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U.S. fails to follow terror money trail

Editor’s note: Joseph Farah’s G2 Bulletin is an online, subscription intelligence news service from the creator of WorldNetDaily.com – a journalist who has been developing sources around the world for the last 25 years.

Criminal investigators of all kinds have long believed the best route to solving crimes is by “following the money.”

So far, according to government investigators, U.S. law enforcement and intelligence agencies trying to track the funding sources of international terrorists haven’t done such a good job.

Terrorists, says a General Accounting Office report, use the illicit drug trade, interstate cigarette dealing and charities as principal sources of money-raising in the U.S. According to officials from the ATF, Hezbollah, Hamas, and al-Qaida have earned assets through trafficking in contraband cigarettes or counterfeit cigarette stamps. The report includes a diagram highlighting bootlegging from North Carolina to Michigan with the profits going to Lebanon.

For instance, suspected terrorist and former University of South Florida professor Sami Al-Arian operated the North American branch of the Palestinian Islamic Jihad and used a charity and academic think tank as a front to raise money for the terrorist group. Al-Arian and two others were charged with racketeering. They have denied the allegations and face a January 2005 trial.

The USA Patriot Act was supposed to make money laundering harder to do. It hasn’t, according to a report in Joseph Farah’s G2 Bulletin, an online premium intelligence newsletter published by WND.

Rooting out terrorist money in U.S. banks is proving every bit as difficult as finding Osama bin Laden. Two years after Congress rushed to pass the anti-terrorist legislation in the aftermath of Sept. 11, terrorists, drug lords and other criminals continue to launder funds through U.S. financial institutions. Hundreds of billions more in illicit cash gushed through banks, brokerage firms and the like last year even though they are spending more than $ 11 billion to bolster their internal controls, reports Celent Communications LLC, a financial-research group in Boston.

The law is still hugely controversial. Civil libertarians argue that it infringes on people’s privacy by giving law-enforcement agencies more power to get customer information from banks. It’s a small price to pay if it succeeds, goes the counterargument. But what’s becoming clear is that a major national priority to starve terrorists and others of dirty money – the Sept. 11 hijackers used U.S. banks to transfer funds – is, in fact, failing.

The GAO report also finds turf battles among key agencies, a lack of leadership, the absence of clear guidelines and a failure to identify top priorities are weakening the government’s crackdown on terrorist financing.

Outside analysts said the government’s campaign to cut off money to radical Islamic organizations and other terrorist groups is complicated by their increased ties with traditional organized crime and use of drug trafficking to raise money.

The GAO, the chief investigative arm of Congress, found that money-laundering laws dating to 1986 – and strengthened in the Patriot Act – are being poorly implemented.

“Money laundering provides the fuel for drug dealers, arms traffickers, terrorists and other criminals to operate and expand their activities, which can have devastating social and economic effects,” the report said.

It found that the government’s current strategy “has not served as a useful mechanism for guiding the coordination of federal law enforcement agencies’ efforts to combat money laundering and terrorist financing.”

Among the missing “critical components” cited by the report are “effective leadership, clear priorities and accountability mechanisms.”

Officials with the Justice, Treasury and Homeland Security departments fired back at Congress, saying lawmakers have not given their agencies enough money for the mission.

A separate United Nations report last month criticized the lack of international cooperation in going after terrorist finances. It claimed two men known to be at the center of al-Qaida’s financial network are being allowed to continue operating in Italy and Switzerland.

These findings provide little reassurance about the battle on the financial front in the war on terrorism.

There continues to be lack of cooperation among a multitude of agencies probing the money trail, such as the FBI, the Treasury Department and the Bureau of Immigration. It also would help if congressional Democrats would quit stalling on key executive branch nominations, including the deputy attorney general and the general counsel at Treasury. Both positions are critical to coordinating terrorist financing investigations.

To spot the movement of terrorist funds, the GAO is urging Treasury, the Justice Department, the FBI and the IRS to systematically collect and analyze data from alternative financial services, such as charities and hawalas, unregulated international banking networks. The IRS is developing procedures with states to establish data-sharing systems about charities.

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