Al-Qaida in the Arabian Peninsula turned to kidnapping in part because of successful Western efforts to crack down on its traditional funding sources, including money transfers from wealthy Persian Gulf Arabs, U.S. intelligence officials say.
In a speech last year to the think tank Chatham House in London, David Cohen, the top U.S. Treasury official in charge of disrupting the finances of terrorist groups, acknowledged the "gut-wrenching dilemma" faced by governments that know payment of a few million dollars could save the life of a citizen.
"We acknowledge this dilemma -- this tragic choice," he said, "but believe that so many lives are at risk of terrorist violence around the globe that the equation tips decidedly in favor of a 'no concessions' policy."
"What you are doing is fueling the group," said a senior Western diplomat, who was not authorized to speak publicly. "AQAP, with its ability to bring down aircraft, it's incredibly dangerous to start funding that."
The better course, the official said, is to attempt a military rescue or work with the Yemeni government to find tribal allies who can help negotiate a hostage's release.
The official acknowledged that in some cases that course can lead to hostages being killed.
The problem exists beyond Yemen. The Yemeni group modeled its kidnapping operations after the lucrative practices of al-Qaida affiliates in North Africa and Nigeria, the official said.
In June, the Group of 8 -- Britain, Canada, France, Germany, Italy, Japan, Russia and the U.S. -- issued a statement saying its members "unequivocally reject the payment of ransoms to terrorists."
If that policy holds up, it would mark a notable shift for some nations. In 2010, the French government arranged for $17 million to be paid to free French hostages seized at a uranium mine in Niger, Vicki Huddleston, the U.S. ambassador to Mali from 2002 to 2005, said in a television interview in February.
The next year, France secured the freedom of three French hostages seized in Yemen by paying a ransom to al-Qaida in the Arabian Peninsula, the first major kidnapping ransom netted by the group, the Western official said.
Two Yemenis with knowledge of the case -- one a source close to the militant group, the other a tribal figure who has negotiated kidnapping ransoms -- said the sum was $9 million.French President Francois Hollande has taken a tougher line than his predecessor and refused to pay ransom money, the Western official said. Four French hostages have been held for more than two years in northern Niger. A French Embassy spokesman said France does not pay terrorists.