Lieberman Questions Why Progress to Stem Flow of Money To Terror Groups Has Not Been More Successful

WASHINGTON – Governmental Affairs Committee Ranking Member Joe Lieberman, D-Conn., said Tuesday progress has been made to choke off funds to terrorist organizations but he questioned whether uncertain leadership, turf battles, and the close relationship between the U.S. and Saudi Arabia have prevented even greater progress. Following is a copy of the opening statement he made at a Governmental Affairs Committee hearing on the financing of terrorist groups.

Thank you, Chairman Collins, for convening this hearing about one of the more important battlefronts of our war on terror – the effort to stop the funding of terrorists. If we can succeed in choking off the money that sustains terrorist activities, we can literally reduce the death and destruction terrorists cause. The Council on Foreign Relations in its report today has done a real service. The report should help us refocus, reexamine, and redouble our efforts to cut the flow of money to international terrorist groups. And that includes taking a hard and demanding look at financial support for terrorism from Saudi sources. Immediately after 9/11, the President signed an executive order aimed at blocking terrorist funds. Our question today is, what progress has been made since then? It’s clear that in the first few months following the President’s announcement, there was very significant success. Over $100 million in terrorist money was blocked or frozen around the world. But in the two years since then, only $30 million has been blocked. So, both the U.N. Monitoring Group on Terrorist Financing and the General Accounting Office concluded at the end of 2003 that American efforts sadly have not stemmed the flow of money to terrorist groups. We will want to ask our witnesses today why this has happened and what we can do to ensure that we do cut off the flow of money. The CFR report suggests one surprising possible cause: the Administration has used new authorities under the Patriot Act to crack down on the assistance of foreign financial institutions for terrorism only one time – and that was quite recently against a Syrian bank. Why? Secondly, the Council’s report tells us that leadership of America’s efforts to block terrorist funding has bounced around among the National Security Council, the Treasury Department, and the FBI. There have been five different people in charge since September 11th. This uncertainty may have undermined the coordination and effectiveness of our anti-terror financing efforts. Leadership has now shifted to the National Security Council – although not through any formal process that would give it continuity and institutional permanence. I do also note that one of our witnesses today, former Treasury Department General Counsel David Aufhauser, believes that this leadership role should reside at Treasury instead. And I’m interested in hearing his views on this matter. But either way, whether it’s placed at Treasury or at the NSC, leadership must be made certain and must be institutionalized; it should no longer be left to ad hoc and uncertain arrangements. The joint Intelligence Committees’ inquiry into September 11th told us that the tendrils of Bin Laden’s terrorist network extend into as many as 60 countries. That means our war against the network and those who finance it must be just as extensive. In working to cut off funding for terrorism, Saudi Arabia is a necessary focus of attention. Bin Laden was a Saudi. But more importantly, 15 of the 19 September 11th hijackers were Saudis. And questions remain about financial connections between Saudi money and terror funding in the U.S. Before the May 2003 terrorist bombings in Riyadh, many independent analysts – including the CFR – have told us that Saudi officials talked the talk on cooperating with U.S. investigators but then, in many cases, didn’t walk the walk but turned “a blind eye” to Saudi money going to organizations directly or indirectly supporting terrorism. Today’s CFR report points encouragingly to positive signs of intelligence sharing and law enforcement cooperation between the Saudis and the U.S., again, particularly since the May 2003 bombings in Riyadh. And it says there is evidence that actions taken by the Saudi government since May 2003 have hindered Bin Laden’s financial operations and forced foreign-based terror groups to begin to try to raise their funds locally. That cooperation between the U.S. and Saudis is important and must grow. In fact, a joint, U.S.-Saudi task force was established last August to help the Saudis clamp down on terror financing. But the Council report tells us, jarringly, that the work of the task force has not led to one public arrest or prosecution of anyone in Saudi Arabia for financing terrorism. And that is hard to understand, particularly when the CFR names two Saudis, Yasin Qadi and Wa’el Hamza Jalaidan, who have been declared financiers of terrorism by the U.S. government. So, Madam Chairman, while we have made some progress in tracking and stopping terrorist financing, we in Congress still need to consider whether our urgent need to “starve the terrorists of funding” is being hampered by uncertain leadership, turf battles, and our special relationship with the Saudi ruling family. The CFR Report and today’s hearing, I hope, will begin to give us some answers to these critical life and death questions. Thank you.