Paying huge ransoms, Europe bankrolls Al Qaeda terror network

The terror outfits have received at least $125 million in revenue from kidnappings since 2008

The cash filled three suitcases: Five million euros. The German official charged with delivering this cargo arrived at Bamako, Bali, aboard a nearly empty military plane and was whisked away to a secret meeting with the president of Mali, who had offered Europe a face-saving solution to a vexing problem.

Officially, Germany had budgeted the money as humanitarian aid for the poor, landlocked nation of Mali. In truth, all sides understood that the cash was bound for an obscure group of Islamic extremists who were holding 32 European hostages, according to six senior diplomats directly involved in the exchange.

The suitcases were loaded onto pickup trucks and driven hundreds of miles north into the Sahara, where the bearded fighters, who would soon become an official arm of Al Qaeda, counted the money on a blanket thrown on the sand. The 2003 episode was a learning experience for both sides. Eleven years later, the handoff in Bamako has become a well-rehearsed ritual, one of dozens of such transactions repeated all over the world.

Kidnapping Europeans for ransom has become a global business for Al Qaeda, bankrolling its operations across the globe. While European governments deny paying ransoms, an investigation by The New York Times found that Al Qaeda and its direct affiliates have taken in at least $125 million in revenue from kidnappings since 2008, of which $66 million was paid just last year.

In news releases and statements, the United States treasury department has cited ransom amounts that, taken together, put the total at around $165 million over the same period. These payments were made almost exclusively by European governments, who funnelled the money through a network of proxies, sometimes masking it as development aid, according to interviews conducted for this article with former hostages, negotiators, diplomats and government officials in 10 countries in Europe, Africa and the Middle East.

The inner workings of the kidnapping business were also revealed in thousands of pages of internal Qaeda documents found by this reporter while on assignment for The Associated Press in northern Mali last year.
In its early years, Al Qaeda received most of its money from deep-pocketed donors, but counterterrorism officials now believe the group finances the bulk of its recruitment, training and arms purchases from ransoms paid to free Europeans. Put more bluntly, Europe has become an inadvertent underwriter of Al Qaeda.

The foreign ministries of Austria, France, Germany, Italy and Switzerland denied in emails or telephone interviews that they had paid the terrorists. “The French authorities have repeatedly stated that France does not pay ransoms,” said Vincent Floreani, deputy director of communication for France’s ministry of foreign affairs.

Source of terror financing

Several senior diplomats involved in past negotiations have described the decision to pay ransom for their countries’ citizens as an agonizing calculation: Accede to the terrorists’ demand, or allow innocent people to be killed, often in a gruesome, public way? Yet the fact that Europe and its intermediaries continue to pay has set off a vicious cycle.

“Kidnapping for ransom has become today’s most significant source of terrorist financing,” said David S Cohen, the US treasury department’s under secretary for terrorism and financial intelligence, in a 2012 speech. “Each transaction encourages another transaction.”

And business is booming: While in 2003 the kidnappers received around $200,000 per hostage, now they are netting up to $10 million, money that the second in command of Al Qaeda’s central leadership recently described as accounting for as much as half of his operating revenue. “Kidnapping hostages is an easy spoil,” wrote Nasser al-Wuhayshi, the leader of Al Qaeda in the Arabian Peninsula, “which I may describe as a profitable trade and a precious treasure.”

The stream of income generated is so significant that internal documents show that as long as five years ago, Al Qaeda’s central command in Pakistan was overseeing negotiations for hostages grabbed as far afield as Africa. Moreover, the accounts of survivors held thousands of miles apart show that the three main affiliates of the terrorist group — Al Qaeda in the Islamic Maghreb, in northern Africa; Al Qaeda in the Arabian Peninsula, in Yemen; and the Shabab, in Somalia — are coordinating their efforts and abiding by a common kidnapping protocol.

A video made by the militants who orchestrated a 2003 kidnapping of 32 Europeans shows that they had no idea what they were doing. To minimize the risk to their fighters, the terror affiliates have outsourced the seizing of hostages to criminal groups who work on commission. Negotiators take a reported 10 per cent of the ransom, creating an incentive on both sides of the Mediterranean to increase the overall payout, according to former hostages and senior counterterrorism officials.

Their business plan includes a step-by-step process for negotiating, starting with long periods of silence aimed at creating panic back home. Hostages are then shown on videos begging their government to negotiate. Although the kidnappers threaten to kill their victims, a review of the known cases revealed that only a small percentage of hostages held by Qaeda affiliates have been executed in the past five years, a marked turnaround from a decade ago, when videos showing beheadings of foreigners held by the group’s franchise in Iraq would regularly turn up online. Now the group has realized it can advance the cause of jihad by keeping hostages alive and trading them for prisoners and suitcases of cash.

Only a handful of countries have resisted paying, led by the US and Britain. Although both these countries have negotiated with extremist groups — evidenced most recently by the United States’ trade of Taliban prisoners for Sgt. Bowe Bergdahl — they have drawn the line when it comes to ransoms.

It is a decision that has had dire consequences. While dozens of Europeans have been released unharmed, few American or British nationals have gotten out alive. A lucky few ran away or were rescued by special forces. The rest were executed or are being held indefinitely.

“The Europeans have a lot to answer for,” said Vicki Huddleston, the former US deputy assistant secretary of defence for African affairs, who was the ambassador to Mali in 2003 when Germany paid the first ransom. “It’s a completely two-faced policy. They pay ransoms and then deny any was paid.” She added, “The danger of this is not just that it grows the terrorist movement, but it makes all of our citizens vulnerable.”

On Feb. 23, 2003, a group of four Swiss tourists, including two 19-year-old women, woke up in their sleeping bags in southern Algeria to the shouts of armed men. The men told the young women to cover their hair with towels, then commandeered their camper van and took off with them. Over the coming weeks, another seven tour groups travelling in the same corner of the desert vanished. European governments scrambled to find their missing citizens.

Armed with a few hunting rifles and old AK-47s, the kidnappers succeeded in sweeping up dozens of tourists over several consecutive weeks, mostly from Germany, but also from Austria, the Netherlands, Sweden and Switzerland. Though they planned the first few ambushes, they appear to have grabbed others by chance, like a pair of hapless 26-year-olds from Innsbruck, Austria, who were spotted because of the campfire they had lit to cook spaghetti.

Beyond the initial grab, the kidnappers did not seem to have a plan. The only food they had was the canned goods the tourists had brought with them. The only fuel was what was in each gas tank. They abandoned the cars one by one as they ran out of fuel, forcing their hostages to continue on foot.

A 47-year-old Swedish hostage, Harald Ickler, remembers being so hungry that when he found a few leftover Danish butter cookie crumbs, he carefully scooped them into the palm of his hand and then let them melt in his mouth. “Once they had us, they didn’t seem to know what to do with us,” said Reto Walther of Untersiggenthal, Switzerland, who was in one of the first groups to be grabbed. “They were improvising.”

Despite the operation’s amateur nature, the jihadists had hit a soft spot. Almost none of the hostages had resisted, simply putting up their hands when they saw the gunmen. And although the Europeans outnumbered their captors, the hostages never tried to run away during what turned into a six-month captivity for some of them, and described the foreboding desert surrounding them as an “open-air prison.”

Impossible demands

Crucially, although the European nations had firepower superior to that of the scrappy mujahedeen, they deemed a rescue mission too dangerous. The jihadists asked for weapons. Then for impossible-to-meet political demands, like the removal of the Algerian government. When a 45-year-old German woman died of dehydration, panicked European officials began considering a ransom concealed as an aid payment as the least-bad option.

“The Americans told us over and over not to pay a ransom. And we said to them: ‘We don’t want to pay. But we can’t lose our people,’” said a European ambassador posted in Algeria at the time, who was one of six senior Western officials with direct knowledge of the 2003 kidnapping who confirmed details for this article. All spoke on the condition of anonymity because the information remains classified. “It was a very difficult situation,” he said, “but in the end we are talking about human life.”

A year later, in 2004, a Qaeda operative, Abdelaziz al-Muqrin, published a how-to guide to kidnapping, in which he highlighted the successful ransom negotiation of “our brothers in Algeria.” Yet at the same time, he also praised the execution of the Wall Street Journal reporter Daniel Pearl, who was grabbed in Pakistan in 2002 and beheaded nine days later by Khalid Shaikh Mohammed, a senior Qaeda member believed to be one of the architects of the Sept. 11 attacks. Within a few years, there was a split within Al Qaeda, with the group’s affiliate in Iraq grabbing foreigners specifically to kill them.

Ransom as a main lifeline

They used the €5 million as the seed money for their movement, recruiting and training fighters who staged a series of devastating attacks. They grew into a regional force and were accepted as an official branch of the Qaeda network, which baptized them Al Qaeda in the Islamic Maghreb. As kidnapping revenue became their main lifeline, they honed and perfected the process.

By Feb. 2, 2011, when their lookouts in southern Algeria spotted a 53-year-old Italian tourist, Mariasandra Mariani, admiring the rolling dunes through a pair of binoculars, they were running a sleek operation. Her tour guide was the first to spot them, and screamed at her to run.

As their cars sped toward her, she sprinted to her nearby desert bungalow and locked herself inside. She could do nothing but sit frozen on the mattress as they broke down the door. They threw her in a waiting car, handcuffing her to the dashboard. Before they sped off, they made sure to place a rolled-up blanket next to her, so that the jihadist sitting next to her would not accidentally make contact with a woman. “Who are you?” she asked them. “We are Al Qaeda,” they replied.

If previous kidnapping missions did not seem to have a thought-out plan, the gunmen who seized Ms Mariani drove for days on what appeared to be a clearly delineated route. Whenever they were low on fuel, they would make their way to a spot that to her looked no different in the otherwise identical lunar landscape.

Ms Mariani would later learn they had an infrastructure of supplies buried in the sand and marked with GPS coordinates. One afternoon they stopped just above the lip of a dune. The fighters got down and unfastened a shovel. Then she heard the sound of a car engine. Suddenly a pickup truck roared out. They had buried an entire vehicle in the mountain of sand. “It was then that I realized, these aren’t just normal criminals,” Ms Mariani said.

Weeks passed before Ms. Mariani’s captors announced that they were going to allow her to make a phone call. They drove for hours until they reached a plateau, a flat white pan of dirt. During her 14-month captivity, whenever the kidnappers felt that attention had flagged, they erected a tent in the desert and forced Ms. Mariani to record a video message, showing her surrounded by her armed captors.

All over Europe, families rallied, pressuring governments to pay. Ms Mariani was ultimately released, along with two Spanish hostages, for a ransom that a negotiator involved in her case said was close to €8 million. The bulk of the kidnappings-for-ransom carried out in Al Qaeda’s name have occurred in Africa, and more recently in Syria and Yemen. These regions are thousands of miles from the terror network’s central command in Pakistan.

Yet audio messages released by the group, as well as confidential letters between commanders, indicate the organization’s senior leaders are directly involved in the negotiations. As early as 2008, a commander holding two Canadian diplomats angered his leaders by negotiating a ransom on his own.

In a letter discovered by this reporter in buildings abandoned by the jihadists in Mali last year, Al Qaeda in the Islamic Maghreb blamed the commander, Mokhtar Belmokhtar, for securing only the “meager sum” of €700,000 — around $1 million — saying the low amount was a result of his unwillingness to follow the instructions of the group’s leadership in Pakistan.