Companies 'are paying protection money' to terrorists

Campaigns waged by terrorist organisations are being partly financed through protection rackets targeting respected large corporations across the world, it was claimed yesterday.

Campaigns waged by terrorist organisations are being partly financed through protection rackets that extort money from respected large corporations across the world, it was claimed yesterday.

Oil companies in South America and Middle Eastern airlines are among those paying to prevent their businesses being damaged, according to the magazine Forbes Global. It claimed timber companies in South-east Asia have also made protection payments and until recently, a Jewish-owned bank was paying off the Lebanese Islamist group Hizbollah.

An executive in the financial division of a state-owned oil company in southern Europe claimed that donating money to Islamic groups was a cost of doing business in the Middle East. He said: "I have been more and more worried about these transactions over the last seven or eight years, because friends in our government's secret service have told me that a number of these intermediaries have direct links to terrorist organisations."

Reports have suggested that the 11 September attacks cost the terrorists about $500,000 (£340,000), which was in part spent on renting cars, flights and large cash withdrawals.

Last week, President George Bush issued the equivalent of a financial "most-wanted list" of groups and individuals in an attempt to starve them of funding. The move was seen as a largely symbolic gesture. Money-laundering experts have dismissed as unworkable attempts to control the terrorists' movements of funds.

The man accused of being behind the outrages, Osama bin Laden, is thought to earns hundreds of millions of pounds every year from both legal and illegal activities. Al-Qa'ida, the organisation that he helped establish in Afghanistan 12 years ago, employs some 3,000 civilians and maintains 2,000 armed troops. The group operates communications equipment, training bases and safe houses around the world, which are used by extremists from Egypt to the Philippines. Frank Cilluffo, of the Washington-based Centre for Strategic and International Studies, said: "I look at bin Laden as the chief financial officer of a very loose coalition of radicals. It's not a monolithic, hierarchical organisation. But he is the glue that holds these groups together with money, training and support."

The financing for his network comes partly from his inheritance of up to £42m and from a cut of the profits from Afghanistan's lucrative heroin trade. Further funding comes from charities, stock market investments and stakes in a variety of businesses in Sudan.

The magazine found that Mr bin Laden also controls an Islamic bank and has a majority stake in a plantation. He is likely to use tools such as offshore internet banks to help keep his financial activities secret, experts said.