 "As an investor, Osama Bin Laden was bullish on gold")
In a letter he wrote in December 2010, Bin Laden instructed Al Qaeda's general manager to set aside a third of the ransom - nearly $1.7 million - to buy gold bars and coins. The letter, written in Arabic, was part of the trove of intelligence seized by Navy SEALs in the raid on Bin Laden's compound in Abbottabad, Pakistan, in 2011 that was declassified last month by the Central Intelligence Agency. It offers a glimpse into how Al Qaeda sought to manage its finances and what militant groups have tried to do with the money they raised.
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"The overall price trend is upward," Bin Laden wrote to Atiyah Abd al-Rahman, the Qaeda general manager. "Even with occasional drops, in the next few years the price of gold will reach $3,000 an ounce."
Bin Laden may have lacked investing acumen - gold peaked at $1,900 an ounce five months after his death in 2011 - but he seems to have had a keen sense of the financial zeitgeist. His belief in gold's bright future was shared at the time by many Americans and a number of financial luminaries, including George Soros and John Paulson, both of whom were investing heavily in the precious metal. Demand was so high that in 2010, JPMorgan Chase reopened a long-closed vault used to store gold under the streets of downtown Manhattan.
It is probably safe to assume that if Al Qaeda bought gold - American officials could not say whether Bin Laden's instructions were followed in this case - the militants did not hand it over to JPMorgan for safekeeping. But, American officials believe that the group had previously relied on gold as a safe haven and an alternative currency to the dollar. Al Qaeda would also have had access to gold brokers in Pakistan's tribal areas and the loosely regulated gold market in Dubai, United Arab Emirates, at the time Bin Laden wrote his letter.
"There was always speculation about how Al Qaeda kept excess capital," said Juan C Zarate, a deputy national security adviser during the George W Bush administration who led American efforts to track the militants' assets after 2001. "They grew worried that we were able to do things with the dollar that influenced their ability to access it, to demand things of financial institutions."
Like Al Qaeda, other Islamist militant groups have wrestled with how to avoid the reach of the Treasury and international blacklists. Their wealth management strategies have varied, and some have proved more adept at making money than investing it.
The Islamic State, for instance, has become perhaps the wealthiest militant group in history by wringing cash from the people it rules, looting bank vaults and smuggling oil. Yet, its success appears to have left it vulnerable: It has taken in so much money that it has had to resort to physically stockpiling cash in warehouses, 10 of which have been struck by American warplanes since the summer.
The Haqqani network, a Taliban faction that is especially close to Al Qaeda, is believed to have poured money into real estate in Afghanistan, Pakistan and the United Arab Emirates. A European official, who spoke on the condition of anonymity to discuss intelligence, said the Haqqanis are believed to have been hit hard by the real estate crash in Dubai, United Arab Emirates, a few years ago. Still, despite the occasional bursting bubble, real estate appears to have been a relatively safe investment, particularly in South Asia, where there is little regulation.
©2016 The New York Times News Service