From New York Times, 5 December 2010, by ERIC LICHTBLAU and ERIC SCHMITT:
WASHINGTON — Nine years after the United States vowed to shut down the money pipeline that finances terrorism, senior Obama administration officials say they believe that many millions of dollars are flowing largely unimpeded to extremist groups worldwide, and they have grown frustrated by frequent resistance from allies in the Middle East, according to secret diplomatic dispatches.
The government cables, sent by Secretary of State Hillary Rodham Clinton and senior State Department officials, catalog a list of methods that American officials suspect terrorist financiers are using, including a brazen bank robbery in Yemen last year, kidnappings for ransom, the harvesting of drug proceeds in Afghanistan and fund-raising at religious pilgrimages to Mecca, where millions of riyals or other forms of currency change hands.
While American officials have publicly been relatively upbeat about their progress in disrupting terrorist financing, the internal State Department cables, obtained by WikiLeaks and made available to several news organizations, offer a more pessimistic account, with blunt assessments of the threats to the United States from money flowing to militants affiliated with Al Qaeda, the Taliban, Hamas, Lashkar-e-Taiba and other groups.
A classified memo sent by Mrs. Clinton last December made it clear that residents of Saudi Arabia and its neighbors, all allies of the United States, are the chief financial supporters of many extremist activities. “It has been an ongoing challenge to persuade Saudi officials to treat terrorist financing emanating from Saudi Arabia as a strategic priority,” the cable said, concluding that “donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.”
The dispatch and others offered similarly grim views about the United Arab Emirates (“a strategic gap” that terrorists can exploit), Qatar (“the worst in the region” on counterterrorism) and Kuwait (“a key transit point”).
The cable stressed the need to “generate the political will necessary” to block money to terrorist networks — groups that she said were “threatening stability in Pakistan and Afghanistan and targeting coalition soldiers.”
While President George W. Bush frequently vowed to cut off financing for militants and pledged to make financiers as culpable as terrorists who carried out plots, President Obama has been far less vocal on the issue publicly as he has sought to adopt a more conciliatory tone with Arab nations. But his administration has used many of the same covert diplomatic, intelligence and law enforcement tools as his predecessor and set up a special task force in the summer of 2009 to deal with the growing problem.
...In hundreds of cables focusing on terrorist financing, the problem takes on an air of intractability, as American officials speak of the seeming ease with which terrorists are able to move money, the low cost of carrying out deadly attacks, and the difficulty of stopping it. Interdictions are few, and resistance is frequent.
In Kuwait, for instance, American officials have voiced repeated concerns that Islamic charities — largely unregulated by the government there — are using philanthropic donations to finance terrorism abroad...
Saudi Arabia, a critical military and diplomatic ally, emerges in the cables as the most vexing of problems. Intelligence officials there have stepped up their spying on militants in neighboring Yemen, and they provided the tip that helped uncover the recent parcel bombs. But while the Saudis have made some progress, “terrorist funding emanating from Saudi Arabia remains a serious concern,” according to a cable in February. Mrs. Clinton’s memo two months earlier said Al Qaeda, the Taliban, Lashkar-e-Taiba and other groups “probably raise millions of dollars annually from Saudi sources, often during Hajj and Ramadan.” Officials said they believed that fund-raisers for extremist groups had often descended on the pilgrims to seek money for their causes...