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News Analysis

Why Minnesota Banks Are Cutting Off Somali Money Transfers

Mon, May 14, 2012

Clare Lopez


Watching the noisy demonstrations in Minneapolis, Minnesota, on May 11, 2012, that blocked intersections and snarled traffic for hours, it might have been difficult to understand why hundreds of Somalis were threatening to close their bank accounts at the local Wells Fargo branch.

In fact, Wells Fargo and other Minnesota banking institutions have made the decision to stop providing money-wiring services to the state’s large Somali immigrant community that previously depended on bank assistance to facilitate their money transfers from the U.S. back to relatives or other recipients in Somalia. In protest, many Somalis are closing their bank accounts.

The problem is that because Somalia has been without a formal functioning government since 1991, and much of its territory is controlled by the Al Qaeda-linked al-Shabaab Islamic terrorist organization, there is no sure way to be sure that money sent there will not wind up in the hands of jihadis.

Indeed, local Minneapolis area terror fundraisers were instructing Somali community members as early as 2007 on how to send money through hawala (an Islamic system of money-transferring through brokers) so as to evade law enforcement attention. Unfortunately, the unregulated hawala system is used by both Islamic terrorists and innocent Muslim family members the world over as a means to transfer money outside of formal banking channels.

For Minnesota banking officials, who cite the many federal regulations put in place after the 9/11 attacks to ensure funds are not being sent to Islamic terrorist organizations, hawala is an unwelcome complication. On a business level, the banks found it too difficult to participate in the hawala system and still comply with all the rules.    

For the state of Minnesota, the problem is an acute and growing dilemma about what to do with the approximately 32,000 Somali refugees (nearly 100% Muslims) that the U.S. Department of State, in coordination with the UN High Commission on Refugees, decided to resettle there.  Overall, some 40% of the 84,000 Somali refugees admitted to the U.S. since the early 1990’s have been placed in Minnesota.

Refugee resettlement is a U.S. federal, not state, prerogative, decided by an interagency process at the level of the National Security Council. Cabinet offices, including the Department of Health and Human Services and Department of State, lead the proceedings and hold quarterly meetings with state-level refugee coordinators that largely by-pass both the local populations and their elected representatives at the state level.

Yet, when a community like Minnesota’s Somalis, arriving from a cultural milieu half the planet and perhaps a millennium of time away, increasingly demonstrates troublesome links to Islamic terrorism, there is little the locals can do.

The House Homeland Security Committee, chaired by Rep. Peter King (R-NY) published a report in July 2010 describing the al-Shabaab threat to the U.S. homeland. The Committee report found that dozens of Americans of Somali background had left the U.S. to join al-Shabaab and its jihad, with several reported to have committed suicide bombings or been killed while fighting in Somalia.

The recruitment pipeline for such youths, who carry U.S. passports, extends deeply into the U.S. upper Midwest and across the border into Canada as well, and involves both the internet and local area mosques. Relatives of some of the Somali men recruited to jihad in Somalia specifically name the Abubakar as-Saddique mosque in Minneapolis as a place where radicalization (actually the process of progressive revelation) and recruitment took place.

Mosque officials deny the allegations and the U.S. HAMAS-supporting organization, the Council on American-Islamic Relations (CAIR), has also spoken up to defend the mosque.

The banking community is largely left to reach its own solutions, unfortunately, as the primary U.S. government response to the issue of Islamic Center instruction on the Islamic doctrine of jihad remains “outreach” to the very individuals responsible for running the mosques and organizations which are doing their own “outreach” (aka, dawa in Islam) and recruitment to jihad.

Closing down the Hawala terror funding system is a good step forward; closing down the channels for zakat (obligatory Islamic tax that always includes a portion for jihad) would be even better. Ending U.S. government “outreach” to those for whom it’s a one-way influence operation bridge to Islam would be the best of all.

Clare Lopez is a senior fellow at the Clarion Fund and a strategic policy and intelligence expert with a focus on the Middle East, national defense and counterterrorism. Lopez began her career as an operations officer with the Central Intelligence Agency (CIA).