U.S. claims to disrupt al Qaeda funds

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By Sean Lengell

The U.S. government has made major strides in disrupting al Qaeda's funding network, as the terrorist group is in its worst financial shape in years, a senior Treasury Department official said Monday.

But David S. Cohen, assistant Treasury secretary for terrorist financing, cautioned that al Qaeda still has the capability to refill its coffers quickly, and he said a more thorough dismantling of the group's fundraising network will require greater cooperation from the international community.

The Treasury Department - by targeting donors, fundraisers and facilitators of terrorist groups in the U.S. and abroad - has been able to partially choke the flow of money to such outfits as al Qaeda, the Palestinian group Hamas and Lebanon's Hezbollah, Mr. Cohen said.

"These targeted financial measures, used alongside our other national security and law enforcement tools, have had a significant disruptive impact on terrorist-financing networks," Mr. Cohen told a joint conference of the American Banking Association and American Bar Association.

The department's anti-terrorism efforts have been particularly successful against al Qaeda, which made four public pleas for funds during the first six months of this year - including a June appeal when a group leader complained that a money shortage was hurting recruitment and training, Mr. Cohen said.

"We assess that al Qaeda is in its weakest financial condition in several years, and that, as a result, its influence is waning," he said. "This success is important. It is a sign we are moving in the right direction."

But Mr. Cohen said Treasury officials "were not taking any victory laps" because there still exists a pool of replacement donors ready, willing and able to assist the network that masterminded the Sept. 11, 2001, attacks.

"We have at least temporarily disrupted some of the most significant facilitation networks between these donors and al Qaeda," he said. "But we have not yet dissuaded nearly enough donors from wanting to give in the first place."

To do so, he said, will require increased assistance from U.S. partners in the Persian Gulf, Southeast Asia and elsewhere.

Mr. Cohen added that several other terrorist organizations - particularly the Taliban in Afghanistan - are much stronger financially than al Qaeda and continue to pose "serious threats" to the United States and its interests around the world.

Terrorist organizations, including al Qaeda and the Taliban, also appear to be turning increasingly to conventional crime to finance their operations, he said.

The Taliban has raised money by extorting poppy farmers and heroin operators and smugglers, as well as demanding protection payments from legitimate businesses, he said.

Yet as terrorists turn to selling narcotics, pirated films, music and computer software; extortion; arms trafficking; and other illegal means to generate revenue, they are more vulnerable to detection by international law enforcement agencies, Mr. Cohen said.

And as terrorist groups increasingly use the financial system to receive or launder money, banks and other financial institutions are better positioned to identify them.

"There is now a greater opportunity [for the financial sector] to provide us with actionable information that permits us to understand better how terrorist networks form, raise revenue and move their money," Mr. Cohen told the bankers and lawyers.

Many foreign financial institutions also voluntarily use the U.S. government's terrorist-designation list in their filtering software, policies and procedures to help catch individuals and organizations who funnel money to terrorists, he said.