Some in the new Congress want to ban the term “global war on terror.” They argue that there is nothing global about America’s efforts to combat terrorists — only separate wars in Iraq or Afghanistan. Perhaps nothing better demonstrates the folly of such a change in the concept of America’s mission than the highly effective financial front in this war. It has operated globally from the start, and that is why it has been so effective. What is the financial front? When did it start? It was launched just after 9/11 when President Bush gave the order to freeze terrorists’ assets and the rest of the civilized world followed suit. As the President emphasized it was “the first shot in the war,” because the military action in Afghanistan did not begin for another two weeks.
This new financial front soon expanded, providing valuable intelligence about global terror networks and even helping to combat nuclear proliferation in North Korea and Iran (as I will explain in a follow-up article.) As the head of the international division at the U.S. Treasury on 9/11, I was present at the launch of this new front. Looking back, we can learn useful lessons about why America’s focus must remain global if we are to continue to be successful in preventing terrorist attacks.
President Bush decided immediately after 9/11 that disrupting the financing of terrorists would be a very high priority. Under U.S. law, the President had the authority to call on U.S. financial institutions to freeze the accounts of terrorists. In the years before 9/11, that law had not been used very aggressively. As described later by the 9/11 commission, “Terrorist financing was not a priority…there was little interagency strategic planning or coordination….The then-obscure Office of Foreign Assets Control (OFAC), the Treasury organization charged by law with searching out, designating, and freezing Bin Laden assets, lacked comprehensive access to actionable intelligence and was beset by indifference of higher-level Treasury policymakers.”
Our first priority, therefore, was to end the indifference and define the mission. We made it clear that there were two purposes of the fight against terrorist financing. The first was to freeze terrorist assets globally and thereby disrupt the flow of funds to the terrorists and thwart future terrorist attacks. The second was to trace the flows of terrorist funds around the world and thereby get information about terrorists.
Global coordination was absolutely essential to the success of the operation. If other countries did not follow U.S. leadership, terrorists could thwart the effectiveness of a freeze in the United States by moving their money to other countries. No mechanism for coordination existed at the time, so we mounted a global diplomatic effort. We called finance ministers around the world, we asked for their help, and we got it. As a Wall Street Journal headline writer put it: "Global Allies Answer U.S. Calls to Freeze Assets Suspected of Terrorist Operations."
President Bush announced the first freeze in the Rose Garden on September 24, and his words sent an important message to terrorists and to the team at Treasury. “Today, we have launched a strike on the financial foundation of the global terror network….the American people must understand this war on terrorism will be fought on a variety of fronts, in different ways….It is a war that will require the United States to use our influence in a variety of areas in order to win it. And one area is financial.”
In order to keep track of other countries’ commitments, we created a special terrorist finance unit at Treasury. This “war room” was jammed with people, computers, phone banks, work tables, and copying machines. A sophisticated computerized tracking system showed how many freezes each country joined in, how much they froze, and so on. The system, developed in a matter of weeks, was the only global tracking system available anywhere.
What were the results? A total of 172 countries and jurisdictions issued freezing orders, 120 countries passed new laws and regulations on terrorist financing, and 1,400 accounts of terrorists were frozen world wide. The total value of frozen accounts was about $137 million, much of that in the fall of 2001. But more important, we were following the money and preventing terrorist attacks.
One of the most effective efforts was a new program to obtain information from a global messaging service called SWIFT (Society for Worldwide Interbank Financial Telecommunication.) It was a highly classified intelligence operation. Using the information from SWIFT, intelligence experts could map terrorist networks.
The program was not easy to set up internationally. SWIFT is overseen by central banks around the world, and to get their cooperation an elaborate system to limit access to the data was set up. The system required subpoenas showing a terrorist connection, with independent audits of the subpoenas. In the end, international agreement was achieved and security was maintained for five years after 9/11.
Unfortunately last summer several newspapers published stories about the SWIFT program after someone leaked it. Those of us involved in creating the program in 2001 were dismayed and disappointed, realizing that knowledge by the terrorists of the methods used would compromise the program’s effectiveness and threaten the hard-earned global cooperation.
Even with such setbacks, the war on terrorist financing remains effective. As a report sponsored by the Council on Foreign Relations put it: “The general willingness of most foreign governments to cooperate with U.S.-led efforts to block the assets of designated persons and businesses with ties to terrorist financing has been welcome and unprecedented.” And the 9/11 Commission gave it the only grade in the A range.
Why the success? First, from the start the mission was global in its scope. Second, dedicated teams of highly-skilled motivated people — including those in the Treasury War Room — had a deep sense of the mission. Now would be a terrible time to take that mission away.