and in turn exploits
the political and social support engendered among the Palestinian pop-
ulation through such activities.69 In other words, although both groups
access this particular value chain (albeit likely different parts of it),
nevertheless, as Gunning observes, HAMAS desires to do so in order
to maintain and strengthen its non-military activities and cement its
reputation with its Palestinian constituency as a benevolent and incor-
ruptible social movement, while al-Qa’ida appears to do so only to gain
the ability to carry out violent terrorist attacks.70 This begins to illus-
trate how this alternative representation of terrorist finance provides
a more systematic and coherent approach to that available in existing
discourse.
To continue, one can also hypothesize, especially based on the discus-
sions of Chapter 3, that terrorist actor assessments of value, objective,
and instrumentality are completely context-specific. In other words,
something that may be of value in one time or place may be less
“desirable” in another, even for the same terrorist actor. This is because
goals change, situations change, and particular forms of value become
relatively more or less valuable accordingly. Taking the example from
Chapter 1, it seems that the Chechen separatists were likely seeking
access to markets for drugs, arms, food, clothing, personnel, or services
according to particular political-economic needs at particular times.
Power and value: analyzing the ability to interact with value chains
The second variable governing terrorist financing “value chains” is the
ability of terrorist actors to access these pre-existing market flows of
value. This refers simply to the actual capability of the terrorist actor to
not only access a market but to do so in a way that he is able to engage
in an exchange that he finds “desirable.” Drawing from the discussions

above, the ability of a terrorist actor to access a given value chain can
be characterized in terms of the power the actor is able to exercise
within the individual interactions that would lead to such access, there-
fore in turn also a function of how and how well terrorist actors are
able to interact with the societal environment that contextualizes those
interactions.
Overall, it is thus logical to assume that how and to what extent ter-
rorist actors are able to access markets such as these will depend on
their capabilities for interacting with these various market dynamics.
More simply, a key assumption one can make about terrorist financ-
ing is that terrorist access to a given market will be dependent on their
knowledge of the market and their abilities to access it in order to use it.
The diversity of potential factors that could possibly influence the desire
and ability of terrorist actors to access value chains, many of which are
illicit and extra-legal, is implicit in the following from Nordstrom:
The profit trail [of extra legal economies] is extensive and equally
nontransparent. Cars, trucks, trains, ships, and airplanes must trans-
port nonlegal goods from the point of production to the final desti-
nation. Each is produced by industrial centers, fueled by petroleum
products, and piloted by professionals. Each transverses controls and
international borders, where complicit personnel assist nonlegal as
well as legal transfers. Handlers transport the commodities, experts
test them, accommodating financial institutions lend and launder
money, and less-than-legitimate security forces take a cut to ignore
the law. Each step in the considerable set of transfers that moves any
commodity across time, space, international borders, and the bound-
aries of the law carries these nontransparent earning into the markets
of everyday life.71
The cases in this chapter certainly well illustrate these points, with
al-Shabaab and the Pakistani Taliban both being able—primarily via
control of both territory and social relations, respectively to access and
interact with local and global flows of economic value for advantage.
Although further research is required to document and analyze precisely
how these factors interact with one another for specific terrorist groups
and their access to particular value chains, it is possible to arrive at some
general preliminary conceptual insights that would guide this further
research by placing this lexicon in context of existing research on com-
mercial value chains. Given that on a conceptual level, as Chapter 3
outlined, terrorist financing relates centrally to how individual-level

political-economic interactions govern and are governed by various
contextual factors; the work of Gereffi, Humphrey, and Sturgeon on
commercial value chain governance is especially relevant.72 They build
a theoretical framework that argues that the key determinates of how
value chains are governed are:
A. the complexity of information and knowledge transfer required to

sustain a particular transaction, particularly with respect to product
and process specifications;
B. the extent to which this information and knowledge can be cod-

ified and, therefore, transmitted efficiently and without transaction-
specific investment between the parties to the transaction; and
C. the capabilities of actual and potential suppliers in relation to the

requirements of the transaction.73
When placed in context of terrorist financing, their argument sup-

ports the hypothesis that how and whether terrorist actors access any
given value chain will depend greatly on the knowledge and power
dynamics that impact their desire and ability to seek out and achieve
this access. This implies that the exact nature of how the particu-
lar factors that impact terrorist access to value chains interrelate is
likely governed by how terrorist actors are willing and able to impact
these power/knowledge dynamics in ways advantageous to them. For
instance, the Pakistani Taliban is widely rumored to be heavily involved
in and around Karachi in various mafia-style criminal rackets, including
organized kidnap-and-ransom, bank robbery, and extortion schemes.74
Key to this activity (that is, key to accessing these particular value
chains) is the ability to both balance the requirements of mafia-style
control over these profit-making enterprises with the need to main-
tain at least a veneer of militant ideological purity. To do this, Pakistani
Taliban leaders heavily indoctrinate, manipulate, and exploit the rank-
and-file members of the group in ways that conveniently marry ideo-
logical with commercial interests; telling, for instance, young militants
that banks or money exchangers are Central Intelligence Agency (CIA)
fronts, or that victims of extortion (who reportedly are just as likely to
be poor as rich) are enemies of the movement or even of Islam.75 Under-
standing terrorist finance in terms of value chains enables the analyst
to pierce through the layers of untruth that terrorist groups promote
about themselves. Sharfuddin Memon, director of a crime watch group
comprised of Karachi businessmen, concisely summed up this key real-

ity of terrorist finance in an interview to the New York Times: “The world
thinks this is about religion, but that’s a mistake. It’s about money and
power. Faith has nothing to do with it.”76
Overall, the desire/ability explanation of the basic political-economic
decision-making process involved in the individual exchanges of the
“value chain” of terrorist financing thus is very similar in substance to
both Amartya Sen’s rationality/freedom dichotomy discussed earlier as
well as Atwood, Glatz, and Muggah’s motive/means explanation of the
demand for small arms.77 One very possible—and important, if born
out in further research—implication therefore is that the same decision-
making process occurs whether buying small arms, remittance services,
plutonium, transportation, or tomatoes, since, as indicated below, the
processes by which terrorist actors access markets for everything from
weapons to money to tires appears to be at core a function of managing
information and relationships within governance structures particular
to specific times and places, regardless of the item of value or the
value chain accessed. The same naturally might be said of any actor
interacting with contemporary political economies.
Epistemologically, understanding terrorist finance in terms of value
chains entails a permanent analytic shift away from the inherently
deficient orthodox descriptions of simply “who finances terrorism and
how they do it,” and toward research focused on collecting and eval-
uating evidence to understand the dynamics by which terrorist actors
interact with, impact, and are impacted by local and global political
economies. In general terms, therefore around the various forms and
practices of power and value exchange evident within both the spe-
cific value chains accessed by terrorist actors and the activities taken
in order for the terrorist actor to access those markets; as well as, most
significantly, observation of the dynamics of how relationships, interac-
tions, and movements within the global system produce these forms and
practices of power and value, both individually and in aggregate. More
specifically, this would in actual research practice likely entail at least
the following:
Identification of the existing market flows and value exchange

systems used by these actors to acquire these resources.
Assessment of how and by whom these markets, value flows, and
value transfer systems are governed and controlled, for example, by
collecting and analyzing data on structural factors, for example, is
the flow of value open and competitive, or is cartel-type behavior
evident, or is it controlled tightly by one (for example, a warlord) or

many elites.
Assessment of how access to these markets, value flows, and value
transfer systems is or could be gained, both in general and specifi-
cally by the given terrorist actor, including identification and con-
textualization of the criteria for and methods of access and entry
to these particular markets, for example, kinship bonds, ideological
credibility, and economic wealth.
Assessment of relevant local practices, traditions, and structures
relating to politics and power (including ideology), society and cul-
ture (including religion), economics and business, and institutions
and law.
Identification of relevant geographies, for example, any known traf-
ficking or smuggling routes, or locations of regulated or unregulated
marketplaces, and so on.
Research into how relevant terrorist actors have accessed these value
chains in the past.
Evaluation of how this access impacted terrorist actors’ capabilities,
operations, and other activities; what this access indicated or cur-
rently indicates about the terrorist actors’ specific operational, social,
political, and other relationships and behaviors; and what access
to a particular market and/or acquisition of a particular resource
indicates about these factors.
Although this alternative approach provides the foundation for an

improved way to represent, research, and ultimately understand terror-
ist finance, it nevertheless also raises new analytic challenges. One is
that naturally it is often difficult to collect data on the abovementioned
areas, especially at the individual or transactional level of detail. How-
ever, as discussed in the previous chapter and as proven by researchers
like Nordstrom, Peters, Horgan, and Kupatadze, among many others,
this is hardly impossible, especially if one employs ethnographic or
historical research methods like interviewing and observation. Another
significant challenge is that, because much of terrorist financing occurs
outside the highly formalized and regulated political economies of
Europe and North America, applying this lexicon requires deep under-
standing of non-Western, informal, extra-legal, and “shadow” political
economies, which are often hard to comprehend without local knowl-
edge. Using these methods, it would be possible to build both a com-
prehensive dataset about “terrorist financing” behavior as well as a set
of evidence-based analytic judgments about the significance (that is,
instrumentality) of this behavior to given actors, times, and places. Both

of these would be applicable to governments, financial institutions, and
other relevant actors within liberal democratic societies.
To illustrate, let us briefly explore how by examining the ability of the
Taliban to access the market flows for opium and heroin one can arrive
at important and highly useful conclusions about a terrorist actor. Prior
to the 2001–02 invasion of Afghanistan by US and NATO forces, the
ruling Taliban movement had—to generalize a complex relationship—a
mutually advantageous partnership with the global drug trafficking net-
works that bought, processed, and sold Afghan poppy, in which these
networks were able to operate in exchange for providing the Taliban
significant revenue from the production and export of Afghanistan’s
primary export.78 However, the invasion saw the Taliban deposed from
power, its leadership displaced, and most of its military and political
capabilities destroyed, a change that unsurprisingly ended the group’s
previous arrangements with drug trafficking organizations. Neverthe-
less, by 2004, the Taliban began to reconstitute itself as a military
and political force in Afghanistan and Pakistan, primarily because it
regained the ability to access the lucrative flows of value related to
the opium trade. This was accomplished, as Peters documents, because
Taliban leaders were able to use their strong kinship bonds and histor-
ical relationships with the Pashtun tribes that governed much of the
Afghan-Pakistani border areas to facilitate both the smuggling of opium
out of the region, as well as the importation of cash and its laundering.79
Since then, this relationship has evolved so that by 2008, the Taliban
was staging large-scale military operations against NATO forces only in
order to divert attention away from convoys conducting many tons of
opium into Pakistan.80
Orthodox approaches to terrorist finance typically describe the above
situation in terms of the growth of a so-called crime-terror nexus,81 a
representation that, as Williams has noted,82 depicts the phenomenon
far too unproblematically, and which does not necessarily require any
exploration and specification of, or nuance about the centrally impor-
tant historical, political, economic, cultural, social, and other contexts
that constitute the individual level realities of such a “nexus.” Repre-
senting terrorist finance instead as in part a function of the ability of
a terrorist group to access value chains recalibrates analysis of terror-
ist finance to engage with these contexts and realities from the outset.
In the above case, for instance, there occurred in essence a change in
what was required of the Taliban to access its primary source of eco-
nomic value—from mutually beneficial tolerance (when it was in a
position of strength relative to the regions drug trafficking organiza-

tions) to active participation and support (when it was in a position of
relative weakness). Examining this change in terms of the dynamics by
which individual political-economic interactions both impact the capa-
bilities and behaviors of terrorist actors and reflect relationships with
wider communities, as Chapter 4 proposes, then, for one, it is possi-
ble to place detailed empirical field research, such as by Peters,83 into a
coherent conceptual and praxial framework and thus better and more
systematically assess and utilize her information. More pithily, this indi-
cates that by simply “asking the right questions” about terrorist finance,
one can arrive at answers that are more coherent, more precise, and
ultimately more useful.
Engaging with the complex individual contexts of realities of ter-
rorist finance via an examination of the ability of terrorist actors to
access value chains naturally involves other factors, which will need
to be explicated with further research. These factors may include, one
could hypothesize, relationships with key players in a particular mar-
ket (as above), institutional knowledge of the market (for example, of
regulations—such as know your customer (KYC) requirements—that
must be met to access services), or simply logistical dynamics (for exam-
ple, that would impact the ability to acquire certain types of weapons in
certain locations).
In summary, the concept of the “value chain” of terrorist actors rep-
resents one half of the new lexicon of terrorist financing presented in
this book. A basic irony of such “value chain activity” is that it involves
interactions that are mostly apolitical (that is, not intentionally sup-
portive of a terrorist cause) but which often directly lead to terrorist
violence. This section introduced the general theory of how terrorist
actors access existing markets for what they need. The following section
discusses these processes in more detail and examines the advantages of
this (re)formulation of terrorist finance relative to frameworks currently
available in the literature.
Advantages over existing frameworks

Representing terrorist financing through a value chain paradigm brings
many advantages to the analyst of terrorist finance. By focusing on
instrumentality, it provides a “North Star” to guide analysts and schol-
ars as they wade through complex and often voluminous sets of data
and seek to explain actions and events that can seem to have no or
almost infinite possible explanation. In the slang of counterterrorism,
it helps “connect the dots” and see at the same time “the big picture”
and “what to look for.” More precisely, it provides an epistemological
framework for systematically analyzing the interplay of power, value,
and human agency within given political-economic contexts at both
transaction and system levels.
A secondary advantage is that shifting to a “value chain” represen-
tation of terrorist finance provides a viable alternative to replace once
and for all the inaccurate, misleading, and easily abused idea of terror-
ist “financial infrastructure,” which mistakenly implies that economic
interaction with a terrorist actor—even if done so illegally, willingly,
and knowingly—necessarily implies being a part of some wider terror-
ist financial “infrastructure” or “network.” It shows this to be no more
accurate than concluding that the various interactions within a business
value chain are actually part of that business. General Electric, to return
to the above comparison, has a vast network of associated independent
businesses and individuals that provide it with goods and services that
range from the glass from for its light bulbs to contracted advice for
its government lobbying, each of whom interacts with GE according
dynamics. Although these relationships are accurately included as part
of GE’s “value chain,” it would be nonsense to conclude that such inter-
action necessarily either makes them part of GE itself or beholden to
GE. Similarly, just because someone interacts with al-Qa’ida econom-
ically does not necessarily imply they “are” al-Qa’ida or part of the
movement’s “infrastructure.” It is useful to emphasize that this epis-
temic reformulation is an analytic, not a normative claim. Naturally,
it is reasonable for a politician, for example, to try to dissuade economic
interaction with terrorist actors with these terms. I argue simply that it is
unreasonable for serious analysts of terrorism and terrorist financing to
do so. This thus is another secondary benefit to this part of the lexicon,
in that it draws a bright line between those that seek to analyze terrorist
financing systematically and rationally, and that they seek to do so to
serve some narrow political, personal, or institutional interest.
The primary analytic outcome is that a value chain modality more
accurately and comprehensively rates the importance of terrorist financ-
ing activity to terrorist actors than any other method currently available,
enabling better and more systematic understanding of, simply put,
who got what, where, when, why, and what does it all mean. This
re-orients analysis of “terrorist financing” toward assessment of the
instrumentality of “financial” activity as it directly relates to terrorist
operations. In other words, the significance of terrorist financing lies
not in the “financial” activity itself, but in the actions that are bene-
fited by that financial activity. This insight is only possible by viewing
terrorist financing in terms of a value chain.
Ironically perhaps, value chain transactions are likely to most directly
lead to specific acts of terrorist violence, even though the dynamics of
them are often apolitical. For example, by providing efficient financial
services (for example, bank accounts, Automated Teller Machine (ATM)
access, and international wire transfer services) to al-Qa’ida operatives
in the United States, SunTrust Bank was a critical component in the
value chain for the 9/11 attacks, even though the bank broke no law and
there has never been any implication that employees of the bank were
in any way aware in advance of the attacks or sympathetic to al-Qa’ida’s
objectives.84 Nevertheless, by representing SunTrust’s terrorism-related
financial activities in terms such as “a component of al-Qa’ida’s value
chain,” it is possible to simultaneously research and assess the bank’s
role in the attacks, without also requiring certain political, ethical, or
legal judgment. Of course while these latter judgments are likely to be
important to various members of the community of terrorist financing
analysts (for example, law enforcement or intelligence agencies, or sim-
ply academic researchers), the point is that the “value chain” based
representation of terrorist finance presented here allows these judg-
ments to be distinct from analysis of the actual activities. More briefly,
the approach allows analysis of terrorism-related financial activity that
is separate from (while still informing) the constructed and contingent
meaning various audiences necessarily will attach to such activity. This
enables a more systematic approach to researching terrorist finance that
is not only coherent but also ultimately useful to a multiplicity of audi-
ences (even ones that hold opposing political or moral perspectives).
This chapter shows that for the purposes of analysis, certain categories
of terrorist financing activity can be (re)represented as the compendium
of individual transactions in which various items of material and non-
material value are exchanged that result in terrorist actors acquiring
something of value. This helps challenge the popular conception of
terrorism-related financial activity, upon which much CTF action is
based (as discussed above), that it “exploits” “legitimate” economic
systems, and must be therefore pushed “out” of those systems. These
normative-based frameworks I argue however are inferior to under-
standing terrorist finance, in part at least as interaction with value
chains. Most simply, the realities of terrorist finance point to the fact
that terrorist actors get what they need wherever it can be gotten and
from anyone who has it. From this foundation, one can then proceed
to systematically analyze, for instance, their interests and objectives,
the nature and extent of their power, in what forms of value and
value exchange they engage, and the consequences of all of the above
for various subjects. Ultimately, therefore, this approach represents the
beginnings of a teleological theory of terrorist behavior, in that it is con-
cerned with the actual conduct of people at the individual level, within
given contexts and tied closely to explicit analytic goals. This represents
a significant advancement in the analysis of terrorist finance, comple-
mented by the greater specification and nuance of so-called material
support for terrorists.
5
Understanding Terrorist Finance
as a Continuum of Material
Support
This chapter argues that, in addition to value chain interaction, terrorist

financing should also be represented in terms of a nuanced under-
standing of the provision of support to socio-political movements and
communities associated with terrorist actors, but not necessarily to the
actual terrorists themselves. Countering such material expressions of
support to socio-political movements and communities associated with
terrorist actors or terrorism is a significant focus of current law and pol-
icy, but to date little nuance has been accorded to different types of
material support. This chapter argues that “support” for terrorism is best
understood and analyzed as a reasoned choice grounded in the norms,
values, beliefs, and interpretations regarding global and local societies
evident in terrorist groups and the socio-political contexts in which they
exist, or more precisely that terrorist financing in the form of material
support consists of freely and rationally chosen actions, which are grounded
in particular social and political ideas, that result in the provision of material
goods, services, or other forms of value that are instrumental to the objectives
of terrorist actors. These support actions, this chapter explores, occur on
a continuum and can range in form from intentional assistance to a ter-
rorist organization in order to finance specific acts of violence against
an enemy to ad hoc material expressions of support for broad social,
political, or religious beliefs that happen to be shared by a particular ter-
rorist group. I argue that understanding material support for terrorism
as a continuum enables more systematic, more nuanced, and ultimately
more useful approach to analyzing this especially contentious aspect of
terrorist finance.
141
A continuum of material support for terrorism
In one sense, terrorist financing is the “material support” of terror-

ists, their violent and non-violent activities, and the causes for which
they supposedly fight, as explored explicitly and implicitly through-
out the book. However, at present, understanding of this support, its
dynamics, and when and how exactly it translates into material or
financial support is largely unsystematic and underspecified, and leaves
out much important nuance. Surely, for example, analytic difference
must be made between those giving money directly to a terrorist group
and simply supporting social, political, or religious institutions some-
how related to these groups. Where this line should be drawn has
not been specified, and, as discussed in Chapter 2, some in fact have
self-servingly even argued that because money is “fungible” no such
line even exists. But if this was indeed the case, then every driver of
every automobile ought to be viewed in exactly the same way as some-
one handing Osama bin Laden a briefcase full of cash because after
all some Saudi citizens whose wealth derives from the sale of oil have
been known to donate significant sums to al-Qa’ida. Others have made
the same mistake in the other direction, claiming that just because
some—or even most—material support claims are exaggerated then no
such line can be drawn because it is politically inspired. Instead, here
I not only argue that such a line can and—given that terrorist financ-
ing is an inherently politicized issue of securitized representation—must
be drawn, but I actually attempt to at least begin to. In this vein,
the following sections develop what is essentially an epistemic theory
of the material support for terrorism, which holds that material sup-
port for terrorism occurs along a four-part continuum, each of which
exhibits different behavioral dynamics, analytic logics, and response
options.
The first two parts of the continuum, “sponsorship” and “sympathy,”
describe material support to the actual violent (and thus defining) activ-
ities of terrorist organizations. At this end of the continuum, material
support represents a way of waging war; specifically by participating
in a violent social or political struggle not by becoming a combatant
in it, but via provision of material resources to those who are will-
ing to fight. The second two parts, “subsidy” and “peripheral support,”
describe other forms of material support not to actual acts of terrorist
violence, but to the non-violent organizational and socio-political activ-
ities of terrorist actors. At this opposite end of the continuum, material
support of terrorists represents a way of waging politics; in particular by
providing resources to the socio-political movements and constituencies
Terrorist Finance as a Continuum of Material Support 143
on whose behalf a terrorist group ostensibly fights. The more nuanced

perspective of material support provided by this continuum enables an
approach for more systematically analyzing how the ideas and actions
of individual people combine to provide instrumental support to the
objectives of terrorist actors, and thus ultimately also a preliminary tem-
plate for more precisely and comprehensively understanding terrorist
finance.
Sponsorship
The first part of the continuum of material support of terrorist financing
is what can be referred to as “sponsorship,” defined here as the direct
and active material support for violent terrorist operations that mean to serve
certain shared objectives. More expansively, “sponsorship” thus encom-
passes those so-regarded “terrorist financing” interactions in which an
actor affirmatively chooses to provide, without meaningful intermedi-
aries or intervening processes, material forms of value directly to actors
who are, or are intending to be, involved in the planning or execution
of violent terrorist acts, and does so intentionally and with at least some
foreknowledge that the resources provided will be used to support vio-
lent ends. Sponsorship of terrorism thereby necessarily entails belief in
terroristic conflict to achieve one’s own political objectives. This implies,
in terms of the “right questions” explored in Chapter 3, that the pri-
mary object of analysis concerning sponsorship is the instrumentality
(actual or intended) of the resources provided to the violent capabilities
and behaviors of a particular terrorist actor. Sponsorship support is at
root a means to wage war, and thus ought to be analyzed and addressed
as such. Sponsorship also importantly implies a straight line from the
sponsor to violent goals and objectives, which distinguishes them, for
example, from those “peripheral supporters” who fund an amorphous
terrorism-related “cause” rather than an actual terrorist actor. This is
only possible with this nuanced distinction which enables systematic
assessment of the actual, tangible importance of a material supporter to
a terrorist actor.
During the latter years of the Cold War especially, the issue of covert
government support of terrorism received a great deal of attention.
This support—dubbed “state sponsorship of terrorism”—was intended
to enable the waging of war-by-proxy against enemies of the sponsoring
state. While state sponsorship of terrorism has declined considerably
since the end of the Cold War, today many individuals and non-state
groups with violent extremist ideologies intentionally provide material
support to terrorist groups with the explicit objective of waging similar
wars-by-proxy against their own particular enemies. For instance, the

Central Intelligence Agency (CIA) has estimated that in 2009 alone, the
Taliban in Afghanistan received $106 million in donations from outside
the country.1
To illustrate this phenomenon, let us briefly explore what can be
described as online grassroots sponsorship of al-Qa’ida. To review,
al-Qa’ida (“the base” in Arabic) is a relatively small, intensely violent
revivalist takfiri, salafist Islamist movement focused primarily on using
terroristic violence to spark a revolution among “true” Muslims against
their primary enemies; the West and apostate Muslim governments.
Individuals identifying themselves as members of al-Qa’ida are present
in many countries in the Middle East, Southeast Asia, Africa, Europe,
and Central Asia, with the largest concentration as of 2010 believed to
be in Pakistan.2 In addition, several distinct militant organizations have
pledged allegiance to the global al-Qa’ida movement, including groups
in Yemen (al-Qa’ida in the Arabian Peninsula), Iraq (al-Qa’ida in Iraq),
Algeria (al-Qa’ida in the Islamic Maghreb—AQIM), Libya (Libyan Islamic
Fighting Group), China (East Turkestan Islamic Movement), Philippines
(Abu Sayyaf Group), and Indonesia (Jemaah Islamiyah), among others;
and numerous other violent jihadist groups share the al-Qa’ida’s over-
all objectives and philosophy but have not necessarily explicitly joined
the movement.3 In this way, al-Qa’ida can be understood most simply
as a global utopian movement seeking above all to be a revolutionary
vanguard within and for the Muslim world.4 The wide perception, how-
ever, is that despite its notoriety, al-Qa’ida lacks significant financial
resources.5 Within the above context, al-Qa’ida and its localized affili-
ates and associates attract a certain amount of grassroots support from
individuals around the world who share both the movement’s utopian
aims as well as its strategy to use violence and brutality to help them
come about.
Many of these globally dispersed supporters are able to realize this sup-
port by using various online resources to both solicit and donate money
and other forms of material value to al-Qa’ida and related groups.6
These resources—often dubbed simply “jihadist Web sites”—include not
only static Web sites but also various user-generated content sites such
as customized private chat rooms, public comment forums, and spe-
cialized pages on commercial sites such as Facebook and YouTube.7
Whatever their particular format, jihadist Web sites provide sympathetic
extremists virtual communities in which they can read ideological and
motivation literature, view videos of attacks on Western military and
civilian targets, and discuss and connect with fellow believers. In 2009,
for instance, one such Web site (hanein.info) announced a one 2-month
long fundraising drive for al-Qa’ida-associated groups in Iraq, dubbed
“The Fourth Campaign: Conduct Jihad with Your Money.”8 Launching
the appeal, one forum member nicknamed Abdullah laid out five gen-
eral purposes relating to material support for violent jihadist groups,
including al-Qa’ida:
1. Provide money directly to specific al-Qa’ida and related jihadist

groups and networks, especially to address explicitly identified fund-
ing shortfalls in those formations.
2. Promote financial cooperation between and among these networks
(that is, to encourage well-funded groups to support their poorer
counterparts).
3. Revive the idea among Islamic scholars, merchants, and sympathetic
publics of financial support for jihadists as a religious duty.
4. Provide money and other material support directly to the families of
dead militants.
5. Provide money and other material support directly to media efforts
related to al-Qa’ida and affiliated jihadist group.9
Abdullah also took time to describe various methods of transferring

donated money to its intended recipients, one of which involved poten-
tial donors writing to the Web sites of the particular Iraq-based groups to
obtain the name of a group representative in Syria, Turkey, or Jordan, to
whom the donor could send money via bank wire or any other means.
The money would be then apparently smuggled into Iraq by this rep-
resentative or his associates.10 Abdullah also stressed the importance of
donating small sums of money in order to avoid bank reporting require-
ments, and in general for potential sponsors to avoid behaviors believed
to garner attention from authorities.11 As can be seen in the case of these
Web sites, sponsorship of terrorism indicates a clear intention to directly
and affirmatively support the violent activities of terrorist groups. As will
be shown, this differs in some subtle but important ways from other
types of material support.
Ultimately, this conception of “sponsorship” is at the same time both
more precise and more broad than traditional views that focus on state
support of terrorism. I argue that any actor can “sponsor” terrorism,
state and non-state alike. This requires the state sponsorship model,
most thoroughly elucidated by Byman,12 to be expanded to include, for
example, activities such as fundraising or individual donations to ter-
rorist actors, as well as direct transfers from state governments. Whether
a state or not, sponsors of terrorism exercise a free and rational choice

to mobilize material resources not only on behalf and in support of a
terrorist actor but also in service of the specific objective of carrying out
terrorist violence.
Sympathy
The second part of the continuum of material support of terrorist financ-
ing is what I refer to as “sympathy.” “Sympathy” is of course a familiar
term, but I argue that it is an important element in material and finan-
cial support of terrorist activity. “Sympathetic support” is defined here as
indirect, passive, or ad hoc support for violent terrorist operations that mean to
serve certain shared objectives. By this I mean activities that are not strate-
gic but either opportunistic or passive and contingent on a particular
time and place, and thus rely on more emotional, normative, or cogni-
tive factors rather than rational calculation. Thus it can include forms
of non-material support as well, such as looking the other way at a bor-
der crossing or lowering the price of a weapon, but only if such action
was undertaken out of sympathy for specifically the violent activities of
a terrorist actor. This distinguishes similar actions in support for either
the non-violent activities of terrorist actors or support for broader, non-
actor, or group-specific causes, which may or may not have a violent
component.
Al-Qa’ida, for example, has received sympathetic support from a vari-
ety of sources at both grassroots and high levels. For example, Saudi
newspaper Al Twafoq reported that during the 2008 Hajj a video appeal
for funds from al-Qa’ida leader Ayman al-Zawahiri was passed around
among many pilgrims via mobile phones. Any money donated was
collected informally by various sympathizers who then carried it in
person out of Saudi Arabia and eventually passed it on to al-Qa’ida
in Afghanistan and Pakistan. A similar fundraising video message from
Saeed al-Shahri, deputy al-Qa’ida leader in Yemen, was apparently also
distributed during the 2009 Hajj.13
On a larger scale, Afghan warlord Gulbuddin Hekmatyar could also
be categorized as a sympathetic supporter of al-Qa’ida for his primarily
opportunistic material support of al-Qa’ida. During the Afghan-Soviet
War of the 1980s, Hekmatyar was one of the most well-known and
powerful mujahedeen, and served as prime minister of Afghanistan
from 1993 to 1994 and again in 1996. However, unlike many of his
compatriots, he both actively and publicly expressed both a takfiri inter-
pretation of Islam as well as a deep hatred of the United States,14 and on
February 19, 2003 was designated a “Specially Designated Global Terror-

ist” (SDGT) by the US Government.15 Currently, Hekmatyar is leader of
a militia group known as Hizb-e-Islami Gulbuddin (HIG) that not only
controls large amounts of territory in Afghanistan’s Kunar and Nuristan
provinces along the country’s border with Pakistan but also is heavily
invested in the illicit trade of timber, gemstones, and heroin out of these
provinces.16 Journalist Gretchen Peters reports that HIG works closely
with al-Qa’ida members present in the neighboring Pakistani districts
of Bajaur and Dir. Although few specifics are given, she implies that
Hekmatyar, via his HIG subordinates, enables al-Qa’ida operatives to
participate and profit from these illicit trades, most likely by either pro-
viding heroin, timber, or gemstones directly to al-Qa’ida (which it can
then sell on using its own networks), or by allowing al-Qa’ida operatives
to participate in HIG’s own trafficking networks.17
Although Hekmatyar intentionally provided direct material support
to a terrorist actor (that is, either marketable goods or at least access
to his trafficking network), this case is best categorized as sympathetic
support because Hekmatyar has at various times sought to distance
himself ideologically from al-Qa’ida and Osama bin Laden,18 and the
support he likely has provided to the group is much more ad hoc and
opportunistic, rather than active and direct. Most likely, this is because
while Hekmatyar is sympathetic and supports al-Qa’ida’s objectives, he
is also known to be aware that too active and overt material or rhetor-
ical support of al-Qa’ida may provoke actions by the United States or
Pakistan that could not only disrupt his trafficking networks but also
jeopardize his well-known ambitions to return to national leadership
in Afghanistan.19 This case thus illustrates the various individual-level
social, political, economic dimensions of terrorist financing, and gener-
ally that material support of terrorism is very profitably represented in
these terms.
Subsidy
The third part of the continuum of material support to terrorists is what
I refer to as “subsidy.” “Subsidy support” is defined here as active mate-
rial support for those non-violent activities of terrorist actors that mean to
serve certain shared objectives. “Subsidy” involves material support as an
expression of support for terrorist actors, but only of their non-violent,
non-terroristic activities. Examples of subsidy support abound. This can,
for instance, include donations or other support either to the various
political and charitable “wings” of terrorist groups, such as Sinn Fein
(Provisional Irish Republican Army—PIRA), Jihad AL-Binaa (Hizbullah),

and Jamaat-ud-Dawa (Lashkar-e-Taiba—LeT); or to distinct organizations
that allegedly work closely with either terrorist groups or their leaders
of the group, such as the Holy Land Foundation (HAMAS). As we see
below, it can also include support from and to organizations who work
with terrorist groups to help them give up violence and find ways to
achieve their political and social objectives peacefully.
Most significant to understanding terrorist finance, the concept of
“subsidies” of terrorist actors provides a way to rationally and analyt-
ically reconcile the politically charged debate (discussed in Chapters 1
and 2) between those who argue that support to a terrorist actors’ chari-
table, political, and other non-violent activities necessarily also supports
their violent activities and those on the other side who argue that there
is no such connection. To illustrate this debate, let us consider the issues
at play in the 2010 US Supreme Court case Holder et al. v. Humanitarian
Law Project et al.20 in which the so-called material support law (18 USC. §
2339B(a)(1)) was challenged on grounds that the law’s criminal prohibi-
tions against “the provision of ‘training,’ ‘expert advice or assistance,’
‘service,’ and ‘personnel’ to government-designated ‘terrorist organi-
zations’ ” were unconstitutional if and when “applied to pure speech
that promotes only lawful, nonviolent activities.”21 In the case, the
Humanitarian Law Project—according to their Web site, a “non-profit
organization founded in 1985, dedicated to protecting human rights
and promoting the peaceful resolution of conflict by using established
international human rights laws and humanitarian law”22 —argued that
it should be legally allowed to assist the Kurdistan Workers’ Party (PKK),
a designated “Foreign Terrorist Organization” (FTO) in the United States,
on making official human rights complaints to the United Nations
and conducting peace negotiations with the Turkish government. The
US Government (under both the Bush and Obama administrations)
argued that such support should be considered illegal because even non-
violent support—or indeed even support meant to actively encourage
non-violence—nevertheless supposedly freed up resources the terror-
ist group could spend on violent activities. This case thus exhibited
these two opposing views of material support to non-violent activities
of terrorist groups, as demonstrated in these quotes:
From then-US Solicitor General (and now US Supreme Court Justice)
Elena Kagan:
The material support statute is a vital weapon in this nation’s contin-

uing struggle against international terrorism . . . Congress reasonably
decided that when you help a . . . terrorist organization’s legal

activities, you’re also helping the foreign terrorist organization’s
illegal activities. Hizbullah builds bombs. Hizbullah also builds
homes . . . . [W]hen you help Hizbullah build homes, you are also
helping Hizbullah build bombs. That’s the entire theory behind this
statute.23
From former US President Jimmy Carter, founder of the Carter Center,

which filed an amicus brief in support of the Humanitarian Law Project:
We are disappointed that the Supreme Court has upheld a law that
inhibits the work of human rights and conflict resolution groups.
The “material support law”—which is aimed at putting an end to
terrorism—actually threatens our work and the work of many other
peacemaking organizations that must interact directly with groups
that have engaged in violence. The vague language of the law leaves
us wondering if we will be prosecuted for our work to promote peace
and freedom.24
The analytic implications of understanding this particular category of

terrorist financing activity as “subsidy” to terrorist groups are twofold.
First, it implies that terrorist financing is sometimes a form of political
expression, and thus that terrorist groups must be analyzed as politi-
cal entities, that is, actors with political objectives that compete against
and with analogous objectives of other political actors, including states.
When put into this context terrorist financing is often an expression,
and as such is often a non-violent activity, that is, it is an exchange of
value in order to express some thought or belief. Analytically, therefore,
the important question is what precisely is being expressed and how
does it change over time and place.
Second, subsidizing a terrorist actor, one can hypothesize in this
conception, often actually constrains their violent terrorist activities,
because the terrorist actor feels pressure to maintain their subsidies even
at the expense of changing their operations or objectives. For example,
Gunning points out that HAMAS is much more constrained in its behav-
ior because it is financially bound to its constituents, whereas al-Qa’ida
is not.25 This interesting side effect of subsidy support, while valuable
in that it supports other core political-economic missions of the group,
also ties terrorist groups to constituencies who may conflict with their
other or broader missions. In this way, it would be logical to hypoth-
esize, subsidizing terrorist actors binds them to certain constituencies,
but often not the ones for whom they supposedly act. For example,
Gunning argues that Hizbullah, even though it is a Shiite group within
Lebanese sectarian-based political community, receives funding support
from Lebanese Christian groups, which in turn influences Hizbullah
to act in certain ways as representing all of Lebanese society’s inter-
ests, especially in opposition to Israel.26 In other words, donations from
subsidizing actors within Lebanese Christian communities appear to
broaden Hizbullah’s desired public identity into an “all-Lebanon” group,
at least in certain contexts. The point of this is not to assume any
cause-and-effect relationship, but simply to point out the important
implication that financial dynamics, it can be hypothesized, will gen-
erally follow pre-existing social or political dynamics. And of course
the reverse is true; one can know the financial dynamics by examin-
ing social and political contexts. Al-Qa’ida does not have this problem
because they do not engage in subsidy support because they have no
non-violent social or political program. Analytically, this is a good indi-
cator of how socially embedded a terrorist actor is. In addition, it both
reflects and is a reflection of local political-economic contexts.
Peripheral
The fourth part of the continuum of material support of terrorist
financing is what can be referred to as “peripheral support.” I define
“peripheral support” as material and non-material support for the broad
socio-political objectives shared by terrorist actors. The central dynamic of
such activity is the material expression of support for the “politics of
terrorists,” or in other words, material assistance meant to further the
social, political, religious, cultural, or other objectives of terrorist actors
(which of course are also typically shared by many non-terrorists as
well). Peripheral support thus would include material support of Irish
republican and nationalist causes (shared by the the Irish Republican
Army and its offshoots), Palestinian opposition to Israeli settlements
of occupied land (shared by HAMAS and other Palestinian terrorist
groups), Deobandism (shared by LeT), and opposition to the presence of
Western military personnel in predominantly Muslim countries (shared
by al-Qa’ida).
Illustrating the concept of peripheral versus other categories along the
continuum of material support is the financial support provided by Irish
Americans to the Irish Republican movement. Throughout its existence,
the PIRA received significant financial support from the Irish-American
community, with approximately half of its approximately $10.3 million
annual operational budget from US sources.27 These funds originated

primarily from Irish citizens living in the United States and Americans
of Irish descent, donations from whom were solicited, collected, aggre-
gated, and eventually transferred across the Atlantic by a number of Irish
republican charities, foundations, and other non-profit organizations.28
The largest of these was the Irish Northern Aid Committee, or more
commonly, NORAID. From its founding in 1969 until 1991 NORAID
raised approximately $3.6 million for Irish republican causes, through a
combination of testimonial fundraising dinners and an extensive cam-
paign to solicit donations through direct mail, dinner-dance benefits,
and “passing the hat” in Irish American-owned businesses (such as bars)
in major US cities.29 This money was ostensibly to provide support for
any number of causes related to Ireland and Irish republicanism, rang-
ing from political activities to support to the families of imprisoned
PIRA members,30 but much of it actually went to purchase weapons
for the PIRA, a fact essentially admitted to by several NORAID leaders
in their 1982 arms smuggling trial.31 As such NORAID support to the
PIRA can be characterized as both subsidy as well as sponsorship. But,
given that NORAID’s fundraising narratives typically appealed to peo-
ple’s sympathies for non-violent aspects of the republican movement,
much of the donations to NORAID can be considered to be peripheral
support, as they were intended to provide support to Irish republican-
ism generally, but not necessarily to the PIRA itself. At the same time,
however, it is evident how various types of support can easily intertwine,
often, one can assume, by the design of those actors participating at end
of the continuum more closely tied to actual terrorist violence.
This case raises some interesting points regarding the regulation and
governance of such interconnected material support. On the American
side, for example, despite such clear and well-established links between
NORAID and the PIRA, the US Government’s response was ambiguous,
if not contradictory. In some ways, US officials were indifferent or even
sympathetic to NORAID’s activities. Under the US Foreign Agents Reg-
istration Act (FARA) of 1938 US individuals and organizations that as
“agents of foreign principals in a political or quasi-political capacity” are
required to publicly disclose “their relationship with the foreign princi-
pal, as well as activities, receipts and disbursements in support of those
activities.”32 Although it tried to register a different recipient, the official
“foreign principal” of record for NORAID in fact has been the PIRA since
a US district judge ruled in 1981 that NORAID was “an agent of the
PIRA providing money and services for other than relief purposes.”33
Despite this, NORAID had always been (and as of 2010 remains) allowed
to operate openly and freely in the United States, even to such an extent
that members of Congress, high-level state officials, and various other
prominent people with ties to the Irish American community regularly
attended NORAID’s fundraising dinners and spoke in explicit support of
the PIRA.34 For example, speaking at a pro-IRA rally in his Long Island
constituency, Rep. Peter King (R-NY) declared, “We must pledge our-
selves to support those brave men and women who this very moment
are carrying forth the struggle against British imperialism in the streets
of Belfast and Derry”;35 rhetoric that mirrors, for instance, that from
various Middle Eastern and South Asian supporters of contemporary
jihadist movements, albeit within a different socio-cultural context.
Generally speaking, Irish-American peripheral support of the
PIRA existed very much in the relevant socio-political contexts of the
day. In the United States, the Irish diaspora would occasionally become
more radicalized and thus more financially generous in response to
perceived British outrages in Northern Ireland (especially the so-called
Internment policy of 1971 and the 1981 deaths of ten imprisoned
PIRA hunger-strikers).36 Regarding the participation of American local-,
state-, and national-level politicians in Irish republican fundraising
efforts, Guelke makes the important observation that “by no means
all of the politicians who went to such dinners could be counted as
supporters of the PIRA; NORAID was the beneficiary of the American
political elite’s disposition to be joiners.”37 The British perspective on
NORAID and Irish American support, unsurprisingly, was very differ-
ent. Throughout 1970s especially, the UK government applied great
diplomatic pressure to the US Government to investigate and prosecute
those involved in financing IRA terrorism, something the United States
resisted in context of the influence of Irish-American constituencies in
US domestic politics. The US position evolved, however, after first the
1979 IRA murder of Lord Mountbatten (which undermined the moral
legitimacy of the group for many in the Irish American community),
and second the close relationship between US President Reagan and UK
Prime Minister Thatcher beginning in the early 1980s, and eventually
led to increased efforts of US authorities against PIRA fundraising in the
United States, including in 1981 the dismantling of a key New York-
based fundraising and arms smuggling ring headed by PIRA member
George Harrison, and the arrest and prosecution a year later of five peo-
ple for attempted arms smuggling. Interestingly, even though this shift
in attitude by the US Government resulted in permanently diminish-
ing the share of funds the PIRA received from the United States from
almost half in the 1970s to perhaps one-tenth of that by the late 1980s,
the PIRA and Sinn Fein continued to exploit the increasingly fictional
foundation of financial support in the United States to bolster its claims
that it was a legitimate military organization involved in a legitimate
armed struggle.38 All this underlines the perhaps inconvenient real-
ity that peripheral support for terrorism is driven by at least—and
often essentially no more than—legitimate support for social and polit-
ical causes that simply happen to have a terrorist group associated
with them.
This of course begs whether it is justifiable to include support for non-
violent political activities as one aspect of “terrorist finance.” On the
one hand, it is certainly analytically justified, since terrorist groups—as
socio-political actors—are definitely impacted by (and often—but cru-
cially not always—benefit from) the success of the social and political
causes with which they are associated. On the other hand, however, by
naming such inherently non-violent—and indeed peripheral—activity
as “terrorist finance” it securitizes a wide variety of peaceful and legit-
imate opposition and thus implicates it for control and sanction, an
outcome that runs counter to the basic Enlightenment principles upon
which the United States, European countries, and other liberal demo-
cratic societies are based. However, I argue that because including such
“peripheral” activity is indeed analytically justified, it should be included
in analysis of terrorist finance. To do otherwise would simply descend
into the realm of polemic and outright propaganda that is so rife in
our current understandings of terrorism and its financing. In a liberal
democratic system, legitimate and peaceful political action should not
be outlawed or sanctioned. Therefore, if governments—especially those
that see themselves to be liberal democracies—implement laws and poli-
cies that in any way outlaw or sanction legitimate and peaceful political
opposition, then that is the problem, not inclusion of such activity into
an analytic framework.
Analyzing material support for terrorism
Understanding terrorist financing as, in part, a continuum of material

support raises three important conceptual issues that need explana-
tion. The first is that one can understand material support to be an
action produced by certain ideas that are related to certain terrorist
actors. For some, this may be problematic as many ideas “linked”
to terrorists are widely held and seen to be legitimate. For example,
the cause of Palestinian statehood—or even violent Palestinian reac-
tions to violent Israeli occupation—is a belief held by many who do
not agree with the terrorist tactics of HAMAS. Similarly, many in the
Irish-American community believed in the idea of a united Ireland but
were disgusted by the terrorism of the IRA. Nevertheless, conceptually
it appears both more accurate and more useful to in some way analyt-
ically connect terrorists with the causes for which they claim to fight,
and thus necessarily also with those that support those causes whether or
not they themselves support the associated terrorist actors.
The first implication, therefore, is that understanding material sup-
port of terrorism requires specifying and understanding the epistemic
nature of these connections. In this way, the above continuum repre-
sents a preliminary typology of such connections, with activity consist-
ing of “sponsorship support” and “sympathy support” at the end involv-
ing material support for the operations of terrorist actors, and “subsidy
support” and “peripheral support” at the continuum’s other end in
which people materially support the socio-political objectives of terrorist
actors rather than their operations themselves. Significantly, this indi-
cates that the argument that the violent and non-violent activities of
terrorists are indeed related (that is, the so-called fungibility argument) is
analytically correct. But, just as importantly, this continuum also means
that material support for the violent versus the non-violent aspects of
terrorist movements not only can be distinguished, but also ought to be,
given that—in context of the “right questions” from Chapter 3—some
material support can actually encourage peaceful and other desirable
outcomes and thus actually diminish the capability and the inclination
of terrorist groups to use violence. Ultimately, the continuum presented
here represents a reconceptualization of terrorist financing that permits
analysis of these aspects of terrorist finance that is more nuanced, more
systematic, and more useful than what is currently possible.
Secondly, this formulation of material support grounds analysis of
terrorist financing into analysis of the choices that go into supporting
terrorist objectives, and thus of the values, beliefs, and ideas that inform
and drive those choices. This takes human agency seriously, using Sen’s
conception of rationality as “reasoned choice” as a basis, material sup-
port can thus be seen to be governed by the content of the rationales
driving support, the extent that those choosing to engage in material
support of terrorism are (culturally, politically, cognitively, morally) free
to do so, and the factors that strengthen or diminish the power of
those rationales. This implies clearly that individuals bring local con-
cerns into even global social movements. This is not new. In fact, it is
the basis of any large-scale political movement, from the Roman Empire,
to Christianity, to Islam, to Communism. Burke describes very well how
al-Qa’ida’s success is proportional to its ability to co-opt local concerns

into a global struggle, much as Communism or even neoliberalism did
before.39 Therefore, by representing terrorist finance as individual level
material expressions of support for certain socio-political causes avoids
the pitfalls of conceiving terrorism as a global political movement or
organization or otherwise forcing terrorist groups into a political space
that they do not occupy. Further research based around this approach
could thus contribute to understandings of how and why individuals
come to support terrorism (the critical factor of terrorist financing),40
and provide a way to analyze the rationality of terrorist actors and
their supporters, something that many have had difficulty doing out
of fear that doing so somehow “legitimizes” terrorists and their causes.
For example, this enables one to assess how and why people provide
the support they do at different parts of the continuum, and why the
same person may move along this continuum at different times and
in different contexts. This could, for example, lead to more systematic
understanding of how much does “money follow success,” that is the
precise extent to which support for a terrorist or other violent organi-
zation depends on the success of that organization, either militarily or
politically. Additionally, further research based on this approach would
contribute to the ongoing debates regarding the role economic poverty
and inequality play in provoking and sustaining terrorist and militant
movements.41
Third, understanding terrorist finance in terms of the above contin-
uum helps focus analysis not only on the ideas and actions constituting
material support, but more importantly on the consequences of support
for terrorist actors’ ability to achieve their objectives. One irony of this
activity is that even though it by definition involves a will to support
terrorism, the economic actions seem to typically result in support-
ing non-violent activities, such as social-welfare and propaganda. Given
that terrorists often fight for vague or broad objectives, it is entirely rea-
sonable to hypothesize that materially supporting actions that empower
the ideas on which these objectives are based is tantamount to “support-
ing terrorism.” In fact, analytically this appears to be logical. The point
therefore is that when states are seeking ways to respond to terrorism,
it is likely impractical or unfair to outlaw all “material support” for ter-
rorism, not to mention in direct contravention of liberal democratic
principles. That said, one can also hypothesize that it is still desirable
for states to learn from such material support, as it will give unique
insight into the social and political power of both terrorists and the
causes linked to them. This is largely because that measuring material
support in this way can provide a window into how seriously various
individuals and groups take which causes and objectives, for the same
reason that prices contain much information about the various factors
that go into economic choice.
Fourth, it is clear that material support activity and value chain
interactions can overlap. Take for instance the case of Arif Qasmani.
Qasmani was a sympathizer and possibly a member of LeT, and who
also was able to arrange significant material donations to the group from
Dawood Ibrahim, the most powerful organized crime figure in South
Asia. At the same time, however, Qasmani apparently helped al-Qa’ida
in Afghanistan and Pakistan obtain supplies and weapons.42 Depending
on perspective, therefore, Qasamani and his actions could be catego-
rized in a variety of different ways. For instance, in terms of al-Qa’ida,
Qasmani was the gatekeeper for accessing value chains relating to
weapons and other supplies. From LeT’s perspective, Qasmani was either
an important middleman (but very likely not the only one) for accessing
a significant value chain—cash and material from Dawood Ibrahim—or
a key facilitator of material sponsorship. In terms of Dawood Ibrahim
(who has been named an SDGT by the US Treasury), Qasami represented
the particular means by which he was able to provide sponsorship and
subsidies to LeT, and also indirectly al-Qa’ida. The perspective one takes
will naturally depend on one’s analytic perspectives and purposes (for
example, if one is interested in specifically the financing of al-Qa’ida,
versus a different focus). But, regardless of one’s focus, the above con-
tinuum of material support, especially in conjunction with the value
chain paradigm, enables a more systematic, more nuanced, and more
useful method to understanding terrorist finance.
Advantages over existing frameworks

As examined earlier in the book, a common view of terrorist financ-
ing depicts terrorist supporters funneling money into some sort of
vast global underground terrorist financial network comprised per-
haps not just of numerous bank accounts and shady middlemen but
also an archipelago of charities, mosques, and businesses, all provid-
ing needed funds and cover for the terrorist actor to perpetrate their
atrocities. Reality, as we have seen, is different. In fact, members of
terrorist groups, which are socio-political entities within particular com-
munities, have beliefs, constituents, allies, and acquaintances, and thus
“material support” to a terrorist group manifests itself in a variety of
context-dependent ways, including everything from cash donations to
a religious institution that promotes the religious or political beliefs
shared and promoted by the terrorist group, to in-kind assistance to “the

cause,” such as Web sites from which sympathizers can join the terrorist
group or contribute money to fund the travel of those who do, to funds
provided to a social welfare organization that is part of or at least asso-
ciated with a designated terrorist group, to of course, the minority of
cases that involve the actual direct purchase of weapons to be used in
an actual terrorist attack.
F. Scott Fitzgerald famously wrote,
The test of a first rate intelligence is the ability to hold two opposed
ideas in the mind at the same time, and still retain the ability to
function.43
Most significantly, therefore, understanding terrorist financing activity

along a continuum of material support enables analysts to begin to
resolve two important opposing ideas: that material support to non-
violent activities should indeed be incorporated into analyses of terrorist
financing (because economic value is “fungible” and thus can go to
support ends different from those originally intended); and also that
evidence- and logic-based analysis of terrorist finance absolutely requires
a way to distinguish material support of violent versus non-violent activ-
ities (given that terrorist actors are also simultaneously social, political,
and economic entities). This innovation allows us to further understand
the nuanced and often-contradictory realities of terrorist finance, and
in particular to start to address some of the deep dysfunctions currently
plaguing our understanding of terrorist finance.
This typological formulation contributes a potentially powerful
framework of analysis that will enable accurate and comprehensive
assessments of the meaning and importance of terrorist financing activ-
ity to global and local societies, illuminating which financial activity
is relevant to which actors, communities, and analytic outcomes. This
would allow, for example, conclusions about future trends in terrorist
finance by researching evident trends in the various types of support
in a given time and place, or relevant to a particular terrorist actor
or socio-political cause, and in general a more targeted and nuanced
(and thus effective) assessment of risk and associated response, which
can be systematically evaluated along this “continuum” of behaviors.
For example, although funding for the social welfare components of a
terrorist group can strengthen the political influence of that group, it
neither necessarily strengthens the military capabilities of that group
nor necessarily increases the likelihood of that group using violence.
In fact, as Gunning has noted, it could very likely actually have
the opposite affect. In terms of the continuum, therefore, it seems

that actions and environments that encourage subsidizing and periph-
eral support at the expense of sponsorship and sympathetic support
represent positive policy outcomes for liberal democracies.
This chapter, building on Chapter 4, demonstrates how certain cate-
gories of terrorist financing activity can be (re)represented as freely and
rationally chosen actions, which are grounded in particular social and
political ideas, that result in the provision of material goods, services,
or other forms of value that are instrumental to the objectives of ter-
rorist actors. This brings critically needed specification to the deeply
and inherently politicized debates about terrorist finance, and thus
enables more nuanced and more systematic approaches to analyzing
and controlling material support for terrorist movements.
6
Terrorist Finance and International
Relations
This chapter situates this book into existing discourse on terrorist financ-
ing in particular and International Relations in general. In the first
section, I argue that this book has shown that terrorist financing can
be represented most generically as an issue of individual-level political-
economic interactions which carry meaning for international or
national security, meaning that terrorist financing relates to the dynam-
ics of power and the everyday individual exchange of value within given
political economies contexts. This finding indicates that, discursively,
terrorist financing is best located within international security discourse,
but which at various times can also touch on those of political economy,
anthropology, politics, culture, psychology, and history. The second
section argues that as such the analytic perspective constructed in this
book addresses many of the deficiencies in what can be called orthodox
representations of the terrorist financing activity, which (incorrectly)
hold that “terrorist financing” is a significant, discrete, and politically
unproblematic (albeit empirically complex) international security threat
that must be uncovered, confronted, and as much as possible stopped,
and therefore analysis of it should focus on uncovering the dark mys-
teries of who finances terrorism and how they do it. The significance of
this advancement, I argue, is twofold. First, because this orthodoxy has
come to be the dominant intellectual foundation of how governments,
the private sector, and even much of academia comprehend, research,
and respond to terrorist finance, this book provides not simply a
critique of, but an actual alternative to, these deficient perspectives. Sec-
ond, given that—as various authors have documented—such orthodox
representations have produced inaccurate and incomplete knowledge
of terrorists’ financial activities, undermined related counterterrorism
efforts, led to a variety of anti-liberal social consequences, and justified
159
an unexamined—and potentially dangerous—expansion of state and

executive power, this book’s alternative representation offers an impor-
tant tool with which these practical outcomes can be challenged and
ultimately addressed. In the conclusion, I summarize how this book con-
structed an ontological and epistemological foundation for an improved
conceptualization of terrorist financing that is capable of systematically
producing knowledge about the realities of terrorist finance that is more
empirically accurate, analytically logical, and also more useful to those
liberal democratic interests that research into this inherently politicized
security issue is ultimately meant to serve.
Situating terrorist financing within the International

Relations discipline
Terrorist financing has not yet been definitively located within the
International Relations discipline. Recalling de Goede’s conception of
terrorist finance as an object of study, she observes that terrorist financ-
ing was not originally and is not currently problematized in context
of other political-economic issues of international society such as cor-
ruption, money laundering, or fraud, but instead exists as a problem
of international relations “only in relation to fighting ‘terror’ and
especially relating to the assertion that ‘money is the lifeblood of
terrorism.’ ”1 Interestingly, however, the study of terrorist finance has
also not benefited much from the terrorism debates. This is largely
because the evolution of dominant orthodox terrorist financing dis-
course has primarily focused simply on increasing the sophistication
with which one can “uncover” the ostensibly “hidden” financial “net-
works” and “infrastructures” of terrorist groups, and thus has largely
failed to investigate the demonstrable problems with how terrorism-
related financial activity is represented, mediated, acted upon, and
fundamentally conceptualized.
More simply, and as mentioned in Chapter 1, terrorist financing has
not—until this book at least—been definitively “mediated” within any
particular field of intellectual endeavor. This is perhaps to be expected to
some extent, considering that, intellectually, terrorist financing crosses
many complex and unsettled areas of thought and practice, only some
of which are systematically dealt with within IR discourse. For instance,
with only the most cursory understanding of the topic, one could rea-
sonably surmise that terrorist financing pertains to not only the terror-
ism debates but also discourses on international political economy (IPE),
anti-money laundering (AML), financial regulation, criminology, law
Terrorist Finance and International Relations 161
and international regimes, security studies, global governance, the role

of non-state actors in the international system, politics, globalization,
conflict, and area studies, among others.
The problem, therefore, is one of potentially putting the cart before
the horse. Given the dearth of IR scholarship explicitly on the topic,
choosing from the outset any single one of these discourses would nec-
essarily constrain the literature, theories, concepts, and methodologies
available to improve the conceptual basis of terrorist financing; and
more importantly would do so before one could establish a basic con-
ceptual understanding of the issue. Therefore, given both that terrorist
finance is such an inherently “mediated” topic and that the objective
of this book is to improve the overall conceptualization of terrorist
financing, it would be arbitrary—and thus intellectually unsound—to
simply pick a discourse to mediate this project, when which discourse is
most appropriate remains unsettled. More briefly, it is clear that terrorist
financing relates to the abovementioned discourses, but it is impossible,
at this juncture, to easily fit this book within any single one (or even
how precisely the issue fits in with any of them), simply because one
cannot confidently locate terrorist financing within any specific part of
IR discourse without knowledge of how terrorist finance is properly con-
ceptualized, which, again, is an objective of this book. Therefore, in this
way, the intellectual and disciplinary context of terrorist financing—that
is, the decision of which disciplinary lens is most appropriate to medi-
ate research on terrorist finance—is in many ways more a puzzle for this
book (which it addresses below), rather than a starting point of it. A key
contribution of this book is thus an explicit solution to the problem of
where to locate this complex, cross-disciplinary topic.
However, this situation remains unsatisfactory for our purposes here,
as locating this book’s research within IR is necessary intellectually and
academically. Therefore, this book makes explicit that this book sits
within “terrorist financing studies,” which is in fact simply the cross-
disciplinary aggregation of discourse that explicitly deals with the issue
of terrorist financing.
This book has attempted to demonstrate that it is more profitable
to orient conceptualizations of terrorist financing away from agents’
characteristics (people and their attributes, like profile or intent), away
from structure (the social, political, economic, legal, and normative
contexts of behavior), away from the state (failed states, weak states,
and non-states), and thus also away from approaches that have proven
so unsuccessful in explaining terrorist financing. Instead, it appears
that analysis of terrorist financing would be much improved if it
were to be reoriented toward a more systematic—but, importantly, not

“objective”—analysis of the dynamics and consequences of political-
economic decision-making and its consequences. In other words, this
book is ready to argue for a shift in the focus of terrorist financing
analysis toward the dynamics of terrorists’ participation in and inter-
action with larger political-economic communities, and the subjective
meaning—for analysts—of such participation and interactions.
This section thus reframes terrorist financing as an issue of interna-
tional security that is governed by individual-level political-economic
interactions, because to summarize, at core terrorist financing related
to the dynamics of power and the everyday individual exchange
of value within given political economies contexts. To reiterate, the
“right” questions asked above reflect that the core concepts of ter-
rorist financing related to the dynamics and meaning of terror-
ists’ participation in larger political economies. This section fleshes
this out a bit, and given that international security discourses gen-
erally are separated from political-economic discourse, this section
more explicitly explores the most relevant concepts of political
economy.
In part, this requires locating terrorist financing into an appropriate
disciplinary home, from which further conceptual and theoretical devel-
opment can proceed. As discussed above, debates on terrorism, conflict,
criminology, and other subsets of International Relations are not suffi-
cient disciplinary bases for a holistic and systematic understanding of
terrorist finance. In fact, International Relations as a discipline seems
ill-suited to the task in its present form. Cox remarked, “We cannot
define a problem in global politics without presupposing a certain basic
structure consisting of the significant kinds of entities involved and the
form of significant relationships among them.”2 Since analysis of terror-
ist financing necessarily involves understanding several different “basic
structures,” “ontologies,” or, in Bourdieu’s words, “universe[s] of possi-
ble discourse,”3 it would seem International Relations, marketed as a
“discipline of disciplines,” would be well suited to integrate not just
one field of knowledge but several. However, International Relations
discourse lacks any such agreed upon epistemological or ontological
structure to govern intersubjective thinking. Therefore, while one can
study complex, intersubjective issues within the IR discipline (and pub-
lish in IR journals), limiting oneself to its discursive boundaries would
be insufficient in the extreme to understand the complex human expe-
riences that govern terrorist finance. For these reasons, I propose “relo-
cating” terrorist financing to within international security discourse,
but explicitly focused on—and engaging with—concepts of political

economy.
Reframing terrorist financing, a security issue that centers on political-
economic interaction brings a larger measure of conceptual order and
coherence to an issue that as we have seen can cross virtually every social
scientific discipline and theoretical boundaries. In particular, including
political-economic concepts so centrally illuminates the central con-
cepts around which terrorist financing revolve. Surprisingly, these are
not terrorism or finance, or even security, globalization, risk, or other
similar issues. Instead, framing the topic as such shows that at the con-
ceptual core of terrorist finance are the concepts of power, value, and the
dynamics of everyday, individual-level exchanges that produce change
in the capabilities and behaviors of “terrorist” actors. In other words,
terrorist financing can be distilled to the interplay of power practices
and dynamics, which flow through all aspects of terrorist financing;
conditioning, determining, and being determined by its complex reali-
ties, and economic competition and inequality, in that the issue relates
directly to how the economic success or failure of terrorist actors impact
securitized views of political and social change, within given contextual
parameters.
Contributing to international security discourse

Terrorist financing studies represents a niche subfield of study that is
centrally concerned with issues of international security, but which can
nevertheless be seen as related to but significantly distinct from other
related subfields. The above context broadly implies that within Inter-
national Relations discourse, “terrorist financing studies”—and thus also
this book—is best positioned as an issue of International Security, rather
than of IPE, Law, International Organizations/Regimes, Criminology, or
any of the theoretical subfields mentioned above that relate to various
specific aspects of or issues raised by terrorist financing. This is because
while terrorist financing does revolve around many concepts that nor-
mally fall outside security discourse (for example, political-economic
decision-making and socio-cultural dynamics), the topic is perceived
in securitized terms and practices meant to understand and control
terrorism-related financial activity are designed to be and are carried out
as security practices.
Discursively, conceiving terrorist finance as a security issue embeds
terrorist financing studies, and thus this book, into the fundamental
questions of terrorism studies. Horgan and Boyle, for example, remarked
that “terrorism studies is ineluctably political.”4 More precisely, how-

ever, terrorism studies relates to security concerns within liberal politics,
in that nearly all terrorism scholars, from early, so-called orthodox
thinkers such as Wilkinson5 (who focuses on how liberal states can
respond to terrorism) to more recent “critical” authors like Jackson6
(who focuses on the emancipatory elements of how terrorism is under-
stood and debated), are centrally concerned with the “liberal problem-
atic of security” by researching how best to understand and respond
to securitized threats from “terrorists” in context of a liberal political
perspective.
More broadly, this locates this book indirectly with other research
concerning how security issues are understood (and therefore acted
upon) within liberal constructs. This discourse includes a range of
International Relations research, most of which is not cited here,
but which includes not only perhaps more obvious works such as
Cramer’s on understanding and conceptualizing contemporary conflict7
and Duffield’s on the relationship between economic development and
security8 but also research unrelated to conflict or terrorism, such as
Lang’s work on understanding the nature of punishment in contempo-
rary international society.9
Moving beyond (deficient) orthodoxies

As a stand-alone topic, the study of terrorist financing has existed for
only a few decades; the first monograph published in 1986.10 Since then
and especially in context of the so-called Financial War on Terrorism,
attention in the issue has grown exponentially (with some 92 percent
of all books on the topic published after 200111 ), and ultimately led
to the emergence of what can be termed as an orthodox approach.
This orthodoxy reflects not an explicitly and coherently formulated
ideational framework, but rather a general and (mostly) shared perspec-
tive about how to address a particular problem of international security,
namely how to “fight” the security threat represented by terrorism-
related financial activity. As such, the orthodox approach to concep-
tualizing terrorist finance is, in essence, what Cox termed a “problem
solving” perspective, which ultimately, as he famously wrote, “takes
the world as it finds it.”12 However, given that, as the critical literature
demonstrates, the “world” of terrorism-related financial activity remains
incorrectly, incompletely, and inconsistently described in orthodox lit-
erature, by “taking the world as it finds it,” orthodox approaches
have ultimately produced not only deep misunderstandings of
the problem of terrorist finance, but also, unsurprisingly, the failure of

actions based on them.
The rise of such orthodox conceptualizations of terrorist financing
occurred because a “qualitative assemblage” of similar thinking on
terrorist finance developed over time, which eventually achieved “res-
onance” among disparate discourses that each concerned the ways
in which “terrorist money” represented a security threat.13 These res-
onating discourses included suspicions about corporate and Western
government money laundering from those on the political Left,14 and
objections to financial aid for Palestinian nationalist groups from those
on the Right,15 but primarily revolved around the belief that targeting
terrorist financing represented a useful strategy with which to prosecute
the “Global War on Terror” in the historical moment following the ter-
rorist attacks of September 11, 2001.16 She cites the following statement
from a senior US Government official as exemplary of what I refer to
here as the orthodox conception of terrorist finance:
The campaign to keep money out of the hands of terrorists has

become a centerpiece of the overall war against terrorism . . . Focus-
ing on and attacking terrorist money flows is important for sev-
eral reasons. Financial records and audits provide blueprints to the
architecture of terrorist organizations. By following the money trail
through financial information sharing worldwide, we can save lives
by unearthing terrorist cells and networks.17
Importantly, de Goede argues that once this “qualitative assemblage”

(or herein, the “orthodox approach” as referred to herein) emerged, this
representation of terrorist finance around the securitized threat posed
by “terrorist money” became a self-referential intellectual framework
largely decoupled from the discourses that had combined to produce it.
Once this occurred, this orthodox conception of terrorist finance gained
near universal currency among governments and thus also in the private
sector,18 as well as wide acceptance throughout academic discourse,19
which led to the production of research aimed at solving the problem
of terrorist finance, which did indeed “take the world as one finds it,”
however poorly conceptualized that “world” actually was.
The first “generation” of terrorist financing discourse refers to those
descriptions of terrorist financing that analyze the problem only as a
tangential logistic issue to the political and operational realities of ter-
rorist groups. Reflecting an evolution in the study of terrorism generally,
the earliest of this literature focused on the financial links between states
and terrorist groups, while the later works offer broader, but still super-
ficial, descriptions of terrorist financing as tangential to other, larger
issues. “First generation” analyses of terrorist finance tend to be nar-
row discussions of financial activity related to terrorist actors, often
raised as mere tangents to broader discussions of terrorism and ter-
rorists. As such, conceptually, this first generation literature tends to
assume a linearity in the reality and the meaning of financial activity to
terrorist actors, which in turns produces an epistemic perspective that
favors certain—usually ideological or geopolitical—variables over oth-
ers. For example, first-generation literature often depicts the financing
of a given terrorist actor as simply the product of a hidden network
of ideologically driven sponsors—or often a sympathetic state spon-
sor. In addition, first-generation orthodox analyses of terrorist financing
are generally characterized by a more superficial and less rigorous use
of empirical evidence, and tend to rely—often uncritically—on ter-
tiary sources, official documents and statements, and pieces or sets of
data that are either of low quality or heavily recycled. The result is
that first-generation orthodox literature is of very little use for study-
ing or ultimately understanding the complex, intersubjective realities of
terrorist finance.
The second generation of orthodox literature begins to view terror-
ist financing as a topic distinct from, although intimately related to,
the problem of terrorism. This generally heavily descriptive literature
offers a more comprehensive description of terrorist financing, expli-
cating the complex, variable, and global nature of the issue, but does
so with little critical perspective about what theoretical contexts are
needed for more contextualized, nuanced, and ultimately useful under-
standings of the topic. In general, this second generation of orthodox
literature is paradigmatic, and is characterized by uncritical utilization
(mostly acceptance, but at times rejection) of popular or official claims
and conclusions regarding “who finances terrorism and how they do it.”
This literature also tends to be overly deterministic about the complex
realities of terrorist financing, a problem often manifested in analyses
that begin with an a priori assumption about the involvement of a cer-
tain actor or behavior in financing terrorism, and then an analysis of
how this actor or behavior could—often rather than has been—used to
finance terrorism. For example, belonging to this generation of ortho-
dox literature are those uncritical discourses that represent hawala as a
“terrorist financing method,” despite presenting little or no actual case
evidence of the use of hawala to “finance” terrorist acts or actors, or,
even when there is such evidence, offering only vague notions about the
precise instrumentality of hawala services to a particular terrorist act or

actor. The result is that although the second generation of orthodox lit-
erature places a greater emphasis on empirical research—especially to
identify the methods and actors involved in financing terrorism—the
empirical evidence produced is, more often than not, grossly underde-
termined. In other words, although this literature presents a more robust
empirical basis for analysis of terrorist financing, the meaning and con-
clusions drawn from this data are generally poorly formulated, which
then in turn negatively influences any follow-on research seeking to
augment this knowledge.
The third generation of terrorist financing literature attempts to fill
these conceptual gaps in understandings of terrorist financing. In gen-
eral, this generation of literature can be characterized by a focus on
analyzing terrorist financing as a more holistic problem encompassing
various economic, political, social, cultural, institutional, and histori-
cal factors. As this book argued, engaging in the full complexity of
terrorist financing activity is crucial to properly conceptualizing and
representing it, and engagement in these factors helps address the
problem of underdetermination of empirical data present in the second-
generation literature. However, severe problems with this orthodox liter-
ature remain, primarily, as the critical literature describes, because it too
is based on poorly formulated—or even simply incorrect—assumptions
and conceptualizations about terrorist finance. In one example, while
frameworks such as Makarenko’s “Crime-Terror Nexus” offer an inte-
grated, coherent conceptualization of terrorist financing, it is ultimately
self-referential and, in this case, continues to rest on the mistaken20
assumption that one can draw such clean lines between “good” and
“bad” money. The result is that while the third “generation” of orthodox
literature offers some useful analytic theories and hypotheses about ter-
rorist financing, it nevertheless fails to fully engage with and correct the
underlying failings of orthodox approaches to terrorist financing, mean-
ing ultimately that such literature remains too incoherent and, overall,
of limited usefulness for conceptualizing, let alone understanding or
confronting, terrorist finance in any systematic way.
Moving beyond (incomplete) critiques

Nearly coincident with the development of these orthodox approaches,
a critical literature has evolved that raises direct and fundamental chal-
lenges to the definitions, assumptions, and systems and practices of
power underpinning more orthodox representations of terrorist finance
introduced above. Unfortunately, like other “critical” approaches in

International Relations discourse in general and the terrorism debates in
particular, these critiques do not offer a coherent alternative framework
that would address the trenchant critiques raised. Horgan and Boyle
remark that so-called Critical Terrorism Studies (CTS) has so far failed—
yet has the potential—to “offer a fully informed theoretical position,
or set of related positions”21 that could produce an improved approach
to terrorism research. A similar criticism could be leveled at the critical
literature described below, although unlike CTS the critiques of terror-
ist financing orthodoxies have no pretense of being a unified discourse
or school of thought, or anything other than a collection of indepen-
dent works that each in their own way persuasively challenge various
deficiencies in the orthodox literature. This section introduces these cri-
tiques and some of their major claims to an extent that a reader who is
not a specialist in “terrorist financing studies” will be familiar with the
literature and its problems.
In aggregate and to generalize, the “critical literature” argues that
there exist major deficiencies in how terrorist financing is understood,
and thus also in the institutions and practices that are based on this defi-
cient thinking. This critical literature ranges widely, from policy-focused
works such as those by Reuter and Truman,22 Sproat,23 Bierstecker and
Eckert,24 and Cassara;25 to critiques of specific issues within terror-
ist financing discourse such as from Passas26 (alternative remittance
systems), Gunning27 (charities), and de Goede28 (regulation); to the
fundamental if somewhat polemical challenges to the basic discursive
foundations of the orthodox terrorist financing literature from Warde29
and Naylor.30
For context, of the 168 publications cited in the Terrorist Financing Bib-
liography produced by the Targeting Terrorist Finances project of Brown
University’s Watson Institute, 1331 can be considered to be “critical”
works in that they critique the conceptual and political foundations of
current conceptualization of the financing of terrorism, or the impact
of such poor conceptualizations. While the bibliography leaves off sev-
eral significant works, including those by de Goede and Naylor (cited
above), in general a common theme runs throughout this literature that
terrorist financing is currently poorly understood and poorly researched.
Even though compared to the overall body of writing on terrorist
financing, “critical” works represent only a small fraction, the criti-
cal literature robustly challenges existing conceptualizations of terrorist
financing, in ways introduced below. To summarize, however, these
works argue that existing understandings of terrorist financing are at
best severely dysfunctional, or at worst malignantly so. In aggregate,

these works’ critique can be summarized that despite the emergence
and relentless prosecution of the global “financial war” against terror-
ism, governments, the financial industry, and academia alike have no
clear, systematic approach for understanding of the financial activities
and economic foundations of terrorist actors. However, as we have seen
throughout this book, these critical works do not generally provide any
viable alternative conceptualization of terrorist financing that would
address the problems the works raise.
Addressing the liberal problematic of security
To review and as discussed in Chapter 1, this book fundamentally

conceives terrorist financing to be “a cultural imaginary and political
problem in need of (security) intervention,” which, because it is “medi-
ated” as a security concern, is at core a topic of securitized socio-political
representation.32 From this starting point, this book has developed the
idea that terrorism-related financial activity is not in itself a threat to
international security (as the orthodox perspectives claim), but rather
represents a set of political-economic interactions that both impact the
nature of and reflect information about threats to international security.
This subtle but profound difference in how one should conceptualize
terrorist finance has equally significant impact on understanding the
security dimensions of terrorist finance, and thus also the place terror-
ist financing most appropriately occupies within international security
thinking and discourse.
Terrorist financing, as mentioned previously, is embedded within a
“liberal problematic of security,” which, to review, means that even
successfully securitizing terrorism-related financial activity does not
produce “more” security, but instead simply changes the conditions
in which certain (desirable) actors and actions achieve gains relative
to their undesirable counterparts.33 For example, as seen above, just
because a terrorist group has more (or less) money, it does not necessarily
mean that it will commit more (or less) terrorism. Conceptually, the rea-
son for this is that the impact the acquisition and exchange of value has
on the capabilities and behaviors of terrorist actors depends on a host
of other factors that, depending on the actor in question, could include
anything from moral considerations to cultural traditions to social prac-
tices to the psychology or strategic calculations of group leaders. This is
exactly why, as argued above, the “right” questions to ask about terrorist
finance relate to how the exchange of value impacts terrorist actions, and
what such exchanges reflect about terrorist actors’ wider relationships.

Thus, the reframed conceptualization of terrorist finance presented here
remains an issue of international security, but one in which a complex
of other factors determine exactly how political-economic activity is
securitized.
The liberal problematic of security construct also provides a spe-
cific conceptual point at which terrorist finance can relate to works
on the problems of understanding and governing illicit and extra-legal
economies,34 an important development because such research has to
date largely been wholly separated from that on terrorist finance.35
For instance, much of terrorist financing appears to involve small-
level, localized political-economic transactions, and as the framework
presented in this book could be applied to systematically answer this
question, it could also be used to more definitively assess the impact
of regulatory frameworks relating to “offshore” jurisdictions and “tax
havens” on terrorist finance. Furthermore, placing this book’s con-
ceptual representation of terrorism-related financial activity explicitly
within the “liberal problematic of security,” it is possible to also compare
and contrast how ideas about other “bad”—but, importantly unlike ter-
rorist financing, not securitized—political-economic activity (for exam-
ple, tax havens or money laundering) have transformed over time, why,
and what the implications have been for liberal societies. For example,
Sharman has argued that such a politicized transformation of ideas was
attempted regarding tax havens, specifically toward a representation of
the issue promoted by rich and powerful Organization for Economic
Cooperation and Development (OECD) governments36 of these activi-
ties as illicit (and thus anti-liberal).37 Interestingly, however, in this case,
this view of tax havens was successfully challenged by a group of small,
comparatively weak states38 that offered an alternative representation
of their actions as (liberal) “tax competition.”39 In particular, Sharman
describes how the weaker “tax haven” jurisdictions used OECD’s own
symbols and values against it to promote a representation of this con-
tested issue that was more advantageous to them. This “critique within
hegemony”40 succeeded, Sharman argues, because since the powerful
OECD viewed itself as both a supporter of free market principles and
also an objective, “scientific” authority on economic regulation, the sub-
ordinated tax haven states were able to present alternative ideas about
international tax regulation in ways that challenged anti-tax haven poli-
cies on those grounds. This worked because by challenging even pow-
erful and ingrained orthodoxies on their own terms, the “tax haven”
states were able to “appeal to sincere members of the elite in a way that
an attack from outside their values could not.” 41
It would be interesting to systematically compare this and similar rep-
resentational transformations to how terrorist finance is understood,
as it may provide insight into ways that alternative representations of
terrorist financing—like the one presented here—could challenge the
ingrained yet analytically deficient orthodoxies that currently dominate
counter terrorist financing (CTF) practice. As discussed earlier, many
efforts to combat the financing of terrorism have been presented as
unproblematic, even though their efficacy and indeed their analytic
and empirical bases are highly debatable.42 For instance, the lexicon
described in Chapter 1 offered a framework, grounded in the two “right
questions” posed in Chapter 3, upon which a systematic comparison
of how terrorist groups access and actually benefit from various value
chains. This representation of terrorism-related financial activity could
potentially provide a potent mechanism for assessing more precisely
the actual threat represented by terrorism-related financial activity, espe-
cially if, as a “critique within hegemony,” it was presented in ways that
demonstrated that specific CTF practices were unsuccessful or poorly
formulated. However, since the above would require in-depth analysis
of the particular CTF practices and systems of power to be assessed, such
an analysis would need to occur outside the bounds of this particular
book.
Regardless, given that both research into and efforts to combat ter-
rorist finance relate closely to this liberal problematic of security, the
conceptual representation of terrorist finance presented in this book
implies a shift in how terrorist financing is imagined and mediated as a
threat, and ultimately used as a justification for action against interna-
tional and national security threats. As such, it also offers an approach
that can be used to develop more nuanced outcomes within this liberal
problematic of security, and thus also outcomes of CTF actions more in
line with liberal principles.
The political-economic dimensions of terrorist finance
Although terrorist financing is at core a security issue, the representation

of terrorist finance presented in this book emphasizes a central place
of political-economic interaction. This section therefore seeks to iden-
tify the key relevant themes within academic political-economic dis-
course. This both helps further locate this improved conceptualization
of terrorist financing into the International Relations discipline, and

helps provide direction to future research on terrorist finance.
By political economy, I refer to neither the narrow sub-discipline of
IPE (in either its statist or “critical” varieties) nor the hyperrationalist
Marxist Political-Economy to which IPE was a response, but rather the
socially incisive, philosophically sound, and morally conscious tradi-
tion begun by Adam Smith. This once great, but now somewhat lost,
discipline of political economy revolves most simply around the study
of how power and wealth influence one another. Such a socially and
cognitively oriented conception of political economy provides a pow-
erful rhetorical/intellectual device for ordering thought. This brings
conceptual and rhetorical order to the complex empirical realities of
terrorist financial activity. It allows for different types of activity to be
systematically differentiated and analyzed according to different logics,
something necessary for such a complex and multivariate topic as ter-
rorist finance. In some ways, however, this is difficult to accomplish
given the space limitations of this book. Political-economic discourse
consists of a variety of often competing ontological, epistemological,
and methodological approaches, including not only nationalist, liberal,
and critical-constructivist perspectives43 but also various formulations
of each, such as “International Political Economy,” “Regulatory Interna-
tional Political Economy,” “Global Political Economy,” and “Classical
Political Economy” Choosing one or another approach thus requires
due attention to the various debates and sub-debates within the chosen
discourse, and rigorous assessment of the relevance of these debates to
this book’s representation of terrorist finance, as well as examination of
any relevant discursive gaps that may exist. More simply, although fully
engaging with IPE and other political-economic discourse is important
for long-term understanding of terrorist financing—and thus also of full
development and application of the representation of terrorist finance
presented herein—doing so to this extent is outside the scope of what
is necessary for constructing a superior approach to understanding and
representing terrorist finance.
Therefore, in order to provide general conceptual context to the
aspects of this representation of terrorist financing that relate to
political economy, and provide an outline of areas important for fur-
ther research, the following discussion will provide a broad, “meta”
perspective of political economy that focuses in particular on the inter-
play between political power and inequalities in wealth and economic
success.44 Most generally, this ecumenical approach focuses in particu-
lar on issues of power and inequality of wealth rejects one-dimensional
views of political and economic orders as either basically conflictual

or basically harmonious, arguing that political economies can be both,
depending on factors such as institutions, actors, and structures.45 This
approach is used to explain how the compendiums of individual choices
and interactions that are the reality of terrorist finance become wider
systems; and how analytically it is possible to simultaneously separate
distinct yet related political and economic factors within analysis yet
also integrate them.
First, this book assumes that politics and economics should be taken
as ontologically inseparable, although in many cases analytically and
epistemologically distinguishable. O’Brien and Williams observe that
approaches that reflexively separate economics from politics lead to
the reification and freezing of economic or political structures and
processes within political-economic discourse.46 An open question,
however, is how precisely to integrate the various “logics” of vastly dif-
ferent spheres of thought and action, for example, cultural obligation
versus self-interest versus political mobilization versus social expecta-
tion versus cognitive agency, and so on. Therefore, by assuming that
there is no ontological separation between politics and economics, this
approach welcomes the finding that analytic devices and tools—such as
the “right questions” about terrorist financing (Chapter 3), the value
chain paradigm (Chapter 4), and the continuum of material support
(Chapter 5), can help structure analyses of terrorist financing and related
issues without freezing them. The next section in this chapter explores
the specifically political logic of terrorist finance in more detail.
Secondly, analysis of political-economic issues such as terrorist finance
should also be sensitive to historical change. In other words, political-
economic discourse should not be ahistorical and should describe
how and from where contemporary political-economic circumstances
arose. It rests on the assumption that the issues and concepts in
the global political economy, as well as our interpretation of them,
arise within specific historical contexts and thus do not have neces-
sarily consistent meanings throughout history. As discussed, terrorist
financing and our understanding of it has arisen specifically within
specific historical contexts such as the Global War on Terror, the exis-
tence of viable alternatives to Western neoliberalism, the wide adoption
of myths about and anti-rational analysis of international society, a
global Islamic revival, globalization, and financial sector standardiza-
tion, among others. A sensitivity to historical change helps uncover
the particular contexts in which terrorist financing activity occurs,
and thus, methodologically, helps illuminate the particular intellectual
discourses and communities of practice relevant to understanding

both terrorism-related economic activity as well as actions meant to
respond to it.
Third, it is useful to take a structurationist position toward political
economy, in which agents and structures are co-determined in complex
ways, but the relative causation of which can be determined through
empirical analysis more than abstract theorization. This offers to expand
the conceptual horizons of terrorist financing research beyond the safe
confines of both the traditional approaches of terrorism studies and
their strong positivist and neorealist undertones, and the unsystematic,
self-referential “critical” approaches. Because actor behavior in terrorist
financing (both at the core and the periphery) is determined by com-
plex sets of causes and effects, the epistemological outlook is potentially
opened up to date to the full range of actor characteristics, including not
only political and operational factors such as ideology and transaction
activity but also societal, economic, institutional, cultural, and psycho-
logical factors like kinship, cost-benefit, and social norms. This enables
more systematic, empirically grounded analysis by changing the cen-
tral unit of analysis of this form of terrorist financing toward the two
questions posited in Chapter 3, and away from agents (people and their
attributes, like profile or intent), away from structure (the social, polit-
ical, economic, legal, and normative contexts of behavior), and away
from definitions of states (failed states, weak states, and non-states).
To quote O’Brien and Williams:
While the assumption of rational human behavior underlying ratio-

nal choice models has something important to tell us about the
events in the global economy, and makes for parsimonious the-
ory, it is nevertheless deficient in failing to take account of diverse
cultural practices, and variations in historical experience. Similarly,
while structuralist approaches are useful in delineating the determi-
nate social structure within which human action takes place they too
often neglect or subsume the role of agency.47
Significantly, this in turn enables a thorough discussion of political-

economic choice. The existing literature at times describes the outcomes
of these choices or the context in which they occur, but there is little
understanding of the dynamics by which individual actors engage with
one another, and the consequences of these interactions. Secondly, it
allows systematic evaluation of the “why” of terrorist finance, specif-
ically why do some terrorist actors succeed economically and others
fail. This requires systematic, methodologically sound analysis of var-

ious social, political, economic, institutional, ideational, and moral
elements, many of which are politically off-limits in the current discur-
sive climate, such as the extent to which terrorist financing is a function
of legitimate political support or apolitical social interaction.
Fourth, it is crucial also to incorporate thorough analysis of the ideas
and cognitive elements of political economy, which are “significant
elements in structures outcomes in the global political economy.”48
This directly addresses the “contested” nature of terrorist finance and
provides the tools to satisfy the crucial need for theoretical under-
standings of the social, political, and economic factors that constitute
these realities, systematic collection of evidence relating to these fac-
tors, and mechanisms to solve specific problems within those realities.
It also helps understand terrorist financing’s role in the global political-
economic system because they illuminate ways in which phenomena
like terrorist financing can challenge, manipulate, and undermine the
ideas that undergird that system. As discussed throughout this book,
the very language that is used to describe economic activity can impact
political outcomes. As Tooze concisely summarizes,
The concepts and languages we use to describe and interpret what is

going on in the world political economy are not neutral—in their ori-
gin, use, or purpose. Nor are they merely instruments through which
we can discover an autonomous preexisting reality of political econ-
omy. Economic theory, concepts, and language are constitutive of
reality.49
As demonstrated in the book, terrorists (as well as of course those who

observe, analyze, and “counter” them) exploit this, because they know
that if only they use the right language, and fit into the right theory,
that is, if they “constitute” themselves to fit the constitutive reality that
the neoliberal world has built, they will likely escape unnoticed. Theo-
retically speaking, this is the mechanism that they use to move among
“criminal,” “terrorist,” and “legitimate” political economies. This is a
crucial point because those that are involved in terrorist financing typi-
cally fit into their own multiple constitutive realities, whether through
manipulation or design. This is a central element to the reformulation
of terrorist financing, because it shows the crucial need for theoretical
understandings of the social, political, and economic factors that con-
stitute these realities, as well as mechanisms to solve specific problems
within those realities.
Fifth, it is necessary to assume that institutions and institutional

change are important elements to understanding political economies,
primarily because institutions affect behaviors and outcomes. This
means that any formulation of terrorist financing must recognize that
legal, state, and other institutions are being replaced by other less well
understood but no less powerful institutions, such as global jihad move-
ments, or global charities, or warlords, or global corporations, or social
networks, or identity networks, and so on, all of which can qualify
as institutions or at least function similar to them. Again, this would
enable further theoretical and methodological development related to
increasing our understanding of these dynamics.
The final claim is that there is a close relationship between domes-
tic social orders and trends and occurrences in global political economy
and international orders, or in other words that the individual affects
the global and vice versa. This issue is of great interest to me and is
in many ways a core issue of international relations. An interesting
insight that comes from orienting analysis of political economy toward
the individual is that it challenges some common conclusions about
the relationship between terrorism and power. Many argue, on the one
hand, that terrorism is a “weapon of the weak,” while others argue that
it represents more a (usually unsuccessful) attempt to use violence as a
shortcut to power. However, this dichotomy is really untrue, as Carolyn
Nordstrom writes:
If analysts cannot see the full compendium of economic, political,

and social forces defining the emergent twenty-first century, yet the
war orphan and [warlord] can, then who has the power?50
Terrorism, like conflict, does not simply involve powerful warlords

oppressing weak war orphans, and thus its analysis should not be
a pointless debate about who should count as a warlord (terrorist)
and who is a war orphan (their victims). Instead, if one views ter-
rorism as simply an extension of the universal struggle for political
power and economic wealth, this implies that terrorism involves the
continual transformation of the weak into the strong—and back again—
depending on the particular political-economic circumstances. More
simply, warlords, terrorists, orphans, and victims all have power of dif-
ferent form within different context, and this concept provides a basis
for systematically analyzing the “full compendium” of these dynam-
ics. This implies first that rather than simply a situation in which
elites oppress and the marginal resist, all actors involved are simulta-
neously resisting one another. This echoes some of the points above,
but further illuminates power dynamics across the whole spectrum
of political and economic behavior, and provides Cox’s “basic struc-
ture” within which improved analysis of political-economic realities can
arise. More simply, it shows that the key to analysis of terrorist finance
is to uncover which dynamics, dimensions, and practices of power
are used in what context, and which forms produce what outcome.
From this foundation of knowledge, analysis of political-economic
phenomena—including terrorist finance—could become much more
useful.
The benefits of this are immediately evident. For example, it over-
comes completely the “terrorist vs. freedom fighter” dichotomy by
repositioning the problem as “No matter if they are terrorists or freedom
fighters, one must ‘negotiate’ a relationship with them in a way that
makes oneself successful.”51 In other words, it reorients both analysis
and action toward a systematic understanding of relationships among
actors and the consequences of those relations. This appears to have
potential as the foundation for significant improvement in understand-
ing not only terrorist finance but also the contemporary global political
economy, especially if combined with systematic empirical work.
The power political dimensions of terrorist finance
Although a complex mixture of societal, political, economic and other

factors influences the financial realities of terrorist actors, the problem
of “terrorist finance” is nevertheless intrinsically political. As explored
throughout the book, terrorist financing is an issue for contempo-
rary international relations because terrorism—itself a form of political
violence—is seen as a threat to international society, or at least the
dominant (primarily Western) members of it. Therefore how terrorist
financing is understood depends on a variety of intrinsically politicized
judgments about the meaning and significance of economic acts that are
either politically motivated (material support activity) or have political
consequences (value chain interactions). There is not sufficient space
in this book to fully conceptualize the political dimensions of terrorist
finance. However, this section draws on the Classical Realist tradition of
International Relations to provide three analytic devices—the specificity
of politics, a strategy of limits, and the balance of power—that may help
serve as a foundation for further conceptual research into the politics of
terrorist finance and how we understand it.
Specificity of politics
The first device is a solution to a problem inherent to intersubjec-
tive, cross-disciplinary research, in which the researcher must choose
between “cherry picking” ideas and insights from other disciplines, or
alternatively engage fully in each relevant disciplines, which may be
practically impossible. I argue that terrorist financing requires the ana-
lyst to engage fully in the diverse disciplines that speak to its complex
reality, but this can be done by simply engaging with the fundamentals
of the disciplines in question. This serves the purpose of embedding the
research in the core of the disciplines without the need for comprehen-
sive expertise in the whole subject area. This is a viable methodological
solution to the thorny problem of interdisciplinary research. But how
does one go about this regarding terrorist finance? I argue that it is pos-
sible by applying the classical Realist conception of the “specificity of
politics.”
Classical Realism views politics as an autonomous sphere of thought
and action, distinct yet related to other spheres. According to
Morgenthau, this concept of politics:
provides the link between reason trying to understand interna-

tional politics and the facts to be understood. It sets politics as an
autonomous sphere of action and understanding apart from other
spheres, such as economics (understood in terms of interest defines
as wealth), ethics, aesthetics, or religion. Without such a concept
a theory of politics, domestic or international, would be altogether
impossible, for without it we could not distinguish between politi-
cal and non-political facts, nor could we bring at least a measure of
systematic order to the political spheres.52
For example, Morgenthau distinguishes extradition and trade policy as

non-political because these interactions occur within set boundaries,
that is, the underlying norms and values are not contested. Non-
political social spheres have defined objects of interests, forms of power
available to achieve those interests, and limits on behavior that poli-
tics lack, for example, the object of interest in economic behavior is
material gain and the dominant form of power is control over material
resources, both of which set certain limits on economic behavior, such
as the pursuit of material self-interest.53 Political activity however has
no set boundaries; in fact it is the competition for domination of one
set of underlying values over another.
To give context, Max Weber heavily influenced Morgenthau in his
conception of the specificity of politics.54 Weber saw the distinctiveness
of the political sphere as both an analytic device and a liberal political

choice. Analytically, the specificity of politics allows for the sepa-
rate assessment of different spheres of human life according to their
own specific rationalities, rather than be forced to adopt universal-
ized analytic standard across fundamentally different spheres of human
behavior. As Warren notes, this is why “one does not judge art by
logical consistency, love by utility, or righteousness by efficiency.”55
Politically, Weber expanded on Kant’s differentiation of spheres of
knowledge (empirical/aesthetic/moral) and argued that such differenti-
ation between spheres of human behavior is a legitimate device because
it promotes the realization of human freedom by liberating thought
from the bounds of dogma (for example, by being forced to adopt reli-
gious rationalities for economic decisions, or vice versa) and, through
politics, provides an arena for people to propose and compete their
values and rationalities.56 To emphasize, this is raised simply in order
to underline the need to and benefit of engaging more deeply with
the full spectrum of political theory in analyzing terrorist financing
(even though comprehensive engagement is outside the scope of this
particular thesis).
This brings up an important criticism of the specificity of politics,
namely that the differentiation of social spheres implies that each has
a single “logic.” On the surface, this can easily be mistaken for a mech-
anistic analytic approach that emphasizes the instrumentality of each
social sphere in its relationships with the others. However, a closer read-
ing of this concept reveals that the specificity of politics should be seen
as simply an analytical device to highlight the competing interests and
struggles at play within a single situation, and that that political deci-
sions should not be reduced to one or another. In fact, it is clear that
Morgenthau differentiated the spheres of human action around the lim-
itless scope of political judgment precisely in order to avoid a concept of
politics that relied on a Schmittian friend/enemy dichotomy of endless
conflict.57
Morgenthau answers this critique by using the specificity of politics
to focus on the evaluations of human judgment, because by doing
so one can analytically challenge the use of “the other” to make a
decision:
Morgenthau’s narrowing of the political sphere is neither an over-

sight nor a result of a lack of analytic sophistication. Rather than
ignoring the obvious breadth of political life or the complexity of the
concept of the political, the limited conception of politics is part of
a sophisticated intellectual strategy seeking to address the centrality
of power in politics without reducing politics to an undifferentiated

sphere of violence, to distinguish legitimate forms of political power,
to insulate the political sphere form physical violence, and to discern
the social structures which such a strategy requires to be successful.58
This represents a much fuller approach to the construction of action

than either a constructivist or Schmittian method. In the first instance,
constructivism would stop simply at concluding that these two con-
structions are intrinsically in conflict (given a particular context, or for
everyone if not).59
This is relevant because terrorist financing exchanges are governed
by and can be analyzed according to a specifically political logic, largely
because local dynamics about competition for power, that is, what forms
of power take precedence over what others, by what and what means
are these forms of power limited, and in which contexts does this occur,
determines which societal, cultural, economic, or other “structural” fac-
tor conditions which act of “agency” in a given political-economic
context. In other words, terrorist financing activities mirror the rela-
tionship terrorists have with wider societies, and understanding terrorist
finance means understanding this relationship. For example, Hizbullah’s
financing mirrors its role as a state proxy within the greater Middle East,
HAMAS (Islamic Resistance Movement) and Irish Republican Army (IRA)
financing mirrors their role as a religiously based national liberation
movement, and al-Qa’ida mirrors its role as a radical grassroots socio-
religious movement.60 This assumption embeds terrorist financing into
societal and historical realities rather than the personal or political agen-
das of analysts. In other words, this acts as a hedge against bias, and
forces a deeper understanding of the externalities influencing terrorist
financing activity.
Differentiating political activity thus provides the capacity to distin-
guish activity related to the financing of terrorism from that which
is not, when the actual behaviors involved may be similar or iden-
tical. In other words, it is a device to arrive at meaning, rather than
simply description, about this intrinsically political issue. As discussed
above, humans are spared endlessly destructive conflict not by any
natural interest or structure but only by the near-infinite capacity for
people to imagine and make real alternative visions of how the world
should be.61 Ultimately, this implies that analysis of terrorist financing
should revolve around analysis of not only the politics of the individ-
ual political-economic decisions involved (for example, intent, ideology,
links with terrorist groups, and so on) but also and in many cases
more importantly how terrorism-related politics are limited (or not) by

economic exchange within given contexts (for example, the actual con-
sequences of agency—which may lead to uncomfortable conclusions or
more difficult sociological analysis).
Narrowing the concept of politics to the process of this existential
contest therefore reveals a “logic” of political conflict in which political
actors seek out ways to strategically limit the destructive capacity and
maximize the positive possibilities of politics. Recognition of this logic
provides an epistemological device to evaluate these strategic choices
separate both from and in context of the various factors influencing
that choice. Because terrorism is a political act—that is, a (small-scale)
conflict over fundamental values—each terrorist financing transaction
will have a particular “logic of political conflict” comprised of a series
of individual strategic choices. Analysis of the dynamics of how these
choices were formulated and exercised can lead to otherwise difficult
to obtain insights into the social, political, economic, and operational
contexts in which these political decisions took place. For example,
knowledge of the political logic of a specific bank transfer may yield fur-
ther knowledge of the operations, support networks, and other aspects
of terrorist groups. In addition, the specificity of the political sphere has
certain political implications in and of itself, which match well with the
political ends of terrorist financing analysis, specifically the goal to aid
liberal democratic societies in both hindering the financing of terror-
ism and exploiting knowledge of it to confront terrorist actors. In this
context, differentiating political activity allows consumers of the anal-
ysis to assess the political implications of terrorist financing activity,
upon which their own political judgments and actions can be based.
In short, the conceptual specificity of politics forces transparency of
political goals of analysis and therefore helps inform political analysis
and shield political judgments from undue or hidden influence from
economic, bureaucratic, or other objects of interest.
A logic of limited politics

Another device is what Morgenthau described as the “Strategy of Limits”
for political action, which is centrally relevant as limited government
is one of the foundations of liberal democracies. This strategy defines
political power as distinct from other forms of power, including those
stemming from physical force, legitimacy, economic, social, ideolog-
ical, and institutional influence. This separates the pursuit of power
from the pursuit of other interests, such as wealth or social acceptance.
Distinguishing political power also provides a way to limit the legiti-

macy of violence by separating the power of force from true political
power (which may be achieved through a variety of means).62 In short,
the strategy of limits is a way in which analysis can be directed toward
“winning,” that is, the victory of one vision of political structure (lib-
eral democracy, for example) against another (that for which a given
terrorist group fights).
A strategy of limits also calls for actions that help develop other social
spheres in which the pursuit of interests using other forms of power
is possible and encouraged. This allows humans the freedom to pursue
the full range of possible interests—that is, to live life according to one’s
own reasoned choices. This strategy also insulates the spheres from each
other, analytically and institutionally. As discussed above, politics is the
process by which ideas and values are created and destroyed. Given
this, a strategy of limits, specifically the separation of spheres that it
requires, acts as a counterbalance against the most destructive conse-
quences of political conflict, just as political conflict checks the ability
of these other realms to dominate the realm of values and thought (for
example, by subsuming values and ethics to material consumption, or
to moral dogma). This helps to establish a system in which the pursuit of
any one or group of interests does not cannibalize the pursuit of others,
for example, that the pursuit of wealth does not eliminate the pursuit of
morality, or that the pursuit of moral living does not rule out the pursuit
of innovation.63
This potent analytical device allows for direct application of critical
analysis to action, for example, by asking “Has political power been sep-
arately defined?” “Have other social spheres been allowed to develop?”
“Are these separate social spheres insulated from one another, and if
so, by what measure?” For example, when analyzing a tribal culture,
this allows for political power to not be defined as separate from social
bonds, particularly those of kinship. Therefore, in order to compete
politically, that is, by promoting alternative values and rationalities in
such a society one must address that condition, either by using power
to separate the spheres, or by creating a system in which their inter-
ests in the political or non-political spheres can be achieved without the
separation.
One hypothesis to which this leads is that political actors and actions
can be analyzed in terms of this “strategy of limits,”—not because it
is either universal (as many or most actors are neither aware of it nor
follow its prescriptions) or comprehensive (as the separation of the
spheres will always be partial)—but because it enables action to be based
on systematic analytical assessment of the components of political

behavior, as well as the elements of non-political behavior that impact
political decisions. This is exactly what the analysis of terrorist financing
requires.
The balance of power

In Realist thought, many strategies for action revolve around the con-
cept of the balance of power. Although for many this concept is intrin-
sically related to the state, the balance of power is an important strategy
for action related to terrorist finance. As Williams describes, the Realist
conception of the balance of power originates in beliefs and assump-
tions about the relationship between ideas and action.64 Morgenthau
argued that ideas are not powerful enough to triumph in social life
(no matter their clarity, effectiveness, or even wide acceptance), and that
they thus must be both supported by viable social foundations and per-
ceived as supporting competing interests. The mechanism by which this
occurs, that is, the device by which politics is narrowed, its destructive
capacity limited, and its creative possibilities protected, is the “balance
of power.”65
This concept however goes far beyond the constricted inter-state con-
ceptions dominant in much International Relations discourse. As noted
before, different social spheres (for example, economic, legal, moral, cul-
tural) act as a limiting force on the unbounded pursuit of power that is
politics, and politics does the same in reverse:
While actors in these spheres may be tempted to further their inter-

est and power by dominating the political field, they will also resist
attempts by the political sphere to encroach upon their autonomy,
and vice versa.66
This leads therefore to a “social balance of power”67 in which competing

spheres of human activity, rather than competing actors, balance one another
out. Analytically, this is extremely useful for the analysis of terrorist
finance, because it provides a clear epistemological framework revolv-
ing around that knowledge which shows how power is exercised in
the pursuit of a particular interest (and that which explains that inter-
est, the forms of power used, and so on). In other words, the social
balance of power is potentially an important concept for understand-
ing the political dimensions of terrorist financing because it provides
an analytic device for systematically understanding how in fact the
“competing spheres of human activity” mentioned by Williams inter-

act, and it is within these interactions and competitions that terrorist
financing occurs to an important extent.
It is helpful to place this concept of the social balance of power within
the context of modernity.68 According to many authors, modernity
intentionally breaks down the social balances of power of premodern
societies, for example, belief in the divine, the lord, the leader, the tribe,
and so on. On the one hand, this liberates people and allows them to
find their own individual balance among the different powers to which
they are subject (for example, economic well-being over belief in God,
or belief in the democratic system over the power of economic wealth).
On the other hand, it leads to atomization and alienation, if individuals
are not able to balance competing interests. This leads to vulnerability to
an unbalanced acceptance of one sphere of interest, for example, violent
jihad, amoral criminality, or soulless consumerism.69 As Morgenthau
wrote,
The growing insecurity of the individual in Western societies, espe-

cially in the lower strata, and the atomization of Western society
in general have magnified enormously the frustration of individual
power drives. This, in turn, has given rise to an increased desire for
compensatory identification with the collective national aspiration
for power.70
It must be remembered that Morgenthau wrote this within his own

historical context. Given the nature of contemporary international soci-
ety and the realities of terrorist finance, this can be expanded to now
read “This, in turn, has given rise to an increased desire for com-
pensatory identification of any collective aspiration for power with
potential.”
In short, the Realist balance of power argues that solving problems is
not just about amassing power. Realists do not assume rational actors,
reasoned behavior, or strategic rational competition, but they do seek
to create such things, as a solution to the problems of destructiveness
of politics.71 In this way, Realism doesn’t assume that actors are self-
interested, they just assume that they are interested. In fact, Morgenthau
rebels against Schmitt with his strategy of limits precisely to avoid the
Schmittian logic of enmity and the realpolitik that could result in a
view of politics as a realm of limitless struggle for domination.72 The
social balance of power is thus potentially an important concept for
understanding the political dimensions of terrorist financing because it
provides an analytic device for understanding how in fact the “com-

peting spheres of human activity” involved interact (many of which
exist in societies not structured according to modern norms, mores,
and structures) and it is within these interactions and competitions that
terrorist financing occurs to an important extent.
As discussed in Chapter 1, the study of terrorist finance is a dichotomous

discourse, focusing primarily on analyzing and critiquing ways of “coun-
tering” the financial and economic activities of terrorist actors, and only
secondarily about actually understanding the realities of these activi-
ties. This book intends to contribute to the latter first, which of course
will eventually inform and improve the latter. In order to understand
this contribution in more depth, it is useful to explore how this book
contributes to both “orthodox” and “critical” approaches to terrorist
finance.
One of the most dominant conceptions of terrorist financing is that
most centrally, terrorism-related financial activity represents a signifi-
cant international security threat that must be countered in order to
fight terrorism and safeguard the legitimate financial system. This is
the foundational perspective upon which most existing approaches to
dealing with the financial activities, contexts, and dimensions of ter-
rorist actors rest. This perspective, which we refer here as the orthodox
approach, emerged primarily—but not exclusively—within the context
of the historical moment following the terrorist attacks on the United
States on September 11, 2001 and the accompanying declaration of a
“Financial War” against terrorism, and has evolved into the dominant
ideational framework about terrorist financing. However, although it is
the ideational basis of most efforts to combat the financing of terror-
ism, this orthodoxy has manifestly failed to produce knowledge about
terrorist finance that is coherent, comprehensive, or particularly use-
ful. Representing terrorist financing in these terms has also therefore
manifestly failed to achieve the intellectual, policy, or operational goals
toward which this representation was originally directed at achieving.
For instance, although there is not currently a consistent understanding
of which activities and behaviors constitute terrorist financing versus
which do not, nevertheless potent laws and regulations oblige banks
across the world to develop and deploy—at great cost—methodologies
and policies to calculate the “risk” that a specific financial transac-
tion constitutes terrorist financing activity, even though without such
understanding such “calculations” naturally are almost certain to be
inadequate. Similarly, intelligence and law enforcement agencies in
many countries have taken legal and even lethal action against people
determined to be “financing terrorism,” despite the fact that no coher-
ent explanation currently exists for either how or why certain actors
and behaviors are involved in financing terrorism but similar actors and
behaviors are not, or a viable framework to identify, contextualize, and
otherwise give meaning to global and localized trends and variations
in terrorist financing currently exist. This is significant to International
Relations because, in the above and other ways, the orthodox represen-
tation of terrorist finance has not only been used to produce knowledge
used by governments, the private sector, and academia to comprehend
and research terrorist financing, but also which has provided potent
justification of and explanation for various coordinated exercises of
state and private sector power against those individuals, charities, socio-
political movements, and others that are—or at least are perceived to
be—involved in “financing terrorism.”
Almost in parallel to the rise of these orthodoxies, a growing
discourse—referred to above as the “critical” approaches—has chal-
lenged both the accuracy and the utility of such orthodox represen-
tations of terrorist finance. While this literature presents in aggregate
a compelling critique of the theoretical and conceptual foundation of
existing understandings of terrorist financing, they do not present a
coherent viable alternative framework for understanding the issue. This
chapter introduced this critical literature and summarized its major
claims, but argued that while the central claims of these critiques are
correct, the conceptual implications of the problems they raise have yet
to be taken seriously, let alone remedied. In particular, the critical litera-
ture fails to offer a coherent alternative epistemological framework that
would address the problems extant in orthodox approaches to terrorist
finance. More simply, while the critical literature has successfully chal-
lenged orthodox representations of terrorism-related financial activity,
it has not taken the logical next step and proposed a viable alternative
approach to representing the issue.
This book aims to accomplish this. In particular, it has done so by
reorienting representations of terrorist financing away from its current
focus on “who finances terrorism and how they do it,” and toward
a more socially and politically embedded understanding of how the
exchange of value impacts and reflects the capabilities, behaviors, and
relationships of terrorist actors. The book also presents the foundations
for a formalization of this alternative representation in the form of a
lexicon that represents terrorist finance as either the process by which
terrorist actors access value chains or the dynamics by which various
individuals and communities express material support for terrorists or

terrorism-related socio-political causes. This alternative representation is
not only more intellectually sound but also more politically useful, espe-
cially for liberal democracies seeking effective and balanced responses to
terrorism and related security threats.
Conclusion
This world with which WE are concerned, in which we have to

fear and love, this almost invisible, inaudible world of deli-
cate command and delicate obedience, a world of “almost” in
every respect, captious, insidious, sharp, and tender—yes, it is
well protected from clumsy spectators and familiar curios-
ity! We are woven into a strong net and garment of duties, and
CANNOT disengage ourselves—precisely here, we are “men
of duty,” even we! Occasionally, it is true, we dance in our
“chains” and betwixt our “swords”; it is none the less true that
more often we gnash our teeth under the circumstances, and
are impatient at the secret hardship of our lot. But do what we
will, fools and appearances say of us: “These are men WITHOUT
duty,”—we have always fools and appearances against us!
—Friedrich Nietzsche, Beyond Good and Evil.1
This book was about how to understand the financing of terrorism. Its
primary aim was to construct an improved approach to conceptualizing,
researching, and understanding terrorism-related financial activity for
spheres of both thought and practice. Toward this, the book attempted
to build on existing research and construct a new conceptual frame-
work that represents a foundation for a more analytical, more nuanced,
and more systematic understanding of this high-profile but intrinsically
contested and politicized topic. Conceptually, the main thesis the book
advanced was that activities typically represented as “terrorist financ-
ing” (for example, donations, criminal activities, weapons procurement,
and so on) ought to be understood in terms of how “terrorists”—as
socio-political actors—access and interact with particular—and often
legitimate—political economic communities; rather than as elements of
188
Conclusion 189
some vast, mysterious, and entirely illicit financial edifice supposedly

underpinning global terrorism.
Why is this significant? Most importantly, this represents an advance-
ment beyond—and importantly not a mere critique of—the deficient
dominant orthodoxies about terrorist finance that focus on uncovering
the secrets of “who finances terrorism and how they do it,” and toward
more contextualized understandings that subordinate the answers to
such questions to the socio-political meaning of both terrorist financing
activity and our attempts to understand it. By emphasizing the socially
contingent, “everyday” ways that terrorist actors interact with local and
global political economies and social movements, the book helps bet-
ter situate knowledge of terrorist financing into the distinct but related
literature on extra-legal political economies something which to date
has not been done. In particular, the book’s focus on value chains and
a more specified understanding of material support helps resolve the
implicit and intellectually stifling levels-of-analysis debate in terrorist
financing discourse; which is caught between, on the “orthodox” side,
pretentions of objectivity, despite the inherent politicized and contested
nature of both terrorism and finance, and, on the critical side, a failure
to present any alternative set of proper objects of analysis and scope of
enquiry for terrorist financing research. This serves to move understand-
ings of terrorist finance into the “more mature phase of research” called
for by Biersteker and Eckert.2 Empirically, the book presented one case
study and numerous short and longer descriptive examples of terror-
ist financing, which together helped to not only chronicle some of the
interactions terrorist actors have with various global, local, and everyday
political economies, but also illustrated for terrorist financing analysts
the many conceptual and methodological issues and opportunities for
improvement present in the topic.
While this book sought to challenge the dysfunctional orthodoxies
that dominate current understandings of terrorist finance, it is never-
theless not a truly critical work. Similarly, while it aimed to improve the
analysis of terrorist financing activities and thus also the design and
execution of actions meant to “counter” them, the book is also not
fully a problem solving work. Instead, this book attempts to not only sub-
vert the current (deficient) ways of understanding terrorist finance but,
most importantly, to also create something better to replace that which
is criticized.
In particular, the approach to understanding terrorist finance cre-
ated and presented in this book provides a foundation to achieve the
four requirements of successful terrorist financing analysis identified
in the first chapter. First, representing terrorist finance dichotomously

as interaction with value chains (Chapter 4) or along a continuum of
material support (Chapter 5) enables systematic determinations of what
activities should count as terrorist financing versus which should not.
Second, by reorienting analysis to answer the “right” rather than the
“wrong” questions (Chapter 3), this book provides guidance about how
to attach meaning and significance to any particular actor and activity
involved in terrorist finance. Third, exploring the empirical and concep-
tual realities of terrorist finance (Chapters 1, 2, and 6) made it possible
for analysis of terrorist finance to be systematic and useful as well as
welcoming of different perspectives and definitions of intrinsically con-
tested issues (especially “terrorism” as well as “finance”). Finally, this
book as a whole provides a sounder and ultimately more useful basis for
understanding the financial and economic dynamics of terrorist actors;
knowledge that ultimately contributes to both spheres of thought and
practice.
It is common for academics to end books with so-called real-world rec-

ommendations for people less abstractly and more practically engaged
with the subjects they study. However, in this case it would be presump-
tuous to recommend anything in particular as all those with an interest
in understanding terrorist finance necessarily bring to their work their
own particular priorities, limitations, and outlooks about this intrinsi-
cally political and subjective issue. Nevertheless, I will indulge in a few
words of advice to those who seek systematic, nuanced, and constructive
understandings of terrorist finance, whether they be a law enforce-
ment or intelligence officer, an overworked and often undertrained
counterterrorism analyst, attorneys fighting to protect civil liberties, or
a charity attempting to legally and ethically provide aid to war zones.
First, incorporate more ethnographic knowledge into your work. Read histo-
ries and ethnographies of the societies relevant to your analysis. Talk to
relevant historians, anthropologists, and indigenous journalists. Fund
academic research if you have unanswered questions and the resources
to do so. Accept that different people live differently and that terror-
ist finance has more to do with trade flows and local socio-economic
inequalities than with money or banks.
Second, recognize that there is no such thing as a terrorist financing expert.
Analysis of terrorist finance is easy to do badly and hard to do well,
and no one knows everything about everything. Look for true experts
on small topics: indigenous financial systems and traditions, the eco-
nomics of relevant value chains, pertinent analytic methods, and so on.
Conclusion 191
Remember that popularity and impressive-sounding CVs do not always

equate to sound knowledge or true expertise. Be wary of propaganda
and marketing that presents itself as research and analysis.
Third, stop countering terrorist finance and start exploiting information
about it. Targeting terrorist finance is a means to an end, not an end
in itself. Look for overlaps or anomalous behavior between locally
normal economic flows versus terrorist actor needs, relationships, and
dynamics. These overlaps and anomalies can be exploited for advan-
tage, although primarily at tactical more than strategic levels. Always
remember that the wrong course of action against even the right target
can turn a win into a loss, or worse.
Fourth, do away with the term terrorist finance, and replace it with
threat economics. Apply, modify, and refine the lessons here to the eco-
nomic dynamics and contexts of nuclear proliferators, guerrilla groups,
organized criminals, corrupt dictators, human traffickers, corporate pol-
luters, poaching and piracy rings, and other contemporary transnational
threats. Continue the debate.
Finally, promote the rule of law, good and transparent governance, political,
social, and economic justice, and equality of opportunity. Promote develop-
ment and freedom side by side. Build capacity. Fight corruption and
injustice. Choose virtuous over vicious cycles.
In conclusion, it is critical to remember that terrorists, however one
defines them, are a threat to national and international security, because
of both what they can do to us and what they can make us do to our-
selves. Understanding terrorist finance offers a potent means to address
this threat, but only if done systematically and in context of its actual
complicated realities. This book attempted to provide the foundation of
a better way to understand the financial and economic dynamics of ter-
rorists, and thus also make a small contribution to the defense of the
Enlightenment principles upon which the survival of American and all
liberal democratic society depends.
Notes
1 Understanding Terrorist Finance: Challenges and Issues

1. Peter Reuter and Edwin Truman, Chasing Dirty Money: The Fight Against
Money Laundering (Washington DC: Institute for International Economics,
2004), 7.
2. Thomas J. Bierstecker and Sue E. Eckert, “Taking stock of efforts to counter
the financing of terrorism and recommendations for the way forward,” ed.
Thomas J. Biersteker and Sue E. Eckert, Countering the Financing of Terrorism
(Routledge, 2008).
3. Thomas J. Biersteker and Sue E. Eckert, “The politics of numbers in
the financial ‘war’ on terrorism,” ed. International Studies Association
49th Annual Convention (presented at the Bridging Multiple Divides, San
Francisco, 2008), http://www.allacademic.com/meta/p252246_index.html.
4. Nikos Passas, “Fighting terror with error: the counter-productive regula-
tion of informal value transfers,” Crime, Law and Social Change 45, no. 4
(December 8, 2006): 315–336.
5. Name and employer withheld. Interview with the author (London, Novem-
ber 2004).
6. Name withheld. Interview with the author (Washington DC, June 2007).
7. Name and employer withheld. Interview with the author (Amsterdam,
May 2009).
8. Name withheld. Interview with the author (Washington DC, Febru-
ary 2008).
9. “CSIS developing new model for understanding terrorist financing, docu-
ments show,” Canadian Press, April 21, 2008.
10. Name and employer withheld. Author notes of a presentation to a financial
industry professional association (New York, April 2009). The speaker was
referring to “risk-based” decisions about activity suspected to be involved
in terrorist financing.
11. John A. Cassara, Hide and Seek: Intelligence, Law Enforcement, and the Stalled
War on Terrorist Finance (Potomac Books Inc., 2006), 197.
12. For example Carolyn Nordstrom, Global Outlaws (University of California
Press, 2007); Moisés Naím, Illicit (Doubleday, 2005); P. Andreas, “Illicit
international political economy: the clandestine side of globalization,”
Review of International Political Economy 11, no. 3 (2004): 641–652.
13. Biersteker and Eckert, Countering the Financing of Terrorism.
14. This structure is inspired by Linklater’s discussion of the basic “points
of contention” within the International Relations discipline, in Andrew
Linklater, “The question of the next stage in international relations the-
ory: a critical-theoretical view,” Millennium – Journal of International Studies
21, no. 1 (1992).
192
Notes 193
15. So much so, in fact, that neither Russia nor Georgia guards most of the
border during the winter. Newspaper Alia, no. 182 (November 25–26, 2000).
16. See Shorena Kurtsikidze and Vakhtang Chikovani, “Georgia’s Pankisi Gorge:
an ethnographic survey,” Berkeley Program in Soviet and Post-Soviet Studies
Working Paper Series (Spring 2002): 13, note 29.
17. Ibid.
18. See especially Akbar S. Ahmed, Millennium and Charisma Among Pathans:
A Critical Essay in Social Anthropology (London: Routledge and Kegan Paul,
1976); Akbar S. Ahmed, “An aspect of the colonial encounter in the north-
west frontier province,” Asian Affairs 9, no. 3 (10, 1978): 319–327.
19. Kurtsikidze and Chikovani, “Georgia’s Pankisi Gorge: an ethnographic
survey.”
20. George Sanikidze and Edward Walker, “Islam and islamic practices in
Georgia,” Berkeley Program in Soviet and Post-Soviet Studies Working Paper
Series (Fall 2004): 30.
21. Personal observations of the author (Khevsureti, Georgia, July 2006).
22. Sanikidze and Walker, “Islam and islamic practices in Georgia,” 26.
23. World Bank, World Development Indicators Database, http://ddp-ext.
worldbank.org/ext/DDPQQ/member.do?method=getMembers& userid=1&
queryId=135 (accessed May 2007).
24. Transparency International, Corruption Perception Index, 2002, http://
www.transparency.org/policy_research/surveys_indices/cpi/2002 (accessed
May 2007).
25. Transparency International, Corruption Barometer, 2003, http://www.
transparency.org/content/download/1566/8095/file/barometer2003.en.pdf
(accessed May 2007). This is the earliest year for which these statistics are
available. The proportion of Georgian citizens who felt that corruption
somewhat or significantly affected cultures and values was 93.4 percent;
political life: 79 percent; business environment: 94.6 percent; and personal
and family life: 68.5 percent.
26. This conflict resulted in the forced expulsion of approximately 300,000
ethnic Georgians from their homes in Abkhazia, and their eventual reset-
tlement in various parts of the country.
27. United Nations High Commissioner for Refugees (UNHCR), UNHCR
2002 Global Report: Georgia, http://www.unhcr.org/publ/PUBL/3edf4fcf0.
pdf (accessed May 2007).
28. United Nations High Commissioner for Refugees (UNHCR), 2002.
29. Newspaper Alia, no. 62 (May 2001).
30. Newspaper Alia, no. 39 (March 2001); Newspaper Alia, no. 62 (May 2001).
31. Newspaper Alia, no. 62 (May 2001).
32. For example, in May 2001 traffic police stopped and searched a suspicious
Georgia-registered car in Tskhinvali. The search revealed the occupants,
four Chechens and one Georgian, were transporting “Fagot” anti-tank mis-
siles, detonators, detonation materials, and a large quantity of money.
During questioning in the Tskhinvali police station, one of the Chechens
shot a policeman and all managed to escape to a private house, where they
took and later killed a hostage, throwing him out of a window. Ossetian
special forces ultimately raided the building, killing two of the Chechens
and arresting the others. Newspaper Alia, no. 62 (May 2001).
194 Notes
33. Newspaper Alia, no. 109 (September 4–5, 2001).

34. Newspaper Alia, no. 46 (845) (March 23, 2000); Former senior official
of Georgian Ministry of State Security, interview by the author, Tbilisi
(July 2006).
35. Murad Batal Al-Shishani, “The rise and fall of Arab fighters in Chechnya,”
Jamestown Foundation Terrorism Monitor (September 14, 2006); Newspaper
Alia, no. 90 (July 21–22, 2001).
36. This term is simply meant to convey that these actors have both trav-
eled from abroad, and are engaged in what they believe to be militant
operations on behalf of a violent interpretation of radical Islamism, and
thus should be seen simply as a catchall term to encompass various—and
often conflicting—strands of violent Islamist radicalism, such as salafism
and takfirism. For a detailed background on foreign fighters in Chechnya,
see Cerwyn Moore and Paul Tumelty, “Foreign fighters and the case of
Chechnya: a critical assessment,” Studies in Conflict & Terrorism 31, no. 5
(5, 2008): 412–433.
37. See Brian Glynn Williams, “The ‘Chechen Arabs’: An introduction to the
real al-Qaeda terrorists from Chechnya,” Jamestown Foundation Terrorism
Monitor 2, no. 1 (January 2004).
38. Newspaper Alia, no. 39 (March 2001); Newspaper Alia, no. 46 (845)
(March 23, 2000).
39. Newspaper Alia, no. 191 (December 11, 2000).
40. Moore and Tumelty, “Foreign fighters and the case of Chechnya: a critical
assessment,” 422.
41. Sanikidze and Walker, “Islam and Islamic practices in Georgia,” 29.
43. See, for example, Al-Shishani, “The rise and fall of Arab fighters in
Chechnya” and J. Millard Burr and Robert O. Collins, Alms for Jihad: Char-
ity and Terrorism in the Islamic World (Cambridge; New York: Cambridge
University Press, 2006). NB: Alms for Jihad engendered some controversy
after its publisher was sued for allegedly libelous claims contained in
the book. For more information, see: Rachel Donadio, “Libel without
borders,” The New York Times, October 7, 2007, sec. Books/Sunday Book
Review.
44. See Burr and Collins, Alms for Jihad, Chapter 1.
45. Those that can receive zakat are: “. . . the Fuqarâ’ (poor), and Al-Masâkin
(the poor) and those employed to collect (the funds), and to attract the
hearts of those who have been inclined (towards Islâm), and to free the
captives, and for those in debt, and for Allâh’s Cause (i.e. for Mujahidûn –
those fighting in a holy battle), and for the wayfarer (a traveller who is cut
off from everything) . . .” At-Taubah 9:60, Abdullah Y. Ali, trans., Holy Qur’an
(Medina, Saudi Arabia: The Presidency of Islamic Researches, IFTA, Call and
Guidance, 2010).
46. Quoted in Burr and Collins, Alms for Jihad, 13, note 5.
47. Magnus Ranstorp, “The virtual sanctuary of al-Qaeda and terrorism in an
age of globalization,” ed. Johan Eriksson and Giampiero Giacomello, Inter-
national Relations and Security in the Digital Age, 1st edition (Routledge,
2007), 42.
Notes 195
48. Interpol, “United Nations Security Council Special Notice, Al-Ahdal

Mohammad Hamdi Mohammad Sadiq,” September 25, 2010, http://www.
interpol.int/public/data/noticesun/notices/data/2010/42/2010_6442.asp.
49. Al-Shishani, “The rise and fall of Arab fighters in Chechnya.”
50. Newspaper Alia, no. 54 (May 7–8, 2002). Former senior official of Georgian
Ministry of State Security, interview by the author, Tbilisi (July 2006).
51. Contemporary news reports simply state that American agents made con-
tact with “Chechen field commanders.” However, given that Gelayev was
the field commander of Chechen militants operating within Georgia and
that the foreign fighters later arrested had been subject to his command,
it is unlikely that American officials would have dealt with any other
Chechen militant leader other than Gelayev.
52. Newspaper Alia, no. 54 (May 7–8, 2002).
53. Ibid.
54. See for example Steve Coll, Ghost Wars, 1st edition (Penguin Press, 2004).
55. Khattab was considered to be the head of al-Qa’ida (that is, foreign jihadist
fighters) in Chechnya.
56. Newspaper Alia, no. 54 (May 7–8, 2002).
57. A combination of its geographic location, high levels of corruption, and a
desire to become a key overland trade route.
58. See U.S. Department of State, International Narcotics Control Strategy
Report 2001, available at http://www.state.gov/p/inl/rls/nrcrpt/2001/rpt/;
U.S. Department of State, International Narcotics Control Strategy Report 2002,
available at http://www.state.gov/p/inl/rls/nrcrpt/2002/html/.
59. Irakli Chikhladze, “Traffic control,” Caucuses Reporting Service, Institute for
War & Peace Reporting (IWPR), August 24, 2001, http://iwpr.net/print/report-
news/traffic-control.
60. Newspaper Alia, no. 130 (August 19–20, 2000). The U.S. Department of
State cited Georgia throughout the period as “a secondary transit route
for narcotics flowing from Afghanistan, transiting Central Asia to Europe.”
U.S. Department of State, International Narcotics Control Strategy Report 2001,
available at http://www.state.gov/p/inl/rls/nrcrpt/2001/rpt/.
61. U.S. Department of State, International Narcotics Control Strategy Report 2001.
62. Ibid.
63. Newspaper Alia, no. 3 (January 8, 2001). The U.S. Department of State con-
tradicted this in a 2001 report, stating, “There is no known . . . synthetic
drug production in Georgia.” U.S. Department of State, International
Narcotics Control Strategy Report 2001.
64. The imported notes were of sufficient quality as to require special equip-
ment for detection. Newspaper Alia, no. 38 (837) (March 9–10, 2000). See
also “Newsline – June 12, 2000,” Radio Free Europe/Radio Liberty, June 12,
2000, sec . . . Plight of Displaced Persons, Chechen Refugees, http://www.
rferl.org/content/article/1142174.html.
65. Jaba Devdariani, “Georgia’s Pankisi dilemma,” Caucuses Reporting Service,
Institute for War & Peace Reporting (IWPR) (January 25, 2002), http://iwpr.
net/print/report-news/georgias-pankisi-dilemma.
66. Newspaper Alia, no. 191 (December 4, 2000); Newspaper Alia, no. 130
(August 19–20, 2000).
196 Notes
67. “An SVR Veteran and a Chechen separatist urge that Russia and Chechnya
join forces against the Wahhabis—and the United States,” North Cau-
cuses Analysis 2, no. 27 (July 1, 2001); Mairbek Vatchagaev, “Who’s who
in the Moscow Chechen community,” North Caucuses Analysis 9, no. 26
(July 3, 2008).
68. Newspaper Alia, no. 8 (July 3–4, 2001).
69. Ibid.
70. Ibid.
71. “An SVR Veteran and a Chechen separatist urge that Russia and Chechnya
join forces against the Wahhabis—and the United States.”
72. Burr and Collins, Alms for Jihad, 38.
73. Ibid., 39.
74. The act of preaching Islam or spreading the word of God.
75. Newspaper Alia, no. 121 (September 26, 2001). According to Vakhtang
Kutateladze, then-Georgian Minister of State Security, this money was
intended for transporting militants under humanitarian guise.
76. Burr and Collins, Alms for Jihad, 39.
77. V. Khaburdzania, Minister of State Security of Georgia, quoted in Newspaper
Alia, no. 24 (February 2002); Burr and Collins, Alms for Jihad, 39.
78. Source for BIF affiliation: “Annex to the note verbale dated 22 April
2003 from the Permanent Mission of the Russian Federation to the
United Nations addressed to the Chairman of the Committee,” April
22, 2003, http://www.nti.org/e_research/official_docs/inventory/pdfs/al-
QaedaT_russia20030422.pdf.
79. Newspaper Alia, no. 134 (August 26–27, 2000).
80. Burr and Collins, Alms for Jihad, 174–175.
81. “Suburban Chicago-based international charity and its director charged
with perjury relating to alleged terrorist activity,” Statement by United States
Attorney Northern District of Illinois Patrick J. Fitzgerald United States Attorney
(April 30, 2002).
82. “Suburban Chicago-based international charity and its director charged,”
Statement by Patrick J. Fitzgerald, 2002.
83. United Nations Office for the Coordination of Humanitarian Affairs
(OCHA), Georgia Information Bulletin for the period 21–28 Feb 2001 (February
28, 2001).
84. Mamuka Komakhia, “Update from Pankisi valley: medical and psycholog-
ical problems of Chechen refugees,” UN Association Georgia (UNGA) Team
Report, no. 5 (UNGA and UNHCR, 2000).
85. International Federation of Red Cross and Red Crescent Societies
(IFRC), July 25, 2001, http://www.reliefweb.int/rw/RWB.NSF/db900SID/
OCHA-64BV8R?OpenDocument&emid=ACOS-635NPP. This encompasses
all costs for providing health, medical, nutrition, and other related
service (including administrative) in Pankisi Gorge. Exchange rate cal-
culated for April 1, 2000. The entire aid budget for UNHCR for all
of Georgia—including services to 300,000 refugees from the Abkhazian
conflict—was only $6 million. See United Nations High Commissioner for
Refugees, UNHCR Global Report 1999, http://www.unhcr.org/publ/PUBL/
3e2d4d553. pdf.
86. Burr and Collins, Alms for Jihad, 174–175.
Notes 197
87. United States Treasury Office of Public Affairs, “Treasury Designates Benev-
olence International Foundation and Related Entities as Financiers of
Terrorism” (November 19, 2002).
88. Interview with former member of UN Association Georgia team in Pankisi
Gorge. Tbilisi, July 2006 and email follow up, March 2007.
89. Al-Shishani, “The rise and fall of Arab fighters in Chechnya.”
90. Personal observations of the author (Khevsureti, July 2006); Kurtsikidze and
Chikovani, “Georgia’s Pankisi Gorge: an ethnographic survey.”
91. Former senior official of Georgian Ministry of State Security, interview by
the author, Tbilisi (July 2006).
92. Sozar Subeliani, “Gun-running in Georgia,” Caucuses Reporting Service, Insti-
tute for War & Peace Reporting (IWPR), January 14, 2000, http://iwpr.net/
print/report-news/gun-running-georgia.
93. Ibid.
94. Although regional-level forces were seen to be much less corrupt. Newspaper
Alia, no. 191 (December 11, 2000).
95. Ibid.
96. Newspaper Alia, no. 53 (April 30–May 1, 2002).
97. Former senior official of Georgian Ministry of State Security, interview by
the author, Tbilisi (July 2006).
98. Newspaper Alia, no. 130 (August 19–20, 2000).
100. United Nations Association of Georgia, “Georgia denies detention of
convoy with arms in Pankisi” (May 24, 2002).
102. Newspaper Alia, no. 90 (July 21–22, 2001).
103. Newspaper Alia, no. 191 (December 11, 2000). The Georgian police stationed
in Pankisi were apparently often frightened of the boeviks, as they were
heavily armed, well disciplined, and several Georgian police were in fact
kidnapped and ransomed by Chechen fighters over the period, typically
in revenge for not facilitating movement of money, supplies, or people, as
arranged.
104. Khevsur elders, interview by the author, Khevsureti, Georgia (July 2006).
105. UNHCR Branch Office, Tbilisi, Georgia, July 2005, http://www.ungeorgia.
ge/cgi-bin/show_agency.pl?name=unhcr_accomplishment.
106. Newspaper Alia, no. 53 (April 30–May 1, 2002).
107. For example, polygamy and the teaching of Wahhabist interpretations
of Islam. Kurtsikidze and Chikovani, “Georgia’s Pankisi Gorge: an ethno-
graphic survey”; Al-Shishani, “The rise and fall of Arab fighters in
Chechnya.”
108. Kurtsikidze and Chikovani, “Georgia’s Pankisi Gorge: an ethnographic
survey,” 17.
109. Alex Schmid, “The response problem as a definition problem,” ed. Ronald
D. Crelinsten and Alex P. Schmid, Western Responses to Terrorism (Routledge,
1993), 7.
110. Bruce Hoffman, Inside Terrorism (Columbia University Press, 1999), 1.
111. This is the dictionary definition of support, which is as good a starting point
as any.
112. United States Code: Title 18: Section 2339A.
198 Notes
113. For example, training camps can be characterized as the use of monetary
resources to add value to personnel, that is, to convert monetary value into
labor value.
114. See, for example, John T. Picarelli and Louise I. Shelley, “Organized crime
and terrorism,” ed. Jeanne K. Giraldo and Harold A. Trinkunas, Terrorism
Financing and State Responses: A Comparative Perspective (Stanford University
Press, 2007), 40; Phil Williams, “Warning indicators, terrorist finances, and
terrorist adaptation,” Strategic Insights 4, no. 1 (January 2005): 5, http://
www.ccc.nps.navy.mil/si/2005/jan/williamsJan05.pdf.
115. Quoted in Don Van Natta and Joe Becker, “Bank reports sparked investiga-
tion of prostitution ring and Spitzer wire transfers,” The New York Times,
March 13, 2008, http://www.nytimes.com/2008/03/13/world/americas/
13iht-spitzer.4.11054461.html?pagewanted=print.
116. See Pierre Bourdieu, Distinction: A Social Critique of the Judgement of Taste,
trans. Richard Nice (Harvard University Press, 1984).
117. J.C. Sharman, “Privacy as Roguery: personal financial information in
an age of transparency,” Public Administration 87, no. 4 (12, 2009):
719–720.
118. Marieke de Goede, “Beyond economism in international political econ-
omy,” Review of International Studies 29, no. 01 (January 11, 2003): 81.
119. Ibid.
120. Jean MacKenzie, “Are US taxpayers funding the Taliban,” GlobalPost,
September 2, 2009, http://www.globalpost.com/dispatch/afghanistan/
090902/usaid-taliban-funding.
121. Ibid.
122. Marieke de Goede, “Money, media and the anti-politics of terrorist finance,”
European Journal of Cultural Studies 11, no. 3 (2008): 292.
123. Ibid.
124. Ibid., 293.
125. Ibid.
126. “President freezes terrorists’ assets: remarks by the president, secretary of
the treasury O’Neill and secretary of state Powell on executive order,”
September 24, 2001, http://www.whitehouse.gov/news/releases/2001/09/
20010924-4.html (accessed October 27, 2007).
127. Ibid.
128. Ibid.
129. Ibid.
130. No comprehensive statistic of the exact amount frozen or seized is available.
Although the United States, the United Kingdom, and other countries have
frozen or confiscated hundreds of millions of dollars under CTF-related
provisions, much of this money has been subsequently been “unfrozen,”
actions that are often not reported or reported much later. Discussions of
these problems can be found in Biersteker and Eckert, “The politics of num-
bers in the financial ‘war’ on terrorism,” ed. Ibrahim Warde, The Price of Fear
(University of California Press, 2008).
131. Especially via suspicious activity reports (SARs) and currency transaction
reports (CTRs). For a discussion of terrorist financing related surveillance
and reporting, see for instance, Sue Eckert, “The U.S. Regulatory Approach
to Terrorist Financing,” ed. Biersteker and Eckert, Countering the Financing
Notes 199
of Terrorism and R.T. Naylor, Satanic Purses: Money, Myth, And Misinformation
in the War on Terror, 1st ed. (McGill-Queen’s University Press, 2006).
132. Donald H. Rumsfeld, “A new kind of war,” The New York Times,
September 27, 2001, sec. Opinion, http://www.nytimes.com/2001/09/27/
opinion/27RUMS.html.
133. John Snow, “The global war on terrorist finance,” US Department of State
Economic Perspectives (September 2004): 2.
134. For more discussion of how terrorist finance is mediated through different
discourses, see the works of Marieke de Goede, especially “Money, media
and the anti-politics of terrorist finance”; “Underground money,” Cultural
Critique-Telos Press- 65 (2007): 140; “The Politics of preemption and the war
on terror in Europe,” European Journal of International Relations 14, no. 1
(March 1, 2008): 161–185; “Hawala discourses and the war on terrorist
finance,” Environment and Planning D 21, no. 5 (2003): 513–532.
135. The content of this graphic is based on both Wesley Anderson, Disrupt-
ing Threat Finances: Utilization of Financial Information to Disrupt Terrorist
Organizations in the Twenty-First Century (Fort Leavenworth, Kansas: U.S.
Command and General Staff College, 2007), 28–54; and the personal
observations, assumptions, and deductions of the author.
136. John Horgan and Max Taylor, “Playing the “green card”: financing the pro-
visional IRA: part 1,” Terrorism and Political Violence 11, no. 2 (June 22,
2003): 41; “Playing the ‘green card’: financing the provisional IRA: part 2,”
Terrorism and Political Violence (January 1, 2003).
137. Marieke de Goede, “Financial regulation and the war on terror,” ed. Libby
Assassi, Duncan Wigan, and Anastasia Nesvetailova, Global Finance in the
New Century: Beyond Deregulation (New York: Palgrave Macmillan, 2007).
138. Cassara, Hide and Seek.
139. For example, Marieke de Goede, “Hawala discourses and the war on ter-
rorist finance,” Environment and Planning D (January 1, 2003), http://www.
envplan.com/epd/editorials/d310t.pdf.
140. Eleni Tsingou, “Who governs and why: the making of the global anti-
money laundering regime,” ed. Geoffrey Underhill, Global Financial Integra-
tion Thirty Years on: From Reform to Crisis (Cambridge: Cambridge University
Press, 2010).
141. de Goede, “Money, media and the anti-politics of terrorist finance,” 293.
142. This bibliography can be found on the Watson Institute’s Web site, located
at: http://www.watsoninstitute.org/project_detail.cfm?id=51.
143. For example, they are faculty members within departments of Interna-
tional Relations, Political Science, or similar. These IR works are Aydinli, E.,
“From finances to transnational mobility: searching for the global Jihadists’
Achilles Heel,” Terrorism and Political Violence 18, no. 3 (2006): 301–313;
Basile, M. “Going to the source: why Al-Qaeda’s financial network is likely
to withstand the current war on terrorist financing,” 27, no. 3 (2004):
169–188; Horgan, J. and M. Taylor, “Playing the ‘Green Card’—financing
the provisional PIRA: part 2,” Terrorism & Political Violence 15, no. 2 (2003):
1–60; Horgan, J. and M. Taylor, “Playing the green card: 1,” Terrorism and
Political Violence 11, no. 1 (1999): 1–38; Levitt, M., “Stemming the flow of
terrorist financing: practical and conceptual challenges,” The Fletcher Forum
of World Affairs 27, no. 1 (2003): 59–70; Passas, N., “Cross-border crime
200 Notes
and the interface between legal and illegal actors,” Security Journal 16, no. 1
(2003): 19–37; Napoleoni, L., “Terrorist financing: how the new genera-
tion of Jihadists funds itself,” RUSI Journal 151, no. 1 (2006): 60–65; Winer,
J.M. and Roule, T.J., “Fighting terrorist finance,” Survival 44, no. 3 (2002):
87–104.
144. Quote from Gary Gutting, “Michel Foucault,” ed. Edward Zalta, The
Stanford Encyclopedia of Philosophy, 2010, http://plato.stanford.edu/entries/
foucault/. For Foucault’s account, see especially Michel Foucault, Discipline
and punish: the birth of the prison (Vintage Books, 1979); The order of things:
An archaeology of the human sciences (Tavistock, 1970).
145. Keith Dowding, “Three-dimensional power: a discussion of Steven Lukes’
Power: a radical view,” Political Studies Review 4, no. 2 (5, 2006): 136.
146. Steven Lukes, Power: A Radical View, 2nd ed. (Palgrave Macmillan,
2005).
147. Ibid., 19.
148. Ibid., 24–25.
149. Ibid., 28.
150. Notable exceptions that exemplify this rarity are the Al-Qa’ida in Iraq
Financial and Accounting documents, collected and translated by the Com-
bating Terrorism Center at West Point. Available for download at http://
www.ctc.usma.edu/harmony/pdf/summaries%20in%20pdfs/Financial%20
and%20Accounting.pdf.
151. John Horgan, “Interviewing terrorists: a case for primary research,” ed.
Hsinchun Chen et al., Terrorism Informatics: Knowledge Management and Data
Mining for Homeland Security, 1st ed. (Springer, 2008).
152. For a discussion, see especially Warde, The Price of Fear; Naylor, Satanic
Purses.
153. Alexander Kupatadze, “Organized crime before and after the Tulip Revolu-
tion: the changing dynamics of upperworld-underworld networks,” Central
Asian Survey 27, no. 3 (November 3, 2008): 280.
154. For reference, this is largely the same presumption used by several major
intelligence agencies, which relevantly obtain much—if not most—of their
data on terrorist financing issues from either “open sources” (that is,
published media accounts) or the “gray literature” (unpublished but not
confidential documents, such as commissioned analyses or some interview
notes). Interviews with six analysts from three different agencies within the
US intelligence community, January and July 2008. Each analyst was asked
about the general extent to which their offices utilized open source and
gray literature information for terrorist financing related analysis. Also, see
Dax R. Norman, “How to identify credible sources on the web,” Thesis for
the Joint Military Intelligence College, December 9, 2001 for an extended
discussion about how the US intelligence community measures credibility,
reliability, and validity of open and other sources.
155. United States Department of State, “Georgia,” 1999 Country Reports
on Human Rights Practices (Washington DC: Bureau of Democracy,
Human Rights, and Labor, February 23, 2000); and United States Depart-
ment of State, “Georgia,” 2003 Country Reports on Human Rights Prac-
tices (Washington DC: Bureau of Democracy, Human Rights, and Labor,
February 25, 2004).
Notes 201
156. Citations include Izvestia: http://www.izvestia.ru/world/article3113263/

and the Press Folder (a Russian news aggregation website): http://www.
etpress.ru/periodicals/?content=periodical&id=6.
157. For discussions of problems with current research on terrorist financing,
see for example, Thomas J. Bierstecker and Sue E. Eckert, “Taking stock of
efforts to counter the financing of terrorism and recommendations for the
way forward,” and Jeroen Gunning, “Terrorism, charities, and diasporas,”
ed. Biersteker and Eckert, Countering the Financing of Terrorism; Reuter and
Truman, Chasing Dirty Money; and Warde, The Price of Fear.
2 Terrorist Finance: Myth and Reality

1. For example, in a typical case the Swedish Financial Supervisory Author-
ity fined Forex, a northern European foreign exchange conglomerate,
50 million kronor ($7.8 million) for failing to demonstrate adequate
implementation of internal CTF and anti-money laundering (AML) poli-
cies. Deutche Presse-Agentur, “Foreign exchange bureau fined by financial
watchdog,” October 1, 2008.
2. National Security Strategy of the United States of America, 2006.
3. N. Passas and K. Jones, “Commodities and terrorist financing: focus on
diamonds,” European Journal on Criminal Policy and Research 12, no. 1
(November 2, 2006): 1–33. The authors note about the embassy bomb-
ings trial records that “If all statements made by the witnesses at that trial
are to be accepted at face value (which is a questionable undertaking), it
becomes clear that import–export business is a major source of funds for
AQ or its associates. Gems and diamonds are far from prevalent among
them; rather, the goods and other kinds of trade that can be used are innu-
merable. The ones mentioned in the course of this trial included animal
hides, asphalt, assembly of watches, bananas, bicycles, butcher equipment,
calculators, camels, canned food, cars and tires, cement, coffee, corn, coal,
diamonds, deer, fava beans, fish, gold, hibiscus, honey, gemstones, insec-
ticides, iron, lathing machines, leather, lemons, ostriches and ostrich eyes,
palm oil, peanuts, salt, seeds, sesame, shower pipes, soap, sugar, sunflower,
tannery, tanzanite, textiles, tractors and tractor parts, wheat, and wood.
Not only is the trade in diamonds just one of the many possible funding
sources but also many statements at the trial were about the intent and
unsuccessful attempts by the AQ operatives to get involved in this trade
and are hearsay. It is also unclear if all references to such activities were a
part of the individuals” occupation or of AQ fund-raising operations,’ 18.
4. Cassara, Hide and Seek, 215.
5. Yaroslav Trofimov, “U.S. rebuilds power plant, Taliban reap a windfall,”
wsj.com, July 13, 2010, sec. World News, http://online.wsj.com/article/
SB10001424052748704545004575352994242747012.html?KEYWORDS=
YAROSLAV+TROFIMOV#printMode.
6. Ibid.
7. United Nations Office of Drugs and Crime, Afghanistan Opium Sur-
vey 2009 (Vienna: UNODC, 2009), 7, http://www.unodc.org/documents/
crop-monitoring/Afghanistan/Afgh-opiumsurvey2009_web.pdf. See also
202 Notes
Gretchen Peters, Seeds of Terror: How Heroin Is Bankrolling the Taliban and
al Qaeda (Thomas Dunne Books, 2009).
8. Gretchen Peters, How Opium Profits the Taliban (Washington DC: United
States Institute of Peace, 2009).
9. Edwina Thompson, “The nexus of drug trafficking and hawala in
Afghanistan,” ed. Doris Buddenberg and William A. Byrd, Afghanistan’s
Drug Industry: Structure, Functioning, Dynamics, and Implications for Counter-
Narcotics Policy, (Washington DC: United Nations Office on Drugs and
Crime and the World Bank, 2006), 158, http://siteresources.worldbank.
org/SOUTHASIAEXT /Resources/Publications/448813-1164651372704/
UNDC.pdf.
10. That is, the goods are simply off-loaded before arrival into Afghanistan,
usually for resale in Pakistan, but relevant trade invoices and declara-
tions will falsely state the goods were indeed imported into Afghanistan.
In other cases, goods that have arrived via the ATT are often simply driven
a short way across the border into Afghanistan and then illegally returned
to Pakistan for resale. For more detailed description of the ATT, see John
Cassara and Avi Jorisch, On the Trail of Terror Finance: What Law Enforcement
and Intelligence Officials Need to Know (Red Cell IG, 2010), 82–89; Thompson,
“The nexus of drug trafficking and hawala in Afghanistan,” 158–159.
11. Peters, How Opium Profits the Taliban, 13. Cassara and Jorisch, On the Trail of
Terror Finance, 86.
12. Refers to primary base of operation. Source: “Terrorist Group Profiles,”
US Naval Postgraduate School Web site: http://www.nps.edu/library/
research/subjectguides/specialtopics/terroristprofile/terroristgroupprofiles.
html (accessed October 15, 2010) and “Foreign Terrorist Organizations,”
National Counterterrorism Center Web site: http://www.nctc.gov/site/
other/fto.html (accessed October 15, 2010). NB: Locations of logistical or
minor bases of operation are not included in this table because this infor-
mation was not readily available for all groups. Future research will include
this data.
13. Source unless otherwise noted: Patrick Honohan, “Cross-country variation
in household access to financial services,” Journal of Banking & Finance 32,
no. 11 (November 2008): 2493–2500. See also Alberto Chaia et al., Half the
World is Unbanked (Financial Access Initiative, 2009), 11–15.
14. Relevance estimated according to how many people have access to for-
malized financial services in the countries where terrorist groups operate.
When a terrorist group operates in multiple areas, relevance is estimated
by an unweighted average (that is, not weighted for population size),
given that if the group is active in a particular country, it will have access
to non-formal financial services in ways irrespective of population size.
Legend: High Relevance = more than 80 percent with access; Moderate
Relevance = 50–79 percent access; Low Relevance = 21–49 percent access;
Negligible Relevance = fewer than 20 percent with access.
15. No data are available for access to formal financial services among the
Afghan population, but it can be assumed to be lower than 20 percent.
Somali population, but it can be assumed to be lower than 20 percent.
Notes 203
Japanese population, but it can be assumed to be greater than 80 percent.
18. Alissa J. Rubin, Charlie Savage and Rod Nordland, “Regulators ignored
warnings about Afghan bank,” The New York Times, September 18,
2010, sec. World, http://www.nytimes.com/2010/09/19/world/19kabul.
html?pagewanted=print.
19. No data are available for access to formal financial services among the Israeli
population, but it can be assumed to be greater than 50 percent.
20. U.S. Department of the Treasury, Assistant Secretary for Terrorist Financing
David S. CohenRemarks on Terrorist Financing before the Council on Foreign
Relations As Prepared for Delivery, Press Release (Washington DC, January 28,
2010), http://www.ustreas.gov/press/releases/tg515.htm.
21. Web site of Da Afghanistan Bank [the Central Bank], http://www.
centralbank.gov.af/licensed-financial-institutions.php (accessed October 23,
2010), and Savage and Nordland, “Regulators ignored warnings about
Afghan bank.”
23. Nordstrom, Global Outlaws.
24. Training camps are essentially a value transfer—taking money already gen-
erated and using it to increase the value of something already purchased
(in this case, terrorist labor).
25. de Goede, “Beyond economism in international political economy.”
26. For example, to illustrate the diversity of views of capital, two different
well-established conceptualizations of these other forms of capital include
that presented in Robert D. Putnam, Bowling Alone: The Collapse and Revival
of American Community (Simon & Schuster, 2001); John G. Richardson,
Handbook of Theory and Research for the Sociology of Education (Greenwood
Press, 1986).
27. U.S. Department of the Treasury, “Press release: treasury designates
Al-Qai’da finance section leader,” August 24, 2010, http://treas.gov/press/
releases/tg838.htm.
28. Rohan Gunaratna, Inside Al Qaeda, First Edition (Columbia University Press,
2002), 81–82.
29. Bruce Hoffman, “The leadership secrets of Osama bin Laden: the terrorist
as CEO,” The Atlantic Monthly, April 2003.
30. R.T. Naylor, Wages of Crime: Black Markets, Illegal Finance, and the Underworld
Economy (Cornell University Press, 2002).
31. Matthew Levitt, HAMAS: Politics, Charity, and Terrorism in the Service of Jihad
(Yale University Press, 2007), 5.
32. Loretta Napoleoni, “Money and terrorism,” Strategic Insights, April 2004.
33. “President freezes terrorists’ assets: remarks,” 2007.
34. Ibid.
35. See, for example, the Web site www.divestterror.org, whose motto
is “Empowering American Investors to Fight Terrorism.” (Accessed
October 12, 2010).
36. United States Treasury, “Treasury designation targets Hizbullah’s bank,”
Press Release, September 7, 2006, http://www.ustreas.gov/press/releases/
hp83.htm (accessed April 10, 2008).
204 Notes
37. Matthew Levitt, “Adding Hizbullah to the EU terrorist list,” Testimony

to the Committee on Foreign Affairs, Subcommittee on Europe, United States
House of Representatives, June 20, 2007, http://foreignaffairs.house.gov/110/
lev062007.htm (accessed April 20, 2008).
38. This phrase was used in Nordstrom, Global Outlaws.
39. “Cocaine, Al Qaeda and tropical gangsters,” StrategyPage, July 4, 2010,
http://www.strategypage.com/htmw/htterr/articles/20100704.aspx.
40. Liana Sun Wyler and Nicholas Cook, Illegal Drug Trade in Africa: Trends
and U.S. Policy (Washington DC: Congressional Research Service, 2010);
Scott Baldauf, “Air Al Qaeda: are Latin America’s drug cartels giving Al
Qaeda a lift?,” The Christian Science Monitor, January 15, 2010, http://www.
csmonitor.com/World/2010/0115/Air-Al-Qaeda-Are-Latin-America-s-drug-
cartels-giving-Al-Qaeda-a-lift.
41. Michel de Certeau, The Practice of Everyday Life, trans. Steven Rendall
(University of California Press, 1988).
42. Victor Comras, “Al-Qaeda finances and funding to affiliated groups,” Strate-
gic Insights (Center for Contemporary Conflict) IV, no. 1 (January 2005).
43. See Jeroen Gunning, “Terrorism, charities, and diasporas,” ed. Biersteker
and Eckert, Countering the Financing of Terrorism.
44. See also Reuter and Truman, Chasing Dirty Money, 3.
45. Robert Looney, “The mirage of terrorist financing: the case of Islamic
charities,” Strategic Insights V, no. 3 (March 2006).
46. See John Roth, Douglas Greenberg, and Serena Wille, Staff Report to the
Commission: Monograph on Terrorist Financing (Washington DC: National
Commission on Terrorist Attacks Upon the United States, 2004).
47. “Judge allows suits against bank for paying bombers’ relatives,” The
New York Times, September 3, 2005, http://query.nytimes.com/gst/fullpage.
html?res=9501E3DC1431F930A3575AC0A9639C8B63&pagewanted=print;
Lloyd de Vries, “Arab bank sued over Israel terror,” CBSNews.com,
July 6, 2004, http://www.cbsnews.com/stories/2004/07/06/terror/main
627703.shtml?CMP=ILC-SearchStories.
48. Roddy Boyd, “Arab bank terror financing case to go forward,” New York
Post, January 31, 2007, http://www.nypost.com/p/news/business/item_
W7Hy8dDJk4OBjWvfoidrUK;jsessionid=1D9B6081CFE8050574E8275BFC
26B774; “Judge allows suits against bank for paying bombers’ relatives.”
49. Casualty figures do not include perpetrators.
50. First report of the Analytical Support and Sanctions Monitoring Team appointed
pursuant to resolution 1526 (2004) concerning Al-Qaida and the Taliban
and associated individuals and entities (United Nations Security Council,
August 25, 2004), 12.
51. Ibid.
52. Roth, Greenberg, and Wille, Staff Report to the Commission.
53. First report of the Analytical Support and Sanctions Monitoring Team appointed
pursuant to resolution 1526 (2004) concerning Al-Qaida and the Taliban and
associated individuals and entities, 12.
54. Ibid.
55. “The Madrid train bombings and what happened next,” Reuters AlertNet,
February 14, 2007.
Notes 205
56. Craig Whitlock, “Al-Qaeda masters terrorism on the cheap,” The

Washington Post, August 24, 2008, http://www.washingtonpost.com/wp-
dyn/content/article/2008/08/23/AR2008082301962.html.
57. This refers to the belief that Osama bin Laden bankrolls al-Qa’ida from his
own personal fortune, which is supposedly hidden in various places around
the world. See Roth, Greenberg, and Wille, Staff Report to the Commission.
58. Peters, Seeds of Terror.
59. Hoffman, Inside Terrorism, 84–85. Figures adjusted into 2005 dollars.
GDP data from International Monetary Fund, World Economic Outlook
Database, April 2006. As GDP data were not available for Liberia,
Somalia, Cuba, North Korea, Iraq, and several small states in Europe
(Andorra, Monaco, San Marino, Liechtenstein, Vatican City) and the Pacific
(Palau, Marshall Islands, Micronesia, Nauru and Tuvalu), the number of
countries poorer than the PLO is likely more than 21.
60. A significant knowledge-building opportunity exists relevant to these
issues.
62. The exceptions would be “follow the money” approaches that focus on
monitoring terrorist financing activity for other purposes, such as prosecu-
tions of law-breaking, counterterrorism actions, and intelligence analysis.
63. See Chapter 1 for discussion.
64. Thank you to Gennaro Buonocore for this insight.
65. While there are no available data to confirm these claims, I argue that they
are nevertheless workable assumptions unless and until proven otherwise.
66. Gilles Kepel, Jihad: The Trail of Political Islam (Belknap Press, 2002), 31, 219.
67. Levitt, Hamas, 54.
68. Global Terrorism Database, National Consortium for the Study of Terrorism
and Responses to Terrorism, University of Maryland. Results for “Inci-
dents over time” and “Perpetrator: Hamas (Islamic Resistance Movement)”
searched October 23, 2010.
69. Levitt, Hamas, 5.
70. Charles Grenier, former head of the CIA’s Counterterrorism Center, quoted
in Josh Meyer, “Terrorism money is still flowing,” Los Angeles Times,
March 24, 2008.
71. Reuter and Truman, Chasing Dirty Money. This refers to the macro level.
There have been a few individual cases where financial intelligence has
produced information that has led police to foil individual plots.
72. Michael A. Ledeen, The War Against the Terror Masters: Why It Happened.
Where We Are Now. How We’ll Win (Truman Talley Books, 2002), 41.
73. Loretta Napoleoni, “The new economy of terror,” open Democracy, January
26, 2005, http://www.mafhoum.com/press7/225E61.htm.
74. See, for example, Paul Allan Schott, World Bank, and International Mon-
etary Fund, Reference Guide to Anti-Money Laundering and Combating the
Financing of Terrorism (World Bank Publications, 2006), Chapter 1.
75. Warde, The Price of Fear, 37.
76. See, for example, Stefan D. Cassella, “Money laundering, terrorism, regu-
lation, laws and legislation,” Journal of Money Laundering Control 7, no. 1
(2003): 92.
206 Notes
77. James Gillespie, “Follow the money: tracing terrorist assets,” Seminar on
International Finance, Harvard Law School (April 15, 2002), 15.
78. Financial Action Task Force, “FATF IX special recommendations,” October
2001, http://www.fatf-gafi.org/dataoecd/8/17/34849466.pdf.
79. The year the last country, Myanmar, was removed from the FATF Non-
Cooperative Country and Territories List (NCCT).
80. Warde, The Price of Fear, 36.
81. William Wechsler, Treasury Special Advisor to the Secretary and Deputy
Secretary William F. Wechsler, Testimony Before the House Committee on Gov-
ernment Reform, Subcommittee on Criminal Justice, Drug Policy and Human
Resources (June 23, 2000). Wechsler was the Special Adviser to the US Secre-
tary of the Treasury from 1999 to 2001.
82. Warde, The Price of Fear.
83. Jude McCulloch and Sharon Pickering, “Pre-crime and counter-terrorism,”
British Journal of Criminology 49, no. 5 (2009): 628–645; de Goede, “The
politics of preemption and the war on terror in Europe”; J. Mcculloch,
“Suppressing the financing of terrorism: proliferating state crime, eroding
censure and extending neo-colonialism,” British Journal of Criminology 45,
no. 4 (July 1, 2005): 470–486.
84. See, for example, Marieke de Goede, “The risk of terrorist financing: politics
and prediction in the war on terrorist finance,” Constructing World Orders
Conference (2004); Louise Amoore and Marieke de Goede, “Governance, risk
and dataveillance in the war on terror,” Crime, Law and Social Change 43,
no. 2 (April 1, 2005): 149–173.
85. See, for example, de Goede, “The risk of terrorist financing: politics
and prediction in the war on terrorist finance”; Amoore and de Goede,
“Governance, risk and dataveillance in the war on terror.”
86. For further discussion of these analogies, see Naylor, Wages of Crime;
Nordstrom, Global Outlaws.
87. Amoore and de Goede, “Governance, risk and dataveillance in the war on
terror,” 168.
88. See Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act
of 2001.
89. Amoore and de Goede, “Governance, risk and dataveillance in the war on
terror.”
90. Sabrina Tavernise and Waqar Gillani, “Frustrated strivers in Pakistan
turn to Jihad,” The New York Times, February 27, 2010, sec. World/Asia
Pacific, http://www.nytimes.com/2010/02/28/world/asia/28youth.html?
sudsredirect=true&pagewanted=print.
91. See Cassara, Hide and Seek.
92. See Ibid.
93. James Harrington, quoted in John Adams, Novanglus Papers, no. 7, Vol. 4, in
The Works of John Adams, ed. Charles Francis Adams, 106 (1851).
94. Nordstrom, Global Outlaws, 19.
95. See, for example, Moises Naim, Illicit (London: William Heinemann, 2005)
for more discussion about how supposedly opposing groups regularly “do
business” with one another.
96. For a description of this evolution, see Reuter and Truman, Chasing Dirty
Money.
Notes 207
97. See for example Tsingou, “Who governs and why: the making of the global
anti-money laundering regime,” ed. Underhill, Global Financial Integration
Thirty Years On.
98. UNSCR 1189, 1998.
99. See, for example, Ole Waever, “Securitization and desecuritization,” in
Security: A New Framework for Analysis (Boulder: Lynne Reinner, 1998).
100. Ron Suskind, The One Percent Doctrine: Deep Inside America’s Pursuit of Its
Enemies Since 9/11, First Edition (Simon & Schuster, 2006).
101. Ibid.
102. See the Egmont Group’s worldwide list of FIUs at http://www.egmontgroup.
org%2Flist_of_fius.pdf. Other examples include the U.S. Treasury’s Office of
Terrorism and Financial Intelligence (TFI), the Federal Bureau of Investiga-
tion’s Terrorist Financing Operations Section (TFOS).
103. Sharman, “Privacy as roguery: personal financial information in an age of
transparency.”
104. Hoffman, Inside Terrorism, 1.
105. de Goede, “Money, media and the anti-politics of terrorist finance.”
106. Ibid., 293.
107. See, for example, Tim Parkman and Gill Peeling, Countering Terrorist Finance:
A Training Handbook for Financial Services (Gower Publishing, Ltd., 2007), 34.
109. See, for example, Levitt, Hamas; Rachel Ehrenfeld, Funding Evil, Updated:
How Terrorism is Financed and How to Stop It, Expanded (Bonus Books, 2005).
110. Roth, Greenburg, and Wille, Staff Report to the Commission, 47.
111. de Goede, “Beyond economism in international political economy.”
112. Mark Duffield, Development, Security and Unending War: Governing the World
of Peoples (Polity, 2007), 2–3.
113. See discussion in Chapter 1.
114. Lee Wolosky and Stephan Heifatz, “Regulating terrorism,” Law and Policy in
International Business 34, no. 1 (2002): 2.
115. Dennis M. Lormel, “Understanding and disrupting terrorist financing”
(IPSA International, October 15, 2007).
116. Parkman and Peeling, Countering Terrorist Finance, 5.
118. See, for instance, Cassara, Hide and Seek; Roth, Greenberg, and Wille, Staff
Report to the Commission. See also Chapter 1 for anecdotes about the wide
usage of open-source information even among counter terrorist finance
intelligence analysts.
119. Carolyn Nordstrom, “Extrastate globalization of the illicit,” ed. Catherine
Lowe Besteman and Hugh Gusterson, Why America’s Top Pundits Are
Wrong: Anthropologists Talk Back (Berkley, CA: University of California Press,
2005).
120. Victor Comras, “Al-Qaeda finances and funding to affiliated groups,” Strate-
gic Insights (Center for Contemporary Conflict) IV, no. 1 (January 2005).
3 Asking the Right Questions about Terrorist Finance

1. Steven Emerson and Jonathan Levin, “Terrorism financing: origination, orga-
nization, and prevention: Saudi Arabia, terrorist financing and the war on
208 Notes
terror,” Testimony of Steven Emerson with Jonathan Levin Before the United States
Senate Committee on Governmental Affairs (Washington DC, July 31, 2003).
2. Horgan and Taylor, “Playing the ‘green card:’ financing the provisional IRA:
part 1.”
3. Jeroen Gunning, “Terrorism, charities, and diasporas,” ed. Biersteker and
Eckert, Countering the Financing of Terrorism.
4. Nigel Dodd, The Sociology of Money: Economics, Reason & Contemporary Society,
1st ed. (Continuum Intl Pub Group, 1994). See also Geoffrey Ingham, The
Nature of Money (Polity, 2004).
5. Partha Dasgupta, Economics: A Very Short Introduction (Oxford University
Press, USA, 2007). The use of the concept of “flow” here is meant to empha-
size that it is the relationship among the many variables of terrorist financing
that is important to knowledge of it, rather than the nature of any particu-
lar set of those variables. Although this is essentially analogous to economic
sociological approaches (see especially Jens Beckert, “The social order of mar-
kets,” Theory and Society 38, no. 3 (1, 2009): 245–269.), for the purposes of
this book, the concept of “flow” makes this point more concisely.
6. Nordstrom, Global Outlaws, 207.
7. Greta Krippner, “The elusive market: embeddedness and the paradigm of
economic sociology,” Theory and Society 30, no. 6 (2002): 782. See also
Beckert, “The social order of markets.”
8. Quoted in Elisabeth Bumiller and Jane Perlez, “After the attacks: the
overview; bush and top aides proclaim policy of ‘ending’ states that back
terror; local airports shut after an arrest,” The New York Times, September 14,
2001, sec. U.S.
10. Matthew Levitt, “Adding Hizbullah to the EU terrorist list,” Testimony
to the Committee on Foreign Affairs, Subcommittee on Europe, United States
House of Representatives, June 20, 2007, http://foreignaffairs.house.gov/110/
lev062007.htm (accessed April 20, 2008).
11. Adham Saouli, “Stability under late state formation: the case of Lebanon,”
Cambridge Review of International Affairs 19, no. 4 (12, 2006): 701–717.
12. Gulfnews, “Hizbullah’s welfare services ensure grass-roots support,”
August 12, 2006.
14. Ibid.
15. Duffield, Development, Security and Unending War, 2–3.
16. See especially—but by no means exclusively—the Critical Security Studies
debates, such as in Ken Booth, ed., Critical Security Studies and World Politics
(Lynne Rienner Publishers Inc, 2004); Keith Krause, Critical Security Studies
(University of Minnesota Press, 1997). See also the “New Wars” and related
literature, such as Mary Kaldor, New and Old Wars: Organized Violence in a
Global Era, 2nd ed. (Stanford University Press, 2007); Duffield, Development,
Security and Unending War; Mark Duffield, Global Governance and the New
Wars: The Merging of Development and Security (Zed Books Ltd, 2001).
17. See discussion on the “opening up” of terrorism studies to wider perspectives
in John Horgan and Michael Boyle, “A case against ‘critical terrorism stud-
ies’,” Critical Studies on Terrorism 1, no. 1 (January 1, 2008): 53–55 and more
generally in Richard Jackson, Breen Smyth Marie, and Jeroen Gunning, eds.,
Notes 209
Critical Terrorism Studies: A New Research Agenda (New York: Routledge,

2009).
18. See discussion in Chapter 1.
19. Michel Foucault, Abnormal, trans. G. Burchell (New York: Picador, 2003),
48, quoted in de Goede, “Money, media and the anti-politics of terrorist
finance,” 298.
20. Ibid.
21. Duffield, Development, Security and Unending War, 5.
22. Michel Foucault, “Right of death and power over life,” ed. Nancy Scheper-
Hughes and Philippe I. Bourgois, Violence in War and Peace (Wiley-Blackwell,
2004), 80.
24. Mitchell Dean, Governmentality: Power and Rule in Modern Society (Sage
Publications, 1999), 113.
26. For discussion of these approaches, see Ashvaig Gordon, “Terrorism and
knowledge growth,” ed. Andrew Silke, Research on Terrorism: Trends, Achieve-
ments and Failures, 1st ed. (Routledge, 2003); Jeroen Gunning, “Babies
and bathwaters: reflecting on the pitfalls of critical studies on terrorism,”
European Political Science 6, no. 3 (2007): 236–243.
4 Understanding Terrorist Finance as Interaction with

Value Chains
1. G. Gereffi, J. Humphrey, and T. Sturgeon, “The governance of global value
chains,” Review of International Political Economy 12, no. 1 (February 1,
2005): 79.
2. Bruce Kogut, “Designing global strategies: comparative and competitive
value-added chains,” Sloan Management Review 26, no. 4 (Summer 1985): 15.
3. Interoperability Clearinghouse, Glossary of Terms, http://www.ichnet.org/
glossary.htm. The term “value chain” arrived into popular usage through
Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior
Performance, 1st ed. (Free Press, 1998).
4. Which of course can be defined in many ways—profit, long-term value, stock
price, and so on.
5. Stuart Levey, “Address of under secretary Stuart Levey,” The American Israel
Public Affairs Committee Policy Conference 2005 (U.S. Treasury, May 25, 2005).
6. Al-Shabaab has been officially named or designated as a terrorist orga-
nization by at least the governments of the United States, the United
Kingdom, and Canada. U.S. Department of State, “Foreign Terrorist
Organizations,” August 6, 2010, http://www.state.gov/s/ct/rls/other/des/
123085.htm; Althia Raj, “Al-Shabaab listed as terrorist group,” Toronto
Sun, March 7, 2010, http://www.torontosun.com/news/canada/2010/03/07/
13145681.html; “Somali group to be banned in UK,” BBC, March 1, 2010,
sec. UK, http://news.bbc.co.uk/2/hi/uk_news/8543347.stm.
7. Al-Shabaab has been dubbed by one Somali observer the “conscience” of the
ICU, as well as the key driver for both the ICU’s success in defeating the
warlords and also its adoption of suicide bombings and other brutal tactics.
210 Notes
Dr. Ali Abdirahman Hirsi, “The enormous debt owed by so many to the UIC,”
Wardheer News, March 5, 2007, http://www.wardheernews.com/articles_07/
March_07/05_UIC_Ali_Hirsi.html.
8. Sudarsan Raghavan, “Islamic militant group al-Shabab claims Uganda bomb-
ing attacks,” The Washington Post, July 12, 2010, http://www.washington
post.com/wp-dyn/content/article/2010/07/12/AR2010071200476.html.
9. Ian Fisher, “Somali business thwarted by too-free enterprise,” The New York
Times, August 10, 2000.
10. Peter D. Little, Somalia: Economy Without State (Indiana University Press,
2003): 124.
11. Ibid., 23.
12. Ibid., throughout, but especially 9, 165–166.
13. Ibid., 9, 119.
14. Anna Lindley, “Between ‘dirty money’ and ‘development capital’: Somali
money transfer infrastructure under global scrutiny,” African Affairs 108,
no. 433 (August 8, 2009): 8.
15. Eric Pardo Sauvagot, Piracy off Somalia and its Challenges to Maritime Security,
UNISCI Discussion Papers (UNISCI, January 2009).
16. “Somali pirates: Islamist insurgents demand weapons from hijacked ship,”
The Daily Telegraph, October 5, 2008, http://www.telegraph.co.uk/news/
worldnews/africaandindianocean/somalia/3140884/Somali-pirates-Islamist-
insurgents-demand-weapons-from-hijacked-ship.html.
17. David Shinn, “Rise of piracy and other maritime insecurity in Somalia,”
April 7, 2009, http://www.eastafricaforum.net/2009/04/11/rise-of-piracy-
and-other-maritime-insecurity-in-somalia/. Shinn observes that the taxation
rate can go up as high as 50 percent if al-Shabaab actually provides financing
for a particular pirate operation.
18. Sauvagot, Piracy off Somalia and Its Challenges to Maritime Security.
19. “Denmark: Financing terrorism in Somalia,” Islam in Europe, January 11,
2010, http://islamineurope.blogspot.com/2010/01/denmark-financing-
terrorism-in-somalia.html.
20. Nina Berglund, “Three charged with financing terrorist activity,” Aftenposten
(Norway, February 28, 2008), http://www.aftenposten.no/english/local/
article2282983.ece. “Denmark: Financing terrorism in Somalia.” Abdisaid
M. Ali, “The Al-Shabaab Al-Mujahidiin—a profile of the first Somali ter-
rorist organisation,” in The Joint Kenya-Uganda Border Security and Manage-
ment Workshop (Jinja, Uganda: IGAD Capacity Building Programme against
Terrorism (ICPAT), 2008).
21. Abdulkadir Osman Farah, “Diaspora involvement in the development of
Somalia,” Development, Innovation and International Political Economy Research
(DIIPER) Research Series, no. 13 (2009), http://vbn.aau.dk/files/16987635/
diiper_wp_13.pdf.
22. Ibid.
23. For a good introduction to khat and its role in the societies in which it
is consumed, see Neil Carrier, Kenyan Khat: The Social Life of a Stimulant
(Brill, 2007).
24. Kaspar Krogh, “Hver dag smugles et ton af planten Khat ind i Danmark,”
Berlingske Tidende, February 6, 2010, http://www.berlingske.dk/danmark/
hver-dag-smugles-et-ton-af-planten-khat-ind-i-danmark.
Notes 211
25. Ibid.
26. Ibid.
27. “Nederlandse qat-smokkel financiert terreurorganisatie Al-Shabab,” Dit is
de Dag (Netherlands: Radio 1 Live, June 28, 2010), http://www.eo.nl/
programma/ditisdedag/2009-2010/page/Nederlandse_qat_smokkel_ financiert_
terreurorganisatie_Al_Shabab/articles/article.esp?article=11726790.
28. Ibid.
29. Carrier, Kenyan Khat.
30. Anna Lindley, “Somalia country study,” in Informal Remittance Systems
in Africa, Caribbean and Pacific (ACP) Countries (Oxford: ESRC Centre on
Migration, Policy and Society (COMPAS), University of Oxford, 2005).
31. Thank you to Dr. Neil Carrier for this insight.
32. “Nederlandse qat-smokkel financiert terreurorganisatie Al-Shabab.” See, for
example, Cindy Horst, “Xawilaad: the importance of overseas connections in
the livelihoods of Somali refugees in the Dadaab refugee camps of Kenya,”
University of Amsterdam, Amsterdam Research Institute for Global Issues
and Development Studies (2003); Anna Lindley, “Somalia country study,”
in Informal Remittance Systems in Africa, Caribbean and Pacific (ACP) Coun-
tries (Oxford: ESRC Centre on Migration, Policy and Society (COMPAS),
University of Oxford, n.d.).
33. See, for instance, de Goede, “Hawala discourses and the war on terror-
ist finance”; Passas, “Fighting terror with error: the counter-productive
regulation of informal value transfers.”
34. Lindley, “Somalia country study.”
35. Farah, “Diaspora involvement in the development of Somalia.” Lindley,
“Somalia country study.”
36. Lindley, “Between ’dirty money’ and ’development capital’,” 20.
37. Ibid.
38. Ibid.
39. Ibid.
40. Hirsi, “The enormous debt owed by so many to the UIC.”
41. Ibid.
42. Lindley, “Between ‘dirty money’ and ‘development capital’.”
43. Lindley, “Somalia country study.”
44. Ibid.
45. “Kismayo islamists shut down money-wiring firms,” Garowe Online,
March 10, 2009, http://allafrica.com/stories/printable/200903110006.
html.
46. “Somali phone cash transfer banned,” BBC, October 18, 2010, sec. Africa,
http://www.bbc.co.uk/news/mobile/world-africa-11566247.
47. Safia Sulaiman, “Empowering ‘soft’ Taliban over ‘hard’ Taliban: Pakistan’s
counter-terrorism strategy,” Terrorism Monitor (Jamestown Foundation) 6,
no. 15, July 25, 2008.
48. US Department of State, “Designations of Tehrik-e-Taliban Pakistan and two
senior leaders,” Press Release, September 1, 2010, http://www.state.gov/r/pa/
prs/ps/2010/09/146545.htm.
49. Former NATO country government intelligence official currently resident
in Pakistan (name withheld), interview by the author (Washington DC,
October 2009).
212 Notes
50. Ravi Somaiya, “Guerilla Trucks,” Newsweek, October 14, 2010, http://www.
newsweek.com/2010/10/14/why-rebel-groups-love-the-toyota-hilux.print.
html. And Former NATO country government intelligence official currently
resident in Pakistan (name withheld), interview by the author (Washington
DC, October 2009).
51. “Vehicular equivalent of the AK-47” by Andrew Exum, and “a modern
version of light cavalry” by David Kilcullen, both quoted in Ibid.
52. Author interviews with former NATO country government intelligence offi-
cial currently resident in Pakistan (name withheld—locations withheld,
October 2009 to April 2010).
53. John F. Burns, “Trucks of the Taliban: durable, not discreet,” The New York
Times, November 23, 2001, sec. Autos, http://www.nytimes.com/2001/11/
23/automobiles/autos-on-friday-international-trucks-of-the-taliban-durable-
not-discreet.html?scp=1&sq=mullah%20omar%20car%20hilux&st=cse.
54. Author interviews with former NATO country government intelligence offi-
cial currently resident in Pakistan (name withheld—locations withheld,
October 2009 to April 2010).
55. See Chapter 1 discussion of the Afghan Transit Trade.
56. Somaiya, “Guerilla trucks” and author interviews with former NATO coun-
try government intelligence official currently resident in Pakistan (name
withheld—locations withheld, October 2009 to April 2010). Although reli-
able estimate was available at the time of writing, to illustrate the likely size
of the trade in Chinese-made counterfeit vehicles, Ford Motor Company esti-
mates it loses $2 billion per year in lost sales from such fakes, and the global
trade in counterfeited car parts, most of which are made in China, is esti-
mated to be worth some $16 billion: Jay Hilotin, “Counterfeit car parts sold
in UAE,” Gulfnews, October 14, 2010, http://gulfnews.com/news/gulf/uae/
counterfeit-car-parts-sold-in-uae-1.696199.
57. Sources for prices: author interviews with former NATO country government
intelligence official currently resident in Pakistan (name withheld—locations
withheld, October 2009 to April 2010).
58. Somaiya, “Guerilla trucks”; author interviews with former NATO coun-
try government intelligence official currently resident in Pakistan (name
withheld—locations withheld, October 2009 to April 2010).
59. Amartya Sen, Rationality and Freedom (London: Harvard University Press,
2004), 4.
60. Ibid.
61. Ash Amin and Ronen Palan, “Towards a non-rationalist international politi-
cal economy,” Review of International Political Economy 8, no. 4 (2001): 561.
62. Sen, Rationality and Freedom, 6.
63. See Ibid., 7, footnote 4.
64. Ibid., 4.
65. Ibid., 48.
66. Sen, Rationality and Freedom. In context of IR discourse overall, this is roughly
analogous to constructivism in which structures matter, but they can change
by the choices of agents; and in particular to the poststructural international
political economy (IPE) and economic sociology approaches that discuss the
social, ideational, and discursive foundations of how value (such as money)
and its exchange (such as “finance”) is perceived and acted upon.
Notes 213
67. Victor Comras, “Al-Qaeda finances and funding to affiliated groups,” Strategic
Insights 4, no. 1 (January 2005).
68. Levitt, Hamas.
69. See discussion in Jeroen Gunning, “Terrorism, charities, and diasporas: con-
trasting the fundraising practices of Hamas and al Qaeda among Muslims in
Europe,” ed. Thomas J. Biersteker and Sue E. Eckert, Countering the Financing
of Terrorism, 1st ed. (Routledge, 2007), 99–104.
70. Ibid.
71. Carolyn Nordstrom, “Extrastate globalization of the illicit,” ed. Catherine
Besteman and Hugh Gusterson, Why America’s Top Pundits Are Wrong:
Anthropologists Talk Back 1st ed. (University of California Press, 2005), 151.
72. Gereffi, Humphrey and Sturgeon, “The governance of global value chains,”
78–104.
73. Ibid., 85.
74. Sabrina Tavernise, “Organized crime in Pakistan feeds Taliban,” The New York
Times, August 29, 2009, sec. International/Asia Pacific, http://www.nytimes.
com/2009/08/29/world/asia/29karachi.html?_r=1&pagewanted=print.
75. Ibid.
76. Ibid.
77. Anne-Kathrin Glatz and Robert Muggah, “The other side of the coin:
demand,” in Small Arms Survey 2006: Unfinished Business (Geneva: Small
Arms Survey, Graduate Institute of International Studies, 2006).
78. Peters, Seeds of Terror, 67–101.
79. Ibid., 102–144.
80. Ibid.
81. Tamara Makarenko, “The crime-terror continuum: tracing the interplay
between transnational organised crime and terrorism,” Global Crime 6, no. 1
(February 1, 2004): 129–145.
82. Phil Williams, “Terrorist financing and organized crime: nexus, appropria-
tion, or transformation?,” ed. Thomas Biersteker and Sue Eckert, Countering
the Financing of Terrorism (London, New York: Routledge, 2008).
83. Peters, Seeds of Terror.
84. Roth, Greenberg, and Wille, Staff Report to the Commission: Monograph on
Terrorist Financing.
5 Understanding Terrorist Finance as a Continuum of

Material Support
1. Craig Whitlock, “Afghan insurgents’ diverse funding sources pose chal-
lenges,” The Washington Post, September 27, 2009, http://www.washington
post.com/wp-dyn/content/article/2009/09/26/AR2009092602707.html.
2. “Al-Qaeda,” Terrorist Group Profiles, Web site of the US Naval Postgraduate
School, http://www.nps.edu/Library/Research/SubjectGuides/SpecialTopics/
TerroristProfile/Current/AlQaida.html (accessed October 23, 2010).
3. For a more complete list, see the United Nations “Consolidated List of Enti-
ties and other groups and undertakings associated with Al-Qaeda,” available
at http://www.un.org/sc/committees/1267/consolidatedlist.htm#alqaedaent
(accessed October 23, 2010).
214 Notes
4. For a discussion of the utopian and global revolutionary aspects of al-Qaeda,

see especially, John Gray, Al Qaeda and What It Means to Be Modern (New
Press, The, 2003).
5. William Maclean, “Al-Qaida’s money trouble,” Reuters, June 15, 2009, http://
www.canada.com/life/QAIDA+MONEY+TROUBLE/1698175/story.html.
6. Abdul Hameed Bakier, “Jihadis debate methods of financing the Mujahideen
network in Iraq,” Jamestown Foundation Terrorism Monitor 7, no. 32 (October
30, 2009).
7. Jordan Steffen, “Experts say some Jihadist websites should be shut down,”
Los Angeles Times, September 19, 2010, http://www.latimes.com/sns-jihad-
websites,0,6784408.story.
8. Ibid.
9. Paraphrase of Bakier, “Jihadis debate methods of financing the Mujahideen
network in Iraq.”
10. Ibid.
11. Ibid.
12. Daniel Byman, Deadly Connections: States that Sponsor Terrorism (Cambridge
University Press, 2005).
13. Bakier, “Jihadis debate methods of financing the Mujahideen network in
Iraq.”
14. Omid Marzban, “Gulbuddin Hekmatyar: from holy warrior to wanted
terrorist,” The Jamestown Foundation, September 2006.
15. “Designation of Gulbuddin Hekmatyar as a terrorist,” Press Statement (U.S.
Department of State, February 19, 2003).
16. Peters, Seeds of Terror, 127.
17. Ibid., 128.
18. Candace Rondeaux, “Afghan rebel positioned for key role,” The Washington
Post, November 5, 2008.
19. Ibid.
20. Docket No. 08-1498. Argued February 23, 2010. Decided June 21,
2010.
21. Oral arguments for Holder et al. v Humanitarian Law Project et al. February
23, 2010.
22. Humanitarian Law Project Web site: http://hlp.home.igc.org/ (accessed
October 22, 2010).
23. Oral arguments for Holder et al. v Humanitarian Law Project et al., Docket
No. 08-1498, February 23, 2010.
24. Quoted in Constitution Project, “Constitution project dismayed by supreme
court’s rejection of constitutional challenge to provisions of material support
laws,” Press Release, June 21, 2010.
25. Gunning, “Terrorism, charities, and diasporas: contrasting the fundraising
practices of Hamas and al Qaeda among Muslims in Europe.”
26. Ibid.
27. James Adams, The Financing of Terror (Simon & Schuster, 1986), 131, 137.
Adams cites the PIRA’s annual budget for the “early 1970s” as £4 million,
which, using the January 1972 dollar/sterling exchange rate of 2.57 equates
to $10.28 million.
28. Comprised of both Irish citizens living in America, and American citi-
zens of Irish descent. See Adams, The Financing of Terror, 137; A Mumford,
Notes 215
“Intelligence wars: Ireland and Afghanistan, the American experience,” Civil

Wars 7, no. 4 (January 1, 2005): 382.
29. Adrian Guelke, “The United States, Irish Americans and the Northern Ireland
peace process,” International Affairs (Royal Institute of International Affairs
1944–) (1996): 524.
30. Ibid.
31. The defendants were NORAID founder Michael Flannery and four others.
They did not deny smuggling arms to the PIRA, but they did claim that
the CIA paid them to do it. See Adams, The Financing of Terror, 137–142;
Mumford, “Intelligence wars: Ireland and Afghanistan, the American expe-
rience,” 382; Guelke, “The United States, Irish Americans and the Northern
Ireland peace process,” 523–525.
32. “Foreign Agents Registration Unit (FARA),” US Department of Justice Web site,
n.d., http://www.fara.gov/.
33. Quoted in Warren Richey, “The Noraid connection,” Christian Science Monitor
(international edition), January 19–25, 1985. Guelke, “The United States, Irish
Americans and the Northern Ireland peace process.”
34. Adams, The Financing of Terror; Guelke, “The United States, Irish Americans
and the Northern Ireland peace process.”
35. Ed. Moloney, “Rep. King and the IRA: the end of an extraordinary
affair?,” New York Sun, June 22, 2005, http://www.nysun.com/national/rep-
king-and-the-ira-the-end-of-an-extraordinary/15853/#. It must be noted that
Rep. King, along with many other former Irish-American supporters of
NORAID, Sinn Fein, and the PIRA, have publicly and repeatedly disavowed
Irish Republican terrorism in the wake of the September 11, 2001 terrorist
attacks on the United States.
36. Internment refers to Operation Demetrius, a policy in which citizens of
Northern Ireland suspected of being paramilitary members could be impris-
oned without trial for up to 10 days. Ed. Moloney, A Secret History of the IRA
(W. W. Norton & Company, 2003), 107, 209.
37. Guelke, “The United States, Irish Americans and the Northern Ireland peace
process.”
38. Adams, The Financing of Terror, 137.
39. Jason Burke, Al-Qaeda: The True Story of Radical Islam (Penguin Books
Ltd, 2004).
40. Especially the literature on “radicalization”
41. See, for example, Paul Collier and Anke Hoeffler, “Greed and grievance in
Civil War,” Oxford Economic Papers 56 (2004): 563–595 who argue that socio-
economic factors play a greater role in determining participation in political
violence than political factors; Alan Kreuger and Jitka Maleckova, “Educa-
tion, poverty, political violence and terrorism: is there a causal connection?,”
Journal of Economic Perspectives 17, no. 4 (2003): 119–144, who argue that
there is no generalizable causal connection between economic deprivation
and participation in terrorism.
42. Nathan Vardi, “Is al-Qaeda bankrupt?,” Forbes, March 1, 2010, http://www.
forbes.com/forbes/2010/0301/terrorism-funds-finance-osama-al-qaeda-bank
rupt.html?boxes=Homepagelighttop.
43. F. Scott Fitzgerald, The Crack-Up (New Directions Publishing Corporation,
1993), 69.
216 Notes
6 Terrorist Finance and International Relations

1. de Goede, “Money, media and the anti-politics of terrorist finance,”
293.
2. Robert Cox, “Towards a post-hegemonic conceptualization of world order:
reflections on the relevancy of Ibn Khaldun,” ed. J. Rosenau and E.O.
Czempiel, Governance Without Government: Order and Change in World Politics
(Princeton, NJ: Princeton University Press, 1992), 132.
3. Pierre Bourdieu, Outline of a Theory of Practice, trans. Richard Nice
(Cambridge: Cambridge University Press, 1977), 168.
4. Horgan and Boyle, “A case against ‘critical terrorism studies’.”
5. For example Paul Wilkinson, Terrorism and the Liberal State, 2nd ed. (NYU
Press, 1986).
6. Richard Jackson, Writing the War on Terrorism: Language, Politics and Counter-
Terrorism (Manchester University Press, 2005).
7. Christopher Cramer, Civil War Is Not a Stupid Thing: Accounting for Violence in
Developing Countries (C Hurst & Co Publishers Ltd, 2006).
8. Duffield, Development, Security and Unending War.
9. Anthony F. Lang, Punishment, Justice and International Relations: Ethics and
Order After the Cold War, 1st ed. (Routledge, 2008).
10. This was Adams, The Financing of Terror.
11. Michael Levi, “Combating the financing of terrorism: a history and
assessment of the control of ‘threat finance’,” British Journal of
Criminology (May 17, 2010), http://bjc.oxfordjournals.org/cgi/content/
abstract/azq025v1.
12. Robert Cox, “Social forces, states, and world orders: beyond international
relations theory,” Millennium—Journal of International Studies 10, no. 2 (1981):
126–155.
14. For example, Napoleoni, “The new economy of terror.”
15. See, for example, Ehrenfeld, Funding Evil, Updated; Steven Emerson, American
Jihad: The Terrorists Living Among Us (Free Press, 2003).
17. Juan Zarate, quoted in Ibid.
18. See Warde, The Price of Fear.
20. See discussion in Chapters 1 and 2.
21. Horgan and Boyle, “A case against ’critical terrorism studies’,” 62.
22. Reuter and Truman, Chasing Dirty Money.
23. Peter Sproat, “The social impact of counter terrorist finance policies in
the UK,” Crime, Law and Social Change 44, no. 4 (December 29, 2005):
441–464.
24. Thomas J. Bierstecker and Sue E. Eckert, “Taking stock of efforts to counter
the financing of terrorism and recommendations for the way forward,” ed.
Bierstecker and Eckert, Countering the Financing of Terrorism.
26. Passas, “Fighting terror with error: the counter-productive regulation of
informal value transfers.”
Notes 217
27. Gunning, “Terrorism, charities, and diasporas: contrasting the fundraising

practices of Hamas and al Qaeda among Muslims in Europe.”
28. Marieke de Goede, “Financial regulation and the war on terror in global
finance in the new century,” ed. L. Assassi, A. Nesvetailova, and D. Wigan,
Global Finance in the New Century: Beyond Deregulation (London: Palgrave
Macmillan, 2006).
30. Naylor, Satanic Purses.
31. These are: Amicelle, A. (2008) “Migrant remittances marginalized: an unin-
tended consequence of the fight against terrorist financing?” Paper presented
at the annual meeting of the ISA’s 49th Annual Convention, Bridging Mul-
tiple Divides, San Francisco, California, March 26, 2008. Biersteker, T. J. and
S. Eckert (2008), “Measuring success in the financial war on terror.” Paper
presented at the annual meeting of the ISA’s 49th Annual Convention, Bridg-
ing Multiple Divides, San Francisco, California, 26 March 2008; Biersteker
and Eckert, eds. (2008) Countering the Financing of Terrorism. Alyson Bailes,
ed., Business and Security After 11 September 2001: Protecting the Legitimate
and Blocking the Illegitimate (Oxford: Oxford University Press); Biersteker, T. J.
with P. Romaniuk (2004) “The return of the state? Financial re-regulation
in the pursuit of national security after september 11,” ed. John Tirman,
Maze of Fear: Security and Migration After 9/11 (New York: The New Press,
2004); Cassara, Hide and Seek; Dulles, V. A., Heng, Y. K. and K. McDonagh
“The other war on terror revealed: global govermentality and the financial
action task force’s campaign against terrorist financing,” Review of Interna-
tional Studies 34 (2008): 553–573; Passas, N. “Setting global CFT standards:
a critique and suggestions,” Journal of Money Laundering Control 9, no. 3
(2006): 281–292; Reuter and Truman, Chasing Dirty Money; Vlcek, W. “Devel-
opment vs. terrorism: money transfers and EU financial regulations in the
UK,” British Journal of Politics and International Relations 10, no. 2 (2008):
286–302; Vlcek, W. “Hitting the right target: EU and security council pur-
suit of terrorist financing.” Paper presented at the Biennial Conference of
the European Union Studies Association, Montreal, Canada, May 17–19,
2007; Vlcek, W. “Along-side global political economy—a rhizome of infor-
mal finance.” Paper presented at the annual meeting of the International
Studies Association 48th Annual Convention, Chicago, Illinois, February 28,
2007; Warde, The Price of Fear; Warde, I., “The war on terror, crime and the
shadow economy in the MENA countries,” Mediterranean Politics 12, no. 2
(2007): 233–248.
33. Duffield, Development, Security and Unending War, 2–3.
34. For instance, Nordstrom, Global Outlaws. Naím, Illicit or R. Palan, The
Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires
(Cornell University Press, 2006).
35. Marieke de Goede, “Money, media and the anti-politics of terrorist finance,”
(August 1, 2008): 289–310.
36. Such as the United States, Great Britain, France, Germany, and Japan.
37. J. C. Sharman, Havens in a Storm: The Struggle for Global Tax Regulation, 1st ed.
(Cornell University Press, 2006).
218 Notes
38. Such as Lichtenstein, Aruba, the Cayman Islands, and Nauru.

39. Sharman, Havens in a Storm.
40. Ibid., 145.
41. Ibid.
42. de Goede, “Hawala discourses and the war on terrorist finance.”
43. For a discussion of this, see Robert O’Brien and Marc Williams, Global Polit-
ical Economy: Evolution and Dynamics, 2nd ed. (Palgrave Macmillan, 2007),
13–26.
44. This meta-approach echoes the “eclectic” approach outlined in O’Brien and
Williams, Global Political Economy. Although presented within a textbook,
O’Brien and Williams argue that their “eclectic” perspective “is not a random
mix of existing theories” but represents “an explicit argument concerning
the key issues and themes in global political economy,” 410–411.
45. Ibid., 418.
46. Ibid., 410.
47. Ibid.
48. Ibid.
49. Roger Tooze, “The missing link: security critical international political econ-
omy and community,” ed. Ken Booth, Critical Security Studies and World
Politics, 144.
50. Nordstrom, Global Outlaws.
51. In this context, the term “negotiate” means roughly “systematic interac-
tion,” rather than necessarily “talking.”
52. Hans Morgenthau, Politics Among Nations, 7th ed. (McGraw-Hill, 2005), 5.
53. Michael Charles Williams, The Realist Tradition and the Limits of International
Relations (Cambridge University Press, 2005), 115.
54. Ibid., 114–115.
55. As quoted in Seán Molloy, The Hidden History of Realism: A Genealogy of Power
Politics (Palgrave Macmillan, 2006).
56. Ibid.
57. Williams, The Realist Tradition and the Limits of International Relations.
58. Ibid., 108.
59. Ibid.
60. See Gunning, “Terrorism, charities, and diasporas: contrasting the
fundraising practices of Hamas and al Qaeda among Muslims in Europe.”
61. This is reflected in the diverse and ever-changing nature of the political
spaces in which terrorist financing occurs.
62. Williams, The Realist Tradition and the Limits of International Relations, 118.
63. Ibid., 118–121.
64. Ibid., 121.
65. Morgenthau, Politics Among Nations, 183–185, especially.
67. Ibid. See also J. Hobson and L. Seabrooke, “Reimagining Weber: constructing
international society and the social balance of power,” European Journal of
International Relations 7, no. 2 (June 1, 2001): 239–274.
69. For a discussion of this alienation process using the balance of power,
see: Ibid.
70. Morgenthau, Politics Among Nations, 118.
Notes 219
72. Ibid., 119.
Conclusion
1. Frederich Nietzsche, Beyond Good and Evil, Chapter VII. Emphasis added.
2. Biersteker and Eckert, eds., Countering the Financing of Terrorism.
Bibliography
Adams, James. The Financing of Terror. Simon & Schuster, 1986.

Ahmed, Akbar S. Millennium and Charisma Among Pathans: A Critical Essay in Social
Anthropology. London: Routledge and Kegan Paul, 1976.
———. “An aspect of the colonial encounter in the North-West Frontier
Province.” Asian Affairs 9, no. 3 (10, 1978): 319–327.
Al-Shishani, Murad Batal. “The rise and fall of Arab fighters in Chechnya.”
Jamestown Foundation Terrorism Monitor (September 14, 2006).
Ali, Abdisaid M. “The Al-Shabaab Al-Mujahidiin—a profile of the first somali ter-
rorist organisation.” In The Joint Kenya-Uganda Border Security and Management
Workshop. Jinja, Uganda: IGAD Capacity Building Programme against Terrorism
(ICPAT), 2008.
Ali, Abdullah Y., trans. Holy Qur’an. Medina, Saudi Arabia: The Presidency of
Islamic Researches, IFTA, Call and Guidance, 2010.
Amin, Ash, and Ronen Palan. “Towards a non-rationalist international political
economy.” Review of International Political Economy 8, no. 4 (2001): 559.
Amoore, Louise, and Marieke De Goede. “Governance, risk and dataveillance in
the war on terror.” Crime, Law and Social Change 43, no. 2 (April 1, 2005):
149–173.
Anderson, Wesley. Disrupting Threat Finances: Utilization of Financial Information
to Disrupt Terrorist Organizations in the Twenty-First Century. Fort Leavenworth,
Kansas: U.S. Command and General Staff College, 2007.
Andreas, P. “Illicit international political economy: the clandestine side of glob-
alization.” Review of International Political Economy 11, no. 3 (2004): 641–652.
Assassi, Libby, Duncan Wigan, and Anastasia Nesvetailova, eds. Global Finance in
the New Century: Beyond Deregulation. New York: Palgrave Macmillan, 2007.
Bakier, Abdul Hameed. “Jihadis debate methods of financing the Mujahideen
network in Iraq.” Jamestown Foundation Terrorism Monitor 7, no. 32 (October 30,
2009): 3–4.
Baldauf, Scott. “Air Al Qaeda: are Latin America’s drug cartels giving Al Qaeda a
lift?” The Christian Science Monitor, January 15, 2010. http://www.csmonitor.
com/World/2010/0115/Air-Al-Qaeda-Are-Latin-America-s-drug-cartels-giving-
Al-Qaeda-a-lift.
Beckert, Jens. “The social order of markets.” Theory and Society 38, no. 3 (1, 2009):
245–269.
Berglund, Nina. “Three charged with financing terrorist activity.” Aftenposten.
Norway, February 28, 2008. http://www.aftenposten.no/english/local/article
2282983.ece.
Biersteker, Thomas J. and Sue E. Eckert, eds. Countering the Financing of Terrorism.
London, New York: Routledge, 2008.
———. “The politics of numbers in the financial ‘war’ on terrorism.” In Inter-
national Studies Association 49th Annual Convention. San Francisco, California,
2008. http://www.allacademic.com/meta/p252246_index.html.
220
Bibliography 221
Booth, Ken, ed. Critical Security Studies and World Politics. Lynne Rienner Publish-
ers Inc, 2004.
Bourdieu, Pierre. Distinction: A Social Critique of the Judgement of Taste. Translated
by Richard Nice. Harvard University Press, 1984.
Boyd, Roddy. “Arab bank terror financing case to go forward.” New York
Post, January 31, 2007. http://www.nypost.com/p/news/business/item_W7Hy
8dDJk4OBjWvfoidrUK;jsessionid=1D9B6081CFE8050574E8275BFC26B774.
Bumiller, Elisabeth, and Jane Perlez. “After the attacks: the overview; Bush and
top aides proclaim policy of ‘ending’ states that back terror; local airports shut
after an arrest.” The New York Times, September 14, 2001, sec. U.S.
Burke, Jason. Al-Qaeda: The True Story of Radical Islam. Penguin Books Ltd, 2004.
Burns, John F. “Trucks of the Taliban: durable, not discreet.” The New York
Times, November 23, 2001, sec. Autos. http://www.nytimes.com/2001/11/23/
automobiles/autos-on-friday-international-trucks-of-the-taliban-durable-not-
discreet.html?scp=1&sq=mullah%20omar%20car%20hilux&st=cse.
Burr, J. Millard and Robert O Collins. Alms for Jihad: Charity and Terrorism in the
Islamic World. Cambridge, New York: Cambridge University Press, 2006.
Byman, Daniel. Deadly Connections: States that Sponsor Terrorism. Cambridge
University Press, 2005.
Carrier, Neil. Kenyan Khat: The Social Life of a Stimulant. Brill, 2007.
Cassara, John A. Hide and Seek: Intelligence, Law Enforcement, and the Stalled War
on Terrorist Finance. Potomac Books Inc., 2006.
Cassara, John, and Avi Jorisch. On the Trail of Terror Finance: What Law Enforcement
and Intelligence Officials Need to Know. Red Cell IG, 2010.
Cassella, Stefan D. “Money laundering, terrorism, regulation, laws and legisla-
tion.” Journal of Money Laundering Control 7, no. 1 (2003): 92–94.
Certeau, Michel de. The Practice of Everyday Life. Translated by Steven Rendall.
University of California Press, 1988.
Chaia, Alberto, Aparna Dalal, Tony Goland, Maria Jose Gonzalez, Jonathan
Morduch, and Robert Schiff. Half the World is Unbanked. Financial Access
Initiative, 2009.
Chen, Hsinchun, Edna Reid, Joshua Sinai, Andrew Silke, and Boaz Ganor, eds. Ter-
rorism Informatics: Knowledge Management and Data Mining for Homeland Security.
1st ed. Springer, 2008.
Chikhladze, Irakli. “Traffic Control.” Caucuses Reporting Service, Institute for War &
Peace Reporting (IWPR), August 24, 2001. http://iwpr.net/print/report-news/
traffic-control.
“Cocaine, Al Qaeda and tropical gangsters.” StrategyPage, July 4, 2010. http://
www.strategypage.com/htmw/htterr/articles/20100704.aspx.
Coll, Steve. Ghost Wars. 1st ed. Penguin Press, 2004.
Comras, Victor. “Al-Qaeda finances and funding to affiliated groups.” Strategic
Insights 4, no. 1 (January 2005).
Cox, Robert. “Social forces, states, and world orders: beyond international rela-
tions theory.” Millennium—Journal of International Studies 10, no. 2 (1981):
126–155.
Cramer, Christopher. Civil War Is Not a Stupid Thing: Accounting for Violence in
Developing Countries. C Hurst & Co Publishers Ltd, 2006.
Crelinsten, Ronald D., and Alex P. Schmid. Western Responses to Terrorism.
Routledge, 1993.
222 Bibliography
“CSIS developing new model for understanding terrorist financing, documents

show.” Canadian Press, April 21, 2008.
Dasgupta, Partha. Economics: A Very Short Introduction. Oxford University Press,
USA, 2007.
de Vries, Lloyd. “Arab bank sued over Israel terror.” CBSNews.com, July 6,
2004. http://www.cbsnews.com/stories/2004/07/06/terror/main627703.shtml?
CMP=ILC-SearchStories.
Dean, Mitchell. Governmentality: Power and Rule in Modern Society. Sage Publica-
tions, 1999.
Devdariani, Jaba. “Georgia’s Pankisi Dilemma.” Caucuses Reporting Service, Insti-
tute for War & Peace Reporting (IWPR), January 25, 2002. http://iwpr.net/print/
report-news/georgias-pankisi-dilemma.
Dodd, Nigel. The Sociology of Money: Economics, Reason & Contemporary Society. 1st
ed. Continuum Intl Pub Group, 1994.
Donadio, Rachel. “Libel without borders.” The New York Times, October 7, 2007,
sec. Books/Sunday Book Review.
Dowding, Keith. “Three-dimensional power: a discussion of Steven Lukes’ power:
a radical view.” Political Studies Review 4, no. 2 (5, 2006): 136–145.
Duffield, Mark. Global Governance and the New Wars: The Merging of Development
and Security. Zed Books Ltd, 2001.
———. Development, Security and Unending War: Governing the World of Peoples.
Polity, 2007.
Ehrenfeld, Rachel. Funding Evil, Updated: How Terrorism is Financed and How to Stop
It. Expanded. Bonus Books, 2005.
Emerson, Steven. American Jihad: The Terrorists Living Among Us. Free Press, 2003.
Eriksson, Johan, and Giampiero Giacomello. International Relations and Security in
the Digital Age. 1st ed. Routledge, 2007.
Farah, Abdulkadir Osman. “Diaspora involvement in the development of
Somalia.” Development, Innovation and International Political Economy Research
(DIIPER) Research Series, no. 13 (2009). http://vbn.aau.dk/files/16987635/
diiper_wp_13.pdf.
Financial Action Task Force. “FATF IX Special Recommendations,” October 2001.
http://www.fatf-gafi.org/dataoecd/8/17/34849466.pdf.
First report of the Analytical Support and Sanctions Monitoring Team appointed pur-
suant to resolution 1526 (2004) concerning Al-Qaida and the Taliban and associated
individuals and entities. United Nations Security Council, August 25, 2004.
Fisher, Ian. “Somali business thwarted by too-free enterprise.” The New York Times,
August 10, 2000.
Fitzgerald, F. Scott. The Crack-Up. New Directions Publishing Corporation, 1993.
“Foreign Agents Registration Unit (FARA).” US Department of Justice Web site,
n.d. http://www.fara.gov/.
Foucault, Michel. The Order of Things: An Archaeology of the Human Sciences.
Tavistock, 1970.
———. Discipline and Punish: The Birth of the Prison. Vintage Books, 1979.
Gereffi, G., J. Humphrey, and T. Sturgeon. “The governance of global value
chains.” Review of International Political Economy 12, no. 1 (February 1, 2005):
78–104.
de Goede, Marieke. “Beyond economism in international political economy.”
Review of International Studies 29, no. 01 (January 11, 2003): 19.
Bibliography 223
———. “Hawala discourses and the war on terrorist finance.” Environment and
Planning D 21, no. 5 (January 1, 2003): 513–532, http://www.envplan.com/epd/
editorials/d310t.pdf.
———. “The risk of terrorist financing: politics and prediction in the war on
terrorist finance.” Constructing World Orders Conference (2004), The Hague.
———. “Financial regulation and the war on terror in global finance in the
new century.” In Global Finance in the New Century: Beyond Deregulation, edited
by L. Assassi, A. Nesvetailova, and D. Wigan. London: Palgrave Macmillan,
2006.
———. “Underground money.” Cultural Critique-Telos Press-65 (2007): 140.
———. “Money, media and the anti-politics of terrorist finance.” European Journal
of Cultural Studies 11, no. 3 (August 1, 2008): 289–310.
———. “The politics of preemption and the war on terror in Europe.” European
Journal of International Relations 14, no. 1 (March 1, 2008): 161–185.
Gray, John. Al Qaeda and What it Means to be Modern. New Press, 2003.
Guelke, Adrian. “The United States, Irish Americans and the Northern Ireland
peace process.” International Affairs (Royal Institute of International Affairs 1944–)
(1996): 521–536.
Gunaratna, Rohan. Inside Al Qaeda. 1st ed. Columbia University Press, 2002.
Gunning, Jeroen. “Babies and bathwaters: reflecting on the pitfalls of critical
studies on terrorism.” European Political Science 6, no. 3 (2007): 236–243.
———. “Terrorism, charities, and diasporas: contrasting the fundraising prac-
tices of Hamas and al Qaeda among Muslims in Europe.” In Countering the
Financing of Terrorism, edited by Thomas J. Biersteker and Sue E. Eckert. 1st ed.
Routledge, 2008.
Gutting, Gary. “Michel Foucault.” In The Stanford Encyclopedia of Philosophy,
edited by Edward Zalta, 2010. http://plato.stanford.edu/entries/foucault/.
Hilotin, Jay. “Counterfeit car parts sold in UAE.” Gulfnews, October 14,
2010. http://gulfnews.com/news/gulf/uae/counterfeit-car-parts-sold-in-uae-1.
696199.
Hirsi, Dr. Ali Abdirahman. “The enormous debt owed by so many to the UIC.”
Wardheer News, March 5, 2007. http://www.wardheernews.com/articles_07/
March_07/05_UIC_Ali_Hirsi.html.
Hobson, J., and L. Seabrooke. “Reimagining Weber: constructing international
society and the social balance of power.” European Journal of International
Relations 7, no. 2 (June 1, 2001): 239–274.
Hoffman, Bruce. Inside Terrorism. Columbia University Press, 1999.
Honohan, Patrick. “Cross-country variation in household access to financial
services.” Journal of Banking & Finance 32, no. 11 (November 2008): 2493–2500.
Horgan, John, and Max Taylor. “Playing the ‘green card:’ financing the pro-
visional IRA: Part 1.” Terrorism and Political Violence 11, no. 2 (June 22,
2003): 41.
———, and Michael Boyle. “A case against ‘critical terrorism studies’.” Critical
Studies on Terrorism 1, no. 1 (January 1, 2008).
———. “Playing the ‘green card:’ financing the provisional IRA: part 2.” Terrorism
and Political Violence (January 1, 2003).
Horst, Cindy. “Xawilaad: the importance of overseas connections in
the livelihoods of Somali refugees in the Dadaab refugee camps of
Kenya.” University of Amsterdam, Amsterdam Research Institute for Global
224 Bibliography
Issues and Development Studies (2003). http://www.transcomm.ox.ac.uk/

working%20papers/ horst2.pdf.
Ingham, Geoffrey. The Nature of Money. Polity, 2004.
Interpol. “United Nations security council special notice, Al-Ahdal Mohammad
Hamdi Mohammad Sadiq,” September 25, 2010. http://www.interpol.int/
public/data/noticesun/notices/data/2010/42/2010_6442.asp.
Jackson, Richard. Writing the War on Terrorism: Language, Politics and Counter-
terrorism. Manchester University Press, 2005.
———, Breen Smyth Marie, and Jeroen Gunning, eds. Critical Terrorism Studies:
A New Research Agenda. New York: Routledge, 2009.
“An SVR Veteran and a Chechen Separatist Urge That Russia and Chechnya Join
Forces Against the Wahhabis—and the United States.” North Caucuses Analy-
sis 2, no. 27 (July 1, 2001), http://www.jamestown.org/programs/nca/single/?
tx_ttnews[tt_news]=29778&tx_ttnews[backPid]=183&no_cache=1
“Judge allows suits against bank for paying bombers’ relatives.” The New York
Times, September 3, 2005. http://query.nytimes.com/gst/fullpage.html?res=
9501E3DC1431F930A3575AC0A9639C8B63&pagewanted=print.
Kaldor, Mary. New and Old Wars: Organized Violence in a Global Era. 2nd ed.
Stanford University Press, 2007.
Kepel, Gilles. Jihad: The Trail of Political Islam. Belknap Press, 2002.
“Kismayo Islamists shut down money-wiring firms.” Garowe Online, March 10,
2009. http://allafrica.com/stories/printable/200903110006.html.
Kogut, Bruce. “Designing global strategies: comparative and competitive value-
added chains.” Sloan Management Review 26, no. 4 (Summer 1985): 15–28.
Krause, Keith. Critical Security Studies. University of Minnesota Press, 1997.
Krippner, Greta. “The elusive market: embeddedness and the paradigm of
economic sociology.” Theory and Society 30, no. 6 (2002): 775–810.
Krogh, Kaspar. “Hver dag smugles et ton af planten Khat ind i Danmark.”
Berlingske Tidende, February 6, 2010. http://www.berlingske.dk/danmark/hver-
dag-smugles-et-ton-af-planten-khat-ind-i-danmark.
Kupatadze, Alexander. “Organized crime before and after the Tulip revolution:
the changing dynamics of upperworld-underworld networks.” Central Asian
Survey 27, no. 3 (November 3, 2008): 279–299.
Kurtsikidze, Shorena, and Vakhtang Chikovani. “Georgia’s Pankisi Gorge: an
ethnographic survey.” Berkeley Program in Soviet and Post-Soviet Studies Working
Paper Series (Spring 2002).
Lang, Anthony F. Punishment, Justice and International Relations: Ethics and Order
After the Cold War. 1st ed. Routledge, 2008.
Ledeen, Michael A. The War Against the Terror Masters: Why It Happened. Where
We Are Now. How We’ll Win. Truman Talley Books, 2002.
Levi, Michael. “Combating the financing of terrorism: a history and assessment
of the control of ‘threat finance’.” British Journal of Criminology (May 17, 2010).
http://bjc.oxfordjournals.org/cgi/content/abstract/azq025v1.
Levitt, Matthew. HAMAS: Politics, Charity, and Terrorism in the Service of Jihad. Yale
University Press, 2007.
Lindley, Anna. “Somalia country study.” In Informal Remittance Systems in Africa,
Caribbean and Pacific (ACP) Countries. Oxford: ESRC Centre on Migration, Policy
and Society (COMPAS), University of Oxford, 2005.
Bibliography 225
———. “Between ‘dirty money’ and ‘development capital’: somali money transfer
infrastructure under global scrutiny.” African Affairs 108, no. 433 (August 8,
2009): 1–21.
Linklater, Andrew. “The question of the next stage in international relations the-
ory: a critical-theoretical view.” Millennium—Journal of International Studies 21,
no. 1 (1992): 77–98.
Little, Peter D. Somalia: Economy Without State. Indiana University Press, 2003.
Looney, Robert. “The mirage of terrorist financing: the case of Islamic charities.”
Strategic Insights V, no. 3 (March 2006).
Lormel, Dennis M. “Understanding and disrupting terrorist financing.”
IPSA International, October 15, 2007.
Lukes, Steven. Power: A Radical View. 2nd ed. Palgrave Macmillan, 2005.
MacKenzie, Jean. “Are US taxpayers funding the Taliban.” GlobalPost, September
2, 2009. http://www.globalpost.com/dispatch/afghanistan/090902/usaid-
taliban-funding.
Maclean, William. “Al-Qaida’s money trouble.” Reuters, June 15, 2009. http://
www.canada.com/life/QAIDA+MONEY+TROUBLE/1698175/story.html.
Makarenko, Tamara. “The crime-terror continuum: tracing the interplay between
transnational organised crime and terrorism.” Global Crime 6, no. 1 (February 1,
2004): 129–145.
Mcculloch, Jude. “Suppressing the financing of terrorism: proliferating state
crime, eroding censure and extending neo-colonialism.” British Journal of
Criminology 45, no. 4 (July 1, 2005): 470–486.
———, and Sharon Pickering. “Pre-crime and counter-terrorism.” British Journal
of Criminology 49, no. 5 (2009): 628–645.
Meyer, Josh. “Terrorism money is still flowing.” Los Angeles Times, March
24, 2008.
Molloy, Seán. The Hidden History of Realism: A Genealogy of Power Politics. Palgrave
Macmillan, 2006.
Moloney, Ed. A Secret History of the IRA. W. W. Norton & Company, 2003.
———. “Rep. king and the IRA: the end of an extraordinary affair?” New York Sun,
June 22, 2005. http://www.nysun.com/national/rep-king-and-the-ira-the-end-
of-an-extraordinary/15853/#.
Moore, Cerwyn, and Paul Tumelty. “Foreign fighters and the case of Chechnya: a
critical assessment.” Studies in Conflict & Terrorism 31, no. 5 (5, 2008): 412–433.
Morgenthau, Hans. Politics Among Nations. 7th ed. McGraw-Hill, 2005.
Mumford, A. “Intelligence wars: Ireland and Afghanistan, the American experi-
ence.” Civil Wars 7, no. 4 (January 1, 2005): 377–395.
Naím, Moisés. Illicit. Doubleday, 2005.
Napoleoni, Loretta. “The new economy of terror.” openDemocracy, January 26,
2005. http://www.mafhoum.com/press7/225E61.htm.
Naylor, R. T. Wages of Crime: Black Markets, Illegal Finance, and the Underworld
Economy. Cornell University Press, 2002.
———. Satanic Purses: Money, Myth, and Misinformation in the War on Terror. 1st ed.
McGill-Queen’s University Press, 2006.
“Nederlandse qat-smokkel financiert terreurorganisatie Al-Shabab.” Dit is
de Dag. Netherlands: Radio 1 Live, June 28, 2010. http://www.eo.nl/
programma/ditisdedag/2009-2010/page/Nederlandse_qat_smokkel_financiert_
terreurorganisatie_Al_Shabab/articles/article.esp?article=11726790.
226 Bibliography
“Newsline—June 12, 2000.” Radio Free Europe/Radio Liberty, June 12, 2000, sec . . .
Plight of Displaced Persons, Chechen Refugees. http://www.rferl.org/content/
article/1142174.html.
Nordstrom, Carolyn. “Extrastate globalization of the illicit.” In Why America’s Top
Pundits Are Wrong: Anthropologists Talk Back, edited by Catherine Besteman and
Hugh Gusterson. 1st ed. University of California Press, 2005.
———. Global Outlaws. University of California Press, 2007.
O’Brien, Robert, and Marc Williams. Global Political Economy: Evolution and
Dynamics. 2nd ed. Palgrave Macmillan, 2007.
Oral arguments for Holder et al. v Humanitarian Law Project, et al., February 23,
2010, 77–98.
Palan, R. The Offshore World: Sovereign Markets, Virtual Places, and Nomad Million-
aires. Cornell University Press, 2006.
Parkman, Tim, and Gill Peeling. Countering Terrorist Finance: A Training Handbook
for Financial Services. Gower Publishing, Ltd., 2007.
Passas, Nikos. “Fighting terror with error: the counter-productive regulation of
informal value transfers.” Crime, Law and Social Change 45, no. 4 (December 8,
2006): 315–336.
———, and K. Jones. “Commodities and terrorist financing: focus on dia-
monds.” European Journal on Criminal Policy and Research 12, no. 1 (November 2,
2006): 1–33.
Peters, Gretchen. How Opium Profits the Taliban. Washington DC: United States
Institute of Peace, 2009.
———. Seeds of Terror: How Heroin Is Bankrolling the Taliban and al Qaeda. Thomas
Dunne Books, 2009.
Picarelli, John T., and Louise I. Shelley. “Organized crime and terrorism.” In Ter-
rorism Financing and State Responses: A Comparative Perspective, edited by Jeanne
K. Giraldo and Harold A. Trinkunas. Stanford University Press, 2007.
Porter, Michael E. Competitive Advantage: Creating and Sustaining Superior Perfor-
mance. 1st ed. Free Press, 1998.
Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community.
Simon & Schuster, 2001.
Raghavan, Sudarsan. “Islamic militant group al-Shabab claims Uganda bombing
attacks.” The Washington Post, July 12, 2010. http://www.washingtonpost.com/
wp-dyn/content/article/2010/07/12/AR2010071200476.html.
Raj, Althia. “Al-Shabaab listed as terrorist group.” Toronto Sun, March 7, 2010.
http://www.torontosun.com/news/canada/2010/03/07/13145681.html.
Reuter, Peter, and Edwin Truman. Chasing Dirty Money: The Fight Against Money
Laundering. Washington DC: Institute for International Economics, 2004.
Richardson, John G. Handbook of Theory and Research for the Sociology of Education.
Greenwood Press, 1986.
Rondeaux, Candace. “Afghan Rebel positioned for key role.” The Washington Post,
November 5, 2008.
Roth, John, Douglas Greenberg, and Serena Wille. Staff Report to the Commission:
Monograph on Terrorist Financing. Washington DC: National Commission on
Terrorist Attacks Upon the United States, 2004.
Rubin, Alissa J., Savage Charlie, and Rod Nordland. “Regulators ignored warnings
about Afghan bank.” The New York Times, September 18, 2010, sec. World.
http://www.nytimes.com/2010/09/19/world/19kabul.html?pagewanted=print.
Bibliography 227
Rumsfeld, Donald H. “A new kind of war.” The New York Times, September 27,
2001, sec. Opinion. http://www.nytimes.com/2001/09/27/opinion/27RUMS.
html.
Sanikidze, George, and Edward Walker. “Islam and Islamic practices in
Georgia.” Berkeley Program in Soviet and Post-Soviet Studies Working Paper Series
(Fall 2004).
Saouli, Adham. “Stability under late state formation: the case of Lebanon.”
Cambridge Review of International Affairs 19, no. 4 (12, 2006): 701–717.
Sass, Ulrick, “Somaliere samlede ind til al-Shabaab i Odense,” Fyens Stiftstidende,
January 11, 2010, as translated in “Denmark: Financing terrorism in Somalia.”
Islam in Europe, January 11, 2010. http://islamineurope.blogspot.com/2010/01/
denmark-financing-terrorism-in-somalia.html.
Sauvagot, Eric P. Piracy off Somalia and its Challenges to Maritime Security.
UNISCI Discussion Papers. UNISCI, January 2009.
Scheper-Hughes, Nancy, and Philippe I. Bourgois. Violence in War and Peace.
Wiley-Blackwell, 2004.
Schott, Paul Allan, World Bank, and International Monetary Fund. Reference Guide
to Anti-Money Laundering and Combating the Financing of Terrorism. World Bank
Publications, 2006.
Sen, Amartya. Rationality and Freedom. London: Harvard University Press, 2004.
Sharman, J.C. Havens in a Storm: The Struggle for Global Tax Regulation. 1st ed.
Cornell University Press, 2006.
———. “Privacy as roguery: personal financial information in an age of trans-
parency.” Public Administration 87, no. 4 (12, 2009): 717–731.
Shinn, David. “Rise of Piracy and Other Maritime Insecurity in Somalia” pre-
sented at the National Maritime Intelligence Center and Office of Naval
Intelligence, April 7, 2009. http://www.eastafricaforum.net/2009/04/11/rise-of-
piracy-and-other-maritime-insecurity-in-somalia/.
Silke, Andrew. Research on Terrorism: Trends, Achievements and Failures. 1st ed.
Routledge, 2003.
Somaiya, Ravi. “Guerilla trucks.” Newsweek, October 14, 2010. http://www.
newsweek.com/2010/10/14/why-rebel-groups-love-the-toyota-hilux.print.
html.
“Somali group to be banned in UK.” BBC, March 1, 2010, sec. UK. http://news.
bbc.co.uk/2/hi/uk_news/8543347.stm.
“Somali phone cash transfer banned.” BBC, October 18, 2010, sec. Africa. http://
www.bbc.co.uk/news/mobile/world-africa-11566247.
“Somali pirates: Islamist insurgents demand weapons from hijacked ship.”
The Daily Telegraph, October 5, 2008. http://www.telegraph.co.uk/news/
worldnews/africaandindianocean/somalia/3140884/Somali-pirates-Islamist-
insurgents-demand-weapons-from-hijacked-ship.html.
Sproat, Peter. “The social impact of counter terrorist finance policies in the UK.”
Crime, Law and Social Change 44, no. 4 (December 29, 2005): 441–464.
Steffen, Jordan. “Experts say some Jihadist websites should be shut down.”
Los Angeles Times, September 19, 2010. http://www.latimes.com/sns-jihad-
websites,0,6784408.story.
Subeliani, Sozar. “Gun-running in Georgia.” Caucuses Reporting Service, Institute for
War & Peace Reporting (IWPR), January 14, 2000. http://iwpr.net/print/report-
news/gun-running-georgia.
228 Bibliography
Suskind, Ron. The One Percent Doctrine: Deep Inside America’s Pursuit of Its Enemies
Since 9/11. 1st ed. Simon & Schuster, 2006.
Tavernise, Sabrina. “Organized crime in Pakistan feeds Taliban.” The New York
Times, August 29, 2009, sec. International/Asia Pacific. http://www.nytimes.
com/2009/08/29/world/asia/29karachi.html?_r=1&pagewanted=print.
———, and Waqar Gillani. “Frustrated strivers in Pakistan turn to Jihad.”
The New York Times, February 27, 2010, sec. World/Asia Pacific. http://
www.nytimes.com/2010/02/28/world/asia/28youth.html?sudsredirect=true&
pagewanted=print.
“The Madrid train bombings and what happened next.” Reuters AlertNet,
February 14, 2007.
Thompson, Edwina. “The nexus of drug trafficking and hawala in Afghanistan.”
In Afghanistan’s Drug Industry: Structure, Functioning, Dynamics, and Implica-
tions for Counter-Narcotics Policy, edited by Doris Buddenberg and William
A. Byrd. Washington DC: United Nations Office on Drugs and Crime and
the World Bank, 2006. http://siteresources.worldbank.org/SOUTHASIAEXT/
Resources/Publications/448813-1164651372704/UNDC.pdf.
Tooze, Roger. “The missing link: security critical international political economy
and community.” In Critical Security Studies and World Politics, edited by Ken
Booth. Lynne Rienner Publishers Inc, 2004.
Trofimov, Yaroslav. “U.S. rebuilds power plant, Taliban reap a windfall.” wsj.com,
July 13, 2010, sec. World News. http://online.wsj.com/article/SB10001424
052748704545004575352994242747012.html?KEYWORDS=YAROSLAV+
TROFIMOV#printMode.
U.S. Department of State.“Foreign terrorist organizations,”August 6, 2010. http://
www.state.gov/s/ct/rls/other/des/123085.htm.
U.S. Department of the Treasury. Assistant Secretary for Terrorist Financing David S.
CohenRemarks on Terrorist Financing before the Council on Foreign Relations As Pre-
pared for Delivery. Press Release. Washington DC, January 28, 2010. http://www.
ustreas.gov/press/releases/tg515.htm.
———. “Press release: treasury designates Al-Qai’da finance section leader,”
August 24, 2010. http://treas.gov/press/releases/tg838.htm.
Underhill, Geoffrey. Global Financial Integration Thirty Years On: From Reform to
Crisis. Cambridge: Cambridge University Press, 2010.
United Nations Office of Drugs and Crime. Afghanistan Opium Survey 2009.
Vienna: UNODC, 2009. http://www.unodc.org/documents/crop-monitoring/
Afghanistan/Afgh-opiumsurvey2009_web.pdf.
U.S. Department of State. “Designations of Tehrik-eTaliban Pakistan and two
senior leaders.” Press Release, September 1, 2010. http://www.state.gov/r/pa/
prs/ps/2010/09/146545.htm.
Van Natta, Don, and Joe Becker. “Bank reports sparked investigation
of prostitution ring and Spitzer wire transfers.” The New York Times,
March 13, 2008. http://www.nytimes.com/2008/03/13/world/americas/13iht-
spitzer.4.11054461.html?pagewanted=print.
Vatchagaev, Mairbek. “Who’s who in the Moscow Chechen community.” North
Caucuses Analysis 9, no. 26 (July 3, 2008).
Warde, Ibrahim. The Price of Fear. University of California Press, 2008.
Whitlock, Craig. “Al-Qaeda masters terrorism on the cheap.” The Washington Post,
August 24, 2008. http://www.washingtonpost.com/wp-dyn/content/article/
2008/08/23/AR2008082301962.html.
Bibliography 229
———. “Afghan insurgents’ diverse funding sources pose challenges.” The

Washington Post, September 27, 2009. http://www.washingtonpost.com/wp-
dyn/content/article/2009/09/26/AR2009092602707.html.
Wilkinson, Paul. Terrorism and the Liberal State. 2nd ed. NYU Press, 1986.
Williams, Brian G. “The ‘Chechen Arabs’: an introduction to the real Al-Qaeda
terrorists from Chechnya.” Jamestown Foundation Terrorism Monitor 2, no. 1
(January 2004).
Williams, Michael C. The Realist Tradition and the Limits of International Relations.
Cambridge University Press, 2005.
Williams, Phil. “Warning indicators, terrorist finances, and terrorist adaptation.”
Strategic Insights 4, no. 1 (January 2005). http://www.ccc.nps.navy.mil/si/2005/
jan/williamsJan05.pdf.
———. “Terrorist financing and organized crime: nexus, appropriation, or
transformation?” In Countering the Financing of Terrorism, edited by Thomas
Biersteker and Sue Eckert. London, New York: Routledge, 2008.
Wolosky, Lee, and Stephan Heifatz. “Regulating terrorism.” Law and Policy in
International Business 34, no. 1 (2002).
Wyler, Liana S., and Nicholas Cook. Illegal Drug Trade in Africa: Trends and U.S.
Policy. Washington DC: Congressional Research Service, 2010.
Index
abbaan, 119 Amal, 122

Abkhazia, 5, 193 n26, 196 n85 Amsterdam, Netherlands, 120
Abu-Amer, 8 analysis of terrorist finance, 3, 4,
Abu Nidal Organization, 48 16–17, 19–20, 22–3, 26–7, 29,
Abu Sayyaf Group, 48, 144 34–5, 38–9, 41–2, 53–4, 60, 62–4,
Afghanistan, 4, 7, 8, 13, 28, 46–9, 72–4, 80–3, 90, 92–115, 123,
52–3, 59, 77, 123–4, 136, 144, 127–30, 136–40, 143, 153–9,
146–7, 156, 195 n60 161–2, 166–7, 171, 173–7, 180–3,
Afghan Transit Trade Agreement 189–91, 200 n154, 205 n62
(ATTA), 46–7, 124 bias in, 16, 25, 60, 99, 109, 180
African National Congress (ANC), 85 conducting systematic, 1–4, 17, 23,
agency and choice, 15–16, 22–3, 41–2, 39, 41, 57, 73–4, 91, 93, 95–7,
58, 60, 64, 70, 78, 88, 99, 110, 99–100, 103, 114, 123, 127,
128–30, 138, 141, 154, 156, 130–1, 138–9, 141, 143, 154–6,
173–4, 179–81, 212 n66 158, 162, 167, 169, 171, 174–5,
Al-Ahdal, Mahmoud Hamdi, 7 177–8, 183, 188, 190
Al-Aqsa Martyrs’ Brigade (al-Aqsa), 48 drawing lines in, 19, 31, 38, 46, 57,
Al-Ayyri, Yousef, 7 69, 80, 122, 167
Al Barakaat, 87, 122 gauging meaning and significance
Aldamov, Khizri, 14, 18 when conducting, 22–3, 25–6,
Algeria, 48, 144 39, 57, 61, 64, 108, 123, 129,
Al Haramein Islamic Foundation 177, 190
(AHIF), 10–11, 18–19, 27, 115 interviews and, 7, 11, 39–41, 113,
Al-Islam al-Masri, Saif, 8, 11, 18 130
Al-Qa’ida, 3, 6–9, 11, 18–19, 21, 28, limited relevance of legality to, 78,
30–1, 45, 48, 52–3, 56, 59–60, 80, 95
62–3, 65, 68–9, 71, 83, 87, 105, methodological issues relating to, 3,
118, 130–1, 138–9, 142, 144–7, 4, 39, 41, 58, 89, 95, 105, 128,
149–50, 155–6, 180, 195 n55, 200 161, 172–3, 175–6, 178, 185,
n150, 205 n57 189
al-Qa’ida in the Arabian Peninsula nuance and, 16, 20, 22, 27, 57, 59,
(AQAP), 48, 120, 144 130–1, 136, 140–2
Al-Qa’ida in Iraq (AQI), 48, 68, 144–5, perspective and, 16, 20–1, 23–4,
200 n150 28, 36, 39, 44, 57, 68, 71, 80–2,
al-Qa’ida in the Islamic Maghreb 85, 102, 105, 119, 127, 143,
(AQIM), 48, 59, 144 152, 156, 159, 164, 166, 172,
Al-Serif, Abu Omar Mohammed, 11, 185
18 as political project, 27, 37, 42, 82
Al-Shabaab (Harakat al-Shabaab primary source evidence and, 136
Mujahideen), 48, 87, 112, 117–23, a priori judgments and, 20, 22–3,
209 n7, 210 n17 25, 27, 39, 74, 81, 128, 130, 166
Al-Shahri, Saeed, 146 purpose of, 99, 105–6, 111
230
Index 231
secondary source evidence and, 136 Canada, 124–5

setting agendas for, 6, 38, 60–1, 180 flag of, 124–5
analytic devices and tools, 179, 183, capital, 26, 54, 74, 88, 100, 118
185 Carter Center, the, 149
Angola, 5, 53 Carter, Jimmy, 149
animal hides, 45 cash, 8, 10–13, 24, 32, 45, 47, 54, 66,
Ansar al-Islam, 48 75, 115, 117, 119–20, 122, 125,
anthropology (academic discipline), 127, 136, 142, 156
37, 58, 109, 159 cash couriers, 24, 32
anti-politics, 107–8 Casino Royale (film), 55
Arab Bank, 60, 62 Caucasian-American Chamber of
Arafat, Yasser, 65 Commerce, 9
Argun, Chechnya, 9 Central Bank of Afghanistan, 52–3
Asbat al-Ansar, 48 Central Intelligence Agency (CIA), 35,
asset freezes, 31, 65, 87, 173 83, 133, 144
asset seizures, 28, 31–2, 44, 65, 198 charity and charities, 5, 10–11, 13,
n130 18–19, 26, 32, 56, 61, 64, 77, 80,
Aum Shinrikyo, 48 90, 94, 104, 119, 130, 151, 156,
Azerbaijan, 10 168, 176, 186, 190
chat rooms, 144
Badghis, Afghanistan, 46 Chechen House, 9
Bajaur, Afghanistan, 147 Chechens, 6, 8–9, 14
Baku, Azerbaijan, 10 Chechen separatists, 3, 14, 18, 23, 69,
Bangladesh, 49 116, 131
bank accounts, 10, 13, 24, 60, 62, 65, Chechnya, 4–6, 8–11, 14, 16, 18, 21,
117, 139, 156 58, 115–16
bank deposits, 45 Chicago, IL, 11
Bank of Georgia, 10 China, 124, 144
Bannu, Pakistan, 125–6 Christianity and Christians, 4, 102–3,
barter, 13, 24, 46–7, 119 154
Basque Fatherland and Liberty (ETA), clothing, 5, 26, 47, 118, 131
48 cocaine, 59, 120
Bayt al-Mal, 57 West African trafficking route, 59
Belfast, 72, 152 Cohen, David, 44, 52–3
Benevolence International Colombia, 50–1
Foundation (BIF), 11, 18–19, 115, commodities, 45–7, 66, 68, 118, 132
196 n78, 197 n87 Communist Party of the
Beslan, Russian Federation, 6 Philippines/New People’s Army
Bin Laden, Osama, 18, 53, 56, 59, 64, (CPP/NPA), 61
73, 142, 147 Consolidated List, see 1267 List
bio-politics, 108 (United Nations)
black markets, 5, 24, 53, 76 construction supplies, 47
blood feuds, 15 consumerism, 184
boeviks, 5, 8–9, 11–15, 23 Continuity Irish Republican Army
Bond, James, 55 (CIRA), 62
bribery, 6, 15, 24, 44, 58, 124, 126 contractors, 28
broker-dealers, 32 Copenhagen, 119–20
Bush, George. W, 30 corruption, 12, 15, 30, 36, 40, 85, 160,
administration of, 148 191, 193 n25
232 Index
counterfeiting, 8, 24 financial intelligence, 25, 32, 34, 73,

Counter Terrorist Financing (CTF) 83–4, 98–9
Regime, 30, 32–3, 35–7, 43–5, Financial War on Terrorism, 1, 30–2,
47–8, 50–3, 73, 82, 126, 128, 36, 44, 82–3, 88, 164, 169, 185
161, 163 flow, 9, 44–5, 74, 92, 97, 100–1,
estimated actual relevance to 114–17, 131, 134, 156, 163
Foreign Terrorist Organizations concept in economics of, 111, 128
of the, 48–51 Foreign Agents Registration Act
crime, 1, 12–13, 17, 24, 34–5, 40, 46, (FARA), 151
74–7, 79, 86, 113, 117, 133, 136, foreign fighters, 6, 14
156, 167 Foucault, Michel, 107–8
crime-terror nexus, 136, 167 Foundation for Chechnya (FfC), 10
criminology (academic field), 37, 160, France, 6, 48, 50
162–3 fraud, 30, 36, 160
freedom, concept of, 10, 19, 29, 38,
Dahabshiil, 122 110, 129–30, 134, 149, 177, 179,
Defense, US Department of, 32, 34–5 182, 191
Deobandism, 150 front businesses, 31, 80, 116–17, 133
development aid, 46 fuel, 47
Diakondy, Afghanistan, 46 fundraising, 7, 9, 24, 28, 58, 70, 116,
Dir, Afghanistan, 147 119, 121, 145–6, 151–2
documentation, 21, 124–5 fungibility ratio, 71
donations, 2, 5, 10, 24, 61, 71, 87,
116, 119, 122, 131, 144–5, 147, Gama’a al-Islamiyya (Islamic Group),
150–1, 156, 188 49
drug trafficking organizations, 136–7 Gelayev, Ruslan, 8
Dubai, UAE, 62, 118, 124 general electric, 62, 114, 138
Duisi, Georgia, 6 Georgia (country), 3–6, 8–12, 14, 16,
18, 21, 40–1
Egypt, 49 Georgian Relief Association, see Madli
electricity, 46 Germany, 49
electronics, 47, 118 globalization, 37, 74, 76, 92, 161, 163,
Enlightenment, the, 153, 191 173
Ethiopia, 118–19 Greece, 51
exports, 136 Gross Domestic Product (GDP), 5, 100
extra-legal, the, 3, 37, 39, 55, 78–80, Groznyy, Chechnya, 9
92, 94, 100, 118, 132, 135, 170, Guinea-Bissau, 59
189
Hajj, the, 146
Facebook, 144 HAMAS (Islamic Resistance
Farah, Afghanistan, 46 Movement), 49, 56, 60, 62–3,
FATF Special Recommendations on 70–1, 81, 114–15, 130–1, 148–50,
Terrorist Financing, 87, 206 n78 154, 180
fava beans, 45 Handicraft containers, 8
Federal Bureau of Investigation (FBI), Harakat ul-Jihad-i-Islami/Bangladesh
34, 91, 105 (HUJI-B), 49
Federally Administered Tribal Areas Harakat-ul Jihad Islami (HUJI), 49
(FATA), Pakistan, 123 Harakat ul-Mujahidin (HUM), 49
financial inclusion / exclusion, 48–51 Harrison, George, 152
Index 233
Hawala, 52, 76, 113, 117, 121, 166–7 Irish Americans, 94, 150–2
Heathrow Airport (London), 120 Irish Northern Aid Committee
Hekmatyar, Gulbuddin, 146–7 (NORAID), 151–2
Helmand, Afghanistan, 46 Irish Republicanism, 151
heroin, 8, 12–13, 18, 22, 24, 46, 120, Islamic Courts Union (ICU), 118
136, 147 Islamic Jihad Union (IJU), 49
Central Asian trafficking route, 8 Islamic Movement of Uzbekistan
history (academic discipline), 159 (IMU), 49
Hizbullah (Party of God), 49, 57–8, Islam and Muslims, 4, 6–11, 18, 48,
60, 68–9, 71, 102–5, 148–50, 69, 102, 122, 133, 144, 146, 150,
180 154
Holder v. Humanitarian Law Project, Israel, 49, 103, 114, 150
148–9
Homeland Security, US Department Jaber, 8
of, 35 Jaish-e-Mohammed (JEM) (Army of
hospitality, 4–5, 15, 22, 24, 61, 116, Mohammed), 62
130 Jamaat-ud-Dawa, 148
humanitarian aid, 7, 11, 13–14, 21–2, Japan, 48
24, 68 Jemaah Islamiya organization (JI), 49,
hunger-strikers, 152 144
jewelers, 32
Ibrahim, Dawood, 156 Jihad, 6–7, 10, 21, 49–50, 62, 116, 130,
Icon (film), 9 145, 148, 176, 184
illicit activity, 2, 22, 33, 37, 45, 52, 59, Jihad al-Binaa, 148
64, 73–82, 92, 94–5, 119, 132, Jihadist, 3, 12, 19, 21, 115, 144–5, 152
147, 170, 189 Jordan, 62, 145
imports, 47, 124 Justice, US Department of, 34
Indonesia, 49, 63, 144
Informal Value Transfer Systems, 76, Kagan, Elena, 148
121, 135 Kahane Chai (Kach), 49
Ingush people, 5 Kajaki, Afghanistan, 46
institutions, 4, 31, 33, 40, 51–2, 55, Kajaki hydropower plant, 46
64, 100–1, 124, 132, 135–6, 142, Kampala, Uganda, 118
168, 173, 176 Kandahar, Afghanistan, 46
insurance companies, 32 Kant, Immanuel, 179
intent, 19, 21, 29, 60–2, 64, 86, 130, Karachi, Pakistan, 133–4
161, 174, 180 Kashmir, 77
International Monetary Fund, 2, 32, Kazakhstan, 49
73 Kegoshvili, Akaki, 5, 18
International Relations (academic Kenchadze, Levan, 14, 18, 20
discipline), 36–7, 85, 99, 101, 128, Kenya, 63, 82, 118–20
159–65, 167–9, 171–3, 175–7, Khat, 120–1
179, 181, 183, 185–7 Khattab, 8
International security studies Khevsureti, Georgia, 15
(academic field), 37, 161, 163–4 Khevsur people, 4, 15, 18, 22, 61,
Internment Policy (UK), 152 130
Iran, 8, 46, 49, 58, 103–4 Khyber-Pakhtunkhwa Province,
Iraq, 8, 35, 48, 50, 68, 144–5 Pakistan, 123–4, 126
Ireland, 49, 51, 70, 151–2, 154 Kidnap and Ransom, 9, 13, 22, 24, 133
234 Index
King, Peter, 152 markets and the market, 5, 12, 24, 66,
Kismaayo, Somalia, 118, 123 68, 74, 76, 79, 101, 108, 113, 117,
Kist people, 4–6, 9, 13, 15, 18, 116 124, 127–8, 131–2, 134–7, 147,
Kleptocracy, 76 162, 170
Know Your Customer (KYC), 76, 137 Marxism, 172
Kongra-Gel (KGK, formerly Kurdistan material support of terrorist actors
Workers’ Party, PKK, KADEK), 50, as an act of charity, 130
148 as an act of politics, 142–3
Krongard, Busy, 84 as an act of war, 142–3
Kunar, Afghanistan, 147 continuum of, 141–3, 145–7,
Kurdistan Workers Party, see 149–51, 153, 155–7, 173, 190
Kongra-Gel (KGK, formerly online, 144
Kurdistan Workers’ Party, PKK, provision of legal advice as, 148
KADEK) US law and, 29, 148
Kuwait, 6, 124 Mauritius, 5
Kyrgyzstan, 49 medicine, 5, 12, 21, 54, 77
methodology, 3, 4, 39, 41, 58, 89, 95,
Lashkar-e-Tayyiba (LeT) (Army of the 128, 161, 172–3, 175–6, 178, 185,
Righteous), 50, 77, 148 189, 205
Lashkar-i-Jhangvi, 50 middlemen, 66, 102, 156
law and legality, 4, 6, 15, 18, 21, mobile banking, 123
29, 31, 33–5, 37, 68, 77–80, modernity, 184
86, 89, 93–5, 99, 105, 116, Mogadishu, 118–19, 122
118–19, 122, 126, 132, 135, 139, money, 2, 6–10, 15, 21, 25–8, 30–2,
141, 148–9, 160, 163, 185, 190–1 34, 36, 43–7, 51, 54–7, 59, 61–3,
Lazashvili, Kornel, 5, 18 65–6, 70, 73–6, 78–9, 81–3, 85–8,
Lebanon, 8, 48–51, 69, 102–3, 150 90, 95, 99–100, 104, 106, 108,
2006 Lebanon-Israel War, 103 113, 116–17, 119–21, 123, 125–7,
Le Chiffre, 55 130, 132–4, 142, 144–6, 151,
legitimacy, 80–1, 102, 125, 152, 181–2 155–7, 160, 165, 167, 169–70, 190
levels of analysis, 4, 16 following the, 25–6
liberal problematic of security, 90, as lifeblood of terrorism, 31, 36, 44,
106–9, 164, 169–71 65, 160
Liberation Tigers of Tamil Eelam, as not lying, 25–6
(LTTE), 63 money laundering, 2, 30, 34, 36, 47,
Libya, 50, 144 73–4, 76, 79, 82, 85–6, 113, 160,
Libyan Islamic Fighting Group, 165, 170
(LIFG), 63, 159 money service businesses, 32
1267 List (United Nations), 18 Morgenthau, Hans, 178–9, 181, 183–4
LogoVAZ, 9 Moroccan Islamic Combatant Group
Lower Jubba, Somalia, 118, 122 (GICM), 50
Morocco, 50
MADLEE, see Madli morphine base, 8
Madli, 11, 18 Moscow, Russia, 6, 9, 13
mafias, 9, 73, 133 motivations for being involved in
Mali, 48 terrorist finance, 12, 15, 20–1, 23,
Malmo, Sweden, 119–20 27, 41, 61–2, 80, 98, 100–1, 116,
Mandela, Nelson, 85 121, 126, 128, 134
Margoshvili, Vepkhia, 15 Mountbatten, Lord, 152
Index 235
Mujahedin-e-Khalq Organization PFLP-General Command (PFLP-GC),

(MEK), 50 51
Musa Qala, Afghanistan, 46 Philippines, 48, 144
Muslim Brotherhood, the, 8 piracy, sea, 118–19, 121, 191
Muslim Protection Organization, 10, Political economy (academic field), 37,
18 101, 159–60, 162–3, 172–7
poppy, 46, 136
National Liberation Army (ELN), 50 Popular Front for the Liberation of
Netherlands, the, 120 Palestine (PFLP), 51
Nietzsche, Frederich, 188 Powell, Colin, 30
9/11 Commission Report, 86 power, 15, 38, 41, 44, 46, 76–9, 84, 89,
9M111 Fagot anti-tank missile, 5, 193 92–3, 101, 107–9, 113–14, 116,
n32 118, 131–6, 138, 140, 154–5,
NORAID, see Irish Northern Aid 159–60, 162–3, 167, 171–2,
Committee (NORAID) 176–8, 180–4, 186
North Atlantic Treaty Organization one dimensional view of, 38
(NATO), 123, 136 two dimensional view of, 38
Northern Bank, robbery by IRA of, 70, three dimensional view of, 38–9
72, 88 Provisional Irish Republican Army, 35,
Northern Ireland, 70, 152 60, 70, 72, 88, 148, 150–4
Northwest Frontier Province (NWFP), psychology (academic discipline), 90,
see Khyber-Pakhtunkhwa 106, 109, 159, 169
Province, Pakistan
Nukhaev, Koj-Akhmed, 9 Qasmani, Arif, 156
Nuristan, Afganistan, 147 Qatar, 7
Qur’an, Holy, 7
Obama Administration, 148
Odense, Denmark, 119–20 rationality, 110, 128–30, 134, 154–5
offshore, 170 rational fools, 128
oil, 9, 142 as reasoned scrutiny, 128, 130
O’Neill, Paul, 30–1 Reagan, Ronald, 152
Organization for Economic Real Irish Republican Army (RIRA), 51
Cooperation and Development realism, 128, 174, 177–8, 183–4
(OECD), 170 Red Cross and Red Crescent,
organized crime, 12–13, 40, 77, 156 International Committee of the,
9, 11
Pakistan, 4, 7, 46–51, 59, 77, 83, 112, refrigerators, 47
123–5, 136, 144, 146–7, 156 refugees, 5, 12, 14, 17–18
Pakistani rupees, 46 remittances, 32, 76, 81, 120–1, 134,
Palestine Liberation Front (PLF), 50 168
Palestinian Islamic Jihad (PIJ), 62 rents and rent-seeking, 118
Palestinian Territories and Palestine, Revolutionary Armed Forces of
48–51, 114, 131, 150, 153, 165 Colombia (FARC), 51
Pankisi Gorgem, 5–6, 8–9, 11–13, 15 Revolutionary Organization 17
Papua New Guinea, 5 November, 51
Pashtun people, 4, 123, 136 Revolutionary People’s Liberation
Peripheral support of terrorist actors, Party/Front (DHKP/C), 51
142, 150–4, 158 Revolutionary Struggle, 51
Peru, 51 Ricin Plot, 6
236 Index
risk, 2, 32, 47, 75–6, 89, 92, 157, 163, suicide bombings, 52, 60, 62
185, 193 n10 Sunni Islam and Sunnis, 102, 117,
Russia, 6, 8, 13, 41, 48, 61, 193 n15 123
SunTrust Bank, 60, 62, 80, 139
safe passage, 12, 14, 119 Supreme Court, US, 21, 29, 148–9
Sahel, the, 59 Sympathetic support of terrorist
Salafism and Salafists, 7, 15, 69, 144 actors, 55, 143, 146–7, 157–8
Sangin, Afghanistan, 46 Syria, 50–1, 103, 145
Saudi Arabia, 6–7, 10, 18, 48, 62, 142,
146
Royal family of, 10, 18 Tajikistan, 49
Schiphol Airport (Amsterdam), 120 Takfirism, 69, 144, 146
Schmitt, Carl, 179–80, 184 Tax havens, 170
Sen, Amartya, 128–30, 134 Tbilisi, Georgia, 4, 8, 10, 13, 41
shares of businesses, 14, 24 Tehrik-e-Taliban Pakistan, 51, 123
Sharia, 119, 122 telephones, 66
Shatili, Georgia, 4, 14 terror free investing, 57
Shatoi, Chechnya, 8 terrorism
Shi’ia Islam and Shia, 102–3, 150 as cheap, 63–4
Shining Path (Sendero Luminoso, SL), costs of selected attacks, 63
51 as expensive, 64, 71
Sinn Fein, 147, 153 relationship between economic
Smith, Adam, 172 success and, 65, 67–70, 163, 172
smuggling, 5–6, 8, 14–15, 24, 56, 59, terrorist attacks
115, 120, 135–6, 151–2 1998 US embassy bombings, 63, 82
social balance of power, 183–4 9/11, 25, 28, 31, 60, 62, 78, 80, 82,
Somalia, 48, 87, 112, 118–23 84, 86, 88, 139
Somali people, diaspora of, 119–22
Bali nightclub bombings, 63
Soviet-Afghan War, 5, 7, 8, 13, 146
Jakarta Marriott hotel bombing, 63
Soviet Union, the, 13
London transport bombings, 56, 63
Spain, 48, 50, 63
Madrid transport bombings, 63
Specially Designated Global Terrorists
USS Cole, 7, 63
(SDGT), 18, 57, 147, 156
Sponsorship of terrorist actors, 142–5, terrorist finance
151, 154, 156, 158, 166 as an issue of politicized
Sri Lanka, 50 representation, 29, 90, 107
State Security, Georgian Ministry of, banality of, 27, 77–9, 88, 93
14 everyday nature of, 2, 24, 27, 53,
States and the State, 41, 75, 82, 119, 59–60, 75, 78–80, 102, 109,
149, 155, 161, 164–5, 170–1, 112, 114, 132, 159, 162–3, 189
174 fungibility of, 70–1, 154
State, US Department of, 34–5, 41, 45, as a mediated issue, 29, 32–3, 37, 39,
47 91, 106–7, 109, 160–1, 169, 171
stock (economics), 100 right questions about, 97, 99, 101,
strategy of limits, 177, 181–2, 184 103, 105, 107, 109–11, 137,
Strela surface-to-air missile, 5 143, 154, 171, 173
Subsidies of terrorist actors, 62, 142, shaping thinking about, 38, 79, 88
147–51, 154 wrong questions about, 42, 98, 104,
Sufi Islam and Sufis, 4, 6 190
Index 237
terrorist finance, myths about Thatcher, Margaret, 152

more/less financing always equals theft and stealing, 5, 13, 24
more/less terrorism, 64–7 of banks, 72
systematically understanding of cars, 13, 17–18, 22, 24, 124–5
terrorist finance is unrealistic, of humanitarian aid, 13, 22, 24
91–3 Toyota vehicles
terrorist finance is illicit, 73–8 Corolla, 125
terrorist finance is a threat to Hilux, 123–5
international security, 81–7 Land Cruiser, 125
terrorist financing is primarily about tractor parts, 45
money, 43–5 trade, 8, 13, 35, 45–7, 55–6, 59, 65, 75,
terrorists have unified, coherent 113, 117–24, 126, 136, 147, 178,
financial structures, 55–8 190
terrorist finance, realities of taxation of, 118, 121
analysis of terrorist finance can be trade-based money laundering, 47
systematic, albeit not objective, trade goods, 45–7, 113, 119, 121, 126
93–5 trafficking, 8, 82, 94, 120, 135–7, 147
the relationship between terrorism Transcaucasian Energy Consortium, 9
and economic success depends Transitional Federal Government
on context, 67–73 (TFG – Somalia), 119
terrorist finance is about the transit trade, 46, 124
exchange of value, 45–55 Trans Sahara, 59
terrorist finance is a compendium of travel agencies, 32
individual exchanges, 58–64 Treasury, US Department of the, 2, 18,
terrorist finance is extra-legal, 78–81 30, 32, 34, 44–5, 52–3, 55, 57, 87,
understanding terrorist finance is a 156
simply a means to analyze and Tskhinvali, Georgia (South Ossetia),
address threats from terrorist 5–6, 193 n32
actors, 87–91 Turkey, 13, 50–1, 145
terrorist financing activity Tush people, 4
as infrastructure, 21, 31, 56–7, 63,
102–4, 114, 117, 126, 131, 138 Uganda, 118
instrumentality of, 90, 98, 105, Ummah, the, 69
110–11, 114–15, 131, 136–8, United Arab Emirates, 77
143, 167, 179 United Kingdom (UK), 6, 49–51, 56,
as product of dedicated financial 63, 72, 94, 120, 152
cells/sections, 55–6, 58 United Nations Security Council, 35,
terrorist organizations 82
charitable and political wings of, Resolution 1269, 82
147–8 United Nations (UN), 10–11, 31–2, 46,
lexicon of critical resources required 83, 86, 148
by, 65–6 United Self-Defense Forces of
as socio-political actors, 2, 24, 45, Colombia (AUC), 51
52, 55, 75, 77, 79, 88, 95, 153, United States of America, 9, 11, 23, 28,
188 30–2, 44, 46, 65, 82, 86, 94, 119,
Terminator view of, 70 123, 139, 146–8, 151–3, 185
understanding operational versus Uruzgan, 46
socio-political capabilities of, USA PATRIOT Act, 76
65–70 US Dollars, 6, 8, 24
238 Index
US Government, 7, 17–19, 23, 33–4, vehicles, 13, 24, 47, 54, 66, 117, 123–6
84, 103, 112, 147–8, 151–2, 165 vendors, 28
USS Cole, 7, 63
U-Turn trade-based money laundering Wahhabism, 6, 9, 15
schemes, 47 Waziristan, North, 123–4, 126
Uzbekistan, 49 Waziristan, South, 123
Weapons, 2, 5–6, 8, 10, 12–14, 21–4,
Vainakhsi, 5 28, 58, 68, 87, 113, 117–18, 122,
value, 3, 9–15, 21–2, 25–6, 43, 45–7, 127, 134, 137, 151, 156–7, 188
52–5, 61, 63, 65, 70, 75–6, 78, 83, Weber, Max, 178–9
90, 95, 97, 99, 101, 104, 106–7, Web sites, 10, 66, 144–5, 157
110, 112–19, 121, 123–7, 129–41, wire transfers, 24
143–4, 149, 156–9, 162–3, 169, World Bank, 5, 32, 73
171, 173, 177, 186, 189–90
flows of, 9, 45, 53, 112, 116, 119,
xawilaad, 121–3
131, 134, 136
xeer, 122
forms of, 10, 21, 46, 54, 63, 104,
117, 126–7, 131, 140–1, 143,
158 Yemen, 7, 48, 63, 144, 146
transfer of, 12, 15, 45, 52, 76, 121, Yousser Company, 57
134–5 YouTube, 144
value chains, 3, 53, 97, 112–13,
115–17, 119, 121, 123–5, 127, Zabul, Afghanistan, 46
129, 131–7, 139, 156, 171, 186, Zakat, 7, 10, 24, 116, 119, 130
189–90 and “Allah’s Cause”, 7, 194 n45
definitions of, 113 Zawahiri, Ayman al-, 146

Timothy Wittig Financing Terrorism

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Timothy Wittig Financing Terrorism

Uploaded by

Copyright:

Available Formats

Understanding Terrorist

List of Tables and Figures viii

1 Understanding Terrorist Finance: Challenges and Issues 1

2 Terrorist Finance: Myth and Reality 43

3 Asking the Right Questions about Terrorist Finance 97

4 Understanding Terrorist Finance as Interaction with

5 Understanding Terrorist Finance as a Continuum of

6 Terrorist Finance and International Relations 159

1.1 Value transfer in Pankisi Gorge, Georgia 1999–2002 12

I would like to express my appreciation to the many people who helped

9/11 the terrorist attacks on the United States on September

NATO North Atlantic Treaty Organization

This book is about how to understand the ﬁnancing of terrorism. It aims

Regulations meant to combat terrorist ﬁnance are based on

This book attempts to address this problem not by providing ﬁnal

movements, the book also helps to better situate knowledge of terrorist

Financing terrorism along the Chechnya–Georgia border,

The border between Chechnya and the Republic of Georgia lies in

and Ingush peoples (who collectively are referred to as Vainakhsi), and

weapons into Chechnya.31 Tskhinvali was a major transhipment point

Zakat can be given in the path of Allah. By this is meant to ﬁnance a

In several cases, fundraising revolved around lobbying efforts and

Security counterterrorism ofﬁcial,50 in March 2002 American person-

Transfer and ﬂow of value

it is useful to think of money as simply an instrument of value, and

Islamic charities and their local agents

Pankisi Gorge: arms, cars, drugs, and corruption

Civilians Drug traffickers

Cars Cash Food & Medicine Heroin (finished) Heroin (raw)

Figure 1.1 Value transfer in Pankisi Gorge, Georgia 1999–2002

In other cases, weapons were exchanged for other instruments of

Concerning the [Ministry of State Security], they are involved in

According to reports, Kenchadze personally drove or escorted an esti-

The motivations behind involvement in value transfer for terror-

Understanding terrorist ﬁnance: problems and challenges

Terrorist financing is difficult to research and, in many ways, difficult to

understanding the ﬁnancial and economic dynamics of terrorist actors.

Levels of analysis: what to look for?

Actors: looking for who ﬁnances terrorism

do business with them, in the ﬁrst instance, and, secondly, by virtu-

Terrorists The ﬁrst category of actors involved in terrorist ﬁnance is, of

Individuals (names known)

Akaki Kegoshvili (district commander Major Kornel Lazashvili (district chief

and individuals designated as terrorist via some kind of ofﬁcial process

Taliban). In some contexts, such as a ﬁnancial institution meeting its

point at hand. Such nuance is not only important to contextualize and

Supporters of terrorists The second category of actors involved in terrorist

. . . currency or monetary instruments or ﬁnancial securities, ﬁnancial

Activities: looking for how terrorism is ﬁnanced

Table 1.2 How is terrorism ﬁnanced? Activities involved in ﬁnancing Chechen

Bank Accounts, wire transfers Bank Accounts, withdrawals

Barter Black market

ranged from complicated criminal schemes to politically inspired dona-

and institutional contexts they understand and in which they can

towards different family members expressed in a will. In general,

Practically speaking, if one applies the same standard to people who

Financial practices do not exist prior to, or independently from, ideas

others like me—willingly hand over thousands of dollars to a large well-

its constituent transactions materially support terrorists. This is the def-

Purpose of inquiry: why research terrorist ﬁnance?

tank, private sector and governmental analyses, journalistic reporting,

It is important to understand that “terrorist ﬁnance” is itself not

More simply, this means that how we understand terrorist ﬁnance is in