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Ransoms funding al-Qaida groups' battles as Western crackdown succeeds in drying up traditional sources

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By The Los Angeles Times
Monday, Oct. 21, 2013, 7:00 p.m.

WASHINGTON — Dominik Neubauer stared into the camera, the steel barrel of an assault rifle pointed at his head.

A Yemeni “tribe” had taken him hostage, the 26-year-old Austrian student said in English, a tear rolling down his left cheek. If they aren't paid a ransom, he continued, “they will kill me seven days after this video is published.”

In May, three months after the video appeared on YouTube, Neubauer was freed along with a Finnish couple. The three had been kidnapped near an Arabic language school in Sanaa, Yemen's capital. Multimillion-dollar ransoms were paid for their release, Yemeni and Western officials said.

The three were seized not by a tribe but by al-Qaida in the Arabian Peninsula, the officials said — the group that has been trying for years to blow up U.S. airliners and overthrow the Western-backed government in Yemen. The ransoms went into the group's coffers, according to the officials.

In the last two years, AQAP, as Western officials refer to the group, has extorted $20 million in ransom, according to an estimate by Alistair Burt, who until this month was the top British diplomatic official for the Middle East.

Kidnapping has become the group's single largest source of money, American and European officials said.

Much of the money comes with the complicity of Western governments that have rebuffed British and American exhortations not to pay ransoms, the officials allege. The governments of Finland and Austria said they did not provide ransom money to terrorists. But two Western officials, speaking on condition of anonymity to avoid publicly criticizing allied governments, said that those denials are for public consumption and that the size of the ransoms indicates government involvement.

Ransom money helped fund the group's 2011 effort to seize and hold towns in southern Yemen, U.S. and European officials said. The money was used to pay militants and the families of the dead and to provide social services and infrastructure, the officials said.

Al-Qaida in the Arabian Peninsula turned to kidnapping in part because of successful Western efforts to crack down on its traditional funding sources, including money transfers from wealthy Persian Gulf Arabs, U.S. intelligence officials said.

The problem extends beyond Yemen. The Yemeni group modeled its kidnapping operations after the lucrative practices of al-Qaida affiliates in North Africa and Nigeria, the official said.

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