Cause for suspicion

Richard Kerbaj
The Australian
August 08, 2008

CHILDREN with distended bellies, villages destroyed by earthquakes, a bandaged infant lying in a makeshift hospital bed recovering from bullet wounds. These are images used by some humanitarian organisations to promote their fundraising campaigns. But such images of human tragedy tell only part of the story. The rest is often lost in translation from the moment people dip into their pockets for a good cause to the time their money reaches its destination. In reality, funds raised for good causes sometimes have a way of taking other routes.

The most dangerous route delivers the money to the hands of Islamic terrorists to bankroll their suicide bombings and other deadly campaigns. It's a route that continues to dog Western security agencies, which are attempting to significantly curb, if not stop, terror financing through charity organisations.

Two of Australia's most prominent Islamic charities -- Muslim Aid Australia and Human Appeal International -- are being investigated for their alleged links to Palestinian terrorist network Hamas.

MAA was raided by the Australian Federal Police last month following The Australian's revelations of the group's connection to humanitarian aid body Interpal, which is proscribed by Australia and the US for its alleged terror links.

While the MAA and HAI, both Sydney-based humanitarian organisations, have denied having any terrorism connections, they have brought into focus questions about whether charity groups have hidden agendas and the extent to which terrorist organisations go to exploit the finances of such bodies.

And for Australia, the second most generous nation among the 30 Organisation for Economic Co-operation and Development member countries, such questions are demanding an answer, especially to put at ease the minds of Australian donors, who in 2006-07 raised more than $750 million for overseas aid through local non-profit charity networks.

National security expert Carl Ungerer says it is difficult to determine whether money raised by charities for humanitarian aid in developing countries is being used for terrorist operations or for the manufacture of things such as rockets and suicide vests.

He says compounding such difficulty is that some proscribed groups such as Hamas and the Lebanon-based Hezbollah have humanitarian offshoots that are not banned by Australia. And even if authorities can prove that Australian-raised funds reach such groups, they must be able to prove the money is being used for non-humanitarian purposes.

"There's a leap of faith in distribution of funding anywhere in the world that you're going to have the outcome that you hope will occur," says Ungerer, from the Australian Strategic Policy Institute.

He says it must also be remembered there are some Australian Muslims who do not believe that Hamas or Hezbollah -- organisations that do not separate the pool of money between their humanitarian and military wings -- are terrorist organisations.

"Hezbollah and Hamas are not only considered resistance groups in the Middle East but ones (that) do charitable work that governments won't do," Ungerer says.

"The Lebanese Government in southern Lebanon is really nonexistent. It really is Hezbollah that is first on the ground after any sort of natural or political conflict."

Ungerer's words are a sobering reminder of the declaration of support for terrorist groups by Australia's most senior Muslim spiritual leaders. At a 2006 rally during the Hezbollah-Israeli war, Australian Sunni Muslim spiritual leader Fehmi Naji El-Imam praised the militants as "freedom fighters".

In June last year, The Australian revealed that Shia Muslim spiritual leader Kamal Mousselmani openly declared his support for the Iranian-backed terrorist group.

And former mufti Taj Din al-Hilali was investigated by the AFP last year following revelations that he gave $US10,000 ($10,986) of Australian-raised funds to an accused terrorism supporter in Lebanon in 2006. Hilali was cleared of any wrongdoing.

Hamas, which has claimed responsibility for numerous terrorist attacks and suicide bombings in Israel, was proscribed in Australia on November 9, 2003. Hezbollah was banned in Australia on June 5, 2003.

Senior Muslim leader Ameer Ali admits there are some local Islamic charities that need to be more accountable and transparent about the way their Australian-generated funds are spent overseas. He says the Muslim charity sector -- which benefits from followers of Islam being obligated to give alms, or zakat, under sharia law -- also needs to be more active in assuring its donors that their money is reaching its intended destination.

"Zakat is commendable and encouraged," says Ali, a former Howard government adviser on Islam. "But what happens is that sometimes some charity organisations can take advantage of this. And nobody knows where that generated money goes to. So it is possible that some of this money may end up in the wrong hands."

Australian Council for International Development executive director Paul O'Callaghan says that in some situations there is nothing local charities can do to stop the flow of humanitarian aid funds being used by the wrong people.

He says it is especially evident in some regions of developing nations that are being run by terrorist outfits. Hezbollah in southern Lebanon is one such example.

"There are some situations where an organisation may have done every possible thing to make sure that the end result of its involvement in a foreign country will not be misused but where it does happen," O'Callaghan says.

"Where you have a whole part of a country which is run by a (banned) organisation and all the services are provided by that organisation and there is a civil war going on, it is a lot harder for foreign parties to avoid being connected in some way because of a very simple fact that to be able to enter that part of the country you have to be allowed to enter by that (organisation)."

US security expert Robert Looney defines Islamic charities under three categories: legitimate bodies promoting positive activities, those that have their funds unknowingly diverted and others that deliberately engage in supporting terrorist networks.

"In many cases charities are a mere sham that exist simply to funnel money to terrorists," Looney writes in his paper, The Mirage of Terror Financing: The Case of Islamic Charities. "However, often the abuse of charity has occurred without the knowledge of the donors or even of members of the management and staff of the charity itself."

Looney, from the Centre for Contemporary Conflict, in California, describes terror financing through charities as "reverse money laundering", exploiting legal assets for illegal activity. "While money laundering is concerned with laundering assets of illegal origin and bringing them back into legal economic circulation, charity-based financing of terrorism is concerned with using legal assets for an illegal activity, namely terrorist attacks," he says.

Ungerer says in some Asian regions, such as Indonesia and The Philippines, 20 per cent to 50 per cent of the money raised by Islamic charities is diverted to terrorism operations. Some of those operations can be committed on a shoestring budget, so militant groups don't always require a lot of money to carry out attacks. "The 2002 Bali bombings (which killed 202 people, including 88 Australians) cost between $50,000 and $100,000 (to commit)," he says. "These are not large amounts of money and they can deliver significant terrorist capability."

MAA executive director Iman Partoredjo admits his organisation uses British-based humanitarian group Interpal to distribute aid and to overcome the Israeli Defence Force's "protracted border closures" in Gaza.

"Tight control over trans-shipment of aid by the IDF saw our medical aid items delivered and distributed by those able to be on the ground, such as UN agencies and local NGOs: UN Relief and Works Agency, Interpal, Families Relief," Partoredjo says.

MAA is not the only Australian Muslim group that has raised security concerns during the past few months.

Sydney Muslim charity Human Appeal International was among three of 12 HAI branches worldwide named and banned by Israel's Defence Ministry last month for allegedly raising "very large sums of money" for Hamas.

HAI's Sydney director Bashar Al-Jamal rejects the Israeli Government's accusations against his organisation but refuses to concede Hamas is a terrorist network. HAI and MAA are under investigation by the NSW Government's Office of Liquor, Gaming and Racing.

The MAA also is being investigated by the AFP and the Australian Council for International Development -- the charity sector's industry body -- for its connection to Interpal.

Interpal, also known as the Palestinian Relief and Development Fund, has been cleared by the British Charity Commission of terror links but failed three years ago to have its proscribed status removed from the Department of Foreign Affairs and Trade's consolidated list, which names banned groups andpeople.

Charity sector expert Don D'Cruz says Muslim charities risk losing their donors if they do not become more transparent.

"The worst aspect of it is it reduces the faith and confidence that Muslims have in giving to charities if there are transparency issues," he says. D'Cruz says charities should all have key performance indicators to reveal how their funds are being used.

"First they need to spell out how they are going to spend their money and, second, they need to have key performance indicators to judge how well they are spending their money.

"If a business raised money from the public, they would provide a prospectus on what they were going to do with the money. And you don't really get that in the charity sector."

O'Callaghan admits that more work needs to be done by the charity sector to ensure more transparency and accountability. He says donors deserve to know how their money is being spent without having to worry about whether it has gone to suspicious causes.

"Contributors to any overseas aid agencies in Australia need to feel confident that the organisation that they're contributing to fully abides by Australian law and that it's making clear how those funds are being used essentially to assure donors," O'Callaghan says.

Ali says Muslims are obligated to give 2.5per cent of their annual savings for charitable purposes and a negative crackdown on Islamic charities would discourage the community to help such bodies.

"There are many genuine cases, in Burma, in Kashmir, in Palestine, where there are poor people who are looking for support, so we should encourage that sort of altruism in our community," he says.

"But at the same time we must be monitoring organisations (that) are encouraging to send money through them because there must be accountability and transparency."

kerbajr@theaustralian.com.au
Thanks Ronit Fraid