Islamic Charities: Facing the Inconvenient Facts

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by Dave Clark, VP Islamic Finance and Charities, Q Society of Australia 

On 10 February this year, Nicola Roxon MP, Attorney General and Jason Clare MP, Minister for Home Affairs and Minister for Justice issued a media release titled "Reports Highlight Risks of Money Laundering and Terrorism Financing" along with three reports produced by the Australian Institute of Criminology.


One of these reports "Money laundering and terrorism financing risks to Australian non-profit organisations" touches on the issue of Islamic charities in Australia and the risk of them funding terror.

Here is a link to this report.

If you haven't time to review the report, then it's worth reflecting on the following comments from the media release:

  • "The report found that smaller, local, community-based NPOs, especially informal ethnic and faith based charities, often fall outside regulatory scrutiny and could be especially vulnerable to money laundering and terrorism financing."

  • "This is particularly the case for organisations that regularly use informal methods of funds transfer - such as alternative remittance services."

  • "The report found that organisations that have overseas offices in less-regulated countries, their structure may make them more vulnerable than their size suggests."

This is, of course, PC talk for "we know that Islamic charities may fund terror".

As for the report, while it's not my intention to analyse its full 60 pages, I would like to point out key sections for readers to review, in particular "Faith-based giving and the targeting of Islamic charities" starting on pg. 10 and "Vulnerabilities in the Australian non-profit sector" starting on pg. 51.

It is difficult to provide a clear analysis anyway because of the
Government's blatant obfuscation and the report being so
hedged, counter-intuitive, contradictory and circular - simply
due to the Government struggling to face the obvious implications
from its own research.

The following is typical of the report: Pg. 10 states that "The Qur'an notes
(9:60) that eight categories of people are entitled to
receive zakat including the poor,
the needy and the wayfarer
", conveniently leaving out
here that one of those categories is for those "fighting in
the cause of Allah" and another two can be construed as
supporting jihad activity. This fact is given a whitewash though
on pg. 12: "The Qur'an also stipulates that
'charity shall go to the poor who are suffering in the cause
of God..."
 (2: 273). Thus, the recipients
of charity are broadly drawn and subject to a degree of
interpretation which has impacted perhaps negatively upon the
manner in which charitable donations have been directed and which
may have exacerbated the perception that Islamic charities
provide succour to terrorist organisations (Ndiaye

So the benign categories of zakat are stated as fact while the jihadist categories are a matter of
"interpretation" which "exacerbate
perceptions". Only in Islamic apologetics do authors not
only qualify statement of fact with words like
"interpretation" and "perhaps" but then say
it's only your "perception" anyway! Then
there's this quote on pg. 11 "It has been suggested
that the obligatory charitable donations of zakat represent the
largest single source of [charitable] revenue diverted to
terrorist groups (Rudner 2006)
" .

It's worth noting at this point that the "academics" consulted for the report were
Professor Abdullah Saaed, Director of the National Centre of
Excellence for Islamic Studies at the University of

And let's not discuss zakat without a summary of Jewish Tzedakah too, despite there being no
relevance to the topic of terror funding or implications which
can be, or are, drawn. Better keep the reader honest though, it
might be religious charity-giving which is the

But there are some frightening admissions from the Australian Government too:

  • "The risk of an NPO
    falling victim to terrorist exploitation may be greater for
    groups that...are closely aligned to particular religious or
    cultural movements
    " pg. 14
  • "AUSTRAC (2010a: 8) lists
    'financial contributions through formal charitable
    donations' as one of the three most common methods by which
    terrorism funds are raised in Australia.
    " pg.
  • "It was reported in the
    2010 typology report from the Asia-Pacific Group on Money
    Laundering that the most 'significant' cases of
    non-profit abuse for terrorism financing detected in Australia
    involved the collection of donations, often following a visit by
    an overseas speaker that was organised by local leaders (APG
    2010). In these cases, the funds raised were wire transferred to
    overseas accounts but usually over a period of time in amounts of
    less than $10,000. These funds were generally sent to third
    parties who were suspected of having a connection with a
    terrorist organisation
    ." pg. 19
  • "Those organisations
    identified as most susceptible are charities, and in particular
    faith-based charities, and smaller entities that do not
    necessarily have the resources (or the inclination) to commit to
    due diligence and similarly recommended procedures.
    pg. 50
  • "Related to this concern
    about the vulnerability of smaller NPOs, especially the less
    formal charities formed around ethnic and faith-based
    communities, was the preferred or common use of informal methods
    for the collection and transfer of funds. The identity of donors
    may not necessarily be pursued by the charity for cultural or
    other reasons and funds are known to be relayed to overseas
    locations using remittance services or similar methods of
    informal funds transfer."..."Risk primarily lies with
    that subset of entities that collected and dispersed donations,
    used informal methods of funds transfer and/or were
     pg. 51

And although these are generally met with the response "but we have no proof though that
Islamic charities are funding terror", at least there is an
acceptance that this may be because of the lack of oversight,
transparency and regulation which the report is trying to

What to do about it?

The report suggests a number of mitigants and other regulatory
responses - some of which are helpful, the rest deliberately miss
the point. In particular, there is too much focus on
self-regulation and too little attention given to
'legitimate' Islamic charities providing
'legitimate' Islamic charity (directly or indirectly) to
terrorists. Mostly, the report assumes that Islamic charities
will be victims of abuse rather than motivated to circumvent all
the mitigation strategies. For example "NPO's,
however, should...continue to avoid engaging with any
organisation they suspect of being a terrorist group.
pg. 44.

That said, the establishment of "sham charities" are discussed in some detail and the
truth is let slip..."Most notable is that almost all
incidents of NPO abuse involved the use of a registered
organisation that was either a sham charity or a charity that
(knowingly) disbursed funds to a group that supported
humanitarian endeavours alongside terrorist activities. The abuse
of an unsuspecting charitable organisation does not appear to be
the preferred modus operandi.
" pg. 58. 

And when independent regulation is proposed there's the extra
burden on everyone else: "It has been suggested that rather
than enhancing the ability of NPOs to mitigate the risks deemed
to exist in relation to money laundering and terrorist financing,
proposed measures to stem misuse not only place an undue burden
on the sector 'without effectively tackling the terrorist
threat' (Quigley & Pratten 2007: 11) but stigmatises and
consequently disrupts non-profit activity (ACLU 2009; Cortright
et al. 2008; Crimm 2008; Quigly & Pratten 2007)." pg.
46. So is it all too hard? Why not impose additional regulation
on only those charities that you have identified as being high

The Government admits it knows who they are, are they afraid to do anything about it? "If
members of the Australian non-profit sector that are perceived at
greater risk of exploitation can be isolated, then that group
would comprise charities and other fundraisers (specifically
those that transmit funds out of Australia and to regions which
have poorer regulatory oversight), small unregulated
organisations and organisations that predominantly use informal
(possibly unregulated) methods of funds transfer. Added to this
group would probably be NPOs that collect and distribute funds
and are connected with cultural or faith-based groups. It's
important to stress here that risk does not equal likelihood,
particularly given sensitivities around past targeting of sector
constituents, most prominently the Islamic charities. The group
cited here are simply characterised by one (or more) of the
factors that is accepted at promoting susceptibility.
pg. 57. This nonsense can be translated as follows: We know it is
Islamic charities that are at risk of funding terror. Actually,
in this case risk does equal likelihood but we'll say it
doesn't anyway as the Islamic charities don't like it
when we're on to them. Just to confuse you, we'll also
use the word "susceptibility" which we hope you think
means something else besides that Islamic charities are at risk
of funding terror. 

There certainly is none so blind as those that will not see. The
Australian Government knows, through its own work, what the
problem with Islamic charities is yet wont do anything
constructive about it. That said, and despite the report's
inadequacies, there are many positives to take from it, not least
that the report even "went there" and what the
Government was prepared to admit.

The issue of Islamic charity terror funding becomes even more
concerning with the Government's encouragement of Islamic
finance and its impending growth in this country. Islamic finance
contributes heavily to Islamic charities through the payment of
zakat by the Islamic finance institutions and through the finance
contracts themselves.

I have written before on all the issues raised in the report and suggest readers see
"Banking on terrorism in Australia, Dave Clark,
Australian Islamist Monitor, 24 October 2010
" for more

1 Comment

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Almost without exception, when we read of intellectual pursuits and achievement, Muslims are rarely to be found, except, as in the recently acknowledgements that Islam is averse to chess. One can ask how it's possible that more than 200 Jewish Nobel prize winners exist as opposed to the 9 Muslims Nobel prize winners, knowing that there are now 100 Muslims to every Jew on the planet Earth. Above, we see the exposure of supposed se Islamic charities funneling money to terrorist activities, which unfortunately, is nothing terribly surprising. We know that millions of profoundly 'religious' Muslims and Islamic clerics support funding orthodox Muslim (Taliban) activity with drug money. We know that 10's of highly organized orthodox Muslim groups (Hexbolla, Hamas, Al Queda, etc etc) promote and educated youth to kill innocents anywhere and everywhere, under the guise that such atrotious and criminal acts are 'Allah's will.' The unconscionable practice of Female Gentile Mutilation is practiced by upwards of 90% of the population in over 31 Islamic countries, and real repression of hundreds of millions of women in all countries is ligitimate Islamic doctrine. The promoting of openly lying, killing and maiming anyone, inclusive children, is deemed as socially acceptable behavior toward 'infidels' or any other religion, by hundreds of millions of adherents of Islam, and one finally ends up gaining the utterly unfortunate conclusion that 1.4 billion people have been 'captured' by many millions of severely propagandized psychopaths, who have reduced the masses to supporting a severely dangerous ideology - and one that would surely be made illegal in most Western countries had it not been for those 1.4 billion adherents! Not a newspaper today is printed without daily news of Muslim attacks and violence in the street, in schools, in jails, or aggressive Muslim behavior in some form or another, in every country where the Muslim population exceeds 3-5%. It concerns and frightens me that the political policy of mass violence and intimidation is so successful, and that the safety of people everywhere in is danger in greater and greater fashion - and not unlike the same sociopolitical process that occurred in Germany in the 1930's. It is also so very sad, if not mind boggling that these simplistic generalizations are actually factual and true, almost regardless of which country we look at. Can one question the growing 'islamofobia' almost everywhere??

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This page contains a single entry by FionaM published on March 1, 2012 12:00 PM.

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