The Importance of Terrorist Financing Investigations

By Dennis Lormel

In the aftermath of the second series of bombings in London on July 21, 2005, and the prospect and concern of additional attacks, it is important that comprehensive financial investigative strategies be developed and implemented in order to identify and link members of the terrorist cell or cells together, as well as identify any support structures.

From a law enforcement perspective, lessons learned since 9/11 should play a significant role in formulating future financial investigative direction. First, we must understand vulnerabilities in terms of systemic societal vulnerabilities and areas of vulnerability to terrorist interests. Systemic vulnerabilities represent systemic weaknesses that terrorists and criminal elements, especially fraudsters, exploit in furtherance of their activities. It�s incumbent that law enforcement and other agencies responsible for controls recognize such weaknesses and implement mechanisms to minimize such exploitation. Systemic vulnerabilities exploited by Islamic Radicals include:

� Identity theft/fraud
� Alien smuggling
� Travel facilitation
� Fraud schemes
� Informal value transfer systems
� Money laundering
� Non-Government Organizations (NGO�s)/charities
� Mosques
� Internet

The two most significant areas of vulnerability or weakness to terrorists and terrorist organizations are communications and finance. These two areas consistently lead to the disruption and dismantlement of terrorist groups and activities. Investigative initiatives should be proactively developed to specifically address terrorist communications and financing. Although terrorists consistently change their methods of operations and demonstrate adaptability at avoiding detection, they must communicate, and raise and spend money to function. This is where law enforcement and intelligence efforts must exploit the weaknesses of terrorists.

By combining financial information and communication information, such as telephone records, a time line can be developed concerning the activities of the terrorists, their facilitators and other supporters. Importantly relational evidence will be quickly developed which could lead to the prompt identification and apprehension of additional terrorist subjects.

Another lesson learned is the importance of developing and implementing time sensitive investigative techniques, particularly time sensitive financial investigative techniques. The immediacy and severity of terrorist threats require investigative strategies that present a sense of urgency. More often then not, circumstances cause investigative strategies to the threats at hand to be reactive and not proactive. More focus must be dedicated to developing proactive investigative techniques. One area where proactive investigative strategies can be implemented is in terrorist financing, which as discussed above is one of the most significant areas of weakness to terrorists. From a tactical standpoint, strategies have been implemented which allow the near real time tracking of financial transactions. This is a truly powerful technique. It requires close coordination and cooperation between law enforcement and the financial community.

Proactive investigative initiatives implemented by the FBI since 9/11 include operations focused on strategic terrorist financial targets, data mining, 24/7 financial monitoring and national coordination strategies. One initiative to mention in more detail is the 24/7 financial monitoring. It is critically important that law enforcement and the financial sector establish and maintain mechanisms to retrieve financial information in as expeditious a fashion as possible. The FBI�s Terrorist Financing Operations Section (TFOS) has established a network of over 400 financial firms who can provide near real time information concerning terrorist investigations on a 24/7 basis.

An important lesson learned is the critical need for actionable criminal and intelligence analysis, and information sharing. Both the FBI and CIA were harshly criticized for their
pre 9/11 failures in this area. The same problem was identified in the European Union following the Madrid bombings in March 2004. Since 9/11, much has been done in the United States to improve analysis and the flow of information out to all levels of law enforcement.

Based on my experience in working with the various investigative and intelligence agencies in the United Kingdom, I am fully confident that they have implemented the financial investigative methodologies to expedite the identification and apprehension of all individuals responsible for the heinous attacks in London. I know that there has been much coordination between British agencies and their international counterparts to include the FBI and CIA. Such cooperative efforts and information sharing will further work to disrupt and dismantle terrorist operations.

TrackBack