U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

22–761 PDF 2016

FOLLOWING THE MONEY: EXAMINING CURRENT 

TERRORIST FINANCING TRENDS AND THE 

THREAT TO THE HOMELAND 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COUNTERTERRORISM 

AND INTELLIGENCE 

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MAY 12, 2016 

Serial No. 114–68 

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 
(II) 

COMMITTEE ON HOMELAND SECURITY 

MICHAEL T. MCCAUL, Texas, Chairman 

LAMAR SMITH, Texas 

PETER T. KING, New York 

MIKE ROGERS, Alabama 

CANDICE S. MILLER, Michigan, Vice Chair 

JEFF DUNCAN, South Carolina 

TOM MARINO, Pennsylvania 

LOU BARLETTA, Pennsylvania 

SCOTT PERRY, Pennsylvania 

CURT CLAWSON, Florida 

JOHN KATKO, New York 

WILL HURD, Texas 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

MARK WALKER, North Carolina 

BARRY LOUDERMILK, Georgia 

MARTHA MCSALLY, Arizona 

JOHN RATCLIFFE, Texas 

DANIEL M. DONOVAN, JR., New York 

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

SHEILA JACKSON LEE, Texas 

JAMES R. LANGEVIN, Rhode Island 

BRIAN HIGGINS, New York 

CEDRIC L. RICHMOND, Louisiana 

WILLIAM R. KEATING, Massachusetts 

DONALD M. PAYNE, JR., New Jersey 

FILEMON VELA, Texas 

BONNIE WATSON COLEMAN, New Jersey 

KATHLEEN M. RICE, New York 

NORMA J. TORRES, California 

BRENDAN P. SHIELDS, Staff Director 

JOAN V. O’HARA, General Counsel 

MICHAEL S. TWINCHEK, Chief Clerk 

I. LANIER AVANT, Minority Staff Director 

SUBCOMMITTEE ON COUNTERTERRORISM AND INTELLIGENCE 

PETER T. KING, New York, Chairman 

CANDICE S. MILLER, Michigan 

LOU BARLETTA, Pennsylvania 

JOHN KATKO, New York 

WILL HURD, Texas 

MICHAEL T. MCCAUL, Texas (ex officio) 

BRIAN HIGGINS, New York 

WILLIAM R. KEATING, Massachusetts 

FILEMON VELA, Texas 

BENNIE G. THOMPSON, Mississippi (ex officio) 

MANDY BOWERS, Subcommittee Staff Director 

JOHN L. DICKHAUS, Subcommittee Clerk 

HOPE GOINS, Minority Subcommittee Staff Director 
(III) 

C O N T E N T S 

Page 

STATEMENTS

The Honorable Peter T. King, a Representative in Congress From the State 

of New York, and Chairman, Subcommittee on Counterterrorism and Intelligence: 

Oral Statement ..................................................................................................... 1 

Prepared Statement ............................................................................................. 2 

The Honorable Brian Higgins, a Representative in Congress From the State 

of New York, and Ranking Member, Subcommittee on Counterterrorism 

and Intelligence: 

Oral Statement ..................................................................................................... 3 

Prepared Statement ............................................................................................. 4 

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Ranking Member, Committee on Homeland 

Security: 

Prepared Statement ............................................................................................. 5 

WITNESSES

Ms. Louise Shelley, Director, Terrorism, Transnational Crime and Corruptions Center, George Mason University: 

Oral Statement ..................................................................................................... 6 

Prepared Statement ............................................................................................. 9 

Mr. Jonathan Schanzer, Vice President for Research, Foundation for the 

Defense of Democracies: 

Oral Statement ..................................................................................................... 13 

Prepared Statement ............................................................................................. 14 

Ms. Deborah Lehr, Chairman and Founder, The Antiquities Coalition: 

Oral Statement ..................................................................................................... 20 

Prepared Statement ............................................................................................. 22 

APPENDIX

Questions From Ranking Member William R. Keating for Louise Shelley ........ 41 

Questions From Ranking Member William R. Keating for Jonathan 

Schanzer ................................................................................................................ 41 

(1) 

FOLLOWING THE MONEY: EXAMINING CURRENT TERRORIST FINANCING TRENDS AND 

THE THREAT TO THE HOMELAND 

Thursday, May 12, 2016 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON COUNTERTERRORISM AND INTELLIGENCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:06 a.m., in Room 

311, Cannon House Office Building, Hon. Peter T. King [Chairman 

of the subcommittee] presiding. 

Present: Representatives Katko, Hurd, King, Higgins, and 

Keating. 

Mr. KING. Good morning. The Committee on Homeland Security, 

Subcommittee on Counterterrorism and Intelligence will come to 

order. 

The subcommittee is meeting today to get testimony from three 

very distinguished experts regarding terror financing. 

I would like to welcome the Ranking Member, Mr. Higgins, and 

express my appreciation for the witnesses who are here today. I 

now recognize myself for an opening statement. 

In 2005, the 9/11 Commission gave the U.S. Government an A– 

in combating terrorist financing. As the United States built additional safeguards into the financial system to identify and disrupt 

the flow of funds to terrorists, we have scored some significant victories. Despite our successes, however, we cannot become complacent. Terrorist organizations have evolved, adopting new strategies 

and tactics, leveraging social media and encryption technology to 

recruit the next generation of jihadis and to plot attacks. 

Recent terror attacks and plotting have demonstrated terrorist 

organizations can have global impact at very little costs. While the 

cost of financing the 9/11 attack was estimated between $400,000 

and a half-a-million dollars, AQAP’s 2010 cargo bomb plot reportedly cost only $4,200. The January Paris attacks cost only $10,000, 

and the 2015 Charlie Hebdo attackers allegedly sold counterfeit 

sneakers and clothing to fund their activity. 

As we have hardened our defenses, our enemies have adapted as 

well, seeking to wear down our resolve with smaller-scale, more 

frequent plots conducted by U.S. and European citizens who have 

fought on the battlefields of the Middle East and Asia or have become radicalized to take action at home. 

While ISIS’ ability to hold territory in Iraq and Syria has provided it with access to resources that have allowed to finance the 
2 

terror campaign internally, the success of coalition airstrikes targeting ISIS’ oil production has forced the group to seek revenue 

through other activities, including human trafficking, taxing the 

local population, and robbing antiquities from world-renowned cultural and historical sites. 

ISIS facilitators have also encouraged recruits to resort to petty 

crime to fund travel to Syria and home-grown violent extremism. 

The alleged head of the Brussels ring that conducted the Paris attacks, doled out cash and presents to wayward youths he recruited 

as thieves and prospective fighters. They were then trained to target train stations and tourists, stealing luggage, even shoplifting 

for their cause. 

I am eager to hear from today’s witnesses how terrorist groups 

and State sponsors of terrorism have been turning to criminal activities to develop new source of funds, evade detection, and acquire 

logistical expertise moving and laundering funds, as well as how 

supporters may be changing tactics to evade current laws and detect illicit funds moving to designated terror groups. 

Hezbollah facilitators have been shown to be particularly savvy 

in circumventing U.S. laws on terrorist financing. The Lebanese 

Canadian Bank case where bank officers engaged in laundering 

money from Colombian drug cartels and mixing it with proceeds 

from used cars bought in the United States, illustrates the sophistication and motivation of Hezbollah to finance its terrorist operations, and the close ties between terrorists and criminal networks. 

These organizations are highly innovative and motivated, and our 

Government must remain nimble in the laws and authorities it 

provides to our intelligence and law enforcement agencies to meet 

this challenge. 

When examined over time, several fundamental lessons emerge. 

First, a wide range of terrorist organizations have sought to draw 

upon the wealth and resources of the United States to finance their 

organizations and activities. Second, just as there is no one type of 

terrorist, there is no one type of terrorist financier or facilitator. 

Third, terrorist financiers and facilitators are creative and will seek 

to exploit vulnerabilities in our society and financial system to further their unlawful aims. 

I would like to welcome our expert panel. Your input is critical 

to the subcommittee’s understanding of the current trends in terror 

financing and how the U.S. Government can build stronger partnerships with the public and private sector to identify funds being 

diverted to terrorist organizations and disrupt and dismantle the 

criminal and money-laundering rings. 

[The statement of Mr. King follows:] 

STATEMENT OF CHAIRMAN PETER T. KING

MAY 12, 2016 

In 2005, the 9/11 Commission gave the U.S. Government an ‘‘A–’’ in combating 

terrorist financing. As the United States built additional safeguards into the financial system to identify and disrupt the flow of funds to terrorists, we have scored 

some significant victories. 

Despite our successes, however, we must not become complacent. Terrorist organizations have evolved, adopting new strategies and tactics, leveraging social media 

and encryption technology to recruit the next generation of jihadis, and plot attacks. 
3 

Recent terror attacks and plotting have demonstrated that terrorist organizations 

can have global impact at very little cost. While the cost of financing the 9/11 attack 

was estimated at $400,000 to $500,000, AQAP’s 2010 cargo bomb plot reportedly 

cost only $4,200. The January Paris attacks cost only $10,000 and the 2015 Charlie 

Hebdo attackers allegedly sold counterfeit sneakers and clothing to fund their activity. 

As we have hardened our defenses, our enemies have adapted as well, seeking to 

wear down our resolve with smaller-scale, more frequent plots conducted by U.S. 

and European citizens who have fought on the battlefields of the Middle East and 

Asia, or who have been radicalized to take action at home. 

While ISIS’ ability to hold territory in Iraq and Syria has provided it with access 

to resources that have allowed to finance its terror campaign internally, the success 

of coalition airstrikes targeting ISIS’ oil production, has forced the group to seek 

revenue through other activities, including human trafficking, taxing the local population, and robbing antiquities from world-renowned cultural and historical sites. 

ISIS facilitators have also encouraged recruits to resort to petty crime to fund 

travel to Syria and home-grown violent extremism. The alleged head of the Brussels 

ring that conducted the Paris attacks doled out cash and presents to the wayward 

youths he recruited as thieves and prospective fighters. They were then trained to 

target train stations and tourists, stealing luggage, even shoplifting for their cause. 

I am eager to hear from today’s witnesses how terrorist groups and state sponsors 

of terrorism have been turning to criminal activities to develop new sources of 

funds, evade detection, and acquire logistical expertise moving and laundering 

funds, as well as how supporters may be changing tactics to evade current laws to 

detect illicit funds moving to designated terror groups. 

Hezbollah facilitators have been shown to be particularly savvy in circumventing 

U.S. laws on terrorist financing. The Lebanese Canadian Bank case, where bank officers engaged in laundering money from Colombian drug cartels, and mixed it with 

proceeds from used cars bought in the United States, illustrates the sophistication 

and motivation of Hezbollah to finance its terrorist operations, and the close ties between terrorist and criminal networks. These organizations are highly innovative 

and motivated and our Government must remain nimble in the laws and authorities 

is provides to our intelligence and law enforcement agencies to meet this challenge. 

When examined over time, several fundamental lessons emerge: First, a wide 

range of terrorist organizations have sought to draw upon the wealth and resources 

of the United States to finance their organizations and activities; second, just as 

there is no one type of terrorist, there is no one type of terrorist financier or 

facilitator; and third, terrorist financiers and facilitators are creative and will seek 

to exploit vulnerabilities in our society and financial system to further their unlawful aims. 

I would like to welcome our expert panel. Your input is critical to the subcommittee’s understanding of the current trends in terror financing and how the U.S. Government can build stronger partnerships with the public and private sectors to identify funds being diverted to terrorist organizations and disrupt and dismantle the 

criminal and money-laundering rings. 

Mr. KING. Now I am privileged to recognize the distinguished 

Ranking Member from upstate New York, almost Canada, Mr. Higgins. 

Mr. HIGGINS. Thank you, Mr. Chairman. 

I also look forward to hearing from the witnesses who have 

joined us today regarding your studies and background about this 

very, very important issue. Hearings like this allows us to stay engaged in the fight against terrorism, engage the dangers terrorist 

organizations pose in regions throughout the world. 

Terrorist organizations such as ISIS, Hezbollah, al-Qaeda, 

Hamas, to name a few, have all become very sophisticated in financing their terror activities. These financing tools span from 

criminal enterprises, such as ransoms, drug operations, and human 

trafficking, to creating charities under false pretenses too, and 

what may be the most surprising of all, looting and selling of antiquities to gain funds. 

Terror financing is of special interest to the committee because, 

according to reports, in 2014 alone, ISIS obtained revenue of $2 bil-
4 

lion and a war chest of nearly $250 million. This surpasses any 

other terrorist organization’s annual earnings. It makes ISIS a financially self-sufficient organization. ISIS’ second-largest form of 

revenue is through the illicit and black market trade of stolen antiques. 

In control of a region that has over 5,000 archeological sites, ISIS 

has destroyed or looted and stolen artifacts that are worth millions 

of dollars. In the Middle East and North African region, ISIS has 

caused mass hysteria, wrecking temples in Syria, destroyed the 

Judeo-Christian tomb of Jonah, and pillaged the Mosul Museum in 

Iraq. Earlier this year, the United Nations Educational, Scientific, 

and Cultural Organization’s director general declared that the deliberate destruction of cultural heritage in Syria and Iraq is, in 

fact, a war crime. 

Finally, through the less-prominent revenue source for ISIS, kidnapping for ransom has been effectively used by other terror organizations to finance their operations. Al-Qaeda and its affiliates 

have reportedly received in excess of $125 million through KFRs 

since 2008, much of it paid by foreign governments. Combating 

these terror financing operations must be among our top priorities 

as doing so is a key component to our efforts to counter these 

groups globally. 

I look forward to having a productive conversation with the panelists and, hopefully, learning more about how to halt these terror 

financing operations. 

With that, I yield back. 

[The statement of Mr. Higgins follows:] 

STATEMENT OF RANKING MEMBER BRIAN HIGGINS

APRIL 27, 2016 

Hearings like these allow us to stay engaged in the fight against terrorism and 

gauge the dangers terrorist organizations pose in regions throughout the world. Terrorist organizations such as ISIL, ISIS, Hezbollah, al-Qaeda, and Hamas (to name 

a few) have all become very crafty in financing their terrorist, extremist operations. 

These financing tools span from criminal enterprises such as ransoms, drug operations, and human trafficking to creating charities under false pretenses, to, and 

what may be most surprising of all, the looting and selling of antiquities to gain 

funds. 

Terror financing is of special interest to the committee because according to reports, in 2014 alone, ISIS attained revenue of $2 billion and a war chest of nearly 

$250 million. 

This surpasses any other terrorist organization’s annual earnings and makes ISIS 

a ‘‘financially self-sufficient’’ organization. ISIS’ second-largest form of revenue is 

through the illicit, black market trade of stolen antiques. 

In control of a region that has over 5,000 archaeological sites, ISIS has destroyed 

looted and stolen artifacts that are worth millions of dollars and a part of history. 

In the Middle Eastern and Northern African region, ISIS has caused mass 

hysteria—wrecked temples at the ruins of Palmyra in Syria, destroyed the JudeoChristian Tomb of Jonah, and pillaged the Mosul Museum in Iraq. 

Earlier this year, the United Nations Educational, Scientific, and Cultural Organization’s director-general declared the ‘‘deliberate destruction of cultural heritage’’ 

in Syria and Iraq a ‘‘war crime.’’ 

Finally, though a less-prominent revenue source for ISIL, kidnapping for ransom 

has been effectively used by other terrorist groups to finance their operations. AlQaeda and its affiliates have reportedly received in excess of $125 million through 

KFR since 2008, much of it paid by foreign governments. 

Combating these terror financing operations must be among our top priorities, as 

doing so is a key component in our efforts to counter these groups globally. I look 
5 

forward to having a productive conversation with the panelists and hopefully learning more about how to halt these terrorist financing operations. 

Mr. KING. I thank the Ranking Member. 

I would advise other Members of the committee that opening 

statements may be submitted for the record. 

[The statement of Ranking Member Thompson follows:] 

STATEMENT OF RANKING MEMBER BENNIE G. THOMPSON

During a similar Committee on Homeland Security hearing during the 112th Congress, I acknowledged that as the administration and our National efforts continue 

to ‘‘disrupt and dismantle the activities and traditional funding sources of terrorist 

groups such as al-Qaeda, it should come as no surprise that their affiliates may turn 

to traditional criminal activities to fund ideologically-based violence.’’ 

As we meet today, the same holds true. Currently, the United Nations Security 

Council Sanctions List includes over 600 individuals and almost 400 organizations. 

As our international partners continue to share and coordinate threat and financial information and nations continue to impose economic sanctions, this game of 

whack-a-mole will continue as state-sponsored terrorist groups will seek other 

sources of financing. 

Terrorists organizations like al-Qaeda, the Islamic State, and Boko Haram are 

being forced to be more innovative with their financing schemes. Terrorist organizations are increasingly being linked to transnational organized crimes like drug trafficking, illicit trading of firearms, extortion, kidnapping, human trafficking, smuggling of migrants, trafficking in natural resources, fraudulent medicine sales, and 

cyber crime. 

It is no shock that the financial structures of terrorist organizations are analogous 

to criminal organizations. Both groups utilize various financing patterns to raise 

and store funds. 

Similarly and due to the criminal nature of terrorist organizations, their use of 

alternative financing apparatuses can make tracking their financial operations especially difficult. 

A 2009 analysis and accumulation of data from various studies suggests that 

transnational criminal proceeds are likely to amount to some 3.6% of global GDP, 

equivalent to about US$2.1 trillion. 

According to the United Nations Office on Drugs and Crime, the largest income 

for transnational organized crime comes from illicit drugs. The most recent figure 

from the United Nations states that illicit drugs account for 20% of all crime-related 

proceeds. 

Since the September 11 attacks, there has been a renewed Federal focus on terrorist organizations. 

In the 15 years that have followed, the U.S. Government has made it a top National security priority to disrupt the financial support networks for terrorists and 

terrorist organizations. 

Most significantly, in 2004, the Department of Treasury created the Office of Intelligence and Analysis to regularly review intelligence information. As a member 

of the intelligence community, the Treasury Office of Intelligence and Analysis creates financial data and trends, based on intelligence information pertaining to terrorist financing abuse of charitable organizations and corporations. 

Intelligence information within this office is gathered and disseminated by and to 

various agents, including the Department of Homeland Security’s Office of Intelligence and Analysis and the Federal Bureau of Investigations. 

Information sharing is the key to maintaining the flow of information and ultimately tracking the dollars that are gained through transnational crimes, cultural 

crimes, and charitable contributions. 

These dollars keep terrorist organizations operational. These are the dollars they 

use to recruit, train, and equip their members so that they will in turn carry out 

violent terrorist acts. 

The duty of disruption and prevention still rests with the entire international 

community, not in the United States alone. In a world that grows more connected 

daily, it is important for other countries to make countering terrorism within their 

financial sectors a top international security priority. 

Terrorist organizations are becoming more fluid and diverse in the acquisition and 

laundering of money; consequently, our policy responses and counter efforts must 

be thoughtful and nimble. 
6 

I look forward to hearing recommendations from our witnesses today regarding 

the best practices and considerations we can undertake to end the cycle of funding 

that these organizations use to survive. 

Mr. KING. We are pleased to have a distinguished panel of witnesses before us today on this vital topic. Our first witness will be 

Dr. Louise Shelley. She’s the founder and director of the Terrorism, 

Transnational Crime and Corruption Center at George Mason University. She is an internationally-recognized expert on the relationship among terrorism, organized crime, and corruption. She is a 

published author on these vital topics and has received numerous 

awards and fellowships. She received her undergraduate cum laude 

from Cornell University, and an MA in criminology from the University of Pennsylvania and holds a Ph.D. in sociology from the 

University of Pennsylvania. 

Dr. Shelley, you are recognized. Thank you for being here today. 

We really appreciate it. 

STATEMENT OF LOUISE SHELLEY, DIRECTOR, TERRORISM, 

TRANSNATIONAL CRIME AND CORRUPTIONS CENTER, 

GEORGE MASON UNIVERSITY 

Ms. SHELLEY. Thank you very much, Chairman King, Ranking 

Member Higgins, and Members of the subcommittee for inviting 

me. 

I have submitted a statement, and so I will supplement it with 

some of the insights that I have had since I submitted it. I also will 

highlight a few important points. 

The last few weeks, I have spent traveling in Europe speaking 

with top specialists and advisers on terrorist finance and their 

homeland security. In fact, I joke that this is a life unlike what 

most academics have, especially American women, academics. 

From these conversations, I have a real concern that, especially in 

Francophone Europe where the attacks have occurred, that is in 

France and Belgium, there is not real appreciation of the relationship of crime and terrorism. 

Despite the fact that, as was mentioned in the opening statements, these terrorist attacks have been funded by petty crime, 

there is a failure to appreciate the importance of this. What we are 

finding is that it is the same network that has been involved in all 

of these terrorist attacks, but is disbursed among France, Belgium, 

the United Kingdom, and Germany, and maybe elsewhere. They 

are heavily funded by crime, and these acts are committed primarily by radicalized criminals. Yet there is not a strategy in Europe to deal with this problem. 

This is not just a problem for the Europeans, it is a problem for 

us, because we have Americans traveling in Europe; we have businesses operating internationally in Europe; we have military operations overseas, and yet we are having our allies failing to see this 

problem with the severity that it is and the consequences that it 

has and the types of policing and intelligence responses that one 

needs to this new hybrid threat. 

Second, my research that I continue to do under my Carnegie 

Corporation Fellowship points out the centrality of the problem of 

illicit trade to terrorist financing. This is a massive problem. It is 
7 

8 to 15 percent of the global economy, and, therefore, it is very possible to hide the illicit in the large-scale illicit flows. 

Yesterday, the research center that I direct had an event on the 

Panama Papers with the manager of the Panama Papers and the 

former head of the tax authority in Colombia, who provided detailed analyses of how much of this illicit money from Colombia, 

from the drug trade that is run by both criminals and terrorists, 

wound up in Panama using the mechanisms of trade-based money 

laundering and hiding illicit trade in larger-scale trade. 

So this is a very clear example that we had yesterday of how this 

problem of trade-based money laundering is supporting terrorism, 

not just in the Middle East, but on our back door, and paid for by 

the drug payments that come from the United States and move 

back to Colombia. 

So, therefore, I think we need to pay much more attention to the 

role of illicit trade. I am glad that we are having a presentation on 

antiquities on this panel, because that is one form of illicit trade 

that is used to fund terrorism and intersects with many other 

forms of illicit trade, as Ms. Lehr and I discussed before the opening of the hearing. 

But this illicit trade does not exist in a vacuum. It is supported 

by banks; it is supported by law firms; it is supported by professional services that write contracts, that develop contracts, and 

help mask the illicit trade. This is one thing that the Panama Papers has also revealed, is that there are a lot of high-level 

facilitators. Even though there are not many people mentioned in 

the Panama Papers that are American, many of the facilitators are 

based in the United States. Therefore, we need to be paying much 

more attention to the members of the legitimate community that 

are either inadvertently or sometimes knowingly facilitating illicit 

trade. We have seen this in recent revelations of Deutsche Bank, 

we have seen it with HSBC, and this continues to remain a problem. 

I also want to mention three foci areas of illicit trade that I think 

of as relatively new that are not being paid enough attention to. 

For example, there is now a large illicit trade in gold, some of this 

coming out of Colombia. One of the things that we see with terrorist groups is they have enormous flexibility and ability to switch 

between one area of illicit activity and another. So the revenues for 

the FARC in Colombia are now estimated to be greater from the 

illicit gold trade than from the narcotics trade. 

The second type of new trade I wanted to discuss is that of the 

kidney trade. For quite a number of years, there has been a trade 

in Egypt in which wealthy foreigners come and are operated on in 

hospitals obtaining kidneys that they cannot legitimately obtain in 

the United States or Western Europe. Now there is a new source 

of providers of these kidneys, according to research with kidney donors and purchasers, is that migrants from the crisis in Iraq and 

Syria want to pay smugglers, but they don’t have the money to pay 

the smugglers. So there are facilitators in Turkey working among 

the refugee communities that find individuals ready to sell their 

kidneys, who will then travel to Egypt, sell their kidneys, and pay 

the smugglers. 
8 

What makes this a problem of terrorist finance is that it appears 

that this trade has become so lucrative that groups like al-Nusrah 

are intimidating the doctors who have traditionally performed this 

trade and are taking many of the profits out of this trade. But 

what has changed is that the purchasers of the kidneys are no 

longer bringing suitcases of dollars to Egypt but are putting the 

money through wire transfers, transfers to travel agencies into 

bank accounts in Western Europe, France, the United Kingdom, 

and Germany, which gives them a new funding source to draw on 

in western banking centers but does not require transfers from the 

Middle East. 

The last area that I want to bring up as a new area of concern 

is what I call a problem of possibly dual-use crime, which is the 

growing trade of illicit pesticides, something that has really 

emerged on the international markets in the last 7, 8 years. 

I was recently on this European trip at a meeting of the OECD 

on illicit trade, and one of the Polish specialists was talking about 

the confiscation of huge amounts of these dangerous pesticides in 

northeast Europe. Europol is now estimating that 25 percent of the 

pesticides used in northeast in Europe are illegal. The general figure is 10 percent in Europe, and it is about a third of the market 

in a major food exporter like India. It is also a problem in China. 

So we are looking at something that is both a health hazard, as 

we are an importer of food. We also have some of these illegal pesticides entering into our markets but not in as large a scale as elsewhere, but there is also the possibility that as this phenomenon increases, it can be used by terrorists to introduce dangerous chemicals and harm health. So this is something that I believe deserves 

more attention. 

So what do I recommend that we do? We are still not focusing 

sufficiently on illicit trade as a source of terrorist financing, despite 

the fact that trade is an essential element of the Middle East economy and is, as I have just mentioned, has been revealed as being 

a central part of financing in the trade that we have in Colombia 

and Latin America. We need to focus on new emerging areas and 

not just the kinds of trade that we have been thinking about before. 

As I talked about before, we need to be expanding our efforts in 

the United States to be focusing on the relationship of crime and 

terrorism and how these phenomena are linked. In our attache ́s 

that work for homeland security, we need to be developing this 

greater appreciation of this phenomena through our insights and 

lessons learned. This needs to especially be done with our European colleagues who have faced such major terrorist challenges 

lately and have not yet reoriented their policing or their intelligence to focus on this threat in a new way. 

Because so much of this illicit trade is connected to the business 

world, we need to establish much more of public-private partnerships with companies that are aware of this illicit trade, with shipping companies, transport companies, and others. Much of this 

trade is going on in the dark Web. 

There is research that is going on today on the internet, the deep 

Web, and the dark Web, but not enough that I think is accessible 
9 

1See Joby Warrick, Black Flags: The Rise of ISIS, (New York: Knopf/Doubleday, 2015). 2Franco Roberti remarks at Dialoghi sulle mafie, Seconda edizione Assessorato alla cultura 

del Comune di Napoli-Universita` Suor Orsola Benincasa Napoli, S. Domenico Maggiore 16–17– 

18–19 marzo 2016; Pietro Grasso, Il rapporto tra traffici illeciti e terrorismo, November 16, 

2015, Italian Senate, http://www.radioradicale.it/scheda/458928/il-rapporto-tra-traffici-illecitie-terrorismo. 3This is a particular problem in France despite the recent attacks and the biographies of the 

terrorist attackers. 4Marie-Christine Dupuis-Danon, ‘‘Pour lutter contre l’argent de la terreur, traitons vraiment 

la question de l’e ́conomie souterraine et des traffics,’’ April 27, 2016, http://www.lemonde.fr/ 

idees/article/2016/04/27/pour-briser-les-ressources-du-terrorisme-luttons-contre-l-economiesouterrainel4909282l3232.html#wj1kZiCU4mGeEFED.99. 5Shelley, 38–39. 

on the interaction of the crime and the terrorist funding that goes 

on between the dark Web and the deep Web. 

We had a seminar on this at our research center about 6 weeks 

ago. We had 120 people in the room, many of them from law enforcement, many of them that work in homeland security, and 

there is a desperate need for information and insights on how to 

understand and focus on this problem. We must continue to address the money laundering that is contributing to the illicit trade 

and also deriving from the illicit trade. We must work much more 

on the beneficial ownership between valuable properties, shell corporations, and understand the challenges we face in not having 

more transparency in our financial system. 

Thank you. 

[The prepared statement of Ms. Shelley follows:] 

PREPARED STATEMENT OF LOUISE SHELLEY

MAY 12, 2016 

The growing linkages between crime and terrorism observed in the past 4 decades 

are not merely a result of globalization or the need to assure a more diversified revenue flow for terrorist groups. Rather, this change represents a profound evolution 

in organized crime and terrorism, as well as their relationship to the state. The terrorist attacks in France and Belgium provide strong proof that the associations of 

crime and terrorism are very present as most of the identified terrorists have criminal backgrounds. The heavy recruitment of criminals by ISIS as terrorists is hardly 

surprising as the antecedents of ISIS lie in its founder, the criminal, Al-Zarqawi 

who became a terrorist.1

What is of particular concern to U.S. homeland security is that many of our European allies fail to see this threat as one of crime and terrorism. Having just recently 

returned from a European trip during which I had many meetings over several 

weeks with highly-placed members of the Francophone security community as well 

as officials from other European states, it is clear that many in policy positions in 

the European security community fail to appreciate this important evolution. The 

exception may be the Italians who have observed these links between crime and terrorism for over 3 decades as publicly expressed by Italy’s current anti-mafia prosecutor and a predecessor who is now President of the Italian Senate.2 But for many 

other countries in Continental Europe, there is not a recognition of the problem that 

terrorists increasingly use crime to support their activities 3 and that ISIS, in particular, focuses on recruiting low-level criminals into its ranks. 

The crimes used by the criminal-terrorists are not large-scale crimes but low-level 

narcotics trafficking, small-scale fraudulent bank loans and illicit trade that are 

being used to support their activity.4 The funding patterns identified in the first 

French attack of the Kouachi Brothers and Koulibaly continue because it is the 

same network that continues to attack—one that is dispersed among France, Belgium, the United Kingdom, and Germany. There have been very few wire transfers 

identified emanating from the Middle East to these overseas members of the ISIS 

network. The European terrorist cells are heavily home-funded through crime. 

Prisons and relationships established in prison are key to recruitment and network enhancement. This was fist evident in the investigations that followed the Madrid subway bombing in 2004 5 and has remained true with the most recent terrorist 
10 

6Steven Mufson, ‘‘How Belgian Prisons became a Breeding Ground for Islamic Extremism,’’ 

March 27, 2016, https://www.washingtonpost.com/world/europe/how-belgian-prisons-became-abreeding-ground-for-islamic-extremism/2016/03/27/ac437fd8-f39b-11e5-a2a3-d4e9697917d1l- story.html. 7Dupuis-Danon. 

8David Luna, ‘‘The Destructive Impact of Illicit Trade and the Illegal Economy on Economic 

Growth, Sustainable Development, and Global Security,’’ http://www.state.gov/j/inl/rls/rm/ 

199808.htm. 9 Europol, Migrant Smuggling in Europe, 2016, p.13, migrantlsmugglingl- europollreportl2016.pdf. 10OECD and EUIPO, Trade in Counterfeit and Pirated Goods Mapping the Economic Impact 

(Paris: OECD, 2016). 11 Illustrative of this are the illegal cigarettes factories in Eastern Europe that produce cigarettes that are distributed within Europe. Their share of illicit trade is not reflected in the 

OECD report because it occurs within the trade bloc but causes the loss of hundreds of millions 

if not billions in lost tax revenues. 12OeCD and EUIPO. 13 Ibid. 

attacks in France and Belgium where bonds among criminals were made in prison 

and individuals once incarcerated together have gone on to commit terrorist attacks 

with their former fellow inmates.6

We need to expect that patterns established in one place may be replicated in another. Therefore, we may see patterns identified in Europe manifesting themselves 

in the United States. Therefore, we need to focus more on prisons and their role 

in terrorist recruitment and financing. 

The attacks in France and Belgium in 2015 and 2016, committed primarily by 

radicalized criminals, are evidence that these countries failed to respond to the new 

hybrid of criminals and terrorists—terrorists who have criminal pasts and continue 

to support themselves and their terrorist acts through criminal activity.7 Law enforcement and security bodies are not organized to reflect this new reality nor are 

there plans to reorient their focus to address this threat. This nearly assures that 

there will be future terrorist attacks in Western Europe. This will be very politically 

destabilizing for our allies but may have even more direct consequences for us. 

Americans, American businesses and installations may be victims of these attacks. 

The failure to respond to the new hybrid threat by European governments also has 

other consequences for our security. Many of these hybrid criminal-terrorists have 

European passports. Therefore, the new hybrid terrorists can enter our country 

more easily as they have more mobility than other potential terrorists who need 

visas to enter the United States. 

HIDING THE ILLICIT IN THE ILLICIT: SIZE OF ILLICIT TRADE

My present research on my Carnegie Council Fellowship continues to see the 

problem of illicit trade as a key funding source for terrorism. The size of illicit trade 

is growing in almost all identified categories. Therefore, while there is a contraction 

in much global trade and a decline of export of natural commodities with the Chinese economic slowdown, a similar shrinking in illicit trade has not been identified. 

Unfortunately no multinational body, no NGO, nor any group of trade specialists 

have reported the contraction of any form of illicit trade that they are analyzing. 

Reliable estimates of recent years indicate that illicit trade represents at least 

10% of global trade with other estimates ranging between 8 and 15%.8 These ranges 

were calculated before the Syrian conflict escalated, the ascendency of ISIS and the 

generation of hundreds of millions from the sale of smuggled oil. Nor do they reflect 

the massive growth of illegal migration facilitated by human smugglers who have 

netted approximately $3–6 billion from this trade to Europe in 2015 alone.9

The OECD has estimated that illicit trade in counterfeits represents 5 percent of 

the economies of the developed world.10 This figure underestimates the problem in 

the developed world because illicit goods produced within Europe such as synthetic 

drugs and illicit whites (legally produced cigarettes intended to be sold without payment of taxes) are widely distributed and traded among European countries but are 

not counted in this figure.11 The OECD figure for illicit trade in the developing 

world is half that of the developed world.12 But this is counterintuitive and the data 

used to derive this result is problematic and leads to a dramatic understatement 

of the problem. The calculation is based on customs data from a relatively limited 

number of countries and OECD did not take into account the very high levels of 

corruption in customs’ agencies in the developing world that choose not to seize 

goods or deliberately fail to report on illegal trade to government officials as the customs personnel are benefiting directly from this trade.13
11 

14GFI data on size of flows—http://www.gfintegrity.org/issue/illicit-financial-flows/, Panama 

Papers, https://panamapapers.icij.org/ as a subset of this. 15 James Shotter and Caroline Binham, ‘‘Deutsche Bank warned on crime curbs: UK Watchdog 

finds ‘systemic’ weakness in laundering controls,’’ Financial Times, May 2, 2016, p. 13. James 

Shotter and Caroline Binham ‘‘Deutsche Bank still plagued by legal uncertainty in wake of FCA 

warning,’’ Financial Times, May 2, 2016, p. 15. 16http://www.worldpoliticsreview.com/articles/17770/colombia-s-informal-gold-miners-feelthe-heat-from-all-sides. 17Global Initiative, ‘‘Organized Crime and Illegally Mined Gold in Latin America,’’ 2016, 

http://www.globalinitiative.net/organized-crime-and-illegally-mined-gold-in-latin-america/. 

The counterfeit figure is only 1 important component of the totality of illicit trade. 

It does not count the equally or more common trade in narcotics that as much as 

3 decades ago was estimated to represent 5 to 7 percent of world trade, a percentage 

that has not declined in recent decades as new drugs have entered the global market and new regions have become significant consumers of illegal drugs. There are 

many more aspects of the illegal economy including such clearly illegal activity as 

trafficking in humans, arms, and many forms of cyber crime consist of illegal trade 

in credit cards, identities, and child pornography. Many of these crimes converge, 

enhancing their impact and enriching the key facilitators. Then there is also the illegal trade in some products that might be legally traded as timber, fish, and gold 

but are exploited and traded illegally. 

Illicit trade and commerce is facilitated by enormous illicit and dubious financial 

flows to offshore locales such as has been recently confirmed by the Panama Papers.14 The anonymity of shell companies and the possibility to disguise the origin 

of funds makes it possible for criminals, terrorists, the corrupt, and the rich seeking 

to hide their wealth to all converge in the same locale. 

Therefore, with such a large quantity of illicit trade and money in the world it 

is easy for terrorists to hide their activity within this massive movement of goods 

and funds. Therefore, we need to pay more attention to the trade and the tradedocuments which may help reveal anomalies in this movement. 

We also need to focus on legitimate banks that can help facilitate the storing and 

transport of money for terrorists. Recent investigations reveal that legitimate large 

banks such as Deutsche Bank, in violation of international regulations, receive 

funds that are associated with terrorists and criminals as this helps increase profits. 

Officials at Deutsche Bank, in a significant number of suspicious files examined by 

auditors, revealed that officials were told to avoid warning signs or not to commit 

due diligence on what should be suspicious clients.15

This illicit movement of funds and sales is increasingly being conducted within 

the dark web. The dark web figures in the illicit kidney trade, mentioned below, because those seeking a kidney transplant establish contact with facilitators through 

closed networks on the web. The dark web also helps facilitate drug and arms sales, 

in particular, as buyers and sellers often interact in private groups that thrive in 

the dark web. 

THREE FOCI AREAS

Within this illicit trade there are 3 areas that deserve more attention because 

they have been associated with terrorist financing or might in the future. These are: 

Illicit gold trade, illicit kidney trade, and illicit pesticide trade. These categories are 

also associated with significant environmental and/or health harms. These new 

areas reveal that illicit actors also shift between diverse forms of illicit trade to optimize profits and reduce risk. 

Gold Trade 

The FARC, a major Colombian terrorist organization that survived for decades in 

the illicit drug trade has now acquired a new illegal revenue source with less risk 

and higher profits. Over 85% of the gold mined in Colombia is mined illegally,16

meaning this large economic sector is a lightly-regulated market, providing the 

criminals and terrorists opportunities to exploit production. FARC’s revenues from 

the illegal gold trade now 17 exceed those from the drug market. The terrorist group 

has taken the practices it has learned in one area and applied them to another. 

Therefore, illicit gold mining and trade is accompanied by intimidation, violence, 

and extortion as well as exploitation of indigenous populations. 

Kidney Trade 

Egypt has had doctors performing kidney transplants for individuals from foreign 

countries who cannot acquire kidneys in their home countries. The nature of the 

business has changed as the cost of kidney transplants has increased in Egypt and 

profit-margins have increased. Long-term research undertaken by Professor Camp-
12 

18Professor Campbell Fraser, ‘‘Human Organ Trafficking: Understanding the Changing Role 

of Social Media and Dark Web Technologies 2010–2015,’’ January 21, 2016, http:// 

traccc.gmu.edu/events/previously-hosted-events/. 19Louise Shelley, Dirty Entanglements: Corruption, Crime and Terrorism (Cambridge and 

New York: Cambridge University Press), pp. 36, 201. 20 ‘‘Federation of Indian Chamber of Commerce and Industry (FICCI) and Tata Strategic Management Group. Study on sub-standard, spurious/counterfeit pesticides in India: 2015 Report, 

New Dehli: FICCI.2015. 21 UNICRI ‘‘Illegal Pesticides, Organized Crime and Supply Chain Integrity,’’ 2016, p. 42. 

http://www.unicri.it/inlfocus/files/Thelproblemloflillicitlpesticidesllowlres1.pdf. 22Presentation at OECD Task Force on Illicit Trade, Paris, April 18–19, 2016. 23The Global Illicit Trade in Tobacco: A Threat to National Security 2016, http:// 

www.state.gov/documents/organization/250513.pdf. 

bell Fraser in the Middle East and Asia suggests that there are new opportunistic 

participants in this trade. Turkish middlemen procure refugees who are seek to pay 

smugglers to move family members to Europe. As the business has grown, groups 

such as al-Nusra have moved in, forcing the doctors, who once were the prime recipients of the profits, to work under their control. Payments made by Europeans 

seeking these operations now remain in European banking accounts, possibly giving 

the terrorists involved in this trade access to significant sums in Europe as the profits of this trade can reach $40,000 an operation.18

Illicit Pesticide Trade 

The problem of the growing use of illicit pesticides is a generally growing problem 

and a threat to our security. But the threat may be compounded because it is an 

ever-escalating part of illicit trade. The threat comes from both the importation of 

food that has been grown in places where these illegal and dangerous pesticides are 

used but also the importation of deadly pesticides into the United States. This could 

be what I have referred to as a dual-use crime in my book Dirty Entanglements: 

Corruption, Crime and Terrorism. It makes money for illicit actors and also causes 

serious harm to purchasers.19 The threat is accelerating as illegal pesticides now 

represent one-third of the market among key food exporters such as India.20 These 

dangerous chemicals are used in 10 percent of Europe with usage in Northeastern 

Europe at 25%.21 Large-scale seizures have occurred in Poland recently.22 Some of 

these pesticides are so deadly that they destroy all crops and damage the soil. 

RECOMMENDATIONS

1. Attach more attention to the analysis and policing of illicit trade as this remains an underpoliced area of criminal activity. This is important for the different agencies of Homeland Security that have such great jurisdictional authority over trade entering and exiting the United States. 

2. Focus on new emergent forms of illicit trade such as organ trade, illicit pesticide trade, and natural resources. Continue to focus on underpoliced areas of 

criminal activity that continue to contribute significantly to terrorism such as 

counterfeiting, antiquities and illicit cigarette trade,23 and trade-based money 

laundering. 

3. Expand the combined policing and counter-terrorism efforts developed in New 

York and Los Angeles to other locales both domestically and internationally. 

There should be best practices developed on combating hybrid threats and the 

relationship of crime and terrorism. This should be done both in the United 

States and also with counterparts in Europe, Asia and Africa, and Latin America. 

4. Work with our allies in Europe to help them understand the relationships 

between crime and terrorism that we are detecting. Bilateral and multi-lateral 

engagement should be expanded. 

5. Establish public-private partnerships to get more insights from the business 

community on the anomalies they see and the emerging patterns that they are 

identifying in illicit trade. 

6. Support research that can help us understand trends in terrorist financing 

in the real and the virtual world. We need to understand more of how the different levels of the cyber world—the internet, the deep web, and the dark web 

interact in the world of threat finance. We need to continue to understand cyber 

currencies and their enabling role. 

7. We must continue to address the money-laundering contributing to illicit 

trade. The targeting of illicit flows into real estate in New York and Miami 

needs to be expanded to other jurisdictions, and made permanent. We must implement the policies being developed to identify the beneficial ownership behind 

valuable properties and shell corporations. 
13 

Mr. KING. Thank you very much, Dr. Shelley. 

Our next witness is Dr. Jonathan Schanzer. He is the vice president for research at the Foundation for the Defense of Democracies. 

He has been a leading scholar on terror finance and other counterterrorism issues for decades, serving multiple think tanks as an analyst at the Department of Treasury. He earned his Ph.D. from 

King’s College in London and has published a number of books on 

terrorism and Middle East-based terror groups. 

Dr. Schanzer, you are recognized. Thank you. Thank you for 

being here today. 

STATEMENT OF JONATHAN SCHANZER, VICE PRESIDENT FOR 

RESEARCH, FOUNDATION FOR THE DEFENSE OF DEMOCRACIES 

Mr. SCHANZER. Chairman King, Ranking Member Higgins, and 

distinguished Members of the subcommittee, on behalf of Foundation for Defense of Democracies, thank you for inviting me to testify. 

As a former terrorism finance analyst at the U.S. Department of 

Treasury, I commend you for keeping an eye on this crucial aspect 

of our National security. I will focus my comments today on recent 

FDD research which tracked a U.S.-based network of former employees and donors from 3 domestic organizations that provided 

material and financial support to the terrorist organization Hamas, 

but who now work or fundraise for an Illinois-based organization 

called American Muslims for Palestine, or AMP. The 3 now-defunct 

organizations are Holy Land Foundation for Relief and Development, KindHearts for Charitable Development, and the Islamic Association for Palestine. 

Let’s address Holy Land first. This is an organization that gave $12 million to Hamas over 10 years, and 5 of their leaders are now 

in jail in the United States. When I testified last month before the 

House Foreign Affairs Committee, I discussed 3 AMP figures who 

had previously worked for or on behalf of the Holy Land Foundation. Today, I will discuss a fourth figure named Kifah Mustapha. 

Kifah Mustapha was the head of the Holy Land Foundation’s office in Illinois. Today, he gives speeches at AMP fundraisers and 

makes promotional videos for the organization. Mr. Mustapha also 

works for the Mosque Foundation, a nonprofit that gave money to 

the Holy Land Foundation before it was shut down. Today, it gives 

money to AMP. 

Now let’s look at the overlap with KindHearts. Abdelbasset 

Hamayel, who is officially the registered agent for AMP, was the 

Wisconsin and Illinois representative for KindHearts, a group that 

the Treasury called the progeny of the Holy Land Foundation. 

Treasury blocked the assets of KindHearts, and it was ultimately 

dissolved. 

Mr. Chairman, we have also learned that AMP’s founder and 

president, Hatem Bazian, was 1 of 2 featured speakers at a 2004 

KindHearts fundraising dinner in California. Incidentally, the 

other speaker at this dinner was Mohammed el-Mezain, who is currently in jail for his role in the Holy Land Foundation and for providing financial support to Hamas. Bazian, I should note, also 

spoke in England at an event in 2014 sponsored by the Hamas 
14 

charity known as Interpal, which was designated for terrorism by 

the U.S. Treasury in 2003. Interpal belonged to an umbrella organization known as Union of Good, which was also designated by 

the Treasury for terrorism in 2008. 

Finally, there are multiple connections between AMP and the Islamic Association for Palestine, or IAP. This was a group found civilly liable in Federal court for supporting Hamas. One interesting 

figure here is Osama Abuirshaid, who ran IAP’s newspaper. He is 

currently the National coordinator and policy director for AMP. 

In late April, Abuirshaid took what he called a surprise trip to 

Doha, Qatar, where he posted pictures of himself on social media 

with Ayman Jarwan. Jarwan was in prison in the United States 

and ultimately deported for his role in a fraudulent charity that 

violated Iraq sanctions, laundered money, and sent funds to 2 charities designated for funding al-Qaeda. The exact nature of this 

meeting between Jarwan and Abuirshaid is unclear. 

My written testimony today, along with the one I submitted to 

Congress last month, describes AMP’s other troubling connections 

to now-defunct organizations implicated in terrorism finance. I encourage you to read them both. When you do, please note how AMP 

operates on university campuses across the country by coordinating 

and funding the efforts of an activist network known as Students 

for Justice in Palestine. 

To conclude, our open-source research did not indicate that AMP 

or any of these individuals are currently involved in any illegal activity. However, because they are a tax-advantaged organization, 

the past activities of those who work for or on behalf of AMP 

should at least merit greater transparency and scrutiny. The IRS 

might consider studying the British model for charity oversight. 

In the United Kingdom, the Charity Commission monitors the 

charitable sector for organizations that are run by extremists. This 

does not stop individuals from exercising their right to free speech, 

according to the laws of their country, but the commission has ensured in the most egregious abuses of the system that they don’t 

receive tax breaks. The goal, according to the commission’s website, 

is to, ‘‘Ensure that the public can support charities with confidence.’’ 

Finally, there is a broader question, one raised today by Eli Lake 

of Bloomberg News, and that is, is the Treasury Department still 

tracking individuals previously involved in terror financing activities here in the United States? If so, this subcommittee has the 

power to ask why, who should be leading this effort, and whether 

more resources should be devoted to the problem. 

Once again, on behalf of Foundation for Defense of Democracies, 

thank you for inviting me to testify. I look forward to your questions about this network and other terrorism finance trends that 

FDD has been tracking. 

[The prepared statement of Mr. Schanzer follows:] 

PREPARED STATEMENT OF JONATHAN SCHANZER

MAY 12, 2016 

Chairman King, Ranking Member Higgins, and distinguished Members of this 

subcommittee, on behalf of the Foundation for Defense of Democracies, thank you 

for inviting me to testify today. As a former terrorism finance analyst at the U.S. 
15 

1 Jonathan Schanzer, ‘‘Israel Imperiled: Threats to the Jewish State,’’ Joint Hearing before the 

House Foreign Affairs Committee, Subcommittee on Terrorism, Nonproliferation and Trade & 

Subcommittee on the Middle East and North Africa, April 19, 2016 (http://docs.house.gov/ 

meetings/FA/FA18/20160419/104817/HHRG-114-FA18-Wstate-SchanzerJ-20160419.pdf). 2 ‘‘What is AMP?’’ American Muslims for Palestine, accessed May 9, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-faq/212-what-is-amp). 3 ‘‘When was AMP formed?’’ American Muslims for Palestine, accessed May 9, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-faq/214-when-was-amp-formed). 4 Email to Subscribers, ‘‘New DC-area office open! AMP welcomes new legislative coordinator!’’ 

American Muslims for Palestine, March 3, 2016. The organization is not located at the address 

registered in Washington, DC. 5 Illinois Secretary of State Business Services, Corporate Filing, ‘‘American Muslims for Palestine Inc.,’’ File Number 66688003, accessed May 9, 2016 (http://www.ilsos.gov/corporatellc/ 

CorporateLlcController). 6 Internal Revenue Service, ‘‘Exemption Requirements—501(c)(3) Organizations,’’ accessed 

May 9, 2016 (https://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/ 

Exemption-Requirements-Section-501(c)(3)-Organizations). 7 ‘‘Are donations to AMP tax exempt?’’ American Muslims for Palestine, accessed May 9, 2016 

(http://www.ampalestine.org/index.php/about-amp/amp-faq/219-are-donations-to-amp-tax-exempt). 8 Internal Revenue Service, Form 990: Return of Organization Exempt from Income Tax, ‘‘AJP 

Educational Foundation Inc.,’’ 2014, accessed via GuideStar (http://www.guidestar.org/ 

FinDocuments//2014/271/365/2014-271365284-0ba3397f-9.pdf). 9Shane Harris, ‘‘Pro-Palestinian Group Lectured On Skirting Terror Laws,’’ The Daily Beast, 

December 5, 2014 (http://www.thedailybeast.com/articles/2014/12/05/pro-palestinian-grouplectured-on-skirting-terror-laws.html). 10 @sidalil1, ‘‘http://istanddrhatem.eventbrite.co.uk come with pockets full at a free event 

and show your support for Palestine,’’ Twitter, December 2, 2014 (https://twitter.com/sidalil1/ 

status/539916046917197824). 

Department of the Treasury, I commend you for keeping a focus on this crucial aspect of our National security. 

This testimony is based on FDD’s most recent findings about a network of former 

employees and donors from organizations that provided material and financial support to the terrorist organization Hamas, but who now work for or on behalf of an 

Illinois-based organization called American Muslims for Palestine (AMP). My testimony today should be of particular interest to this subcommittee. It builds on findings I submitted to Congress last month, while highlighting new areas of concern.1

AMERICAN MUSLIMS FOR PALESTINE

American Muslims for Palestine’s mission, according to its website, is ‘‘all about 

educating people about Palestine.’’2 FDD has determined that the group is a leading 

orchestrator of the so-called Boycott, Divestment, and Sanctions (BDS) campaign, 

which can be best described as a concerted campaign to delegitimize and wage economic warfare against the state of Israel. 

AMP states that it has existed for more than a decade, first as a ‘‘strictly volunteer organization’’ beginning in 2005, before opening its National headquarters in 

Palos Hills, Illinois in 2008.3 Registered as a corporation in California in 2006, the 

organization now has an office in the Washington, DC area that engages in lobbying 

on Capitol Hill.4 Based on available records, AMP is not a Federal,5 501c3, tax-exempt organization.6 Rather, it is a corporate nonprofit, which means that it does not 

file IRS 990 forms that would make its finances more transparent. AMP instead receives tax-exempt funds through its fiscal sponsor, Americans for Justice in Palestine Educational Foundation (AJP), which is a 501c3.7 AMP and AJP share offices 

and officers,8 yet they remain legally distinct entities. 

At its 2014 annual conference, AMP invited participants to ‘‘come and navigate 

the fine line between legal activism and material support for terrorism.’’9 This is 

quite apt. Several individuals now working for or on behalf of AMP once worked for 

or on behalf of the Holy Land Foundation for Relief and Development (HLF), the 

Islamic Association for Palestine (IAP), and/or KindHearts for Charitable Development. All 3 organizations were implicated by the Federal Government for financing 

Hamas between 2001 and 2011. Moreover, several of AMP’s donors were involved 

in organizations implicated in funding the designated terrorist groups Hamas, Palestinian Islamic Jihad, and even al-Qaeda. 

KINDHEARTS, INTERPAL, AND THE HOLY LAND FOUNDATION

I would first like to direct your attention to the past activities of AMP’s founder 

and president, Hatem Bazian. In December 2014, Bazian spoke at an event10 sponsored by a UK-based charity called Interpal (also known as the Palestinian Relief 
16 

11 @sidalil1, ‘‘Last call for free tickets as Dr Hatem Bazian has arrived in Glasgow.,’’ Twitter, 

December 15, 2014 (https://twitter.com/sidalil1/status/544484525892317184). 12 U.S. Department of the Treasury, Press Release, ‘‘U.S. Designates Five Charities Funding 

Hamas and Six Senior Hamas Leaders as Terrorist Entities,’’ August 22, 2003 (http:// 

www.treasury.gov/press-center/press-releases/Pages/js672.aspx). 13 U.S. Department of the Treasury, Press Release, ‘‘Treasury Designates the Union of Good,’’ 

November 12, 2008 (https://www.treasury.gov/press-center/press-releases/Pages/hp1267.aspx). 14Flier, ‘‘KindHearts San Diego Fundraising Dinner for Palestine,’’ Sakkal Design Graphic Design and Illustrations, June 18, 2004 (http://www.sakkal.com/Graphics/logos/kindheart/ 

benefit/kindheartlsanldiegolflyer.html). 15 U.S. Department of Justice, Press Release, ‘‘Federal Judge Hands Downs Sentences in Holy 

Land Foundation Case,’’ May 27, 2016 (https://www.justice.gov/opa/pr/federal-judge-handsdowns-sentences-holy-land-foundation-case). 16 U.S. Department of the Treasury, ‘‘Protecting Charitable Organizations—E,’’ accessed May 

9, 2016 (http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protecting-charitieslexecorderl13224-e.aspx). 17 United States of America v. Mohammad El-Mezain, et al., Appeal, 09–10560 (Court of Appeals Fifth Circuit, December 7, 2011), page 9 (http://www.ca5.uscourts.gov/ 

opinions%5Cpub%5C09/09-10560-CR0.wpd.pdf). 18 U.S. Department of the Treasury, Press Release, ‘‘Treasury Freezes Assets of Organization 

Tied to Hamas,’’ February 19, 2006 (https://www.treasury.gov/press-center/press-releases/ 

Pages/js4058.aspx). 19 U.S. Department of the Treasury, Press Release, ‘‘Treasury Freezes Assets of Organization 

Tied to Hamas,’’ February 19, 2006 (http://www.treasury.gov/press-center/press-releases/ 

Pages/js4058.aspx). 20 Illinois Secretary of State Business Services, Corporate Filing, ‘‘American Muslims for Palestine, Inc.,’’ File Number 66688003, accessed April 15, 2016 (http://www.ilsos.gov/ 

corporatellc/CorporateLlcController). 21Steven Emerson, ‘‘Money Laundering and Terror Financing Issues in the Middle East,’’ Senate Committee on Banking, Housing, and Urban Affairs, July 13, 2005 (http:// 

www.banking.senate.gov/public/lcache/files/d2b01fcf-a768-45d3-9d9d-436f93ee5f9e/33A699FF535D59925B69836A6E068FD0.emerson.pdf). 22 ‘‘KindHearts Business Cards with Names,’’ Sakkal Design Graphic Design and Illustrations, 

accessed April 15, 2016 (http://www.sakkal.com/Graphics/logos/kindheart/kindheartslbc03.html). 23Flier, ‘‘Annual Fund Raising Dinner for Palestine & KindHearts’ Annual Contest,’’ 

KindHearts Charitable Humanitarian Development, April 23, 2005, accessed via WayBack Machine (http://web.archive.org/web/20050515004402/http://www.kind-hearts.org/upcoming- 

%20event/set%204%20prinout.pdf). 24Press Release, ‘‘Latest bus ad causes stir in DC,’’ American Muslims for Palestine, February 

24, 2015 (http://www.ampalestine.org/index.php/newsroom/press-releases/627-new-bus-adtakes-on-israel-us-relationship-on-eve-of-netanyahu-s-address-to-congress). 25Press Release, ‘‘AMP condemns attack on Al Aqsa; youth,’’ American Muslims for Palestine, 

September 16, 2015 (http://www.ampalestine.org/index.php/newsroom/statements/666-ampcondemns-attack-on-al-aqsa-youth). 

and Development Fund).11 The U.S. Treasury designated Interpal as a terrorist entity in 2003 for providing money to Hamas and Hamas’s global financing network.12

Interpal was a branch of Hamas’s international fundraising organ, the Union of 

Good, itself designated by the U.S. Department of the Treasury in 2008.13

It is also worth noting that Bazian was 1 of 2 featured speakers at a 2004 

KindHearts fundraising dinner in California.14 The other speaker at this dinner was 

Mohammed el-Mezain. Mezain is currently serving time in prison for his role in the 

Holy Land Foundation and for providing financial support to Hamas.15 HLF was 

designated as a terrorist entity by the U.S. Treasury in December 2001.16 From 

1995 to 2001, according to Federal court documents, ‘‘HLF sent approximately $12.4 

million outside of the United States with the intent to willfully contribute funds, 

goods, and services to Hamas.’’17 Mezain also served as a consultant for 

KindHearts.18 The Treasury Department in 2006 used a mechanism known as a 

Block Pending Investigation (BPI), which required that the Government freeze the 

assets of KindHearts, stating that the organization was the ‘‘progeny’’ of HLF, and 

that it provided ‘‘support for terrorism behind the fac ̨ade of charitable giving.’’19

Bazian is not the only AMP figure with KindHearts connections. There is also 

AMP’s registered agent, Abdelbasset Hamayel.20 Hamayel appears to have served 

as KindHearts’ Illinois representative.21 Indeed, one graphic design firm posted 

Hamayel’s business card on its website, identifying him as KindHeart’s ‘‘Illinois and 

Wisconsin Representative.’’22 Additionally, a KindHeart’s poster for a 2004 fundraiser lists Abaset@Kind-Hearts.org as the point of contact.23

THE ISLAMIC ASSOCIATION FOR PALESTINE AND HELP THE NEEDY

I would also like to discuss Osama Abuirshaid, who AMP identifies as its ‘‘National Coordinator’’24 and ‘‘National Policy Director.’’25 In August 2015, the United 

States Citizenship and Immigration Services deemed that Abuirshaid was currently 
17 

26 Abuirshaid v. Johnson et al, No. 1:2015cv01113 (Virginia Eastern District Court, August 31, 

2015) (https://dockets.justia.com/docket/virginia/vaedce/1:2015cv01113/327963). 27Laurie Cohen, ‘‘3 Islamic fundraisers held liable in terror death,’’ Chicago Tribune, November 11, 2004 (http://articles.chicagotribune.com/2004-11-11/news/0411110231l1ldavid-boimmagistrate-judge-arlander-keys-joyce-boim). 28 ‘‘Anti-Terrorism Judgment Upheld Against U.S. Charities,’’ Anti-Defamation League, December 18, 2008 (http://archive.adl.org/mainlterrorism/boimlupheld.html#.VLg28y5RLGA). 29Osama Abuirshaid, Facebook, April 28, 2016 (https://www.facebook.com/ 

osama.abuirshaid.7/posts/1089811474428955?pnref=story). 30Osama Abuirshaid, Facebook, April 28, 2016 (https://www.facebook.com/ 

osama.abuirshaid.7/posts/1090156511061118?pnref=story). 31William Kates, ‘‘Gov’t: Suspect Hid Illegal Charity Role,’’ Associated Press, March 9, 2003 

(http://www.freerepublic.com/focus/news/860489/posts). 32 U.S. Department of Justice, Press Release, ‘‘Indictments Allege Illegal Financial Transfers 

to Iraq; Visa Fraud Involving Assistance to Groups that Advocate Violence,’’ February 26, 2003 

(https://www.justice.gov/archive/opa/pr/2003/February/03lcrml119.htm). 33Katherine Hughes, ‘‘Muslim Charity and the Case of Dr. Rafil Dhafir,’’ Guild Practitioner, 

accessed May 9, 2016 (http://www.dhafirtrial.net/2007/11/24/denial-of-due-process-to-muslims-disgraces-us-all/). 34 ‘‘AMP National Board,’’ American Muslims for Palestine, accessed May 9, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-national-board). 35 ‘‘IAP Contact Information,’’ Islamic Association for Palestine, April 7, 2003, accessed via 

Wayback Machine (http://web.archive.org/web/20030407164156/http://www.iap.org/ 

contactus.htm). 36 ‘‘IAP Contact Information,’’ Islamic Association for Palestine, April 7, 2003, accessed via 

Wayback Machine (http://web.archive.org/web/20030407164156/http://www.iap.org/ 

contactus.htm). 37 Illinois Secretary of State Business Services, Corporate Filing, ‘‘American Muslims for Palestine Inc.,’’ File Number 66688003, accessed May 9, 2016 (http://www.ilsos.gov/corporatellc/ 

CorporateLlcController). 38 ‘‘IAP Contact Information,’’ Islamic Association for Palestine, April 7, 2003, accessed via 

Wayback Machine (http://web.archive.org/web/20030407164156/http://www.iap.org/ 

contactus.htm). 39 Internal Revenue Service, Form 990: Return of Organization Exempt from Income Tax, 

‘‘AJP Educational Foundation Inc.,’’ 2014, accessed via GuideStar (http://www.guidestar.org/ 

FinDocuments//2014/271/365/2014-271365284-0ba3397f-9.pdf). 40 ‘‘[Sic] (Hundreds of Thousands in the Streets of American Cities in Support of Gaza),’’ 

Ma’an News Agency (Palestinian Territories), August 11, 2014 (http://maannews.net/ 

Content.aspx?id=719809). 41 ‘‘Petition to ISNA Leadership to do more for Syria,’’ Change.org, September 3, 2015 

(https://www.change.org/p/isna-leadership-president-secretary-gen-and-majlis-ash-shura-petition-to-isna-leadership-to-do-more-for-syria). 42 ‘‘Jaber Financial Services INC,’’ Cortera, accessed May 9, 2016 (http://start.cortera.com/ 

company/research/k5m5qyr4s/jaber-financial-services-inc/); ‘‘IAP Contact Information,’’ Islamic 

Association for Palestine, April 7, 2003, accessed via Wayback Machine (http://web.archive.org/ 

web/20030407164156/http://www.iap.org/contactus.htm). 

‘‘ineligible for naturalization’’ because he failed to properly disclose his connections 

with the Islamic Association for Palestine (IAP).26 IAP was found civilly liable in 

a Federal district court for supporting Hamas.27 The defendants appealed, but a 

Federal appeals court upheld the judgment in 2008.28

Shortly after my April 19 testimony, Abuirshaid announced on Facebook that he 

was taking a ‘‘surprise trip’’ to Doha, Qatar.29 While there, Abuirshaid met and even 

posted pictures with a man named Ayman Jarwan on Facebook.30 Jarwan was the 

executive director of a fraudulent unregistered charity known as Help the Needy, 

which illegally sent funds to Iraq in violation of U.S. sanctions and also sent funds 

to charities designated by the U.S. Treasury for funding al-Qaeda.31 Jarwan was 

sentenced to 18 months in a Federal prison for conspiring to violate the International Emergency Economic Powers Act (IEEPA).32 He appears to have served 15 

months before being deported to Jordan.33 The exact nature of this meeting between 

Jarwan and Abuirshaid is unclear. 

Abuirshaid is 1 of 4 AMP figures to have worked for or on behalf of IAP. There 

is Sufian Nabhan, an AMP board member 34 who was IAP’s former Michigan representative.35 There is also the aforementioned Abdelbasset Hamayel, who served 

as IAP’s secretary general.36 Today, he is AMP’s registered agent in Chicago.37 And 

finally, there is Rafeeq Jaber, the former president of IAP.38 AMP’s tax-exempt arm, 

the AJP Educational Foundation, listed him as its tax preparer in its most recent 

public filing.39 He has been identified in the Palestinian press as the ‘‘spiritual father’’ of AMP’s coalitions with other Muslim-American organizations,40 and he 

signed a September 2015 petition as a representative of AMP.41 His financial services business is currently listed at the same office building where IAP was located 

before it shut down.42
18 

43 AMP-Chicago, Facebook, November 21, 2015 (https://www.facebook.com/ 

ampalestinechicago/posts/909912559098044). 44 Conference Program, American Muslims for Palestine, November 2015; Conference Program, 

American Muslims for Palestine, November 2014. 45 Boim v. Quranic Literacy Institute, Memorandum Opinion and Order, 127 F. Supp. 2d 1002 

(Northern District of Illinois, January 10, 2001) (http://law.justia.com/cases/federal/districtcourts/FSupp2/127/1002/2512250/). 46 Boim vs. Quranic Literacy Institute, Deposition of Kifah Mustapha, 00–C–2905 (Northern 

District of Illinois, March 2, 2004). 47 ‘‘AMP National Board,’’ American Muslims for Palestine, accessed April 15, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-national-board). 48 ‘‘Hussein Khatib,’’ LinkedIn, accessed January 12, 2015 (https://www.linkedin.com/profile/ 

view?id=100176222&authType=NAMElSEARCH&authToken=6PVm&locale=enlUS&- 

srchid=3641870051421096965128&srchindex=4&srchtotal=20&trk=vsrplpeoplelreslname&- 

trkInfo=VSRPsearchId%3A3641870051421096965128%2CVSRPtargetId%3A100176222%2CVSRPcmpt%3Aprimary). 49 AMP-Chicago, ‘‘AMP Annual Fundraising Dinner,’’ Facebook, March 19, 2014 (https:// 

www.facebook.com/ampalestinechicago/photos/gm.1407041112890451/597477577008212/ 

?type=3&theater); AMP-Chicago, Facebook, April 18, 2015, (https://www.facebook.com/events/ 

1568230430114028/); AMP-Chicago, Facebook, March 5, 2016 (https://www.facebook.com/ 

events/1693121294239623/). 50 Joel Mowbray, ‘‘Reign of the Radicals,’’ The Wall Street Journal, January 27, 2006 (http:// 

www.wsj.com/articles/SB113832728441457779). 51 ‘‘Kifah Mustapha,’’ LinkedIn, accessed May, 6, 2016 (https://www.linkedin.com/in/ 

kifahmustapha). 52 Chuck Goudie, ‘‘I-Team Report: Pillar of the State Police,’’ ABC, March 9, 2010 (http:// 

abc7chicago.com/archive/7309866/). 53 Andrea Elliott, ‘‘White House Quietly Courts Muslims in US,’’ The New York Times, April 

18, 2010 (http://www.nytimes.com/2010/04/19/us/politics/19muslim.html). 54 Chuck Goudie, ‘‘Rebuke for Well-Known Muslim Cleric,’’ ABC, March 12, 2013 (http:// 

abc7chicago.com/archive/9024968/). 55Kifah Mustapha v. Jonathon E. Monken, Patrick Keen, and Illinois State Police, Memorandum Opinion and Order, 1:10–cv–05473 (Northern District of Illinois, June 25, 2013). 56 ‘‘AMP National Board,’’ American Muslims for Palestine, accessed May 9, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-national-board). 57 ‘‘Sponsor the Conference,’’ American Muslims for Palestine, accessed May 9, 2016 (https:// 

web.archive.org/web/20160323162120/http://conference.ampalestine.org/index.php/ 

sponsorship). 58 Email to Subscribers, ‘‘A letter from AMP Conference Chairman Salah Sarsour,’’ American 

Muslims for Palestine, December 1, 2014. 

ADDITIONAL LINKS TO THE HOLY LAND FOUNDATION

I would next like to bring to the attention of this subcommittee information about 

Kifah Mustapha who films promotional videos for AMP.43 He is also a regular 

speaker at AMP events, including AMP’s 2014 and 2015 annual national conferences.44 Troublingly, AMP is giving him this prominent platform even though he 

was the registered agent in Illinois for the Holy Land Foundation.45 As the registered agent, Mustapha described his role as ‘‘soliciting money for the various programs HLF held’’ in Illinois and in other States.46

Mustapha is not the only AMP figure to have worked for or on behalf of the Holy 

Land Foundation. He joins Hossein Khatib, a board member for AMP,47 who was 

previously a Holy Land Foundation regional director.48 There is also Jamal Said, 

who is a regular keynote speaker at AMP fundraisers,49 and who raised money for 

HLF as the director of the Mosque Foundation, a 501c3 organization that donated 

money to the HLF.50 I should note that Mustapha was the associate director of the 

Mosque Foundation from 2002 to 2014.51 Like Said, Mustapha was an unindicted 

co-conspirator52 in the Holy Land Foundation trial.53

Interestingly, in December 2009, Mustapha joined the Illinois State Police as part 

of its volunteer chaplain program. A few months later, he was fired after the Illinois 

police ‘‘watched a video seized from Mustapha’s office on which they say Mustapha 

chants terrorist lyrics and children are seen with guns,’’ which was filmed when 

Mustapha was younger.54 Mustapha filed a lawsuit, claiming discrimination based 

on his political views and national origin, but it was dismissed in 2013 after a Federal court found the police were well within their rights to conclude that Mustapha’s 

past statements and associations made him an inappropriate candidate to be a police chaplain.55

There is also Salah Sarsour, an AMP board member,56 fundraiser,57 and 2015 

conference chairman.58 A 2001 FBI memo describes how Sarsour’s brother, after 

being arrested by Israel in 1998, told Israeli officials about his brother’s ‘‘involve-
19 

59FBI Memo to the U.S. Department of the Treasury, ‘‘Holy Land Foundation For Relief And 

Development International Emergency Economic Powers Act,’’ November 1, 2001 (http:// 

www.copleydc.net/cnsllinks/terrorism/fbi%20report.pdf). 60 ‘‘Contact Information,’’ Middle East Financial Services, accessed May 9, 2016 (http:// 

mefs.us/). 61 Conference Program, American Muslims for Palestine, November 2014, page 29; Conference 

Program, American Muslims for Palestine, November 2015, page 6. 62Sana’a Abed Daoud, Facebook, April 28, 2016 (https://www.facebook.com/ 

sanaa.a.daoud?fref=ts). 63 ‘‘AMP National Board,’’ American Muslims for Palestine, accessed May 9, 2016 (http:// 

www.ampalestine.org/index.php/about-amp/amp-national-board). 64 Illinois Secretary of State Business Services, Corporate Filing, ‘‘Middle East Financial Services Incorporated,’’ File Number 60642273, accessed May 9, 2016 (http://www.ilsos.gov/ 

corporatellc/CorporateLlcController). 65 ‘‘Witness says Al-Arian co-defendant sent $60,000 to the Middle East,’’ Associated Press, 

June 30, 2005 (http://www.mywebtimes.com/news/illinoislap/witness-says-al-arian-co-defendant-sent-to-the-middle/articlel9533c078-b9c2-522e-9d6e-48fd41be15c3.html); United States v. 

Sami Amin Al-Arian et al., Transcript of Proceedings, 8:03–CR–77–T–30TBM, (Middle District 

of Florida Tampa Division, June 29, 2005). 66 ‘‘Witness says Al-Arian co-defendant sent $60,000 to the Middle East,’’ Associated Press, 

June 30, 2005 (http://www.mywebtimes.com/news/illinoislap/witness-says-al-arian-co-defendant-sent-to-the-middle/articlel9533c078-b9c2-522e-9d6e-48fd41be15c3.html). 67Meg Laughlin, ‘‘Al-Arian associate gets prison,’’ Tampa Bay Times, July 26, 2006 (http:// 

www.sptimes.com/2006/07/26/Tampabay/AllArianlassociatelge.shtml). 68 Andrew Gilligan, ‘‘Extremists to be purged from charity boards under new law,’’ The Telegraph (UK), September 19, 2015 (http://www.telegraph.co.uk/news/uknews/terrorism-in-theuk/11877560/Extremists-to-be-purged-from-charity-boards-under-new-law.html). 

ment with Hamas and fundraising activities of HLFRD [Holy Land Foundation for 

Relief and Development].’’59

MIDDLE EAST FINANCIAL SERVICES

Finally, I would like to discuss Middle East Financial Services (MEFS), which is 

a Bridgeview, Illinois-based business 60 that provides financial support to AMP.61

One of MEFS’s employees, Sana’a Abed Daoud,62 is a board member of AMP.63 Her 

relationship to the owners is unclear, but they share a last name.64

MEFS has never been charged with being complicit in terrorism financing, and 

we do not have evidence that it has been engaged in illicit activities, but its services 

have been used by some who have. Indeed, MEFS was used in 2002 to wire money 

to Palestinian Islamic Jihad (PIJ), which the State Department designated as a terrorist group in 1997. 

Salah Daoud, a former MEFS employee and former IAP board member, testified 

in court in 2005 about how one of IAP’s volunteers, Hatem Fariz, used MEFS over 

several months to send approximately $60,000 to PIJ.65 Daoud testified in exchange 

for immunity.66 Fariz was sentenced to 37 months in a U.S. prison for ‘‘conspiracy 

to make or receive contributions of funds, goods, or services to or for the benefit of 

a Specially Designated Terrorist.’’67

RECOMMENDATIONS AND CONCLUSIONS

Mr. Chairman, FDD has not seen any evidence that AMP is engaged in any illicit 

activity. But we remain deeply concerned that individuals connected to entities that 

were previously implicated in terrorism finance can so easily regroup with such 

scant oversight. That is why, in my April 19 testimony, I stated that the IRS needs 

to pay more attention to the prior histories of Section 501 entities and their officers 

or directors. 

It should be required that nonprofits disclose in their IRS 990 and 1023 forms 

the roles of its leaders (board members and executives) in organizations that earned 

Treasury or State Department designations, Treasury actions like Block Pending Investigations (BPI), or litigation in which their organization was found liable for material support for terrorism. This is a transparency issue at its core. 

The IRS might consider studying the British model for charity oversight. In the 

United Kingdom, the Charity Commission monitors the charitable sector for organizations that are run by extremists.68 This oversight has not stopped individuals 

from exercising their right to free speech according to the laws of their country. But 

the Commission has ensured that, in the most egregious cases, if there are any organizations that have abused the system, they do not receive tax breaks. The goal, 

according to the Commission’s website, is ‘‘to ensure that the public can support 
20 

69 UK Charity Commission, ‘‘What we do,’’ accessed May 9, 2016 (https://www.gov.uk/ 

government/organisations/charity-commission). 70 Holy Land Foundation (2001), Benevolence International Foundation (2002), Global Relief 

Foundation (2002), Islamic American Relief Agency (2004), Al-Haramain Islamic Foundation 

(2004), Goodwill Charitable Organization (2007), Tamil Rehabilitation Organization (2007), and 

Tamil Foundation (2009). U.S. Department of the Treasury, ‘‘Designated Charities and Potential 

Fundraising Front Organizations for FTOs (listed by affiliation and designation date),’’ April 5, 

2016 (https://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protectingfto.aspx). 

charities with confidence.’’69 Again, we do not conclude that AMP’s activities would 

warrant any regulatory sanctions, but we do believe that Americans have a right 

to know what we have uncovered. 

Finally, there is a broader question this subcommittee may wish to ask the Federal Government: Does the Treasury Department still issue designations of U.S.- 

based charities like Holy Land Foundation or KindHearts? After 8 high-profile terrorist designations of domestic charities between 2001 and 2009,70 the pace has 

slowed to a crawl. This subcommittee has the power to ask why, who should be 

leading this effort, and whether more resources should be devoted to the problem. 

On behalf of the Foundation for Defense of Democracies, thank you again for inviting me to testify. 

Mr. KING. Thank you, Doctor, very much for your testimony. 

Our next witness is Deborah Lehr. She is the chairman of the 

Antiquities Coalition, an organization which she launched to work 

with governments across the Middle East to fight against antiquities trafficking and its use in financing terrorism. She is also 

CEO and founding partner of Basilinna—did I pronounce that correctly? Okay.—a strategic consulting firm focused on China and the 

Middle East. She serves as a senior fellow at the Paulson Institute, 

a not-for-profit chaired by former Treasury Secretary, Hank 

Paulson. 

Ms. Lehr also serves on a number of prestigious board and advisory councils, including National Geographic and the board of the 

Archeological Institute of America. 

Ms. Lehr, thank you for being here today, and we look forward 

to your testimony. You are recognized. 

STATEMENT OF DEBORAH LEHR, CHAIRMAN AND FOUNDER, 

THE ANTIQUITIES COALITION 

Ms. LEHR. Thank you, Chairman King, Ranking Member Higgins. We really appreciate the opportunity to testify before the subcommittee this morning. The Antiquities Coalition commends the 

subcommittee for its focus on the cutting off of financing for terrorist organizations, particularly for antiquities trafficking. 

Culture has very clearly become a weapon of war and a fundraising tool for violent extremist organizations across the Middle 

East and northern Africa. Certainly, antiquities looting has been 

happening ever since there was buried treasure, but not since 

World War II has it happened on this scale. Millions of archeological sites, historic and religious sites are being threatened by organized plunder by ISIL. These attacks are more than a destruction of heritage. They are the eradication of its shared history, the 

elimination of economic opportunity. They are a crime of war. They 

are precursors to genocide and they fund terrorism. 

The Abu Sayyaf raid by U.S. special forces confirmed how the extremist group has institutionalized the trafficking and destruction 

of antiquities. It has created its own ministry of antiquities and it 
21 

uses the sales of permits to promote antiquities looting and illicit 

excavations. 

ISIL is making significant profits from this. Our records that 

were seized show that in just a 3-month period, they had raised 

$1.25 million or annualized $5 million. While not on the scale of 

oil revenues, as was indicated by the Ranking Member earlier, if 

you think about what the costs are to fund some of these terrorist 

activities, that money goes a really long way, particularly when you 

think there is a virtual limitless supply of these antiquities across 

the MENA region. 

ISIL use these priceless antiquities as just a commodity to be 

plucked from the ground for profit. The organized looting and trafficking of antiquities, or as we call it cultural racketeering, is a 

criminal industry that spans the globe. All countries with a past 

worth protecting are now at risk, but countries in crisis are most 

vulnerable, particularly during times of war. 

Nowhere has heritage suffered more than in Syria and Iraq. The 

list of destruction and plundering is long: Palmyra, the Muslim 

Museum, Nineveh, and hundreds of others, including historical 

sites that are meaningful to the foundations of Islam, Christianity, 

and Judaism. 

What is the size of this illegal trade? It is very difficult to determine the size of a legitimate antiquities market, let alone the illicit. So my organization has sponsored research by the University 

of Chicago to calculate, for the first time ever, the size of the losses 

in Iraq and Syria through algorithms that could be applied for 

other countries. We had commissioned Dr. Sarah Parcak, who was 

this year’s TED Prize winner to do the same in Egypt, where she 

calculated that over a 3-year period the losses were potentially as 

high as $3 billion. 

Yet what we do know are what are the declared trade figures of 

the imports into the United States of HTF tariff line 97, which is 

for antiques over 100 years old. 

The United States accounts for 43 percent of the global art market. We are the largest in the world. Last year, our No. 1 import 

from Syria, accounting for 40 percent of our total imports, were antiquities. Even though overall imports from Syria have dropped 

precipitously from $430 million in 2010 to $12.4 million last year, 

the rate of antiquities has continued to increase—rate of antiquities imports has continued to increase. All of these antiquities 

came through one port, the customs port of New York. For Iraq, 

after oil, antiquities are the largest import from that country. 

Since the Arab Spring in 2011, we have seen, from 5 countries 

in the MENA area, an average increase overall in antiquities of 90 

percent. For Turkey, it’s been up by 80 percent; Egypt, 55; Syria, 

134; Iraq, 492; and Lebanon, 58. Why Turkey and Lebanon? Because they are the major transshipment points for antiquities coming out of Iraq and Syria. 

So there is much that can be done. In April, the Antiquities Coalition released a task force report with recommendations to promote very practical solutions to this growing crisis and to serve as 

an on-going resource for policymakers. It was recommendations for 

the U.S. Government, international institutions, and the art mar-
22 

ket, and just one in a series of reports that we hope to release, particularly the next one focused on what source countries can do. 

In addition, we fully support the recommendations in H.R. 2285 

focused on ICE and CBP. These organizations are on the front line 

of our war against cultural racketeering and protecting our own 

market. 

But other considerations for this subcommittee to think about: 

One is there needs to be an overall coordinator within the United 

States Government. We believe that that person should be at the 

National Security Council, that they should be able to coordinate 

through all the institutions of the U.S. Government and work with 

subcommittees like this one. The focus of law enforcement should 

be on criminal prosecutions, not just on seizing the antiquities and 

repatriating them. The trade should be restricted to designated 

ports. This has been done in the case of wildlife. There is no reason 

it can’t be done in the case of antiquities. 

One of the things that the earlier legislation promotes, and we 

strongly support, is as the majority of antiquities are coming in 

through New York, there is a big difference between the quality of 

the seizures that are happening in Newark, which has done a tremendous amount of work and the authorities there are highly 

trained, and JFK. We think an additional focus on just some practical aspects of training at JFK could go a long way toward stopping the United States becoming the principal designation, particularly since most of the art market is based in New York City. 

Raising awareness at ports of entry, just having Border Patrol 

work at various ports of entry to recognize that the import of these 

antiquities is illegal. The Department of Homeland Security could 

be supportive of what we hope will be a more active role in the 

State Department in negotiating cultural MOUs with countries in 

crisis. These cultural MOUs serve as the legal basis to give ICE the 

ability to close the market to antiquities coming into our country. 

There is not a single one of them with any country in the Middle 

East at the moment. 

The legislation that was passed recently that stops the import of 

antiquities into Syria builds on what was done with Iraq, but both 

of those have been legislated. We need to see them with Egypt, 

with some of the transshipment countries, and others to really help 

protect our own market from being a source of terrorist financing. 

It is important we stop American dollars from funding conflict in 

crime through cultural racketeering. This is a problem that didn’t 

start with ISIL and it is not going to end with it. So it is necessary 

to create a framework for combating the illicit trade and antiquities globally. 

I thank the subcommittee for your work, and I thank you for the 

opportunity to testify before you today. I am happy to answer any 

questions. Thank you. 

[The statement of Ms. Lehr follows:] 

PREPARED STATEMENT OF DEBORAH LEHR

MAY 12, 2016 

It is an honor to appear before the House Committee on Homeland Security’s Subcommittee on Counterterrorism and Intelligence at the hearing on ‘‘Following the 

Money: Examining the Current Terrorist Financing Trends and the Threat to the 
23 

Homeland.’’ We commend the committee for its focus on cutting off all aspects of 

financing for terrorist organizations, including from antiquities trafficking. 

Culture is increasingly a weapon of war and a fundraising tool for violent extremist organizations, especially in the Middle East and North Africa (MENA). Millions 

of archeological, historic, and religious sites in this region—including the Cradle of 

Civilization—are threatened by organized plunder or destruction from armed conflict by terrorist organizations such as ISIL, the al-Nusrah Front, and other alQaeda affiliates. The sheer number of sites provides a consistent source of revenue 

for the foreseeable future. 

Not since the Nazis have we seen more calculated and wide-spread attacks on 

heritage, which as witnessed in World War II, are an inseparable part of broader 

attacks against ethnic and religious minorities. 

These terrorist acts against culture—whether bombing ancient temples in Palmyra, plundering the Mosul Museum, or burning libraries with historic texts in 

Mali—land violent extremists on the front page of international newspapers and 

generate attention in social media. The propaganda value of this publicity cannot 

be overstated. These attacks strike at the economies of the countries targeted, intimidate local populations, and eradicate their past and ours—all while bringing in 

millions of dollars to fund additional violence. 

Certainly, antiquities looting has occurred since there was buried treasure. ISIL 

is not the first terrorist organization to benefit from it: We have much evidence of 

organized involvement by al-Qaeda and the Taliban going back to the turn of the 

millennium. But ISIL and its sympathizers have taken it to a new level. 

They are intentionally targeting the symbols of our cultures—the very foundations 

of our history—as a means to destroy our spirit. ISIL’s use of culture as a weapon 

strikes at the values we cherish: The freedom of expression and religion. They are 

trafficking these plundered antiquities, which have become with oil and kidnapping 

a critical source of funding, to arm their deadly cause. 

The problem is wide-spread across the MENA region. Many of the attacks on heritage are targeted at its economy, which is reliant on cultural tourism. A slowing 

economy threatens political stability, a point not lost on ISIL. 

In Egypt, earlier this year, a bomb was disarmed at the Pyramids. Just last summer, a suicide bomber detonated his explosive device outside of the Temple of 

Karnak in Luxor. The bombing of the airliner from Sharm el-Sheikh was carrying 

Russian tourists, who were Egypt’s single largest source of tourism revenues. 

In Tunisia, ISIL targeted the Bardo Museum—killing 21 foreign tourists and injuring many more. Cultural heritage tourism, a top source of revenue for the country, has declined precipitously since then which has placed a heavy burden on the 

economy. 

In Mali, Yemen, and Libya, historic libraries have been raided, artifacts pillaged, 

and ancient structures razed, along with Shiite and Sufi places of worship. 

Nowhere has heritage suffered more than Syria and Iraq. The list of destruction 

is long: Palmyra, Mosul, Nineveh, and hundreds of others from throughout millennia of history, culture, and religion, including historical sites meaningful to the 

foundations of Islam, Christianity, and Judaism. Priceless treasures from these sites 

have been stolen, unceremoniously ripped from the ground, losing all sense of history and context, perhaps never to be seen again. 

Sometimes, in our work, we are confronted with what we believe to be a false dichotomy: The supposed choice between saving lives or ‘‘saving stones.’’ The director 

of National Museum of Iraq answered this question eloquently when he explained: 

‘‘Yes, they’re just statues, but for us, they’re living things. We came from them, we 

are part of them. That is our culture and our belief.’’ 

These attacks are so much more than the destruction of heritage. They are the 

eradication of a shared history. They are the elimination of economic opportunity. 

They are precursors to genocide. They are a crime of war. It is the use of our shared 

heritage and culture to fund their terrorist activities. 

The Abu Sayyaf raid was the confirmation of these linkages between the promotion of illicit digging and trafficking of antiquities for profit and its financing of 

international terrorism. 

The raid in May 2015 by U.S. Special Operations Forces on the compound of the 

ISIL leader Abu Sayyaf, the group’s director of financial operations and proclaimed 

‘‘Emir of Oil and Gas,’’ uncovered a treasure trove of documents that exposed the 

illicit trade of antiquities in detail. These records confirmed that ISIL’s antiquities 

operations are far more systematic than the opportunistic grave robbing that has 

taken part in the region for centuries. It also confirmed that ISIL is making significant profits from them. 

ISIL’s use of cultural racketeering is industrial, methodical, and strictly controlled 

from the highest levels of the organization’s leadership. The recovered papers re-
24 

vealed that Abu Sayyaf headed ISIL’s Diwan Al-Rikaz or Ministry of Resources. 

This office includes an entire antiquities department, itself subdivided by geography 

and specialization. Bureaus have been carved out for administration, exploration 

and identification of new sites, investigation of known sites, excavation, and marketing and sale of antiquities. 

By placing the antiquities departments under the Diwan Al-Rikaz, ISIL clearly 

views cultural heritage as a resource to be exploited like oil and gas. It has created 

an institutionalized and legalized form of plunder. 

Under their established system, ISIL issues permits to loot and sell antiquities, 

subject to a traditional 20% khums tax, a religious levy on spoils of war. Receipts 

for these transactions, signed by Sayyaf or other top officials in the Diwan, were 

discovered in the raid. 

Just 3 months of these receipts indicated total sales worth $1.25 million, or $5 

million on an annualized basis. Counterterrorism experts tell us that attacks such 

as the one in Paris cost approximately $30,000 to finance. While not on the scale 

of oil revenues, sales of these illicit treasures can still fund a significant number 

of terrorist attacks globally. Especially when there is a virtual endless number of 

archaeological sites yet to be excavated in the region. 

Moreover, a cache of antiquities was found in the compound, awaiting sale beyond 

the group’s borders. Most of these were small and easily transportable, but photos 

found on a computer showed larger items that had already been sold. Some of these 

recovered antiquities came from the Mosul Museum with their museum inventory 

numbers still intact. This is definite proof that while ISIL was destroying artifacts 

on camera at the Mosul Museum in February 2015, as part of their propaganda efforts, behind the scenes they were plundering and trafficking them for profit. 

The organized looting and trafficking of antiquities, or cultural racketeering, is a 

criminal industry that spans the globe. All countries with a past worth protecting 

are at risk, but countries in crisis are most vulnerable, especially during times of 

war. 

The United States has the opportunity and responsibility to play a leadership role 

in the fight against cultural racketeering and deal an effective blow against the 

overall illicit market. The United States is the largest art market, accounting for 

43% of the global trade, and leads world demand for antiquities. 

So what can be done? 

There is much that can be accomplished—both by individuals and institutions. 

I launched the Antiquities Coalition—and we emphasize the Coalition aspect of 

our name in bringing together a broad range of interests in fighting this crime— 

to focus on practical, viable solutions to cultural racketeering. 

Last spring, we united 10 governments in the MENA region, Foreign and Antiquities Ministries, to issue the Cairo Declaration, which is an action plan to protect 

the region’s heritage. This year, we will bring 14 MENA countries and the Arab 

League together in Jordan, to explore how to implement the commitments in the 

Cairo Declaration. It will also include the first meeting of a MENA-wide task force, 

where governments designate a principal coordinator for their country to work within their own governments on this important initiative. 

During the U.N. General Assembly meetings in New York last fall, the Antiquities 

Coalition convened foreign ministers, ambassadors, and leaders in the archaeological, law enforcement, and museum communities for the first time to explore solutions. Our #CultureUnderThreat Task Force was created as a result of these discussions. The Antiquities Coalition will convene this high-level group again in New 

York this September to continue the momentum for the necessary political will to 

win this fight. Our goal is to support individual countries in their efforts to better 

protect their own heritage. Most importantly—we focus on action—and implementing what we have recommended. 

In April, the Antiquities Coalition released a task force report, along with the 

Middle East Institute and the Asia Society, #CultureUnderThreat: Recommendations 

for the U.S. Government, to promote solutions to this growing crisis and serve as 

an on-going resource for policy makers. 

The report puts forward a series of recommendations for the U.S. Government, 

the international community, and the global art market. It also details the importance of halting antiquities looting and trafficking as part of the fight against violent extremism and organized crime. Cultural crimes are linked to security threats 

such as money laundering, transnational organized crime, and international terrorist financing. 

We fully support the recommendations in H.R. 2285, The Prevent Trafficking in 

Cultural Property Act, for Customs and Border Protection (CBP) and Immigration 

and Customs Enforcement (ICE). These organizations are on the front lines of our 
25 

war against cultural racketeering, and essential to preventing the United States 

from being a major source of terrorist financing, especially from looted antiquities. 

In addition, we congratulate each Member of the committee for passage of H.R. 

1493, The Protect and Preserve International Cultural Property Act, which will ensure that the United States is in compliance with U.N. Security Resolution 2199. 

H.R. 1493 will restrict imports of Syrian antiquities so that the United States market will no longer be a destination of choice for conflict antiquities. 

Additional recommendations that the committee could consider include our calls 

to: 

• Develop a coordinated whole-of-Government strategy in conjunction with the 

Executive branch. A point person at the National Security Council should be appointed who can coordinate with relevant agencies including ICE and CBP, as 

well as with Congress, including this critical committee, to ensure that policies 

to halt antiquities as well as other illicit sources of financing for terrorism and 

organized crime are cut off. 

• Shift the focus of law enforcement to dismantling criminal networks through 

more criminal prosecutions instead of primarily seizing and repatriating antiquities. 

• Restrict the import and export of cultural property to designated ports in order 

to more effectively monitor the antiquities trade. This step has already been 

taken to better oversee the wildlife trade. 

• The Department of Homeland Security could also further raise awareness at 

ports of entry about not importing conflict antiquities. 

• U.S. Customs and Border Patrol should work with the World Customs Organization (WCO) to join and further develop ARCHEO, a web-based application 

that allows real-time communication between government authorities and international experts to prevent antiquities trafficking. 

• The Department of Homeland Security could support State Department efforts 

to negotiate cultural memoranda of understandings with countries in crisis. 

These agreements provide the legal basis for closing the U.S. market to illicit 

antiquities from signatory countries. 

These steps are important not only to combat financing to ISIL—but also to other 

violent extremist organizations such as the al-Nusrah Front, al-Qaeda, and the 

Taliban, as well as armed insurgents and organized criminals operating in countries 

in crisis. We must stop American dollars from funding conflict and crime through 

cultural racketeering. This is not a problem that started with ISIL, and it will not 

end with ISIL, even if they were to be defeated tomorrow. So we must work together 

to create a framework for combating the illicit trade in antiquities globally. 

I thank the committee for the work that you are already doing to combat this illicit and dangerous trade, and thank you for the opportunity to testify before you 

today. I am happy to answer any questions. 
26 
27 
28 
29 

Mr. KING. Thank you, Ms. Lehr. 

I thank all of you for appearing today. Just so you know, all of 

your written statements will be submitted for the record. 

I recognize myself. 

Dr. Shelley, in your testimony, you make a reference to the 

NYPD and Los Angeles Police Department, success they have had 

in disrupting terror activities and how that can be applied to other 

law enforcement. Do you have anything in specific—anything specifically you want to say in that that other departments should be 

looking at that is being done by New York and Los Angeles? 
30 

Ms. SHELLEY. I think one of the successes that explains—or one 

of the reasons that explains their successes is the ability to help 

organize the diverse Federal agencies that are working in these 

locales and to cooperate with local law enforcement. So that is one 

very important part, that there needs to be much more local-Federal cooperation. 

Second, New York has very top analysts on counterterrorism 

with wide experience that are helping their intelligence and their 

analytical community. So they are doing things that are site-specific. Just as Ms. Lehr was talking about the particularities of the 

New York market, there are things that you need to focus on and 

understand vulnerabilities in your community. 

Also, there is an importance of coordinating the counterterrorism 

policing and the counter-crime policing, because these 2 intersect 

in many ways that are not high-level transnational crime. So it becomes very much the activities of local police that help detect something that could be overlooked by Federal law enforcement, but the 

2 of them informing each other makes for much more successful policing. 

Mr. KING. Thank you, Doctor. 

Dr. Schanzer, you mentioned in your written testimony that the 

Treasury Department has not made a domestic designation of a 

charity for supporting terrorism for 2009. Now, does that mean 

that illegal fundraising has stopped, or has there been a shift in 

U.S. policy? Any comment you can make on that, I appreciate it. 

Mr. SCHANZER. Sure. Mr. Chairman, in short, the reason for this 

halt is still unclear. I think on the one hand, we can certainly say 

that the environment has become a restrictive one for charities 

that would like to fundraise on American soil. The successes that 

we have had, certainly since the first few years after 9/11, may 

have served as a deterrent for those who would want to fundraise 

for terrorists on American soil. 

On the other hand, I find it very hard to believe that there is 

not one single charity operating here in the United States and actively fundraising for a terrorist organization, whether it would be 

Hamas, Hezbollah, al-Qaeda, or the Islamic State. So I do wonder 

whether this is a political decision that has been made by the 

White House, whether it has been a bureaucratic one made by the 

Treasury Department as the office of terrorism and financial intelligence has shifted its priorities. So it may be that the FBI is focused on this squarely. 

The issue that I would raise, though, is whether the FBI has 

enough manpower and has enough at its disposal in order to 

counter this challenge. In other words, we know that the FBI is 

squarely focused on trying to defend the homeland day in and day 

out, but they are looking at threats from ISIS or from lone-wolf terrorists or from al-Qaeda, and they may be less inclined to go after 

some of what they might deem as small fries, smaller charities that 

are fundraising for organizations that may not pose a direct threat 

to the homeland. 

So I think there are some interesting bureaucratic questions to 

ask the Federal Government right now, to ask the White House, 

and it could be the function of this subcommittee to do so. 
31 

Mr. KING. Thank you. You also mentioned in connection between 

the U.S.-based BDS movement and the PLO. Anything you can add 

to that? 

Mr. SCHANZER. Absolutely. The research that we submitted to 

the House Foreign Affairs Committee 3 weeks ago indicated that 

there is an unregistered charity operating in the Chicago area, 

which is also where this other charity, AMP, is operating right 

now. That this smaller charity, this unregistered charity, has 

been—that one of its members, one of its leaders, has been a fighter for the Popular Front for the Liberation of Palestine, has a function within the PLO as one of their notaries in the Chicago area. 

Also, members of this organization have gone to meet with 

Mahmoud Abbas, the chairman and president of the Palestinian 

Authority, as well as his prime minister, Rami Hamdallah. 

The extent to which the PLO may or may not be funding the 

BDS movement, we just don’t know at this point. But certainly 

that node that we found in Chicago may offer some indication. 

Mr. KING. Thank you. 

I recognize the Ranking Member. 

Mr. HIGGINS. Thank you, Mr. Chairman. 

Just on the issue of ransoms. The United States and Britain has 

an explicit policy not to pay ransoms. My question is: Do they do 

that? Do they pay ransoms through proxies? 

Dr. Shelley, any thoughts on that? 

Ms. SHELLEY. I think that there is a decline on the kidnapping 

of Americans because there is less likelihood of paying ransoms. I 

am afraid that in some cases, some people may use proxies, but I 

have no definitive proof of that. 

Mr. HIGGINS. But if the other European countries beyond Great 

Britain are—have a policy of paying ransoms, and the incidences 

of hostage-taking disproportionately from folks from those countries, are those European countries now reconsidering their policies 

of paying ransom? 

Ms. SHELLEY. I have not heard that there is a major reconsideration of this. This is part of the problem of what I was discussing 

earlier, of the Europeans failing to connect the dots between the 

crime problem and the terrorism problem and the money that 

funds terrorism. 

Mr. HIGGINS. Yes, please. 

Mr. SCHANZER. Just a quick note, Mr. Ranking Member. That I 

think that there is maybe an interesting angle to look at when we 

talk about proxies or cutouts involved in ransom. 

I look at the case of Bowe Bergdahl as being extremely instructive that the Qataris served as an intermediary on behalf of the 

Taliban to secure the release of Bowe Bergdahl in exchange for 

other Guantanamo Bay prisoners. This is something that the 

Qataris have been doing. This is an interesting country that is, on 

the one hand, it is an ally of the United States, on the other hand, 

it is working on behalf of some of our enemies. So it would be instructive to take a look at the case of Qatar in the role of kidnapping and the release of people who have been held hostage. 

Mr. HIGGINS. So are you arguing that a prisoner exchange would 

constitute a paying of ransom in a way? 

Mr. SCHANZER. Certainly. 
32 

* The information follows has been retained in committee files and is available at http:// 

taskforce.theantiquitiescoalition.org/. 

Mr. HIGGINS. Okay. Interesting. Okay. 

Just the other issue. Generally, with respect to ISIS, what is the 

current trend in terms of, you know, where their financing is coming from, from the largest component to the smallest component? 

Has that changed at all? 

For all the panelists. 

Ms. SHELLEY. There has been, certainly, a diminution in the 

amount of money obtained from oil, but there has been an increase 

in the amount of money obtained from forcing refugees so that 

their property is being confiscated. There has been a taxing of the 

migrant flows. There has been a movement into taxing the 

Captagon, on the drugs that move within the Middle East, especially to Saudi Arabia. So that there are other areas of growth that 

have compensated for this. 

What is very interesting is that there is a very different basis of 

funding for ISIS in the Middle East than ISIS in Europe. Almost 

all of ISIS in Europe is locally crime funded from small-scale petty 

crimes. There have been, as I mentioned in my testimony, very few 

examples of financial transfers from the Middle East to fund the 

terrorism attacks or the travel of terrorists to the Middle East. So 

we are looking at 2 very different funding sources for Europeanbased terrorism versus Middle East terrorism. 

Mr. SCHANZER. Mr. Ranking Member, we had Assistant Secretary Danny Glaser from the Treasury Department at FDD yesterday and gave a very interesting presentation. He did mention 

that we have seen a precipitous decline in ISIS finance, which we 

certainly welcome as good news. 

I think some of that has to do with the simple fact that the price 

of oil has dropped since ISIS’ formation. Also, we have seen the 

bombing of cash depots, which has certainly dealt a blow to the organization. 

But I would note that the primary source of funding, from my 

perspective, for ISIS has been through taxing, plunder, and pillaging. So what this means is that the ability of ISIS to raise funds 

for itself is inextricably tied to the territory that it controls. 

So when one talks about defeating ISIS finance, a lot of the time 

we hear in the U.S. Government that we can sort-of separate out 

the battle against the flow of finance from the overall battle of trying to degrade or defeat ISIL, as the administration calls it. I actually see that it is one and the same. That if we are able to deprive 

them of this territory, then we will be able to deprive them of the 

ability to tax their own people or to plunder the territory that they 

have captured. So this is an incredibly important issue to note as 

we talk about a strategy for ISIL moving forward. 

Mr. HIGGINS. My time is up. 

Mr. Chairman, I ask for unanimous consent that this report from 

the Antiquities Coalition be submitted for the record. 

Mr. KING. Absolutely. Without objection.* 

Mr. HIGGINS. Thank you. 

Mr. KING. Okay. The gentleman from New York, the Chairman 

of the Transportation Security Subcommittee, Mr. Katko. 
33 

Mr. KATKO. Thank you, Mr. Chairman. 

Ms. Lehr, I want to focus some of my questions on you for a moment, if I may. I don’t think you can underestimate the importance 

of the antiquities black market. Before I came to Congress, I was 

a Federal prosecutor. Remarkably, we had one such case in our district in Syracuse, New York. It happened because we found thousands upon thousands of tablets that had ended up at Cornell University. They ended up there through an antiquities dealer in New 

York City. Going through that case, it was remarkable to me to see 

how difficult it was to do any sort of a criminal prosecution and 

how difficult it was just to go through the process of repatriating 

these assets back to Iraq. 

The tablets were stolen. They were all small tablets, about 4,000 

years old, that really chronicled Iraq’s history. I don’t know how 

you put a value on that. But I know that this dealer in New York 

City paid a substantial amount of money to get those. He kept 

some there and some were donated to Cornell. They all ultimately 

have been back. 

But, you know, I saw—I want to talk to you more about that. Because I think, you know, what ISIS has done in Palmyra and these 

other places, we don’t know what they have done with those antiquities. But I do know there is a voracious appetite for them on the 

international market. 

So with that in mind, and that as a backdrop, I want to ask you 

a couple of questions. What can we do to tweak the laws from a 

criminal standpoint to try and use these—to better prosecute—better investigate and prosecute these antiquities laws? Also, probe 

with you after that a little bit more about why you think it is necessary to have someone on the National Security Council involved 

on this as opposed to the Department of Justice. 

Ms. LEHR. Well, thank you for raising I think what are some of 

the critical issues, because it is very hard to try these cases. I think 

there are several different reasons for it. 

One, there is a lack of understanding sometimes about the antiquities issues, and they aren’t seen as a priority, even though it is 

one of the top global crimes. There aren’t dedicated resources at 

the Department of Justice or dedicated prosecutors like there are 

in wildlife, that if you even had one dedicated antiquities prosecutor at DOJ who local prosecutors could call—— 

Mr. KATKO. See, that was my thought. When somebody from the 

Department of Justice that became a specialist on this and really 

understood it—— 

Ms. LEHR. Right. 

Mr. KATKO [continuing]. Once you understand the law, it is really not that hard to make a case like any other case. Garnering the 

proof is the thing. But I think having someone at the Department 

of Justice specifically designated for that is probably a pretty good 

idea. 

Ms. LEHR. That is right. Just a month ago it was antiquities 

week in New York—Asia week. Sorry. Dealers from around the 

world came to sell antiquities there. Every single day for 10 days, 

there were raids on antiquities dealers and on auction houses, not 

a single person is going to jail. Some poor old Japanese man, dealer, was caught and he went to Rikers for one week, and then he 
34 

cut and deal and went back. They seized his antiquities and that 

was the worst that happened. 

So it really is an issue. So all that work takes place. These are 

being sold for millions and millions of dollars. They raised over, I 

think, close to $400 million in that time, and there are no prosecutions. So—— 

Mr. KATKO. You think about the $400 million, like Mr. King 

noted earlier, the Paris attacks were, what, $10,000 total? 

Ms. LEHR. Yeah. 

Mr. KATKO. So you can do a lot of damage with $400 million. 

Ms. LEHR. Exactly. The reason I said the National Security 

Council, and maybe I am biased because I used to work there, but 

there needs to be coordination overall in the Government. 

Currently, the top position in the U.S. Government is an assistant secretary in culture and diplomacy at the State Department. 

When we are dealing with terrorist issues and financing and many 

of these others, I just don’t think it is capable as obviously, they 

are there, that that is the right seat in looking at cultural diplomacy. There needs to be somebody who is centralized, who can coordinate with DOJ, with ICE, with others, with Treasury to make 

sure that we are collecting the kind of information that we need 

and these things are being investigated. 

The other point, just if I can say—— 

Mr. KATKO. Sure. 

Ms. LEHR [continuing]. One last thing on the art market, it is 

largely unregulated. So in many ways for these auction houses, 

who I think Christie’s makes about $7 billion annually, Sotheby’s 

makes very similar, in many ways these seizures are just the price 

of doing business. 

Mr. KATKO. Right. 

Ms. LEHR. So it is not necessarily in their interest to do the kind 

of due diligence that we would expect to see to track it back to terrorists. 

Mr. KATKO. When you say Sotheby’s makes $7 billion a year, 

around there, is that just the commissions they earn on the things 

they are selling? 

Ms. LEHR. Yes. 

Mr. KATKO. Okay. So obviously—— 

Ms. LEHR. Those are their annual revenue. 

Mr. KATKO. The amount of revenue they are generating through 

those sales is exponentially more than that, obviously. Right. 

So, yeah, I mean, I think that—I am trying to think of the best 

legal means. Do you have any suggestions as to what the best legal 

means would be to create this position or positions at the Department of Justice? Because I think it is something that needs to be 

done. 

Ms. LEHR. I think there could be a precedent with what has been 

done with wildlife, and they have appointed somebody who is the 

top prosecutor, I understand, who comes with a background in 

wildlife crimes. There is an art unit—arts crime unit at the FBI, 

but they are not investigators. So I think really the position needs 

to be a DOJ with somebody with a criminal prosecution background. 
35 

Mr. KATKO. Okay. All right. Well, thank you very much. My time 

has pretty much expired, so thank you. 

Mr. KING. Thank you, Mr. Katko. 

The gentleman from as Massachusetts, Mr. Keating. 

Mr. KEATING. Thank you, Mr. Chairman. I might comment that 

I am just days back from traveling through northern Africa in particular, and I must tell you that our efforts at striking and targeting oil reserves and the revenues they are getting from there 

has really been effective and is being extended, actually, because 

of its effectiveness. So I have seen how we have been successful in 

that regard. 

I also am aware that, you know, in Syria and Iraq how the area 

is shrinking and that will affect taxation. But we are going to see 

more of an emphasis because of this effectiveness, I think, on ransoming and on antiquities because of the way we are shrinking the 

other alternatives, I believe. 

So I want to thank Ms. Lehr, for the work that you have done 

with the #CultureUnderThreat Task Force and the Antiquities Coalition. It is important work in many respects. But I would ask you 

to talk about what we can do to have more bilateral agreements 

with other countries. Because, again, as we begin—and we have a 

lot of work still to do. As we begin putting up barriers here, they 

will seek other venues. So how can we work, in your opinion, to extend those agreements? 

Ms. LEHR. Great. Thank you also for the excellent work that you 

are doing. We are very supportive of the legislation that you are 

proposing. 

These cultural MOUs are really very important because they do 

provide the legal basis to stop the import of antiquities into our 

country, and we have approached it in 2 ways. No. 1, to encourage 

the State Department—well, 3. Encourage the State Department to 

look at these as part of their diplomatic efforts in the Middle East. 

No. 2, to work with the countries in question to help them understand what they can be doing, because it is not just the United 

States, it is all the major markets that we can do this with. No. 

3, we are talking to the Arab league to get them to consider requesting an MOU on behalf of all of its members so that we could 

do it at once. 

The United States is the leader on this issue. If we proceed with 

this, we will see very quickly that the Europeans will do something 

similar. So if we can close our market, we can use these agreements to close the European market and the Japanese market. We 

at least have made a major step forward in cutting off these 

sources, which is the largest markets. 

The only other one out there, which is the second-largest market 

is China, and we have to start to think about how to work with 

them because soon, if they decide they want to start buying these 

antiquities, that is going to be a big problem. 

Mr. KEATING. I do think we are going to have to look at northern 

Africa as well, because they are sourcing that as they are getting 

more pressure in Syria and Iraq as well. 

Just another question that I had in terms of the way the organizations, the terrorist organizations are trying to deal monetarily 

with things. The Society of World-wide International Financial 
36 

Telecommunications, SWIFT, I wanted to see—you know, there is 

a little tension, as you might have known, with our E.U. allies in 

terms of privacy issues and dealing with that. 

If we are changing that to adapt to their concerns too, how can 

that limit our effectiveness? So could you comment on what is 

going on, our privacy concerns of our allies in Europe and how that 

is affecting our ability to deal with it from a financial standpoint? 

Mr. SCHANZER. Mr. Keating, I am happy to answer that from 

maybe 1 or 2 angles. As you are likely aware, at one point the U.S. 

Treasury was mining the SWIFT database through a subpoena system. This is now made public, but this is something that was 

first—it first made news when I was at the Treasury Department 

that the Treasury was subpoenaing—issuing subpoenas to the 

SWIFT system, and then they were able to look at the actual data 

that was being transferred by suspected terrorists. I am unclear as 

to whether that continues to this day, and it may have something 

to do with the specific concerns that our European allies have 

voiced over this. 

We have also seen SWIFT at the center of a controversy with regard to Iran. The SWIFT consortium had agreed to block the Iranians from the SWIFT system, making it virtually impossible for 

17 different Iranian banks to move money electronically around the 

world, and this was an incredibly effective method to halt terror finance coming out of Iran. We—pursuant to the deal just signed 

over the last summer, the Joint Comprehensive Plan of Action, we 

have now allowed Iran back onto this system. So this is going to 

make the countering of Iranian terrorism finance that much more 

difficult. 

So my sense here is that we have, I think, growing disagreements over the financial data that can be used by the U.S. Government to counter terrorism finance coming from SWIFT. I don’t 

know how they plan on moving forward with their cooperation with 

the United States, but my sense is that it is a steady backslide. 

Perhaps engaging with the SWIFT consortium on a one-to-one 

basis could be very useful. 

Mr. KEATING. Mr. Chairman, if I could just have unanimous consent to indicate I will have a written question on the matter of virtual currency. Because, as we know, the terrorists in the Paris attack, the night before, paid for their hotel with prepaid, you know, 

type of currency, if you want to call it currency. So that is another 

issue we are going to have to look at carefully. 

So I will do that in writing, Mr. Chairman, so I don’t extend my 

time here. I yield back. 

Mr. KING. Without objection. The gentleman from Massachusetts 

always get what he wants anyway so—— 

The gentleman from Texas, Mr. Hurd, the Chairman of the Information Technology Subcommittee, House Committee on Oversight 

and Government Reform. 

Mr. Hurd. 

Ms. SHELLEY. Can I say something on that? 

Mr. KING. Surely. 

Ms. SHELLEY. I say that one of the topics I heard discussed extensively at the meetings I was at in Europe among Europeans was 

the issue of how much the prepaid credit cards, the SWIFT, are 
37 

held by corporations, and yet it is governments that are trying to 

combat the terrorism. This is forcing a lot of consideration of this 

issue in Europe. 

I think—and this is why I was pointing out in my testimony that 

I think the Europeans, as they are facing this issue of the evidence 

of the linkage between crime and terrorism, with just the example 

that you gave, are doing a serious thinking. As they are worrying 

that they are not doing enough to prevent the next terrorist attack, 

I think there is an area of flexibility and engagement that is open 

now that was not open previously. 

Mr. KING. Thank you. 

Mr. Hurd. 

Mr. HURD. Chairman King, Ranking Member Higgins, I want to 

thank you all for this, putting on this hearing. It is one of the more 

illuminating hearings I have been to this year. 

My first question is to Ms. Lehr. Can you—you mentioned that 

organized plunder by ISIS, you said it is generating $1 million a 

year or $5 million a year? 

Ms. LEHR. In the raid on the Abu Sayyaf compound by our special forces, and he was essentially the CFO, they set up a ministry 

of the antiquities, and they were selling permits to promote digging 

as well as they take taxes. We have an info graph we submitted—— 

Mr. HURD. Yeah, I saw. 

Ms. LEHR [contiuing]. Into the record to show the process. Receipts for 3 months were $1.5 million. 

Mr. HURD. Wow. Okay. That is helpful. 

Can you mention or answer briefly what is UNESCO’s role in all 

of this? 

Ms. LEHR. UNESCO’s responsibility is obviously over culture. 

They have raised awareness significantly and highlighted the linkages between cultural genocide as a precursor to genocide and promoting this as a crime of war under the Hague Convention. Their 

actual ability to go in and help protect sites and other activities 

like that is very limited. I think that that is an opportunity, if the 

United States were to consider participation again in UNESCO, to 

really take a leadership role. 

Mr. HURD. Thank you. 

Terrorists are becoming increasingly tech savvy. There is evidence that cyber attacks and cyber theft are becoming tools in their 

arsenal. Dr. Schanzer, this may be most appropriate for you. Are 

there any instances that you know where terrorist groups have engaged in ransomware? Are they trying to take people’s data and 

hold it hostage for a reward? 

Dr. Shelley, if you have any input on that. 

Mr. SCHANZER. Congressman Hurd, I have actually not seen anything specifically related to that. What we have seen is what we 

call cyber-enabled economic warfare, which is, I would say, is a 

growing trend where state sponsors of terrorism are trying to capture that information and perhaps use it for political means. 

I don’t know if you can call it terrorism, per se, but certainly the 

capturing of the SF–86 information of U.S. Government officials by 

what we believe is the Chinese certainly qualifies as cyber-enabled 
38 

economic warfare, to my mind. The hack of Sony by North Korean 

hackers, this also, I think, qualifies. 

It is a new realm. I think it is more difficult to characterize, but 

certainly something to watch. 

Mr. HURD. Thank you. I think I would—that is an area that we 

need to explore a little bit more. 

One point to Ms. Lehr. One of the other values of having someone sitting at NSC on this is to drive collection within the intelligence community. I spent 91⁄2 years as an undercover officer in 

the CIA and, you know, I was chasing hawala dealers and folks 

like that to try to, you know, understand, to follow the money and 

collect that. If we—if I would have had some of this information on 

some of these folks that are organized in, you know, illegal antiquities dealing, those guys are probably less covert than, you know, 

al-Qaeda. I think that is another value of having an entity within 

the NSC to ensure this is part of the NIPF, the National Intelligence Priority Framework, to drive collection in order to stop this 

funding stream to terrorists. 

My last question is probably best directed to Dr. Shelley. Many 

of our Gulf partners were seeing the money coming from the Gulf 

into organizations in Syria and Iraq. What can be done to help our 

Gulf partners solve this problem that is happening within their 

own borders? 

Ms. SHELLEY. That is a very difficult question. In part, some of 

our Gulf partners have to be aware that this money is being moved 

and are not—consciously not doing something about it. So this is— 

this is a problem. So I can’t say that there is government complicity, but there is also not an attempt to suppress it. 

I think part of what I said in my testimony is that much more 

needs to be explained about the linkages between the crime, the 

money movement, and the terrorism, and how it comes back to bite 

you. That is something that many people don’t understand. I think 

the Saudis are beginning to understand this much better, but there 

are other parts of the Gulf that need to be helped along in this area 

as well. 

Mr. HURD. On that, the deputy crown prince of Saudi Arabia is 

leading a coalition of 39 Islamic countries that are focusing on the 

narrative, encountering the narrative of extremism, and I think 

this is a topic that can be integrated into their efforts. You know, 

the fact that it is being led by our Sunni partners is important, but 

this is an area where we can support them. 

Ms. SHELLEY. It is also very interesting that within the context 

of the United Nations, the Saudis are being very involved in looking at the crime terror linkage as well and trying to bring other 

countries to be aware of this. 

Mr. HURD. I really appreciate you all being here today. 

Mr. Chairman, I yield back. 

Mr. KING. Thank you, Mr. Hurd. The gentleman yields back. 

Ranking Member, do you have any further questions? 

Mr. HIGGINS. No. 

Mr. KING. All right. Thank you. 

So I want to thank the witnesses for your testimony today. It has 

been extremely valuable. I want to thank the Members for their 

questions. The Members of this subcommittee may have some addi-
39 

tional questions to the witnesses, and I would ask you to respond 

to those in writing, if you would. We appreciate it. 

So pursuant to Committee Rule VII(e), the hearing record will be 

held open for 10 days. 

Without objection, the subcommittee stands adjourned. 

[Whereupon, at 11:13 a.m., the subcommittee was adjourned.] 

(41) 

A P P E N D I X 

QUESTIONS FROM RANKING MEMBER WILLIAM R. KEATING FOR LOUISE SHELLEY

Question 1a. The Islamic State has proven adept at using the internet for its propaganda and recruitment, as well for conducting operations. For example, the terrorists involved in the Paris attack used prepaid cards to rent hotel rooms before the 

night of the attack. 

How prevalent are anonymous payments, prepaid instruments, and virtual currencies like Bitcoin, at financing terrorism? 

Question 1b. Is this an area that the United States’ current financial intelligence 

units and terror financing units are equipped to handle? 

Answer. The European-based terrorists have relied more on more simple forms of 

financing such as pre-paid cards and transfers through underground banking that 

enhance their anonymity. But they have made use of the internet to order weapons. 

Therefore, it is highly possible that they have or will use virtual currencies in the 

future to buy commodities that they need. 

The European terrorists have not shown the sophistication that has been shown 

by individuals affiliated with ISIS central in Iraq and Syria. Therefore, it is likely 

that the technical capacity shown by terrorists based in the Middle East will permit 

them to rely more on virtual currency in the future. 

The rapidly changing and evolving forms of virtual currencies should remain a 

priority for financial intelligence and terrorist financing units because so much of 

terrorist financing is linked to trade. Therefore, any payment system that can help 

facilitate the anonymity of trade is deserving of significant attention. 

QUESTIONS FROM RANKING MEMBER WILLIAM R. KEATING FOR JONATHAN SCHANZER

Question 1a. The Islamic State has proven adept at using the internet for its propaganda and recruitment, as well for conducting operations. For example, the terrorists involved in the Paris attack used prepaid cards to rent hotel rooms before the 

night of the attack. 

How prevalent are anonymous payments, prepaid instruments, and virtual currencies like Bitcoin, at financing terrorism? 

Answer. Alternative payment platforms enabled by advances in financial technology (Fintech) have become increasingly prevalent. But as my colleague Yaya 

Fanusie notes, the extent to which such tools are currently facilitating terrorism is 

unclear as only a handful of cases of terrorist fundraising on these platforms has 

been made public. 

Prepaid cards’ anonymity, ease-of-use, and global availability make it difficult for 

financial authorities to identify significant illicit use. The Brussels attackers used 

prepaid cards to purchase walkie-talkies for their operation last March, according 

to Belgium’s finance minister. In France, where the Paris attackers last November 

used roughly 30,000 euros on prepaid cards to pay for cars and housing in the runup to the attack, identification is not required for loading up to 2,500 euros. 

The key risk lies in cards that allow users to reload without identity checks. Indeed, new forms of on-line and mobile payment services, some of which allow for 

anonymous transactions, have become more common in terrorist financing in recent 

years. For example, U.S. law enforcement reported that some individuals have used 

the on-line and mobile payment system CashU for illicit transactions. A FATF report points out that millennials—who use on-line and mobile payments more than 

older adults—make up the half of customers in terrorism financing suspicious transaction reports. 

Using social media, supporters of jihadist groups have exploited mobile platforms 

like Kik, WhatsApp, and Telegram as a way to facilitate fundraising. Some apps use 

end-to-end encryption, making them even more attractive to terrorists looking to operate clandestinely. 
42 

The growth in mobile payments also reflects the expansion of mobile-based solutions in other parts of the world, particularly in Africa and Asia, which lack access 

to conventional banking services. Financial intelligence experts point out that illicit 

actors can exploit mobile payment systems for money laundering by directing the 

transfer of funds through multiple, seemingly unaffiliated accounts. 

As for terrorists exploiting bitcoin, the possibility is certainly there but law enforcement and financial authorities have not confirmed these reports. Worryingly, 

in 2014, a U.S.-based Islamic State supporter posted on-line a manual he authored 

explaining how to use bitcoin to fund the group. One reason bitcoin has not become 

the currency of choice could stem from the fact that cryptocurrencies are not fully 

anonymous. Indeed, cryptocurrency platforms leave an open trail of transactions encoded in software which can be tracked through financial forensics. In addition, virtual currencies have minimal circulation within the international financial system. 

One final platform to watch is peer-to-pear on-line lending. One of the San 

Bernardino attackers accessed a loan for $28,500 from the on-line lending site Prosper weeks before the December 2015 attack. These platforms provide users with 

funds quicker than conventional bank loans or credit card companies. 

Question 1b. Is this an area that the United States’ current financial intelligence 

units and terror financing units are equipped to handle? 

Answer. The U.S. Government’s current financial intelligence apparatus appears 

sufficiently aware of the terror finance risks posed by these emerging technologies, 

but it might not be fully equipped to investigate the coming rise in Fintech-related 

terror finance cases. For example, FinCen in 2013 provided overall guidance on how 

virtual currencies would be treated under U.S. regulatory and compliance infrastructure. However, the rate of change in new financing platforms, led in part by 

small start-ups and highly technical software innovation, is difficult even for the 

broader financial sector to keep pace. And the public sector traditionally falls behind 

the market. 

Moreover, there is likely to be a gap between the monitoring FinCen requires on 

customer transactions and the level of transaction analysis small Fintech firms can 

do, especially for products with no verified customer identification. Finally, this 

problem is bigger than FinCen’s jurisdiction. Outside the United States, suspicious 

transaction analysis may be particularly difficult for firms in the growing mobile 

payment industry. 

Æ