Terror financing through charities

Militancy in Pakistan is an extremely complex phenomenon with several aspects to it, including ideology, violence and recruitment. Contrary to their perception as violent brutes, militant groups have proven to be not just resilient but also extremely intelligent and aware of the socioeconomic conditions of the areas they wish to occupy. Arguably the biggest evidence of this is the financing activities of these groups through various means. Despite several military operations, militant outfits have continued to grow in Pakistan by inventing new strategies and exploiting legal loopholes to circumvent constraints enforced by the government. Although most of these outfits are not operating openly but their support and financial sources are still active.
Evidence has shown that religious charity giving during the month of Ramazan and the follow-up Eid holidays have been used by militant outfits. They have established dubious charity organisations claiming to do welfare work, but are instead using those funds to carry out their harmful activities. This paper aims to demonstrate the threat of terrorist financing through charity activities. The paper will also show how and why these funds can be diverted towards the victims of the actions of the terrorists instead, which is the primary aim of the 'Haq Haqdaar Tak' campaign of the Ministry of Information, Broadcasting and National Heritage (MoIB).
CHARITY GIVING IN PAKISTAN Charity, or giving funds for the underprivileged sectors of society, is a well established practice in Islam. As an Islamic republic with approximately 97% Muslim population, charity is seen as the norm in Pakistan, as a religious duty as well as an altruistic act. A study by the Pakistan Center for Philanthropy showed that in 2010, dollars 1.7 billion were given in donations, which amounted to 1% of the country's GDP3.
The highest level of donations are given in the holy month of Ramazan, and the following holy days of Eid, Eid-ul-Fitr (commemorating the end of Ramazan) and Eid-ul-Azha (commemoration through animal sacrifice) are particularly important in these endeavours. It is in this period that certain donation activities are known to increase in frequency.
These activities include:
Zakat: Compulsory annual practice of giving a percentage of one's wealth (2.5%) as charity for the needy and the poor.
Ushr: The agricultural equivalent of Zakat, where a portion of agricultural produce is given away as charity.
Khairat: Voluntary charity donation for the sake of helping others
Fitrana: Also known as Sadaqah-e-Fitr, it is a voluntary charity donation given during Eidul Fitr to ensure the poor and needy also enjoy the Holy day of Eid. The Ruet-e-Hilal Committee, a government sanctioned religious authority, has fixed a minimum amount of Rs 100 per person4 for Fitrana. There is no upper limit
Animal hides: Practice of giving hides of animals (mainly goats and cows) sacrificed during Eid. The hides are of enormous value. According to estimates in 2012, the average rate is Rs 3000 per cow/calf hide and Rs 600 per goat hide
Sadaqah: Voluntary giving of charity in expiation of sins or to ward off evil
Afshan Sobohi's article on the practices of charity highlights the extent of the monetary transactions that take place during Ramazan. According to Subohi, the donations dispersed in Ramazan are estimated to be more than the rest of the year combined. It is approximated that 60 percent of all households in Pakistan engage in charity giving (and nearly 90% giving zakat), a sum which is estimated at Rs 200 billion. While charity is given all year round, the donations dispersed in Ramazan are estimated to be more than what the nation doles out during the rest of the 11 months put together.
CHARITY GIVING EXPLOITED BY MILITANT GROUPS With billions in financial transaction, it is no surprise that terrorist groups would exploit these practices to fund their activities. Several charity organisations have been used as fronts for terrorist outfits, several of which are active during Ramazan and the two Eids, seeing a lucrative opportunity to deceive the public into providing donations in the guise of development work.
Some militant groups have established public welfare wings as fronts for their activities. This ploy has not only helped them gain social acceptance but also enabled them to expand their support base, ultimately adding to their financial resources. According to a study in 2009 by Muhammad Amir Rana of PIPS, militant groups raise between 55 to 65 percent of their funds from local sponsors8, while 30 to 35% of charity funds go to militant activities9.
There have been several document cases of dubious charities making millions to fund their violent activities at the expense of a gullible public. One of these cases was of banned charity organisation Al-Akhtar Trust, which according to an investigation by security agencies received around $100 million in bank accounts it maintained in Karachi in the form of Zakat. Even after their accounts were frozen in Karachi, Al-Akhtar and Al-Rashid Trusts received $10 million in 2006 in other bank accounts from a UK-based organisation that sacrificed animals on Eidul Azha for thousands of British-Muslims.This is not a stand-alone phenomenon. Many rich Arabs from the Gulf countries including dozens of Saudi-Arabian nationals make annual donations in cash and kind to people and groups they believe deserving. Sometimes the donations are purely humanitarian while sometimes ideological, that would extend financial support to groups and people they think are serving the cause of Islam. Donations from Saudi Arabia, Qatar, Bangladesh, and Kuwait have made their way to Pakistani extremists. Donations especially coming from Saudi Arabia have been directed at domestic terrorist outfits. Imtiaz Gul, Executive Director of the Center for Research in Security Studies (CRSS) cites an incident where a military official discovered "entries with names and addresses of the households in the register that were recovered from one of the training centres next to a mosque being run by the TTP leader Mullah Fazlullah," with the total donation of $300,000.
Attempts have been made to thwart their activities both international and domestically, including UN approved financial sanctions, bans by individual countries, closing down organisation offices, banning certain organisations from collecting animal hides and ensuring registration of charities before they set up donation camps. Despite these efforts, militant outfits have exploited legal loopholes, such as re-registering a banned organisation under a new name, to continue their activities. Examples include the Falah-e-Insaniyat Foundation, a front for Lashkar-e-Taiba; Maymar Trust, a front for the banned Al-Rasheed Trust (ART); Al-Rehmat Trust, a front for Jaish-e-Muhammad; and the Pakistan Relief Foundation, a front for the banned Al-Akhtar Trust (AAT).
ASSISTING THE VICTIMS OF TERRORISM A bigger concern is that these funds are diverted at the expense of those who are in desperate need of it. Among the segments that are being affected due to these activities are the victims and survivors of terrorism. Since 2003, terrorism in Pakistan has claimed nearly 50,000 lives and injured nearly 55,000 people18, in addition to the displacement of tens of millions19, and hundreds of millions in property damage. Many of the public's donations, which should go towards the victims of terrorist attacks, are instead used by militant outfits to increase the number of these victims.
It has been observed in recent years, that the Pakistani public has enthusiastically come to the aid of the victims of natural disasters. Two such incidents stand out in this regard. The first was the 2005 earthquake in which 80,000 people died and nearly 3 million were left homeless20. Billions of dollars were provided in aid, both from within the country and outside of it, with public donations playing a major role in relief efforts. The second such incident is the 2010 floods, in which 1,985 people were killed, and nearly 2 million households were damaged. In this scenario as well, the public donated millions of dollars in aid to relief funds. While an exact number in aid cannot be ascertained for both incidents21, a good indicator can be seen in live telethons for relief activities. Former President Pervez Musharraf participated in a live flood relief telethon for a private news channel that raised $10 million in one night22, while a telethon for the 2010 flood relief arranged by television anchors Talat Hussain and Kashif Abbasi raised $15 million within 24 hours23.
However, such efforts have not been undertaken towards the victims and survivors of terrorism. One possible reason for this is that natural disasters are viewed in a more simplistic manner (an act of God) as opposed to man-made disasters such as terrorism (which carries a variety of personal, social, political and security issues). Another reason for this is that natural disasters are considered as circumstantial, with the 'shock-value' of thousands being killed in days capturing the public's imagination far more than chronic issues such as terrorism, where the public has gradually become de-sensitised to the violence and body counts, and has adopted an increasingly apathetic attitude. The final reason has much to do with the 'free-rider' phenomenon between the public and the government: The public is under the impression that the government is already providing compensation to the victims of terrorism. This compensation is around the range of Rs 0.5 million from the Federal Government24, and between Rs 0.1 to 0.5 million from provincial governments25. Hence the public has put the responsibility entirely on the government, and no governmental or non-governmental agency has publicly sought the help of citizens' donations to assist the victims of terrorism.
However, it is to be emphasised that the fallout of terrorism in Pakistan possesses numbers in casualties and property damage to rival some of the worst natural disasters the country has seen. The success of the campaign based model for relief activities in Pakistan is a clear indicator that a similar campaign for the casualties of terrorism can be implemented successfully as well.
In a country where the majority of the population lives in abject poverty, it is deeply concerning that the billions in charity are not only diverted from those in desperate need of it, but also directed towards financing terrorist activities on Pakistani soil. The public remains unaware of these activities, relying on the superficial credibility of religious charities while selecting organisations for donations.
The inability of law enforcement to clamp down on these elements requires the need for a non-law enforcement based approach. Such a measure would involve the use of an effective communications strategy to inform the public of the need to give their charity towards families who have faced the worst impact of terrorism, facilitate in reducing funding provided to controversial/banned organisations, and re-direct the funds towards organisations that have actually contributed positively towards welfare and development, and which actively assist the victims and survivors of terrorism.
1 Kiran Firdous, Militancy in Pakistan, accessed on May 4, 2013, http://www.issi.org.pk/publication-files/1299825170_97247252.pdf, p 1.
2 Muhammad Amir Rana, Financial Sources of Pakistani Militant and Religious Organisations, Pakistan Institute of Peace Studies July-September 2009.
3 Express Tribune, June 3rd 2013. http://tribune.com.pk/story/18318/philanthropy-doubles-to-rs140b/
4 The Nation, August 5th 2013. http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/national/05-August-2013/fitrana-fixed-at-rs100-per-head
5 The News, October 30th 2012. http://www.thenews.com.pk/Todays-News-3-139961-Declining-trend-in-hide-rates-after-Eid
6 Afshan Subohi, 'Philanthropy Unlimited', DAWN, July 14th 2013. http://dawn.com/news/1028735/philanthropy-unlimited
7 PEW Research Poll, 'Religion and Public Life Project', July 2013. http://www.pewforum.org/2012/08/09/the-worlds-muslims-unity-and-diversity-2-religious-commitment/
8 Muhammad Amir Rana, Financial Sources of Pakistani Militant and Religious Organisations, Pakistan Institute of Peace Studies July-September 2009.
9 Zia Ur Rehman, Pakistan curtails donations to militants during Ramazan, accessed on May 10, 2013, http://afpakwatch.wordpress.com/tag/zakat-collection-in-Ramazan/.
10 Mufti Mohammed Rashid founded the Al-Rashid Trust (ART) on February 13, 1996, in Karachi. The Trust gradually grew to operate 21 branches across Pakistan. A day after the US announcement of the ban on the outfit, the State Bank of Pakistan issued circular asking banks to freeze the accounts of Al-Rashid Trust. See also http://www.satp.org/satporgtp/countries/pakistan/terroristoutfits/Al-Akhtar_Trust.htm.
11 Mufti Mohammed Rashid founded the Al-Rashid Trust (ART) on February 13, 1996, in Karachi. The Trust gradually grew to operate 21 branches across Pakistan. A day after the US announcement of the ban on the outfit, the State Bank of Pakistan issued a circular asking banks to freeze the accounts of Al-Rashid Trust. See also http://www.satp.org/satporgtp/countries/pakistan/terroristoutfits/Al-Rashid_Trust.htm.
12 Muhammad Amir Rana, Financial Sources of Pakistani Militant and Religious Organisations.
13 Imtiaz Gul, the Most Dangerous Place, (New Delhi: Penguin Books, 2009), 192.
14 Ibid.
15 Jimmy Gurulé, 'Unfunding Terror: The Legal Response to the Financing of Global Terrorism', 2010, pg. 126.
16 Zia-ur-Rehman, 'Pakistan curbs militant zakat collection', Central Asia Online, August 15th 2013. http://centralasiaonline.com/en_GB/articles/caii/features/pakistan/main/2013/08/15/feature-01
17 Zia ur-Rehman, 'Militants seek to exploit zakat', Central Asia Online, July 15th 2013. http://centralasiaonline.com/en_GB/articles/caii/features/pakistan/main/2013/07/15 /feature-01
18 Statistics compiled from PIPS database on terrorism in Pakistan indicate 49,420 deaths and 54,873 injured
19 During Operation Rah-e-Rast, nearly 20 million were displaced from Swat and forced to live either with relatives, other families or in IDP camps
20 Statistics from Nato Report 'Pakistan Earthquake Relief Operation' http://www.nato.int/cps/en/natolive/topics_50070.htm
21 After PPC discussions with PCP officials, it was revealed that there are no statistics available on public donations towards relief activities.
22 Story from ANI press agency http://in.news.yahoo.com/musharraf-donates-rs-10-million.html
23 http://pkpolitics.com/discuss/topic/live-telethon-by-syed-talat-hussain-nd-kashif-abbasi-for-flood-affectees
24 RazeshthaSethna, 'Invisible Victims', DAWN, March 8th 2013 http://beta.dawn.com/news/791116/invisible-victims
25 Manzoor Qadir, 'Compensation Policy Sought for Victims of Terrorism', Daily Times, February 23rd 2012 http://www.dailytimes.com.pk/default.asp?page=2012%5C02%5C23%5Cstory_23-2-2012_pg7_26