International Security Studies
The Money Trail: Finding, Following, and Freezing Terrorist Finances
This event, co-sponsored by Council on Global Terrorism, Georgetown University's Center for Peace and Security Studies and the Center's Middle East Program, is part of International Security Studies' ongoing Terrorism and Homeland Security Forum.
For terrorist groups, such as Al Qaeda, the ability to raise, launder, transfer, store, and gain access to funds is essential. Since the September 11 attacks, combating the financing of terrorism (CFT) has been a strategic priority for the U.S. government. Matthew Levitt, the former head of the Treasury Department's terrorism and financial intelligence branch and co-author of a recent study on this issue by the Washington Institute for Near East Policy, discussed the role of this important tool as part of a comprehensive counter-terrorism strategy and the impact of the changing global terrorist threat on terrorist financing.
Levitt observed that after every major terrorist attack, the utility of financial investigative tools has been reaffirmed. Financial data provided essential leads to investigators after the 9/11 attacks, as well as the bombings in Madrid (2004) and London (2005). The ability to track and hold accountable those who might be inclined to support financially terrorist groups can have a deterrent effect. Linking money flows to specific individuals can provide essential preventive intelligence. Although terrorism does not require large sums (the 9/11 plot cost about $500,000), it nonetheless requires some money. Levitt underscored the importance of CFT as a disruptive tool that makes it more difficult for terrorists to travel or procure the materiel to mount an attack. By "constricting the operating environment," CFT is an essential component of a counter-terrorism strategy.
Levitt argued that the traditional metrics of CFT – how much money has been frozen, and how many entities have been designated – is misleading. As the character of the terrorist threat evolves, the key to successful CFT is to target the chokepoints: the "key nodes in matrix of terror financing" – for example, where financial and logistical support networks interest. In mounting an effective strategy, counter-terrorism officials need to understand how these ad hoc relationships (often based on personal connections with no official or institutional links) work. "The overall strength and effectiveness of the war on terror," Levitt stated, "is undermined by the failure to appreciate these overarching connections." He advocated greater engagement between the public and private sectors to increase and improve information-sharing.
In fashioning a comprehensive counter-terrorism strategy (in which constricting the operating environment through CFT is one dimension), Levitt stressed the importance of distinguishing between terrorist operatives and supporters. The latter should be the target of a counter-radicalization strategy – the "battle of ideas" – to separate them from hardcore radicals intent on perpetrating terrorist attacks.