Observations Concerning the Defense Department’s Study on Disrupting Terrorist Financing

By Dennis Lormel

My colleague Andy Cochran, wrote an excellent article posted on the Counterterrorism Blog on October 12 2007. It was a succinct summary and assessment of the newly released report by the Defense Department which is a Study on Disrupting Terrorist Financing. According to Andy’s post, the most important element of the monograph recommended that one overarching organization be given the mandate and funding authority to direct the government’s overall terrorist financing efforts. Andy quoted directly from the monograph where it recommended giving an existing organization the mandate and funding authority to direct all activities of U.S. departments and agencies.

Following 9/11, I was directly involved in the government’s terrorist financing initiative. I formed and directed the FBI’s Terrorist Financing Operations Section. One of the first steps I took was to host an all agency meeting to get commitments for resources to establish a multi-agency task force to investigate the funding of 9/11 and looking forward, to developing a government wide terrorist financing investigative template. Over the short term and specifically dealing with 9/11 and collateral issues, this approach was extremely successful. However, at that time, it was not practical or logistically feasible to establish a single committed interagency task force.

David Aufhauser, former General Counsel, U.S. Treasury Department, also believed in the multi-agency task force concept. He established and directed the interagency Policy Coordinating Committee (PCC) for terrorist financing. Informally, we identified the most significant terrorist financing targets facing the nation and developed strategies to disrupt and/or dismantle the threats. However, the PCC did not have authority over any department or agency, to include budgetary authority. The interagency community voluntarily cooperated and coordinated efforts under Aufhauser’s brilliant leadership.

Fast forward to the Defense Department report. I have extremely strong feelings about this topic. Initially, I was not a proponent for the creation of the Director for National Intelligence (DNI). I believed it would be too cumbersome and cause an additional layer of bureaucracy. However, I have changed my opinion and support the position of DNI. I am impressed with the evolution of the office of the DNI.

I have always been a staunch believer that there should be a single organization with the mandate and funding authority to direct the interagency community concerning terrorist financing. However, this must be carefully thought out and coordinated. First, in order to succeed, this entity must understand and accept the guiding premise that terrorist financing is a component of terrorism, and as such, any overarching organization must establish initiatives that support and are directly coordinated with the greater counterterrorism mission and strategy of the U.S. government. The second factor to consider is that any overarching terrorist financing strategy must be led by a new organization, answering directly to the DNI. Giving the overall authority to an existing agency is much too problematic. Each agency possesses different authorities and priorities; therefore, it would be difficult for an existing agency to develop a macro strategy and methodology. A new entity could do this and would be better positioned to coordinate investigative, intelligence, regulatory and diplomatic interests. The third element necessary would be that each agency should continue their terrorist financing initiatives at their agency level and the new agency should develop and implement a government wide strategy with specifically defined priorities, setting forth measurable goals and objectives.

I hope that, in the near term, Congress and government leaders study the report and consider establishing an office for terrorist financing directly under the DNI. To be successful, any such
office should include the steps I outlined above.

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