Bin Laden’s gone, but what about al Qaeda’s finances?


As the world absorbs the news of Osama bin Laden’s death, government warnings of counter strikes show that the death of one man won’t kill al Qaeda. One reason: the terrorist group doesn’t need bin Laden for money.

“There are two things a brother must always have for jihad, the self and money.” — An al Qaeda operative

This truism is cited by none other than the 9/11 Commission in the detailed report that it published in 2004. One of the first and most important chapters in that document looks at how al Qaeda raises cash and moves it to its operatives around the world, weaving a financial web that the Commission said “allows the organization to support itself, its operations, and its people.”

“You can’t run a terror network without funding because it takes money to train operatives, transport them, and buy equipment,” Thomas Kean, the former New Jersey governor who chaired the Commission, tells Fortune. “When you cut off those supplies, it becomes very difficult to operate.”

Contrary to popular opinion, the death of bin Laden does not strike a blow to the organization’s financial health. “[Osama bin Laden] Does not support al Qaeda through a personal fortune or a network of businesses,” the Commission wrote in its report.

“Al Qaeda relied on fund-raising before 9/11 to a greater extent than thought at the time,” the Commission wrote. “Bin Laden did not have large sums of inherited money or extensive business resources. Rather, it appears that al Qaeda lived essentially hand to mouth.”

And yet the myth has persisted that bin Laden has been the organization’s financial pillar. This is likely because he was the son of a billionaire who used a portion of his inheritance to start al Qaeda in the 1980s and he nurtured it to become, in the words of the New York Times, “a multinational enterprise to export terror around the globe.”

But by 2004, al Qaeda financed itself by raising money from “witting and unwitting donors, mosques and sympathetic imams, and nongovernment organizations such as charities,” says the report. Intelligence reports reveal a financial web that is nearly impossible to track, as the money is distributed as fast as it is raised by a network of couriers. Each strand in the web is taken down and distributed as fast as it is woven. There is no war chest to discover and no bank from which al Qaeda draws funds.

The reality of how al Qaeda actually survives has kept intelligence officials and operatives in other countries fighting to stay one step ahead of the organization. “One lesson of 9/11 was that you can’t fight the last war,” says Kean. “We talk about a failure of imagination on 9/11 because the terrorists did something we never imagined they would do. The way they raise money is no different.”

This game of whack-a-mole has changed global finance. Banks now must take responsibility for knowing who their customers are and for sussing out unusual behavior.

Kean says the Treasury has used its powers to disrupt the flow of money to al Qaeda, including tracking down individual financial deals.

But it hasn’t stopped terrorism.

“A lot of what al Qaeda is doing now doesn’t require a lot of money, like recruiting people over the Internet,” says Kean, who notes that the amounts seem to have gotten smaller since 9/11. “That huge 9/11 operation only took $500,000 maximum.”

Bin Laden’s death is an important moral blow to al Qaeda, but it is less of a blow to the organization’s lifeline.

By Katie Benner (CNN MONEY)

U.S. Kills Osama Bin Laden In Daring Pakistan Raid


President Barack Obama announced late Sunday night that U.S. forces killed Osama bin Laden, the mastermind of the 9/11 attacks, during a Sunday morning raid against his compound in Abbottabad, Pakistan. The  al Qaeda leader was killed during a firefight and his body was retrieved by U.S. troops, who suffered no casualties, Obama reported. “The death of bin Laden marks the most significant achievement to date in our nation’s effort to defeat al Qaeda,” the President said in his 10 minute televised address.

The successful raid took place almost a decade after the 2001 attacks, which took nearly 3,000 lives in New York City’s World Trade Towers, the Pentagon, and aboard four hijacked U.S. commercial flights.   “We can say to those families who have lost loved ones to al Qaeda’s terror:  Justice has been done,” Obama said.

Even before the President made his official announcement at 11:35 EST, word of bin Laden’s death had spread through Washington, to foreign capitals and around the Internet. U.S. bases were put on high alert against possible reprisal attacks, while a cheering, chanting crowd began gathering outside the White House.

In a briefing after the President’s announcement, senior administration officials said that Obama authorized the raid Friday morning after months of planning and after five National Security Council meetings, beginning on March 14th, held to discuss the operation.  The high risk raid was carried out by a small U.S. team that landed in helicopters, with no advance notice to the Pakistani or any other government.  One helicopter had unspecified problems and was destroyed on the ground by the U.S. forces, they said. (The officials declined to identify the forces, but the mission was reportedly carried out by two dozen Navy Seals.)

In addition to bin Laden, three other men, including one of bin Laden’s sons, and one woman who was “used as a shield by a male combatant,” were killed, they said.  Two other women in the compound were injured during the operation which lasted “under 40 minutes” and was completed without local police authorities noticing, the officials reported.  One official added that the body of the 54-year-old bin Laden would be “handled in accordance with Islamic practice and tradition.” (Update: CNN reported at 3 A.M. Monday morning that bin Laden had been buried at sea.)

According to the officials, U.S. intelligence agents had been following the trail that ultimately led to bin Laden for four years, after learning from detainees that there was one courier whom the al Qaeda leader particularly trusted.   Two years ago, they identified areas where that courier was operating and last August located the compound where he was living with his family, his brother’s family and a third, unidentified family. (The two brothers were the third and fourth men killed, the official said.)

As the U.S. investigated that compound, “we were shocked by what we saw,” one official said. The property,  located in an affluent suburb  “with lots of retired military’’ 35 miles north of Islamabad, was roughly eight times larger than other homes in the area and was secured by 12 to 18 foot walls, topped by barbed wired. While valued at $1 million, the compound had no telephone or Internet service. The compound’s residents burned their trash, rather than putting it out to be collected, as neighbors did.  Although the compound was built at the end of a dirt road in 2005, the area  has since become more developed, they said.  It is unclear how long bin Laden himself had been hiding there.

“It was custom built to hide someone of significance,’’ one official said. The third family living in the compound appeared to match bin Laden’s family, with a woman believed to be his youngest wife and some other family members.  The compound “was perfectly consistent with what we expected” his hideout to be like, the official added.  “The bottom line,’’ he said, was “we had high confidence that the compound harbored a high value target and there was a strong possibility that the terrorist who was hiding there was Osama bin Laden.’’ After intelligence operatives concluded in February that this was most likely bin Laden’s compound,  U.S. forces began planning and practicing the operation.

During the briefing, one administration official observed that while “al Qaeda may not fragment immediately,”  the death of  bin Laden “puts the group on a path of decline that will be difficult to reverse.”

In his address, Obama said that “shortly after taking office, I directed Leon Panetta, the director of the CIA, to make the killing or capture of bin Laden the top priority of our war against al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.”

While the raid was carried out without advance notice to the Pakistanis, in his statement, Obama credited “our counterterrorism cooperation with Pakistan” with helping  “lead us to bin Laden and the compound where he was hiding.”  But the fact that bin Laden was hiding in a densely populated suburb, and not a remote tribal area or cave, will likely feed speculation that some elements within the Pakistani intelligence service or military were aware of his presence there.

It is unclear what the reaction  to the operation will be within Pakistan, although some Pakistanis will no doubt be unhappy about U.S. military action on their soil. “Over the years, I’ve repeatedly made clear that we would take action within Pakistan if we knew where bin Laden was,” Obama said. He added: “Tonight I called (Pakistani) President Zardari, and my team has also spoken with their Pakistani counterparts.  They agree that this is a good and historic day for both of our nations.  And going forward, it is essential that Pakistan continue to join us in the fight against al Qaeda and its affiliates.” Obama also called former Presidents George W. Bush and Bill Clinton before making his announcement.

The death of bin Laden, Obama said, “does not mark the end of our effort.  There’s no doubt that al Qaeda will continue to pursue attacks against us.  We must –- and we will — remain vigilant at home and abroad.”  He added that as the the U.S. pursues terrorists, “we must also reaffirm that the United States is not –- and never will be -– at war with Islam.  I’ve made clear, just as President Bush did shortly after 9/11, that our war is not against Islam.  Bin Laden was not a Muslim leader; he was a mass murderer of Muslims.  Indeed, al Qaeda has slaughtered scores of Muslims in many countries, including our own.  So his demise should be welcomed by all who believe in peace and human dignity.”

Source: Forbes

British Stiff Upper Lip Goes Wobbly For Will And Kate


“Where there’s a Will, there’s a day off.” That was the clever slogan on a t-shirt worn today by a woman in Belfast, Northern Ireland, during one of the 5,000 street parties taking place across Britain to celebrate the Royal Wedding. It perfectly encapsulated how most people in this country had been feeling in the run-up to this grand occasion. A mixture of irreverence and grudging appreciation: “Don’t really care about the wedding, or the royals, but I’ll take two extra public holidays, thanks.”

For the past week, journalists on Twitter and friends on Facebook had all been feigning indifference to the biggest Royal Wedding Britain had seen in 30 years because, well, we’re past all that pomp and circumstance aren’t we?

But then Friday morning came, and it became a different story. Thousands of people got early cabs to the Mall leading up to Buckingham Palace, to try and catch a glimpse of Will and Kate. More descended on Hyde Park to watch the wedding on big screens. After all, when they had a day off work there wasn’t anything better to do. Except maybe watch the whole thing on TV.

I had been determined through the week to not to care about the Royal Wedding, I even told an anti-royalist friend to check out the anti-Royal wedding party on Red Lion Square, because I might be going for the irony of it all. Yet for some inexplicable reason my eyes at 7am this morning found their way to the television, and a colorful array of random wedding guests shuffling into Westminster Abbey. For the next four hours there was a valiant running commentary from the BBC’s Huw Edwards on stuff that wasn’t happening. I couldn’t look away.

My anti-royalist friend also ended up snubbing Red Lion Square, for the party in Hyde Park instead. Such is Britain. We spend 95% of the time rolling our eyes at the royal family and insisting we could do without them, the other 5% peeking through tear-stained hankies at wedding proceedings like today’s.

Kate and Will were for years nothing more than fodder for the tabloids, especially during their temporary split in 2007. Today, the pomp and circumstance, the global media attention, with millions watching on YouTube and the adoring, colourful crowds of people dressed in union jack flags and wedding attire, suddenly elevated them to a celestial status.

You got the feeling, for instance, that it didn’t matter what Kate ended up choosing for her wedding dress. A mumu would have sufficed. I personally didn’t know what to think of all the lacy bits when I saw her emerge from London’s Goring Hotel this morning – perhaps it was a little demure? But there was no question for the news commentators and members of the crowd, who praised the thing for its classic simplicity and elegance. I found I suddenly rather liked it. It was becoming increasingly hard not to like everything about Will and Kate.

Brits recover from celebrating the royal wedding in Hyde Park

Then the newlywed’s balcony appearance dashed any of the country’s remaining cynicism to smithereens. “We might just get a kiss!” the BBC’s Edwards cried in the nail-biting minutes before they emerged from the front facade of Buckingham Palace. And then, the country’s heart collectively leapt – there it was! A one and a half second smooch between the two (not that I counted), marginally longer than the one-second peck between Charles and Diana in 1981 (not that I’m comparing). Will blushed and the nation blushed with him. A few moments later, as if we hadn’t had enough, the pair treated us all to a second kiss. Two kisses! The crowds from Buckingham Palace, to Hyde Park, to Belfast, roared with delight.

Wait, was this the Britain that didn’t care about the Royal Wedding? The one that was only in it for the day off? Now people were tweeting things like “Marriage, FTW!” I headed over to Hyde Park to see the last of the revellers and get a feel for the atmosphere, maybe catch an anti-royalist or two with placards.

Instead, there were union jack flags everywhere, flowing behind toddlers as capes, hanging from a dog’s neck, pinned into the ground to surround a picnic. Among the buttercups and pink cherry blossoms, there were neat rows of porta potties. At 3pm, well after the balcony appearance, thousands of people were still lounging around the park drinking wine and eating cupcakes. Every so often they would erupt into cheers. I soon realized they were watching re-runs of the wedding ceremony on two big screens. One girl skipped across to her friends shaking a flag and tunelessly sing the chorus to God Save the Queen. No one really seemed annoyed with the royal family anymore.

I stumbled across three huge plastic bins with a few cupcakes inside – the cupcakes’ source. A few entrepreneurial young women had been selling them for £1.50 each and managed to get rid of nearly all 350. Aside from making money, people were here because they had the day off, because there was a fleeting chance they might catch some sun and because, well, they wanted to celebrate the occasion. While the Brits feel mostly irreverent towards the royal family, there’s a quiet, genuine regard simmering underneath. The Royal Wedding stirred up those nascent feelings along with dare I say, a bit of pride and even romance. I noticed a few more couples than usual canoodling in Hyde Park afterwards.

The anti-royalist party will no doubt have been good fun. Somehow though, I’m satisfied at having got swept up in today’s royal romantic reverie, and rather glad I didn’t go.

Source: Forbes

Bill Clinton, Carlos Slim to Launch Soccer Project for Mexican Youngsters


President Bill Clinton addresses the audience before the "Walk In My Shoes: Conversations Between A Civil Rights Legend and His Godson on The Journey Ahead" book Event at The Paley Center for Media on February 9, 2011 in New York City.  (Photo by Michael Loccisano/Getty Images)

President Bill Clinton addresses the audience before the “Walk In My Shoes: Conversations Between A Civil Rights Legend and His Godson on The Journey Ahead” book Event at The Paley Center for Media on February 9, 2011 in New York City. (Photo by Michael Loccisano/Getty Images)

Bill Clinton and Carlos Slim are teaming up for Mexican youngsters.

The former U.S. president and the Mexican tycoon are planning to launch a project using soccer to encourage 900 teenagers and young adults to return to school in a border state ravaged by drug violence.

Renato Flores, spokesman for the Fundación Carlos Slim, said Friday that the project will transform lessons and intellectual skills developed through sports into marketable job skills for youth in the northern state of Chihuahua.

The Clinton Giustra Sustainable Growth Initiative says in a news release that the program will involve people ages 16 to 24.

Flores says both foundations will provide an undisclosed amount of money to the project and monitor its development through a local organization in Ciudad Juárez, epicenter of the drug war.

Based on reporting by The Associated Press.

Source: Fox News

Movies You’ve Heard Of Coming To YouTube. Will You Rent Them?


YouTube is finally ready to move its movie rental service from a long-running test into a real, bona fide movie store.

TheWrap’s Sharon Waxman first reported the news Monday evening. I’ve been able to confirm much of her story from people familiar with the plans.

Waxman’s report says the revamped store at Google’s video site “may start as early as this week or next;” I’m told it could be “weeks, but not months.” Big studios including Sony, Time Warner’s Warner Bros. and Comcast’s Universal are on board. So are indies like Lionsgate.

Notable holdouts: News Corp.’s Fox (News Corp. also owns this Web site) and Paramount, whose corporate parent Viacom is still suing Google over YouTube copyright claims.

YouTube started testing movie rentals internally in 2009, and has been renting a small handful to the public since 2010. Those movies have been offered as a streaming file, instead of the downloads that Apple’s iTunes rents, and I’m told the plan is for that to continue.

The difference is that you’ve probably only heard of a handful of the movies in YouTube’s existing store (I think “Made” is really under-appreciated). Post-expansion, you’ll get the same stuff, or much of the same stuff, that you can get from Apple, Amazon, and several other Web services.

So here’s the real question: Will you, or anyone else, use it?

Waxman quotes an unnamed executive who says they are “pretty excited,” but primarily because YouTube is embracing individual rentals, instead of a Netflix-style subscription plan.

A source I talked to from a participating studio, though, is less enthused: “A small VOD deal? Who cares? There are 40,000 other people who are selling VOD. This is a short-term, transactional deal.”

Another source familiar with the plans cautions that the initial expansion will only be the “first inning” of a longer game. Other features that Google could add down the road would be the ability to purchase movies, and store them in a cloud-based locker service.

Google is unlikely to get that ability until it makes several moves to mollify the big studios, primarily around copyright issues: They want the search giant to make it harder to find pirated movies, and they don’t want Google placing its ads on pirate sites, etc.

Google has been making some moves along those lines, but apparently not enough of them. (The flip side of this argument: Many studios are very interested cloud-based lockers, because they think that system, which allows people who own an individual movie to watch it on different machines, will support their eroding DVD sales. That may be more wishful thinking than anything else, but that’s for a different story.)

But the problem for both Google and the studios is that so far digital consumers seem largely uninterested in renting or buying individual movies.

Given the choice, consumers have overwhelmingly gone for Netflix, which now boasts 23.6 million subscribers. Research firm NPD estimates the company has 61 percent of the digital movie market.

Source: Smart Money

Mattel loses Bratz case


bratz.top.jpg

NEW YORK (CNNMoney) — A federal jury ruled against Mattel Thursday, awarding damages to MGA Entertainment in the latest twist in a dispute over the ownership of Bratz, the most popular dolls since Barbie.

The jurors in a Santa Ana, Calif. court found Mattel does not own rights to the popular Bratz franchise, and that rival MGA did not steal the idea.

The two toymakers have been engaged in a running battle over who owns the lucrative doll line for the better part of a decade. Mattel argued that since the idea was developed by designer Carter Bryant while he was a Mattel employee, it owns the rights.

MGA argued that the language of Bryant’s contract only covered work created within the scope of the job, and not work done during his own time or outside of his duties at the company.

Both sides have scored big wins in the past, but on Thursday MGA prevailed.

The jury found that Mattel’s (MAT, Fortune 500) copyright claim on the franchise was invalid, and that MGA had not stolen trade secrets from Mattel.

Instead, the jurors awarded MGA $88.5 million in damages, finding that Mattel was the party that had stolen trade secrets. MGA had accused Mattel of stealing 114 of them. The jury awarded damages in 26 instances.

“We are grateful for a hard-working and smart jury,” MGA CEO Isaac Larian said in an email to CNNMoney.

“This is a victory for all the hard-working entrepreneurs and small companies who get bullied unfairly by large multinational corporations with deep pockets,” he said.

Mattel said it would challenge the decision.

“MGA’s claims against us were simply not supported by the evidence at trial. We will ask the court to set aside the verdict. Once the judge rules on our motions, we will evaluate our next steps,” Mattel general counsel Robert Normile said in a statement.

The jury did find MGA at fault on one count, saying the company did in fact intentionally interfere with Bryan’s contract with Mattel.

Last year, the 9th U.S. Circuit Court of Appeals in San Francisco dismissed a December 2008 ruling that gave Mattel ownership rights.

 Source: CNN Money

Just How Rich Are Queen Elizabeth And Her Family?


Queen Elizabeth II of the United Kingdom durin...

Britain’s Royal family is just days away from throwing its most memorable wedding in 30 years.

Prince William and his longtime girlfriend Kate Middleton will marry at 11 a.m. on April 29 at Westminster Abbey.  Two choirs, one orchestra and two fanfare teams will perform the music at the service, which will be followed by a procession through London.

The wedding party will arrive at Buckingham Palace, the site of the  reception to be hosted by his grandmother, The Queen. Guests are expected to include Prince Albert of Monaco and his fiancé, South African Olympic swimmer Charlene Wittstock and professional soccer player David Beckham and his wife Victoria.

The bride’s parents, the Middletons, will make a “private contribution,” but the Royal Family will pay for nearly all of the celebration. The festivities are expected to cost a reported $30 million; a huge sum, to be sure, but likely less than half the estimated cost, adjusted for inflation, of  Princess Diana’s and Prince Charles’ 1981 wedding, also paid for by the Royal Family. (The Government and other bodies will pay for costs that are consequential to the wedding like extra security.)

These monied monarchs can well afford it. Queen Elizabeth, 85, has an estimated personal net worth of $500 million that comes from property holdings including Balmoral Castle in the Scottish Highlands, stud farms, a fruit farm and marine land throughout the U.K.; extensive art and fine jewelry; and one of the world’s largest stamp collections built by her grandfather.

Not included are those assets belonging to the Crown Estate, which she gets to enjoy as Queen, such as $10 billion worth of real estate, Buckingham Palace (estimated to be worth another $5 billion), the Royal Art collection, and unmarked swans on stretches of the Thames.  The Crown has claimed ownership of these birds since the 12th century when swan meat was considered a delicacy; they are no longer eaten. The Queen also receives an annual government stipend of $12.9 million.

Because most of her wealth is tied to her position and not hers personally – in otherwords, she could never sell the royal assets – she is not included among the World’s Billionaires but did appear among the World’s Richest Royals in our most recent rankings.

As heir to the throne, Prince Charles, 62, got $28 million stipend last year from Duchy of Cornwall Estate. He spends well over half of aftertax income on official duties and charitable activities. Paid more than $10 million last year on salaries of 150 staffers.

Princess Diana reportedly left both Prince William, 28, and Prince Harry, 26, $10 million after taxes. They apparently started receiving annual dividends at age 25, estimated at $450,000 a year. They get the full sums when each turns 30. Prince William also earns between $68,000 and $74,000 a year as a flight lieutenant with the Royal Air Force while Prince Harry receives between $50,000 and $53,000 as a helicopter pilot for the Army Air Corps. Prince William and Kate will eventually live in an eco friendly house built by Prince Charles in Herefordshire.  Both princes have Ducati Superbikes that they sometimes ride for charity. Prince Harry is also a keen polo player.

Net worth estimates compiled by Cristina von Zeppelin who also contributed to this report.

By: Luisa Kroll (Forbes)

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