Ransoms are al-Qaeda’s main source of funding, says new investigation

Al-Qaeda is increasingly funding terror operations using at least US$125 million in ransom money paid largely by European governments to free hostages since 2008.

The payments totalled US$66 million in 2013 alone, according to an investigation by the New York Times on Tuesday.

While al-Qaeda's network was first funded by wealthy donors, "kidnapping for ransom has become today's most significant source of terrorist financing", said David Cohen, the Treasury Department's undersecretary for terrorism and financial intelligence, in a 2012 speech.

"Each transaction encourages another transaction," he said.

The organisation has openly acknowledged the windfall.

"Kidnapping hostages is an easy spoil, which I may describe as a profitable trade and a precious treasure," wrote Nasser al-Wuhayshi, the leader of al-Qaeda in the Arabian Peninsula.

Wuhayshi said ransom money - reaching about US$10 million per hostage in recent cases - accounts for up to half his operating budget.