Posted on 09/19/2001 6:24:56 PM PDT by freedomnews
Following the money
Money laundering is getting ever more sophisticated
Financial authorities around the world are stepping up their efforts to trace illegal money flows in the wake of the attacks inflicted on New York and Washington DC on 11 September.
Whoever proves to be behind the attacks, law enforcement agencies in the US are well aware that one of the best ways to prove a case is to follow the money.
No intelligence organisation - except the Directorate of Revenue Intelligence in India, perhaps - has ever effectively cracked the (hawala) system
Prof Barry Rider IALS, London
How were the hijackers supported? And how did the money make it into their hands in the US and elsewhere without being traced?
No-one is under any illusion that the task will be an easy one.
Tracing the flow of illicit money is a complicated, time-consuming business, and the cards are stacked against investigators.
To help boost the chances of finding a paper trail that could lead back to the perpetrator, regulators are planning to upgrade their systems for uncovering the laundering of dirty money.
Transatlantic efforts
The Bush administration has unveiled a package of measures concentrating on the biggest of money laundering operations.
US authorities are ramping up the search for terrorist money
On 18 September the Federal Reserve ordered all banks, domestic and foreign, under its jurisdiction to search through their records for any accounts or transactions involving the 19 people identified by the FBI as the hijackers.
The government will also identify and focus on specific areas of the US where money laundering is rife, via a new body to be called the Foreign Terrorist Asset Tracking Center with staff drawn from all US law enforcement and intelligence agencies.
The aim is to "map" the finances of terrorist organisations.
In the UK, Chancellor of the Exchequer Gordon Brown told the BBC's Today programme that banks needed to tighten their rules on oversight of suspicious transactions.
The reporting of suspicious transactions is seen as a cornerstone of compliance with the global anti-money laundering effort, spearheaded by an international Paris-based group, the Financial Action Task Force (FATF), affiliated to the OECD.
Brown: plans to tighten up bank oversight
"It's necessary to create that wider (reporting) obligation on international institutions," Mr Brown said.
"But equally it's necessary to have a system of reporting so that there's not only no safe haven (for terrorists) but no hiding place for terrorist money."
One bank account supposedly connected to the US terrorists, at a Barclays Bank branch in Notting Hill in London, has already been closed.
Switzerland, a country whose reputation for banking secrecy has often made its banks a prime suspect in money laundering investigations, says its task force is "working at high speed" to see if any terrorist-linked funds had flowed through Swiss institutions.
And other European countries are following suit
. Imprecise estimates
But experts believe the task is going to be an extremely difficult one.
Despite years of intense intelligence interest in Bin Laden - still the prime suspect - estimates of his resources vary wildly.
Some authorities quote figures of $50m a year drawn from investments dating back to his youth in Saudi Arabia.
No-one knows just how much money Bin Laden has
Others say much of his fortune was invested on projects in his former refuge, Sudan, and is now lost to him as a result of his forced departure in 1996.
In evidence presented at trials of his alleged comrades, some witnesses talk of multi-million dollar bank accounts scattered across the Middle East, the US, Europe and Asia and filled with funds creamed off Islamic charities.
But others point to parsimony, quoting examples of penny-pinching and bare-bones operations.
Cheap at the price
In any case, terrorism experts say that an operation such as the attacks on the US would not necessarily have been all that expensive.
"It would not be that expensive, not millions of pounds but hundreds of thousands, provided that you have enough dedicated people," said Paul Rogers, professor of peace studies at Bradford University.
"Even if you had 50 people involved for a year, that would still not be a tremendous amount of money."
But Prof Rogers said it was important not simply to focus on Bin Laden. "There could be lots of support from other sources than him," he said.
Follow the money?
And setting aside the question of just how much money is involved, the practical problem remains. How do authorities trace the money in the first place?
Banks don't have the people or those with enough experience to play Sherlock Holmes... The processes are very skilled. How can you possibly detect all of them?
Senior UK banker
Suspicious transaction reports (STRs) are hardly reliable, many experts fear. Some banks are less than diligent about filing them, and not only the "correspondent banks" which sometimes consist of little more than a brass plate on a door and a nominated director in a house down the road.
Even if the reports are filed, usually a required practice for any sum over about £10,000, the regulators may be too snowed under to pay attention.
The US Financial Crimes Enforcement Network (FinCEN), which oversees anti-money laundering efforts at the moment, is notorious in US banking circles for having a huge backlog of STRs.
And banks complain about being forced to be policemen.
"Banks don't have the people or those with enough experience to play Sherlock Holmes," said one senior UK banking executive.
"The process are very skilled - they are run through 'legitimate' companies. How can you possibly detect all of them?"
And the weight of STRs, "know your customer" rules and other regulations is too much of a burden, he says.
"If we were to implement all the regulations, bankers would be doing nothing else. And the regulations are now so tight in some of the offshore places, you might have a better chance getting money into a retail bank in New York and London rather than Jersey."
That has certainly been proved in recent money laundering cases. When regulators probed the money stolen from Nigeria by former dictator Sani Abacha, they found much of it had passed through London institutions.
The regulators have to ensure bankers police themselves because the money flows through the major banking centres are now so huge that keeping track is near impossible.
Avoiding the paper trail
But however clever a money laundering scheme might be, the aim is always the same: disguising the paper trail of transactions from dirty money to clean.
Usually this happens through layers of "shell companies" - firms which exist only on paper, perhaps with directors whose sole responsibility is to be a front man with a sinecure - anonymous bank accounts, bearer shares, over-or under-invoicing on general trade deals and a range of other techniques.
But what if you could avoid the paper trail altogether?
That could prove to be the real difficulty in tracing money back to those responsible for the US attacks - especially if Bin Laden really is behind them.
The secret lies in an alternative banking system hundreds of years old, known in India as hawala and in Pakistan - and Afghanistan and the Middle East - as hundi.
According to Prof Barry Rider, director of the Institute of Advanced Legal Studies in London and an expert on financial crime, the trust-based hundi system is entirely normal, and prevalent wherever there is a South Asian or Middle Eastern diaspora.
"Say I'm working in the UK and want to sent money back to a village in Pakistan," he said. "I could get a bank transfer, but that's going to be at the official exchange rate. And what good will it do my family in a village with no bank?"
Instead, he says, you find the hundi broker - often a local small businessman - give him the money, and after a short time his contacts back home will deliver the money, at the black market rate, in local currency and minus a handling fee, to your relatives.
No paper trail, no fuss. And no money ever crosses a border - discrepancies in the two-way flow are settled up at the end of the month, or perhaps every half year.
Impenetrable
Which makes it perfect for drug traffickers, for example - Afghan drug smugglers have used Pakistani hundi brokers for years.
More recently, the Chinese "chop" system - where no money changes hands at all, and instead "tokens" (often now passwords sent by email) are used as the equivalent of letters of credit for gold or diamonds deposited with trusted third parties - has been used by the Afghan drug and arms trade.
And many observers believe the chances are such a widespread, impenetrable system is certain to be used by the likes of Bin Laden.
"No intelligence organisation - except the Directorate of Revenue Intelligence in India, perhaps - has ever effectively cracked the system," says Prof Rider.
"You could count the number of successful penetrations on the fingers of one hand."
AMERICAN military action against Afghanistan is unlikely to begin for another four to five weeks because of Washington's lack of knowledge and intelligence about the situation, Western sources said yesterday.
European diplomats with experience of the region are urging America to limit its military campaign and restrict the use of land forces to avoid getting them bogged down in Afghanistan.
"The US armed forces do not have a single soldier or officer who speaks Pushtu [the principal language of the Taliban]," said a senior Western military official.
"They will have to first hire hundreds of Pushtu speakers. That shows how much they lack on the ground for this upcoming battle in Afghanistan." Pushtu, or Pashto, is the language of the Pathans and of the Taliban, who come from southern Afghanistan.
Although the US army has people who speak Farsi, or Persian, is also extensively spoken in central and northern Afghanistan, bin Laden is hiding among Pushtu-speaking Afghans.
According to authoritative reports, before the current crisis the CIA had no agents on the ground inside Afghanistan, and the State Department has no high level contacts with the anti-Taliban forces in northern Afghanistan.
The lack of intelligence stems from Washington's decision effectively to ignore developments in Afghanistan from 1989 after Moscow withdrew its forces.
Its only major intelligence source is satellite imagery, which cannot clearly differentiate between Taliban and Arab fighters nor between fighters and civilians. America is expected therefore to rely on intelligence provided by Afghanistan's neighbours and other allies such as Britain which will take time to collate and evaluate.
The key to obtaining intelligence on Taliban and bin Laden troop movements and their whereabouts is the degree to which Pakistan's Inter-Services Intelligence, which has been the principal backer of the Taliban, will co-operate with the CIA.
President Pervaiz Musharraf of Pakistan has pledged full co-operation, but with the lack of trust between the ISI and the CIA, Pakistan may well limit what it passes over.
European governments closely allied to America are trying to influence decision-making in the Pentagon to make Washington aware of the dangers of sending large numbers of ground forces into Afghanistan.
"The danger is that Washington may be in an overkill mode, without realising the complexities of Afghanistan and the potential to destabilise the region," said a European diplomat.
European defence experts and military attaches hope that America does not attempt an invasion of Afghanistan. British and Soviet invasions were defeated by Afghan guerrilla fighters in the 19th and 20th centuries.
Instead America is hoping to establish military bases in Pakistan and Central Asia. From there, special forces could attack specific targets inside Afghanistan, eliminate their opponents and then return to their bases after a few days.
US forces in Pakistan would be based along the border with Afghanistan in Baluchistan and the North-West Frontier Province, which is just 15 minutes' flying time for troop-carrying helicopters to reach many of bin Laden's bases.
US special forces rather than satellite imagery would be used inside Afghanistan to guide aerial and missile strikes, the main American weapon to break up Taliban and Arab groups.
The bulk of the war effort is expected to be directed at four provinces in southern Afghanistan - Kandahar, Helmand, Herat and Uruzgun - where the Taliban leadership and bin Laden will try to hide.
"There will be absolutely no point in bombing the cities because they will be evacuated by the time the war starts and the cities are pretty much devastated already," said a European official.
"The US may also try to capture an airfield inside Afghanistan and use it as a bridgehead for attacks in the interior of the country. But securing an airfield will mean committing some 20,000 troops just to guard the outer perimeter, which is high risk."
At the same time America will have to enlist Afghans, and arm and fund them to go after the Taliban in the ravines and valleys of the mountainous and desert terrain.
In northern Afghanistan the anti-Taliban United Front has already pledged 15,000 fighters to the US-led alliance. If it is given American air cover, its forces could quickly capture the major cities in the north.
However, its forces have little presence in the Pathan belt in the south and it is here that the main war will be fought.
Also, I've been doing my own research into Karachi, Pakistan where many US certified pilots call home.
http://www.karachi.com
Worth a check?
By T.K.MALOY and SHIHOKO GOTO
UNITED PRESS INTERNATIONAL
WASHINGTON, Sept. 18 (UPI) -- Intelligence and financial market authorities are investigating whether agents of alleged terrorist mastermind Osama bin Laden manipulated stock markets in Japan, Europe and the United States before and after last week's devastating terrorist attacks.
Various authorities are also looking into the larger question of terrorist fundraising. The U.S. Treasury Department announced this week that it has created an interagency task group devoted to the investigation of terrorist fundraising.
According to Treasury's Under Secretary of Enforcement Jimmy Gurule, the newly established "Foreign Asset Tracking Center" will work to assess the source and method of fundraising used by identified terrorist groups, and to provide information to law enforcement officials about location and movement of terrorist funds.
A number of stock regulatory authorities around the world have confirmed they are examining both the potentially large selling of stock futures before the Sept 11 attack, and the repurchase of them after the attack at a cheaper price when they plunged in value; the so-called "short-selling" of stocks after the attack, which also profits from shares dropping in value; and the possible dumping of a large volume of insurance and airline firm stocks prior to the attacks.
Japanese authorities confirmed they are looking into the possibility that terrorists were active in the Tokyo and Osaka markets shortly before and after the attacks.
Massaki Tsuchida, president of the Tokyo Stock Exchange, said in a statement that investigations are looking at stocks traded on the exchange both before and after the attack.
One official said that while certain trades themselves are not illegal, their probe might provide a linkage to agents or groups related to bin Laden.
"The significance of the investigations, though, is what it could lead to, and to see who might be involved with the terrorist groups directly," said one Japanese government official, who spoke on condition of anonymity. "Any lead we can have on the complex web of terrorist activities is significant."
Meanwhile, European exchange regulators held a conference call Monday as part of the kickoff of an investigation into whether bin Laden's network, al Qaida or "The Base", or other allied groups or agents used any of the Western European stock exchanges to profit from terror attacks that led to market declines around the world.
A spokesman for the German market regulatory agency, the Bundesaufsichtsamt fuer Wertpapierbesitz (BAW), said the type of information exchange taking place between market regulators is standard. He confirmed, however, that regulators were looking into certain trading surrounding the attacks.
In particular, the German authorities are looking into short selling of several large insurance firm stocks -- including Germany's Munich Re, Switzerland's Swiss Re (reinsurance), and the French company AXA, a major "reinsurance" firm that dropped over 10 percent in value after the attack.
According to reports published in Italy's La Stampa, the Italian government is looking into whether bin Laden or allies channeled funds through a Milan-based brokerage house in order to speculate on the international financial markets.
In an interview with La Stampa, Italian defense minister Antonio Martino, said he believes that bin Laden and groups with links to bin Laden's network have been actively trading on the financial markets.
"It is no exaggeration to think terrorist groups were among those who would speculate on international markets," Martino told La Stampa.
British market regulators at the Financial Services Authority, the watchdog for the U.K. markets, said the agency was investigating possibly suspicious trades on the market.
For a number of years, U.S. intelligence has been looking into bin Laden funding in general. The Saudi Arabian is estimated by authorities to be worth more than $300 million, and to have created a financial network -- including shell companies -- that spans several continents.
In a news conference Monday, U.S. Secretary of State Colin Powell describe bin Laden as being like "the CEO (chief executive officer) of a holding company, with many autonomous divisions."
A U.S. official said Tuesday intelligence reports show that "in general, Osama bin Laden has financed his terrorists network through business, charitable organization, and individual donors."
"Al Quida -- 'the Base' -- uses charitable NGOs to hide the movement of their money, weapons and personnel," the official added.
{THE U.N}
Oh good. Like BCCI?
Supermen, these suicide agents? Not at all.
Islamic terrorists have been taught to believe that heaven and frisky virgins await them for dying in their unholy actions.
Courage has NOTHING to do with it.
The solution?
These so-called super-fighters have a Kryptonite vulnerability, an Achilles Heel.
They will fight like beasts for martyrdom, but martyrdom will be DENIED if...
...they are contaminated with the blood and flesh of the swine.
Every US military agent must be known to coat their bullets and missiles with pig guts.
Every terrorist killed in the entire world must be known to await burial in pigsh*t.
Every pilot, flight attendant, passenger should carry pepper-like pork spray to coat a would-be suicide skyjacker. Without paradise, why die?
Use their own beloved Koran, the source of their strength, against them, and this is OVER!
America, buy Boeing, American Airlines, Hilton while they are cheap!
See also:
from police and others as they rented apartments, hotel rooms and cars.
The Rich story goes every-which-way. The US media dropped that episode at a predictable time.
“All of them obtained their licenses legally by presenting the documents required by Florida statutes,” Department of Motor Vehicles spokesman Bob Sanchez said Tuesday.
While a drivers license isn't required to board a plane — only a photo ID — having a license made the terrorists legitimate, lowering the risk of arousing suspicion
from police and others as they rented apartments, hotel rooms and cars.
Rich has connections accross the globe in hundreds of holding companies. Those companies are in China, Russia, Indonesia, Mid-east, Europe, US, etc., viturally everywhere. And who pardoned him?
Now, put that together with the Riady connection. I hope the feds are looking into all the angles. It is just too coincidental.
This is an important fact of history that we need to understand. Number one, the type of religious fervor they have and the type of Islam they have in Saudi Arabia is very similar to that in Afghanistan.
It is unbending and intolerant and they do not permit any other faith in their country. Also, the Pakistanis, a large number of the Pakistanis, especially those who were the Pastuns up near the border of Afghanistan, they too share the same type of extremist and fanatic branch of Islam, even though that has nothing to do, it is an aberration, with the rest of Islam throughout the world. So that is number one. They have that in common.
But the Pakistanis and the Saudis have two other things in common. As long as chaos was able to reign and continues in Afghanistan, there will never be a pipeline built through Afghanistan that permits the oil from central Asia. This vast quantity of oil that we know exists in central Asia, it cannot be brought to market because a pipeline will never be built through Afghanistan while the Taliban is in power and while chaos reins. What does that mean? That means oil prices have been much higher, maybe $5 a barrel higher, than they would have been had Afghanistan been under a good king and a stable government and a pipeline built that would have brought that oil out into the world market; and there are vast quantities of oil in central Asia waiting, just waiting to come to market.
The other factor is drugs. Unfortunately, there are many corrupt people and there are corrupt people all over the world, but there are many corrupt people in the Pakistani intelligence system, people who have been involved with drugs right up to their eyeballs. And what has Afghanistan produced in these last 10 years? Sixty percent of the world's heroin. Sixty percent of the world's heroin comes from Afghanistan. That huge amount of money, I knew, would bring down the government of Pakistan, the democracy of Pakistan. rohrabacher
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