Sunday, October 27, 2019

USAID Has A Terror Finance Problem, by Cliff Smith

Washington Examiner

The U.S. Treasury recently decided to level sanctions against the Lebanon-based Jammal Trust Bank for supporting Hezbollah's illicit financial and banking activities. This led almost immediately to the bank's collapse, showing just how much of an effect targeted sanctions can have.

This is a welcome development that may well deter others from working with terrorists or working with those who fund terrorists.

But unfortunately, one group seemingly in need of such a deterrence is part of our own government. The U.S. Agency for International Development, as late as last year, was still openly touting its work with Jammal Trust.

Indeed, in a series of Facebook posts in 2018, USAID Lebanon openly touted a $250,000 grant in "partnership" with Jammal Trust for their "The Livelihoods and Inclusive Finance Expansion" project, which was aimed at expanding microfinance to Lebanese entrepreneurs. Jammal Trust reciprocated the celebration, advertising the same program on their Facebook page (since removed, but still visible here).

It is true that until last month, Jamaal Trust was not a sanctioned entity. However, the problems with the bank are not new. Treasury's press release announcing sanctions specifically mentions that the relationship between Hezbollah and Jamaal Trust went back to "at least the mid-2000s." Wikileaks documents show that American diplomatic officials have been raising these concerns with Jammal Trust officials since at least 2007. And earlier this year, a major lawsuit was filed on behalf of victims of Hezbollah's terrorism that named Jamaal Trust as a defendant.

In other words, this problem had been percolating well before USAID entered into its partnership with Jamaal Trust.

If this were the first time USAID had been funding groups closely linked to terrorism in regions dominated by terrorist organizations, it could be written off as a simple mistake. Unfortunately, it's a recurring issue.

In 2014, USAID, through the evangelical charity World Vision, subgranted a six figure sum to the Islamic Relief Agency, a Sudanese-based group that the United States had designated as terror financiers in 2004 for providing funds to Osama bin Laden and other terrorists. While this was largely the fault of World Vision, which failed to responsibly vet its subcontractors, USAID did little or nothing to catch the error. It is especially troubling to rely on World Vision's due diligence, as the organization has previously been involved with U.S.-designated terror groups Hamas, INTERPAL, and the People's Front for the Liberation of Palestine.

Worse still: This wasn't the first time ISRA had benefited from a USAID grant since being designated by the U.S. Misappropriated USAID money funded former Rep. Mark Siljander's illegal efforts to get ISRA delisted as a designated terror finance group.

Prior to that, USAID had funded the READ Foundation in Pakistan-controlled Kashmir, one of the most dangerous flashpoints in the world. READ is openly affiliated with Jamaat-e-Islami, a radical theocratic group with a long, violent history. Some wings of Jamaat-e-Islami, such as Hizbul Mujahideen, are designated as terrorists by both the U.S. and the U.N., and openly claim responsibility for terrorism in Kashmir. Nonetheless, USAID saw fit to give the READ Foundation over $2 million.

Muslim Aid, another group established by Jamaat-e-Islami activists, has also received USAID grants. Documents recently released pursuant to a Freedom of Information Act request show that Treasury's Office of Foreign Asset Control, in charge of stopping funds to terrorist groups, looked into Muslim Aid as a potential terror financer in 2015. The group had received more than $1.5 million from USAID in 2013, three years after it admitted to funding Hamas organizations.

Finally, Islamic Relief Worldwide and its branches (not to be confused with ISRA, a separate organization) are designated as terror financers by the United Arab Emirates and Israel. One of its founders, Essam El Haddad, was just sentenced to 10 years in jail by an Egyptian court because of his collaboration with Hamas while involved with both Islamic Relief and the short-lived Morsi regime.

Tunisia and Bangladesh have accused Islamic Relief of terror finance and attempts at radicalizing vulnerable refugees, respectively. All this caught the eye of the House Oversight and Government Reform Committee last year, with witnesses and members denouncing Islamic Relief.

Nonetheless, USAID has partnered extensively with Islamic Relief, providing them with over $1.5 million dollars since 2014 and even jointly sponsoring Iftar dinners.

While the specifics in each case differ, the pattern is somewhat alarming of USAID failing to delve deeply into the unsavory alliances and ideologies of groups that receive its funds. As the American Enterprise Institute's Jessica Darden, an expert on the nexus between aid and terrorism, points out, even USAID's own inspector general, as a result of a partial audit, said USAID gave away $700 million in awards without an adequate system to ensure funds don't benefit terrorists.

Much of the aid community seems resentful of existing restrictions, instead demanding lighter ones. They would like to see restrictions apply only when there is a clear "diversion" of funds to terrorism directly. But even if funds end up in the pockets of groups connected to terrorist groups' welfare and political arms, the problem remains. As Supreme Court Justice Elena Kagan once said, "When you help Hezbollah build homes, you help Hezbollah build bombs."

USAID, through their partnership with Jammal Trust, did precisely this. Giving funds to extremists and their enablers both provides unearned legitimacy and frees up other funds for nefarious deeds.

The chief problem seems to lie with USAID's vetting policy. In the cases of Jamaal Trust, Islamic Relief, and Muslim Aid, USAID appeared unconcerned with handing out taxpayer's money to radicals because the only cause for prohibition would have been inclusion on the Treasury Department's list of designated terrorist entities. None of the groups was present on the list at that time. And in the case of ISRA, USAID relied on a problematic third party to check whether ISRA was on the list or not.

The Trump administration should follow up on its tough rhetoric toward radical Islamic networks by taking the practical step of broadening USAID's vetting approach. Mere exclusion from the designated terror list should not be enough. A higher standard should be required to actually receive government funds than simply not being barred from receiving them. Instead, USAID should check itself to see if recipients of U.S. government funds have any connection at all to an entity on the list. This stricter policy would have excluded all of the terror-linked charities named above from receiving U.S. government grants.

If USAID's policy does not change, expect more instances in which well-intentioned grant programs end up subsidizing unspeakable acts of terrorism instead of saving lives.

Cliff Smith is Director of the Middle East Forum's Washington Project.