Outrage voiced today by President Bush, whether feigned or genuine, over recent news that the U.S. Government is using bank data to track terrorists, is disturbing because it reveals how little the President knows about tracking terrorist financing. President Bush called:

the New York Times story revealing the administration’s monitoring of bank records “disgraceful,” and said the decision to publish details of the program “does great harm to the United States of America.”

His selective moral outrage, directed exclusively against the New York Times, was in response to a story that also appeared in the Los Angeles Times and the Wall Street Journal. The New York Times reported that:

Under a secret Bush administration program initiated weeks after the Sept. 11 attacks, counterterrorism officials have gained access to financial records from a vast international database and examined banking transactions involving thousands of Americans and others in the United States, according to government and industry officials. (This is a quote from the NY Times by Lichtblau and Risen)

Excuse me, but where is the beef? As someone who works on a daily basis on money laundering issues and who is credited (see page 3, footnote 15 .pdf), along with my partner, for identifying a money laundering technique employed by terrorists, I am mystified why this is even considered a story. It is no secret that the U.S. Government has been trying to monitor terrorist financial transactions since 9-11. Anyone who works in the banking/financial sector knows that SWIFT–the Society for Worldwide Interbank Financial Telecommunication–is a major, but not only mechanism, for moving financial assets around the world.
The only “secret” I can see, based solely on my understanding of how financial investigations work, is the fact that the CIA has access to this data without any judicial oversight. This is the classic FBI vs. CIA connundrum. If you use a law enforcement approach you are subject to judicial oversight. If you are doing “international” intelligence you have no effective oversight; the key is not to get caught.

What has the President’s shorts in a knot is that this latest revelation may create a political problem for the Administration and could lead SWIFT to stop “sharing” the information with the CIA. But, to paraphrase Shakespeare, methinks the President doth protest too much. If his outrage was directed at all three media outlets and he announced a search for the leakers, I would give him the benefit of the doubt. But, I have learned from one of the reporters from the three outlets who published the story that the White House did not make a serious effort to get the story stopped (and no I was not a source for any of them and learned about the story the way the rest of America did). We have to entertain the possibility that this was deliberately leaked so the President and his Republican allies could try to refocus public attention on the evil “liberal” media.

The dog that has not barked here, however, if you carefully read the story, is the paltry results produced to date despite having access to this enormous volume of data. If we had taken apart major terrorist operations besides the two referenced in the NY Times story, we would have heard about it. If they had developed information that helped identify the location and activities of Osama Bin Laden or Ayman Zwahiri, we would have heard about it. Instead, despite this massive volume of data, there are few tangible results to point to. That appears to be the real story.

Let me conclude with some good news, the U.S. Money Laundering Threat Assessment of December 2005 (.pdf) is a remarkable document and offers a great overview of some key money laundering techniques. Terrorism, however, rarely relies on money laundering. Money laundering starts with a crime, such as drug trafficking, and involves activities to create a “clean” trail to explain how the money was earned legally. When it comes to terrorism, the money ususally starts out clean. It may come from a legitimate business or a charitable contribution. It is only when the money is put in the hands of a terrorist, who then uses the funds to pay for food and shelter or buy explosives that the “crime” is about to occur. Identifying and tracking such activity is difficult.

What the Bush Administration needs to do, rather than pitch a childish fit about reporters doing their jobs, is to figure how to marshall the various investigative and intelligence resources in the U.S. Government to work in a coordinated fashion to go after the finaciers of terrorism. A careful reading of the various articles over the weekend makes it clear that the CIA is doing this on its own with some minimal assist from Treasury. Three other agencies that do financial investigations on a regular basis–DEA, Customs (now ICE) and Secret Service–are conspicuously absent in these articles. That, in my view, explains a lot why so few terrorist financiers have been wrapped up in the last four years.

……………………………………………………..


Larry C. Johnson is CEO and co-founder
of BERG Associates, LLC, an international business-consulting firm
that helps corporations and governments manage threats posed by
terrorism and money laundering. Mr. Johnson, who worked previously
with the Central Intelligence Agency and U.S. State Department’s
Office of Counter Terrorism (as a Deputy Director), is a recognized
expert in the fields of terrorism, aviation security, crisis and risk
management. Mr. Johnson has analyzed terrorist incidents for a variety
of media including the Jim Lehrer News Hour, National Public Radio,
ABC’s Nightline, NBC’s Today Show, the New York Times, CNN, Fox News,
and the BBC. Mr. Johnson has authored several articles for
publications, including Security Management Magazine, the New York
Times, and The Los Angeles Times. He has lectured on terrorism and
aviation security around the world. Further bio
details.


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