U.S. split on tracing, freezing terror funds

Divide: Some push to halt assets to stop attacks, others urge following it to suspects.

August 02, 2004|By Laura Sullivan | Laura Sullivan,SUN NATIONAL STAFF

WASHINGTON - Several days before the Sept. 11 attacks, plot ringleader Mohamed Atta, never tempted by new clothes or expensive restaurants, had money to spare. Having spent less than $500,000, he and several other hijackers went to Western Union and sent $26,000 back to an account in the United Arab Emirates.

FBI officials know how and when money was first wired to U.S. bank accounts, and they know which UAE account received the extra cash when it was returned, but nearly three years later, neither they nor any others in U.S. law enforcement have any idea who exactly paid for the terrorist attacks.

After years of scrambling to discover ways to thwart the financing of terrorism, U.S. officials have come to a startling conclusion: Supporting an international jihad with training camps, schools and foot soldiers may be expensive, but launching a terrorist attack is dirt cheap.

Yesterday's announcement that al-Qaida could be planning to blow up U.S. buildings proved no different as senior intelligence officials described possible plots to turn the World Bank and other major financial sites to rubble with only a truck, a cargo of explosives and a well-scouted subterranean parking garage.

`Ideological divide'

This realization has led to a growing split among law enforcement officials over how to best prevent the financing of a terrorist attack. Some officials are urging U.S. agencies to freeze more assets and attempt to plug the terrorists' funding pipelines. Others want to try spotting suspicious money and following its movement in hopes that it leads to terrorists or offers clues to a potential plot.

"There is a big ideological divide right now between the asset freezers and the people who want to follow the money as it changes hands," said Jonathan M. Winer, former deputy assistant secretary of state for international law enforcement in the Clinton administration. "There's no easy answer one way or the other."

Last week the commission investigating the terrorist attacks argued in favor of watching the money, saying that "trying to starve the terrorists of money is like trying to catch one kind of fish by draining the ocean."

The report found that asset freezing has had "little effect" when faced with legal challenges, international politics and concerns about revealing intelligence gathering secrets.

"A better strategy has evolved," the report said, "as the government learned more about how al-Qaida raises, moves and spends money."

Commission Chairman Thomas H. Kean told NBC's Meet the Press last week that he believes following the money would be "more productive."

"Right now we have been spending a lot of energy in the government to dry up sources of funding," Kean said. "When it only costs $400,000 to $500,000 to pull off an operation like [9/11], we'll never dry up the money. But by using the money trail, we may be able to catch some of these things and break them up."

Phillip D. Zelikow, executive director of the commission, said yesterday that he was briefed on "several concrete examples" of active cases that remain classified where money is being traced in connection with possible terrorist activity.

`Attacking the sources'

However, Juan Zarate, assistant secretary for terrorist financing at the Treasury Department, said that while the department supports such intelligence gathering strategies, shutting down terrorist's access to funding will impede their ability to launch attacks.

"I think we need to do everything the commission said with respect to the money trail," Zarate said. "But we also need to continue - and frankly be even more vigorous - on attacking the sources because that affects the long-term ability of al-Qaida to do all the nasty things we want to stop them from doing."

Kean said in an interview Friday that the two approaches are not mutually exclusive. "Obviously if you can dry up money, you dry it up," he said. "But ... we believe one thing we didn't do effectively is follow the money."

The two differing tactics, former and current intelligence officials acknowledge, have on occasion put some of the 19 federal agencies that investigate terrorist financing at odds with one another.

Treasury, for example, which is responsible for freezing assets, has a tradition of halting fraudulent banking with immediate action. The FBI favors lengthy undercover investigations that might lead to suspects and front organizations.

Since the 2001 attacks, Treasury has frozen more than $142 million linked to al-Qaida and other terrorist organizations and identified 383 people it believes are associated with terrorism, department officials say.

Those efforts, counterterrorism officials at both organizations contend, have run al-Qaida out of international banking and into riskier, more cumbersome financial dealings. Officials believe al-Qaida operatives have had to resort to carrying duffel bags of cash across the border to get it to operatives, which could make them easier to spot and vulnerable to robbery and delays.


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