Commentary Magazine

The Financing of Terror, by James Adams

IN MID-APRIL 1986, almost at the moment American F-Ill’s were making their way to Libya, a group of experts on terrorism were mak- ing their way to a conference in Scotland. To a press anxious for authoritative comment on the U.S.

action, the timing could not have been more fortuitous: here was an entire auditorium filled with ex- pert opinion. In the event, most of those present criticized the Reagan decision, though few proposed any convincing alternative. Joining in the chorus of condemnation was James Adams, the defense corre- spondent of the Sunday Times of London, who hastily revised the galley pages of this book to include his verdict on the Libya raid. In his own words, "Politically, mili- tarily, and morally [the raid] was a serious mistake." However much one might ques- tion this judgment, one must con- cede its author’s credentials. Ad- ams’s expertise on the subject of terrorism developed during a stint on 8 Days, an Arab-owned British weekly specializing in Middle East- ern affairs which devotes consider- able space to the Palestinians and the Palestine Liberation Organiza- tion. As he relates in a preface to this book, The Financing of Terror owes its existence to a last- minute decision by the owners of 8 Days to "spike" a cover story about PLO finances because they did not appreciate Adams’s por- trait of PLO leaders as corporate- style "fat cats." Since working for the Times, Adams has also covered other terrorist groups (e.g., the Irish Republican Army), and thus rounded out his overall knowledge of his subject.

Unfortunately, a command of facts has not enhanced Adams’s powers of interpretation. It is a sign of his intellectual weakness that Adams feels it necessary not only to advance his own findings on the international terror net- work but to denigrate all previous work on the subject as either biased or ignorant. His particular contempt is reserved for those who "paint the image of the Russian Bear as an all-embracing evil that is behind every wrinkle in what would otherwise be a smooth blanket covering the democratic world." Such a sentence merely betrays its own bias. Early on, Adams de- fines terrorism as the attempt "to achieve political ends using violent means, often at the cost of casual- ties to innocent civilians.

This allows him to lump together the CIA and the KGB in their sup- port of various foreign groups, even at times to suggest that the CIA is far better at the game. But in any true definition of the term, terrorism has to do with the delib- erate and specific targeting of inno- cent people, who are not "casual- ties" but the conscious objects of terrorist acts. Unfortunately this initial confusion of terms reverber- ates throughout the book; together with Adams’s unwarranted patro- nizing of other authors, it helps to make The Financing of Terror a disappointing jumble of solid re- porting, scattered insight, and gen- eral intellectual incoherence.

Adams’s strengths as a reporter can be seen in the coverage of the PLO, the organization which dominates the book. Having been around many of its members and having investigated its structures, Adams has no patience with PLO folklore. "Although the PLO and their Arab supporters have more than enough capital to provide decent housing and a living wage for every single Palestinian in the Lebanon," he writes, "the refugee camps remain-as a symbol of what the PLO claims the Israelis have done to their nation." His documentation of that capi- tal is impressive. From its begin- nings, when it was completely de- pendent on the largesse of the oil-rich Arab states, the PLO has parlayed the initial investment of its backers into a multinational empire, using the business acumen that has made the Palestinians themselves such valued managers throughout the Arab world. Adams credits Yasir Arafat with being the first to recognize the necessity of a strong financial base, and argues persuasively that Arafat has stayed on top largely through his control of the PLO pursestrings.

Adams dates the entry of the PLO into the world of commerce to 1970, when it founded Samed (the Palestinian Martyrs Work So- ciety). Starting with the manufac- ture of small essentials such as shoes and blankets, Samed soon realized its vast potential for the general market: In the early days, Samed received donations from various sympa- thetic governments: knitting ma- chines from East Germany; cot- ton for clothes from the Soviet Union; and timber from Ruma- nia for a furniture workshop.

With a willing workforce and al- most unlimited funds, Samed quickly expanded to cover a WILLIAM McGURN is deputy editorial- page editor of the Asian Wall Street Journal.BOOKS IN REVIEW/77 wide area of industrial produc- tion. According to a senior offi- cial in Samed, by 1982 the orga- nization had a turnover of $45 million with thirty-five factories operating in the Lebanon, a number of businesses located abroad, and a regular flow of ex- ports to Eastern bloc and Arab countries.

The PLO’s business muscle is al- so reflected in manpower. Before the 1982 Israeli invasion, Adams estimates, Samed employed 5,000 workers in Lebanon, 200 in Syria, 1,800 in Africa, along with anoth- er 6,000 part-timers in Lebanon and some 12,000 who started out with Samed but went on to found their own businesses.

The overall dollar amounts in- volved are staggering: Adams places the PLO’s annual income at $600 million, with a mere $100 million coming from donations by Arab states like Saudi Arabia. When the total of all the groups operating under the PLO umbrella is consid- ered, the figures run up to $1.25 billion in total annual income and $5 billion in assets.

These figures easily place the PLO in the ranks of the Fortune 500. So solid is the PLO’s financial base, reports Adams, that in 1981 it even lent the Nicaraguan gov- ernment $12 million. "It is very difficult to find a poor Palestinian leader," Adams writes. "Most have large cars, all have their own homes, and some have expensive holiday homes." So MUCH for the good part of this book. When he is not investigating business portfolios, however, Ad- ams founders. There is, for exam- ple, his insistence on playing down the Soviet role. At one point Ad- ams declares that the Soviets "have generally urged moderation by the PLO," at another that they have "never provided funding for the PLO," at a third that the idea of Soviet involvement in fomenting terror around the world is a para- noid Western fantasy. All this is so much muddying of the waters. It has been shown again and again that the Soviets have a general policy of supporting terrorist or- ganizations, for the simple reason that they stand to gain from any instability thereby created in areas vital to the West (and terrorism is a problem only in these areas). Nor does it matter whether the Soviets fund the PLO: the "in-kind" bene- fits-e.g., training and diplomatic status-are often more valuable means of support.

When it comes to the issue of what actions should be taken to stop terrorism, Adams is unequiv- ocally against the military option.

Evidently he has been so seduced by his own impressive findings as to believe that merely squeezing the terrorists’ funds will magically halt their operations. But it does not require much wealth to plant a bomb here and there; such groups as the IRA and the PLO were al- ready doing this quite proficiently before they amassed their fortunes.

Adams rightly attacks corporate leaders and bankers who are all by R. K. Ramazani "No reader of this volume will again feel bewil- dered or lost amid the complexities, twists, and turns of Middle Eastern politics." -Stanley Hoffmann, from the foreword One of the foremost authorities on the Persian Gulf provides the first comprehensive assessment of the continuing impact of revolu- tionary Iran on the whole of the Middle East, demonstrating more clearly than ever before the interrelations of issues and events in the region. $27.50 Available atyour bookstore orfrom THE JOHNS HOPKINS UNIVERSITY PRESS 01 West 40th Street, Suite 275, Baltimore, Maryland 2121178/COMMENTARY JANUARY 1987 too willing to deal with terrorists, and firms like Lloyd’s of London, which has made terrorist kidnap- pings more lucrative by offering ransom insurance to potential tar- gets. Among efforts he applauds is a 1984 Spanish law to prosecute intermediaries in kidnappings and the successful FBI initiative that effectively shut down the IRA’s American front, NORAID.

But here, too, like people who are forever droning on about "white-collar crime," Adams misses the obvious in his vigorous pur- suit of the ancillary. The problem of terrorism is not that some PLO, IRA, or Red Brigade leaders are making themselves rich through gangsterism. The problem of ter- rorism is terrorism.

If Adams had approached the subject of terrorist finances with an interest in expanding our knowledge of the terrorist phe- nomenon in general, rather than contracting it to fit his own, the original material he has amassed would have made this book an im- pressive addition to the field. As it is, The Financing of Terror pro- vides yet another illustration of the truth that, however indebted we may be to experts for provid- ing us with information, in the realm of policy decisions we need to look elsewhere for guidance.

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