Karachi police have arrested Taliban fighters they say have committed crimes to raise funds for commanders operating in the troubled North West Frontier Province [AFP]

It was a little after midnight when the distinctive crack of gunfire disturbed the neighbourhood and then, within seconds, chaos.

Flashing police lights, rapid gunfire and chants of "Allahu akbar" intermingled with garbled instructions shouted into police radios.

This was how one resident describes a police raid in his Karachi neighbourhood.

The raids are becoming commonplace as ethnic tensions rise in Pakistan's financial capital - a city of 16 million people, which makes it bigger than some 60-odd countries in the world.

The reason for the raids? The Pakistani Taliban.

According to official police documents leaked to Al Jazeera, the Pakistani Taliban are using Karachi to fund their fight across Pakistan.

'Chilling reading'

The documents make for chilling reading.

They list neighbourhoods in which the Taliban are present. These are no-go areas for law enforcement agencies between midnight and 4am, say the police.

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Taliban 'using Karachi funds'

The Taliban have armed pickets who ensure that no strangers can access their homes.

The Taliban, the documents say, use these neighbourhoods to rest and recuperate.

Every 30-to-35 days between 20 and 25 Taliban fighters come to Karachi to take a break from their fight with Pakistan's army in the North West Frontier Province (NWFP).

Once they are safely in the place that they control they begin to raise money to finance their fighting.

To do this they turn to crime; kidnap for ransom, bank robbery and street theft.

And this is big business.

Another document shows just how much money is transferred from local banks within the area that, the police allege, finds its way to Taliban fighters in Pakistan's north west.

According to the police, $17m have travelled this route from one bank alone.

But there is a concern in Karachi that much of this money could simply be cash sent by hardworking Pashtun businessmen to their families back home.

There are some, though, who seem to be convinced that at least a small portion is being used to finance Taliban activity.

There also seems to be a religious justification for the criminal activity.

Fatwa

Reportedly, a cleric in Waziristan in the troubled NWFP has issued a fatwa, a religious edict, stating it is legal to partake in criminal activity to fund the fighting.

All of this has made the Karachi law enforcement community nervous.

I met with a senior police officer for an off-the-record briefing on Taliban criminal activity.

He says that the Taliban are firmly established within Karachi and that Talib networks are very difficult to infiltrate with the resources that police have.

That said, they are mounting raids as and when they have actionable intelligence.

But good, hard intelligence is hard to come by.

Many fear Taliban activity is only adding to existing ethnic tensions in Karachi

Jameel Yousef is a silver-haired resident of Karachi who has a long history of dealing with criminal activity.

He is the former chair of the citizens' police liaison committee, a watchdog set up to help families who have suffered crime to deal effectively with the city police force.

Yousef was also a key official in the case of Daniel Pearl, a Wall Street Journal correspondent, who was kidnapped and subsequently murdered in the city.

"You see we have investigated a number of these kidnap cases in the last few years," he says, "and each time we found something new ... the financial system is being used to transfer funds to militant safe havens in the north west.

"Criminal activity is the Taliban's biggest money spinner it would seem. But getting things like cellphone numbers that can give good intelligence, is very difficult."

His words back up information in the leaked documents.

However, the Pashtun community is worried about the reports.

In the sprawling suburb of Sarabgot, a Pashtun area, I met with Dr Zia Uddin - a member of the Awami National party who represents the Pashtuns.

"The Taliban are Pashtun, so for them operating out of a neighbourhood like this is no problem. But we are not protecting them.

"They are as big a problem for us as they for Pakistan. Their activities need to be dealt with by law enforcement agencies."

Ethnic tensions

But there is also another problem. Taliban activity is adding to the ethnic tensions in Karachi.

The city has had a long history of violence among the different ethnic groups who live here. The biggest problem has traditionally been with the city's largest ethnic community - the Mohajirs.

"The financial system is being used to transfer funds to militant safe havens in the north west... criminal activity is the Taliban's biggest money spinner it seems"

Jameel Yousef, former chair of the citizens' police liaison committee

Mohajirs are descendents of Indian Immigrants who came to Pakistan after Partition in 1947.

They have often clashed with the Pashtun community here, who they say operate as "mafia", controlling the construction industry.

The Pashtun, for their part, say that for decades they have been denied jobs, basic services and housing because of their ethnicity.

These tensions have often spilled over into violence and, when you add the Taliban to this already volatile mix, the situation becomes explosive.

The Pakistani government has a huge challenge on its hands.

If it wins its war with the Taliban, it has to tackle their fundraising activities in the heart of Karachi.

But the government needs to be sensitive in its handling of the issue and ensure it is careful it does not paint all Pashtun as Taliban.

If that happens, already frustrated Pashtuns may take their anger to the streets which could spark gunfights across the city.

If you destabilise Karachi, the financial heart of Pakistan, then you threaten to derail the whole country.

That is something Pakistan simply cannot afford.

Source: Al Jazeera