Talk of unintended consequences; The Argus (of San Francisco) contains a deeply ironic piece today by Steve Geissinger on how do-gooder attempts to improve Americans' health by raising federal taxes on cigarettes ends up sending money to anti-American terrorists. Seemingly innocent legislation to increase the price of cigarettes makes cigarette smuggling more lucrative, and that in turn provides additional funding for terrorist groups such as Al-Qaeda and Hezbollah. The U.S. Government Accountability Office finds that illegally transporting cigarettes from a low-tax state to a high-tax state, then selling them, can gross about $2 million on a single truckload of cigarettes.
"The illicit sale of cigarettes and other commodities by terrorist groups and their supporters has become a crucial part of their funding activities," said William Billingslea of the Bureau of Alcohol, Tobacco, Firearms and Explosives. "Raising the tax on cigarettes widens the difference between the wholesale and retail price and inadvertently creates opportunity for traffickers. … Illicit cigarette trafficking now rivals drug trafficking as the method of choice to fill the bank accounts of terrorists. Each state that raises its cigarette taxes is a new prospect for illicit profits gained by trafficking in cigarettes." (March 11, 2005)
March 20, 2005 update: And designer fakes are sustaining Al-Qaeda reports Jon Ungoed-Thomas in the Sunday Times (London). Top designer companies, including Burberry and Louis Vuitton, warn that terrorists and organized crime syndicates use profits from fakes, among other things, to fund Al-Qaeda and other terrorist organizations. Stuart Lockyear, director of intellectual property at Burberry, urges customers "to think about where their money is going." A source at Louis Vuitton says that "most groups raising money for terrorism will have a counterfeiting arm."
Interpol confirms the problem. John Newton, a specialist in intellectual property crime, says: "North African radical fundamentalist groups in Europe, Al-Qaeda and Hezbollah all derive income from counterfeiting. This crime has the potential to become the preferred source of funding for terrorists." Interpol even finds a direct link between Al-Qaeda and the counterfeit trade. A 2002 interception of fake perfumes and other goods from Dubai to Britain was sent by a suspected member of Al-Qaeda. That same year saw three suspected members of the Salafist Group for Preaching and Combat, linked to Al-Qaeda, arrested in France and seventy boxes of fake designer clothes were seized.
Comment: The above way well be entirely true, but as one well-dressed woman comments, "Some of us wonder if it this isn't the designers' way of making us buy the real thing."