Lashkar-e-Taiba Financing
Group financing profile
Pakistan is no stranger to terrorist groups, and one that has operated in its borders since 1984 is Lashkar-e-Taiba (LeT). A co-founder of the group, Hafiz Muhammad Saeed, has recently been sentenced to 31 years in prison for terrorism financing, although he has previously been both convicted of similar offences, and released from prison on other occasions. Saeed’s militant group has conducted high profile terrorist attacks, the latest of which was a 2018 attack on an Indian Border Security Force vehicle. The most infamous attack conducted by LeT was the November 2008 Mumbai attacks, when ten fighters held the city in a siege for 60 hours. This article looks at how the group finances its activities.
Lashkar-e-Taiba is based and operates primarily in Pakistan. The group is also active within Afghanistan and has targeted several military and civilian targets in India. LeT supports the Afghan Taliban, maintains ties to the Al Qaeda global network, and is allied with the Indian Mujahideen. The group’s powerful relationships and diversified funding streams allows them to maintain operational strength.
Raising Funds
The LeT raises funds through several methods, both licit and illicit. Donations from LeT’s supporters in Pakistan, the Arabian Peninsula, and international identity-based support networks make up a considerable organizational revenue stream.1 Fundraising for LeT is overt, with donation boxes common in Pakistani markets, businesses, and at public gatherings. By levying taxes on the public and diverting revenue raised from LeT-affiliated Islamic institutions, madrassas, medical clinics, and public service provisions, the organization can fund various militant activities.
The group also raises funds from the families of fighters themselves, another form of donation from identity-based support networks. Following the death of a LeT militant, family members choose to continue providing financial and material support for the organization.
The government of Pakistan has also directed money to the organization, through the Inter-Services Intelligence (ISI) and via civilian government funds. The ISI has allegedly supported LeT since the 1990s as the paramilitary group works as a force to create instability in India. Various ministries in Pakistan have also allocated funds to LeT-run schools and hospitals.
The LeT additionally controls several companies in real estate, fish-farming, agriculture, and commodity trading industries.2 One particular LeT business venture is the collection and trade of animal skins, purportedly earning the group millions. Furthermore, LeT members engage in criminal activities such as extortion, fraud, counterfeiting currency, and drug trafficking.
Money Movement, Storage, and Management
Similar to other groups in the region, the LeT relies heavily on hawalas and cash couriers to move funds within Pakistan and throughout the region. The group leverages the travel of affiliated Islamic preachers to raise, collect, and move funds throughout the country and abroad. By providing bank account numbers on their website for ‘charitable donation’ purposes, LeT also exploits financial institutions to move money into Pakistani banks. As the group stores their wealth in cash and online bank accounts, LeT leaders can access resources easily and seemingly legitimately.
LeT has created advanced mechanisms for managing their resources. The group developed an independent financial network, overseen by a Department of Finance. The network encompasses district commanders in charge of cadre spending at a local level. Within Pakistan, the group also operates branch offices and training camps that collect and control finances. At the organizational level, key leadership figures provide input in designating resources for particular activities or operations. Strategically, a financial chief provides policy-making guidance for the LeT.
Using Funds
In order to achieve the LeT’s objectives of establishing an Islamic Caliphate in South Asia and fighting Indian control over contested land near the Pakistani-Indian borders, the group spends money on weapons and conducting militia operations. The militia alone is purported to cost the group over 4.5 million dollars annually. Moreover, millions of dollars are spent per year to provide incentives for operatives to join the organization. The organization also provides training, weapons, and funding to other Islamist groups inside India.
To gain organizational legitimacy, the LeT spends money to operate mosques, madrassas, medical clinics, and other public facilities in Pakistan. A charitable organization, Jamaat-ud-Dawa, was created by LeT and supports humanitarian missions in the country. The LeT also founded and supports a political coalition of Islamist groups. The running of fundraising and recruitment centers all over the world also requires considerable resource use from the group.
Ultimately, the costs associated with running the LeT and the various services provided by the organization are believed to use up most the group’s financial resources.
Obscuring Funds
As a result of the Pakistani government’s implicit support of the LeT in the past, the group did not need to go to great lengths to obscure funds within the country. With the recent prosecution of Saeed as well as mounting pressure from the Financial Action Task Force for Pakistan to combat illicit financing, LeT might need to take additional care to conceal the source and destination of their funds.
Internationally, LeT has used legitimate businesses, such as real estate, to commingle licit and illicit money. Pakistani charities have also been used to obscure money from (sometimes unsuspecting) foreign entities. For example, millions of dollars were transferred from the UK to a Pakistani charity to allegedly assist in relief efforts following the 2005 earthquake. Investigations into the transactions found that the money was likely going to be diverted to the LeT for use terrorist attacks against the West.
Looking to the Future
Pakistan’s conviction of Saeed is a positive development in countering LeT’s financing. However, Pakistan has been on the FATF “Grey List” since 2018 for failing to address deficiencies in their AML/CFT regime.3 Lacking equipment to verify data, non-application of KYC protocols, and poor supervision of reporting entities has plagued Pakistan’s CFT efforts. While progress has been made by the country to work on the action items outlined by the FATF, further interrupting the revenue streams and financial management mechanisms of LeT is necessary to help prevent the group from mobilizing.
Looking ahead, an alliance between LeT and the Afghan Taliban has been further nurtured since American troops left Kabul in August 2021. Whether the LeT will be another group that benefits (financially or otherwise) from the Taliban takeover is worth watching.
To compare the financing methods and mechanisms that the LeT uses with those of other illicit organizations, check out the Insight Intelligence group financing profiles on Tehrik-i-Taliban and ISIL-KP.
Jan Goldman, The War on Terror Encyclopedia: From the Rise of Al-Qaeda to 9/11 and Beyond: From the Rise of Al-Qaeda to 9/11 and Beyond (Santa Barbara, UNITED STATES: ABC-CLIO, LLC, 2014), 224.
Jan Goldman, The War on Terror Encyclopedia: From the Rise of Al-Qaeda to 9/11 and Beyond: From the Rise of Al-Qaeda to 9/11 and Beyond (Santa Barbara, UNITED STATES: ABC-CLIO, LLC, 2014), 224.
Jessica Davis, “Chapter 15: Prevention of Terrorist Financing,” in Handbook of Terrorism Prevention and Preparedness, ed. Alex P. Schmid (The Hague: ICCT, 2021).