Combating Terrorist Financing and the 110th Congress

On January 30, 2007, Hudson Institute hosted the Honorable Sue Kelly, Former Chair of the House Financial Services Committee’s Subcommittee on Oversight Investigations, Stephen Kroll, Former Democratic Special Counsel to the Committee on Banking, Housing, and Urban Affairs of the U.S. Senate; Lecturer at American University School of International Service, and Andrew Cochran, Senior Vice President of GAGE LLC and Founder and Co-Editor of the Counterterrorism Blog in a panel discussion moderated by Hudson senior fellow Zeyno Baran. Kelly, Kroll and Cochran reviewed past legislative efforts to cut off terrorist financing and made recommendations for the 110th Congress.

(Please click on the speakers’ names for the text of their speeches)

Transcript of the Question and Answer Session

Question:
I have two questions for Congresswoman Kelly. What is being done in regards to informal transfer methods such as hawala and e-gold? I get the feeling we concentrate on the systems we are familiar and comfortable with such as banking. However, a lot of money flows through these informal channels; and, it is my impression that we have made very little progress.

Secondly, prior to 9/11, Hamas raised most of its funding not from Saudi Arabia or the Gulf states, but rather right here in the US. I am interested in your view on the role of the American Muslim organizations that apparently facilitated these transfers.

Sue Kelly:
We had some hearings and talked about these informal systems such as hawala. There is a law here in the U.S. requiring hawala donors to register. We have addressed some of the problem. There are experts who have traced a lot of the shadow funding that can speak to that question better than I. Possibly Andy could give you links to some of that on his website.

I am going to jump to the second question since we are short on time. In my personal opinion, not nearly enough is being done on this issue. I would like to see some very strong, coherent statements from Muslim communities around the world. Until there is some worldwide leadership on the meaning of the Islamic faith, I believe that people can be easily misled, especially young people. If you do not study the Quran and understand the true meaning of the Muslim faith, I think you can be easily misled by terrorists in small madrasas that are dedicated to fomenting violence. I personally believe that we must work with the leaders of the Muslim faith around the world because solutions will only come from an internal structure that they themselves must build. I do not think we have heard nearly enough. Their silence has gone on too long, it is involving too many young people, and, it seems to me, that we have reached a point where we have to make very serious choices. Now is the time for the Muslim leaders to step forward and talk strongly about the seriousness of their faith and the irreconcilability of terrorism and Islam.

Steve Kroll:
I have a quick, technical point. First, we have under-funded and under-resourced our ability to look at the phenomenon of informal money remitters, let alone hawala. Second, as any intelligence officer or any police officer who has ever looked at this knows, this is an incredibly time-consuming task if you are going to proceed by any rules other than to sweep all remitters up and put them all away, which is not particularly productive. Finally, one of the real strategic mistakes that we made was to put the Customs Service and the Secret Service into the Department of Homeland Security. I know that the Department of Home