Osama's gold

Editorial, Washington Post, Friday 18 October 2002

[Publisher's note: This article appears to be in reality a statement by the U.S. government.]

WHEN THE PENTAGON wanted an attack-proof communications network, it designed the Internet. The Net's key defense mechanism was redundancy: There would be several paths connecting the sender of a message to its recipient, so an attack on one or two paths wouldn't disrupt the message flow. Unfortunately, the Pentagon is not alone in grasping this principle; al Qaeda's financial network is based on redundancy also. The terrorists move money around through the Western banking system, the Islamic banking system and the traditional hawala system; they pack cash into suitcases and haul gold over mountain passes and traffic in diamonds. This complex network, connected to a diversity of money sources, has given al Qaeda the resilience to survive successive expulsions from Sudan and Afghanistan. Rather than depending on the largess of state sponsors, al Qaeda is rich enough to turn the tables: It is a sponsor of states.

In the wake of 9/11, President Bush resolved to go after al Qaeda's money network. We will starve the terrorists of funding, Mr. Bush declared. The administration has since designated 241 individuals and organizations as terrorist and frozen $112 million in assets belonging to these groups. It has enlisted the support of allies; the Treasury says that 166 nations have taken action against terrorist accounts. The administration has even sent four dozen teams of advisers to countries that lack the legal framework or technical competence necessary to locate and freeze al Qaeda's cash.

One year into this commendable effort, a Council on Foreign Relations task force has reported that the administration could do more. It suggests that the administration make use of the enhanced power, created by last year's USA Patriot Act, to go after suspect accounts abroad. Before the act's passage, the administration was required to designate a bank for terrorist connections, a drastic step that's often hard to justify without compromising intelligence sources. The Patriot Act allows the Treasury to nail probable terrorist financiers for the more easily proven offense of complicity in money laundering. But the administration has yet to use this option. Now that it has announced most of the terrorist designations that it can justify, it must be prepared to move into a new phase of targeting suspect institutions under the Patriot provision.

The task force also recommends that the administration give its financial offensive a higher profile, perhaps by creating a terror-finance czar in the White House. Whether or not yet another czar is desirable, it's true that governments such as Saudi Arabia's won't do what's needed to clamp down on terrorist money unless they feel that no less a person than the president is demanding it of them. So far, Mr. Bush has shrunk from publicly denouncing the Saudi monarchy for tolerating money flows to al Qaeda, even though the kingdom remains al Qaeda's biggest source of funds. No doubt this is because Saudi cooperation is needed on other issues, from the Iraq war to the Organization of Petroleum Exporting Countries. Yet Mr. Bush has shown that you can talk tough to the Russians on missile defense while still cooperating with them on other issues. There is no reason the Saudis should be spared a similar approach.