David Cohen, the department's assistant secretary for terrorist financing, said the extremist group extorts money from poppy farmers and heroin traffickers involved in Afghanistan's booming drug trade. The Taliban also demand protection payments from legitimate Afghan businesses, he said during a speech at a conference on money laundering enforcement.
Cohen's assessment came as President Barack Obama and his top advisers discuss whether many more troops may be needed in the 8-year-old Afghanistan conflict. A critical part of the deliberations is whether the fight should be a more narrow one against al-Qaida or a broader battle against the Taliban-led insurgency.
According to Cohen, al-Qaida is a cash-strapped organization that is losing its clout. That condition is the product, he said, of a long-running effort by the U.S. and its allies to cut off the terror group's sources of funding by targeting its deep-pocketed donors and interfering with its ability to move money.
In the first half of 2009, he said, al-Qaida's leaders made four public appeals for money to bolster recruitment and training.
"We assess that al-Qaida is in its weakest financial condition in several years, and that, as a result, its influence is waning," Cohen said at the conference, sponsored by the American Banking Association and the American Bar Association.
But Cohen cautioned that situation could reverse quickly because a pool of donors "who are ready, willing and able to contribute to al-Qaida" still exists.
The Taliban, meanwhile, appear to be heading in the other direction despite an international effort to shut down the movement's cash supply. Drugs are a major money maker for the group.
But Richard Holbrooke, the Obama administration's special envoy for Afghanistan and Pakistan, has said the Taliban get most of their cash from private benefactors in the Persian Gulf.
Army Gen. Stanley McChrystal, the top U.S. commander in Afghanistan, said in his 66-page assessment of the war that the diversity of the Taliban's streams of cash makes it difficult to blunt their ability to operate.
Cohen said portions of the Taliban's illicit proceeds make their way out of the country and into the global financial system. But he did not specify how much or detail the money's suspected entry points.
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