Centre

Franais de Recherche sur le Renseignement

FOREIGN ANALYSIS N30

ISLAMIST CHARITY ORGANIZATIONS :
AVENUES OF TERRORISM FINANCING IN PAKISTAN

Dr Farhan Zahid
Ph D, Counter-Terrorism and Security Analyst (Pakistan).

Pakistani Islamist charities organizations are known for their widespread
influence. Most of the Islamist charities are associated with (or wings of) either Islamist
political parties or Islamist violent non-state actors operating in Pakistan. It is pertinent
to note here that the Islamist charity organizations actively seek support and funding
from Pakistani diaspora where affluent Pakistanis donate huge sums of money every
year. Terrorism is considered as the weapon of the weak and in most of the cases
requires few resources; on the other hand, counter terrorism is a pretty expensive
activity. Despite being cheap, terrorism still requires continuous flow of finances for
sustainability. Exponential growth of Islamist terrorist in Pakistan is somehow related
to undeterred financing of terrorist organizations. The article intends to study avenues
of terrorism financing of Islamist terrorist organizations operating in urban areas of
Pakistan.


Al-Akhter and Al-Rashid Trusts


Al-Akhter and Al-Rashid Trusts are two Al-Qaeda-linked social welfare
organizations.1 Before 9/11 attacks, the two were primarily involved in rendering
medical, logistics and financial support to Islamist militant organizations fighting in
Afghanistan, Pakistan, Chechnya and Indian Kashmir. These two charities were formed
as charity wings of Harkatul Mujahedeen, and later joined hands with its offshoot Jaishe-Mohammad (JeM) in late 1990s.2

Al-Akhter Trust, Mapping Militant Organizations, Stanford University, available

http://www.stanford.edu/group/mappingmilitants/cgi-bin/groups/view/111
2
Al-Akhter
Trust,
South
Asia
Terrorism
Portal
(SATP),
available
http://www.satp.org/satporgtp/countries/pakistan/terroristoutfits/Al-Akhtar_Trust.htm

at:
at:

___________________________________________________________________________
21 boulevard Haussmann, 75009 Paris - France
Tl. : 33 1 53 43 92 44 - Fax : 33 1 53 43 92 92 - www.cf2r.org
Association rgie par la loi du 1er juillet 1901 - SIRET n 453 441 602 000 19

Al-Rashid Trust (ART) was established by Mufti Mohammad Rashid and Mufti
Abu Lubaba in 1996 after the formal takeover of Afghanistan by the Taliban in 1998.1
ART initially focused on providing assistance to Afghan Taliban by establishing a
network of madrassas in Afghanistan and opening up of bakeries across Taliban ruled
areas of Afghanistan.2 It was during that period that ART managers developed close
relationship with Al-Qaeda3, that continued after Taliban ouster from Afghanistan. ART
was listed as Specially Designated Terrorist Entity under Executive Order 13224 in
2001, for having ties with Islamist terrorist groups.4

Before being banned in Pakistan in 2002, the ART was also involved in publishing
JeMs official monthly journal Zarb-e-Momin5, both in English and Urdu languages. JeMs
founder, Masood Azhar, wrote regularly in the said journal. According to South Asia
Terrorism Portal, The ART perceives the various non-governmental organizations (NGOs)
currently working in Afghanistan as enemies of the Muslims and media reports have
indicated that one of the other significant objectives of the ART is to reportedly push
Western NGOs out of Afghanistan. The ART subscribes to the Deobandi school of thought, a
trait it shares with the Taliban. The trust also promotes the concept of Jihad among
Muslims, especially at times and in places where it perceives the community of faithful is
being oppressed. One of the numerous ART booklets states, "the holy war is an essential
element of Islam.6

It further says, The Al-Rashid Trust is reported to be one of Osama bin Ladens
many sources of income. It is closely linked with the Taliban as also with Jaish-eMohammed (JeM) and other terrorist outfits active in Indias J&K. The trusts formation
coincided with the Taliban capture of Afghanistan in 1996.7


Al-Akhter Trust (AAT) was also established under the Harkatul Mujahedeen
(HuM) platform to cater the financial needs in late 1990s.8 It became part of JeM wider
network after its formation in 2000. Masood Azhar, chief of JeM and principal ideologue,
is considered the main patron of AKT. It was headed by Hakeem Muhammad Akhter.9
The charity organization helped establish a liaison between Afghan Taliban and
Pakistani Islamist violent non-state actors HuM, JeM, LeT and LeJ. Islamist militants
1

Al-Rashid
Trust,
South
Asia
Terrorism
Portal
(SATP),
available
at:
http://www.satp.org/satporgtp/countries/pakistan/terroristoutfits/Al-Rashid_Trust.htm
2 Narrative Summaries of Reasons for Listing, Security Council Committee pursuant to resolutions 1267
(1999) and 1989 (2011) concerning Al-Qaida and associated individuals and entities, 1267/1989, available
at: http://www.un.org/sc/committees/1267/NSQE00501E.shtml
3 Narrative Summaries of Reasons for Listing: QE.A.121.05. AL-AKHTAR TRUST INTERNATIONAL, Security
Council Committee pursuant to resolutions 1267 (1999) and 1989 (2011) concerning Al-Qaida and
associated
individuals
and
entities,
2011,
available
at:
http://www.un.org/sc/committees/1267/NSQE12105E.shtml
4 Executive Order 13224, 2001, Office of the Coordinator for Counterterrorism, US Department of State,
available at: http://www.state.gov/j/ct/rls/other/des/122570.htm
5 Jaish-e-Mohammad, Mapping Militant Organizations, Stanford University, available at:
http://www.stanford.edu/group/mappingmilitants/cgi-bin/groups/view/95
6
Al-Rashid
Trust,
South
Asia
Terrorism
Portal
(SATP),
available
at:
http://www.satp.org/satporgtp/countries/pakistan/terroristoutfits/Al-Rashid_Trust.htm
7 Op Cit, SATP
8
Pakistan
bans
25
militant
Organizations,
Dawn,
available
at:
http://archives.dawn.com/archives/150279
9 Bill Roggio, US designates 2 Pakistanis for running al Qaeda and Taliban charitable front groups, The
Long
War
Journal,
April
15,
2010,
available
at:
http://www.longwarjournal.org/archives/2010/04/us_designates_two_pa.php

during Taliban regime period sought assistance from AKT to reach training camps in
Afghanistan.1 International jihadists from many different Muslim majority countries and
expatriate communities from Europe and North America also reached those camps via
AAT.

Since the shifting of training facilities to Taliban ruled Afghanistan, the AAT also
focused its activities and developed relations with Al-Qaeda and Taliban. AAT is known
to provide material and financial support to Taliban militants and it was listed as
Specially Designated Terrorist entity under executive order 13224 of US Treasury
Department in 2003. The US government accused AAT for The U.S. government reported
that Al Akhtar Trust was secretly treating wounded Al-Qaeda members at its medical
facilities in Afghanistan and Pakistan. This was followed by information from a senior AlQaeda detainee who, in a custodial interview, revealed that Al Akhtar Trust and Al-Rashid
Trust were the main relief agencies used by Al Qaeda to send supplies in Kandahar.2

During the Taliban period, when AAT remained most active, the said charity
broadened its network and cooperated with other Arab and Middle Eastern Islamist
charity organizations to bankroll activities of Taliban, Al-Qaeda and Pakistani Islamist
violent non-state actors.3 It collected donations from various sources such as alms
money (Zakat, Fitra, and Sadqaat) during the Muslim holy month of Ramzan and
established offices across Pakistan and Middle East. In the aftermath of 9/11 attacks the
AAT acquired ART amid increasing US efforts to curb the terrorist financing.4

AATs involvement in cooperating with radical Islamists was obvious when its
key financer and founding member, Saud Memon, was found involved in Daniel Pearls
murder, a Wall Street Journal correspondent in Pakistan in 2002. Saud Memon, a
financier of Al Akhtar Trust, however was found to be involved with the kidnapping and
murder of the Wall Street Journal's journalist Daniel Pearl .Memon owned the compound
in the outskirts of Karachi where Pearl was being held before his murder in January 2002.
Memon's employees are believed to be responsible for killing Pearl.5

After being designated as terrorist entity in Pakistan and the US, the AAT
continues on to work under different names such as Pakistan Relief Foundation, and
Azmat-e-Pakistan Trust.6

1 Op Cit, Pakistan bans 25 militant organizations

2

Profiles: Al-Akhter Trust, Mapping Militant Organizations, Stanford University, available at:
http://www.stanford.edu/group/mappingmilitants/cgi-bin/groups/view/111
3 The Global Intelligence Files: INDIA/PAKISTAN/US/CT- UP-born Pak national funding Al Qaeda,
Taliban:
US,
Wikileaks,
Released
on
2012-10-19
08:00
GMT,
available
at:
http://wikileaks.org/gifiles/docs/758548_india-pakistan-us-ct-up-born-pak-national-funding-alqaeda.html
4 Ibid
5 Profiles: Al-Akhter Trust, Mapping Militant Organizations, Stanford University, available at:
http://www.stanford.edu/group/mappingmilitants/cgi-bin/groups/view/111
6 Interviews with Pakistani journalists

Al-Khair Trust
(JUI)

Falah-eInsaniyat
Founda,on
(LeT)

Islamist
Chari,es
associated with
Islamist Par,es
and I-VNSAs

Al-Khidmat
Founda,on
(JI)

Al-Akhter and
Al-Rashid
Trusts
(HuM and
later JeM)

Figure: Network of Islamist Charities in Pakistan

Falah-e-Insaniyat Foundation


Markaz-ud-Dawa-wal-Irshad (MDI), the parent organization of proselytizing
Jamaat-ud Dawa (JuD), and militant Lashkar-e-Taiba also provides charity and social
welfare services. The primary welfare organization is registered by the name of Idara
Khidmat-e-Khalq (Organization for Serving Humanity).1 The said wing of JuD worked
during 2005 earthquake alongside other charity wings of Islamist parties2 and militant

1 Bill Roggio, US designates Lashkar-e-Taibas charitable front as terror group, The Long War Journal,

November
24,
2010,
available
at:
http://www.longwarjournal.org/archives/2010/11/us_treasury_designat.php
2 Jawad Hussain Qureshi, Earthquake Jihad: The Role of Jihadis and Islamist Groups after the October
2005
Earthquake,
International
Crisis
Group,
July
24,
2006,
available
at:
http://www.crisisgroup.org/en/regions/asia/south-asia/pakistan/earthquake-jihad-the-role-of-jihadisand-islamist-groups-after-the-october-2005-earthquake.aspx

organizations1. Because of Wahabi/Salafi ideology of JuD, its humanitarian wing

received huge funding from Middle Eastern and Saudi donors.2 JuD and its Idara
Khidmat-e-Khalq had successfully used their welfare services as part of launching
recruitment drives and improving its brand image.

JuD became more prominent after Mumbai attacks in 2008, in which its
involvement led India and Pakistan on the brink of War.3 Earlier LeT and JeMs
combined terrorist operation at Indian Parliament in December 2001 created a situation
even worse and both countries amassed their armies at border areas. In lieu of Indian
Parliament attack, Pakistani government banned LeT and shut down all of its offices
across Pakistan, but it continued to work under JuD banner. The US State Department
added LeT on its Foreign Terrorist Organizations (FTO) list and Treasury Department
also applied executive order 13224 on it.4

All of these developments led LeT and its mother organization Markaz Dawa wal
Irshad to activate under a new cover called Falah-e-Insaniyat Foundation (FIF)5. FIF
started its relief activities for recruitment in calamity hit regions during 2010 floods in
Pakistan, posing as relief and social welfare organization.6

In Pakistan, it is not uncommon for banned outfits to bounce back with new
names and that is one reason the National Action Plan to combat terrorism (announced
after December 16, 2014 attack on Army Public School resulted in deaths of 142 school
children) included a section on this issue. JuD and its militant wing LeT were banned in
January 2002 but soon reemerged with new names. FIF in Pakistan is the new face of
JuD/LeT. The main reason is covert support provided to these banned organizations by
Islamist political parties in times of need. The banned outfits and their Islamist helpers
either have overlapping memberships or their leaders were previously part of Islamist
parties and in a way the relationship is still on.

According to one report on FIF activities during their relief work activities in one
refugee camp in northern Pakistan in 2009, the workers of FIF proclaim their allegiance
to parent party JuD. When asked about it one FIF worker said, We are with the Falah-eInsaniat [Human Welfare] Foundation," Jafar Khan, a volunteer, told TIME. "We used to be
known as Jamaat-ud-Dawa. We are doing the work that the government is not here to
do.7

FIF and its parent organization JuD have had a close relationship with Jamaat-eIslami and its sister-concerns such as Islamic Medical Association and both at occasions

Ria Misra, Terrorists Exploit Disaster, The Daily Beast, August 13, 2010, available at :
http://www.thedailybeast.com/articles/2010/08/13/extremist-groups-exploiting-pakistans-flooddisaster.html
2 US embassy cables: Lashkar-e-Taiba terrorists raise funds in Saudi Arabia, The Guardian, December 5,
2010, available at: http://www.guardian.co.uk/world/us-embassy-cables-documents/220186
3 Mumbai attacks: Indias relationship with Pakistan in the balance, The Telegraph, December 1, 2008,
available at: http://www.telegraph.co.uk/news/worldnews/asia/india/3537954/Mumbai-attacksIndias-relationship-with-Pakistan-in-the-balance.html
4 Secretary of States Terrorist Designation of Falah-i-Insaniat Foundation, US Department of State,
November 24, 2010, available at: http://www.state.gov/r/pa/prs/ps/2010/11/151931.htm
5 Lashkar-e-Tayyiba (LT), Counter Terrorism 2013 Calendar, National Counterterrorism Center,
available at: http://www.nctc.gov/site/groups/let.html
6 Outlawed JuD emerges as key player in flood relief ops in Pak, The Indian Express, August 4, 2010,
available at: http://www.indianexpress.com/news/outlawed-jud-emerges-as-key-player-in-flood-reliefops-in-pak/655911
7 Omar Waraich, Terrorism-Linked Charity Finds New Life Amid Pakistan Refugee Crisis, Time Magazine,
May 13, 2009

join hands in relief and rescue activities1. Both worked together in 2009 refugee crises
that emerged after the launch of military operations to curb Islamist militancy in Swat
and South Waziristan districts (Operation Rah-e-Rast and Operation Rah-e-Nijat, 2009).
Later, during 2010 floods in Pakistan, the same organizations deployed their workers at
refugee camps and took part in relief operations.

The US government swiftly acted against FIF and added it to State Departments
list of designated Foreign Terrorist Organizations (FTO)2. Pakistani Interior Ministry
also directed authorities not to allow banned organizations working under the garb of
humanitarian services.


*



Former Inspector General of Police Punjab province Khawaja, Khalid Farooq,
revealed in an article that during 1999-2002 Al-Akhter Trust received $100 million in
38 international transactions, mostly from Western countries, i.e. from overseas
Pakistanis. Finally, in 2002, the Pakistani government of General Pervez Musharraf froze
the accounts of both Akhter and Rashid trusts under Al-Qaeda specific UN Security
Council Resolution 13333.

This showcases a grave situation and requires immediate crackdown on financial
avenue of Islamist terrorist organizations active in Pakistan. Despite government
measures to curb terrorism financing, such as establishment of Financial Monitoring
Unit (FMU) at Ministry of Finance, amendment in Anti-Terrorism Act of 1997 and AntiMoney Laundering Act in 2010, the Islamist charity organizations are still operating
under new names - such as Al-Rashid is working under Al-Amin Trust - and collecting
donations and sacrificial hides during Eid ul Azha, the Abrahamic sacrificial celebration.
A renewed policy is required for rooting out all avenues of terrorism financing in
Pakistan.

Dr Farhan Zahid
October 2015

Jihadis engaged in relief work, Daily Times, December 12, 2005, available at:
http://www.dailytimes.com.pk/default.asp?page=2005\12\12\story_12-12-2005_pg7_34
2 US adds Pakistans banned charity to terror list, Dawn, November 24, 2010
3 Khawaja Khalid Farooq, NAP and terrorism financing, Daily Times, July 14, 2015,
http://www.dailytimes.com.pk/opinion/14-Jul-2015/nap-and-terrorism-financing accessed on October
1, 2015