WASHINGTON, The Washington Post
The U.S.-led effort to track money belonging to terrorist groups has been hobbled by bureaucratic infighting and a growing understanding by investigators that most of al-Qaida’s money is not in banks but in untraceable commodities, including gold and diamonds, according to U.S. and international officials.
The transfer of al-Qaida’s assets, the scale of which is only now becoming clear, has left much of the organization’s financial network untouched by the Bush administration’s campaign to freeze terrorist funds around the globe.
At the same time, the efforts to shut down terrorist financing, one of the key components of President Bush’s counterterrorism strategy, have been hindered by interagency turf battles in the U.S. government, sources in various agencies said.
The disputes mirror those that have plagued intelligence-sharing efforts between the CIA and the FBI. Coupled with the elusive nature of al Qaida’s financing, they reveal the formidable challenges confronting the financial leg of the war on terrorism nine months after Bush launched it amid great fanfare.
“If we were trying to build a new police force in another country, we would have to tell them, ‘Look at us and don’t do what we do,’ “ a senior U.S. official said. “We compartmentalize, we don’t share intelligence among agencies, no one seems to have the authority to make that cooperation happen. We are very much a Third World country in how we are doing this.”
According to dozens of investigators and financial sources interviewed in Asia, Africa and the United States, al-Qaida operatives long before Sept. 11 began shifting money out of bank accounts that could be traced and into untraceable gold and precious stones such as diamonds, tanzanite and sapphires.
“It was a paradigm shift in the financial organization that we missed,” said one European financial investigator. “Everyone was trying to find bank accounts in Geneva when al-Qaida was greatly reducing their exposure in the formal financial sector. Now we are finding tentacles into all kinds of precious stones and metals.”
Such commodities are small and easy to store and transport, and they hold their value over time. They can be released in small amounts on the market without arousing attention.
Monitoring the shift of millions of dollars into precious stones was made even more difficult because the U.S. government has still not developed a central database on what is known about al-Qaida’s financial network.
The government’s effort is marred by other problems. Senior officials from the Treasury and Justice departments and their component agencies, along with the CIA and the Pentagon, began weekly interagency meetings within days after Sept. 11. But due in part to rivalries between the departments, those at the working level often have had little time for each other.
Some of the worst conflicts have been between Treasury and Justice. Asset-tracking task forces within the Customs Service at Treasury and the FBI’s financial review group inside Justice have nearly identical investigative missions. But they have been so resistant to cooperation that, until recently, they did not fill designated chairs at each other’s tables.
Though not disputing that there have been problems with coordination and information sharing, a number of officials throughout the government argue that the situation has greatly improved since Sept. 11. They note that the Foreign Terrorist Asset Tracking Center, established under Treasury’s auspices in late September, was moved in April to CIA headquarters in Langley, Virginia, to improve coordination.