Treasury's War Read online

  Chapter 14: Dusting Off the Playbook

  1.Timothy Geithner, “Finance Committee Questions for the Record,” US Senate Committee on Finance, January 21, 2009, 66.

  2.For more information on the Center for Strategic and International Studies’ “Smart Power Initiative,” see http://csis.org/program/smart-power-initiative.

  3.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), 5–6, 23.

  4.For a detailed chronology of events, see “Chronology of U.S.–North Korean Nuclear and Missile Diplomacy,” April 2012, Arms Control Association, www.armscontrol.org/factsheets/dprkchron.

  5.David Ignatius, “Obama’s Signal to Iran,” Washington Post, April 5, 2012.

  6.For background on EU sanctions and designations of Iran in 2007–2008, see Council of the European Union, “Fact Sheet: The European Union and Iran,” April 23, 2012, www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/127511.pdf.

  7.The arguments in this paragraph were first featured in Juan Zarate, “Beyond Sanctions,” National Review, October 4, 2010.

  8.“Senior US Senator Calls on Ending Appeasement Policy vis-à-vis Mullahs in Iran,” February 14, 2012, CNN, http://ireport.cnn.com/docs/DOC-748676.

  9.Karen DeYoung and Michael Shear, “U.S., Allies Say Iran Has Secret Nuclear Facility,” Washington Post, September 26, 2009.

  10.Stuart Levey, “Comments During Panel on Terrorist Financing,” Aspen Institute, July 2011, cited in “Zarate Blasts Obama’s Iran Sanctions Pause,” Money Jihad, October 7, 2011, http://moneyjihad.wordpress.com/2011/10/07/zarate-blasts-obamas-iran-sanctions-pause/.

  11.Hillary Rodham Clinton and Timothy Geithner, “Measures to Increase Pressure on Iran,” US Department of State, November 21, 2011, www.state.gov/secretary/rm/2011/11/177610.htm.

  12.Stuart Levey, “Iran’s New Deceptions at Sea Must Be Punished,” Financial Times, August 15, 2010.

  13.“Levey Lauds Iran Sanctions,” Money Jihad, June 29, 2010, http://moneyjihad.wordpress.com/2010/page/16/.

  14.“Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010,” Public Law 111–195, July 1, 2010.

  15.US Department of the Treasury, “Amendment to the Iranian Financial Sanctions Regulations,” February 27, 2012, www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20120227.aspx.

  16.Flavia Krause-Jackson “Sanctions Cost Iran $60 Billion in Oil Investments, Burns Says,” Bloomberg, December 1, 2010, http://www.bloomberg.com/news/2010–12–01/sanctions-cost-iran-60-billion-in-oil-investments-burns-says.html.

  17.See Juan C. Zarate, “Beyond Sanctions,” National Review.

  18.Benjamin Netanyahu, “Address to the American Israel Public Affairs Committee,” Washington, DC, March 5, 2012.

  19.“Japan’s Crude Imports from Iran Drop as Sanctions Bite,” Reuters, April 26, 2012, www.reuters.com/article/2012/04/26/us-crude-japan-iran-idUSBRE83P0DV20120426.

  20.“Iran Exchange to Start Fuel-Oil Trading in April, Official Says,” Reuters, April 1, 2011, www.bloomberg.com/news/2011–04–01/iran-exchange-to-start-fuel-oil-trading-in-april-official-says.html.

  21.Kenneth Katzman, “Iran Sanctions,” Congressional Research Service, December 7, 2012, 19.

  22.Kenneth Katzman, “Iran Sanctions,” Congressional Research Service, February 3, 2011, 51.

  23.“Sanctions Felt,” Times Daily, October 4, 2012, http://timesdaily.com/stories/Sanctions-felt,196708.

  24.Katzman, “Iran Sanctions,” Congressional Research Service, February 3, 2011, 49.

  25.“Iran’s Rial Hits an All-Time Low Against the U.S. Dollar,” BBC News, October 1, 2012, www.bbc.co.uk/news/business-19786662.

  26.Katzman, “Iran Sanctions,” Congressional Research Service, February 3, 2011, 50.

  27.“Sanctions on Iran Effect [sic] Ordinary Iranians Psyche,” National Public Radio, January 6, 2012, www.npr.org/2012/01/06/144772880/sanctions-on-iran-effect-ordinary-iranians-psyche.

  28.Hiedeh Farmani, “Ahmadinejad Says Iran Open to More Nuclear Talks,” Iran Focus, January 23, 2011, www.iranfocus.com/en/index.php?option=com_content&view=article&id=22654:ahmadinejad-says-iran-open-to-more-nuclear-talks&catid=8:nuclear&Itemid=45.

  29.Hashem Kalantari, “Iran New Year Marred by Mideast Unrest—Khamenei,” Reuters, March 20, 2011, www.reuters.com/article/2011/03/21/iran-khamenei-idAFLDE72K00320110321.

  30.“Iran Downplays Report India Paying for Oil via Russia,” Reuters, October 29, 2011, www.reuters.com/article/2011/10/29/iran-india-oil-idUSL5E7LT06U20111029.

  31.“U.N.: Iran Seeks to Skirt Nuke Sanctions,” United Press International, May 12, 2011, www.upi.com/Top_News/US/2011/05/12/UN-Iran-seeks-to-skirt-nuke-sanctions/UPI-77751305218161/.

  32.“‘Sanctions Have Had No Impact,’” February 16, 2011, PressTV, www.presstv.ir/detail/165434.html.

  33.Thomas Erdbrink, “Ahmadinejad Admits Impact of Sanctions on Iran,” Washington Post, November 1, 2011, www.washingtonpost.com/world/middle_east/ahmadinejad-admits-impact-of-sanctions-on-iran/2011/11/01/gIQAvBIacM_story.html.

  34.Caren Bohan and Glenn Somerville, “Key Obama Aide on Iran Sanctions Steps Down,” Reuters, January 24, 2011, www.reuters.com/article/2011/01/24/us-iran-usa-sanctions-idUSTRE70N5PK20110124.

  35.“Official: US, EU Economic Institutions Opposed to Sanctions Against Iran,” Fars News Agency, January 26, 2011, http://english.farsnews.com/newstext.php?nn=8911060616.

  36.Robert O’Harrow Jr., James V. Grimaldi, and Bradley Dennis, “Sanctions in 72 Hours: How the U.S. Pulled Off a Major Freeze of Libyan Assets,” Washington Post, March 23, 2011, www.washingtonpost.com/investigations/sanctions-in-72-hours-how-the-us-pulled-off-a-major-freeze-of-libyan-assets/2011/03/11/ABBckxJB_story.html.

  37.“Standard Chartered Bank in ‘$250bn Scheme with Iran,’” BBC News, August 6, 2012, www.bbc.co.uk/news/business-19155577.

  38.Ivanka Barzashka, “Using Enrichment Capacity to Estimate Iran’s Breakout Potential,” January 21, 2011, Federation of American Scientists, www.fas.org/pubs/_docs/IssueBrief_Jan2011_Iran.pdf.

  39.James R. Clapper, “Statement for the Record on the Worldwide Threat Assessment of the U.S. Intelligence Community for the Senate Select Committee on Intelligence,” February 16, 2011, Office of the Director of National Intelligence, http://intelligence.senate.gov/110216/dni.pdf.

  40.International Atomic Energy Agency Board of Governors, “Implementation of the NPT Safeguards Agreement and Relevant Positions of Security Council Resolutions in the Islamic Republic of Iran,” May 25, 2012.

  Chapter 15: Learning Curve

  1.US Department of the Treasury, “Treasury Targets Major Money Laundering Network Linked to Drug Trafficker Ayman Joumaa and a Key Hizballah Supporter in South America,” June 27, 2012, www.treasury.gov/press-center/press-releases/Pages/tg1624.aspx; also see US Department of the Treasury, “Treasury Identifies Lebanese Canadian Bank Sal as a ‘Primary Money Laundering Concern,’” February 10, 2011, www.treasury.gov/press-center/press-releases/pages/tg1057.aspx; Jo Becker, “Beirut Bank Seen as a Hub of Hezbollah’s Financing,” New York Times, December 13, 2011.

  2.Samuel Rubenfeld, “Treasury Targets Drug-Money Laundering Network, Hezbollah Fundraiser,” Wall Street Journal, June 27, 2012.

  3.David Cohen, “Treasury’s Role in National Security,” Interview by Juan Zarate, Washington, DC, May 10, 2012, http://csis.org/files/attachments/051412_TreasuryRoleInNatSec_Transcript.pdf.

  4.Michael Jacobson and Matthew Levitt, “Staying Solvent: Assessing Al-Qaeda’s Financial Portfolio,” November 2009, Washington Institute for Near East Policy, www.washingtoninstitute.org/uploads/Documents/opeds/4b28f9a9e2216.pdf.

  5.Daniel Benjamin, Testimony Before the House Foreign Affairs Committee, “LRA, Boko Haram, Al-Shabaab, AQIM, and Other Sources of Instability in Africa,” April 25, 2012.

  6.United Nations Security Council, “Letter from the Chai
rman of the Security Council Committee Pursuant to Resolutions 751 (1992) and 1907 (2009) Concerning Somalia and Eritrea, Addressed to the President of the Security Council,” July 18, 2011, www.un.org/ga/search/view_doc.asp?symbol=S/2011/433&referer=http://www.un.org/sc/committees/751/mongroup.shtml&Lang=E.

  7.Ibid., 28.

  8.Ibid., 28, 30.

  9.Ibid., 182–186.

  10.Greg Bruno, “Backgrounder: Al-Qaeda’s Financial Pressures,” February 1, 2010, Council on Foreign Relations, www.cfr.org/terrorist-organizations/al-qaedas-financial-pressures/p21347.

  11.“Nigeria: Boko Haram, al Shabaab, AQAP Sharing Funds—U.S. General,” Stratfor, June 25, 2012, http://stratfor.us4.list-manage1.com/track/click?u=74786417f9554984d314d06bd&id=392762032c&e=827da1dca2.

  12.US Department of the Treasury, “Treasury Targets Key Al-Qa’ida Funding and Support Network Using Iran as a Critical Transit Point,” June 28, 2011, www.treasury.gov/press-center/press-releases/Pages/tg1261.aspx.

  13.Whitney Eulich, “Developing Countries Lead the Way in Deploying Mobile Technology,” Christian Science Monitor, July 28, 2012, www.csmonitor.com/World/Global-Issues/2012/0728/Developing-countries-lead-the-way-in-deploying-mobile-technology.

  14.Steve Ragan, “Four Arrested for Hacking Phone Systems to Fund Terrorism,” Security Week, November 28, 2011, www.securityweek.com/four-arrested-hacking-phone-systems-fund-terrorism.

  15.Mike Braun, Testimony Before the House Foreign Affairs Committee, “Ahmadinejad’s Tour of Tyrants and Iran’s Agenda in the Western Hemisphere,” February 2, 2012, http://foreignaffairs.house.gov/112/HHRG-112-FAWState-MBraun-20120202.pdf.

  16.Ibid.

  17.White House, “Release of Strategy to Combat Transnational Organized Crime,” July 25, 2011, http://iipdigital.usembassy.gov/st/english/texttrans/2011/07/20110725153733su0.5098492.html#axzz1gMFUYLxA.

  18.Colleen Cook, “Mexico’s Drug Cartels,” Congressional Research Service, February 25, 2008, www.statealliancepartnership.org/Resources/CRS%20Report%20to%20Congress%20-%20Mexico%27s%20Drug%20Cartels.pdf.

  19.Stephanie Hanson, “FARC, ELN: Colombia’s Left-Wing Guerillas,” August 19, 2009, Council on Foreign Relations, www.cfr.org/colombia/farc-eln-colombias-left-wing-guerrillas/p9272.

  20.Eric Schmitt, “Many Sources Feed Taliban War Chest,” New York Times, October 18, 2009, www.nytimes.com/2009/10/19/world/asia/19taliban.html.

  21.Gretchen Peters, “How Opium Profits the Taliban,” August 2009, United States Institute of Peace, www.usip.org/files/resources/taliban_opium_1.pdf.

  22.Braun, “Ahmadinejad’s Tour of Tyrants.”

  23.“Kurds and Pay: Examining PKK Financing,” Jane’s Intelligence Review, March 13, 2008, www.silkroadstudies.org/new/docs/publications/2007/0803JIR-PKK.pdf.

  24.United Nations Office on Drugs and Crime, “Estimating Illicit Financial Flows Resulting from Drug Trafficking and Other Transnational Crimes: Research Report,” October 2011, www.unodc.org/documents/data-and-analysis/Studies/Illicit_financial_flows_2011_web.pdf.

  25.Matthew Greene, “Afghanistan Acts to Curb Flight of Capital,” Financial Times, March 18, 2012, www.ft.com/cms/s/0/a888d1fc-6f12–11e1-afb8–00144feab49a.html#axzz258fZB86J.

  26.James Risen and Duraid Adnan, “U.S. Says Iraqis Are Helping Iran Skirt Sanctions,” New York Times, August 18, 2012.

  27.Mark Dubowitz, “So You Want to Be a Sanctions Buster,” Foreign Policy, August 10, 2012, www.foreignpolicy.com/articles/2012/08/10/so_you_want_to_be_a_sanctions_buster.

  28.Edith Lederer, “Diplomats: UN Experts Say North Korea Violates Sanction,” The Guardian, May 18, 2012.

  29.United Nations, “Report of the Panel of Experts Established Pursuant to Resolution 1874,” 2009.

  30.Dick Nanto and Mark Manyin, “China–North Korea Relations,” Congressional Research Service, December 28, 2010, 12.

  31.Ibid., 19.

  32.John S. Park, “North Korea, Inc.,” April 22, 2009, United States Institute of Peace Working Paper, www.usip.org/files/resources/North%20Korea,%20Inc.PDF, 12; Drew Thompson, “Silent Partners: Chinese Joint Ventures in North Korea—Executive Summary,” February 2011, US-Korea Institute at SAIS, http://uskoreainstitute.org/wp-content/uploads/2011/02/USKI_Report_SilentPartners_DrewThompson_ExecSum3.pdf.

  33.Jayshree Bajoria, “The China-North Korea Relationship,”October 7, 2010, Council on Foreign Relations, www.cfr.org/china/china-north-korea-relationship/p11097.

  34.Ibid.

  35.Nanto and Manyin, “China–North Korea Relations,” 17.

  36.Ibid.

  37.Asia Society Center on US-China Relations and University of California Institute on Global Conflict and Cooperation, “North Korea Inside Out: The Case for Economic Engagement,” December 2009, http://asiasociety.org/files/pdf/North_Korea_Inside_Out.pdf, 12; Scott Snyder, “China Embraces North and South, But Differently,” January 2010, Asia Foundation / Pacific Forum CSIS, http://asiafoundation.org/resources/pdfs/SnyderByunChinaKorea.pdf.

  38.“Otto Reich: Hugo Chavez Helps Assad Slaughter Syrian Civilians,” June 19, 2012, Americas Forum, www.americas-forum.com/otto-reich-hugo-chavez-helps-assad-slaughter-syrian-civilians/.

  39.Roger Noriega, Testimony Before the Senate Foreign Relations Committee, Subcommittee on the Western Hemisphere, Peace Corps, and Global Narcotics Affairs, “Iran’s Influence and Activity in Latin America,” February 16, 2012, www.foreign.senate.gov/imo/media/doc/Roger_Noriega_Testimony1.pdf.

  40.Ibid., 28; see also Jerome Bjelopera and Kristin Finklea, “Organized Crime: An Evolving Challenge for U.S. Law Enforcement,” Congressional Research Service, January 6, 2012, www.fas.org/sgp/crs/misc/R41547.pdf.

  41.United Nations Office on Drugs and Crime, The Globalization of Crime: A Transnational Organized Crime Threat Assessment, 2010, www.unodc.org/documents/data-and-analysis/tocta/TOCTA_Report_2010_low_res.pdf?bcsi_scan_E6B5D3DA0AAC65B7=0&bcsi_scan_filename=TOCTA_Report_2010_low_res.pdf; United Nations Office on Drugs and Crime, “United Nations Convention Against Transnational Organized Crime and the Protocols Thereto,” November 15, 2000, www.unodc.org/unodc/en/treaties/CTOC/.

  42.Rolf Mowatt-Larssen, “Al Qaeda Weapons of Mass Destruction: Hype or Reality?” January 2010, Belfer Center for Science and International Affairs, http://belfercenter.ksg.harvard.edu/publication/19852/al_qaeda_weapons_of_mass_destruction_threat.html.

  43.Remarks by Under Secretary of the Treasury David S. Cohen on the Presidential Strategy to Combat Transnational Organized Crime, July 25, 2011, www.treasury.gov/press-center/press-releases/Pages/tg1256.aspx.

  44.Kristin M. Finklea, “Organized Crime in the United States: Trends and Issues for Congress,” Congressional Research Service, January 27, 2010.

  45.Michael Mukasey, “Combating the Growing Threat of International Organized Crime,” Remarks at the Center for Strategic and International Studies, April 23, 2008, http://csis.org/files/media/csis/events/080423_mukasey.pdf.

  46.Richard Shultz, Roy Godson, Querine Hanlon, and Samantha Ravich, “The Sources of Instability in the Twenty-First Century,” Strategic Studies Quarterly, Summer 2011; Douglas Farah, “Terrorist-Criminal Pipelines and Criminalized States: Emerging Alliances,” Prism 2, no. 3 (2011), www.ndu.edu/press/emerging-alliances.html.

  47.Raymond Bonner, “Russian Gangsters Exploit Capitalism to Increase Profits,” New York Times, July 25, 1999, www.nytimes.com/1999/07/25/world/russian-gangsters-exploit-capitalism-to-increase-profits.html?pagewanted=print&src=pm.

  48.Robert S. Mueller III, “Remarks at the 10th Anniversary of ILEA Budapest,” May 12, 2005, www.fbi.gov/news/speeches/moving-beyond-the-walls-global-partnerships-in-a-global-age.

  49.White House, “Strategy to Combat Transnational Organized Crime,” July 2011, www.whitehouse.gov/sites/default/files/Strategy_to_Combat_Transnational_Organized_Crime_July_2011.pdf.

  50.White House, “Fact Sheet: Strategy to Combat Transnational Organized Crime,” July 25, 2011, www.whitehouse.gov/the-press-office/2011/07/25/fact-sheet-strategy-combat-transnational-organized
-crime.

  Chapter 16: The Coming Financial Wars

  1.See Henry M. Paulson Jr., On the Brink: Inside the Race to Stop the Collapse of the Global Financial System (New York: Business Plus, 2010).

  2.See Gideon Rachman, “Why 9/15 Changed More Than 9/11,” Financial Times, September 13, 2010. Rachman wrote, “[In 2008] America’s economic prowess still seemed to provide a reliable basis for the country’s global political position. The financial crisis has changed that assumption, almost certainly forever. In its aftermath, the US is much more conscious of the limits to its own power.”

  3.Jason Dean, Andrew Browne, and Shai Oster, “China’s ‘State Capitalism’ Sparks a Global Backlash,” Wall Street Journal, November 16, 2010.

  4.Liane Hansen, Host, “Sanctions Turn Tables in U.S.–China Relations,” National Public Radio, Weekend Edition, February 7, 2010, www.npr.org/templates/story/story.php?storyId=123463748.

  5.Emma Simpson, “Russia Wields the Energy Weapon,” BBC News, February 14, 2006, http://news.bbc.co.uk/2/hi/4708256.stm. See also “Russia Blamed for ‘Gas Sabotage,’” BBC News, January 22, 2006, http://news.bbc.co.uk/2/hi/europe/4637034.stm.

  6.Peter Guest, “Is the Greek Crisis a Boon for Russia’s Gazprom?” CNBC, June 29, 2011, www.cnbc.com/id/43561012.

  7.“Spy Agency Told to Help Companies,” St. Petersburgh Times, October 23, 2007.

  8.Hillary Rodham Clinton, “Remarks at the 2011 U.S. Global Leadership Coalition (USGLC) Conference,” July 12, 2011, www.state.gov/secretary/rm/2011/07/168061.htm.

  9.Damian Grammaticas, “Are China’s Leaders Worried?” BBC News, December 2, 2011, www.bbc.co.uk/news/world-asia-16003625.

  10.Wayne M. Morrison, “China-U.S. Trade Issues,” Congressional Research Service, May 21, 2012, www.fas.org/sgp/crs/row/RL33536.pdf.

  11.See Ian Bremmer, The End of the Free Market: Who Wins the War Between States and Corporations? (New York: Penguin, 2010). Bremmer wrote: “Corporate leaders and investors must recognize that globalization is no longer the unchallenged international economic paradigm—and that politics will have a profound impact on the performance of markets for many years to come.”