Terror groups to use crime to raise funds

By Inday Espina-Varona, Executive Editor

First of 3 parts

Philippine terrorist groups will increasingly use crime to fund operations as a government crackdown on dirty money chokes off normal cash flow routes, according to senior military intelligence sources.

But creativity on the terror front is also progressively matched with ingenuity as government sleuths find ways to go around the absence of an antiterror law and the limitations of antimoney laundering legislation.

An official of the Intelligence Service of the Armed Forces of the Philippines (Isafp) told The Manila Times that units scouring financial systems for possible fund movements by terrorists and their allies found more than 7,000 “suspicious transactions” in 2006.

The figure was more than triple the 2,000 suspicious transactions reported in 2005, the officer said.

Only a fraction of these cases have been subject to seizure applications. But the Isafp officer said the information allowed military and police intelligence groups to track the flow of logistics into the frontlines of insurgent groups, leading to some “preemptive strikes.”

This strategy will continue in 2007 until 2010, the timetable set by President Arroyo to eliminate the national communist underground movement and secessionist groups in Mindanao.

Funding sources

AFP officers from different service units spoke with The Manila Times in a series of interviews on the growth of Islamic extremist groups and developments on the communist insurgency. They requested anonymity because there was no clearance for the interviews.

The Isafp officer said the fund movements under review are worth “several hundreds of millions of pesos.”

“I cannot give you the exact value but we are talking here of drug money and illegal arms shipment,” the officer added.

The Times also learned that US intelligence units coordinate closely with Philippine counterparts, concentrating on linkages between crime and terrorism.

Among the cases quietly discussed was a counterfeit cigarette-manufacturing outfit suspected of being a conduit for funds to and from North Korea, officials said.

The sources would not reveal who the Philippine beneficiaries are but said a brother of a Hong Kong crime lord managed operations here until the middle of last year.

Intelligence sharing eventually led to the confiscation of some equipment in Taiwan and further probes into the North Korean financial network.

Last month, a wire reports said a Macau bank accused by Washington of aiding the laundering of illicit North Korean cash had handled tens and possibly hundreds of millions of dollars for Pyongyang last year.

Myanmar, which is ruled by a military junta, is also eyed by Philippine authorities as a major transshipments point of drugs and arms as is Thailand, which faces a serious insurgency in its southern provinces.

Legal limits

Smuggling and the manufacture of counterfeit products are the choice operations of terrorists these days, an Air Force official with intelligence tasks, said.

“Remember narco-politics? Terrorists are now using the same template,” the official said.

“Terrorists no longer use legitimate organizations as fronts because we are able to track them,” the source added.

“What they do now is use middlemen who will do the transactions on their behalf,” he explained. “These middlemen do not know about the terrorist activities.”

As the military and police forces learn to work closely with government judicial bodies, they have stepped up financial attacks on suspected terrorist networks.

In December 2006, Philippine cops scored a major victory when the Court of Appeals froze bank accounts of the Saudi-based International Islamic Relief Organization (IIRO).

Leaders of the organization, which is well known for its charities in impoverished and strife-torn Muslim provinces, have denied charges—dating back to the 1980s—that it provides fund to terror groups.

What was curious about the petition filed with the CA, was that it was based on a US press release alleging the IIRO’s Philippine branch served as a liaison for groups allied with Osama bin Laden’s al-Qaeda network, including the Jemaah Islamiah and the homegrown Abu Sayyaf.

The use of a press release to represent the voluminous data in the Philippine National Police intelligence archives brought laughter among veteran terrorist hunters. But it also underscored a major problem faced by Philippine authorities. The absence of an antiterror law, they say, means sleuths often have to skirt around legal limits.

Those constraints have not stopped authorities from unearthing information on terrorist groups. But the data, while crucial to the prevention of terror attacks, is often unusable in the prosecution of terror suspects.
To be continued

http://www.manilatimes.net/national/2007/jan/07/yehey/top_stories/20070107top2.html