Congressional Panel Wants Trump Admin to Tackle Terror Financing

Task force pushes for 'whole-of-government strategy' to cut off funds from terror groups

ISIS fighters
Islamic State fighters / AP
December 22, 2016

Members of Congress want the incoming administration of Donald Trump to develop a "whole-of-government strategy" to combat terrorism financing and cut off illicit revenue from groups like the Islamic State.

The recommendation is included in a year-end report issued Tuesday by the House Financial Services Committee's bipartisan Task Force to Investigate Terrorism Financing, which said U.S. government agencies need to cooperate better with each other, the private sector, and foreign governments to fight terrorism financing and other forms of illicit finance.

"While the government produces studies of the terror finance threat and of money laundering methodologies, absent a requirement for a regularly updated unified strategy, departments and agencies pursue their efforts in ways that can lead to duplication of effort, gaps and general inefficiency," the report stated.

"Given the motivation that criminals and terrorists have to innovate past existing detection and interdiction regimes and the fact they do not need to clear new methodologies through bureaucracies, they often are nimble at developing new channels through which to funnel bad assets," it stated. "A constantly updated strategy will have the added benefit of increasing intra- government networking and awareness of emerging tools that could be used to stop the flow of illicit funds."

Implicit in the recommendations is the suggestion that President Obama and his predecessors have failed to cut off funds to terrorist organizations, as groups like Hezbollah, al Qaeda, and ISIS thrive and develop new capabilities.

Rep. Michael Fitzpatrick (R., Pa.), chairman of the task force, has introduced legislation that would require the president to create a national strategy for combatting terrorism financing and other financial crimes through the Treasury Department.

The bill, which passed the House in July, would compel the new administration to spell out how the U.S. government would coordinate on illicit finance with government bodies and the private sector. It would also direct Trump's Treasury Department to examine the relationship of cyber crime and illicit finance, and how Treasury attachés at U.S. embassies can help foreign governments fight financial terrorism.

One of the congressional panels near-term goals is to pass the bill, along with others introduced by committee members to strengthen the United States' ability to combat terrorism financing.

The U.S. Treasury Department concluded in a risk assessment last year that, despite safeguards implemented since the September 11, 2001, terror attacks, the U.S. financial system is at risk from terrorist financing given its role in the global financial system.

"The U.S. financial system continues to face residual TF [terrorist financing] risk," the assessment stated. "The central role of the U.S. financial system within the international financial system and the sheer volume and diversity of international financial transactions that in some way pass through U.S. financial institutions expose the U.S. financial system to TF risks that other financial systems may not face."

The task force engaged in a "systematic review" of terrorist financing during the 114th Congress, holding hearings and examining how terrorist groups obtain and move money.

Rep. Robert Pittenger (R., N.C.), vice chairman of the task force, told the Washington Free Beacon on Wednesday that the financing operation of ISIS was a major driver of the panel's work.

"The presupposition that must be embraced is that the Islamic State particularly, distinct from other terrorist organizations, they govern," Pittenger said. "They manage what they have control over. They have to provided services, whether it's utilities, healthcare, food, they have to manage."

"We believe their revenue demands are $2 million to $4 million dollars a day," he said. "In 2015, we estimated their revenue was upwards of $500 million. To the extent that you can intercept their funding, you can help dismantle their efforts."

While ISIS has lost territory in its strongholds of Iraq and Syria, it has looked to establish roots in other regions, including Southeast Asia. The terror organization has also focused on inspiring external attacks in Europe and the United States, and has looked to diversify its sources of funding amid losses of illicit oil revenue streams.

"We've looked at a vast array of sources for revenue. Obviously, through various kinds of extortion, the sale of antiquities, kidnappings, the illicit sale of oil," Pittenger said. "Much of all of this money needs to go through the international financial system. If we can intercept that money, we can dismantle some of their enterprise."

Pittenger has expressed concern about ISIS abusing Latin American financial systems to fund its operations. He held an international forum in Buenos Aires to address the issue last month.

The task force's report mentions recent "lone wolf" attacks in Orlando and San Bernardino, California that were later found to be ISIS-inspired, noting that disrupting terrorist groups' exploitation of the global financial system can curtail their ability to support external assaults.

"The recent massacres in San Bernardino, California, and Orlando, Florida, were the deadliest on U.S. soil since the terrorist attacks of September 11, 2011. While none of these attacks was expensive to execute, each required specific and targeted funding," the report states.

"Against this backdrop, the Task Force remains committed to ensuring that the United States is doing everything in its power, and is as efficient as possible in seeking to prevent extremist terror groups, and so-called 'lone wolves,' from accessing the global financial system."

The panel plans to press the issue into the new year, with a set of long-term issues to address in the next Congress. Its priorities include helping government agencies gain better access to information that can identify illicit financing activities, making sure agencies have the resources and skilled staff to address the problem, and doing more to help developing countries combat terrorism financing.

Published under: ISIS , Terrorism