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

Blood from Stones

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What is Missing in the SWIFT Program Debate
My friend Dennis Lormel and others are correct in stating that programs to attack terror finance must be differentiated and viewed in their many different elements. Which is why what is striking in the current debate is not what is said but what is not discussed.

What is not being discussed is the non-formal methods of money transfer, with the accompanying use of commodities and other methods to store financial value; and the use of the Islamic banking structures and its corresponding, massive offshore structures. This includes not only the multiple holdings of DMI and others in the Bahamas, Caymen and Panama, but also the offshore holdings of designated terrorist financiers such as Yousef Nada and Idriss Nasreddin. None of these have been touched.

The Islamic banking strucutre, while having every right to exist as a system to meet particular religious constraints, does not play by the same rules. Massive amounts of money move outside the SWIFT-reported systems all over the world, in part through Islamic banks that are specifically designed to help the customer avoid the Western banking system. One need look no further than Bank al Taqwa and Akita Bank in Nassau to see how ripe for abuse the system is.

It has been important for the U.S. and international banking structures to take additional measures to both crack down on the use of facilities by terrorists and to help track terrorist operations.

But numerous people who work or have recently worked in the terror finance structures of different government organizations can see what is also obvious-Islamists don't want to use Western banks. There are enough offshore havens willing to open subsidiary companies and offshore banks to insure that almost any suspect transaction can go through unreported.

It is similar in the world of commodities, regardless of whether one agrees with me on the particulars of the diamond story. Commodities and gold, through hawalas and other structures, also allow one to avoid intersecting almost entirely with the Western fianncial structure.

One recently-retired intelligence community career official who worked on terror finance likened the attention paid to the formal banking structure to the old joke about the drunk who lost his car keys. He groped for them under a streetlight when a passerby asked what he was doing. The drunk said he was looking for keys he had dropped on the lawn. Then why, the passerby asked, was he looking in the street? Because, the drunk said, there is more light over here.

We all like to do what we know how to do and do well. We do banking records very well. But it might be profitable to spend more time on learning more about things we don't know, and working where the light isn't so bright.
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