LONDON - On May 6, the Saudi police raided a terrorists' safe house in Riyadh, where suspected al-Qaida cell members were hiding. After a shootout with the police, the militants escaped, abandoning a huge cache of weapons, including 829 pounds of explosives and 55 hand grenades. They also left tens of thousands of American dollars and Saudi riyals, piled on closet floors and stuffed in duffel bags.
The mountain of cash was as worrisome to investigators as the grenades. Cash is a terrorist's most valuable asset, and as one American investigator inside the kingdom put it, "terrorism is dirt cheap." Six days later, members of the same cell unleashed simultaneous suicide car bombings at three Western residential compounds in Riyadh. One occurred only a few hundred yards from the raided safe house.
"Despite the police grabbing tens of thousands of dollars in cash, the terrorists were still able to execute their attacks," said Jim Walsh, a professor at the Kennedy School of Government at Harvard. "It was jarring - it shows they have no lack of cash to pay for their operations. That's very, very troubling."
Cash has always been king to the leaders of al-Qaida, Hamas, Hezbollah and other terrorist groups, but never more so than today. While most nations aggressively try to halt the torrent of money worldwide by tightening banking regulations and restricting some Muslim charities, terrorists have quickly improvised. The terrorist financiers are now relying less on traditional commerce to move money, according to intelligence and law enforcement officials and experts in Europe and the United States.
Instead, enormous sums of cash raised through illegal activities are being transported in suitcases and containers. Terrorists also depend on the hawala financial system, whose money brokers in the Middle East, Pakistan, India and southern Asia can transfer cash from one office to another, based on trust.
Terrorists need cash to finance their networks, for salaries of operatives and protection money for friendly governments. In the 1990s, a large part of al-Qaida's budget was paid to the governments of Sudan and Afghanistan, analysts say.
"In the last few months, we have seen far more evidence that al-Qaida is shifting from moving its money through institutional-based transfer systems ... to much more practical and harder-to-detect methods," said Jean-Charles Brisard, a French private investigator who filed a report on terrorism financing to the United Nations in December. "The hardest way to detect money moving is when it's cash and it moves from one hand to another."
