April 13, 2010: The tactics that dried up much of the terrorist cash flow in Iraq three years ago, has now done the same for al Qaeda worldwide, and is being applied to the Taliban in Afghanistan and Pakistan as well. The impact of these tactics, which involve more lawyers, bankers and accountants, than combat troops, was first seen three years ago in Iraq. The Islamic terrorists there suddenly saw their financing drying up. Since most of the terrorism was carried out by mercenaries, no cash meant no action. That played a large role in the defeat of Islamic terrorism, and al Qaeda, in Iraq.

Going after the money requires a considerable intelligence effort to identify where the money comes from, and how it is moved. That has been going on since before September 11, 2001. It took years to convince Arab governments to cooperate. In the meantime, U.S. Treasury Department officials developed tools and tactics that made it possible to quickly halt, or interrupt, terrorist funds moving through the international banking system. Even the informal "halawa" banking system in the Arab world depended on the international banking system for some of their needs, and the major halawa networks could be pressured as well. Terrorists were forced to use couriers to carry cash, and couriers were vulnerable to getting caught. Individual terrorist fund raisers were identified and arrested, or banned from the banking system. Same with businesses and Islamic charities.

These tactics don't halt all terrorist cash flow, but they do interrupt it, seize a lot of cash, and discourage donors from giving. It has a major impact, which the media usually only notes as reduced terrorist activity.

With the remaining Iraqi Islamic terrorists left to Iraqi security forces to deal with, the American cash flow commandos turned their full attention to al Qaeda in 2008. Last year, intelligence monitoring began to pick up more messages about money, or the lack of it. Al Qaeda fund raisers were all over the Persian Gulf, seeking wealthy Arabs willing to donate. One of these fund raisers was captured, and his cell phone was found to contain a fund raising video, asking Saudi Arabians to send money to the new "Al Qaeda In Arabia" headquarters in Yemen. The video included the assurance that, "the bearer of this message is trusted by us."

Al Qaeda was trying to develop and expand a network of fund raisers in Saudi Arabia. The members of this network collect the donations and get the cash back to Yemen, or buy weapons and supplies and see to it that the stuff gets to where it is needed (which might be Saudi Arabia, which is still seen as the major target for "Al Qaeda In Arabia".) This group had to move to Yemen because Saudi counter-terrorism efforts proved too successful for al Qaeda to risk keeping most of their people in the kingdom.

But it was now a lot harder for wealthy Arabs to fund their favorite Islamic radical groups. Two years ago, most Arab nations agreed on a new set of regulations, that would help crack down on terrorist fund raising and money laundering in their countries. Until the defeat of al Qaeda in Iraq, it was considered too politically risky to send the police after wealthy donors to Islamic radical groups. Money laundering was another untouchable area, because corruption was so common, and money laundering was part of that. But "reform" has become increasingly popular in the Arab world over the past few years, and these new counter-terrorism efforts are part of it.

It's no longer fashionable (as it used to be) to rejoice whenever a Islamic terrorist bomb goes off in the West, or anywhere else for that matter. Since 2003, most of the al Qaeda violence has been against Arabs, and after a few years of this, public opinion turned on the Islamic terrorists. Public opinion wants these butchers shut down, especially in Arab countries. This means that those who support Islamic radicalism are no longer as tolerated as they used to be.

Another aspect of the crackdown on money laundering is the growing popularity of honesty in business and government. Lots of corruption is still tolerated, and many Arabs insist that corruption is "part of the culture." But the money laundering is seen as primarily criminal, a tool largely for gangsters and terrorists.

Many Arab nations have also cracked down on Islamic charities, at least the ones that serve as fronts for terrorist fund raising. More troublesome are Islamic charities that are largely legit, but often send money to recipients who are with terrorist groups, or who share the donations with terrorists. This has to be addressed in the nations where the donations end up.

As expected, the many (20 percent or more of the population) Arabs still willing to support terrorism, have simply become more discreet. Thus the fund raising videos use someone the potential donors may be familiar with, and include a pledge that the person delivering the video is "trusted."

Al Qaeda has been having increasing cash problems over the last seven years. Once al Qaeda went on the offensive in Iraq in 2004, and began slaughtering Moslem civilians, especially children, popular support throughout the Moslem world began to decline. It is still declining, despite al Qaeda efforts to cut down on the civilian deaths.