Kidnapping and construction: Al-Qaeda turns to big business, mafia-style

niqash Ahmad Salama wed 06 apr 11

Recently terrorist organizations in Mosul have been acting more like European criminal mafias, going into business for themselves and extorting money from everyone, from government departments to vegetable sellers. His children are safe and Ahmad al-Taei praises God "a thousand times" for that.

The Mosul businessman sacrificed most of his wealth to save both children after they were kidnapped by an armed group. The grateful father preferred not to disclose the exact amount he paid to have his two sons released. He will only say that it was in the tens of thousands of US dollars. “Many rich people in Mosul have been blackmailed by terrorist organizations in different ways,” al-Taei said, “as they attempt to collect money following the loss of external sources of support.”

There is no doubt that over the past two years, local contractors – everyone from the owners of construction companies to plumbing services - in Mosul have become a major source of income for Iraqi terrorist organizations. Nobody wants to talk about it openly – in fact, most of those interviewed for this story only spoke to NIQASH on condition of anonymity for fear of reprisals from terrorist groups.

But according to one local analyst, the groups are evolving from religious crusaders into criminal mafias and even emulating the contracting businesses themselves. The people of Mosul, capital of the northern Iraqi province of Ninawa with close to two million inhabitants, can all remember the day that the Islamic State of Iraq (ISI), an umbrella organization that includes al-Qaeda and other militant groups, announced that it had taken control of the city’s institutions. The only exception was the Provincial Council building, which was protected by US forces.

It was Nov 11, 2005 and members of the ISI managed to dispel local police and armed forces after destroying police stations and the homes of police officers. They also terrorized the city, targeting minorities and imposing strict religious rules on its citizens. As one local contractor told NIQASH: “Since 2005, the ISI al-Qaeda organization has allowed us to work.

But only on the condition that they get a percentage of each project’s budget.” Another local contractor estimates that, “at the time, the percentage being paid to the [ISI] members was 10 percent on each project.” In May 2008 a military campaign, Operation Umm al-Rabiain (the name, mother of two springs, is the city of Mosul’s nickname) was launched by the Iraqi Prime Minister Nouri al-Maliki. The campaign’s aim was to push al-Qaeda back out of the city and it had a significant impact on the overt presence of terrorist groups in the city.

But, as a contractor explained, the groups simply went underground and this meant that pressure on locals was applied in different ways. “Instead of targeting homes and businesses with explosive devices, al-Qaeda started kidnapping and assassinating,” the contractor said. According to a number of businessmen that NIQASH has spoken to in the area, the percentage of each budget that al-Qaeda now claims from each project has fallen to around 6 percent.

The decline in al-Qaeda’s income can be partially attributed to the increase in the presence of security services. But it is also because many contractors cannot afford to pay such high percentages. As one told NIQASH, “many contractors are more reluctant to work because of the losses they are incurring.” It’s impossible to hide your budgets, he explained. “Because they [the ISI] now have a strong presence in government departments and armed groups know about every aspect of projects that have been tendered out.

So it becomes difficult not to pay them their share.” One engineer who supervises a number of projects, who has been kidnapped by ISI members in the past, explained that a company he works for “often uses poor construction materials to compensate for any losses incurred when they are eventually obliged to pay these organizations. If they didn’t do this,” he said, “the company wouldn’t be able to finish the project.”

Along similar lines, the University of Mosul, one of the largest educational institutions in the Middle East, has also inadvertently become a major source of funding for al-Qaeda. According to a professor there, who also requested anonymity, this is due to the number of large construction projects at the university over the last three years from which the terrorist groups make money in two ways.

“Members of al-Qaeda receive money from the projects that are being implemented inside the university,” the professor said. “The organization has its own construction companies. It participates in the reconstruction efforts under different names.”

The mafia-like extortion does not end there either. According to a number of state employees interviewed by NIQASH, most of the provincial government departments in Ninawa are also victims of some kind of extortion or blackmail, particularly those departments involved in oil, electricity, trade, housing and reconstruction as well as factories, social welfare and educational networks. Off the record, officials are well aware of the issue, saying they realise that money allocated for public services ends up in the pockets of armed groups.

Judge Abdul-Raheem al-Uqaili, the head of the Public Integrity Commission in Iraq, an independent body with offices around Iraq that investigates corruption within the Iraqi government, agreed that: “Corruption is one of the very important sources of financing for terrorist acts.” According to a police source in Ninawa, who also spoke to NIQASH on condition of anonymity: "The terrorist groups that take extortion money are the so-called Islamic State of Iraq. [This organization] gets the lion's share, more than 90 percent.

The rest of the money is distributed among other organizations such as Ansar al-Islam.” The latter, which is another group with a more radical interpretation of Islam, also collects money from the owners of local generators and pharmacies, the source noted, adding that, “this group recently asked some pharmacists to pay the ransom amount for six months in advance.”

The gathering of funds goes all the way from top to bottom: Abdallah Ghadeer, owner of a business trading in fruit and vegetables tells a similar story. “The ISI takes between US$100 and US$200 for every big truck of fruit and vegetables that comes in from Syria, Turkey or Iran,” Ghadeer said. “The importers pay these amounts to protect themselves against al-Qaeda, which threatens revenge if they don’t pay.”

The “tax” that terrorist groups levy on businesses in Mosul is common knowledge among locals – even though most won’t talk about it openly for fear of reprisals. The Mosul authorities don’t like to talk about it much either. Colonel Khalid Abdul Sattar, a spokesperson for the local security forces at the Ninawa Operations Command, preferred not to give a statement to NIQASH on this subject. He did not explain why.

Other local government officials that NIQASH approached reacted similarly. The one recent exception to this occurred a few months ago, when local security forces arrested a number of “enforcers”, individuals that specialize in the collection of ransoms or taxes from gas station owners as well as a group of civilians and government officials who were also involved. Only Abdul-Rahim al-Shammari, head of the Security and Defence Committee at the Ninawa provincial council was explicit about the existence and scale of extortion in the area.

He admitted that: “this phenomenon has become widespread and we have received numerous complaints from citizens who have been blackmailed by terrorists.” Part of the reason for the widespread nature of the extortion practices is the security forces’ lack of intelligence on the subject, Al-Shammari said. As extortion by terrorist groups becomes more prevalent, political analyst Majdi al-Abdali, believes that locals are becoming more acquiescent. “There is a growing tendency among members of society to accept the culture of paying money in order to avoid [violent] acts and killing and in order to maintain certain positions or jobs,” Al-Abdali said.

According to him, this sort of extortion is now routine for a large number of wealthier people. And he describes members of the groups responsible for the extortion as “ghosts” in the society. “They have false names and they constantly change their identity cards or use forged ones,” al-Abdali explained. In fact, al-Abdali continued, "these groups have no specific political ambition. From Jihadi movements, they have become criminal mafias, committing murder and theft to make money.

This rings especially true once you become aware that most of those who have joined these organizations are unemployed or ex-offenders." Meanwhile another provincial official, who, once again, preferred not to be named, has a further theory. He believes that one of the reasons for the decline in violence in Mosul is the direct involvement of the ISI and al-Qaeda in construction and trade in the area.

He pointed out that "through holding companies which are actually owned by terrorist organizations, al-Qaeda is now taking direct part in reconstruction projects that yield mouth-wateringly, high profits. They are busy making profits and they are only pressuring those who do not pay and punishing them.”