Treasury's War Page 12
We turned our focus to finding chokepoints. If we could check those carrying cash for Al Qaeda, we could disrupt their ability to move money from donors to operatives. Not only that, but stopping suspect cash couriers could provide us with a window into the evolving terrorist network and their dependencies and locations. At a minimum, putting pressure on the courier system would inject some valuable risk and uncertainty into Al Qaeda’s use of couriers around the world. We applied a three-pronged strategy.
First, we needed to establish the importance of monitoring and checking the inflow and outflow of cash globally. We did not want to stop the flow of this kind of capital around the world, but we needed the international community to focus on the use of reporting requirements and enforcement operations to catch illegal cash smuggling. For instance, in the United States, it is not illegal to move cash or other monetary instruments in and out of the country. It is, however, mandatory to declare amounts larger than $10,000 when moving these sums across borders. For these amounts, travelers coming into or going out of the country are required to fill out a Customs form called a Report of International Transportation of Currency or Monetary Instruments. The United States has demonstrated over the years that you can target narcotics-related cash couriers at major airports that are hubs for international travelers without stifling the legitimate flow of money in whatever form.
In theory, targeting suspect cash couriers should not have been difficult. Cash couriers are not new or unique to terrorism, and the lost tax and customs revenue for undeclared movements of cash should incentivize governments to be vigilant. Even so, the prospect of adding another layer of regulation onto the anti-money-laundering system was not welcome, especially as countries were still grappling with the new requirements for banking and nonbanking financial institutions that had been put into place after 9/11.
Nevertheless, something needed to be done. I tasked Paul DerGarabedian, a veteran anti-money-laundering expert who understood how to pull the levers of the international system, with developing the framework for an international standard. He worked methodically with law enforcement, customs and border agencies, and regulators around the world to develop “typologies” of how terrorists had used cash couriers in the past as well as “methodologies” for stopping them in the future.5 With these typologies and methodologies as a starting point, we could move toward a new FATF Special Recommendation that would obligate members of the FATF and FATF regional-style bodies and the rest of the world to put detection and enforcement structures into place to stop the illicit movement of cash across borders. And once this requirement was in place, jurisdictions like Hong Kong began to pass laws, implement reporting requirements, and put systems in place to track the physical movement of cash in and through their ports of entry and exit.
Second, while we moved on developing these requirements, we needed to help train and impel foreign law-enforcement and customs officials. They would need to enforce their own laws and international requirements. In many cases, laws to catch illegal movements of cash already existed, but were not being enforced. In other cases, customs officials had poor training or lacked any political backing to begin checking the luggage of travelers who appeared suspicious or failed to declare their possession of cash or monetary instruments. Over time, US Customs officers were dispatched to train their counterparts in other countries at conferences and in key jurisdictions. They focused on operational techniques and practices designed to target high-risk passengers and flights.
Finally, we needed to make sure nothing would hinder our efforts to have a material impact on the movement of illicit capital. It was fine to have the standards in place, laws and procedures adopted, and customs officials trained, but they needed to be directed to have a real-world impact on illicit financial flows. This would become the most frustrating aspect of our cash-courier endeavors. The idea from the start was that customs and border agents would be coordinating and implementing risk assessments for key transit points and at critical travel chokepoints globally. If we could be certain that the major ports of entry and exit in the international travel system were being methodically covered, particularly when it came to high-risk flights and passengers, then we might have a disruptive impact on the flows of cash to Al Qaeda and other terrorist organizations. Looking carefully at potential suspect cash flows on flights from Dubai to Karachi, or London to Islamabad, would be important. At a minimum, as money was seized and names identified, we would gain insights into the flows of cash around the world. We would also, perhaps, disrupt some illicit financial flows and deter others by adding greater risk into the system. In the best-case scenario, we would have found another way to squeeze an Al Qaeda money channel—and might even nab some Al Qaeda couriers.
To do this, we had to enlist transit points where illicit and terrorist financing was likely to flow. This meant including not only important chokepoints such as Dubai, Doha, and Istanbul, through which terrorist operatives would travel, but also important crossroads such as London, Frankfurt, and Hong Kong, through which terrorist funding might flow. Getting American security officials—Customs or otherwise—into the relevant countries to help train and then coordinate operations was a sensitive and difficult project. Many countries did not want to create new security requirements that would slow the movement of passengers and tourists through busy airports. The United Arab Emirates and numerous other countries were sensitive—with good reason—to having any American presence at the point of interaction with passengers. Others, such as Qatar, were just not interested at all. The key, however, to giving greater strategic effect to targeted inspections and the new cash-courier requirements was to create a global net focused on important chokepoints and coordinated operations based on the experts’ best estimates of suspect movements of cash.
Through persistent efforts, such operations were put into place over the years, but never to the full extent that we had envisioned. In several locations, the program had an impact, and some seizures did occur. For example, Egyptian authorities would catch Hamas officials and couriers moving suitcases of cash across the Rafah border crossing because Hamas bank accounts had been shuttered.
In August 2003, British authorities at Heathrow Airport noticed a suspicious individual who was flying from London to Damascus. His name was Abdurahman Muhammad Alamoudi, a naturalized American citizen. Born in Eritrea in 1952, and a graduate of Cairo University in 1975, Alamoudi had already attracted law-enforcement attention in the United States after September 11. He had long been a prominent member of the Muslim community in the United States and abroad. He was the founder of the American Muslim Council (AMC), where he served as executive director and was on the board of directors. He was also the founder of the American Muslim Foundation (AMF), where he served as president.6 Moreover, Alamoudi was involved with the SAAR Foundation and the Success Foundation,7 which had been the subject of intense investigation under Treasury’s Operation Green Quest and from the US Attorney’s Office in the Eastern District of Virginia.
When British officials opened Alamoudi’s suitcase, they found $340,000 in cash. When asked about the money, Alamoudi claimed it was the proceeds of a fundraising venture for AMF and had come from the Islamic Call Society, a Libyan group. British authorities also found Alamoudi in possession of two passports from the United States and one from Yemen. Examination of these passports exposed Alamoudi’s frequent travel to Libya in 2002 and 2003, with stays as long as five days, in violation of US travel restrictions to states sponsoring terrorism.8 Alamoudi had deliberately attempted to conceal his travel to Libya, Lebanon, Syria, Yemen, and Egypt in earlier conversations with customs officers.9 When questioned further, he admitted that he had traveled to Tripoli multiple times to arrange the donation for AMF. All of this was extremely fishy. As investigators began to dig, they began to uncover a major geopolitical plot, with Alamoudi sitting in the middle as the moneyman and choreographer.
The intelligence community believed the Islamic Call Society to be
an agency of the Libyan government, founded by Muammar el-Qaddafi in part to serve as a terrorist fundraising and support front.10 The investigation of Alamoudi’s accounts disclosed wire transfers ($5,000 in December 1999) and checks ($2,000 in November 2000) from the Libyan Mission to the United Nations to Alamoudi, ostensibly sent as donations to the AMF. Alamoudi also sought reimbursement for travel expenses of $7,000 from the same source in August 2001.11 He used four US bank accounts to launder Libyan money back to the United States, and he had other bank accounts in Riyadh and Zurich. Additional funding came from Alamoudi’s five wealthy brothers in Saudi Arabia, who had sent him more than $550,000 to assist with his overall activities.12 None of this money was disclosed on tax returns—nor did his tax returns disclose his bank accounts in Riyadh and Zurich.13
Alamoudi’s funding ties exposed his involvement in an elaborate Libyan plot to assassinate Saudi Crown Prince Abdullah. Between Qaddafi and the Saudi monarchy there was a long-standing animosity, which periodically revealed itself in harsh comments at Arab League summit meetings. However, attempting to kill the Saudi leader was a far cry from anything that had been seen in the past between the two nations. Paid by the Libyan regime to coordinate the plot, Alamoudi had recruited assassins for the plot by introducing Libyans and Saudis in London, and he had facilitated the transfer of Libyan funds to dissidents who were to carry out the plan.14 Being caught red-handed with a briefcase full of cash at Heathrow put a stop to the scheme.
British and American security and customs officials coordinated the investigation and the next steps. On September 28, 2003, Alamoudi was allowed to return to the United States and was detained upon reentry at Dulles International Airport in Northern Virginia. He was charged with violation of the International Economic Emergency Powers Act (IEEPA), executive orders, and Libyan Sanctions Regulations, as well as with the misuse of a passport and interactions with state sponsors of terrorism.15 The affidavit submitted by the United States for the case outlined Alamoudi’s connections to an extensive terrorist financing network that was part of a broader scheme to conceal wire transfers and transactions abroad from immigration, customs, and law-enforcement officials.16
Alamoudi had been an influential figure in the American Muslim community and had interacted officially with both the Clinton and Bush administrations.17 He had engaged in spreading goodwill for the US State Department, traveling frequently to Muslim countries on America’s behalf (and on taxpayer expense) during the 1990s. He had also founded the Muslim chaplaincy program for the US military.18
Yet Alamoudi’s views and connections had been suspect all along. In a 2000 speech given at Lafayette Park in Washington, DC, Alamoudi cried, “We are all supporters of Hamas. . . . I am also a supporter of Hezbollah.” He expressed similar opinions in newspaper interviews.19 Other allegations against Alamoudi included significant funding ties to Al Qaeda operatives and business relations with men and organizations later designated as terrorists and fronts.20 The money trail had exposed Alamoudi as more than just a suspect individual with terrorist sympathies. It had put him at the heart of a major international assassination plot that could have had major geopolitical impact.
Alamoudi pled guilty to charges of violating IEEPA, making false statements in his application for naturalization, and concealing his transactions with Libya and his foreign bank accounts from the Internal Revenue Service. He forfeited the $910,000 he had gained from his involvement in the Libyan scheme and was sentenced to twenty-three years in jail, but, as part of the plea agreement, was not charged directly in the failed assassination plot.21
Even with these successes, we never had a magic, demonstrable moment when a key Al Qaeda courier was caught with cash in an airport terminal. We had to hope that the random checks at airports would at a minimum make it riskier for Al Qaeda to try to move money across borders in suitcases and satchels.
The halawa and courier systems weren’t our only targets by 2003. Our department continued to employ terrorist financing designations as a potent weapon. The trouble was that, almost two years after 9/11, targets were becoming harder to find. The low-hanging fruit had already been picked, and our enemies were beginning to adapt to the global pressure on their financial networks. Within the US government, the sense of urgency that characterized the post-9/11 period was beginning to wane. O’Neill’s 80/20 rule had given way to a cautious demand for 100 percent surety of any action, given the perceived legal, diplomatic, and intelligence costs of public designations. Adding to this was a growing concern in the international community about the aggressive use of asset freezes to disrupt fundraising networks—especially when those affected had no direct link to acts of terror and there was no clear path to get out from under the sanctions.
We needed to leverage our authority—and the designation process—more precisely for long-term strategic impact against the terrorist movement, and we needed to expand the international efforts to account for how Al Qaeda and related groups were adapting to the pressure we had put on them. We needed to find and go after terrorism’s most deep-pocketed donors.
At the Treasury Department, we realized early on that while actual suicide bombers might not be deterrable at the point of detonating an explosive, the financiers could be. For many of the financial backers of terrorist organizations, fighting a holy war was not their day job. They were often successful businesspeople with one foot in the legitimate financial and commercial world and another in the world of violent global jihad. Supporting terrorist causes was in line with their sense of religious obligation—and often seen as a form of zakhat (charity). Al Qaeda and those who stoked support for the terrorist movement with religious rulings (fatwas) and exhortation would often make the point that if a person could not join the physical jihad himself, then he had an obligation to support it financially.
We thought then that our strategies and tools should be directed at both stopping those who were currently investing in Osama bin Laden’s movement and deterring future donors for Al Qaeda’s cause. Deterrence of the financial supporters would be a driving principle for Treasury’s efforts. Part of this strategy was demonstrating that any money spent to support Al Qaeda would be pouring money down a rat hole for a losing cause. No one wants to back a losing horse—especially if it also meant putting their livelihoods at risk. Much of this strategy required ensuring that such financiers understood there would be a dangerous, direct cost to them and their financial futures if they continued to finance these activities. And this threat to their commercial and financial legitimacy could impact their decision making—making it easier for them to slow or end their wire transfers and donations to Al Qaeda.
We proceeded by targeting key financiers with our financial tools—freezing the assets of those designated as well as of the entities and companies they owned or controlled. We fence-ringed those identified so that others—banks, business partners, and investors—would quarantine these individuals from the legitimate commercial and financial worlds. The effect would be a form of forced divestment conducted by the private actors themselves for fear of being tainted by the association with a designated terrorist supporter and affected by the consequences to their reputations and business interests. We wanted to demonstrate that those who were willing to cast their lot with Al Qaeda were going to have to forfeit their wealth and access to a legitimate financial future. We wanted to make Al Qaeda radioactive to the financiers.
The Al Qaeda operatives did not exist in a vacuum. They relied on an entire system and support structure. The financial networks and the money were essential to their ability to operate and for the movement to survive in the long term. That support structure was made up of different types of actors, with varying motivations and vulnerabilities. For the financiers—who often were not as ideologically committed to the cause as the terrorists themselves—money was a factor, and they valued their bank accounts and businesses. They wanted and needed to continue to do business across borders. Thus, we could find ways of altering t
he decision making of those donors, suppliers, and supporters who would value their ability to continue to do business. If their access to the legitimate commercial and financial systems were blocked, we reasoned, then they might reduce their support, desist for a time, or never provide support again. Any of these would be good outcomes.
This theory became an important driver of our strategy. We wanted to impact the variety of networks necessary for Al Qaeda to survive and succeed—from deep-pocket donors to smuggling networks and counterfeiters who were willing to assist Al Qaeda for profit. This approach would also inform how we thought about engaging the clerical establishment—we had to “delegitimate” terrorists and show that there was no moral or theological justification for terror or the use of weapons of mass destruction. There were some, such as Samantha Ravich, a senior staffer for Vice President Cheney, who were thinking creatively about how to deter communities that might support terrorist causes—for example, by building awareness of the global and local economic impacts of a nuclear attack on the United States.
In 2006, well after I arrived at the White House, we took this a step further and began to look at designating terrorist ideologues—those who attempt to provide ideological and theological justification for terrorism but often sit comfortably beyond the reach of legal strictures in legitimate societies, where freedom of speech often allows the advocacy of murder. For this work I relied on Todd Hinnen, a brilliant lawyer and former computer crimes prosecutor who was sensitive to the balance between First Amendment rights and the need to clamp down on material support to terrorism. I had recruited Hinnen, a close friend of mine and a former Harvard Law School classmate, who looked like he belonged on the cover of GQ magazine, into the National Security Council with me to ensure that our counter-terrorist-financing efforts were tied directly to our broader strategies and policies—both globally and in the war theaters. Hinnen would later become a chief legal adviser to Senator Joe Biden and acting assistant attorney general in the national security division for the Obama Justice Department.