January 13, 2020 | FDD's Long War Journal

Federal lawsuits target both Iran and private firms for allegedly financing Taliban and Al-Qaeda operations that killed U.S. troops

January 13, 2020 | FDD's Long War Journal

Federal lawsuits target both Iran and private firms for allegedly financing Taliban and Al-Qaeda operations that killed U.S. troops

On December 27, 2019, more than 500 members of American military families, including over 100 Gold Star families, filed two lawsuits: one against the Islamic Republic of Iran, and another against eight multinational companies that operate in Afghanistan. The pair of lawsuits alleges that the government of Iran and these specific corporations – the defendants in the cases – materially assisted al-Qaeda and the Taliban to kill American military forces.

The first lawsuit involves 503 Americans seeking damages from the Islamic Republic under the Foreign Sovereign Immunities Act (FSIA), which holds state sponsors of terrorism liable for extrajudicial killings of Americans. The complaint, filed in U.S. District Court of the District of Columbia, alleges that Iran provided financial, material, and tactical support to the Taliban and al-Qaeda. This support reportedly resulted in hundreds of American casualties between 2007 and 2017.

Based on State Department cables and Congressional testimony, the lawsuit accuses Iran of building close ties to al-Qaeda. After 9/11, the Iranian government offered a safe haven for senior al-Qaeda leaders. While living in Iran, they reportedly directed and organized terrorist operations around the world. The lawsuit cites Osama Bin Laden’s own admission of Iran being al-Qaeda’s “main artery for funds, personnel, and communication.” In July 2011, the U.S. Treasury Department designated six members of al-Qaeda, citing the Iranian government’s agreement to grant al-Qaeda members “freedom of operation and uninhibited ability to travel for extremists and their families.”

The lawsuit mentions dozens of other cables that underscore Iran’s material support for the Taliban. For example, members of the Iranian government, particularly the Qods Force and Iranian Intelligence Secret Service, met with Taliban officials as early as 2000 to collaborate with them against U.S.-led coalition forces. The lawsuit also cites a 2007 U.S. Treasury Department Press Release, which explains that “since at least 2006, Iran has arranged frequent shipments of small arms and associated ammunition, rocket propelled grenades, mortar rounds, 107mm rockets, plastic explosives, and probably man-portable defense systems to the Taliban … Through Qods Force material support to the Taliban, we believe Iran is seeking to inflict casualties on U.S. and NATO forces.”

In 2014, the U.S. Treasury Department sanctioned two Qods Force officers for providing “logistical support” to terrorists for attacks in Afghanistan.

The FSIA complaint provides evidence of Iran training terrorists specifically to attack Americans. It cites a February 2005 military-intelligence report that the Iranian government paid the Taliban approximately $1000 for each U.S. troop killed and $6000 for each U.S. military vehicle destroyed. These payments were made after the dozens of husbands, sons, brothers, and parents of the defendants were killed in suicide bombings, IED attacks, and rocket propelled grenade attacks.

The second lawsuit, an Anti-Terrorism Act complaint, was filed against parent companies and subsidiaries of MTN Group, Centerra Group, Environmental Chemical Corporation, G4S, Janus Global Operations, DAI Global, Louis Berger Group, and Black & Veatch Special Projects Corporation.

Notably, the latter three corporations executed contracts in Afghanistan for the U.S. Agency for International Development (USAID). These contracts with USAID contained a “standard clause,” stating that “U.S. law prohibits transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. It is the legal responsibility of the contractor/recipient to ensure compliance with these Executive Orders and laws.” However, the aforementioned companies that had contracts with USAID allegedly hid their protection payments from the federal agency.

The lawsuit alleges that these eight international corporations financed al-Qaeda and the Taliban through “protection payments” aimed at coaxing the terrorist organizations into permitting business operations in Afghanistan.

In exchange for these payments, the Taliban allegedly promised not to harm physical infrastructure, such as transmission masts, and to refrain from threatening to attack contractors and employees of these corporations.

The lawsuit argues that all eight corporations “knew or recklessly disregarded” both the endemic corruption in all business operations in Afghanistan and that their payments would directly finance terrorism against Americans. These payments allegedly funded the post-9/11 Taliban insurgency that killed and wounded hundreds of American troops. Since 9/11, over 2,400 Americans have been killed in Afghanistan.

One of the corporations accused of paying the Taliban is South Africa’s MTN Group, Africa’s largest telecommunications company and the eighth largest in the world. “MTN was a particularly aggressive practitioner of protection payments,” the lawsuit asserts.

The just-filed lawsuit alleges that MTN’s protection payments enabled the company’s rapid growth from 2006 to the present. For MTN to successfully expand their business to almost every province in Afghanistan, “every single one of the shadow provincial governors set up by the Taliban leadership council received $50,000 to $60,000 in protection money.”

The lawsuit claims that financing from the World Bank Group“ was pivotal to MTN’s decision to enter the Afghan market and to expand its footprint throughout the country.” Some of the financing of MTN’s operations in Afghanistan came from two Washington, D.C.-based arms of the World Bank: the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

The lawsuit alleges that loans from the IFC went towards “[funding] its protection payments and [building] the cellular towers.” MIGA allegedly gave MTN coverage guarantees, a form of insurance against political risk, for its operations in Afghanistan.

Neither IFC nor MIGA had knowledge of MTN’s alleged business with the Taliban, according to the lawsuit. IFC’s contract with MTN prohibited material support to terrorism and required MTN to regularly report terrorism-related security issues. MTN allegedly failed to disclose its dealings with the Taliban, thereby breaching its contract with IFC. Similarly, MIGA’s contract with MTN required the company to regularly send updates about its operations in Afghanistan. According to the lawsuit, MTN allegedly breached its contract with MIGA and “failed to inform its American financers of its illegal payments.” The lawsuit concludes that “had MTN disclosed…that it was paying protection money to the Taliban” these arms of the World Bank “would not have continued to back MTN’s operations.”

MTN, which has operated cellular towers in Afghanistan since 2006, allegedly abided by the Taliban’s request to deactivate cellular towers, on which the U.S. military relies to apprehend Taliban fighters before they executed terrorist acts.

MTN has also been at the center of other controversies over its business interests in Iran.

MTN secured a lucrative license from Iran to become the country’s second cellphone operator. A lawsuit filed by a Turkish competitor said that Chris Kilowan, a former MTN executive in Iran turned-whistleblower, alleged that MTN did so by seeking to meet Iran’s demands to “acquire military hardware … and to win support for Tehran’s nuclear development program” by “providing access to high-level South African government officials.”  MTN denies Kilowan’s allegations and is contesting the lawsuit.

MTN received the license to form Irancell, a joint venture with a company tied to Iran’s military establishment. A 2006 State Department cable stated that Irancell is “fully owned” by the Islamic Revolutionary Guard Corps.

Cyril Ramaphosa, one of South Africa’s wealthiest citizens and the country’s current president, served as chairman of the boardof MTN Group from 2002 to 2013.

MTN also has been ensnared in a scandal in Nigeria, where the company did not comply with the Nigerian government’s initiative to address rampant illicit activity by Boko Haram, an Islamist terrorist group. In 2015 the Nigerian government ordered all telecom companies operating in Nigeria to disconnect unregistered SIM cards from their networks. MTN did not comply, which according to Nigeria’s President contributed to Boko Haram’s ability to covertly coordinate attacks with their unregistered SIM cards and evade Nigerian authorities. At least 10,000 Nigerians were reportedly killed by Boko Haram between 2009 and 2016.

In October 2015, the Nigerian Communications Commission fined MTN $5.2 billion, but this fine was reduced to $1.7 billionAllegations surfaced in 2016 that MTN bribed the Chief of Staff to the Nigerian president to reduce the fine, which MTN denied.

Companies operating in countries with highly corrupt governments that have no checks run the risk of getting entangled with terrorist organizations and malign actors. In the case of Afghanistan, profit-motivated corruption of these enterprises allegedly resulted in the death of hundreds of American service members.

Toby Dershowitz is the Senior Vice President for Government Relations and Strategy at the Foundation for Defense of Democracies. Talia Katz is a government relations analyst at the Foundation for Defense of Democracies.

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Issues:

Afghanistan Al Qaeda Iran Iran Global Threat Network Iran-backed Terrorism Jihadism Military and Political Power The Long War