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 Two years later, Shekau’s skepticism appears well founded: his
Islamic militant group is now the biggest security threat to
Africa's top oil producer, is richer than ever, more violent and its
abductions of women and children continue with impunity.
As the United States, Nigeria and others struggle to track and choke
off its funding, Reuters interviews with more than a dozen current
and former U.S. officials who closely follow Boko Haram provide the
most complete picture to date of how the group finances its
activities.
Central to the militant group’s approach includes using
hard-to-track human couriers to move cash, relying on local funding
sources and engaging in only limited financial relationships with
other extremists groups. It also has reaped millions from
high-profile kidnappings.
"Our suspicions are that they are surviving on very lucrative
criminal activities that involve kidnappings," U.S. Assistant
Secretary of State for African Affairs Linda Thomas-Greenfield said
in an interview.
Until now, U.S. officials have declined to discuss Boko Haram’s
financing in such detail.
The United States has stepped up cooperation with Nigeria to gather
intelligence on Boko Haram, whose militants are killing civilians
almost daily in its northeastern Nigerian stronghold. But the lack
of international financial ties to the group limit the measures the
United States can use to undermine it, such as financial sanctions.
 The U.S. Treasury normally relies on a range of measures to track
financial transactions of terrorist groups, but Boko Haram appears
to operate largely outside the banking system.
To fund its murderous network, Boko Haram uses primarily a system of
couriers to move cash around inside Nigeria and across the porous
borders from neighboring African states, according to the officials
interviewed by Reuters.
In designating Boko Haram as a terrorist organization last year, the
Obama administration characterized the group as a violent extremist
organization with links to al Qaeda.
The Treasury Department said in a statement to Reuters that the
United States has seen evidence that Boko Haram has received
financial support from Al Qaeda in the Islamic Magreb (AQIM), an
offshoot of the jihadist group founded by Osama bin Laden.
But that support is limited. Officials with deep knowledge of Boko
Haram's finances say that any links with al Qaeda or its affiliates
are inconsequential to Boko Haram's overall funding.
"Any financial support AQIM might still be providing Boko Haram
would pale in comparison to the resources it gets from criminal
activities," said one U.S. official, speaking on condition of
anonymity.
Assessments differ, but one U.S. estimate of financial transfers
from AQIM was in the low hundreds of thousands of dollars. That
compares with the millions of dollars that Boko Haram is estimated
to make through its kidnap and ransom operations.
LUCRATIVE KIDNAPPING RACKET
Ransoms appear to be the main source of funding for Boko Haram's
five-year-old Islamist insurgency in Nigeria, whose 170 million
people are split roughly evenly between Christians and Muslims, said
the U.S. officials, who spoke on condition of anonymity.
In February last year, armed men on motorcycles snatched Frenchman
Tanguy Moulin-Fournier, his wife and four children, and his brother
while they were on holiday near the Waza national park in Cameroon,
close to the Nigerian border.
Boko Haram was paid an equivalent of about $3.15 million by French
and Cameroonian negotiators before the hostages were released,
according to a confidential Nigerian government report later
obtained by Reuters.
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Figures vary on how much Boko Haram earns from kidnappings. Some
U.S. officials estimate the group is paid as much as $1 million for
the release of each abducted wealthy Nigerian.
It is widely assumed in Nigeria that Boko Haram receives support
from religious sympathizers inside the country, including some
wealthy professionals and northern Nigerians who dislike the
government, although little evidence has been made public to support
that assertion. Current and former U.S. and Nigerian officials say
Boko Haram's operations do not require significant amounts of money,
which means even successful operations tracking and intercepting
their funds are unlikely to disrupt their campaign.
Boko Haram had developed "a very diversified and resilient model of
supporting itself," said Peter Pham, a Nigeria scholar at the
Atlantic Council think-tank in Washington.
"It can essentially 'live off the land' with very modest additional
resources required," he told a congressional hearing on June 11.
LOW-COST WEAPONS
"We’re not talking about a group that is buying sophisticated
weapons of the sort that some of the jihadist groups in Syria and
other places are using. We’re talking AK-47s, a few rocket-propelled
grenades, and bomb-making materials. It is a very low-cost
operation," Pham told Reuters.
That includes paying local youth just pennies a day to track and
report on Nigerian troop movements.
Much of Boko Haram's military hardware is not bought, it is stolen
from the Nigerian army.
In February, dozens of its fighters descended on a remote military
outpost in the Gwoza hills in northeastern Borno state, looting 200
mortar bombs, 50 rocket-propelled grenades and hundreds of rounds of
ammunition. [ID:nL3N0OD3BU]
Such raids have left the group well armed. In dozens of attacks in
the past year Nigerian soldiers were swept aside by militants
driving trucks, motor bikes and sometimes even stolen armored
vehicles, firing rocket-propelled grenades.
Boko Haram's inner leadership is security savvy, not only in the way
it moves money but also in its communications, relying on
face-to-face contact, since messages or calls can be intercepted,
the current and former U.S. officials said.
"They're quite sophisticated in terms of shielding all of these
activities from legitimate law enforcement officials in Africa and
certainly our own intelligence efforts trying to get glimpses and
insight into what they do," a former U.S. military official said.
U.S. officials acknowledge that the weapons that have served
Washington so well in its financial warfare against other terrorist
groups are proving less effective against Boko Haram.
"My sense is that we have applied the tools that we do have but that
they are not particularly well tailored to the way that Boko Haram
is financing itself," a U.S. defense official said.
(Additional reporting by Tim Cocks in Abuja. Editing by David
Storey, Jason Szep and Ross Colvin)
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