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Losing battle
in war on terror finances
By Mark
Berniker
NEW YORK - While US President George W
Bush is quick to champion his administration's
achievements in the "war on terror" ahead of elections
later this year, he neglects to mention the problems
that the US and other countries are having in actually
choking the financial transactions of terrorists
worldwide.
US and other troops continue to be
killed in Iraq and Afghanistan, and terrorist acts
persist from Gaza to Riyadh, via Istanbul. Serious
questions, therefore, still need to be asked about
whether the Bush administration and its allies are
utilizing effective tactics in their attempts to stymie
terrorists from getting their hands on money, car bombs
and other destructive materiel.
Nearly
two-and-half years after September 11, the US and its
coalition partners continue to monitor financial
institutions and global money networks in an effort to
stop the flow of funds between financiers and terror's
foot soldiers.
Many of the financial
investigators are scanning bank records around the world
for transactions that may look fishy, but some say that
may not be the best way to fight this flank in the "war
on terror". Experts say that the bulk of the terrorists'
financial moves are made in cash through runners,
smugglers and underground markets. Now, new questions
are being asked in the US Senate Finance Committee, if
the Bush administration's efforts to stem the tide of
terrorist finances are actually working.
Senator
Charles Grassley of Iowa and Senator Max Baucus of
Montana have written two letters to the Bush
administration's Internal Revenue Service and the
Department of the Treasury's Office of Foreign Asset
Control (OFAC) addressing some potential inadequacies in
Bush's policies. The two Senators want information
produced by these offices on the tax records of more
than two dozen Muslim charities operating around the
world, and also a number of details from the Treasury's
OFAC on terror groups and individuals, as well as the
funds they have seized.
Specifically, the US
Senate Finance Committee has asked the Internal Revenue
Service (IRS) for tax records of the Muslim charities
and groups which could possibly have connections to
non-governmental organizations and possible links to
terrorist networks.
"Many of these groups not
only enjoy tax-exempt status, but their reputations as
charities and foundations often allows them to escape
scrutiny, making it easier to hide and move their funds
to other groups and individuals who threaten our
national security," committee chairman Charles Grassley
of Iowa and ranking Democrat Baucus said in a December
22 letter to the IRS, the US's federal tax collection
agency. The letter was made public on January 14 in a
finance committee news release, and includes requests
for the organizations' tax returns, donor lists,
applications for tax-exempt status, and all materials
from examinations, audits and criminal investigations.
It is unclear if the Bush administration will provide
details for the Senators, or if they will hide behind
the veil that they can't disclose that information on
grounds it would threaten national security.
An
attachment to the letter names 25 specific
organizations, including Global Relief Foundation,
Benevolence International Foundation, Islamic
Association for Palestine and the Holy Land Foundation
for Relief and Development. The Senators additionally
ask for IRS information on all charities, foundations
and tax-exempt organizations that have been designated
since September 11, 2001 as having links to terrorist
networks by the Treasury Department's Office of Foreign
Assets Control (OFAC). Grassley and Baucus asked the IRS
to deliver the requested information to the Senate by
February 20.
And on December 22 last year,
another letter obtained recently from the Senate finance
committee, says that Grassley and Baucus wrote to
Richard Newcomb, the director of the Treasury's OFAC.
The letter has a long list of questions that it would
like OFAC to address, including the speed and efficacy
of the Treasury's activities in locating, freezing and
preventing financial transfers between terrorist
organization and the individuals and entities supporting
their destructive activities. The Senators expect a
written response from OFAC some time in February.
"By eliminating terrorists' access to funding,
we're eliminating their ability to harm our country. As
ranking member of the finance committee, I'm working to
make sure that the Treasury Department's Office of
Foreign Assets Control (OFAC) is fully engaged in
sealing any leak that allows terrorists to get a hold of
funding. I look forward to receiving OFAC's response and
am hopeful that we'll find that the office is being as
vigilant as possible in helping to prevent terrorist
activities," Baucus told Asia Times Online.
There is no question that exhaustive efforts are
being made to stop terrorist groups from getting their
hands on funds, moving those funds around the world and
translating that economic wherewithal into strikes
against a Humvee on a Baghdad highway, or a bank in
Istanbul.
The Treasury says that it has shut
down the banking activities of more than 281 individuals
or entities garnering close to US$138 million, with
$36.4 million being seized within the US, and the other
$101.6 million from financial institutions around the
world. There is no question that the Bush
administration's Executive Order 13224 has improved
Treasury investigators' ability to track and ultimately
seize millions of dollars in funds, but some say the
moves are too little, too late.
The General
Accounting Office (GAO), the investigative arm of
Congress, recently issued a report stating that US law
enforcement officials don't have a firm grip on how
terrorists go about moving their money around the globe.
The report went onto criticize the Federal Bureau of
Investigation (FBI), which it says does not
"systematically collect or analyze" terrorist financial
data. The GAO report said both the US Justice and
Treasury departments are more than a year behind in
devising a strategy for uncovering terrorist assets, and
techniques such as using gold, diamonds and other
commodities like honey to hide assets and financial
transfers.
And within the Bush administration, a
tension is emerging between the Justice Department's FBI
and the Treasury's OFAC. While the FBI is more of a
policing and investigative arm of Justice, Treasury has
the financial experts and forensic accounting
specialists, who some say have a better understanding of
how money moves and ways to stop it.
But while
the challenge is immense, the pressure is building on
the Bush administration to respond to the charges that
it is not doing all it could to hit hard against
terrorist finances. From all indications, al-Qaeda and
other terrorist groups still have formidable financial
resources.
One leading expert questions whether
the fight against terrorist finances is being fought in
the best manner. Radio Singapore International recently
broadcast an interview with Rohan Gunaratna, the author
of Inside al-Qaeda: Global Network of Terror and
a leading terrorism specialist at the Singapore-based
Institute of Defense and Strategic Studies. He said:
"There has been very little success overall in the world
in the fight against terrorist finance." Gunaratna goes
on to say that while governments continue to target the
formal banking infrastructure, much of terrorist
financing flows through hawalal and other
informal methods of money transfer.
No one would
accuse Bush, British Prime Minister Tony Blair or any of
their European, Middle Eastern, African or Asian allies
from not trying to squeeze the financial networks of
terrorists around the globe, but ultimately their
gameplan isn't working. The "war on terror" in Bush's
eyes doesn't seem to have an end, his advisers believe
he has leverage in national security affairs as his
re-election campaign kicks off in earnest.
Perhaps, some suggest, more resources should be
devoted to using unconventional methods and intelligence
schemes to infiltrate informal terrorist financial
transfers, arms exchanges and preventing terrorists from
packing cars with loads of explosives ready to be
detonated at a moment's notice.
Mark
Berniker is a New York-based freelance journalist
who writes about global terrorism and Eurasian
geopolitics.
(Copyright 2004 Asia Times
Online Ltd. All rights reserved. Please contact content@atimes.com for
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