by Dou­glas Farah
Pub­lished on April 18th, 2006

Almost from the incep­tion of the mod­ern Islamic bank­ing struc­ture (early 1980s), the inter­na­tional Mus­lim Broth­er­hood set up a par­al­lel and far-flung off­shore struc­ture that has become an inte­gral part of its abil­ity to hide and move money around the world. This net­work is lit­tle under­stood and has, so far, gar­nered lit­tle atten­tion from the intel­li­gence and law enforce­ment com­mu­ni­ties track­ing ter­ror­ist finan­cial structures.

The fun­da­men­tal premise of the Broth­er­hood in set­ting up this struc­ture was that it is nec­es­sary to build a clan­des­tine struc­ture that was hid­den from non-Muslims and even Mus­lims who do not share the Brotherhood’s fun­da­men­tal objec­tive of recre­at­ing the Islamic caliphate and spread­ing Islam, by force and per­sua­sion, across the globe.

To this end, the Brotherhood’s strat­egy, includ­ing the con­struc­tion of its finan­cial net­work, is built on the pil­lars of “clan­des­tin­ity, duplic­ity, exclu­sion, vio­lence, prag­ma­tism and opportunism.“[1]

Among the lead­ers of the Brotherhood’s finan­cial efforts, based on early Broth­er­hood doc­u­ments and pub­lic records, are Ibrahim Kamel a founder of Dar al Maal al Islami Bank (DMI ) and its off­shore struc­ture in Nas­sau, Bahamas; Yousef Nada, Ghalib Him­mat and Yusuf al-Qaradawi and the Bank al Taqwa struc­ture, in Nas­sau; and Idriss Nasred­din, with Akida Bank Inter­na­tional in Nassau.[2]

Map­ping the net­work of bank, insur­ance (tako­fol) com­pa­nies and off­shore cor­po­ra­tions — which are often used as cov­ers to open bank accounts and move money in difficult-to-trace paths pro­tected by bank secrecy laws — should be the focus of far more atten­tion because the net­work pro­vides a mech­a­nism for fund­ing the Brotherhood’s licit and illicit activ­i­ties around the globe.

This is of fun­da­men­tal impor­tance because the Broth­er­hood has played a cen­tral role in “pro­vid­ing both the ide­o­log­i­cal and tech­ni­cal capac­i­ties for sup­port­ing ter­ror­ist finance on a global basis” the Broth­er­hood has spread both the ide­ol­ogy of mil­i­tant pan-Islamicism and became the spine upon which the fund­ing oper­a­tions for mil­i­tant pan-Islamicism was built, tak­ing funds largely gen­er­ated from wealthy Gulf state elites and dis­trib­ut­ing them for ter­ror­ist edu­ca­tion, recruit­ment and oper­a­tions widely dis­persed through­out the world, espe­cially in areas where Mus­lims hoped to dis­place non-Muslim or sec­u­lar governments.[3]

Almost every major Islamist group can trace its roots to the Mus­lim Broth­er­hood, founded in 1928 by the Has­san al-Banna, a pan-Islamicist who opposed the sec­u­lar ten­den­cies in Islamic nations. Hamas is a direct off­shoot of the Broth­er­hood. Has­san al-Turabi, who offered sanc­tu­ary in Sudan to Osama bin Laden and his al Qaeda allies, is a leader of the Broth­er­hood. He also sat on the boards of sev­eral of the most impor­tant Islamic finan­cial insti­tu­tions, such as DMI.[4]

Bin Laden’s men­tor Abdul­lah Azzam was a stal­wart of the Jor­dan­ian Mus­lim Broth­er­hood. Ayman Zawahiri, al Qaeda’s chief strate­gist, was arrested at age 15 in Egypt for belong­ing to the Broth­er­hood. Khalid Shaikh Mohammed, Ayman al-Zawahiri, “Blind Sheikh” Omar Abdul-Rahman, and chief 9–11 hijacker Mohamed Atta, were mem­bers of the Brotherhood.

There has been some under­stand­ing of the Brotherhood’s rela­tion­ship to Islamist groups, and of those ties even in the United States. In 2003 Richard Clarke said “the issue of ter­ror­ist financ­ing in the United States is a fun­da­men­tal exam­ple of the shared infra­struc­ture lev­ered by Hamas, Islamic Jihad and al Qaeda, all of which enjoy a sig­nif­i­cant degree of coop­er­a­tion and coor­di­na­tion within our bor­ders. The com­mon link here is the extrem­ist Mus­lim Brotherhood—all these orga­ni­za­tions are descen­dants of the mem­ber­ship and ide­ol­ogy of the Mus­lim Brotherhood.“[5] How­ever, this under­stand­ing has not taken root in the intel­li­gence, law enforce­ment and pol­icy com­mu­ni­ties, nor has the finan­cial net­work of the Broth­er­hood come under intense scrutiny.

Pub­lic records show the Brotherhood’s finan­cial net­work of hold­ing com­pa­nies, sub­sidiaries, shell banks and real finan­cial insti­tu­tions stretches to Panama, Liberia, British Vir­gin Islands, Cay­man Islands, Switzer­land, Cyprus, Nige­ria, Brazil, Argentina, Paraguay and beyond. Many of the enti­ties are in the names of indi­vid­u­als who, like Nada, Nasred­din, al-Qaradawi and Him­mat, have pub­licly iden­ti­fied them­selves as Broth­er­hood leaders.

A senior U.S. gov­ern­ment offi­cial esti­mates the total assets of the inter­na­tional Broth­er­hood to be between $5 bil­lion and $10 billion.[6] It is a dif­fi­cult thing to assess because some indi­vid­ual mem­bers, such as Nada and Nasred­din, have great indi­vid­ual wealth. They also jointly own dozens of enter­prises, both real and off­shore, with Ghalib Him­mat and other Broth­er­hood lead­ers. Dis­cern­ing what is per­sonal wealth, legit­i­mate busi­ness oper­a­tions, and Broth­er­hood wealth is dif­fi­cult if not impos­si­ble. It is clear not all the money is intended to finance ter­ror or even rad­i­cal Islam. But it is equally clear that this net­work pro­vides the ways and means to move sig­nif­i­cant sums of cash for those operations.

One indi­ca­tion of a com­pany or cor­po­ra­tion being a Broth­er­hood activ­ity, rather than part of indi­vid­ual assets and wealth, is the over­lap of the same peo­ple on the direc­tor­ships of the finan­cial insti­tu­tions and com­pa­nies. For exam­ple, the Broth­er­hood net­work enti­ties estab­lished in Nas­sau, Bahamas, all reg­is­tered their address as that of the law firm –Arthur Hanna and Sons — which incor­po­rated their busi­nesses and bank­ing institutions.[7] Mem­bers of the Hanna fam­ily served on the boards of the banks and com­pa­nies, han­dled legal cor­re­spon­dence and rep­re­sented the com­pa­nies in legal cases. Many of the direc­tors of the myr­iad com­pa­nies served as direc­tors of sev­eral com­pa­nies simul­ta­ne­ously. In turn, many of those same peo­ple served simul­ta­ne­ously on the gov­ern­ing boards or sharia boards of DMI and other impor­tant Brotherhood-dominated finan­cial insti­tu­tions. The over­lap of direc­tor­ships and share­hold­ers strongly indi­cates the tight-knit nature of the orga­ni­za­tion and the inter-connectedness of the finan­cial network.

The most vis­i­ble part of the net­work, off­shore shell banks in the Bahamas, did merit some inves­ti­ga­tion imme­di­ately after 9–11. The Trea­sury Depart­ment pub­licly stated that Bank al Taqwa and Akida Bank Inter­na­tional were “involved in financ­ing rad­i­cal groups such as the Pales­tin­ian Hamas, Algeria’s Islamic Sal­va­tion Front and Armed Islamic Group, Tunisia’s An-Nahda, and Usama bin Laden and his al-Qaida organization.“[8]

The pri­mary share­hold­ers in al Taqwa Bank were Nada, Nasred­din, mem­bers of the Bin­laden fam­ily and dozens of other Broth­er­hood lead­ers, includ­ing Yousef al-Qaradawi, the grand mufti of the United Arab Emirates.[9]

A clus­ter of char­i­ties based in Hern­don, Va., where many lead­ers had ties to Nada and his bank­ing activ­i­ties, is under active inves­ti­ga­tion by the FBI and the Depart­ment of Home­land Secu­rity. Two of the lead­ers of the clus­ter, called the “Safa Group,” incor­po­rated the al Taqwa Bank in Nas­sau, and other lead­ers worked for Nada’s banks and had exten­sive finan­cial deal­ing with him. Many of the Safa Group’s lead­ers are also mem­bers of the Brotherhood.[10]

Unfor­tu­nately, while the Trea­sury Depart­ment des­ig­nated Bank al Taqwa and Akida Bank with great fan­fare in the imme­di­ate after­math of 9–11, it was largely the­ater. The gov­ern­ment of the Bahamas had already shut both banks down in April 2001.[11] The inves­ti­ga­tions sub­se­quent to 9–11 revealed the ter­ror­ist ties that had been sus­pected, but never acted on. Ear­lier intel­li­gence oper­a­tions by the CIA found Bank al-Taqwa and other struc­tures of the busi­ness empire were used not only to fun­nel money to al Qaeda, but also pro­vided the ter­ror­ist orga­ni­za­tion with access to Inter­net ser­vices and encrypted tele­phones, and helped arrange arms shipments.[12] The Trea­sury Depart­ment, cit­ing intel­li­gence sources, said that
“As of Octo­ber 2000, Bank Al Taqwa appeared to be pro­vid­ing a clan­des­tine line of credit to a close asso­ciate of Usama bin Laden and as of late Sep­tem­ber 2001, Usama bin Laden and his al-Qaida orga­ni­za­tion received finan­cial assis­tance from Youssef M. Nada.“[13]

The struc­ture of Bank al Taqwa and Akida Bank in Nas­sau fol­low the pat­tern of other off­shore endeav­ors. The bank was a vir­tual bank, with only a hand­ful of employ­ees in Nas­sau man­ning com­put­ers and tele­phones. The bank was affil­i­ated with the al Taqwa Man­age­ment Orga­ni­za­tion, owned by another Nada entity in Switzer­land. Nada owned a con­trol­ling inter­est in the bank, and Nasred­din was a direc­tor. At the same address, Nasreddin’s Akida Bank Pri­vate Ltd, oper­ated as a sub­sidiary of the Nasred­din Foun­da­tion. Nasred­din was the pres­i­dent, and Nada served on the board. The real bank­ing activ­ity, how­ever, was car­ried out through cor­re­spon­dent rela­tion­ships with Euro­pean banks.[14]

Nada and Nasred­din, along with their banks, were des­ig­nated by the U.S. and the U.N. as ter­ror­ist financiers in Novem­ber 2001. In August 2002, the United States and Italy jointly des­ig­nated 14 more joint Nada/Nasreddin enti­ties for sup­port­ing terrorism.[15] But that was not the end of the use of shell com­pa­nies and off-shore havens by the Nada/Nasreddin group. An exam­i­na­tion of these activ­i­ties point to seri­ous short­falls in the efforts to com­bat ter­ror­ist financing.

Despite the clear and com­pelling evi­dence that the off­shore net­work of the Broth­er­hood pro­vided vital finan­cial and logis­ti­cal sup­port to a vari­ety of Islamic ter­ror­ist oper­a­tions, the only action taken so far has been to freeze a few more of the com­pa­nies owned by Nada and Nasred­din. There has been lit­tle or no coor­di­nated, con­certed effort to map out, iden­tify and under­stand the rest of the Broth­er­hood struc­ture. One pos­si­ble excep­tion is the NATO project on the Mus­lim Broth­er­hood, which focused on the Brotherhood’s activ­i­ties in Europe and has sought to iden­tify the dif­fer­ent Broth­er­hood entities.

Many Broth­er­hood busi­nesses were reg­is­tered as off­shore com­pa­nies through local trusts in Liecht­en­stein, where there is no require­ment to iden­tify com­pa­nies’ own­ers, and no record is kept regard­ing activ­i­ties or trans­ac­tions. On Jan. 28, 2002, Nada, in vio­la­tion of the U.N. travel ban he is sub­ject to, trav­eled from his home in Cam­pi­one d’Italia, Switzer­land, to Vaduz, Liecht­en­stein. While in Vaduz, he sought to change the names of sev­eral of the des­ig­nated com­pa­nies. At the same time, he applied to put the new com­pa­nies in liq­ui­da­tion, and had him­self appointed as liq­uida­tor. As off­shore enti­ties, the newly-named com­pa­nies main­tained no records in Liechtenstein.[16]

Attempts by des­ig­nated ter­ror­ist financiers to switch com­pany reg­is­tra­tions, or estab­lish new com­pa­nies with­out their vis­i­ble par­tic­i­pa­tion, is a pat­tern dis­cov­ered by U.N. and Euro­pean inves­ti­ga­tors. While some enti­ties have been detected, many oth­ers are believed to have tran­spired with­out being detected or blocked. The United Nations Mon­i­tor­ing Group, which wrote a series of well-documented reports based on months of inves­ti­ga­tions around the world by a team of finan­cial experts, uncov­ered the Nada move­ments in Liecht­en­stein. The group con­cluded that “The Nada and Nasred­din exam­ples reflect con­tin­ued seri­ous weak­nesses regard­ing the con­trol of busi­ness activ­i­ties and assets other than bank accounts.” The group cited the dif­fi­cul­ties in iden­ti­fy­ing ben­e­fi­cial own­er­ships and shared assets, and the weak­ness of the travel ban.[17] In fact, the panel found the where­abouts of the vast major­ity of the 272 indi­vid­u­als named as ter­ror­ist financiers by the United Nations, remained unknown.[18]

The modus operandi of Nada and Nasred­din is vis­i­ble else­where. Dozens of com­pa­nies of des­ig­nated indi­vid­u­als remain active despite the osten­si­ble inter­na­tional com­mit­ment to shut­ting them down. In some cases, such as Panama, com­pa­nies under the names of des­ig­nated indi­vid­u­als remain untouched.[19] This does not include the many dozens of com­pa­nies and other cor­po­rate enti­ties belong­ing to des­ig­nated indi­vid­u­als, either out­right or through nom­i­nee share­hold­ers, reg­is­tered in the British Vir­gin Islands, Cay­man Islands and else­where in the Caribbean. While the Broth­er­hood reg­is­tered dozens of com­pa­nies in the 1980’s and 1990’s using Broth­er­hood lead­ers as iden­ti­fied direc­tors, this changed over time, mak­ing it more dif­fi­cult to trace the own­er­ship of the enti­ties. Begin­ning in the late 1990’s, per­haps in response to the few intel­li­gence probes that were car­ried out, many off­shore com­pa­nies have been shut down. Many appear to be re-opened under the direc­tion of nom­i­nee share­hold­ers, mak­ing the direct tie to the Broth­er­hood more dif­fi­cult to detect.

How­ever, it is often not nec­es­sary to take any pre­cau­tions at all because the inter­na­tional sanc­tions regime aimed at des­ig­nated ter­ror­ist financiers is so weak. For exam­ple, Nige­ria is in fla­grant vio­la­tion of the UN sanc­tions regime by refus­ing to freeze the func­tion­ing busi­nesses of Nasred­din. Nasred­din has done noth­ing to hide his own­er­ship of the enter­prises. The pri­mary com­pany is Nasco Invest­ment & Prop­erty Ltd., owned by Amana Hold­ings and Man­age­ment Inc., a still-functioning off­shore com­pany reg­is­tered in Panama.[20] The com­pany lists Nasred­din as its president.[21]

These issues — off­shore and shell com­pa­nies, front com­pa­nies and the inabil­ity to account for the vast major­ity of the des­ig­nated al Qaeda financiers or their bil­lions — make it dif­fi­cult to ascer­tain how much of al Qaeda’s finan­cial flow has been impaired in the 4 1/2 years since 9–11. While the 9–11 Commission’s Mono­graph on Ter­ror­ist Financ­ing states that al Qaeda’s oper­at­ing bud­get is now reduced to a few mil­lion dol­lars a year and its finan­cial needs are minimal[22], this assess­ment is not uni­ver­sally shared. The U.N. Mon­i­tor­ing Group esti­mated the value of al Qaeda’s finan­cial port­fo­lio “at around $30 mil­lion,” includ­ing its “large port­fo­lio of osten­si­bly legit­i­mate businesses.“[23] What­ever the amount in the direct port­fo­lio of al Qaeda may be, it is only a small frac­tion of the port­fo­lio of the Mus­lim Broth­er­hood. If al Qaeda were to run into seri­ous finan­cial dif­fi­culty, its cof­fers could eas­ily be qui­etly replen­ished through the Brotherhood’s off­shore struc­ture with very lit­tle dan­ger of being interdicted.

If the flow of money to Islamist ter­ror­ist groups is to be cut off, and the fund­ing for the Mus­lim Brotherhood’s announced inten­tion of recre­at­ing the Islamic caliphate and the even­tual dom­i­na­tion of the world by a rad­i­cal Islam is to be slowed, then the off­shore struc­ture must be under­stood and steps must be taken to shut it down. It will be nec­es­sary to under­take the tedious task of dig­ging up cor­po­rate and finan­cial records and map­ping the com­plex and secre­tive rela­tion­ships among indi­vid­u­als, cor­po­ra­tions and finan­cial insti­tu­tions. A first, and rel­a­tively easy step, would be to rein­vig­o­rate the U.N. sanc­tions regime by putting pres­sure on the most fla­grant vio­la­tors. A sec­ond would be to ded­i­cate more US gov­ern­ment resources to the mis­sion of iden­ti­fy­ing and track­ing Broth­er­hood financiers and assets. This would raise the Brotherhood’s cost of doing busi­ness and force the mem­bers to move away from the eas­i­est, most prof­itable ways of doing busi­ness, while also afford­ing demo­c­ra­tic gov­ern­ments a clearer pic­ture of their ene­mies’ capabilities.

[1] Alain Chouet, “The Asso­ci­a­tion of Mus­lim Broth­ers: Chron­i­cle of a Bar­barism Fore­told,” Euro­pean Strate­gic Intel­li­gence and Secu­rity Cen­ter, April 6, 2006.

[2] Cor­po­rate records and Mus­lim Broth­er­hood writ­ings in pos­ses­sion of the author.

[3] Tes­ti­mony of Jonathan Winer, for­mer Deputy Assis­tant Sec­re­tary of State for Inter­na­tional Law Enforce­ment, before the Sen­ate Com­mit­tee on Gov­ern­men­tal Affairs, July 31, 2003.

[4] Doc­u­ments on al Turabi’s lead­er­ship of DMI in pos­ses­sion of the author.

[5] Tes­ti­mony of Richard A. Clarke before the Sen­ate Bank­ing Com­mit­tee, Oct. 22, 2003.<
br />
[6] Con­fi­den­tial author interview.

[7] Doc­u­ments in pos­ses­sion of the author.

[8] “The United States and Italy Des­ig­nate Twenty-Five New Financiers of Ter­ror,” U.S. Trea­sury Depart­ment, Aug. 29, 2002.

[9] 1999 List of Bank al Taqwa share­hold­ers, obtained by author.

[10] Dou­glas Farah, Blood From Stones: The Secret Finan­cial Net­work of Ter­ror, Broad­way Book, New York, 2004, pp. 155, 209.

[11] Notice of clo­sures in pos­ses­sion of the author.

[12] Hosen­ball, Perain and Skipp, op cit.

[13] “The United States and Italy Des­ig­nate Twenty-Five New Financiers of Ter­ror,” U.S. Trea­sury Depart­ment, Aug. 29, 2002.

[14] Cor­po­rate records obtained by author and “The United States and Italy Des­ig­nate Twenty-Five New Financiers of Ter­ror,” U.S. Trea­sury Depart­ment, Aug. 29, 2002.

[15] “The United States and Italy Des­ig­nate Twenty-Five New Financiers of Ter­ror,” U.S. Trea­sury Depart­ment, Aug. 29, 2002.

[16] Sec­ond report of the Mon­i­tor­ing Group Estab­lished Pur­suant to United Nations Secu­rity Coun­cil Res­o­lu­tion 1363 (2001) and to Res­o­lu­tion 1455 (2003) on Sanc­tions Against al Qaeda, Dec. 3, 2003, para­graphs 77–80.

[17] Ibid, para­graphs 81–82.

[18] Ibid, exec­u­tive sum­mary, pg. 3.

[19] Doc­u­men­ta­tion of cur­rently reg­is­tered com­pa­nies by SDIs in pos­ses­sion of the author.

[20] Lisa Myers, “Alleged Ter­ror­ist Financier Oper­ates in Plain Sight,” NBC, June 30, 2005.

[21] Reg­istro Pub­lico de Panama, ficha 271559, rollo 38428.

[22] National Com­mis­sion on Ter­ror­ist Attacks Upon the United States, Mono­graph on Ter­ror­ist Financ­ing, p. 28.

[23] Sec­ond report of the Mon­i­tor­ing Group Estab­lished Pur­suant to United Nations Secu­rity Coun­cil Res­o­lu­tion 1390 (2002) on Sanc­tions Against al Qaeda, Decem­ber 2002, para­graph 48.