Behind the GAO Report on Problems in fighting Terrorism Funding

By Michael Kraft

Hold on folks. Unfortunately there is more to the US Government�s inter-agency problems in countering financing terrorism than Doug Farah and Zachary Abuza commented on posts earlier today or even the GAO said in its report issued Tuesday.

The process was described as suffering from severe turf fights in the just-released GAO report with the typically Washington title � Better Strategic Planning needed to Coordinate U.S. Efforts to Deliver Counterterrorism Financial Training and Technical Assistance Abroad.http://www.gao.gov/new.items/d0619.pdf

The New York Times, which obtained an advance copy of the report, headlined it �Turf Wars Hinder U.S. Attack on Terror Cash.�

In a nut shell, the GAO said the Treasury Department �does not accept the State Department�s leadership or the procedures of the State-led interagency group, the Terrorist Financing Working group, for providing training and technical assistance to other countries. (Under a long standing US law, the State Department is given the task of coordinating U.S. counterterrorism assistance to other countries). However a Treasury Department official is quoted anonymously in the report as saying the process is broken and State �creates obstacles rather than coordinates the efforts.� Treasury was miffed that State Department had held up granting country clearance for a team it wanted to send to another country.

The Justice Department meanwhile complained that Treasury had used contractors who gave bad and outdated advice to at least one country that was trying to strengthen its anti-terrorism financing laws. The Justice Department feels that only current government officials should serve on the small teams that go overseas on temporary missions to help other countries strengthen their terrorism financing-related regulations and investigative capabilities.

At the heart of the dispute is more than who should run the program. It also involves funding and contractors. What the GAO seems to have overlooked or left out is that the terrorism financing issues took on a unique edge because of what has the appearance of an end run or free-lancing on the Hill by some Treasury officials. This surfaced in 2003, in the House Foreign Operations Appropriations Subcommittee report language (House Report 108-222) on the FY 04 Foreign Aid Appropriations Bill. The language praised the Treasury�s Office of Technical Assistance (OTA) for �the key role� it played in blocking terrorist financing. The report also gave the Treasury Department, without reference to State or the Intelligence Community, the task of providing a report on countries that are a major source of terrorism financing, and what countries still need assistance.

Meanwhile the subcommittee added $5 million to the budget more than requested by OMB. At least one official in the NSC was livid, especially over what he considered out of bounds behavior that ended up in funding above the Administration request, which cut into appropriations available for White House-supported funding levels.

The State Department antiterrorism training program was one of the victims of the shifted funds. Some State Department officials seemed as concerned over the implication of the report language that OTA was the only agency involved in fighting terrorism financing. (I was serving in the State Department Counterterrorism Office at the time and although not directly involved in the interagency program, recall being told that higher level Treasury officials said they were unaware of the OTA language in advance and that OTA had gone off the reservation. One Congressional staffer said he thought a contractor may have been behind pushing the language to key members. I did get involved in drafting talking points taking issue with the subcommittee language.)

Unfortunately the issue raised by the GAO is both important and not new. Doug Farah in his posting said the wind had gone of the sails in terms of high level interest in dealing with the terrorism funding problem. I agree, but would add that this seems to apply to other programs too that are not seen as directly related to Iraq.

A symptom is the GAO�s statement that �although we requested a meeting, we did not obtain access to the National Security Council (NSC), which is responsible for the overall coordination of the interagency framework for combating terrorism including the financing of terrorist operations.�

The same lack of coordination may be true of other issues involving detailed and persistent work. This has been hampered by a high turnover in many government agencies involved in the counterterrorism effort. By coincidence earlier this week as the GA0 report was being released, I was at a presentation by the Nuclear Threat Initiative group on the need to do more to reduce the threat of nuclear terrorism. Officials of that private group used very similar language in complaining about the lack of follow-through on programs and funding as those who have been involved in counterterrorism programs.

Two footnotes: Professor Abuza�s blog item cited the delay in the Treasury�s announcement that three top Abu Sayyaf (ASG) group leaders were designated under an Exacted Order 13224 used to freeze assets in the anti terrorism funding campaign. He called laughable the State Department�s position that the interagency working group on terrorism financing is one of the most successful in the government. Perhaps State has some of the other interagency efforts in mind as a basis of comparison.

I don�t know why this particular designation was held up but I know that in the past, there have been frustrating delays in one agency or another. Often .the delays are simply because the relatively few officers and lawyers dealing with the issue are overwhelmed by other priorities -- sometimes even writing reports for Congress which seldom get read or the paperwork us held up at the very top levels of Treasury, State or Justice.

Second footnote: Rep James Kolbe (R-Ariz.) chairman of the House Foreign Operations Appropriations Subcommittee cited above announced last week that he is retiring at the end of the session. I wish him well. Although his subcommittee consistently cut the Administration�s requests for all but one (the terrorism financing program) of the State Departments counterterrorism programs, I�m sure he had to balance a lot of competing claims for scarce foreign assistance dollars. I hope his successor and the future staff will take a fresh approach and more carefully consider the future needs for these and related important programs that are designed to help friendly foreign law enforcement officials stop the terrorists overseas before they can hit us. It would be timely to take a comprehensive look and put some muscle behind efforts to more effectively coordinate all the programs.

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