BIN LADEN, CRIME AND OPPORTUNISM[i]

by

R. T. Naylor

McGill University

Montreal, Canada

November 3, 2001

In the wake of the September 11 tragedy, there has been a rush to craft new legislation and implement new policies in an attempt to hunt down and neutralize the perpetrators and to prevent a repetition. Apart from tightening immigration regulations, granting police forces greater power to hold suspects incommunicado, and expanding the scope for information gathering by intelligence agencies, the most important manifestations appear in tighter anti-money laundering regulations. These have as their raison d’être finding and freezing terrorist assets before they can be used. Islamic charities, supposedly fronts for terrorist financing, are a major target. Not least important, the U.S., pacesetter for the world economy, appears to have abandoned conservative fiscal management in favour of a stimulus package to offset the economic damage of the attacks.

Clearly something had to be done. But is there any convincing evidence that the transformation of law, police powers and intelligence gathering methods, or the shifts in financial and economic policy, will really target the problem? Or are politicians reacting to immediate pressures, even if what they do may be of little efficacy, and even if it has the potential for long-term harm? And is it possible that at least some of the measures are the result, not of a well-considered attempt to address fundamental issues, but of vested interests seizing the opportunity presented by the September 11 tragedy to promote their own agendas in the name of national security and a “war on terrorism?”

The common view, seemingly shared by politicians, mass media and general public alike, can be summarized as follows:

§         The architect of the terrible crimes of September 11 was Usama bin Laden, a fanatic Muslim fundamentalist who has already been named as the party responsible for a series of previous outrages against U.S. and other targets and who has issued a fatwa calling for the murder of Americans.

§         Drawing on his experiences fighting the Soviet Union in Afghanistan, Usama bin Laden has put together el-Qa’ida, a sophisticated, coordinated global terrorist organization staffed with zealots eager for martyrdom at his command.

§         He is able to conduct his terror campaign because his financial resources which include the US$ 300 million from his share of a family construction business and the returns from his own business empire, including a stake in the huge Afghan drug trade. He is able to use networks of phony Islamic foundations, along with a widespread underground banking system, to secretly move operating funds around the world. The estimate is that el-Qa’ida, though such means, disburses US$30-40 million per annum, small change for someone often characterized as a Saudi billionaire.

§         Using these resources, bin Laden has set out to target the U.S. economy, in much the way suggested by the classical theories of economic warfare, through a campaign of destruction of key infrastructure like the financial and transportation systems. Indeed, he has driven the U.S. economy into a recession, and forced the U.S. government to try to offset the economic damage with a emergency economic stimulus package.

§         To fight back, the U.S., apart from mobilizing its military might, is leading the rest of the world in deploying against the terrorists, a new weapon, though one already well tested in more conventional forms of crime control, namely a concerted effort to search out and seize the money which constitutes the lifeblood of terrorist groups, and to put the front organizations and pseudo-charities that transfer the money out of business.

At first glance this analysis has a chilling logic. But, on closer examination, it seems that, whatever elements of truth they might contain, the five propositions on which the scenario is based are laced with myth, confusion, and mass-media hyperbole.

First, as to Usama bin Laden’s direct responsibility, so far the case has been based, not merely on guilt by association, but on hearsay, rumour and innuendo. Someone knows someone who was once, in that deliciously versatile phrase, “linked to” bin Laden or one of his business or charitable enterprises. This would be a troublesome basis for criminal prosecution. It is far worse as a justification for unleashing the most awesome killing machine in history on one of the most wretched places on earth where a handful of people, who seized power against the will of the population they rule, harbour a fugitive from the justice system of another country which refuses to provide serious evidence against him. Indeed, U.S. government spokespersons repeatedly admit their “evidence” would never stand up in court, and the British government’s recent public statement of the “case” was prefaced with just such disclaimer.[ii]

This is not so say that bin Laden is a nice guy. He is a dangerous megalomaniac who preaches a retrograde and violent ideology – although where anyone got the idea he has the right to issue a fatwa (something only accredited senior religious scholars can do) remains a mystery. And there is a good chance he bears a moral, if not a legal, responsibility for at least some recent terrorist actions. However, it is extremely unlikely he is responsible for all the things recently imputed to him. For example claims in a New York court indictment that he orchestrated for the attack on U.S. forces in Somalia were dismissed long ago even by then-head of the U.S. Office of Counter-Terrorism as “preposterous.” Indeed, it is hard to resist the conclusion that what is involved is yet another instance of the U.S. government’s penchant for demonization, something common to its crime control and foreign policy rhetoric. The result of all the accusations by the U.S., now followed by other governments from Russia to the Philippines, is to blow bin Laden out of proportion in order to make him a surrogate for broad social and political forces with which it is much harder to deal.

Even if it eventually transpires - and it might - that bin Laden had some legal responsibility for the September 11 crimes, instead of just a twisted propensity to indulge his ego after the fact, demonization is short-sighted and counter-productive. It leads to quick-fix “solutions” that make people feel better in the short run, while leaving an array of even graver problems for someone else to clean up in the long run. And demonization builds up to mythic proportions the political and military threat of someone who is, in fact, a somewhat successful businessman and part-time fundraiser for Islamic causes, some charitable, some developmental, some military in nature, but who himself had no real military background or knowledge and whose battlefield exploits in Afghanistan during the anti-Soviet war appear to have been largely fictional in order to coax more money out of rich Saudis.

The second proposition, that there is some transnational terrorist organization called el-Qa’ida at bin Laden’s beck and call, seems another serious oversimplification. Indeed, when George W. Bush claims that el-Qa’ida is to terrorism what the Mafia is to crime, on one level he may be right. Just as law enforcement bodies around the world insist on seeing hierarchically-controlled institutions in place of loose networks and individuals engaged in arms-length commercial transactions, so the security services seem to have a compelling need to find great terrorist “cartels.” The old “war on crime” and the new “war on terrorism” even employ much the same terminology. Absent any real proof of hierarchical chains of command, the old cop-speak – so-and-so is “linked to” or an “associate of” someone else, whatever those terms are supposed to mean – has been turned into a new spook-speak.

For el-Qa’ida, rather like the Mafia, seems to be less an organization than a loose association of like-minds that changes form and personnel in an ad hoc way in response to threats and opportunities. What is known about its structure and modus operandi, to the extent it can be said to even possess those things, seems to point to a series of only vaguely related cell-like entities characterized by absence of formal contacts with any supposed command structure. 

The spiritual roots of el-Qa’ida can be traced back to the Vietnam war when the CIA took over from a retreating French military intelligence, a special counterinsurgency apparatus based on the Hmong hill people of Laos and Vietnam. The men were hired as anti-Communist mercenaries, while the women, who did the farming, grew opium which, first the French, then the Americans, assisted them to market. In turn the income from opium helped to finance the anti-Communist battles. That traffic continued even after opium gave way to heroin to serve a rich hard-currency market comprised of hundreds of thousands of American soldiers. And it followed the U.S. soldiers home.

Similarly after the Red Army rolled into Afghanistan, the CIA began organizing from among the clans and tribes an Afghan insurgent army that at peak may have numbered 250,000.[iii] Much as in Vietnam, money was the key to maintaining an alliance. Regional chiefs and local warlords changed sides regularly depending on who was paying most. And one of the main ways in which they were paid was by their patrons accommodating, at least by default, their smuggling rackets, including the flow of drugs. As in south east Asia, opium soon gave way to heroin, and the local to the international market.

During the anti-Soviet struggle, backed by several billions of U.S. and Saudi money, the arms and drugs pipelines were inseparable. The CIA would secure arms, preferably Soviet model ones, from Egypt, China and Israel, and from black market deals in East Bloc countries. From one end to another the pipeline leaked. Some weapons seem to have been skimmed at the outset by the CIA itself to equip other insurgencies where there was no authorized U.S. intelligence involvement. Others were diverted to other customers by the brokers and arms dealers, with the theft covered by substituting inferior equipment or reporting the material lost at sea. On arrival at the port of Karachi, the Pakistan Inter-Services Intelligence (ISI) took charge, with the result that several generals retired rich. The arms not taken for Pakistan army stockpiles or diverted to other insurgencies, such as those in Kashmir and the Punjab, or sold on the black market to anyone with cash, would be moved north in sealed trucks and trains which Pakistani police and Customs were forbidden to inspect. They were hauled to Peshawar, capital of Pakistan’s North West Frontier Province and Afghan exile headquarters, or to the border city of Quetta in Baluchistan, to be turned over to the leadership of the Afghan resistance. At that point more diversion occurred. The final stage, entrusted to “private” contractors with business or family relations with the Afghan exile leadership, required that weapons be hauled, often by mule train, into Afghanistan. The leaders of each clan through whose territory the pipeline ran demanded tribute, payable in cash or in arms. Once in Afghanistan, the arms were supplied to field commanders, some of whom exaggerated quantities used or lost in battle and sold off the difference.

In the meantime there was a return cargo. Afghanistan produces not only the world’s finest hashish, but during the wars began to match Burma as a source of opiates. Rivalry between resistance leaders as to whom got to tax the opium crop meant that some spent more time battling each other than combating the Red Army. It was often easier for one faction’s drug caravans to get through government controlled areas where a small bribe sufficed than through territory run by a rival mujahideen commander. Although there were some small refineries in Afghanistan itself, most raw opium was taken by return mule train back across the border in the autonomous tribal region of Pakistan’s North West Frontier Province. There the heroin refineries, joint ventures of Pakistani merchants and Afghan leaders, yielded so much protection money that, when combined with the returns from gun-running, kidnapping and extortion, tribal chiefs could move from mud-walled forts guarded by a few kinsmen with bolt-action rifles to marble-floored Jacuzzi-equipped mansions protected by anti-aircraft missiles.

From the North West Frontier the drugs moved south, hidden in sacks of grain carried by the same ISI trucks that brought the weapons north, still protected against Customs and police probes. Then some of the drugs were taken over by professional smuggling gangs linked to Sikh guerrilla groups already moving whiskey (banned under Islamic law) into Pakistan and arms back into India. Inside India drugs would go to Bombay where the underworld, rich on gold smuggling, arranged their export. Or they would head further south where Tamil separatist guerrillas from Sri Lanka would move them out via their European courier system. Other shipments headed to Karachi where five families, each with a senior officer in their ranks, ran most of the exports. And some went westward by land. Baluchi tribesmen would carry drugs to Iran, and transfer them to Kurdish groups to take across Turkey where the drugs entered a smuggling complex of corrupted officials, political insurgents, career gangsters and intelligence agents before taking the Balkan route into western Europe (where it would later help fuel the rise of the Kosovo Liberation Army). All of this was well known to the U.S. which tolerated the traffic for several reasons. It was regarded as necessary to keep the Afghan clan leaders and warlords on side; drugs were taking a toll of morale and ability among Red Army soldiers; and very little Afghan heroin made it to the U.S.[iv]

The long term costs were enormous. They included turning Afghanistan into rubble – of an pre-conflict population of 23 million, 1.5 million died, hundreds of thousands were maimed, 5 million fled as refugees to neighbouring countries, and the economic infrastructure, already weak, was largely destroyed. The only thing that flourished was opium. The costs included converting Pakistan’s North West Frontier province into the world’s premier arms bazaar in which it was possible to find tanks in front of people’s houses with “For Sale” signs on them, while unleashing on Pakistan a scourge of heavily armed religious and political dissident groups. And they included thousands of highly motivated, well-trained insurgents ready to turn their talents to other causes once the anti-Soviet war ended.

In keeping with the principles of covert war, it was essential that U.S. military personnel keep as low a profile as possible. Hence certain persons – drawn partly from Pakistani military intelligence, partly from the Afghan military leadership, and partly from volunteers from Islamic countries - were picked for instruction as future trainers. Deniability was enhanced by subcontracting the job of training the future trainers to private American (and British) firms run by special forces veterans. Then the trainers were sent to Pakistan to instruct the rank and file.

Recruitment was similarly privatized. Apart from campaigns across the Muslim world, within the U.S. recruitment centres were set up in the major American cities that hosted large Muslim or Arab populations. Along with manpower, the émigré communities were tapped as a source of money, through the types of Islamic charities now being denounced as conduits for terrorist financing. To Muslims, giving to charity is more than just an act of generosity, it is a religious duty – it is one of the five pillars of Islam. At the same time working through the front of charities and foundations, sometimes without their knowledge, is standard intelligence operating  procedure. So the connection was natural. The Islamic charities were, if not created, then certainly encouraged and monitored regularly by U.S. intelligence during the anti-Soviet campaign. And their function was twisted away from bona fide charitable work towards financing a military campaign that would eventually put a ramshackle gang of cutthroats, bandits and drug dealers in power in Kabul. Meanwhile tens of thousands of volunteers from dozens of Islamic countries were being taught, directly by the U.S. and Britain, or indirectly via Pakistan’s ISI, the techniques of strategic sabotage – how to improvise explosives from ordinary materials and take out key infrastructure. It is interesting to note that when Egyptian militants were caught in the U.S. in the early 1990s mixing ammonia fertilizer with fuel oil to produce an impressive explosive, they were following a formula taught to Afghan resistance fighters by U.S. intelligence or its proxies.[v]

Usama bin Laden entered all of this as a small cog in an already well-oiled machine. Originally his role was simply to tap rich Saudis for funds to aid the Afghan resistance. Later he turned up with some of his family construction equipment to build housing and training facilities along with a tunnel complex the CIA financed and the ISI used to store arms. In fact the term el-Qa’ida was originally applied to a rest house and barracks he built for fighters passing through. Afterwards, once bin Laden had moved to exile in the Sudan, el-Qa’ida was transformed into the name of a global terrorist conspiracy, one that supposedly operates on the basis of his legendary wealth.

The third proposition deals with Bin Laden’s fortune, reputedly composed of three elements: the family construction firm; an independent business empire interfacing with (sometimes presented as identical with) el-Qa’ida; and the Afghan heroin trade which has allegedly burgeoned under Taliban rule.

Bin Laden, so the legend goes, was the son of a Saudi construction tycoon and inherited the family empire on his father’s death. Young Usama must have been quite a chap – to take over the region’s largest private construction conglomerate at age 13, even though he had 19 brothers, nine of them older. In another version of the story, he merely inherited $80 million from his father. Presuming the father made equal provision for his other sons (and ignoring anything that might have left to the 37 daughters), that would have meant the distribution at his death of $1.6 billion, several times the total assets of the company at that time, while still leaving the company with the financial wherewithal to continue to grow to its present $5 billion size. Obviously the tales of his construction mega millions are grossly exaggerated. And any remaining connection between bin Laden and the mainstream of his family was severed in the early 1990s, when he was denounced by Saudi Arabia and stripped of his citizenship. Despite recurrent rumours, it is extremely unlikely that the family, which officially disowned him, would risk either their wealth, which depends on the good will of the Saudi regime, or their current status of living in luxury in the U.S., by maintaining clandestine financial links with their notorious sibling.[vi]

Another source of funds for the terrorist treasury bin Laden allegedly controls is the businesses he set up independently across the Middle East but especially in the Sudan during the early 1990s. Supposedly bin Laden’s Sudanese charities and enterprises were fronts for mounting a series of attacks on American targets, as well as those of America’s closest allies, Saudi Arabia and Egypt. It is true bin Laden invested heavily in the Sudan, both whatever resources he had plus what he could persuade Saudi financiers to put up. The result was a series of enterprises, with the agreement of the ruling National Islamic Front, that included import-export firms, construction companies, land reclamation projects, refugee relief institutions, and a bank. Far from fronts, these projects were vitally important to an impoverished country wracked by decades of civil war and crippled further by U.S. sanctions. Far from lucrative, almost all seem to have been money-losing propositions. Their value depreciated further as the Sudanese currency plummeted. Any external assets associated with the bin Laden companies were frozen at American request after the embassy bombings in Kenya and Tanzania. And when the National Islamic Front government was ousted by the military, most of the remaining bid Laden assets in the Sudan seem to have been stolen by the new rulers. Thus, Bin Laden may have been de facto bankrupt by the time he fled the Sudan and returned to Afghanistan, just in time for his old mujahideen colleagues to be ousted from power by the Taliban.[vii]

Far from the Taliban being a creature of bin Laden (the oft-repeated story that el-Qa’ida “controls” the Afghan defense and foreign ministries), it was more a joint venture of the Pakistani military and certain big U.S. oil and gas companies. Pakistan saw the Taliban as a tool in its drive to control the trade of Central Asia after the disintegration of the Soviet Union; while the oil and gas companies, with the quiet endorsement of the U.S. government, were counting on the Taliban to stabilize the country prior to building through it a pipeline to draw Central Asian gas to Pakistan, from where it would go by tanker to European and American markets. That way the hydrocarbon resources of the region would be kept out of the control of Russia or Iran.

The final component of the bin Laden terrorist treasury supposedly derives from the fact that the Taliban regime, after it took power in 1996, cut in bin Laden for ten percent in exchange for his aid in marketing Afghanistan’s $8 billion per annum opium crop. This is story that must be taken, not with a grain of salt, not even with the entire shaker, but with an option on the output of all of the world’s salt mines.

In 1917, when the U.S. was about to enter World War I, the official line was that imperial Germany was responsible for narcotics entering the U.S. In World War II, the culprit became Japan – it would be hard to blame Nazi Germany which was so desperate for opiates it created methadone as a synthetic substitute. In the 1950s the head of the Bureau of Narcotics and Dangerous Drugs formally blamed the People’s Republic of China. And in the early Reagan era the Soviet Union, Cuba and even the PLO were at various points held responsible. Tales about Usama bin Laden’s role in the world heroin trade must be understood in that context.[viii]

Furthermore the story makes no sense in light of the current facts on the ground. In the 1980s and early 1990s producing and trafficking in drugs was overwhelmingly in the hands of various warlords and clan chiefs who supported the mujahideen fighters. That remained true after they overthrew the Communist government. When the feuding mujahideen, in turn, were ousted by the Taliban, one of the main complaints against them was precisely the proliferation of drugs. In fact, the Taliban initially tried to move against opium, only to bump up against political and financial realities. Politically it risked alienating local chiefs and warlords – for in Afghanistan loyalties are usually for sale to the highest bidder. Furthermore, opium is not an official monopoly but an integral part of the structure of patron-client relations between local chief and peasant. Where possible the Taliban did tax the production and trade of opiates. But the most important sources of its revenue were taxes on and contributions from the “trucking mafia” running general contraband from Karachi through Afghanistan to Central Asia, and secret subsidies from Pakistan. And when they did tax opium, the returns were minimal. Since Afghan farmers collect about one percent of the traded value of their opiates, even if the Taliban succeeded in imposing their 20% tax across the country, the total take could never have exceeded $20 million – even if the rather foolish conventional story were true, that would have given bin Laden a maximum of $2 million per year. Furthermore, shortly after the Taliban took power, a massive drought struck the country and wiped out much of the opium crop. Finally in 1999 the Taliban announced a total ban. The UN Drug Control Office verified a dramatic drop in production from areas at least nominally under Taliban control. Indeed, the great bulk of the current crop now originates in areas controlled by the so-called Northern Alliance, with no obvious attempt by the U.S. to interfere. It is at least worth speculating that the U.S. is again turning a blind eye to the drug flow in order to buy the loyalty of the Northern Alliance bosses and provide them with the financial wherewithal to bribe other clan chiefs and warlords.[ix]

Finally, with respect to financing, if bin Laden really had the mega-billions imputed to him, why did he leave his supposed disciples so poorly funded? Those identified as the hijackers lived by low-wage jobs, petty scams or begging money from their families.[x] That by itself contradicts the stereotype about a giant Terror Unlimited dripping filthy lucre. And the truth is that the amount of money required even for crimes of the magnitude of September 11 is not especially large. What seems to have happened is consistent with the pattern of urban insurgent groups all over the world for decades. They form small, autonomous and self-financing cells; if there ever is outside funding, it is minor; and any financial movements that are required tend to take the form of transfers of cash or other anonymous instruments.[xi] According to the official theory, Egypt’s Gama’at el-Islamiya, supposedly the most important single component of the el-Qa’ida network. to date it has had to finance itself by robbery and by counterfeiting Egyptian currency. These are remarkably risky endeavors for a group supposedly flooded with Usama bin Laden’s cash.

The fourth proposition is that el-Qa’ida on September 11 launched what was part of a concerted economic war against the U.S., deliberately targeting the key financial and transportation infrastructure. On this theory, follow-up attacks would follow the same pattern. In wartime situations the best way to defend against serious damage is to spread essential infrastructure across large amounts of territory and assure redundancy. Lack of both of these defenses supposedly makes the U.S. particularly vulnerable.

The modern principles of economic warfare, and the use of strategic bombing to implement them, were invented jointly by the U.S. and Britain during World War II. In fact the U.S. had a special branch of its Office of Strategic Services (forerunner of the CIA) dedicated to planning strategic sabotage. Intriguingly, the person in charge of that branch was William Casey, the future CIA chief who later ran the Afghan war against the Soviet Union.[xii] It is also intriguing that the Afghan resistance fighters were instructed on how to destroy essential economic infrastructure. It is therefore an easy inference that the attacks on September 11 involved veterans of bin Laden’s alleged Arab-Afghan brigade treacherously turning the knowledge the U.S. so selfishly gave them, against their former benefactor.

True, the immediate impact on the U.S. economy was dramatic. But there is no evidence that that was the intent. What was involved was a psychological and political blow. The World Trade Center was targeted, not because it was in some way the throbbing heart of American capitalism, but because it was obvious and vulnerable. Nor did the attacks drive an already weakening U.S. economy into a formal recession. A recession was looming because of three successive and interrelated developments that started well before the attacks. One was sharp cutbacks in corporate capital spending. The second was the financial meltdown which began in the high-tech equipment sector and spread through a grossly overheated stock market. The third was the drying up of consumer demand. In response, savings rates in the U.S. began to climb and consumption expenditure, the driving force of economic growth in the 1990s, started to stagnate. To be sure, the attacks may exacerbate those structural and cyclical problems, but they certainly did not cause them. 

That, of course, raises a serious question about the U.S. government response. The Bush Administration has announced a package supposedly to stimulate the U.S. economy and pull it out of the bin Laden-induced recession. In reality the tax package is exactly the opposite of stimulation. To get the economy moving again requires massive redistribution of income to lower and middle class consumers, and on a temporary basis, with the stimulus removed once the economy recovers. Yet more than 90% of the $125 billion in tax cuts go permanently to corporations and rich individuals – the first will react, not by investing more, but by declaring higher dividends or paying down debt; and the second will react by increasing their savings rate. The entire notion of a fiscal stimulus is a charade – what the Bush Administration did is seize the opportunity of the attacks to override Democratic objections to another big handout to the already rich.

Nor does the race to lavish as much wealth as possible on the oil companies, as well as give them carte blanche to ravage national wildlife reserves, have anything to do with the September 11 outrages. The decision to turn big oil loose, and to sabotage the Kyoto Accord, were made well before. It is just that they can now be rationalized, and environmentalist opposition muzzled, by citing an alleged bin Laden threat to the U.S. energy lifeline.

Finally, it is necessary to look critically at the fifth proposition, the notion that the way to prevent future terrorist outrages is to mimic recent fads in more orthodox law enforcement policy by following the money trail. 

Now it is certainly important in many forensic investigations to include a financial component. It can provide evidence to lead to guilty parties, and it can help find the wherewithal to make restitution to victims. It is, in short, useful after the fact. But what the public is being told is that the money trail can function preemptively, to lead to those plotting nefarious deeds or, at least, to lead to the money without which they would be unable to pull them off. This raises serious questions of logic and of fact, as well as the possibility that, once more, vested interests are capitalizing on the September 11 tragedy to advance their own programs.

For the last several years, at least since 1998, FINCEN (the Financial Crimes Enforcement Network run by the U.S. Treasury) and the CIA have been chasing the alleged bin Laden billions, and declaring freezes on numerous institutions and individuals on the basis, it sometimes seems, of names drawn from a fez. None of this has served to stop the terrorist attacks. And there is no reason to expect much better results in the future, no matter what new reporting regulations get passed.

In ordinary law enforcement, the rationale for a follow-the-money policy is that it takes away the motive (profit) and the means (working capital) to commit more crimes. Even if that argument is correct – and it is in fact fatally flawed – it would not apply to terrorist financing.[xiii] For here the motive is hardly profit – money is an resource, not an end in itself. And the notion that large sums of money are necessary to pull off operations is simply false.

On the tactical level the problem is not only to follow a trail that involves small sums (keep in  mind the daily clearing of $3 trillion through New York each day) but one that may already be several years old. On the strategic level, the theory only makes sense if there really are substantial sums out there waiting to be deployed, and if stopping the financial flow will actual preclude further attacks – a doubly dubious assumption. Given the relatively small sums involved, anyone intent on a terrorist outrage can move the money in cash, have it stuffed into a debit card, or resort to one of a whole range of informal value transfer systems that work without any kind of paper or electronic trail outside the formal financial system. Much more sensible would be to put all the energy and talent into directly tracing down the individuals and groups responsible. After all, the main resource the people who did the September 11 operation possess is not money, it is commitment, and that cannot be frozen in a bank account.

Not least, most of the new regulations being brought into play in the U.S., much as with the tax changes, are have little or nothing to do with control of terrorist financing. The problem was that the follow-the-money measures demanded and usually obtained by law enforcement over the last two decades had finally begin to test the limits. More and more people criticized its excesses, and pointed to the enormous regulatory burden compared to the paucity of results. As a result, prodded on by the financial industry, the Bush Administration began to back off, both in terms of domestic regulations and in terms of attempting to force the rest of the financial world into following an American model.

Now, in the wake of September 11, there has been a dramatic reversal. Already passed or in the works are know-your-client rules that turn bankers into police informants, the granting to Treasury of the power to ban foreign banks from the U.S. if they fail to cooperate in American investigations, restrictions on transactions with offshore shell banks, stronger powers to investigate funds from acts of corruption, the right to confiscate any cash sum greater than $10,000 crossing the U.S. border even if it is properly declared, and so forth. They also include efforts to regulate informal transfer systems, the type typical of much of Asia where the banks provide poor service to lower income groups. Perhaps some of these measures are justified in their own right. But few have any direct connection with combating terrorism. Rather they represent a long-standing wish-list of law enforcement. Hence, much as with the Bush “fiscal stimulus” package, passing of such measures now is an act of political opportunism.

Perhaps most severely affected will be the networks of Islamic charities across North America and western Europe. They are essential to the well-being of the home countries of the donor population – sometimes remittances from the émigré population exceed foreign trade receipts. For across the Muslim world, massive unemployment and drastic cutbacks in social services (often dictated by western financial institutions) coincide with fiscally strapped, corrupt or incompetent governments. This throws the burden of providing essential social services on the Islamic charities, precisely the ones now being harassed and in some cases closed. 

Although prognosis in such a fluid situation is always dangerous, beyond the obvious danger to civil liberties and to the position of ethno-religious minorities, there seems to be five likely consequences.

First will be a rise in the covert action budgets of the major intelligence services. (The CIA has already received an extra billion.) In the wake of Vietnam, covert action fell into disrepute; during the Reagan-Bush era the covert action capacity of U.S. intelligence was rebuilt; during the Clinton years, it languished again. Now the pendulum is again swinging in favour of the shadow warriors. That will inevitably lead to more intelligence service excesses of precisely the type that incubated the networks which pulled off the September 11 outrage.

Second will be a rise in military budgets. Defense contractors, still reeling from the end of the Cold War, will find their stock rising, literally and figurative, particularly as the Pentagon finds the equipment designed to combat other superpowers rather inappropriate, to say the least, for the kind of terrain and the sort of enemy places like Afghanistan host.

Third will be a series of ugly little wars, and some not so little, as states, large and small, move to settle scores and crush opposition groups in the combined name of national security and counter-terrorism. Supposed Islamist groups will be the first, but certainly not the only ones.

Fourth will be a shot of high octane fuel for the carbon club. Who can ask for curbs on greenhouse gas emissions or restraints on drilling in fragile environments when America is under siege, its energy lifeline threatened by the Saracen hordes? Indeed, one of the real prizes of the current campaign is precisely the fossil fuel resources of Central Asia, the world’s last great untapped source. The fact that the world cannot afford to burn already proven reserves without risking climate catastrophe is unlikely to slow down the process.

Fifth, to Afghanistan, as a result of this most recent assault (it would be absurd to grace it with the term “war”), millions more may well flee or starve or both, and what remains of the civilian infrastructure (recall the phrase “dual purpose” used to rationalize the carnage unleashed against Iraq) obliterated. Inevitably the Taliban will be largely smashed (to call such a gross inbalance of force a war is preposterous) and reduced to a guerrilla remnant. But the country is more likely to disintegrate back into feuding fiefdoms based on clan, tribe and control of contraband than anything resembling a normal state. As such it is more likely to be an even greater incubator of terrorist activities than before.

The uncomfortable truth is that very little is actually known about the perpetrators of September 11, their organizational infrastructure or their financial resources; and what clues do exist seem to point in a quite different direction from those suggested by the widely-held stereotype. As a result, policies and responses have a remarkably improvised, even desperate air, a sort of blind lashing-out at external devils instead of carefully reasoned probes of social and political ills, which are, to some degree, the consequences of past mistakes. And this is a very dangerous basis indeed on which to base profound and potentially long-term decisions which will critically affect national security, criminal law and social justice.