The problem is particularly acute in Saudi Arabia, where militants soliciting funds slip into the country disguised as holy pilgrims, set up front companies to launder funds and receive money from government-sanctioned charities.

One cable details how the Pakistani militant outfit Lashkar-e-Taiba, which carried out the 2008 Mumbai attacks, used a Saudi-based front company to fund its activities in 2005.

Meanwhile officials with the LeT’s charity wing, Jamaat-ud-Dawa, travelled to Saudi Arabia seeking donations for new schools at vastly inflated costs – then siphoned off the excess money to fund militant operations.

http://www.time.com/time/world/article/0,8599,2035347,00.html