David Cohen, the department's assistant secretary for terrorist financing, said the 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 enforcement.
Cohen's assessment came asand 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'sby 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 Bankers Association and the .
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.
Source: Yahoo News