France and other European countries 'bankrolling Al Qaida' with ransom payments

Report claims that, despite denials, French authorities and other European nations pay out millions over kidnaps that then help finance terrorism.

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BAMAKO, Mali: The cash filled three suitcases: 5 million euros, reports The Times of India

The German official charged with delivering this cargo arrived here aboard a nearly empty military plane and was whisked away to a secret meeting with the president of Mali, who had offered Europe a face-saving solution to a vexing problem.

Officially, Germany had budgeted the money as humanitarian aid for the poor, landlocked nation of Mali.

In truth, all sides understood that the cash was bound for an obscure group of Islamic extremists who were holding 32 European hostages, according to six senior diplomats directly involved in the exchange.

The suitcases were loaded onto pickup trucks and driven hundreds of miles north into the Sahara, where the bearded fighters, who would soon become an official arm of al-Qaida, counted the money on a blanket thrown on the sand. The 2003 episode was a learning experience for both sides. Eleven years later, the handoff in Bamako has become a well-rehearsed ritual, one of dozens of such transactions repeated all over the world.

Kidnapping Europeans for ransom has become a global business for al-Qaida, bankrolling its operations across the globe.

While European governments deny paying ransoms, an investigation by New York Times found that al-Qaida and its direct affiliates have taken in at least $125 million in revenue from kidnappings since 2008, of which $66 million was paid just last year.

In news releases and statements, the United States Treasury Department has cited ransom amounts that, taken together, put the total at around $165 million over the same period.

These payments were made almost exclusively by European governments, who funneled the money through a network of proxies, sometimes masking it as development aid, according to interviews conducted for this article with former hostages, negotiators, diplomats and government officials in 10 countries in Europe, Africa and the Middle East. The inner workings of the kidnapping business were also revealed in thousands of pages of internal-Qaida documents found by this reporter while on assignment for Associated Press in northern Mali last year.

In its early years, al-Qaida received most of its money from deep-pocketed donors, but counterterrorism officials now believe the group finances the bulk of its recruitment, training and arms purchases from ransoms paid to free Europeans.

Put more bluntly, Europe has become an inadvertent underwriter of al-Qaida.

The foreign ministries of Austria, France, Germany, Italy and Switzerland denied in emails or telephone interviews that they had paid the terrorists. "The French authorities have repeatedly stated that France does not pay ransoms," said Vincent Floreani, deputy director of communication for France's ministry of foreign affairs.

Several senior diplomats involved in past negotiations have described the decision to pay ransom for their countries' citizens as an agonizing calculation: Accede to the terrorists' demand, or allow innocent people to be killed, often in a gruesome, public way?

Yet the fact that Europe and its intermediaries continue to pay has set off a vicious cycle.

"Kidnapping for ransom has become today's most significant source of terrorist financing," said David Cohen, the Treasury Department's under secretary for terrorism and financial intelligence, in a 2012 speech. "Each transaction encourages another transaction."

And business is booming: While in 2003 the kidnappers received around $200,000 per hostage, now they are netting up to $10 million, money that the second in command of al-Qaida's central leadership recently described as accounting for as much as half of his operating revenue.