T4 B1 Team 4 Workplan Fdr- Undated Draft- To Commissioners- Team 4 Workplan- Funding of Terrorist...

8/14/2019 T4 B1 Team 4 Workplan Fdr- Undated Draft- To Commissioners- Team 4 Workplan- Funding of Terrorist Activities

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National Commission on the TerroristAttacks upon the United States

o

Team #4Funding of Terrorist Activities

Team m embers: John Roth

Douglas GreenburgSerena Wille



List of key questions

1 . W hat are, and should be, the goals of government efforts in the area of terrorist

financing?

• Government efforts concerning terrorist financing appear to have three goals: (1)

obtaining intelligence regarding terrorist activities and operations; (2) disrup tionof terrorist activities and operations; and (3) depriving terrorists of resourcesthrough executive or judicial action. To wh at degree has the governmentpursued each of these goals? Have the goals changed over time? How muchemphasis should be placed on each of these goals?

• The government has stated that the premise of the effort on terrorist financing is

that "money is the lifeblood of terrorism." Given the demonstrated ability ofterrorists to use relatively tiny amounts of money to create significant attacks,should this be the most important goal? Are efforts directed at that goaldetracting from the other goals?

2. Prior to 9/11, what did the U.S. do to identify and stop terrorist funding?

• The primary public effort within the U.S. was to identify and name specificterrorist groups and then attempt to financially isolate them through the use ofexecutive orders. How successful were these efforts?

• Va rious government policies were instituted to allow for more effective trackingand attacking of terrorist assets. What were these policies? Did they work? Why

or why not?

• There have been a number of the public criticisms about the government's pre-9/11 efforts: a failure to appreciate the threat, unclear roles am ong the institutionsinvolved, a failure to share information, no overall strategy, and an unwillingnessor inability to get the necessary cooperation from key foreign governments. Howvalid are these criticisms?

3. How were the 9/11 terrorists able to generate and move their money?

• Wh at were the identifiable financial transactions of the hijackers? Where did theyget their funding, where did they keep their funds in the United States and how

did they distribute their funds among the 19 hijackers? Did anyone in the United

States itself provide funding to the hijackers?

• 4 .• What do these transactions say about how organized, planned terrorist operations

operate within the United States? Are they different from other terrorist

operations, such as ad-hoc terrorist operations or the maintenance of sleeper cells?



• How did Al Qaeda gen erally raise and move funds to sup port itself as an

institution? For exam ple, how did it raise money to pay for training cam ps andbring recruits to Afghanistan fo r training?

4. Does the fact that the 9/11 hijackers were able to evade detection and disruptiontell us anything about the system in place at the time?

• Were the various anti-money laundering controls in place sufficient to detect the

types of movement of money involved here? Why or why not? Was the existingsystem simply not designed to detect the type of transactions engaged in by the9/11 terrorists?

• Was there any concerted effort to track contemporaneously known terrorists cells

through their financial transactions? Did the government have the technicalability to do so? W hat would such a system look like?

• What were the other deficiencies w ith the pre 9/11 system? For example, were

there shortcomings in efforts to prevent the abuse of charities, regulate informalmoney transmitters, identify illegal trade-based money mov emen ts? Did weeffectively engage key foreign governments, particularly Saudi Arabia, to assist?

5. What are we currently doing, and have these efforts eliminated the deficienciespresent before 9/11?

• The U.S. government has devoted substantial resources since 9/11, includingenacting significant new regulations, in an effort to disrupt and curtail the funding

of terrorist organizations. W hat were those changes? A re they effective? Are thedeficiencies that may have contributed to the 9/11 failu res still present?

6. What specific, actionable policy recommendations can be made to improve the

current efforts in light of the lessons of 9/11?

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• Should the goals of the efforts regarding terrorist financing be changed? If so,

how?

• Is the government effectively organized to provide for adequate coordinationamong the various agencies and actors involved in the effort? If not, how couldthe structure be improved?

• How has, and how will, the raising and movement of money for terroristoperations change in response to governmen t actions? Is there a move aw ay from

formal financial systems into something more difficult to detect? Can the

government recognize and quickly adapt to those changes?

• What is the best approach to increase the ability and the willingness of key

foreign states to track and disrupt terrorist finan cing?



Briefing plan for commissioners

David Aufhauser, Treasury General Counsel [Head of US government's policy andcoordination efforts in terrorist financing]

Lee Wolosky, Council on Foreign R elations Task Force [co-author of report on terrorist

financing]

Reading list

Council on Foreign R elations, Terrorist Financing, 2002 [Relevance: Mostcomplete discussion of the issue to date. Staffed and written by leading experts inthe field. Makes specific policy recomm endations w orth considering.]

National Commission on Terrorism, Final Report, pages 26 to 29. [Relevance:Discussion of the issue and recommendations to stop n on-state financial support

of terrorism worthy of consideration. Failure to implement recommendations alsoworth discussion.]

Financial Crimes Enforcem ent Netw ork, SA R Report no. 4 [Relevance: U.S.Government's first efforts at identifying a typology fo r domestic finan cialtransactions relating to terrorism. Open to question how useful such a typologyis, given the innocuou s nature of terrorist-related financial transactions.]

Financial Action Task Force, Special Recomm endations on Terro rist Financing,October 31, 2001. [Relevance: Best efforts to date on international cooperationand standards setting.]

Indictment. United States v. Zacarias Mo ussaou i [Relevance: good illustrationof the use of a financial investigation to determine the scope and nature of theconspiracy.]

National Money Laundering Strategy 2002, Goal 2 [Relevance: U.S.government's published strategy on attacking terrorist financial n etworks]



Preliminary categories of documents

1) Select OF AC decision packagesa) Al-Qaida and bin Laden (8/22/1998)b) Taliban (7/4/1999)

c) Other relevant OFAC decision packages

2) Relevant documents from Policy Coordination Committee (PCC) for terrorist financereflecting policy changes since 9/11.

3) Documents relating to Presidential Decision Directives 39 (counter terrorismcoordination), 42 (international organized crime) and 63 (critical infrastructureprotection).

4) Relevant documents from NSC's Counterterrorism Strategy Group, pre 9/11.

5) Lists and summaries of pre 9/11 FB I terrorist financing investigations.

6) FinCEN BSA data and analytical products relating to terrorist finance.

7) Relevant State Department documents concerning cooperation by foreigngovernments on terrorist financing, particularly concerning states through w hichpassed financing for the 9/11 hijackers or A l Qaeda (including relevantcommunications to/from U.S. embassies in these states)

8) Financial analysis of 9/11 attacks, created by FBI's Terrorist Financial Review Group(later renamed Terrorist Financing Operations Section)

9) Other documents as suggested by the joint inquiry report

Persons to interview

NSCJody MyersWilliam F. WechslerRichard E. Clarke

CustomsMarcy Forman, Director, Operation Green Quest, US C ustomsDirector, US Customs Service Office of Strategic Trade and Intelligence

FB IDennis Lormel, Terrorist Finance Operations Section



TreasuryJim Johnson, former Undersecretary for EnforcementRon Noble, former Undersecretary for EnforcementElisabeth Bresee, Assistant Secretary for EnforcementKenneth Dam, former Deputy SecretaryDavid Aufhauser, General Counsel

Jimm y Gu rule' former Undersecretary for Enforcement,2001-03

Juan Zarate, DAA S for terrorismBob McBrien, OFACRichard Newcom b, OFAC, DirectorJim Sloan, FinCEN, DirectorDavid Vogh t, FinCEN, Office of IntelligencePeter Djinis, former FinCEN, Office of Financial E nforcement

IRSSteven Miller, Director, Exempt Organizations, Tax Exempt/Government EntitiesDivision, IRS

Martha Sullivan, Director, Compliance, Small and MediumSized

Businesses, IRS(MSBs)

StateUnit head, Office of the Coordinator for Counterterrorism, Counterterrorism Finance andDesignation U nit

Justice

Michael Chertoff, AAGJames Robinson, former AAGAlice Fisher, DAAG

Bruce Swartz, DAAGJim Reynolds, former Chief TVCSBarry Sabin, Chief CT (formerly TVC S)Jeff Breinholt, CT section, terrorist fina ncingGordon Kromberg, AUSA, EDVA

Private industry and independent policy analystsJohn Byrne, American Bankers AssociationRick Small, Director for Global Anti-Money Laundering, CitigroupDirector of compliance, Sun Trust

Michael Zeldin, partner, Deloitte and ToucheKenneth Katzman, Congressional Research ServiceLee Wolosky, Council on Foreign RelationsJon Winer, form er Depu ty Assistant Secretary of StateSteve Emerson, The Investigative Project

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