U.S. officials: Cash from Iraq funds Al Qaeda - As CIA hunts for bin Laden, it uncovers money trail

U.S. officials: Cash from Iraq funds Al Qaeda - As CIA hunts for bin Laden, it uncovers money trail
By Greg Miller
Copyright © 2007, Chicago Tribune and The Los Angeles Times
Published May 20, 2007

WASHINGTON -- A major CIA effort launched last year to hunt down Osama bin Laden has produced no significant leads on his whereabouts but has helped track an alarming increase in the movement of Al Qaeda operatives and money into Pakistan's tribal territories, according to senior U.S. intelligence officials familiar with the operation.

In one of the most troubling trends, U.S. officials said that Al Qaeda's command base in Pakistan increasingly is being funded by cash coming out of Iraq, where the terrorist network's operatives are raising substantial sums from donations to the anti-American insurgency as well as kidnappings of wealthy Iraqis and other criminal activity.

The influx of money has bolstered Al Qaeda's leadership ranks at a time when the core command is regrouping and reasserting influence over its far-flung network. The trend also signals a reversal in the traditional flow of Al Qaeda funds, with the network's leadership surviving to a large extent on money coming in from its most profitable franchise, rather than distributing funds from headquarters to distant cells.

Little more than a year ago, Al Qaeda's core command was thought to be in a financial crunch. But U.S. officials said cash shipped from Iraq has eased those troubles.

"Iraq is a big moneymaker for them," said a senior U.S. counterterrorism official.

The evolving picture of Al Qaeda's finances is based in part on intelligence from an aggressive effort launched last year to intensify the pressure on bin Laden and his senior deputies.

As part of a "surge" in personnel, the CIA deployed as many as 50 clandestine operatives to Pakistan and Afghanistan. All the new arrivals were given the primary objective of finding what counterterrorism officials call "HVT1" and "HVT2"-- bin Laden and his top deputy, Ayman al-Zawahri.

Nevertheless, U.S. intelligence and military officials said, the surge has yet to produce a single substantiated lead on the two targets' location.

"We're not any closer," said a senior U.S. military official who monitors the intelligence on the hunt for bin Laden.

Current and former U.S. intelligence officials involved in the CIA surge said it had been hobbled by a number of other developments. Chief among them, they said, is Pakistan's troop pullout last year from border regions where the hunt has been focused. Just months after the CIA deployed its additional operatives, Pakistani President Pervez Musharraf announced "peace agreements" with tribal leaders in Waziristan.

Driven by domestic political pressures and rising anti-American sentiment, the agreements called for the tribes to rein in the activities of foreign fighters and bar them from launching attacks in Afghanistan, in exchange for a Pakistani military pullback.

But U.S. officials said there is little evidence that the tribal groups have followed through.

"Everything was undermined by the so-called peace agreement in North Waziristan," said a senior U.S. intelligence official responsible for overseeing counterterrorism operations. "Of all the things that work against us in the global war on terror, that's the most damaging development. The one thing Al Qaeda needs to plan an attack is a relatively safe place to operate."

Some officials in the administration initially expressed concern over the Pakistani move, but President Bush later praised it, following a White House meeting with Musharraf.

But the Pakistani pullback took significant pressure off Al Qaeda leaders and the tribal groups protecting them, officials said. It also made travel easier for operatives migrating to Pakistan after taking part in the insurgency in Iraq.

Some of these veterans are leading training at newly established camps and are positioned to become the "next generation of leadership" in the organization, said the former senior CIA official.

"Al Qaeda is dependent on a lot of leaders coming out of Iraq for its own viability," said the former official, who recently left the agency. "It's these sorts of guys who carry out operations."

The official added that the resurgent Taliban forces in Afghanistan are "being schooled" by Al Qaeda operatives with experience fighting U.S. forces in Iraq.