Treasury's War Page 8
In the late 1990s, the intelligence community focused on financial operations tied to nuclear proliferation. The financial trackers knew that it was money that allowed rogue regimes to slip nuclear equipment and materiel past international sanctions and controls. In 1996, financial operatives began counterfinancial operations against Iran’s incipient weapons program,2 fully aware that it was financial networks that allowed the proliferation trade to metastasize and attract global players. Financial intelligence could make the crucial difference in uncovering and disrupting proliferation networks.
They were right. Money motivated key actors, such as Abdul Qadeer (AQ) Khan, the father of the Pakistani nuclear program, to develop a worldwide proliferation network. AQ Khan sold nuclear secrets, expertise, and specialized equipment to anyone willing to pay. Rogue regimes, including Libya, North Korea, Iran, and Syria, were willing, lined up, and ready to pay his price.
In 2001, Alec Station, the part of the CIA that was charged with hunting Osama bin Laden and the Al Qaeda network, was not yet focused on tracking the global financial footprints for the network. Cofer Black, the head of the Counterterrorism Center and by then a veteran of tracking bin Laden—having watched him directly as the station chief in Khartoum—was ready to act. Bin Laden had watched Black, too, with direct threats to Black’s life coming from the Al Qaeda network. In Black’s experience, although bin Laden sometimes used banks to move his money, he would more frequently rely on trusted couriers to move money to agents and operatives outside of Sudan. Bags of cash were being walked across border checkpoints and into airports. Black would approve a plan to help pierce the shroud of Al Qaeda’s financial networks.
The crux of the plan amounted to an aggressive effort to uncover money trails to terrorist networks—with the ultimate goal of finding terrorist targets and disrupting attacks. Existing sources of financial information would not be enough. They would need to procure more intelligence from the banking and nonbanking worlds, while also finding new ways to track financial transactions—and quickly.
This strategy became the intelligence community’s roadmap in the financial war on terrorism. The plan would be presented to the intelligence community. Those briefings would be followed later by a meeting with Vice President Dick Cheney and National Security Adviser Condoleezza Rice.
Along with others in the intelligence and law enforcement communities, this plan and the financial operatives who would execute it would build the financial capabilities to track terrorist financial trails—using the financial debris of networks to piece together maps of terrorist relationships. That information and the work of intelligence analysts throughout the government uncovered never-before seen links and led to disruptions of terrorist plots around the world.
Later, Treasury would make two cases of value from the SWIFT program public. These were the cases that we briefed to the 9/11 Commission. In one of them, the SWIFT data helped catch one of the most wanted Al Qaeda terrorists in the world, Hambali.
Hambali was the nom de guerre of Riduan Isamuddin, a leader of the militant Indonesian Islamist group Jemaah Islamiyah (JI, Islamic Congregation), which had long-standing ties to Al Qaeda. JI was one of the most dangerous groups operating in Southeast Asia, with cells in Indonesia, Malaysia, Singapore, the Philippines, and Thailand. Hambali was critical because he served as the main link between JI and the core Al Qaeda leadership. Hambali was a true believer and was dangerous. Ever since 2000, Hambali had been operating underground, orchestrating a series of bombings in Indonesia from his place of hiding.
In October 2002, he helped organize the deadliest act of terrorism in the history of Indonesia in Bali, killing over 200 people, including 88 Australians, by detonating a suicide bomber, a large car bomb, and a smaller device outside nightclubs and a US consulate. JI would later claim responsibility for attacks on the JW Marriott Hotel in Jakarta and the Australian embassy. JI cells were being wrapped up in places such as Singapore, where they had been planning more attacks against transportation sites and civilian targets. Hambali was on the top tier of wanted Al Qaeda operatives around the world and was being hunted in the region. Authorities were worried that more attacks were coming, and were most concerned about a possible biological attack from Hambali and his henchmen.
The US government, in concert with allies around the world, was looking for any signs of Hambali, and a small team of analysts uncovered some financial tracks. The analysts looking for Hambali found SWIFT data to identify a previously unknown figure in Southeast Asia who had financial dealings with a suspected Al Qaeda member. The financial data helped identify a key operative who served as the connection between Al Qaeda’s core and Hambali’s operations in Southeast Asia. This was the missing link to track Hambali.
Hambali was in Thailand, planning attacks against Thai hotels to coincide with the 2003 Asia Pacific Economic Cooperation (APEC) summit. He and JI were looking for more spectacular and politically significant attacks to undertake, and the APEC summit provided a ripe and local opportunity. The attacks were thwarted. On August 11, 2003, Thai police took Hambali into custody, seizing explosives and firearms. He was transferred to CIA custody and ultimately moved to Guantanamo Bay.3 According to US officials years later, the Terrorist Finance Tracking Program “played an important role in the investigation that eventually culminated in the capture of Hambali.”4 One of Al Qaeda’s most important and dangerous terrorist lieutenants had been taken off the battlefield—with the help of the financial trackers.
The Treasury Department would later release even more examples of cases where financial information helped save lives—in the United States and abroad. From the plot to attack JFK airport in New York in 2007 to the plan to attack US bases in Germany that same year, financial information provided key investigative leads. Financial nuggets from the program would often serve as the missing puzzle piece to help authorities around the world disrupt terrorist activity.
This kind of financial intelligence would form the basis for our ability to track and stop terrorist funding, and the growing discipline of financial intelligence would animate efforts to isolate rogue financial behavior and the movement of money by America’s enemies. We were now aggressively looking for terrorists’ financial footprints and using a variety of tools at our command to freeze assets and arrest suspects. This work, however, had to involve cooperation with our closest allies in the very places where Al Qaeda and other terrorist groups were getting their funding. We had to use aggressive financial diplomacy to ensure the international cooperation we needed to isolate terrorists and their rogue allies. This would take us to the heart of the Arabian Gulf.
3
NOSE UNDER THE TENT
When our Treasury delegation landed in Jeddah on Air Force Two in the spring of 2002, the first thing we saw was the special airport terminal that the Saudi monarchy had built especially for the Hajj, the annual Muslim pilgrimage to Mecca. The terminal was enormous—a bright white edifice that looked like a large tent in the desert. Lines of buses for as far as the eye could see take the pilgrims from the airport to hotels and holy sites. The Saudi government had built a logistical marvel of transport and accommodation to handle the inflow and outflow of humanity’s largest annual migration.
Led by Secretary O’Neill, our small, senior-level Treasury delegation had come to the Kingdom of Saudi Arabia to engage the Saudi monarchy in an uncomfortable discussion about terrorist financing. Crown Prince Abdullah, the heir apparent to the ailing King Fahd, along with other senior members of the Saudi royal family and several Saudi officials, would receive us in this modern city, the country’s second largest after its capital, Riyadh. This would be the first time the Saudis would host the secretary of the treasury since 9/11. Despite decades as close allies, the United States and Saudi Arabia found themselves at a critical juncture. The role of the fifteen Saudi hijackers in the attacks had cast a pall over the relationship between the two countries. These tensions only deepened as Treasury officials began to del
ve into the financing of Al Qaeda, as part of that funding had been coming from Saudi Arabia and the Arabian Gulf for years.
To be clear, there was no suggestion of state sponsorship of Al Qaeda. The Saudis had long ago disavowed bin Laden, who considered the Saudi monarchy to be an apostate, corrupt regime worth targeting and toppling. The problem was that the Saudis had built an infrastructure of donors, charities, and sponsors in the 1980s to help the Afghan mujahideen and foreign Islamic fighters in their opposition to the Soviet invasion of Afghanistan. That infrastructure still existed, and violent jihadist causes took full advantage of it. Fighters battling the Russians in Chechnya, the Israelis in the Palestinian territories, the Americans in Afghanistan, and apostate or infidel regimes in Asia reaped the rewards of this system.
We were there to provide a much-needed reality check to the highest levels of the Saudi monarchy about the need to shut these kinds of charities down. It would not be easy.
Saudi society was not predisposed to look favorably on such an initiative. Within the Saudi populace, there still remained some denial as to the perpetrators and motivations behind 9/11. There was some agreement that, like the 1979 seizing of the sacred mosque in Mecca by violent radical Muslims, the attacks had been an anomalous act by religious fanatics, to be condemned and prevented from happening again. Yet for the Saudis, the sins of these actors were not a reason to implicate an entire society or the monarchy. Some saw 9/11 as an isolated act of terror, not symptomatic of something more dangerous emerging from within their society or even from the broader Sunni extremist movement.
But there was more at play than most were willing to admit. The issue of financial support for Al Qaeda pointed to a deeper question about how money from Saudi Arabia was being used around the world. The Saudis had been committed for decades to the export of an extreme form of Sunni Wahhabi Islam. When the House of Saud established its rule over the Arabian Peninsula in 1932, the royal family made a pact with the ultraconservative clerical establishment to allow the Saudi regime to maintain power and legitimacy. The kingdom’s leadership and royal family derived their ultimate legitimacy from their role as the “Keeper of the Two Holy Mosques.” This meant that the king was not only the head of state but also the religious guardian of the first and second holiest sites in Islam, the cities of Mecca and Medina. They required consistent validation from the Sunni clerical establishment in Saudi Arabia, which espoused the Wahhabi, Salafi ideology and embedded its strictures into Saudi culture. The Saudi government was thus wedded to the promotion of this theology and used its money around the world to establish Islamic centers and mosques and to export Islamic scholars who reinforced this extreme interpretation of Islam.
The Saudis had built an extensive global network for spreading a certain brand of religious thought, but in so doing they had provided a platform for Al Qaeda and its like-minded adherents, who benefited greatly from this network both financially and in terms of growth. The Wahhabi theology and Saudi proselytization around the world provided an ideological baseline for Al Qaeda and the recruitment of like-minded believers. Al Qaeda’s leaders advocated the practice of declaring others as apostates (takfir) and the right to use violence against them and to defend Muslims against perceived assaults. Many of the Wahhabi institutions funded out of Saudi Arabia served as way stations for Al Qaeda operatives and fundraising. Distinguishing between some of the international Wahhabi organizations and terrorist support networks was nearly impossible, especially when support for Al Qaeda and support for spreading Wahhabi beliefs seemed to blend together so seamlessly. This was true in the work of some of the branches of Saudi-based institutions, such as the International Islamic Relief Organization (IIRO). For us, cutting off flows of funds to Al Qaeda thus meant much more than just targeting a few select individuals or institutions. It was ultimately about challenging a fundamental element of Saudi policy by constricting how the Saudis and their institutions funded activities abroad.
This was a critical aspect of our work. Al Qaeda’s financial and logistical base consisted of a network of radicalized Islamic fundamentalists and institutions around the world whose roots could be traced to the days of the Afghan mujahideen. This meant that Al Qaeda could take advantage of certain madrassas (educational institutions), Islamic cultural centers, and Islamic charities around the world both to promote its militant ideology and to raise, hide, and move funds. Such funds were intended, at least partially, for the maintenance of the terrorist network and allegiances as well as for operations.1 The money chain traveled from sympathizers in the Arabian Gulf and around the world to hot spots such as Afghanistan and Pakistan where Al Qaeda was recruiting and operating.
The flow of money was constant. Al Qaeda and other violent extremists used the Islamic obligation of zakhat (charitable giving) and their interpretation of obligatory jihad to generate financing through charity. They used the logistics, networks, and funding of charities to support their operations and build allegiances. This was a well-established strategy and structure. For certain groups, such as Hamas and Hezbollah, charitable operations—and their Dawa (fundraising) committees—were a key function that allowed them to provide services to people in need while building allegiances necessary for recruitment outside the confines of the state or official channels. They fiendishly used the infrastructure and nature of charity to enlist devotees and move operatives around the world under a benevolent cloak. It was a devious and ingenious way of raising and moving money—especially with chapters of charities located around the world. Charities might be providing services to widows and orphans, but their funding and recruitment would often send suicide bombers into buses and cafés.
Despite our attempts to be surgical in our financial strikes, sometimes our actions and tools proved blunt and imprecise against charities. There was a legitimate concern that the effects of US designations, raids, and asset freezes on charities were creating unintended consequences and an impression that US policy was intentionally trying to extinguish Islamic charity. Many worried that the aggressive actions we had taken were chilling good-faith giving and philanthropy, a hallmark of American culture.2 Al Qaeda leaders latched onto this theme, with Ayman al-Zawahiri—then bin Laden’s deputy—highlighting the “American war on Islamic charity” in the wake of the devastating Pakistani earthquake in 2005.3
There was no doubt that charity now required new layers of fact finding and diligence—especially if organizations were doing business or sponsoring projects in places where terrorist organizations were known to run charitable services. They intermingled their activities and funds, and we had no easy way to carve their organizations or activities neatly between the legitimate and the illegitimate, or to distinguish consistantly between funds going to Al Qaeda or other terrorist groups and funds going to charitable causes. We were careful with our designations and began trying to encourage “charitable backfill” in communities around the world where our targeted sanctions and enforcement efforts were shutting down critical services and legitimate funding flows.
Al Qaeda and groups like the Taliban were also clever to leverage the Hajj as cover to gather donations and move cash donations out of Saudi Arabia back to Afghanistan, Pakistan, and the rest of the world. Though the Saudi authorities would do what they could to monitor the movement of people in and out of the country for the world’s largest annual migration, groups like the Taliban and Hamas would send special representatives to meet with donors and collect money, jewelry, and other financial commitments from fellow Muslims from around the world—including wealthy donors. Despite our protestations, the Saudis had been unwilling to deny access to Mecca to pilgrims who were also potential fundraisers. Instead, they opted for monitoring, but even that proved difficult as a flood of pilgrims flowed in and out of the airport at Jeddah.
The American approach was far more visible. We were using an aggressive notification method to stop and deter terrorist financing, publicly designating individuals and entities as terrorist financiers a
s our cudgel. Not only did this freeze millions of dollars around the world, it made the organizations we designated radioactive to others doing business. Our flurry of designations was intended to clog Al Qaeda’s financial system and to send a clear deterrent message to those who would support or finance terrorism that they could be next.
When it came to companies, organizations, and individuals abroad, our work would have more impact if the host government took actions along with us to freeze assets and shut down suspect operations. This is why we still needed Saudi help. What we were asking the Saudis to do would be difficult, considering the internal dynamics of their country. The House of Saud ruled because the leadership was able to balance the power centers within the kingdom and to reassert legitimacy with each decision made. To avoid upsetting harmony among tribes and power brokers, the Saudis preferred to isolate rogue individuals quietly or to co-opt or force them to submit to the monarchy’s wishes. The Saudi approach was less about punishment and more about channeling internal support for extremist causes into support for the government’s actions. Part of this strategy entailed building opposition to Al Qaeda slowly but surely. This approach took time—and it was not what Washington was looking for from the Saudis in the aftermath of 9/11. We wanted quick, visible action.
Our specific goal in this meeting was to gain Saudi approval to shut down its largest Islamic charity, the Al Haramain Foundation. Al Haramain had established branches around the world, including in the United States, to raise money for Muslim causes. Despite supporting some legitimate charitable causes, however, Al Haramain was also a platform for Al Qaeda to raise and move money into places like Bosnia and Indonesia. It seemed that the organization’s head, Sheikh Aqeel Abdulaziz al-Aqil, was well aware that this was going on, and quite willing to let it happen.