Part 1:
Operation Green Quest, and things you find while following the money
"The lifeblood of terrorism is money, and if we cut the money we cut the blood supply,"
Assistant Attorney General Michael Chertoff, head of the Justice Department's criminal division in October 2001 and current head of the Department of Homeland Security.
A couple notes before we start down the money trail: First, this series of essays are primarily going focus on how financing of modern day Islamic terrorist groups and the broader historical context of the actors involved in such activities. In particular, we will be focusing on the links between terror financing and fascism, as there is a wealth of relevant information on that topic. There have been some recent rather fascistic changes to the laws regarding terrorist financing that should be kept in mind while we explore this topic. On October 17, 2006, President Bush signed into law the Military Commission Act of 2006. Let’s take a quick look at some of the implications of this law with an excellent September 2006 article from the LA Times:
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The White House Warden
Congress may give the president the power to lock up almost anyone he thinks is a terror threat.
By Bruce Ackerman
BRUCE ACKERMAN is a professor of law and political science at Yale and author of "Before the Next Attack: Preserving Civil Liberties in an Age of Terrorism."
September 28, 2006
BURIED IN THE complex Senate compromise on detainee treatment is a real shocker, reaching far beyond the legal struggles about foreign terrorist suspects in the Guantanamo Bay fortress. The compromise legislation, which is racing toward the White House, authorizes the president to seize American citizens as enemy combatants, even if they have never left the United States. And once thrown into military prison, they cannot expect a trial by their peers or any other of the normal protections of the Bill of Rights.
This dangerous compromise not only authorizes the president to seize and hold terrorists who have fought against our troops "during an armed conflict," it also allows him to seize anybody who has "purposefully and materially supported hostilities against the United States." This grants the president enormous power over citizens and legal residents. They can be designated as enemy combatants if they have contributed money to a Middle Eastern charity, and they can be held indefinitely in a military prison.
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Middle Eastern charities and their ties to the financing of terrorist groups are a topic we are going to explore in great detail. You would be amazed what you find while looking under that rock, and it doesn’t make any side look particularly good. Except for the innocent charity workers and their needy recipients, who are serious victims in this whole mess.
And finishing our look at the LA Times article…
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Not to worry, say the bill's defenders. The president can't detain somebody who has given money innocently, just those who contributed to terrorists on purpose.
But other provisions of the bill call even this limitation into question. What is worse, if the federal courts support the president's initial detention decision, ordinary Americans would be required to defend themselves before a military tribunal without the constitutional guarantees provided in criminal trials.
Legal residents who aren't citizens are treated even more harshly. The bill entirely cuts off their access to federal habeas corpus, leaving them at the mercy of the president's suspicions
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On September 29, 2006, two days after the Senate debated and approved of the bill, the US Treasury Department issued a warning specifically to Muslim charities. It was an unprecedented move. And so given the fact that these organizations appear to have been singled out as potential targets of the new powers given to President Bush, it is a topic we urgently need to understand because the individuals involved with Muslim charities just might become some of the first targets of these new powers.
It is also a highly complicated and confusing topic that cuts to the heart of so many modern-day conflicts because money is both the lifeblood and motivation for a lot of war and terror. Many Muslim charities have, indeed, been involved with terror financing and appear to be used as fronts for powerful people that support militant Islamist groups. They also provide real charitable services for people in need. And as we’re going to see, many of these powerful people have successfully escaped prosecution after 9/11 in large part due to their powerful political connections. It is a complicated, confusing, and embittering topic.
The second note is that we’re going to be using the term “Islamism” a lot in these essays, in part because it’s a common term used to describe movements that view Islam as both a religious and political system. But terms like “Islamism” and “Islamists” are also vague, often loaded terms, and ripe for abuse. Christians that feel the Bible should be the guiding principle in how we govern ourselves are not one and the same, do not all share the same vision, and are obviously not all militant. The same is true for “Islamists”.
Still, the militant strains of Islam propagated by the Muslim Brotherhood and Saudis can fairly be characterized as “Islamist”. And they’re ideological strains that are often involved with conflicts across the globe that include Muslim peoples. Whether we’re talking about Muslim populations in Egypt, Chechnya, the Philippines, Afghanistan, Indonesia, Malaysia, Bosnia, or just about anywhere else where there are conflicts involving Muslim populations, you will find Muslim Brotherhood Islamists with a heavy dose of Saudi financing. That does not mean those native Muslim populaces are also Islamists. The vast majority of Muslims are like people of any religion: peaceful, and not particularly zealous, and like all people, they can end up in conflicts for whatever reason. Keep that in mind also as we examine the financial networks primarily set up and maintained by Muslim Brotherhood and fueled by Saudi petrodollars, because assuming that Islam = Islamism or that Islamism = militant Islamism would be a grave mischaracterization indeed.
A third note is that these essays are not a refined, finished products. Quite simply, the author has run out of time. There are also a number of links that will inevitably die. Feel free to change links, modify the commentary, correct mistakes and mischaracterizations, and hopefully build upon this body of knowledge. This information is urgently important and it’s just the tip of the iceberg.
Having said all that, let’s start down the money-trail:
In the immediate aftermath of 9/11 we all wondered what the United States’ response would be. Certainly a criminal investigation was already underway, and talk of military retaliation was in the air. But some of the first shots fired in the War on Terror weren’t fired from a gun, but a pen:
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President Freezes Terrorists' Assets
Remarks by the President, Secretary of the Treasury O'Neill and Secretary of State Powell on Executive Order
The Rose Garden
9:35 A.M. EDT
THE PRESIDENT: Good morning. At 12:01 a.m. this morning, a major thrust of our war on terrorism began with the stroke of a pen. Today, we have launched a strike on the financial foundation of the global terror network.
Make no mistake about it, I've asked our military to be ready for a reason. But the American people must understand this war on terrorism will be fought on a variety of fronts, in different ways. The front lines will look different from the wars of the past.
So I told the American people we will direct every resource at our command to win the war against terrorists: every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence. We will starve the terrorists of funding, turn them against each other, rout them out of their safe hiding places and bring them to justice.
I've signed an executive order that immediately freezes United States financial assets of and prohibits United States transactions with 27 different entities. They include terrorist organizations, individual terrorist leaders, a corporation that serves as a front for terrorism, and several nonprofit organizations.
Just to show you how insidious these terrorists are, they oftentimes use nice-sounding, non-governmental organizations as fronts for their activities. We have targeted three such NGOs. We intend to deal with them, just like we intend to deal with others who aid and abet terrorist organizations. This executive order means that United States banks that have assets of these groups or individuals must freeze their accounts. And United States citizens or businesses are prohibited from doing business with them.
We know that many of these individuals and groups operate primarily overseas, and they don't have much money in the United States. So we've developed a strategy to deal with that. We're putting banks and financial institutions around the world on notice, we will work with their governments, ask them to freeze or block terrorist's ability to access funds in foreign accounts. If they fail to help us by sharing information or freezing accounts, the Department of the Treasury now has the authority to freeze their bank's assets and transactions in the United States.
We have developed the international financial equivalent of law enforcement's "Most Wanted" list. And it puts the financial world on notice. If you do business with terrorists, if you support or sponsor them, you will not do business with the United States of America.
I want to assure the world that we will exercise this power responsibly. But make no mistake about it, we intend to, and we will, disrupt terrorist networks. I want to assure the American people that in taking this action and publishing this list, we're acting based on clear evidence, much of which is classified, so it will not be disclosed. It's important as this war progresses that the American people understand we make decisions based upon classified information, and we will not jeopardize the sources; we will not make the war more difficult to win by publicly disclosing classified information.
And, by the way, this list is just a beginning. We will continue to add more names to the list. We will freeze the assets of others as we find that they aid and abet terrorist organizations around the world. We've established a foreign terrorist asset tracking center at the Department of the Treasury to identify and investigate the financial infrastructure of the international terrorist networks.
It will bring together representatives of the intelligence, law enforcement and financial regulatory agencies to accomplish two goals: to follow the money as a trail to the terrorists, to follow their money so we can find out where they are; and to freeze the money to disrupt their actions.
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President Bush was right: Money is key to understanding an event like 9/11, and prosecuting those behind it. Terrorists are rarely of the “lone wolf” variety, and there’s no reason to believe those that supported groups like al-Qaeda before 9/11 will suddenly pursue a less-violent form of patronage unless they’re forced to. Nor is there any reason to believe we can come close understanding the full scale of those supporting the particularly poisonous brand of militant theocratic Islamism we face until we take to time to learn about the myriad of groups supporting it, including governments, Non-government organizations (NGOs), and wealthy individuals. And neither can we expect to make much sense of how this state of affairs came about and where its heading without looking at the history of Islamic terrorist financing and what’s been done since 9/11 to disrupt those money flows. Those are the topics that we’ll be covering in this initial set of essays: the who, what, when, why, and how of terror financing.
Let’s take a look back at the formation of the new Foreign Terrorist Asset Tracking Center (FTATC) at the Department of the Treasury with this excelent October 2001 article from the Associated Press:
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Terror Asset Tracking Center Delayed
By Ken Guggenheim
Associated Press Writer
Friday, Oct. 26, 2001; 3:22 a.m. EDT
WASHINGTON –– Just three days after the Sept. 11 attacks, the Treasury Department announced it was creating a new team to fight terrorists: an asset tracking center that would work to cut off their funding.
It sounded like a new idea, but it wasn't: Congress had agreed almost a year before to fund the Foreign Terrorist Asset Tracking Center, but Treasury hadn't set it up yet.
"It just wasn't given the kind of priority it should have been, frankly, by the outgoing administration or the incoming administration," said Stuart Eizenstat, deputy Treasury secretary in the Clinton administration.
Past and present government officials, some speaking on condition they not be identified, cited several reasons for the delay:
–Bureaucratic snags in setting up the center, especially a lack of access to classified materials at Treasury's Office of Foreign Assets Control, known as OFAC, where the center is based.
–The normal delays that occur during a presidential transition were compounded by the hold Sen. Jesse Helms, R-N.C., put on the confirmation of a key official.
–A perception at Treasury that the Bush administration was less interested in financial investigations than the Clinton administration had been.
No one suggested that if the center had been established earlier, the attacks could have been prevented.
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Jonathan Winer, deputy assistant secretary of state for international enforcement in the Clinton administration, said Treasury has had problems getting intelligence information for 20 years.
"It began to be an obvious problem" in President Reagan's first term, "and it hasn't been solved, near as I can tell, prior to Sept. 11," he said.
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Ok, so this clearly isn’t the most positive look back at our early terror finance efforts. The problem is that there just aren’t too many positive ways to look at this topic. Effective anti-terror financing efforts, especially when they involved Saudi financing, are an old, unsolved problem. Over 20 years old, as the article indicates, and coincidentally (perhaps) going back to the time the Reagan administration saw a budding covert intelligence alliance with the Saudi regime blossom, and US-Saudi efforts to fund proxy armies around the world took place. The Afghan Mujahedeen and the Nicaraguan Contras were prominent recipients of US-Saudi aid, but not the only ones. As such, the above article is likely correct that 9/11 still could not have been prevented had the Foreign Terrorist Asset Tracking Center been created in time. The problems are run deeper and go back long before 2001.
But why are the problems so deep and far reaching? That’s something we need to keep asking ourselves as we delve into this topic? Why wouldn’t the existence of a functional Foreign Terrorist Asset Tracking Center have made a difference? Is it primarily due to the commonly given reasons (i.e. Bureaucratic snags, lack of inter-agency communication, lack of available tools and enforcement options)? Are their other agendas at work? And if so, which factions in the US government supported turning a blind eye to these threat, and why? Who are their supporters and political backers? Whose toes would have been stepped on (other than the toes of an obscenely rich theocratic monarchy that sells us lots of oil), and whose agendas would have been disrupted? The many articles we’re going to look at regarding terror financing help answer these questions, so let’s continue down this path of inquiry by taking a look at the formation of a 2nd multi-agency terror-financing task force, Operation Greenquest (also spelled “Green Quest”), with this excellent CBS News article:
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From CBS News
Feds Launch 'Operation Green Quest'
WASHINGTON, Oct. 25, 2001
The government is assembling a team of financial sleuths to cut off terrorists from their lifeblood - money.
Under Operation Green Quest, law enforcement people with financial expertise will investigate how terrorists move their money and where, the Bush administration announced Thursday.
The government would use the findings to freeze financial assets, seize money, impose fines and launch legal proceedings, including criminal prosecutions.
Using undercover operations, electronic surveillance and other techniques, the special investigative team will closely examine underground financial systems, illicit charities and corrupt financial institutions. It also will target other funding mechanisms for terrorists, including counterfeiting, credit card fraud, cash smuggling and drug trafficking.
"The lifeblood of terrorism is money, and if we cut the money we cut the blood supply," said assistant attorney general Michael Chertoff, the head of the Justice Department's criminal division.
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You tell ‘em Chertoff! Surely we can expect great things from this Chertoff fellow as we follow his post-911 career.
Continuing…
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The U.S. government considers Osama bin Laden the prime suspect in the Sept. 11 terror attacks on the World Trade Center and Pentagon.
His al-Qaida network has built a fund-raising operation using Islamic charities and relief organizations that attract money from wealthy donors.
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Not surprisingly, most of these US-based foundations and charities were founded and funded by wealthy Saudis with the intent on promoting the extreme forms of Islam around the globe. The particular Islamic charities, think tanks, and foundations investigated in Operation Green Quest are a big component of the story behind 9/11, and understanding just who’s promoting them and why is critical to understanding 9/11.
Continuing…
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Al-Qaida moves its money through front companies and in suitcases stuffed with cash, and by using the ancient, informal banking network known as "hawala" that is popular in the Middle East and south Asia.
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It’s worth noting, given recent port ownership controversies, that it was the United Arab Emirates' informal network of hawalas that came under particular scrutiny after 9/11.
It’s also worth noting that, when one reads into history of crime and questionable behavior, whether it is terrorism, cronyism, government and business fraud, or whatever malevalence you can think of, nearly every case involves an “informal network” of some type of another. While not all informal networks are criminal (and the vast majority of hawalas are not not criminal), they’re are a common vehicle through which influence is conveyed in the behind-the-scenes world where politics, money, and power intersect. For example, Khalid bin Mahfouz, the Saudi billionaire and general international man of mystery, is a walking, talking informal network. From terror financing (especially with the various Saudi charities involved), US-Saudi covert operations (think Iran Contra and BCCI), and Bush family dealings (Harken Energy, for example), Khalid bin Mahfouz, his money, and numerous associates have been there.
Continuing…
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"It's a tough nut to crack," acknowledged Deputy Treasury Secretary Ken Dam. Federal officials said hawala brokers operate in the United States, but wouldn't say how many or where.
President Bush has ordered assets blocked of 66 individuals and organizations suspected of conducting or financing terror, including bin Laden and his senior aides. Since the attacks, 152 countries have now joined the effort to disrupt terrorist funding, with 81 issuing blocking orders.
Roughly 30 people from various federal law enforcement agencies will be reassigned to the project, to be run out of a Customs Service command center. A senior Customs official will serve as director, a senior IRS official will be the deputy, and a senior FBI official will be on staff, as will two Justice Department prosecutors.
Over time, roughly 200 law enforcement experts involved in the "El Dorado" anti-money-laundering task force in New York will refocus their work on the terrorists' money trail, officials said. The 9-year-old task force, which includes people from Customs, FBI, IRS and state and local law enforcement, has produced more than 1,000 arrests and $425 million in seized assets.
The team will serve as the investigative arm for the Treasury's office that freezes financial assets and for a newly created center that has brought together intelligence, law enforcement and financial regulators to chase terrorist money.
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Ok, so to review, on October 25, 2001 the government set up Operation Greenquest, a multi-agency task force designed to coordinate the terrorist-financing investigations amongst the multiple agencies involved. It will serve Treasury Department’s investigative arm and is located out of a Customs Service command center. Senior officials from Customs the IRS, both of which fall within the Treasury Department, will serve as director and deputy director, with a senior FBI official and two Justice Department prosecutors on staff.
But hold on now...wasn’t the Foreign Terrorist Asset Tracking Center (FTATC) also primarily a Treasury Department-run multi-agency unit set up to investigate terror financing and coordinate the activities of all government agencies involved? Yep, and it appears there wasn’t too much conflict between the two, since the belatedly-launched FTATC quietly languished in understaffed obsolescence until November of 2002, when Congress renamed it the Foreign Terrorist Asset Tracking Group, and transferred it to the CIA. From an excellent January 2005 report by the Center for Contemporary Conflict we find:
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A number of bureaucratic battles developed in the aftermath of the September 11 th attacks. The Treasury Department was at the center of most of them. Within the Treasury Department, the Office of Foreign Asset Control (OFAC) was hastily made the home of the Financial Assets Tracking Center, established and funded in fall 2000, but it was only established three days after the September attacks. It initially was made up of the same agencies as Customs’ Operation Green Quest. FTATC never fully functioned at Treasury, and the CIA essentially took over the operation. This fact was made official by November 2002, when the Bush Administration renamed it the Foreign Terrorist Asset Tracking Group and made it an independent entity administered by the CIA. Since its move to the CIA, the Treasury Department has not detailed any analysts from Treasury to FTATG. Treasury’s Financial Crimes Enforcement Center (FinCEN) also does not detail analysts to FTATG. FTATG now functions as a targeting arm of the PCC, but it appears to have a low priority within the Administration, as it had been without a director for five months as of August 2004.[84]
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So we have two Treasury Department-run multi-agency units created within months of 9/11, one of which dies a quiet death a year later. Is this the extent of the bureaucratic messiness involved with the terror-financing investigation? Certainly not. Let’s take a quick look at this overview from the same Center for Contemporary Conflict report on the various terror-financing units set up in the wake of 9/11:
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U.S. Counter-Terrorist Financing Efforts after the 9/11 Attacks
The shock of the September 11, 2001 attacks caused radical changes in the way the U.S. framed and managed the issue of terrorist financing. Within days, federal bureaucracies came together to act collectively to understand the financial basis of the attacks. Agencies immediately established new units to work the problem, and agreed to interagency cooperation. The FBI, which was harshly criticized in the 9/11 Commission Staff Monograph for its failures prior to 9/11, established an interagency Financial Review Group within days of the attacks. This group became the Terrorist Financing Operations Section (TFOS). It focuses on ensuring that the U.S. develops a real-time financial tracking capability for urgent financial investigations and that each terrorism investigation has a financial component. Most importantly, for the first time it coordinates in a single office the FBI’s counter-terrorist financing efforts.[78] The U.S. Customs established Operation Green Quest to investigate terrorist financing. The Justice Department reallocated resources from other areas after 9/11 to create a unit devoted to pursuing and coordinating terrorist financing criminal investigations nationwide.[79] In 2003, a FBI-led Joint Terrorism Task Force combined the investigative efforts of the FBI, Justice Department, Customs (now under the Department of Homeland Security) and the IRS. Within a week of the September 11 attacks, the CIA had created a new interagency section to develop long-term intelligence on terrorist financing, track terrorists and disrupt their operations.
The NSC set up an ad hoc structure immediately after the attacks, which was replaced by a Policy Coordinating Committee (PCC) on Terrorist Financing in March 2002.[80] The PCC was chaired by the Treasury Department Office of Legal Counsel until November 2003, and owing largely to General Counsel David Aufhauser’s personality, was able to overcome differences.[81] The Treasury’s lead on counter-terrorist financing came under fire from an Independent Task Force on Terrorist Financing of the Council on Foreign Relations, which insisted that the NSC must take the lead on the PCC because of diplomatic and intelligence aspects of counter-terrorist financing. The Independent Task Force also recommended that the Administration needed to designate a single point person for terrorist financing in the NSC to chair the PCC in order to insure the requisite level of priority and integration with the government’s broader counterterrorism strategy.[82] The 9/11 Commission staff also reported that the PCC was not well integrated into the U.S.’ broader counterterrorism effort, particular with regard to Saudi Arabia, a criticism loudly echoed by the Council on Foreign Relations Independent Task Force.[83]
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Ok, so multiple agencies set up their own multi-agency units (sometimes multiple multi-agency units) to better coordinate the multiple agencies involved in investigating terror financing. What could possibly go wrong? A lot, unfortunately.
Fortunately, much did go right, and a great deal was learned about the financial and institutional networks that feed the beasts of terror. And of all these task forces, the most relevant (and revealing) unit to follow is the Operation Greenquest task force. We’ll be spending much of the rest of these essays on the story that emerges out of Operation Greenquest’s findings, because few elements of the 9/11 investigation are more illuminating about why terror-financing is such a touchy topic in DC. At the same time, by following the money, we’ll learning quite a bit about the roots of modern militant Islam, whose been promoting it, and what they gain from it. As with so much in our lives, there is far more to this story, and our world, that meets the eye. It’s also an incredibly important part of our history with profound implications so keep reading!
