Our friend Doug Farah, the fine investigative reporter and former West Africa Bureau Chief for the Washington Post, made the point to us in a conversation the other day: the US needs some fresh ideas in their campaign to cut off the flow of money to terrorists.
Doug said the current tactics in opposition to money laundering are based on US government experience with the drug cartels, experience gained and developed in the 1980’s. That strategy relies heavily on regulation of the formal financial system. Intelligence work plays only a secondary role.
These strategies are not working, Doug says. We think he is right. Terrorists now take money generated by legitimate business or legitimate charity and divert smaller portions for illegal purposes. This is a kind of “reverse money laundering” and is hard to detect or stop. In the immediate aftermath of the September 11, 2001 attacks, this was the principal tool of the Bush administration. It grabbed and kept about $130 million from charities and some other groups being used to finance terrorism. It designated some specific people as financiers of terrorism, almost all of it of them of the Mideastern jihadist variety.
The problem is the terrorists are increasingly savvy. They have been changing their methods to stay a step ahead of the US and Western democracies and their law enforcement and intelligence counter-terrorism activities. Al-Qaeda and its allies, Doug Farah says, haven’t relied on the formal financial sector for years. They no longer use banks but have turned to the ancient Hawala method of money transfer, or they deal in precious gems or gold or smuggled commodities and their financial networks are in offshore tax havens whose names change constantly.
We can cut of the flow of terrorist money. Ours is a sophisticated society and government. We just need to gather sufficient will.
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