Afghan Insurgents' Diverse Funding Sources Pose Challenges

The largest source of cash for the Taliban was once thought to be Afghanistan's opium, made from the type of poppies shown above.
The largest source of cash for the Taliban was once thought to be Afghanistan's opium, made from the type of poppies shown above. (By Julie Jacobson -- Associated Press)
  Enlarge Photo    
By Craig Whitlock
Washington Post Foreign Service
Sunday, September 27, 2009

KABUL -- The Taliban-led insurgency has built a fundraising juggernaut that generates cash from such an array of criminal rackets, donations, taxes, shakedowns and other schemes that U.S. and Afghan officials say it may be impossible to choke off the movement's money supply.

Obama administration officials say the single largest source of cash for the Taliban, once thought to rely mostly on Afghanistan's booming opium trade to finance its operations, is not drugs but foreign donations. The CIA recently estimated that Taliban leaders and their allies received $106 million in the past year from donors outside Afghanistan.

For the past decade, the U.S. Treasury and the U.N. Security Council have maintained financial blacklists of suspected donors to the Taliban and al-Qaeda. The U.N. list, originally designed to pressure the Taliban to hand over al-Qaeda leader Osama bin Laden, requires all U.N. members to freeze the assets of designated Taliban officials and their supporters.

The U.N. and Treasury blacklists were greatly expanded after the Sept. 11, 2001, terrorist attacks. Since 2005, however, only a handful of alleged Taliban benefactors have been added to the lists.

Some American and Afghan officials said the U.S. government, which had been a leading nominator of names for the U.N. blacklist, paid less attention to Taliban donors after the 2003 invasion of Iraq. Until recently, they said, Washington had also been preoccupied with preparing sanctions against individuals and companies doing business with the Iranian government.

Richard Barrett, the coordinator of the United Nations' Taliban and al-Qaeda Monitoring Team, said Taliban sympathizers are much more skillful today at masking their donations and ensuring that the money cannot be traced back to them.

"It's been very, very difficult to identify these people," Barrett said. "You can track the money flow and say this money came from the Gulf, but it's a lot more difficult to confirm the source."

In July, Richard C. Holbrooke, the Obama administration's special representative for Afghanistan and Pakistan, said the Taliban was reaping the bulk of its revenue from donors abroad, especially from the Persian Gulf.

Other U.S. officials have noted that the Taliban received substantial financial help from Gulf countries during the 1990s, when Saudi Arabia and the United Arab Emirates -- along with Pakistan -- were the only nations that gave diplomatic recognition to the Taliban government.

U.S. officials said there is no evidence today that the Saudi, UAE or other Gulf governments are giving official aid to the Taliban. They said they suspect that Pakistani military and intelligence operatives are continuing to fund the Afghan insurgency, although the Islamabad government denies this.

As the insurgency has grown in strength, the Taliban and its affiliates have embraced a strategy favored by multinational corporations: diversification. With money pouring in from so many sources, the Taliban has been able to expand the insurgency across the country with relative ease, U.S. and Afghan officials said.

In an Aug. 30 report assessing the overall state of the war, Gen. Stanley A. McChrystal, commander of U.S. and NATO forces in Afghanistan, said the Taliban's range of financial resources made it difficult to weaken the movement.

CONTINUED     1           >

© 2009 The Washington Post Company