Merchant of Death
Money, Guns, Planes, and the Man Who Makes War Possible

Blood from Stones

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Press Releases

An A on Terror Finance?
The one bright spot in the final report of the 9-11 Commission is combatting terror finance. While awarding the effort an A-, the Commission wrote:

"The U.S. has won the support of key countries in tackling terrorism finance—though there is still much to do in the
Gulf States and in South Asia. The government has made significant strides in using terrorism finance as an
intelligence tool. However, the State Department and Treasury Department are engaged in unhelpful turf battles,
and the overall effort lacks leadership."

I would beg to differ with the high grade, although, if it is grading on effort, it might be accurate. The truth is, accross the civilian and military terrain, I have not talked to anyone who really believes that we now have a handle on terror finance issues, especially the Zarqawi network, or that we have any real metrics for measuring true progress. It is true that there is broad lip service now paid across the Gulf region to the need to deal with terror finance issues, but charities continue to opereate, designated individuals continue to sit on the boards of the charities, offshore structures continue to function unimpeded. While there appear to have been some cash flow problems for the traditional al Qaeda structure, it does not seem those problems represented anything more than a temporary glitch.

There is also growing evidence of the willingness of al Qaeda and its affiliates to occassionally hook up with organized criminal groups, sometimes blending the two into one operation, as is the case with Dawood Ibrahim, the main subject of the fine U.S. News cover story from last week. So, the money may be generated from different sources and the organizations may not need the amount they once did to keep the Taliban afloat. The change is the funding patterns of Islamic extremist groups does not mean their financial flows are disrupted. It means, rather, that they are adaptable, flexible organizations that know how to move far ahead of where law enforcement and intelligence usually are.

I think some in the intelligence community dealing with this issue is finally getting out of traditional mindset of looking at banking regulation, SARs etc. as the primary tool to deal with terror finances, and are beginning to become more flexible, or at least more creative, in thinking about how it works. And that is progress, but after 4 years, I am not sure I would give that an A-, unless one were grading on a curve, which may be badly needed, given the other grades handed out.

The most telling line in the Commission report is that there is still a lack of leadership on this issue in the administration. The FBI has the lead, but has proven, through its history on this issue, that the lead role would have been better left with Treasury. The Bureau is exercising little leadership, but often likes to take over cases that develop, effectively keeping other agencies from exercising leadership either. The turf fights are noted, and that has been discussed here before. The question is, now what? Will there be a sustained effort, with senior leadership involved, to bring a serious focus to this? Or will there be a continued lack of engagement at the highest levels, meaning a lack of resources for the people in the trenches capably going about their jobs without fully committed leadership?
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