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U.S. Cracks Down on Financial Networks Linked to Terrorists

Aired November 7, 2001 - 13:41   ET


JUDY WOODRUFF, CNN ANCHOR: We are watching -- we've been watching President Bush, who is, or at least watching a room where President Bush is due to make a statement just shortly on cracking down on the financial networks that support terror networks: in particular, al Qaeda and the Osama bin Laden organization. The president has been touring something called the Financial Crimes Enforcement Network. This was a little-known and little-talked-about arm of the Department of Treasury that existed before September 11th, but only now has it begun to get some attention. We are told the president, our John King has been reporting, because he's gotten this information from senior government officials, the president is going to talk about two financial networks in particular that have benefited the al Qaeda network and talk more generally about the government's efforts to crack down on the source of money.

As we know, the president from the very beginning has said the war on terrorism, it's not just preventing a future terror attack, it's not just the military campaign over Afghanistan. It is also drying up the money, the financial resources that go to these terrorists and their organizations that allow them to carry out these elaborate schemes.

We know that the terrorists who operated in the United States for months before the attacks on September 11th had an enormous amount of money, upwards of several hundred thousand dollars. In order to get that money, they had to have banks and other organizations that were working with them.

Again, President Bush, we are expecting to see him in just a moment now. This is a room -- I believe this is a room at the Tyson's Corner Treasury office. And this is in suburban Virginia, just outside of Washington.

They told us it was going to be two minutes. Evidently, it's not. So while we wait, we'll take a break and be right back.


WOODRUFF: President Bush now making an appearance to talk about the Treasury Department's efforts to crack down on the financial networks that benefit the terrorist organizations. Let's listen.

(JOINED IN PROGRESS) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... against terror on every front, from the mountains of Afghanistan to the bank accounts of terrorist organizations.

The first strike in the war against terror targeted the terrorists' financial support. We put the world's financial institutions on notice: If you do business with terrorists, if you support them or sponsor them, you will not do business with the United States of America.

Today, we are taking another step in our fight against evil. We are shutting down two major elements of the terrorists' international financial network, both at home and abroad.

Ours is not a war just of soldiers and aircraft. It is a war fought with diplomacy, by the investigations of law enforcement, by gathering intelligence, and by cutting off the terrorists' money.

I want to thank Secretary Paul O'Neill for being here today and for being the leader of this fine organization. I want to thank the director, Jim Sloan (ph), as well. Doing some imaginative work here at the Financial Crimes Enforcement Network, and I want to thank all the fine Americans who are on the front line of our war, the people who work here.

I want to thank Secretary Colin Powell for being here as well.

He's doing a magnificent job of stitching together one of the greatest coalitions ever, a coalition of nations that stands for freedom.

And I want to thank our attorney general for coming; the man whose job it is to make sure that any time we find anybody inside our country you will threaten an American, threaten our institutions, they will be brought to justice, and that's exactly what our nation is doing.

Acting on solid and credible evidence, the Treasury Department of the United States today blocked the U.S. assets of 62 individuals and organizations connected with two terrorist-supporting financial networks; the Al Taqwa and the Al-Barakat. Their offices have been shut down in four U.S. states, and our G-8 partners and other friends, including the United Arab Emirates, have joined us in blocking assets and coordinating enforcement action.

Al Taqwa is an association of offshore banks and financial management firms that have helped Al Qaeda shift money around the world. Al-Barakat is a group of money-wiring and communication companies owned by a friend and supporter of Osama bin Laden. Al Taqwa and Al-Barakat raise funds for Al Qaeda. They manage, invest and distribute those funds. They provide terrorist supporters with Internet service, secure telephone communications and other ways of sending messages and sharing information. They even arrange for the shipment of weapons.

They present themselves as legitimate businesses, but they skim money from every transaction for the benefit of terrorist organizations. They enable the proceeds of crime in one country to be transferred to pay for terrorist acts in another.

The entry point to these networks may be a small storefront operation, but follow the network to its center and you discover wealthy banks and sophisticated technology, all at the service of mass murderers.

By shutting these networks down, we disrupt the murderer's work. Today's action interrupts Al Qaeda's communications. It blocks an important source of funds. It provides us with valuable information, and sends a clear message to global financial institutions: "You are with us, or you're with the terrorists. And if you're with the terrorists you will face the consequences."

We fight an enemy that lies in caves in Afghanistan and in the shadows within our own society, an enemy who can only survive in darkness.

Today, we've taken another important action to expose the enemy to the light and to disrupt its ability to threaten America and innocent life.

I'm proud of the actions of our agencies. We're making a difference. We're slowly but surely tightening the noose, and we will be victorious.

Now it's my honor to welcome the secretary of treasury, Paul O'Neill.


PAUL O'NEILL, U.S. SECRETARY OF TREASURY: Thank you. Mr. President, Secretary Powell, Attorney General Ashcroft, I'm pleased (inaudible) global terrorism, the Foreign Terrorist Asset Tracking Center. It's here that we marshal the combined assets of law enforcement, intelligence and public databases to identify, track and disrupt the flow of money to terrorists.

This ongoing task requires patience and sophisticated means, because the financial supporters of terror hide in offshore havens of secrecy, disguise their true identities and masquerade as legitimate businesses, while directing their profits to underwrite enterprises of hate and violence.

They also know that we are watching, and for that reason they try to funnel their money through undocumented, unregulated financial networks constructed to bypass the civilized world's detection. But their system is imperfect.

Somewhere it must always interface with modern banking and finance. When that connection is made, we have the wherewithal to intervene.

And thanks to the cooperation of allies and coalition partners, cemented by the good work of Secretary Powell, we have begun to act to block assets; to seize books, records and evidence; and to follow audit trials to track terrorist cells poised to do violence to our common interests.

With the president's leadership, the Department of Justice, the Department of State and the Treasury Department have eliminated barriers that have hampered past efforts. This new joint effort has borne fruit. In the United States we've blocked $24 million in assets of the Taliban and Al Qaeda, we have an 962 counts under review, we've built an international coalition to deny terrorists access to the world financial system, 112 nations have blocking orders in force and nations around the world have blocked at least $43 million in assets

The announcement the president just made is a significant milestone in this effort, but we will not be finished until we have dismantled the financial network of the terrorists.

And let me also thank you all for the effort that you're making in this war against terrorism.

Thank you very much.

And now it's my pleasure to introduce Secretary of State Colin Powell.


COLIN POWELL, SECRETARY OF STATE: Well, thank you very much ladies and gentlemen. It's a pleasure to be out here this afternoon.

And Mr. President, Secretary O'Neill, Attorney General Ashcroft and Mr. Sloan, I also add my congratulations to the earlier speakers for the wonderful work that is being done here.

It's a pleasure to be here, really, because with this event we build on success; success in starving terrorists of their money. For money is the oxygen of terrorism. Without the means to raise and move money around the world, terrorists cannot function.

Mr. President, your executive order on terrorist financing has been a critical part of our efforts worldwide to deny the terrorists their financial oxygen. We have moved aggressively against the individuals and organizations covered by your executive order.

And with your announcement today, we have taken our efforts to a new level. We are now going after the hawala organizations, the shadowy financial networks that underpin the terrorists' underworld.

Cutting off their financial flows that feed terrorism requires international cooperation on the broadest scale. And I am pleased by the strong support and cooperation that our efforts are receiving.

United Nations Security Council Resolution 1373 requires member states to prevent the financing of terrorist acts, to criminalize the provision of funds to terrorists, and to freeze funds and other assets of terrorists and of their supporters. This is a binding obligation under Chapter 7 of the United Nations Charter. In the past few weeks alone, over 130 countries have committed to implement this crucial element of the campaign against terrorism. But that is not good enough. We are working hard to get 100 percent adherence to Resolution 1373. And to that end, we have named and experienced diplomat, Ambassador Ted McNamara, to lead our efforts around the world to bring the remaining countries on board -- bring them in support of the U.N. resolution.

So far, we and our international partners have frozen millions of dollars in terrorist assets, as you've just heard. Saudi Arabia has been prominent among the countries acting against the accounts of terrorist organizations. We and our partners have millions more in suspect accounts under review. But this is only a beginning. There's more to do and we are doing it.

For example we are pressing all countries to sign and ratify the International Convention for the Suppression of the Financing of Terrorism, a treaty which removes legal obstacles to more effective international cooperation against terrorism.

And I am delighted that Saudi Arabia, once again, has just ratified this convention. We are now working with our United States Senate to gain its consent to our ratification of that treaty.

Mr. President, the coalition against terrorism is strong, and we are making real progress against the terrorists under your leadership. And I can tell you, you can count on your State Department and our many dedicated employees around the world to do their very best in making sure that we will prevail in this campaign.

Thank you so very much.

And now it is my pleasure to present my colleague and friend, the attorney general of the United States, John Ashcroft.


JOHN ASHCROFT, U.S. ATTORNEY GENERAL: It is an honor to be here today with the president and with my colleagues from the Department of State, from the Department of the Treasury, to announce an important new effort in the fight against terrorism.

When the president declared war on terrorism, he promised we would fight the war on many fronts. One of the most important, one of the most crucial fronts is the choking off of the money supply that fuels terrorist organizations.

Today, we have shut down several financial networks exploited by terrorist groups. Piece by piece, we are dismantling the infrastructure of the terrorist network.

The Department of Justice is bringing the full weight of the criminal law against those who fund or launder money for terrorists.

This morning the United States attorney in Boston charged two individuals with operating an illegal foreign money transmittal business. They are alleged to be officers of Barakat-related businesses in Dorchester, Massachusetts.

In addition, in locations across the country, the Department of Justice, the FBI and other federal law enforcement agencies are interviewing individuals and taking other investigative steps in the ongoing criminal investigations of Al-Barakat entities. These steps include executing search warrants on Al-Barakat-related facilities in Massachusetts, Ohio and Virginia.

Our criminal investigation of Al-Barakat-related activities and entities is national in scope and it is ongoing. As today's actions demonstrate, we will use all tools available to us -- administrative tools, civil tools and criminal prosecutions -- to find and uproot terrorists' financial networks. We will not stop until the war on terrorism is won.

Thank you very much. This concludes today's event.

WOODRUFF: President Bush and you might say the top civilian generals In the war on terrorism. There was the secretary of state, secretary -- secretary of state, secretary of the treasury, and the attorney general, all of them supporting the president's announcement that they are shutting down what the president described as two major elements of the terrorist financial network here at home and abroad, announcing that two organizations, the Al Taqwa and Al-Barakat -- if I'm pronouncing it correctly -- organizations have been shut down. They have offices in four states in the United States as well as many, many offices overseas.

For more information, for more detail on what the president had to say, let's turn to our senior White House correspondent, John King, who's been reporting this story all day long -- John.

JOHN KING, CNN CORRESPONDENT: Judy, more than 40 countries involved in all, according to U.S. Treasury Department officials and other documents filed in conjunction with these investigations. The president calling this significant, not only because he said it'd choke off a source of millions of dollars to Osama bin Laden and the al Qaeda terrorist network, but also he said some of these companies -- some are small phone companies, some are Internet companies. He said it was also part of the communications network of the terrorist network. More to be learned when documents are filed in the court cases. But many of those documents, we are told, will be sealed, because the government believes -- the government believes that information is critical to ongoing investigations.

And you heard something significant. We know there have been activities in Switzerland, Liechtenstein, Great Britain, Italy, and Germany. The president also noted the cooperation of the United Arab Emirates, a key Arab nation and a key potential partner in the financial crackdown. And twice, Secretary of State Powell praised Saudi Arabia for cooperating.

There have been reports of tension between the Bush administration and the Saudi government that the administration has consistently denied, saying the Saudis are fully cooperating. The secretary of state seems to be going to great pains to twice thank the Saudis for their support in the financial aspect of the war as well.

The White House believing this is a significant breakthrough. They say the more they investigate the financial operations, the more they learn about a shadowy network of charities, small banks, small businesses around the world. And they believe just the operations of Al-Barakat here in the United States have been over the years a source of tens of millions of dollars to the bin Laden network -- Judy.

WOODRUFF: John, I was struck that the president, in describing this second network -- I believe again I'm pronouncing it correctly -- Al-Barakat, he said it's owned by a friend and supporter of Osama bin Laden. And as you suggested, he went on to describe a wide-ranging operation, not just providing, as you said, secure communications for the al Qaeda network, but providing Internet services, even arranging for shipment of weapons.

KING: And as we learn more about this, we also learn of the potential coming fronts in the war on terrorism. Some of these organizations, like the president noted, in the United Arab Emirates, in Saudi Arabia. Some also in Somalia, where we have been told in the past from U.S. officials that Osama bin Laden has base camps and operations. Certainly, that is not a friendly nation in the war on terrorism, if you will.

So as we learn more from these documents, not only do we learn the names of small companies that the government alleges are nothing more than fronts -- they may be listed as charities or phone companies or small banks or money exchange companies -- the government says they are little more than fronts for terrorism: some of them in places where this campaign might be to expand once the phase in Afghanistan is completed or some administration officials say even as the phase in Afghanistan continues.

WOODRUFF: All right, John King, our senior White House correspondent. Thanks very much.




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