How Homeland Security Combats the Financing of Terrorism Research Paper

Pages: 11 (3643 words)  ·  Bibliography Sources: 1  ·  Level: Master's  ·  Topic: Terrorism

Financing Terrorism: America's Unique Position In Blocking Such Efforts

Aside from issues in foreign policy and tense international relations, arguments about oil, and other factors which contributed to 9/11, the destruction of the World Trade Center would not have occurred if there hadn't been entities to back such an attack. While most civilians don't consider the practical and financial issues in connection to terrorism, they are incredibly real and incredibly immediate. Without proper funding, there would be no terrorism. Financial institutions in the United States play a major role in the government's ability to combat these actions.

Harnessing the power of financial institutions has been one tactic that the government has taken to thwart terrorist operatives and the people who back them; in fact the government has lauded these institutions and the concerted efforts they have made time and again in actively seeking to help stop terrorist projects from being funded. However, one of the major issues with the current regulatory system was that it was designed to catch criminal in the realms of money laundering and drug trafficking -- as these criminals are generally trying to move a great deal of cash through the financial system (unt.edu). Banks can easily report red-flag information of this nature on to the government. "For terrorist financial transactions, the amount of money is often small or consistent with the customer's profile (such as a charity raising money for humanitarian aid) and the transactions seemingly innocuous. As a consequence, banks generally are unable to separate suspicious from legitimate transactions" (unt.edu). This quote demonstrates the inherent difficulty in flagging such transactions; terrorist organizations don't make transactions that offer up the telltale signs that the government is used to seeing.

Thesis: Finding viable ways to stop or prevent terrorist funding is a crucial but flawed endeavor. This endeavor often means a sacrifice of personal privacy of Americans through the co-partnering of financial institutions. This is an absolute necessity, but it comes at a high price. At the same time, the predictability of this maneuver has led terrorist groups to aptly adapt, finding ways to fund their attacks that are largely untraceable. Thus, the task of thwarting terrorist operatives is a constant game of cat and mouse, with the U.S. government being forced to repeatedly adapt to the changing tactics and strategies of terrorist organizations.

Targeting Financial Institutions

This means that in order for financial institutions to most effectively help governments, they need to be able to offer up the most useful information, information that is different from that of organized crime. Banks are thus most helpful to the government by collecting accurate info about potential clients who aid terrorist and giving it to the government. "At the same time, the government should strive to provide as much unclassified information to financial institutions as possible" (unt.edu).

Soon after September 11th, the Bush administration began a secret program to gain access to financial records from a range of sources such as vast international databases, scrutinizing banking transactions involving hundreds and thousands of Americans in the nation. Naturally, this program is exclusive to individuals who have ties to Al Qaeda or who are thought to have ties to Al Qaeda. This intelligence was found "by reviewing records from the nerve center of the global banking industry, a Belgian cooperative that routes about $6 trillion daily between banks, brokerages, stock exchanges and other institutions. The records mostly involve wire transfers and other methods of moving money overseas and into and out of the United States. Most routine financial transactions confined to this country are not in the database (Lichtblau & Risen, 2006). This program was part of the "new normal" in protecting homeland security, and worked as a strategic tool in countering domestic and foreign terrorism, and was also a valuable tool in capturing a major player in Al Qaeda in Southeast Asia (Lichtblau & Risen, 2006). This organization was extremely lauded, in spite of its short-comings. The program was run out of the Central Intelligence Agency and was looked over by the treasury department, offering a pertinent snapshot into the inner workings of all terrorist networks, particularly how they're funded (Lichtblau & Risen, 2006).

While it's necessary to take aggressive actions in blocking terrorist organizations from having their projects set into motion, there's still note that the program marked an extremely bold (and some say brazen) use of the President's economic powers. With that said, there are still safeguards in place to prevent an unfair search of the records of average Americans. "The program, however, is a significant departure from typical practice in how the government acquires Americans' financial records. Treasury officials did not seek individual court-approved warrants or subpoenas to examine specific transactions, instead relying on broad administrative subpoenas for millions of records from the cooperative, known as Swift" (Lichtblau & Risen, 2006).

With such aggressive action comes a need to address certain pertinent concerns about legal and privacy issues, in spite of the necessity to take aggressive actions against terrorism. As experts acknowledge, there is a pretty enormous capability to use this information for good and to preempt terrorist efforts before they start; at the same time such actions are incredibly disturbing as the potential for abuse is so high (Lichtblau & Risen, 2006). This agency is distinct even from the National Security Agency's efforts to listen in on domestic phone calls without warrants -- a fact which is highly controversial in and of itself. This demonstrates a constant criticism (or as some say, a "necessary evil") of the effort to thwart terrorist financing. The government may feel compelled to step on certain civil rights of Americans in the name of keeping the country safe. This theme will be explored again in the need to vet passengers during air travel.

Understanding the Bank Role of Terrorist Organizations

For many people, it's surprising to find out that charity organizations have historically been a huge financier of terrorist funding. Donations from actual charities and wealthy individuals have long been responsible for fiscally supporting terrorist groups (Kaplan, 2006). In fact, according to a 2002 CFR Task Force Report, funding for Al-Qaeda was largely based on charitable donations and rich donors: while a more recent report demonstrates that the Saudi Arabian government has worked hard to disrupt terrorist financing in the nation, charities are still major players in bankrolling terrorist groups (Kaplan, 2006). "In the Islamic world, there are tens of thousands of charities,' says Robert O. Collins, coauthor of the new book Alms for Jihad. While as few as a hundred may sponsor terrorism, 'these are some of the wealthiest charities,' Collins says. Experts say some of these organizations raise funds with the express intent of supporting terrorists; others seek to promote Islam through legitimate programs, but can be coopted by jihadists who then use the funds to promote their own radical cause" (Kaplan, 2006). The fact that charities bankroll terrorist groups generally seems bizarre to most Americans; however, to those who practice Islam, the connection is more "reasonable." For instance, one of the pillars of Islam (zakat) refers to the requisite giving of a set proportion of one's wealth to charity (Kaplan, 2006). The bulk of these charities are around to provide assistance to the poor and to communicate Islam to the country, though, some of them are used to finance terrorists.

This means that the United States has a truly formidable task in attempting to weed out charities which do good work from those which finance terrorism. As Lee Wolosky, a former National Security Council official describes, there are corrupt charities and then there are benevolent charities with corrupt people working for them: discriminating between the two is often a formidable task for the government to even attempt, though making this attempt is absolutely crucial. Yet the, conundrum remains the same: the U.S. Treasury Department has been accused of shutting down charities that critics have waged actually have no ties to terrorism, just as the government has been harshly criticized for infringing on the privacy of individual Americans in the name of keeping the country safe (Kaplan, 2006). Critics of this movement see the U.S. As stomping around the international playing-field, shutting down and annihilating charities which have rather tenuous ties to terrorism. For instance, America received a great deal of flack for shutting down Interpal, but the country remains unapologetic, even if the foreign community is out-raged (Kaplan, 2006).

One of the aspects of the financial backing of terrorism that is too easy to forget is that every terrorist act is the result of millions and millions of dollars in investment into the structure and development of the terrorist movement over a period of years. "Media sources have often stated that the September 11th attacks cost the Al-Qaida terrorists a mere $250,000 to $500,000. In reality, however, the few hundred thousand dollars used for flight training, reconnaissance, transportation, and box cutters represent only a small portion of the funds spent by Al-Qaida on terrorist activities" (Ehrenfeld, 2003).… [END OF PREVIEW]

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