For the first 18 months after the September 11 attacks, US officials charged that Saudi Arabia, shell-shocked by the fact that a majority of the perpetrators had been Saudi nationals, was dragging its feet on implementing measures to prevent Saudis from funding militant Islamic groups like al Qaeda.It took a series of al Qaeda attacks on Saudi targets in 2003 and 2004 to persuade the kingdom to pay more than lip service to the need to halt funding of terrorist groups.
US and European officials acknowledge that the Saudi government has introduced strict monitoring of bank transactions and banned the transfer abroad of charitable funds without government approval. They also note that some 100 suspected terrorism financiers have been arrested in the kingdom over the past two years, approximately 20 of which were prosecuted. Most recently, Saudi authorities said that they had arrested a charity official for directing funds to extremists.
A US Government Accountability Office (GAO) report concludes that "Saudi individuals and Saudi-based charitable organizations continue to be a significant source of financing for terrorism and extremism outside of Saudi Arabia." It quotes US Treasury officials as saying that "Saudi-based individuals are a top source of funding for al Qaeda and associated groups, such as the Taliban." The report says Saudi individuals and charities circumvent Saudi restrictions by employing couriers to transfer cash to militant organizations.
US President Obama's special envoy to Pakistan and Afghanistan has in recent months repeatedly complained that Saudi funding may be as important to the Taliban as drug revenues as a source of income. "In the past there was a kind of feeling that the money all came from drugs in Afghanistan. That is simply not true... [the Taliban] get a lot more money out of the Gulf, according to our intelligence sources," Holbrooke recently told a news conference in the Pakistani capital Islamabad.
A recent Pakistani police report accused Saudi Arabia's Al Haramain Foundation of donating $15 million (10 million euros) to militants responsible for suicide bombings in Pakistan and the assassination of former Prime Minister Benazir Bhutto. The US and Saudi Arabia jointly as well as the United Nations have designated in recent years several foreign branches of Al Haramain as terrorist organizations. However, Al Haramain continues to operate legally in Saudi Arabia although the US Treasury last year put the foundation as a whole, including its Saudi headquarters, on its list of designated terrorist organizations.
Similarly, Indian officials say Lashkar e Tayiba, the Pakistani group responsible for last year's attacks in Mumbai, continues to operate in Saudi Arabia. Indian police recently arrested Lashkar leader Muhammad Omar Madni shortly after he had visited the kingdom on a fundraising trip. Indian police said they had also recently found a large amount of Saudi riyals during a raid on a Lashkar safe house in Mumbai.