Money
laundering laws won't stop international terrorism
By Bert Ely
web
posted June 3, 2002
The anti-money laundering provisions in the USA PATRIOT Act of 2001 will
not stop international terrorists from carrying out evil deeds in the
United States. The underlying premise of the new law is both false and
extremely dangerous: grant federal authorities more intrusive access to
customer records at banks, securities firms, and other financial services
providers to enable the authorities to identify future terrorists and
to cut off their funds before they strike.
The legislation's premise is false, on two grounds. First, the authorities
have consistently failed to use existing laws effectively to detect criminal
behavior before-the-fact. Second, even with this additional police power,
the authorities will still not be able to identify terrorists before they
strike nor shut off their funding. In fact, the new law and its accompanying
regulations will provide future terrorists with a highly detailed road
map of how to avoid detection.
The legislation's premise also is extremely dangerous, for it could give
Americans a false sense of security, that evildoers will be identified
and caught before they strike. Worse, the premise detracts attention from
the extremely serious intelligence failures that occurred before September
11.
FBI boss Robert Mueller admits his agency could
have done more in a May 29 press conference |
As has become increasingly clear, the Federal Bureau of Investigation
(FBI) is most to blame for this devastating intelligence failure. Other
federal agencies, notably the Immigration and Naturalization Service and
the Central Intelligence Agency, failed both to perform their assigned
tasks as well as to coordinate their activities with their fellow intelligence
agencies.
In enacting the USA PATRIOT Act, Congress mistakenly bought the assumption
that technology, in the form of running an electronic dragnet across all
financial records, is a sufficient substitute for the hard, dangerous
work of gathering intelligence by using human agents to penetrate terrorist
cells. Many Americans believe that in times of war, it is necessary to
sacrifice personal liberties to gain physical security. That is a false
trade-off, for individual liberty need not be sacrificed if the government
agencies charged with protecting America from foreign attacks do a more
effective job than they did prior to September 11.
The latest chapter in the war on international terrorism must be fought
on two fronts -- outside the United States, where the terrorists are headquartered,
and inside the country, where terrorists could strike again. Domestically,
though, the war must be fought in a manner which respects the constitutional
protections Americans have long enjoyed and prospered from.
One unchallengeable fact of the war on terrorism is that the enemy consists
overwhelmingly of radical Muslims. To defeat al-Qaida inside the United
States, domestic terrorist fighters must find the Muslim terrorist cells,
penetrate them, and then destroy them. Fishing through financial records
will not flag those cells, particularly as future terrorists become more
effective in covering their financial tracks. Instead, the search for
the terrorists' cells must start where they incubate -- in the minority
of Muslim mosques, cultural centers, and similar gathering spots where
hatred of America is fomented.
Loyal Arab-Americans and non-Arab American Muslims must be recruited
for this task, just as Japanese-Americans helped to win World War II.
These new gatherers of intelligence must speak the appropriate languages
and the culture of the mosque or the cultural center must be their culture.
Penetrating terrorist cells has the added benefit of sowing mistrust
among cell members, greatly impairing their effectiveness. There has been
no indication that the FBI attempted, much less succeeded, in penetrating
the hijackers' cells.
The failure of the domestic intelligence agencies to prevent the September
11th terrorist attacks may partially reflect this shortcoming -- the crime-fighting
orientation of these agencies, notably at the FBI. Intelligence gathering
has been of secondary importance, and often has been ineffective, as in
the case of the drug wars.
Hence, winning the international war on terrorism within the United States
will require a fundamental restructuring of the federal police agencies
into just two organizations -- a terrorist-fighting agency that focuses
on gathering intelligence on domestic terrorists and acting to prevent
terrorist attacks and a second agency devoted to traditional crime detection
and after-the-fact apprehension. In particular, the FBI's intelligence
activities must be shifted to the new terrorist-fighting agency while
the rest of the FBI is combined with other domestic police agencies.
The war on international terrorism will not be won by a bunch of mid-level
bureaucrats sitting in front of computer terminals scanning financial
records and otherwise probing the financial affairs of almost 300 million
Americans who clearly have no terrorist involvement. Instead, it will
be won to a great extent by American Muslims ferreting out and penetrating
radical Muslim terrorist cells operating within the United States.
Achieving victory does not mandate an assault on the U. S. Constitution,
as the new legislation does. Instead, it requires an intelligent, constitutional
attack on the sources of international terrorism within the United States.
Bert Ely, the principal in Ely & Company, Inc., is a financial
institutions and monetary policy consultant in Alexandria, Virginia. This
commentary is drawn from an essay by Mr. Ely that was published in The
Privacy Papers. The longer essay is available at a cost of $8.00 from
the Free Congress Foundation by calling 202-546-3000 or by sending a check
or money order to Publications, Free Congress Foundation, 717 Second St.,
NE, Washington, D.C. 20002.
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