T4 B1 Team 4 Workplan Fdr- Outline- 5-19-03- Lines Of Inquiry 123

05/19/03

Lines of inquiry 1) Intelligence

a) Pre9-ll i) What was the role of the intelligence community in gathering intelligence about the flow of funds to terrorist organizations? (crosscut with team#2) (much of this may have been explored in the joint intelligence report) ii) Did the intelligence community collect useful intelligence in this area? How was that information used? Could have it been put to better use? iii) What was the intelligence community proposal for covert action against bin Laden financial accounts? Why was the proposal not approved? *

b) Post 9-11 i) What is the current role of the intelligence community in gathering intelligence about the flow of funds to terrorist organizations? ii) Is information useful? Is it being put to good use? iii) Is the Foreign Terrorist Asset Tracking Group operational? What does it do? Is it effective?

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2) Executive/Administrative

a) Pre9-ll i) What was the role of Treasury, particularly OFAC, in blocking and seizing assets associated with terrorist groups generally? Was it effective? ii) What role did the State Department play in designating Foreign Terrorist Organizations (FTOs)? Was it effective? iii) When were al-Qaida and the Taliban designated? What efforts were made in finding and freezing assets after the designation? Were they effective? How could this be measured? Could anything else have been done? iv) Congress appropriated money for the development of the foreign terrorist asset tracking center (FTAT) for FY 2000, to be placed in Treasury, but the Center was not operational until after 9/11. What were the circumstances surrounding that delay? What was the impact of

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05/19/03 that delay? Why did Treasury oppose the White House efforts to fund this center? What does the 9/11 Closed by Statute

v) What was the level of support from the intelligence and law enforcement communities in gathering evidence to support both the OFAC and FTO designations? b) Post 9-11 i) Domestically: (1) What have we blocked and why? Is blocking being used in appropriate circumstances? What has been the net effect of the blocking? (a) Who have we designated and why? What has been the net effect of the blocking? (2) Have there been any before and after assessment of money flows that occurred as a result of blocking? What do we think terrorists groups have done in reaction to blocking? 3) Law Enforcement a) Pre9-ll i) What was law enforcement's role in investigating and prosecuting the financing of terrorist operations domestically? How effective was it? (Partial crosscut with team 6) ii) The terrorist fundraising statutes, 18 USC 2339A and 2339B, had never been used until after 9/11. What was the level of investigative effort generally into terrorist funding? If there had not been an effort, why not? (1) The FBI knew of the Holy Land Foundation's links to Hamas as early as 1993. Why no law enforcement or blocking action taken against it until 2001? iii) The Financial Crimes Enforcement Network ("FinCEN") is the government's center for analysis and distribution of financial crimes information. What was the level of effort prior to 9/11? (1) In 1999, there were specific law enforcement requests to FinCEN, asking for assistance from its hawala expert. Those requests were not acted upon. Why? [Washington post]

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05/19/03 iv) Besides the FBI, did other law enforcement agencies (either federal of state) investigate terrorist financing? Was there any confusion as to the roles of the various law enforcement agencies? What was the general level of coordination among agencies? b) Post 9-11 i) Prosecution of charities and other groups. Who have we prosecuted? What do the investigations reveal about the nature of terrorist financing? How effective has the use of the terrorist fundraising statutes been? Has FinCEN helped? (1) IANA associate "help the needy" prosecution of charity using Jordan Islamic Bank ii) What is the level of cooperation with intelligence community? What has been the effect of greater information sharing powers contained within the USA Patriot Act? (crosscut with team 6) Hi) What is the level of cooperation within and among law enforcement agencies? Are they coordinating efforts? Are there any institutional barriers? What can be improved? 4) Regulatory and Private

a) Pre9-ll i) What regulatory controls were in place to prevent the U.S. financial system from being used by terrorists to move money? Were they effective? (1) How much feedback (or SAR reporting) from financial institutions re terrorist financing? (2) Hijacker's financial transactions merited suspcicious reporting, but none of those reports reached the proper authorities until after 9/11 [Ievitt64] (3) There were specific legislative proposals to assist in curbing the unregulated movement of money, identify transactions and also to assist in getting foreign banks to open their books to legitimate law enforcement requests. (a) Section 311 was administration proposal. Why not acted on? Eizenstat 10/3/01: bill with special measures had strong support by law enforcement. (b) What was the "know your customer" proposal and why wasn't it implemented?

05/19/03 (c) Congress had directed FinCEN in 1994 to regulate the money transmitter business, yet the regulations doing so were not put into place until after 9/11. Why? Could the controls have detected the money movements of the 9/11 hijackers? (4) Regulation aside, was the private sector doing anything? b) Post 9-11 i) USA PATRIOT Act: (1) General background. What does it do? Is it effective? (2) Policy re general balancing of bank burden, privacy interests and law enforcement utility. (a) What are the burdens on the financial services industry? Are they too much? Should the,re be more? Are there privacy issues? Can it be made better? (b) Will the new regulations of non-bank financial institutions catch methods used by terrorists? Who is to regulate non-bank financial institutions in this area? Do they have sufficient resources? ii) Is BSA data on terrorist finance being used by law ' enforcement? How? Does it result in assisting cases and investigations? Does it contribute to our understanding of terrorist financing investigations? If not, why not? iii) What have we learned about what the financial transactions of a U.S.-based terrorist cell looks like? Are we able to get any predictive data on terrorist financing? iv) How do we get information, either concerning general trends or specific individuals, to financial institutions? How effective is it? v) Is there a way to regulate charities to prevent abuse? What do other countries rin? 9/11 Closed by Statute

5) Overall Government Strategy And Coordination

a) Pre9-ll

05/19/03 i) Was there an overall U.S. interagency strategy for combating the financial support given to terrorist organizations? ii) How effective was that coordination? What was the level of cooperation among government agencies in this area? Between government and the private sector? If there were shortcomings in this area, what were the causes? (1) Presidential Decision Directive 42 (1995) ordered other agencies to increase and integrate efforts against terrorist financing and money laundering. What efforts did the directed agencies make in complying with this FDD? (2) After the East Africa bombings in 1998, a new interagency team was created under the auspices of the NSC to look at terrorist financing. What did this group do? (3) The National Commission on Terrorism released a report in 1999, making specific recommendations in the area of terrorist financing. Who was responsible for assessing and implementing these recommendations? Were they implemented? If not, why not? (4) To what extent did any identified failures of coordination contribute to the failure to detect the 9/11 hijackers or other Al-Qaeda activity? b) Post 9-11 i) Do we have a government-wide strategy on terrorist financing? How is this enforced within the interagency community? ii) What is the current mechanism for coordinating and ensuring cooperation? Do gaps (still) exist? Is information being shared? Is there something else that needs to be done? iii) How effective are the current efforts to disrupt terrorist financing in preventing another 9/11 or making another 9/11 substantially more difficult to accomplish? 6) International efforts a) Pre9-ll i) What were the U.S. government's diplomatic efforts to ensure that other countries would assist

05/19/03 us in the tracking, seizing and freezing terrorist assets? 9/11 Closed by Statute

ii) Were there any particular countries whose lack of effort, or ability, impeded the U.S. government's efforts to disrupt terrorist financing? What efforts did the U.S. government make, if any, to improve the effort nr ability nf any snc;h f-.nnnfrip.s? 9/11 Closed by Statute

iv) What was the level of law enforcement cooperation between countries? v) Bow effective were these efforts? b) Post 9-11 i) How well are other countries cooperating with U.S. regulatory, intelligence and law enforcement authorities in the area of terrorist financing? (1) What has the U.S. requested other countries to do? How has the U.S. tried to influence enforcement in other countries? (2) Who are key allies that need to improve enforcement? Who are non-allies that need to improve enforcement? (3) Does the U.S. see the problem the same way as the international community? If not, what is the disconnect? ii) What has been the level of cooperation with US generated (OFAC) lists? What are the perceived flaws, if any, in the current approach (crosscut with Team #3)? iii) Do other countries have the technical capacity to regulate and monitor for transactions relating to terrorism? What can be done about that? iv) Are there international organizations that address this problem? How effective are they?

7) How were the 9/11 attacks funded? (in conjunction with team 1A)

05/19/03 a) What was the source of funds of the 9/11 hijackers, and how did those funds get to the hijackers? How much did the operation actually cost? b) To what extent was the U.S. financial system used by the hijackers? c) Why did the financing of the 9/11 operation go undetected? Was it a specific failure of an individual or group, or was the failure more systemic? d) What do the methods of the 9/11 terrorists tell us about current government efforts? e) Charities i) International Islamic Relief Organization (HRO) (1) 86 to 94 Muhammad Jamal Khalifa (bin laden brother in law) headed UK's Philippine Office, channel money to Al Qaeda affiliates [levitt 67] ii)

05/19/03

Documents 1) Select OFAC decision packages - Treasury a) Al-Qaida and bin Laden (8/22/1998) b) Taliban (7/4/1999) c) Al-Barakaat (11/7/2001) d) Holy Land Foundation (Hamas) (12/4/2001) e) Al-Hamati Sweets Bakeries, Al-Shifa' Honey Press For Industry and Commerce, et al., (the honey companies) (10/12/2001) f) Afghan Support Committee and Revival of Islamic Heritage Society (1/9/2002) g) Al-Harimain Islamic Fountation (3/11/2002) 2) Policy Coordination Committee (PCC) for terrorist finance — minutes and agendas for post 9/11 activities. 3) NSC documents relating to terrorist financing, particularly Presidential Decision Directives 39 (counter terrorism coordination), 42 (international organized crime) and 63 (critical infrastructure protection), and documents relating to the implementation of those directives. 4) Agenda, minutes and notes of meetings of Counterterrorism Strategy Group, pre 9/11. 5) Lists and summaries of FBI terrorist financing investigations, both pre and post 9/11. 6) Lists and summaries of Operation Green Quest or other Customs/IRS/Secret Service investigations into terrorist financing pre and post 9/11. 7) FinCEN BS A data and other information, including pre and post 9/11 Suspicious Activity Reports and analytical products resulting from this analysis. Includes 1998 report on hawala prepared by Patrick lost. 8) CTC, UBL Task Force materials as it related to terrorist finance (overlap with Team #2)

05/19/03 9) Cables to/from State Department to US embassies concerning cooperation on terrorist financing intelligence gather or law enforcement. 10) U.S. Customs Service Office of Strategic Trade and Intelligence report, October 2001 (re: honey shipments) 11) Financial analysis of 9/11 attacks, created by FBI's Terrorist Financial Review Group (later renamed Terrorist Financing Operations Section) 12) Other documents as suggested by the joint committee's report

05/19/03

Interviews NSC Jody Myers William F. Wechsler Richard E. Clarke Customs Marcy Forman, Director, Operation Green Quest, US Customs Director, US Customs Service Office of Strategic Trade and Intelligence FBI Dennis Lormel, Terrorist Finance Operations Section Treasury Jim Johnson, former Undersecretary for Enforcement Ron Noble, former Undersecretary for Enforcement Elisabeth Bresee, Assistant Secretary for Enforcement Kenneth Dam, former Deputy Secretary David Aufhauser, General Counsel Jimmy Gurule' former Undersecretary for Enforcement, 2001-03 Juan Zarate, DAAS for terrorism Bob McBrien, OFAC Richard Newcomb, OFAC, Director Jim Sloan, FinCEN, Director David Voght, FinCEN, Office of Intelligence Peter Djinis, former FinCEN, Office of Financial Enforcement IRS Steven Miller, Director, Exempt Organizations, Tax Exempt/Government Entities Division, IRS Martha Sullivan, Director, Compliance, Small and Medium Sized Businesses, IRS (MSBs) State Unit head, Office of the Coordinator for Counterterrorism, Counterterrorism Finance and Designation Unit Justice Michael Chertoff, AAG James Robinson, former AAG 10

05/19/03 Alice Fisher, DAAG Bruce Swartz, DAAG Jim Reynolds, former Chief TVCS Barry Sabin, Chief CT (formerly TVCS) Jeff Breinholt, CT section, terrorist financing Gordon Kromberg, AUSA, EDVA Private industry and independent policy analysts John Byrne, American Bankers Association Rick Small, Director for Global Anti-Money Laundering, Citigroup Director of compliance, SunTrust Michael Zeldin, partner, Deloitte and Touche Kenneth Katzman, Congressional Research Service Lee Wolosky, Council on Foreign Relations Jon Winer, former Deputy Assistant Secretary of State Steve Emerson, The Investigative Project Matthew Levitt, Washington Institute for Near East Policy Rachel Ehrenfeld, author, Funding Evil Thomas Biersteker, Professor, Watson Institute, Brown University

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