Following the Money Trail to the Rebels

APFormer Chechen fighter Lomali Nasho with his wife, Roza, and son Turgul in Istanbul.
ISTANBUL, Turkey -- Pro-Chechen activists are increasingly going underground to funnel money secretly to fighters in Chechnya as post-Sept. 11 government crackdowns and Russian pressure choke off what was once a flow of hundreds of millions of dollars to the republic, say Chechens and experts familiar with the funding.

The financial squeeze comes as Chechen rebels rely more on dramatic low-cost terror attacks, such as the Beslan school hostage-taking and suicide bombings with militants so starved of cash they cannot afford to keep heavily armed forces in Chechnya.

"Limited resources mean more terrorism," said Michael Radu, a terrorism expert at the Foreign Policy Research Institute in Philadelphia. "Terrorism is cheaper than guerrilla warfare and it has a more dramatic impact. You don't need heavy weapons to kidnap kids."

The money flow has plummeted from its peak in the 1990s to an estimated several hundred thousand dollars a year now, Chechen activists and terrorism experts said.

Wealthy Chechen businessmen and Islamic and pro-Chechen charities in the Persian Gulf, Jordan, Turkey, Europe and the United States once accounted for most of the hundreds of millions of dollars in fundraising. It was mostly done through a far-flung Chechen diaspora and Islamic charities often using murky and secret transactions that are difficult to track.

Now the money is smuggled into Chechnya largely by private businessmen traveling through Azerbaijan, the Chechen activists and experts said.

A former Chechen fighter, who remains in touch with rebels in Chechnya, said militants and commanders were complaining about the fall in funding.

"You need money for food, medicine and to keep fighters in the field," said the fighter, identifying himself as Lomali Nasho, the name he uses in Turkey, where he lives with refugees.

He said he does not use his real name for fear of attracting the attention of Russian agents.

The largest contributions are believed to still be from the gulf, with smaller amounts moving through Turkey, Europe, Islamic states and even North America.

Earlier this month, the U.S. Treasury Department accused an American arm of a Saudi charity, the Al-Haramain Islamic Foundation, of links to al-Qaida leader Osama bin Laden. The department alleged the charity tried to conceal funds intended for Chechnya by omitting them from tax returns and mischaracterizing their use.

The Treasury Department also said there were allegations that donations made to Al-Haramain for Chechen refugees were diverted to rebels and Chechen leaders affiliated with al-Qaida.

"Finances have been flowing into Chechnya in support of both the global jihad and the separatist movement," said Molly Millerwise, a spokeswoman at the Treasury Department.

Aid groups insist the money they collect is for refugees and infrastructure in Chechnya, but Chechens and terrorism financing experts say at least part of the funds is diverted to fighters.

"Money for refugees, it never existed," Nasho said. "The money went to the fighters."

An example of the cutoff can be seen in the dramatic fall in contributions from Turkey.

After the first war in Chechnya began in 1994, the Chechen cause was so popular in Turkey -- home to some 5 million people who trace their ancestry to the region -- that money began to flow to pro-Chechen organizations from the Chechen diaspora, businessmen and ordinary Turks, some of whom contributed at mosques.

About $10 million was collected in 1995, said Mitat Celikpala, an international relations expert at Ankara's Hacettepe University.

Russia pressured Turkey to stop the flow of aid, and Celikpala said that figure is believed to have fallen to some $2 million in 2002. Many people in secular Turkey also began to turn away from the Chechen cause as the Chechens increasingly identified with radical Islam.

A takeover by pro-Chechen activists of an Istanbul hotel in 2001 also alienated many Turks.

"People are scared to give money and to collect money," Nasho said. "Police ask the reasons as to why they collect money. It has to be done in secret."

Turkish police visited the Ankara office of the pro-Chechen Federation of Caucasus Associations every day during the Sept. 1-3 Beslan siege, which ended with the deaths of more than 330 hostages, including many children.

Turkish intelligence and police "asked us what we are doing and what were our thoughts on the terror incidents," said Cumhur Bal, the group's secretary-general. "They didn't apply any pressure. ... They just came to get information."

After Beslan, Moscow threatened preventive strikes on terrorist bases anywhere in the world.

Moscow has already been accused of acting outside Russia to go after Chechens. In February, rebel leader Zelimkhan Yandarbiyev was killed by a bomb in Qatar, a major source of funding for the Chechens.

A Qatari court convicted two Russian intelligence agents in the assassination of Yandarbiyev, believed to be a key figure in collecting money for Chechnya. The court also said the killing was carried out with the backing of "Russian leadership" and coordinated between Moscow and the Russian Embassy in Qatar.

Pro-Chechen activists brush off Russian threats.

"We already have risks," said Cuma Bayazit, head of the Chechen Caucasus Support Committee in Ankara, when asked about Moscow's threat. "It won't change anything for us."

The gulf was long the main source of funding for Chechnya outside of Russia.

In Qatar, Interior Minister Abdullah bin Khaled al-Thani, a Muslim fundamentalist, was among the strongest Chechen supporters, and a Qatari television station raised $8 million in a 1999 telethon for Chechnya.

The Sept. 11,2001, attacks were key in cutting Chechen funding from gulf states. The United States pressured gulf states to monitor the flow of money that could reach radical groups -- a step aimed at cutting off al-Qaida, but which also blocked money for Chechen rebels.

Still, terrorism expert Radu said, the money flow "can never be completely cut off."

Associated Press writers Tarek al-Issawi in Dubai, United Arab Emirates, Jamal Halaby in Amman, Jordan, and Jeannine Aversa in Washington contributed to this report.