Event Transcript: The Evolution of U.S. Counterterrorism Policy

By Andrew Cochran

On February 12, I moderated a special panel titled, "The Evolution of U.S. Counterterrorism Policy" before a packed room at the U.S. Capitol building in Washington. Panelists were Prof. Yonah Alexander and Contributing Experts Michael Kraft and Jonathan Winer. The Counterterrorism Foundation co-sponsored this special panel with the Inter-University Center for Terrorism Studies, the International Center for Terrorism Studies at the Potomac Institute for Policy Studies, and the Inter-University Center for Legal Studies at the International Law Institute. The initiative for the panel, and the source of the title, was the publication of the three-volume work by the same name, co-edited by Prof. Alexander and Michael Kraft and published by Praeger Security International. This set provides the first comprehensive collection of key documents, statements, and testimony, dating back to the early 1970s, on U.S. government counterterrorism policies as they have evolved in the face of the changing terrorist threats. The following is a transcript of the event, beginning with my introductions of the panelists and continuing through their remarks (edited for grammar and using the panelists' written remarks when available) and the attendees' questions and the panelists' answers. We appreciate the assistance of Brett Wallace of the Potomac Institute in preparing the transcript.

Now, the standard disclaimer: None of the presentations here today represent the official views of the organizations represented; they are purely the personal views of the individuals making the presentations. So if you don’t like what you hear, blame the speaker, not the group.

Professor Yonah Alexander, one of the most respected experts on counterterrorism in the world, is currently Senior Fellow at the Potomac Institute for Policy Studies and Director of its International Center for Terrorism Studies. Concurrently, he is Director of the Inter-University Center for Terrorism Studies and Co-Director of the Inter-University Center for Legal Studies. Both are consortia of universities and think tanks throughout the world. He is the former Director of Terrorism Studies at The George Washington University and the State University of New York, totaling 35 years of service. He lectures at numerous institutions and universities around the world and has published over 90 books on the subjects of international affairs and terrorism. Professor Alexander has appeared on many television and radio programs in over 40 countries, and his numerous articles and interviews are published everywhere.

--------------

Michael Kraft is a former Senior Advisor for Legislative and Budget Affairs for the State Department’s Counterterrorism Office, with nineteen years of experience working on a variety of legislative, program, and regional issues. Prior to that, he was the Staff Director for the Senate Foreign Relations Middle East Subcommittee, and was a foreign correspondent for Reuters and UPI. During his government service, Mike worked to expand the Antiterrorism Training Assistance program and assisted in drafting the Antiterrorism and Effective Death Penalty Act of 1996 and sections of the 1979 Export Administration Act which authorized the Secretary of State to designate terrorist-supporting states and invoke sanctions. Since retiring from the State Department three years ago, he has been an adjunct counterterrorism faculty member at the National Defense University's Africa Center for Strategic Studies, a guest lecturer at several other universities, and a consultant and writer authoring chapters and articles in various books and newspapers. I’m most pleased that he is a Contributing Expert on The Counterterrorism Blog.

--------------

Jonathan Winer is a partner at the Washington office of Alston & Bird and was Deputy Assistant Secretary of State for International Law Enforcement in the 1990s, as well as chief counsel on the Senate Banking Committee for Sen. John Kerry during his investigation of the BCCI scandal in the early 1990s. He represents domestic and foreign clients on regulatory and enforcement matters as well as on a wide range of government affairs issues, including data protection and management, information security and privacy. Jonathan counsels companies in such areas as anti-money laundering, data security, and electronic payments, including complying with USA Patriot Act, Bank Secrecy Act (BSA) and Office of Foreign Assets Control (OFAC) regulations and with state regulatory and licensing requirements, as well as with enforcement actions.

Thank you, Andrew, for your generous introduction and thanks for taking the initiative to organize this event. I would also like to welcome many of our friends and colleagues in the audience. First of all, Dr. Milton Hoeing with whom we just published a book on Iran. We have many colleagues here from the academic community and diplomatic community. This morning we had a seminar at the George Washington University with Ambassador Sen of India and I see some people who attended the seminar this morning. I was reminded this morning that years ago at the UN, I was listening to one of the fiery speeches of Krishna Menon, who represented India as Minister of Defense. He quoted an Indian proverb saying that truth is one but sages call it by many names. In a way, one can look at the threat of terrorism and see the controversy of what terrorism is. The famous cliché of "one man's terrorist is another man's freedom fighter" goes all the way back. Fortunately, we in the academic community try to develop some intellectual capability over the years. I mention this because the the three-volume set which Mike Kraft and I just published has a long journey, both on a personal level and an academic level. We couldn't have done this work without the understanding and without the support and guidance of many institutions, academics, the US government, other governments and the US Congress. In fact, when Mike worked on Capitol Hill (and he will tell you more about this), and in my personal experience going back 35 years, we conducted research on this subject for Senate Committees. With one of my colleagues, Ray Klein, we worked very closely with Congress on these issues as well as with government agencies such as the State Department and Pentagon.

I'm not going to deal specifically with the book itself; Mike is going to deal with the US response on the policy level. I will try to provide a framework for the discussion and subsequently may make some comments on other issues. The only thing I may note here is that one cannot deal with US policy in a vacuum. We need to provide a general framework. Fortunately, before 9-11, my colleagues and I tried to understand what the nature of the policies of governments is, those that worked and those that did not work. We decided first to develop a research project related to 15 countries around the world. I see some of the representatives of those countries in the crowd right now. The general questions that we found are what follows. I would like to list them so you can keep them in mind when you try to analyze American policy, past present and future. The first question we asked was how successful were the concerned governments, fifteen governments, including the US, in their policies and their actions in combating both domestic as well as international terrorism. Second, about the counterterrorism battlefield of the specific government, what does it look like? Third, which counterterrorism strategies worked and which did not? Fourth, what are the lessons of this experience for future counterterrorism strategies? Of course, the question is: how does one assess success, for example, the reduction of the number of terrorist incidents or the reduction of causalities or the reduction of monitoring costs or the reduction of terrorist groups operating or the number of terrorists killed or the protection of infrastructure and so on and so forth.

In this particular three-volume set, we tried to provide first the framework and the background for US policy. I wanted to mention a few points at this stage. As we know, the element of fear is one of the most important issues in the history of man's inhumanity to man, the spread of fear in violation of law, with no but's and no if's and no why's, in regard to whether terrorism is permissible or impressible. This instrument has been used by both the strong and the weak throughout history. The element of fear through propaganda, psychological warfare and physical force, certainly poses a serious threat to humanity throughout history and particularly in contemporary times. This is true especially after 9-11; terrorism was labeled as a threat of war. I'd like to remind all of us that in our lifetime, or at least in my lifetime, we dealt with the Cold War, and since 1979 we've dealt with a "war" with Iran, and the third war is the "war" with jihadism and extremism, personified by the "war" with Bin Ladin.

It seems to those who have studied this problem, particularly on super-terrorism going back to the 80's - it's not a question of if it will occur but when, where and what is the impact? We have other experts in the room who are willing to make comments on this later.

We're dealing with super-terrorism, conventional terrorism, as well as cyber terrorism. It's important to look at the nature of the threat, because the policy is a function of the nature of the threat. Before 9-11, US officials didn't consider terrorism to be a major threat to national security. One only need look at state and federal entities in terms of what their perception of what terrorism was before 9-11 - one will find a common denominator that terrorism was labeled as a crime. After 9-11 we find a new and unprecedented challenge to the United States.

I don't have to remind this audience that terrorism before 9-11, in the 60's, 70's, 80's and so forth, was limited to the nature of the threat and the impact, until 1993 when the first attack on the World Trade Center took place. Subsequently, in 1995, there was the attack on Oklahoma City that shook up the US. When I studied and lectured in the Midwest, I used to say that "the Midwest is not the Mideast," and then of course things changed.

After 9-11 it became very clear that one cannot separate the domestic from the international threat; they are really linked in terms of the threat to US security abroad as all of us know. For a very long time, we have seen the intensification of attacks on American targets, against American persons, interests, bases, business; about 25% of the documented statistics that we have relate to attacks against US nationals abroad. We find that particularly in the 1980's. It was up and down after the Desert Storm campaign, and then we have seen of course attacks by al Qaeda.

Again, before the 1970's, terrorism was not much of a challenge until 1972, because of the attack in Munich. Of course, there were race riots in the US in the 70's; some people call it terrorism, but we can debate that. As far as Congressional action, I'd like to mention some, and then Mike Kraft will go into greater details. I think over the past 30 years, Congress focused on the terrorist sponsors list, and then we had the international security assistance and armed export control act in 1979. We had quite a number of commissions looking at the nature of the threat, for example after the 1983 attack in Beirut, the Inman commission after Beirut, and we had some anti-terrorism acts in 1986. The Presidents also, Reagan and Clinton, ordered a NSC director to establish counterterrorism infrastructures. I remember the V.P. Bush report in the 1980s; some of us academics were involved in this study and recommendation. The US did not hesitate from time to time to resort to military action, for example against Libya, and President Clinton ordered attacks against the Sudan, Iraq and Afghanistan. I won't go into the situation today in Afghanistan, incidentally, next week there will be a session at the George Washington University with the Afghani Ambassador.

Also I'm not going to go into the issue of Iraq, besides to say that despite the fact there is no WMD, there is no doubt in my mind that it is the most likely area in terms of escalation around the Middle East and around the world. It seems to me that today we have to look at the nature of the threat in the US itself. Secondly, in terms of some of the cells that are planted in this country, diasporas and foreign affinity terrorism, we have to look at the domestic infrastructure, what are some of the tools that are available, from the Department of Homeland Security, intelligence reform and so forth.

Again, this is a tall order, but we do find some common ground throughout the years in terms of the mission of the US, not only to defeat the terrorists, but also to make sure that we live up to our value system and protect civil liberties and maintain the democratic nature of the country. Clearly it's very easy to move from a democratic system to a totalitarian system and then kill all the terrorists. But the same time there is the in danger in eliminating democracy so we have to be very cautious about the nature of that challenge.

Finally, even if the US is the only superpower in the world, the US by itself cannot cope with the challenge of terrorism without maintaining very powerful relations and links with other nations. And I believe that we are moving in the right direction. The challenge of terrorism is going to last centuries. For example, education in hatred is one of the major challenges we are facing. It will take decades before we can deal with education and hatred, so we have to place must more emphasis on the intellectual battle, not just law enforcement and military. At this point I am going to stop and we'll move on, thank you.

In looking ahead, it’s useful to look at the context of US counterterrorism policy. I’m also pleased to see here several colleagues from the Counterterrorism Office at State. Please feel free to contradict me if you disagree with my remarks, Also I want to pay tribute to our colleagues in the Department of Justice, without whose diligent work drafting laws on counterterrorism this book ‘s description of legislation would not be possible.

Since there are a number of people here who haven’t worked in Congress forgive me if I go into too much detail. For those not familiar with our governmental system, legislation can originate from either the executive branch or Congress. I would like to outline briefly some developments in legislative policies and then I’ll hand it over to Jonathan Winer.

First, I would like to make a point often overlooked in the press; US counterterrorism laws did not spring full blown after 9/11. There is a background to these laws; some of them go back to the 70’s, developed long before 9/11, although some of the programs did get additional resources and manpower after 9/11.

After the Munich massacre in 1972, U.S. legislation focused mainly on state sponsors and efforts to criminalize terrorists acts Also in the 60’s and 70’s there was a development of international treaties.

In the 90’s we saw the emergence of terrorist groups that didn’t depend on state sponsorship, for example like Abu Nidal with Syria and Iraq. Other major developments included legislation that allowed for civil suits and various efforts to keep up with modern technology, which is more controversial now.

In the 70’s we saw various international treaties developed against attacks on aircraft because of hijackings by the PFLP in the 70’s and to an extent the hijacking of planes by Cuban hijackers. The theme of these treaties was "extradite and prosecute." If a country found a terrorist on their soil, they have a duty to prosecute or extradite the suspect to a country that had jurisdiction, such as being the owner of the aircraft. The treaties however did not attempt to define terrorism. This is a difficult subject: academics have come up with over 110 definitions, and the United States government has three or four. The one I like is in the State Department annual “Patterns of Terrorism” report - premeditated violence perpetrated against non-combatants. Yonah Alexander referred to the criminalization of terrorism. Part of these activities go back to the Reagan administration. They were trying to emphasize for public diplomacy reasons that persons who hijack aircrafts, buses, trains, are criminals regardless of the motivation. These were efforts on the public diplomacy side to counter the glamorization of terrorists by European or Arab “intellectuals.” This effort has been unfairly denigrated by some in the Bush administration and during the last election campaign, because the use of legal tools is still a major part of our international counterterrorism efforts.

In the mid 80’s, there was a very interesting study done by the intelligence community that showed that some terrorists were setting up front companies, using banking institutions. Jonathan Winer was involved in some of the investigations on the Hill. This led to legislation aimed against those who provide material support to terrorism. There was a first run at this in 1994 with a provision that supported specific acts of terrorism. Congress at the time was dealing with a huge omnibus criminal bill so in 1995 we at State helped introduce what became the Anti-Terrorism and Effective Death Penalty Act of 1996, which authorized the designation of terrorist organizations and made it illegal to provide support to those groups designated by the Secretary of State.

This second phase of legislation piggy-backed the initial phase, that of opposing state supporters of terrorism. In 1979, Congress passed the Export Administration Act which required advanced notification to Congress before export licenses could be listed for dual purpose goods to countries that have repeatedly provided support to international terrorism. This legislation came out of a desire to block a sale of 200 heavy duty tank transporter trucks to Libya. The State Department was worried about the use of these trucks to threaten Egypt. A State Department official came to me and the member of Congress I was working for then, Millicent Fenwick of New Jersey, a member of the House Foreign Affairs Committee. Soon after that it was also discovered that a mid-level State Department Official approved C-130’s to Libya, and Congressman Edward Derwinski’s Chicago Christian Lebanese constituents were of course upset about that because Syria had been shelling the Christian suburbs of Beirut.

That export control law laid the basis for the so-called terrorist list. There have been numerous modifications, piggy-back amendments, which require the cutoff of financial transactions of countries on the terrorist list, and denial of tax credits for income earned in countries that are on the terrorist list. In addition, there has been specific legislation, like the Iran-Libyan Sanctions Act. In the case of the Anti-Terrorism and Effective Death Penalty Act, the initial draft came primarily from the State Department and Justice Department but went through a lot of changes while going through the Hill.

Civil liberties were very much kept in mind. For example, the original draft allowed for someone to write a check to a designated terrorist group if it could be shown that it was specifically for humanitarian or medical reasons. The proposal was rejected by a staffer to then-Senator Abraham of Michigan of the Senate Judiciary Committee, who has a large number Palestinian constituents in Dearborn, because the staffer said the groups didn’t want anyone looking at their books.

A key passage in the bill, drafted by the House Judiciary Committee, is Section 301, which says that designated terrorist foreign organizations are so tainted by criminal contributions that any contribution given is aiding that criminal conduct. In effect, Congress said that money is fungible. The provision is similar to the theory of sanctions against countries that sponsor terrorism. Countries such as Iran and Syria of course build schools and roads. But that doesn’t mean we lift sanctions and give foreign aid to these countries while they are still supporters of terrorism.

Another restriction was the “long arm statute” which made it a criminal offense, punishable in U.S. courts, to commit terrorist actions against Americans overseas. This 1979 provision had one interesting unintended consequence; it opened the doors for FBI legal attaches to be based overseas in US embassies to help investigate terrorism crimes. Some of them have helped their host countries improve their counterterrorism laws.

A further development in counterterrorism laws is the use of civil suits by families of terrorism victims, to allow families to bring suits against state sponsors of terrorism and terrorist organizations. This was the Anti-terrorism Act of 1991. The State Counterterrorism Office supported this on the principal that it was useful to put more financial pressure on state sponsors. But the Legal Advisor’s office wasn’t too happy because it required amending the Foreign Sovereignty Act to allow civil suits against foreign governments. There was also the issue of determining who had a better claim to frozen assets if there were more than one claimant.

The civil suits issue just came up today in the Washington Post. The story said that lawyers of the Palestinian Authority (PA) were trying to counter an effort to sue the Palestinian Authority for terrorist acts that killed Americans and the Palestinian Authority lawyers say the PA is entitled to immunity on the grounds that the PA is a state. US judges, the Post said, said that the PA is not a state and thus able to enjoy immunity. I would add that if there was an official Palestinian state, the way things are now, there are grounds for it to be designated as a terrorist state and thus subject to the laws requiring the cutoff of foreign aid. The lawyers should be careful about getting what they wish for

Since 9/11, a very major piece of legislation passed Congress, the Patriot Act. One of the controversial issues now is providing authority for wiretaps of terrorist suspects. Some colleagues from DOJ are here and I want to recognize them in playing such for their big role in drafting legislation. Lots of the concepts though originated during the Clinton Administration, drafted by career Department of Justice lawyers. A former Justice Department colleague of mine once said that it takes about 7 years for a major new provision to work its way through Congress.

I would classify the roving and warrantless wiretap provision as an effort to bring the counterterrorism effort into the modern computer age. There is obviously controversy; it falls into the category of trying to adjust to cell phones and the use of the internet. Those who get into this issue should look at the history of the previous legislation. There are also other efforts with modern technology, to strengthen US laws dealing with biological and chemical agents and their transportation. These bills are quite technical of course and are run through the science community. It’s another example of interagency cooperation. We’ve tried to flag these laws as potential models for other countries, or at least the provisions on how to define certain substances and agents.

I should also mention that there are efforts to work through the United Nations. Security Council resolution 1373 requires states to take action against terrorist financers.

On overall policy and doing research on this book, there is a remarkable continuity of US counterterrorism policy. There is what a former Assistant Secretary for Diplomatic Security called the defensive ring, such as strengthening the physical protection of embassies and other buildings. And then there is the offensive ring of developing international cooperation, which has been a key theme all along. Bilaterally, of course, we have extremely close relations with our British, Canadian and Australian allies, along with some Arab allies who don’t necessarily want to be identified. There are practical security and training programs, diplomatic efforts, and the emergence of the thickening legal web of treaties, which now cover terrorist fundraising and bombing of marketplaces as well as aircraft, airports and shipping. I think there are 13 counterterrorism conventions now.

Even renditions are important. Some people think this means turning suspects over to Syria or Egypt to have their fingernails ripped out. But there are perfectly legal and formalized renditions, usually done because a country which finds a terrorist suspect on its soil does not want to prosecute them because their legal system is not strong enough or there are domestic political reasons.

Economic sanctions is another key tool, not always effective but can be useful although it is hard to measure at what point a country decides not to go through with a terrorist act because of sanctions.
In the course of research on the book, I came across laws from the 1980’s that can be used against Iran, to impose airline sanctions, against air travel links, spare parts and maintenance, and which we can use to restrict easy transportation by Iranian elites I think we should at least put this on the table for consideration for another round of sanctions.

Another element in counterterrorism policy involved moving from bilateral and multilateral cooperation and working more on a regional level. Former Coordinator Mike Sheehan started this about 10 years ago, and Henry Crumpton, who was a more recent S/CT coordinator, pushed that even further with a series of regional conferences. In many ways this is the way to go. When we get neighboring countries to cooperate with each other you can do a lot more. Former State Department official Steven Monblatt, who is here in the audience, later headed an Organization of American States coordinating committee to do the same thing.

Very quickly, on public diplomacy a lot more has to be done, and not just promoting the angle of showing how well American Muslims are treated and integrated, but by emphasizing some of the bad things terrorists are doing.

Very quickly, some recommendations: The smart power theme, which (State Department Counterterrorism Coordinator) Ambassador Dailey described at a recent Washington Institute appearance, emphasized that we have to do more to build up national capabilities of other countries. This is the right approach. I note that Defense Secretary Gates in a recent speech argued for more resources for the State Department.

The new administration has to take a very close look at the interagency coordinating mechanisms. When working on a chapter for another book on US research and development programs for counterterrorism equipment, I discovered that the Department of Homeland Security testified to Congress that it had the lead in counterterrorism research with other countries, even though the interagency Technical Working Group lead by the State Department and Defense Department had been conducting such research for years with Britain and other countries. The testimony was not even cleared with State and Defense.

I suggest that Congress take a look at streamlining the existing sanctions legislation and make them more consistent and understandable to industry. Congress should also repeal the Nethercutt Act passed in 2000, which allowed the export of foodstuffs and medical equipment to countries on the terrorism list. The bill was motivated by the former Washington Congressman’s desire to open the door for selling apples to Cuba. But Iran started to buy large numbers of medical scanners, raising suspicions that some equipment might be used to examine missile parts or other technology. This caused hundreds if not thousands of hours to be spent by government agencies to check out the licenses.

Attention has to be paid to the implementation of counterterrorism policies. The Bush administration has been cutting funds and needs to put its money where its mouth is in fighting counterterrorism. The Anti-Terrorism Assistance to help improve the ability of other countries to fight terrorism is extremely important. But OMB and Congress, even since 9/11 have consistently cut the State Department’s funding requests. This year the Administration is requesting $141 million for the program.

Finally, for congressional staffers, and I used to be one for 10 years: Think twice about imposing a reporting requirement or organizing a hearing just because it’s sexy. They take huge number of hours away from actually dealing with terrorism to instead prepare for a hearing or write and clear reports which nobody reads.

There are no magic solutions, the trick is to try to mitigate the terrorism threat and counter the forces many hind it. There are a lot of facets to this threat. This is the time to start thinking of what we need for the next administration and Congress.

I remember getting a book 20 years ago on counterterrorism from Yonah Alexander, “Preventing Nuclear Terrorism,” which is still on my shelf. Looking at this book, the United States has a massive amount of power against terrorism that it doesn’t use. Unfortunately, the power can’t always be used. For the next administration we have to mix up the authorities we already have been given and achieve a lot more multilateral consensus and improving mechanisms which are in the US in other countries.

If you think about the last forty years on terrorism, there are lots of continuities. The problem of sponsorship has been with us from the beginning. Also you have the problem of community-based organizations providing resources to people when governments fail, who also turn to terrorist activity. Hamas and Hezbollah are good examples, but not the only examples. The third problem: disaffected people forming local cells. Timothy McVeigh isn’t the only nut; you find terrorist groups across the world with very tiny footprints.

So where do the resources come from? State sponsorship, charitable orgs and crimes and drugs. The people? They come from state sponsors, diasporas and local cells. You can find that over decades, different political movements, and theological movements. Most of the instruments we have which are collected in this comprehensive book, are instruments that can be used against many groups. We have to build a common global infrastructure for whatever ails you, its going to change over time. Groups we haven’t heard of today will commit terrorist acts. I'm reminded that when I grew up in Boston, groups used to contribute to the IRA at a bar. People didn’t realize that was for buying guns to kill British soldiers.

(The following is an outline of Jonathan's additional remarks.)

1. STATE SPONSORSHIP PROBLEM REQUIRES COUNTRY-SPECIFIC TERRORIST FINANCE STRATEGIES.

a. Iran, Afghanistan, Pakistan, Saudi elites (with or without the support of particular Saudi officials).
b. Hamas and Hezbollah by Syria, and support for Hamas by governments elsewhere in the Muslim world.
c. Such country-specific strategies likely should include a mixture of cooperative efforts against agreed upon targets when possible (Afghanistan, Pakistan, and Saudi Arabia); seeking and obtaining multilateral support for comprehensive economic sanctions when appropriate (Iran). They likely should also involve, when appropriate, unilateral enforcement actions when such actions can leverage U.S. power in a way that will be sustainable and result in further protecting the global financial infrastructure from terrorist finance vulnerability. The U.S. has already used authorities under Section 311 of the Patriot Act, to target particular financial institutions and countries for enhanced scrutiny by U.S. (and by implication, all international) financial institutions, thus threatening access to the payments system of any entity unfortunate enough to be named by the Treasury. It has yet to use for terrorist finance purposes, Section 319 of the Patriot Act, which allows the U.S. to seize funds in any foreign bank with an account in a U.S. financial institution that in turn is handling tainted funds in another country. Although, the Justice Department has used this authority in some criminal cases unrelated to terrorism. The authority remains a powerful one that could leverage further changes of behavior by even remote financial institutions wanting to avoid the risk of loss due to handling funds of uncertain or dangerous provenance.

2. CHARITIES.

a. Enforcement directed at the charities where they are located beyond the U.S. (Section 319 comes to mind as a mechanism)
b. Strategies to replace them. To date, the U.S. has been unable to reach agreement even inside the inter-agency process on any mechanism by which it could facilitate the provision of social services to Muslims under particular stress leaving them susceptible to exploitation by terrorist groups abusing the provision of social services to carry out violent political agendas. As one U.S. official candidly told me, it would be a career-killer to promote any charitable alternative to Hamas in the West Bank or Gaza that ultimately could be found to provide funding, direct or indirect, for some terrorist group, even if Israeli officials supported the idea. The feckless corruption of the Fatah government under Yassir Arafat provided a textbook example of a situation in which a terrorist group could exploit the gap in providing social services left by the incapacity of the then-elected government. Risky as it may be, a terrorist finance strategy needs to provide solutions for non-terrorist charitable contributions to provide social services to people seen as in need in places such as the West Bank, Gaza and Pakistan. If the U.S., the EU, and other countries joined together to facilitate alternatives, their credibility might be enhanced as they undertook enforcement again against charities that continue to abuse their status to fund extremism and violence.

3. GLOBAL ENFORCEMENT CAPACITY.
U.S. law enforcement needs to continue its two-decade old migration to becoming not merely cross-border but global. Criminal groups and terrorist groups will continue to learn from one another and the interactions between these two types of activities will continue to provide opportunities for governments to counter both. There is no substitute for countries putting law enforcement professionals cheek-by-jowl next to one another to investigate joint targets. Although, bilateral and multilateral training are also effective ways of building bridges among separate systems that need to come together. INTERPOL’s greatly increased information capacities under its current Executive Director, Ron Noble, have provided a useful spine for some forms of information sharing, as has the growing number of Egmont Group members for information on AML/CFT.

a. An incoming Administration will need to carefully review the existing capacities of both INTERPOL and the Egmont Group with a view in determining whether there are additional types of data that should be collected and subject to sharing. In this regard, development of some enhanced mechanism to track sanctions activity, and to provide counterparts for OFAC in administering and monitoring sanctions programs, is essential.

4. COMPLETE PATRIOT ACT REGULATION. The U.S needs to complete, on its own, the regulation of all financial sectors required of it by the Patriot Act, and to finish the job of issuing regulations on hedge funds and any other uncovered sectors. These may need to include at least some forms of stored value cards and other new technologies, defined in such a way as to be replicable internationally and feasible to the needs of card operators, issuing banks, merchants, and consumers. Treasury has already been able to develop tailored regulations for money transmitters, who are not required to adhere to the identical customer identification procedures required of institutions, such as banks and brokers that hold customer accounts. The first steps at doing this have already been undertaken, with the convening of a group at the FATF which in October 2006, published an initial report on new technologies, including stored value. Further work to understand the technologies and to develop controls should be expedited, with the goal of policy outputs for action by the incoming administration.

5. BULK CURRENCY SMUGGLING. Further strategies need to be developed to address bulk currency smuggling, gold, diamonds, and other high value commodities capable of readily holding and transferring stored value. One possible technique could involve micro-labeling commodities by the consent of participating countries in a form of mini-bar code that would provide evidence of the last licit owner. While this type of approach has its limitations, especially with gold, which is easily smelted and reconstituted, it might be usefully combined with micro-tags, which once marking a high-value commodity would be difficult to remove. The costs, benefits, and feasibility of these kinds of approaches need further study and cannot work without broad, international commitment to the principle that labeling high-value commodities is in the national security interest of essentially all governments. In such areas, the U.S. should be prepared to suggest topics for discussion, study, and analysis, rather than pushing too hard in the absence of interest from other countries, all too many of which have their own distinct, and serious, terrorism and terrorist finance problems. But technologies continue to change, and those changes provide opportunities for the hunters as well the game.

6. REINVIGORATE UN ACTIVITY. The U.S. should consider whether the United Nations activity against terrorism can be reinvigorated. From 2001-2003, the UN was unusually vigorous in facilitating a global response against terrorism in general and terrorist finance in particular, with the Counter-Terrorism Committee (“CTC”), under Jeremy Greenstock, remarkably efficient at causing member states to report on their CFT capacities, gaps, and their plans to fill the gaps. The process catalyzed an usually speedy process in many countries as dozens quickly changed their laws and created foundations for a CFT regime, aided by training programs and technical assistance facilitated by the World Bank, IMF, and by FATF regional bodies. Greenstock’s departure at the time of the initiation of the invasion of Iraq in the spring of 2003, ended this phase of UN activity. A new Administration should explore whether there are opportunities for the UN to play a constructive role in further harmonization in the future.

7. US ENFORCEMENT. The U.S. needs a hard look at its own enforcement activities, as well as its communications about terrorist finance to its own public and to the world. Too many U.S. law enforcement cases involving terrorist finance have turned out poorly for the government. Why this should be the case is not something that an outsider can readily assess, other than to observe that the relatively poor results in front of U.S. juries speak for themselves. More broadly, too little is available to document what information the U.S. government actually has to justify particular terrorist finance designations, placing the U.S. in a poor position to explain itself when it chooses to remove a previously prominent “terrorist financier” from a sanctions list. To sustain the necessary public support for a comprehensive international approach to combating terrorist finance, we need to be able to make our case in public against any target, and make that case stick.

Peter Huessy of the National Defense University Foundation: I have two questions for Mr. Winer. I didn’t hear you correctly; Sudan was the only state sponsor of Al Qaeda prior to 9-11? Second, who in 2008 are the state sponsors of Al Qaeda?

Jonathan Winer: Official state sponsors, if you look at the list, Sudan was the only country listed. There was Saudi support and Pakistan involvement but that wasn’t the official US government position. In 2008, as near as I can tell you we still have problem with Saudi charities, I can’t say if it’s for Al Qaeda because there is enough dope money in Afghanistan. You don’t need state support for Al Qaeda. There is support of elements of elites for Hamas and Hezbollah. Iran is pretty clear, other than that you can say what you believe.

Jeffrey Breinholt of the Counterterrorism Blog: Days ago I took a plunge and proposed publically that the US government start giving banks security clearances so that people who regulate bank secrecy can share real-time classified intelligence with banks. I described the real problem as one of political will. I have two questions. First, do you think it is a good idea as a private lawyer representing banks and second, is there political will in an incoming Democratic administration for something like that?

Jonathan Winer: It’s an interesting idea, when I was in government the wall between intelligence and law enforcement was a lot thicker. Before there was a tag line, intelligence above and law enforcement below the tag line. The short response is, it’s an interesting, provocative, potentially good idea if you consult the process issue and if you create a sufficiently narrow category and not intrude upon people’s rights. In terms of the Democratic and Republican Parties, I don’t see any difference between McCain, Barack Obama and Hillary on many of these subjects.

Jeffrey Breinholt: Do you think there will be bankers who want that?

Jonathan Winer: It depends on the liability that comes with it and degree that the government will prevent litigation. If you are a telecom company you’re happy to help NSA at a time of national crisis, but don’t want to be involved in civil lawsuits later. Financial companies would raise this issue for it to be resolved.

Stephanie Kinney, former State Department: Yonah Alexander, you cited the importance of the intellectual battle, and as someone who was told by Coordinator for Counterterrorism that "hearts and minds were irrelevant, it’s all about ops," I would be interested in your views where that needs to start.

Yonah Alexander: I think that on the basis of our studies in 15 countries, it is clear that you need a comprehensive approach to deal with the problem of terrorism. The leadership has to articulate what it is about; if it is war there are consequences…with the role of intelligence, the rule of law and legislation, law enforcement, sanctions, a public diplomacy aspect and involvement of civic society. It seems to me if you want a specific point, I would say we have to touch the children. In other words, we’re late for the next 100 years. If we start today we can mitigate the threat in 100 years, because the Arab children of today are going to be the terrorists of tomorrow. If they survive and become grandparents then we talk about three generations. I can tell you from very limited personal experience interviewing some of the Palestinian children in refugee camps in Lebanon 35 years ago. You ask them where they were born, you know exactly where, in refugee camps. But they say they were born in Jerusalem. The education in hatred is critical - it has two forms. First, the family. A tape recently of a mother and her son were actually together and were filmed before a suicide operation from Gaza. The mother said she blessed the son to go to heaven and encouraged other parents to do likewise. Number two, in all the services you mentioned, in terms of providing education and social assistance, then you look at the school texts and those who go to school. We have the translations of Saudi Arabia and many other countries. If I would read these texts and go to school, I would become a terrorist as well. Then you have TV and websites and so forth. We have a very difficult mission, and that is why we need a consensus in terms of radicalization of youth. In Europe this is the main concern of many countries. You have to monitor the radio, and TV, you even have the Hezbollah TV station. If you don’t ban it you are liable to become a terrorist. We have that challenge.

Secondly, we have to develop dialogue with communities with diasporas and get them involved. If they want to be citizens in the US, in Australia and in Germany, they have to be involved with the community. We put too much emphasis on law enforcement, military, and intelligence and shove under the carpet education. Civil society is important - lawyers, clergy, and the media. There are no simplistic solutions but we must start today. In 100 years maybe we can reduce terrorism and bring it to manageable levels.

Thomas Watson, researcher at CSIS: There is a recent report that said 60% of terrorist organizations listed were related to Cuba and may or may not have true link to terrorism and there might a political bias of who is on the list. What recommendation would you have in reexamining who is placed on the list?

Jonathan Winer: Cuba being listed on a state sponsor list is one that isn’t shared by a very large number of countries in the world. The US is only able to achieve foreign policy objectives when there is broad consensus, which would suggest for a revaluation of that policy.

Thomas Watson: Where could we start?

Jonathan Winer: Well in the Clinton administration, whenever they tried to increase relations with Cuba, Fidel would do something which would prevent that. I hope that we can seek change on that in the future; it’s not really a terrorism issue.

Michael Kraft: If I could add this in - this affects North Korea too. In 1989 the Arms Control and Anti-Terrorism Act was passed after Ollie North was funneling weapons to Iran and after Iraq was taken off the terrorism list. Congress said before a country could be taken off the list, they have to certify and give assurances that it will not support terrorism in the future. Before the rescission takes place it has to lie before Congress for 45 days to give Congress a chance to weigh in. This administration is reluctant to get into the hassle.

Yonah Alexander: Just a little footnote. What is really interesting is that there are new candidates for this list. Take Venezuela for their activities and encouraging connection with terrorists in Latin America. I find most disturbing that there are Iranian agents today and scientists in Venezuela to help them develop a nuclear program, for peaceful purposes of course. It seems to be it is so fluid that we have to look not only at states but uncontrolled areas. One of the most troubling areas is the tri-border area. It is unbelievable what is happening there. That brings me to a question for you, Jonathan - do you think for example that there is a need from an organizational point for you, internally and internationally to reorganize the ‘battle or war’ against narco-trafficking, since this is one of the major sources that aids terrorists. The trend by and large is to make a distinction between the criminal activity and the terrorist activity.

Jonathan Winer: The amount of work it would take to combat cross-border narcotics trafficking would take us well beyond the minutes we have left. When we fail to take into account narco-trafficking and the link to terrorist groups we can’t deal with any of them. We find terrorist groups commonly supported by narco-trafficking, and in turn terrorist groups can provide the security function. Both can undermine government controls. If you look at narcotics producing areas, you can’t find a single area where there isn’t a terrorist problem.

Andrew Cochran: One other group of counterterrorism policies recently in flux is the debate over the victims of terrorism. In my business at GAGE International. I represent Motley Rice, a law firm which has represented more terrorism victims in civil litigation than any other law firm in the world. Recently, the Defense Authorization bill included the Lautenberg provision which assisted victims of terrorism - a provision that Lautenberg worked for years to pass. But victims of non-state terrorism are still inconsistently protected. The current laws are not comprehensive, and there will be other legislated moves to try to assist victims of non-state terrorism.

TrackBack