Terrorism: Get used to it
Forget Iraq: the real war has yet to be fought, the war against those who finance the likes of Osama bin Laden. It won't happen any time soon
Daphne Bramham
Vancouver Sun
Saturday, May 10, 2003
CREDIT: Canadian Press
THE WORLD TRADE CENTER, SEPT. 11, 2001: A portion of terrorists' funds is raised legally through non-profit groups. Buthowever it is obtained, it flows through some of the world's biggest banks, credit card companies, life insurance companies, law firms and stock exchanges.
We should all get used to living with terrorism because the war in Iraq has done nothing to make the world safer for anybody. What it has done is create more martyrs and strengthened the myths that Saddam Hussein -- like Osama bin Laden -- is invincible.
It has sent a signal that terrorist leaders will not necessarily pay the price for the acts they commit. Rather, they are more likely to join the long list of tyrants and dictators who have systematically brutalized opponents, enemies and even their own citizens and gone unpunished.
The real war against terrorism has yet to be fought. That war would stop or at least stanch the flow of money to the terrorists. It's a war few politicians have the stomach for. It cuts too close to their hearts and wallets.
Yet it's clear that money laundering by terrorists is increasing. In its February report to the Organization for Economic Cooperation and Development, the financial action task force says the number of suspicious transactions reported since Sept. 11, 2001 has risen worldwide and has doubled in some countries.
That's partially because financial institutions are now required to report transactions by people and entities on international lists of terrorists and terrorist-related groups.
Nobody really knows how much money terrorists raise each year. But the OECD report specifically notes that at least a portion of it comes through non-profit groups. These cultural, humanitarian or social groups receive donations, collect membership fees and sell tickets to various events -- events that vote-seeking politicians often attend.
But whether gained legally or illegally, the money is then usually laundered using methods criminal organizations have perfected. Money for terrorism flows through some of the world's biggest banks, credit card companies, life insurance companies, law firms and, of course, the world's stock exchanges.
BIG PLAYERS VIRTUALLY IMMUNE
To stop it, secret banking systems in the world's tax havens would have to be shut down. It would mean the world's richest countries would have to move beyond their initial efforts to curb money laundering that targeted tiny, powerless countries from Liechtenstein to Niue, Nauru and Dominica and poor countries like the Philippines, Poland and Ukraine.
It would mean going after the big players in Switzerland, where a third of the world's private wealth is secreted away. And who's going to do that?
The thing is that not just terrorists and criminals shelter money in tax havens. Rich, powerful people use them and many of them are political donors or politicians themselves.
When the Clinton administration was highly supportive of the OECD initiatives after the FBI tied Osama bin Laden to terrorist attacks on two U.S. embassies in Africa in 1998, the Republican majority opposed them.
Majority House leader Dick Armey said the initiatives would set up "a global network of tax police." Yet the U.S. alone has estimated that it loses $70 billion worth of taxes each year to tax havens. That's roughly equivalent to what the U.S. spent in its first year of the war on terrorism.
President George W. Bush withdrew American support for the OECD initiatives, gutted money-laundering and anti-tax-haven laws. His rationale followed the position of the then-influential Enron Corp., the all-time leading contributor to Bush's political campaigns, and its chairman Ken Lay, a senior adviser on Bush's transition team.
It's no surprise Enron executives opposed banking transparency laws. A February 2003 report by the congressional committee on taxation said many of the tax shelters Enron executives set up with names like "Show Me The Money!" were too complex for the Internal Revenue Service to understand.
And although some changes have been made, committee members admit they're not even close to plugging all the holes.
Bush himself was a director of Harken Energy Corp. when it set up a subsidiary in the Cayman Islands, although Bush says he opposed the decision.
Harken Energy had earlier been bailed out by a $25-million investment from a Swiss subsidiary of the Bank of Credit and Commerce International. BCCI went down in flames in the 1990s in one of the world's biggest financial scandals. It was partly owned by Khalid bin Mahfouz, who's been called Osama bin Laden's bagman.
Two more Bush confidantes, James Langdon and George Salem, are partners in the influential law firm of Akin, Gump, Strauss, Hauer & Feld, which represented Mahfouz.
The firm also represented Holy Land Foundation for Relief and Development, the largest Islamic charity in the United States. Its assets were frozen in December 2001 because of links to Hamas, a militant Palestinian group.
Since Sept. 11, Bush has not brought in tougher money-laundering laws and he is unlikely to lead a substantial worldwide banking reform.
For that, don't look to Britain either. The story that has rocked it recently involved George Galloway, a Glasgow Labour MP and Britain's most outspoken critic of UN sanctions against Iraq. His own party is now investigating reports that Galloway was being paid $852,000 a year by the Iraqi government.
And don't look to Canada. Here there is little appetite to disrupt money flows between rich Canadians and secret banks or shut down vote-rich, ethnic-based non-profit groups.
On Paul Martin's watch as finance minister, one unnamed Canadian family was allowed to move its $2-billion family trust offshore, tax-free.
Martin's own company, Canada Steamship Lines, is registered in Bermuda, his tax haven of choice.
And he's not alone. Even governments here have links to tax havens. The government allowed B.C. Hydro to contract out its back-office business to Bermuda-based Accenture. Accenture did open a B.C. office, so at least it will pay some taxes here.
B.C. Hydro itself dabbled in numbered companies based in the Cayman Islands a few years ago when it got involved in building a hydroelectric plant in Pakistan.
Not only is there little concern about tax havens, there is no indication that Prime Minister Jean Chretien, Martin, any of the other Liberal party leadership candidates or -- for that matter -- any federal, provincial or even municipal politicians, want to meddle with non-profits even ones that the Canadia Security Intelligence Service has been warning about for the past five years.
As Stewart Bell has reported in the National Post, in 2000 Martin and Maria Minna, then minister for international cooperation, were guest speakers at a dinner hosted by the Federation of Associations of Canadian Tamils. They went even though CSIS had warned that the association is a front for the Tamil Tigers, a Sri Lankan insurgency group that claims more suicide bombings than any other terrorist group.
Despite repeated warnings from CSIS that every major terrorist group in the world had a foothold in Canada, the government did nothing.
It was only after Sept. 11, 2001 that Canada outlawed fundraising for terrorism.
NON-PROFIT GROUPS NOT ALWAYS CLEAN
Not only were politicians flirting with terrorists, the federal government gave money to some terrorist-linked non-profits.
As Bell reported, the immigration department gave $2 million a year to the Tamil Eelam Society, which CSIS listed as front for the Tamil Tigers.
It's happening closer to home, too. The Vancouver Sun's Kim Bolan recenty reported that Surrey RCMP Inspector Amrik Virk, B.C. cabinet minister Gulzar Singh Cheema and Canadian Alliance MP Gurmant Grewal all addressed a 2002 fund raiser for a youth group called Sikh Vision which was purportedly raising money to send kids to summer camp.
Now their photos taken at the event are on the group's Web site, just a click away from photographs of gun-toting men. Some of those men are Canadians linked to terrorist groups outlawed in other countries.
Bolan has also reported on the unprecedented lobby by the prime minister, cabinet ministers and MPs to spare convicted terrorist Davinder Pal Singh Bhullar from the death penalty in India. Bhullar's wife, Navneet Kaur Sandhu, is a Canadian.
Chretien, Natural Resources Minister Herb Dhaliwal, Industry Minister Allan Rock, Heritage Minister Sheila Copps and Paul Martin all met with Bhullar's wife when she was in Ottawa in January. She was accompanied by representatives from a Vancouver-based, multi-faith human rights committee chaired by a founder of the terrorist-linked International Sikh Youth Federation.
Secretary of State David Kilgour has also been actively lobbying. At taxpayers' expense, he dispatched his constituency assistant to India to lobby the government on Bhullar's behalf.
The OECD's task force report makes it clear that weeding out good non-profits from terrorist-linked ones can be difficult because there are so many ways non-profit organizations can be used by terrorists.
Some non-profits are registered with a stated charitable purpose, but exist only to channel money to terrorists.
Some are infiltrated by terrorists, who then divert funds to other uses -- often without the knowledge of donors and even staff. Still others are set up to serve only as a cover for the movement of funds offshore.
Following the money is further complicated because virtually all of these non-profits send money offshore, and internationally there are widely varying standards for reporting the movement of money.
STOPPING THE FLOW OF BLOOD MONEY
But as hard as it might be, it can't be any more difficult than sending armed forces into countries like Iraq and Afghanistan and killing thousands of unarmed men, women and children.
As expensive as it might be to set up an international force of tax police and forensic accountants, it can't be any more expensive than war in Iraq, which has cost the United States $79 billion so far. Rebuilding the country will cost the U.S. alone more than $20 billion a year for an undetermined number of years.
And as distasteful and politically incorrect as it may be to shut down ethnic non-profit groups to stop the flow of blood money, how could it possibly be worse than allowing the flow of injured civilians' blood in countries where there is no power, no water and no medicine?
Daphne Bramham can be reached at dbramham@png.canwest.com
© Copyright 2003 Vancouver Sun
canada.com |
