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Authorities trying to track money back to bin Laden

The money trail from last week's terrorist attacks may eventually lead back to Osama bin Laden. But experts say it could just as easily reach a dead end at an offshore bank account, an automated teller machine or even a shoe box.

"Don't rule out a shoe box full of cash," says John Fernandez, editor of the monthly newsletter Money Laundering Alert, based in Miami. "Bin Laden's organization has used both modern and ancient ways of moving money."

The hunt for the financiers behind the attacks in New York and Washington is a crucial part of the investigation, promising the possibility of a direct link to bin Laden, whom President Bush has called the prime suspect. The investigation could reveal whether bin Laden played the role of chief plotter and paymaster or whether he merely supplied the rhetoric of a holy war on America to inspire those who carried out the slaughter.

"I'm not sure we'll find that the money came out of his pocket, but I think we'll find ties to him," says Ed Bridgeman, who studies terrorism at the University of Cincinnati. "It's important, because it gives us legitimacy and credence in targeting him before the rest of the world."

That appears to be the goal of a web of U.S. agencies as they launch the most intensive money-tracking effort in U.S. history.

A new task force at the Treasury Department "has begun to create financial profiles" of the suicide hijackers, Treasury Undersecretary Jimmy Gurule said at a news conference Wednesday. He said the new sub-agency, called the Foreign Terrorist Asset Tracking Center, "will be an important tool in our quest to dismantle the terrorists' financial bases and shut down their funding capabilities and operations. ... We seek to create a big-picture profile, if you will, of the financial infrastructure of terrorist organizations."

But Fernandez says the new tracking center should have been in operation months ago. "This center was proposed more than a year ago and funded last October, and just in the last few days they've activated it," he says. "It's just government bureaucracy."

FBI agents are poring over the 19 suspected hijackers' known transactions, however trivial, from video rentals to ATM withdrawals and rent payments. Other investigators, focusing on the sources of their funds, are inspecting bank records in the Cayman Islands and Panama, Fernandez says, and Barclays bank in London has frozen a suspicious account.

With an inheritance from his family's construction empire in Saudi Arabia and a network of legitimate businesses and bank accounts, bin Laden certainly is capable of providing the money for patient, meticulous, large-scale terror operations. But tracking the funds will not be easy, experts say.

The first and most important problem is that the total cost of planning and mounting the attacks that have transformed geopolitics overnight was relatively modest, probably several hundred thousand dollars spent over the past few years. The only relatively large expenditure was flight training tuition for several terrorists at prices ranging from $10,000 to $20,000 apiece.

"We've had a saying for a long time - that terrorism is warfare on the cheap," says Yonah Alexander, a terrorism specialist at the Potomac Institute for Policy Studies in Arlington, Va., who recently co-wrote a study of bin Laden. "You had pilot training, air tickets, car rentals, apartments and food for a number of years. But for the whole operation, what are you talking about? Maybe a million dollars? They invest very little money, and the results are unbelievable."

Bridgeman agrees. "I'm sure this whole thing ran less than a million dollars - a lot less," he says. "That's why terrorism is so popular with the underdog - it's so cost-effective."

Funding on that scale would not necessarily have required large international bank transfers of the kind often seen in cases involving drug cartels or corrupt regimes. That could limit the ability of the National Security Agency to follow the money through its electronic intercepts of such transactions, which are carried out by the Society for Worldwide Interbank Financial Telecommunications (SWIFT), headquartered in Belgium.

The Treasury Department's first line of defense against money laundering, the Financial Crimes Enforcement Network, also might not be of much help. FINCEN, located in Virginia, studies bank reports of cash deposits of $10,000 or more, as well as other suspicious transactions. But none of the known financial activities of the hijackers would have generated such reports.

If the terrorists used an ATM card to withdraw cash from an account in a bank that does not cooperate with international authorities, that could also prove to be a brick wall for investigators, Fernandez says. In June, the 31-nation Financial Task Force on Money Laundering listed 19 countries that did not meet its reporting standards, including Egypt, Guatemala, Russia, and the tiny Pacific island of Nauru, home to 400 "shell banks" whose purpose is often to hide money. Accounts in those places could prove inaccessible to investigators.

Bin Laden's organization also has used a traditional method for transferring money in South Asia, known by the Hindi word hawala, or "in trust." Under such a transaction, money is deposited with a hawala broker in one country and withdrawn, often the same day, from a second broker in another country. The system produces no records and depends on absolute trust between the brokers, since the money must later be transferred from one to the other.

But some terrorist money moves in an even simpler fashion - in wads of bills passed hand to hand, according to testimony at the trial this summer of four men in the bombing of U.S. embassies in Kenya and Tanzania in 1998, attacks allegedly directed by bin Laden. An operative named Jamal Ahmed al Fadl testified that when he was ordered to move $100,000 in $100 bills from Sudan to a terrorist cell in Jordan, he simply put the cash in his suitcase "with my clothes" and hopped on a plane.

Al Fadl listed some of bin Laden's legitimate businesses in Sudan, ranging from a construction company to a farm that grew sesame seeds, peanuts and corn - as well as providing a terrorist training ground. In Kenya, bin Laden's organization helped one of its operatives start a fish business in the coastal town of Mombasa, according to testimony.

"It's a pretty diverse portfolio," says Bridgeman, at the University of Cincinnati. "Because they're legitimate businesses, he can use them to move money and to launder money."

Some of the money also might have been diverted from a web of Islamic charities, as occurred in previous terrorist attacks. Several such charities were closed after donations were proved to have been diverted for the 1993 and 1998 bombings.

In an attempt to crack down on bin Laden's finances in August 1998, President Bill Clinton banned U.S. banks and companies from doing business with a number of organizations linked to bin Laden and Al Qaeda. But according to a report issued Sept. 10 - the day before the World Trade Center and Pentagon attacks - by terrorism expert Kenneth Katzman of the Congressional Research Service, no assets have been frozen by the order, because authorities have not been able to link any to bin Laden.

"Tracing the funding is not so simple," says Alexander, at the Potomac Institute for Policy Studies. "But one benefit of the investigation may be to shut down some of the financing methods. At least that might make their operations more difficult in the future."

Copyright © 2015, The Baltimore Sun
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