Foreign Policy Essay

The Foreign Policy Essay: Elizabeth Dickinson on "Financing Extremism in Syria"

By Daniel Byman
Sunday, December 22, 2013, 10:00 AM

The civil war in Syria has confounded U.S. policymakers, who worry about the mounting humanitarian crisis, the collapse of the Syrian state, the prominent Iranian presence, and especially the growing role of jihadist terrorists in the conflict---yet have proven unable to halt or even stem these problems.  One of the most vexing issues, however, is that the United States is often at odds with the preferences of allied publics. In particular, wealthy individuals in the Gulf are important donors to jihadist groups in Syria, with Kuwait proving an especially troubling problem. Elizabeth Dickinson’s piece here discusses this serious issue, which the United States has so far been unable to stop and often fails to understand.  Because this financing continues, radical groups are stronger, sectarianism is worse, and the overall Syrian opposition is more fragmented.

Elizabeth Dickinson is Gulf correspondent for The National and author of the report for the Brookings Institution's Project on U.S.-Islamic World Relations, "Playing with Fire: Why Private Gulf Financing for Syria's Extremist Rebels Risks Igniting Sectarian Conflict at Home," from which this blog post is adapted.

Sometime in early 2012 in a meeting with his colleagues, Kuwaiti cleric Shafi Al Ajmi pulled out a map of Syria. One of the major donors to rebels fighting against President Bashar Al Assad, Ajmi had for months organized Syrian expatriates, Kuwaiti donors, and fellow clerics in support of Salafist brigades. Referring to his map of Deir Ez Zour, Ajmi knew where the rebels operated, and where their positions were strong and weak. “He knows everything,” one witness to the meeting said. “He has a project.”

From the very moment that the once-peaceful Syrian uprising began to militarize in the winter of 2011 and early 2012, private donors from across the Gulf have piled in. Their involvement has become one of the thorniest topics for anyone seeking to secure a political solution to the conflict there. Many of these donors have specific goals and ideological agendas for their beneficiaries in Syria, a fact that has contributed to the fracturing of the military opposition and the strengthening of its extremist components. As the conflict has dragged on, a growing proportion of these donors view Syria’s crisis in existential sectarian terms.

dickinson-8618Despite its magnitude and implications, however, little has been done to curb private financing. And today, rebel brigades with independent funding channels are among the most powerful and the most extreme in Syria.

Kuwait was the obvious choice for these financiers. While other Gulf states passed strong counter-terrorism financing laws after the September 11, 2001 attacks, Kuwait’s 2002 law failed to explicitly criminalize terrorist finance. The broad language made it difficult until recently to follow up on suspected cases, and few prosecutions have been undertaken. Weak legislation was complimented by Kuwait’s relatively pluralistic political atmosphere, in which free assembly, political associations, and NGOs are all legal.

The networks now active in private financing have been built up over years, if not decades, across the Gulf. During the Iraq War next door, clerical networks rallied against the American troop presence. They were reactivated in late 2011 in support of the Syrian rebels, many of whom draw from the country’s Sunni majority and are opposed to Assad’s Allawite-led government. Allawi Islam, a splinter of Shiism, is considered by Salafists to be among the most heretical sects, and indeed, many donors paint adherents as an abomination.

Kuwaiti involvement in Syria began in 2011 with humanitarian work. Syrian expats, of which there are estimated to be more than 100,000, approached prominent individuals and religious charities in the hopes of accessing their deep networks of wealthy donors.

Yet not long after the fundraising began, these same charities and individual clerics began to partition their money between non-lethal and lethal aid. Donors sought to create or bolster armed factions in an attempt to speed up the ousting of Assad. Armed group liaisons in Kuwait approached individual backers and requested funding. Like any good businessmen, the Kuwaiti backers wanted to see returns on their investments; in early 2012, rebels released a slew of YouTube videos hailing the creation of brigades—some even named after their donors in Kuwait.

These early days in 2012 saw the most broad-based contributions from Kuwaitis themselves, many of whom were genuinely optimistic about the prospect of change in Syria and disgusted by the behavior of the Assad regime. Sunni tribes held large-scale gatherings, small-time donors contributed to the cause, and Syria became a political fad, particularly among the country’s vocal Sunni-led opposition, which coincidentally was on the political ascent throughout 2012. In addition to clerical involvement, numerous politicians, including then-members of parliament, began raising funds and even traveling to Syria to visit their brigades.

But when the conflict didn’t end as quickly or neatly as many had hoped, the popular funding began to dry up and only the hardliners remained. The money that continued to flow was channeled through increasingly extremist networks.  Several major donor groups have emerged, each backing their own Salafist factions, the majority of which have cooperated with Jabhut Al Nusra, a group that the U.S. government labeled a terrorist organization in December 2012.

Based on fieldwork and dozens of interviews, I estimate that hundreds of millions of dollars have been raised for the Syrian opposition by private donors over the last two and a half years of the uprising. Kuwaiti fundraisers have also gathered funds from other Gulf citizens, whose governments are more vigilant in monitoring—particularly Saudi Arabia.  Riyadh has closely watched border posts and bank accounts, as well as warned specific clerics to channel their would-be assistance through the Saudi government’s own humanitarian contributions. On November 4, the Saudi Cabinet also approved a measure that would grant a significant fiscal reward—5 percent of any amount confiscated—to anyone who reports money laundering or terrorist financing operations, provided he is not party to the crime himself.

But donors in Saudi Arabia often just send their money on a brief detour to the Kuwaiti financial system. Given the extensive family and business ties between the two countries, money transfers are common and don’t necessarily raise any red flags. Donors have used everything from direct bank transfers to hawala agents to cash, receive, and send these funds. In recent months, as the conflict in Syria has grown more intense and the scrutiny of funds accelerated slightly, some donors have traveled directly to Kuwait carrying donations in cash. Several Kuwaiti donors also appear to have representatives elsewhere in the Gulf who are designated to receive contributions on their behalf.

Equally alarming is the body of evidence that it is not just Kuwaiti Sunnis, but also Kuwaiti Shiites who have invested in the Syrian conflict. Shiite supporters of the Assad regime have held events in Kuwait, and appear to have raised funds in the millions of dollars. This is a significant area for further investigation, as it could violate U.S. Treasury Sanctions on various individuals linked to the Assad regime.

The US Treasury Department is aware of the risk of private donors, but caveats that some of the hundreds of millions they believe have been raised has been directed toward humanitarian work. When funds are chanelled to lethal aid, a senior treasury official said: “[T]he recipients of these private funds are often extremist groups, including Al Qaeda's Syrian affiliate, the Nusrah Front, which operate outside the command structure of the [Western-backed] Syrian Joint Military Command Council”.

Meanwhile, U.S. diplomats have consistently underestimated both the scope and the importance of private donors to the Syrian conflict. In my conversations with Western diplomatic officials who have been tasked with working on the Gulf over the last year, not one has named the issue as a priority; most have simply characterized the issue as too diffuse—and too small potatoes—to focus on. When the State Department did comment on the issue after a high-profile article in the New York Times, it appeared not to have noticed that the Kuwaiti government had passed new legislation over the summer.

Indeed, the Kuwaiti government finally signed into law a long-delayed bill that criminalizes terrorist financing and gives the central bank authority to investigate suspicious transfers. The new legislation will create a Financial Intelligence Unit—to be established with the assistance of the IMF—broadly empowered to undertake forensic investigation. Banks have already received circulars about how these changes will prevent them from operating anonymous accounts and require passport or ID information for all international transfers over $10,000 USD.

This legislation is extremely promising, but it is also brand new--and like all laws, will take time to implement. While there is some evidence that the Kuwaiti government is keen to cut private financing channels, many others still remain open—and obviously so. Twitter, Facebook, and YouTube broadcast a constant stream of solicitations for funds to the Syrian mujahedeen.

If the United States and other Western allies pressure Kuwait to do more, there is one final complication: despite the fact that Kuwait remains a conduit for private military financing, the country’s NGOs are also among the most generous and effective in the region. Separating these two types of aid is vital, as Kuwait is today the single largest regional donor to humanitarian assistance and will convene an international UN donors conference in January—the second of its kind—to raise funds for relief.

Meanwhile, two and a half years later, private donor networks for Syria’s opposition are entrenched, savvy, and adept at avoiding authorities---and long-term stability in Syria may depend on the international community’s ability to limit their cash flow.