Treasury's War Read online

16.Blanchard and Prados, “Saudi Arabia: Terrorist Financing Issues,” 12.

  17.O’Brien, “US Presses Saudis.” One Saudi spokesman commented, “It’s a cheap shot to say our money goes to fund terrorists.”

  18.Ibid.

  19.Marc Perelman, “Banks Eyed in Lawsuits on Funding for Terror: Saudi Accounts at Issue,” Forward, October 15, 2004, http://forward.com/articles/4323/banks-eyed-in-lawsuits-on-funding-for-terror/.

  20.Lenzner and Vardi, “Terror Inc.”

  21.Ibid.

  Chapter 4: Financial Chokepoints

  1.Samuel Munzele Maimbo, “The Money Exchange Dealers of Kabul: A Study of the Hawala System in Afghanistan,” World Bank, Finance and Private Sector Unit, South Asia Region, June 2003, www.ifc.org/ifcext/gfm.nsf/AttachmentsByTitle/Tool6.13.WorldBankReport-HawalaSystem/$FILE/Tool+6.13.+World+Bank+Report+-+Hawala+System.pdf.

  2.Patrick M. Jost and Harjit Singh Sandhu, “The Hawala Alternative Remittance System and Its Role in Money Laundering,” 1999, Financial Crimes Enforcement Network, US Department of the Treasury, in cooperation with INTERPOL/FOPAC, www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf.

  3.See Financial Action Task Force (FATF)–Groupe d’Action Financière (GAFI), “FATF Recommendations: IX Special Recommendations, VI: Alternative Remittance,” October 2001, www.fatf-gafi.org/topics/fatfrecommendations/documents/ixspecialrecommendations.html#VI.

  4.Abu Dhabi Declaration on Hawala, May 16, 2002, www.hsdl.org/?view&did=455469.

  5.Financial Action Task Force (FATF)–Groupe d’Action Financière (GAFI), “International Best Practices: Detecting and Preventing the Cross-Border Transportation of Cash by Terrorists and Other Criminals,” February 12, 2005, www.fatfgafi.org/media/fatf/documents/recommendations/International%20BPP%20Detecting%20and%20Preventing%20illicit%20cross-border%20transportation%20SR%20IX%20%20COVER%202012.pdf.

  6.Brett Gentrup, US Immigration and Customs Enforcement, United States of America v. Abdurahman Muhammad Alamoudi: Criminal Complaint, 2003, news.findlaw.com/wp/docs/terrorism/usalamoudi93003cmp.pdf, 8–9.

  7.Brett Gentrup, US Immigration and Customs Enforcement, United States of America v. Abdurahman Muhammad Alamoudi: Supplemental Declaration in Support of Detention, news.findlaw.com/cnn/docs/terrorism/usalamoudi102203sdec.pdf, 4.

  8.Ibid., 17–18.

  9.Ibid., 25–26.

  10.Gentrup, Criminal Complaint, 12–15.

  11.Ibid., 23, 27–28.

  12.Gentrup, Supplemental Declaration, 23.

  13.Ibid., 14–23.

  14.US Department of Justice, “Abdurahman Alamoudi Sentenced to Jail in Terrorist Financing Case,” October 15, 2004, www.justice.gov/opa/pr/2004/October/04_crm_698.htm.

  15.Gentrup, Criminal Complaint, 2, 7–8.

  16.Ibid., 10–12.

  17.National Corruption Index, “Profile: Abdurahman Alamoudi,” January 12, 2009, www.nationalcorruptionindex.org/pages/profile.php?profile_id=4.

  18.Steve Emerson, “Testimony of Steven Emerson Before the United States House of Representatives Committee on Foreign Affairs, Subcommittee on Terrorism, Nonproliferation, and Trade,” July 2008, http://foreignaffairs.house.gov/110/eme073108.pdf, 8.

  19.Gentrup, Criminal Complaint, 10–11.

  20.National Corruption Index, “Profile: Abdurahman Alamoudi.”

  21.US Department of Justice, “Abdurahman Alamoudi Sentenced.”

  22.Craig Whitlock, “The CIA and the Militant That Eluded It in Norway,” Washington Post, December 4, 2006.

  23.“Judge Sentences Mullah Krekar to Five Years in Prison for Making Threats,” March 26, 2012, News In English, www.newsinenglish.no/2012/03/26/judge-sentences-mullah-krekar-to-five-years-in-prison/.

  24.Nicholas Schmidle, “Disarming Viktor Bout,” New Yorker, March 5, 2012.

  25.Douglas Farah and Stephen Braun, Merchant of Death: Money, Guns, Planes and the Man Who Makes War Possible (New York: Wiley, 2007).

  26.Ariel Zirulnick, “Arms Dealer Viktor Bout, Blamed for Arming Al Qaeda, Receives 25 Years in Prison,” Christian Science Monitor, April 6, 2012, www.csmonitor.com/World/terrorism-security/2012/0406/Arms-dealer-Viktor-Bout-blamed-for-arming-Al-Qaeda-receives-25-years-in-prison-video.

  Chapter 6: Bad Banks

  1.Glenn Kessler, “President Imposes Sanctions on Syria,” Washington Post, May 12, 2004, http://www.washingtonpost.com/wp-dyn/articles/A19087–2004May11.html.

  2.“Syrian Minister Admits US Sanctions Will Hurt,” Agence France-Presse, May 29, 2004.

  3.Note that the Section 311 regulatory actions were eventually rescinded for the Ukraine, Nauru, Asia Wealth Bank, Myanmar Mayflower Bank, First Merchant Bank, Multibanka, and VEF Banka. For updates on status of Section 311 actions and rules, see www.fincen.gov/statutes_regs/patriot/section311.html.

  Chapter 7: “The Mother of All Financial Investigations”

  1.“A Fridge Full of Dollars,” The Bulletin, March 21, 2006, www.ericellis.com/archive/moosa.htm.

  2.John Taylor, “Reconstruction in Iraq: Economic and Financial Issues,” US Department of the Treasury, June 4, 2003, www.treasury.gov/press-center/press-releases/Pages/js452.aspx.

  3.United Nations Security Council, Resolution 986, April 14, 1995, http://usiraq.procon.org/sourcefiles/UNSCR986.pdf.

  4.United Nations, “Observations on the Oil for Food Program: Statement of Joseph A. Christoff, Director, International Affairs and Trade,” GAO-04–651T, April 7, 2004, www.gao.gov/new.items/d04651t.pdf.

  5.US Department of State, “Saddam Hussein’s Iraq,” September 1999, www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB167/13.pdf.

  6.“Comprehensive Report of the Special Advisor to the DCI on Iraq’s WMD, with Addendums (Duelfer Report)”, September 30, 2004, http://permanent.access.gpo.gov/lps60059/Volume_1.pdf.

  7.Edward Iwata, “Posse Tracks Billions of Saddam’s ‘Blood Money,’” USA Today,/May 14, 2003, http://usatoday30.usatoday.com/money/world/iraq/2003-05-14-bloodmoney_x.htm.

  8.Juan C. Zarate, Testimony Before the Senate Permanent Subcommittee on Investigations, November 15, 2004.

  9.George W. Bush, “President’s Statement on Kleptocracy,” White House Archives, August 10, 2006, http://georgewbush-whitehouse.archives.gov/news/releases/2006/08/20060810.html.

  Chapter 8: Resurrection

  1.For more information about the new organizational structure, see US Department of the Treasury, “Terrorism and Financial Intelligence,” n.d., www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Terrorism-and-Financial-Intelligence.aspx.

  2.Public Law 108–447, Division H, Title II, Section 222, December 8, 2004, 31 USC § 313.

  3.William J. Broad and David E. Sanger, “C.I.A. Secrets Could Surface in Swiss Nuclear Case,” New York Times, December 23, 2010, www.nytimes.com/2010/12/24/world/europe/24nukes.html?pagewanted=all.

  4.The Federal Authorities of the Swiss Confederation, “Charges Filed in the Tinner Case,” 2011, www.parlament.ch/e/organe-mitglieder/delegationen/geschaeftspruefungsdelegation/fall-tinner/Documents/fall-tinner-anklage-2011–12–13-e.pdf, 1–2.

  5.“Chronology: A.Q. Khan,” New York Times, April 16, 2006, www.nytimes.com/2006/04/16/world/asia/16chron-khan.html?pagewanted=all.

  6.World at Risk: The Report of the Commission on the Prevention of WMD Proliferation and Terrorism, Bob Graham and Jim Talent, co-chairs (New York: Vintage Books, 2008).

  Chapter 9: “Killing the Chicken to Scare the Monkey”

  1.Peter Prahar, Testimony Before the US Senate Committee on Homeland Security and Governmental Affairs, “North Korea: Illicit Activity Funding the Regime,” April 25, 2006, 5.

  2.David L. Asher, Victor D. Comras, and Patrick M. Cronin, Pressure: Coercive Economic Statecraft and U.S. National Security (Washington, DC: Center for a New American Security, 2011), 32; also see David Rose, “North Korea’s Dollar Store,” Vanity Fair, August 5, 2009.

  3.Bill Gertz, “North Korean General Tied to Forged $100 Bills,” Washington Times, June 2, 2009.<
br />
  4.Dick K. Nanto, “North Korean Counterfeiting of U.S. Currency,” Congressional Research Service, June 12, 2009, www.fas.org/sgp/crs/row/RL33324.pdf, 4.

  5.“Counterfeiting: Notes on a Scandal,” The Independent, August 24, 2009.

  6.George W. Bush, Decision Points (New York: Crown, 2010), 420–422.

  7.Financial Crimes Enforcement Network, US Department of the Treasury, Notice of Finding, “Finding That Banco Delta Asia SARL Is a Financial Institution of Primary Money-Laundering Concern,” www.fincen.gov/statutes_regs/patriot/pdf/noticeoffinding.pdf.

  8.“Macau’s Gambling Industry: A Window on China,” The Economist, December 10, 2011.

  9.Asher et al., Pressure, 30–31.

  Chapter 10: The Awakening

  1.Financial Crimes Enforcement Network, US Department of the Treasury, Notice of Finding, “Finding That Banco Delta Asia SARL Is a Financial Institution of Primary Money-Laundering Concern,” www.fincen.gov/statutes_regs/patriot/pdf/noticeoffinding.pdf.

  2.“World Watch,” Wall Street Journal (Eastern edition), October 4, 2005, A15.

  3.Henry Paulson, “Remarks by Treasury Secretary Paulson on Targeted Financial Measures to Protect Our National Security,” June 14, 2007, US Department of the Treasury, www.treasury.gov/press-center/press-releases/Pages/hp457.aspx.

  4.Victor Cha, The Impossible State (2012), 266.

  5.Author interview with Victor Cha, Washington, DC, December 13, 2011.

  Chapter 11: Putting the Genie Back in the Bottle

  1.See Jayshree Bajoria, “The Six Party Talks on North Korea’s Nuclear Program,” February 29, 2012, Council on Foreign Relations, www.cfr.org/proliferation/six-party-talks-north-koreas-nuclear-program/p13593.

  2.“North Korea Missile Launches,” July 4, 2006, Office of the Press Secretary, White House Press Release, US Department of State Archive, http://2001–2009.state.gov/p/eap/rls/prs/68546.htm; see also Federation of American Scientists, “North Korea’s Taepodong and Unha Missiles,” 2011, www.fas.org/programs/ssp/nukes/nuclearweapons/Taepodong.html.

  3.“Statement by the President on North Korea,” October 9, 2006, US Department of State Archive, http://2001–2009.state.gov/p/eap/rls/ot/73741.htm.

  4.Choe Sang-Hun and John O’Neil, “N. Korea Expects Talks to End Sanctions,” New York Times, November 1, 2006, www.nytimes.com/2006/11/01/world/asia/01cnd-korea.html?pagewanted=print&_r=0.

  5.“Statement by DAS Glaser on the Disposition of DPRK-Related Funds Frozen at Banco Delta Asia,” March 19, 2007, US Department of the Treasury, www.treasury.gov/press-center/press-releases/Pages/hp322.aspx.

  6.Steven Weisman, “The Ripples of Punishing One Bank,” New York Times, July 3, 2007.

  Chapter 12: Revelation

  1.Glenn R. Simpson, “U.S. Treasury Tracks Financial Data in Secret Program,” Wall Street Journal, June 22, 2006; Josh Meyer and Greg Miller, “Secret U.S. Program Tracks Global Bank Transfers,” Los Angeles Times, June 22, 2006; Barton Gellman, Paul Blustein, and Dafna Linzer, “Bank Records Secretly Tapped,” Washington Post, June 23, 2006.

  2.“John W. Snow: Treasury Dept.’s View of the Bank Data,” Letter to the Editor, New York Times, June 29, 2006, www.nytimes.com/2006/06/29/opinion/l29terror.html.

  3.“Testimony of Stuart Levey, Under Secretary Terrorism and Financial Intelligence, U.S. Department of the Treasury, Before the House Financial Services Subcommittee on Oversight and Investigations,” July 11, 2006, US Department of the Treasury, www.treasury.gov/press-center/press-releases/Pages/hp05.aspx (“Testimony of Stuart Levey” hereafter).

  4.“Update and Q&A to SWIFT’s 23 June 2006 Statement on Compliance,” August 25, 2006, SWIFT, www.swift.com/about_swift/legal/compliance/statements_on_compliance/update_and_q_and_a_to_swift_s_23_june_2006_statement_on_compliance/index.page?.

  5.“SWIFT Statement on Compliance Policy,” June 23, 2006, SWIFT, www.swift.com/about_swift/legal/compliance/statements_on_compliance/swift_statement_on_compliance_policy/index.page?.

  6.Byron Calame, “Secrecy, Security, the President and the Press,” New York Times, July 2, 2006, www.nytimes.com/2006/07/02/opinion/02pub-ed.html?pagewanted=1.

  7.Byron Calame, “Banking Data: A Mea Culpa,” New York Times, October 22, 2006, www.nytimes.com/2006/10/22/opinion/22pubed.html?pagewanted=2&_r=2.

  8.“Testimony of Stuart Levey.”

  9.“Processing of EU Originating Personal Data by United States Treasury Department for Counter Terrorism Purposes—’SWIFT,’” Official Journal of the European Union 100, no. 166 (2007): 3–8, http://eur-lex.europa.eu/LexUriServ/site/en/oj/2007/c_166/c_16620070720en00180025.pdf.

  10.Stuart Levey, “Letter from the United States Department of the Treasury Regarding SWIFT / Terrorist Finance Tracking Programme,” Official Journal of the European Union 100, no. 166 (2007), http://eur-lex.europa.eu/LexUriServ/site/en/oj/2007/c_166/c_16620070720en00170017.pdf.

  11.Council of the European Union, “EU-US Agreement on the Transfer of Financial Messaging Data for Purposes of the Terrorist Finance Tracking Programme,” February 9, 2010, www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/jha/112850.pdf, 1.

  12.European Parliament, “European Parliament Resolution of 17 September 2009 on the Envisaged International Agreement to Make Available to the United States Treasury Department Financial Payment Messaging Data to Prevent and Combat Terrorism and Terrorist Financing,” September 17, 2009, www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2009–0016&language=EN.

  13.Council of the European Union, “EU-US Agreement,” 1. See also Europa, “Cecilia Malmstrom Member of the European Commission Responsible for Home Affairs Terrorist Finance Tracking Programme (TFTP), European Parliament Debate on SWIFT, Strasbourg, 10 February 2010,” http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/10/24&format=HTML&aged=1&language=EN&guiLanguage=en.

  14.European Parliament, “SWIFT: European Parliament Votes Down Agreement with the US,” February 11, 2010, www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+IM-PRESS+20100209IPR68674+0+DOC+XML+V0//EN. European Parliament President Jerzy Buzek said, “The majority view in the European Parliament is that the correct balance between security, on the one hand, and the protection of civil liberties and fundamental rights, on the other, has not been achieved in the text put to us by the Council.” Europa, “EP President Jerzy Buzek on the Rejection of the SWIFT Agreement by the European Parliament,” February 11, 2010, www.europarl.europa.eu/sides/getDoc.do?type=IM-PRESS&reference=20100211IPR68856&language=EN.

  15.Mark Hallam, “Finance, Security and Privacy Collide in SWIFT Controversy,” DW, n.d., www.dw.de/finance-security-and-privacy-collide-in-swift-controversy/a-14987543.

  16.US Department of the Treasury, “Terrorist Finance Tracking Program: Questions and Answers,” www.treasury.gov/resource-center/terrorist-illicit-finance/Terrorist-Finance-Tracking/Documents/Final%20UpdatedTFTP%20Brochure%20(8–5-11).pdf, 1–2.

  17.“Agreement Between the United States of America and the European Union on the Processing and Transfer of Financial Messaging Data from the European Union to the United States for the Purposes of the Terrorist Finance Tracking Program,” June 28, 2010, US Department of the Treasury, www.treasury.gov/resource-center/terrorist-illicit-finance/Terrorist-Finance-Tracking/Documents/Final-TFTP-Agreement-Signed.pdf, 10, 14, 15–18, 20–21, 27.

  18.Eric Lichtblau, “Controls on Bank-Data Spying Impress Civil Liberties Board,” New York Times, November 29, 2006, www.nytimes.com/2006/11/29/washington/29nsa.html.

  Chapter 13: The Constriction Campaign

  1.Frederic Wehrey, Jerrold D. Green, Brian Nichiporuk, Alireza Nader, Lydia Hansell, Rasool Nafisi, and S. R. Bohandy, The Rise of the Pasdaran: Assessing the Domestic Roles of Iran’s Islamic Revolutionary Guards Corps (Washington, DC: RAND Corporation, 2009).

  2.Emanuele Ottolenghi, The Pasdaran: Inside Iran’s Islamic Revolutionary Guard Corps (Washington, DC: Foundation for Defense of Democracies, 2011), 44–45.

  3.Ibid., 43.

>   4.Matthew Levitt, “Financial Sanctions,” in Iran Primer (Washington, DC: United States Institute of Peace Press, 2010), http://iranprimer.usip.org/sites/iranprimer.usip.org/files/Financial%20Sanctions.pdf.

  5.US Department of State, “Designation of the Islamic Republic of Iran Shipping Lines (IRISL) and Subsidiaries for Proliferation Activities,” September 11, 2008, http://2001–2009.state.gov/r/pa/prs/ps/2008/sept/109485.htm.

  6.US Department of State, “Iran’s Defense Industries Organization Designated by State,” March 30, 2007, http://2001–2009.state.gov/r/pa/prs/ps/2007/mar/82487.htm.

  7.US Department of State, “Designation of Iranian Entities and Individuals for Proliferation Activities and Support for Terrorism,” October 25, 2007, http://2001–2009.state.gov/r/pa/prs/ps/2007/oct/94193.htm.

  8.Vikas Bajaj and John Eligon, “Iran Moved Billions via U.S. Banks,” New York Times, January 9, 2009, www.nytimes.com/2009/01/10/business/worldbusiness/10bank.html.

  9.Robert M. Morgenthau and Adam S. Kaufmann, Testimony Before the US Senate Committee on Foreign Relations, May 6, 2009, www.iranwatch.org/government/US/Congress/Hearings/sfrc-050609/documents/us-sfrc-morgenthaukaufmanntestimony-050609.pdf.

  10.Robert Morgenthau, “The Emerging Axis of Iran and Venezuela,” Wall Street Journal, September 8, 2009.

  11.Clearstream, “About Us,” www.clearstream.com/ci/dispatch/en/kir/ci_nav/about_us; Clearstream, “Clearstream Snapshot 2011/2012,” December 2011, www.clearstream.com/ci/dispatch/en/binary/ci_content_pool/attachements/001_about_us/clearstream_snapshot.pdf.

  12.Peterson v. Clearstream Banking, S.A., Citibank et al., https://materials.proxyvote.com/Approved/629491/20110509/NPS_91360/PDF/nyse_euronextsmproxy2011_0255.pdf.

  13.“Rafsanjani Urges Iran Not to Dismiss Sanctions as ‘Jokes,’” Agence France-Presse, September 14, 2010.