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S. HRG. 112–352 

COUNTERING TERRORIST FINANCING: PROGRESS 

AND PRIORITIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CRIME AND TERRORISM 

OF THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

SEPTEMBER 21, 2011 

Serial No. J–112–42 

Printed for the use of the Committee on the Judiciary 

( 
(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

CHUCK SCHUMER, New York 

DICK DURBIN, Illinois 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

AL FRANKEN, Minnesota 

CHRISTOPHER A. COONS, Delaware 

RICHARD BLUMENTHAL, Connecticut 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

JON KYL, Arizona 

JEFF SESSIONS, Alabama 

LINDSEY GRAHAM, South Carolina 

JOHN CORNYN, Texas 

MICHAEL S. LEE, Utah 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

KOLAN DAVIS, Republican Chief Counsel and Staff Director 

SUBCOMMITTEE ON CRIME AND TERRORISM

SHELDON WHITEHOUSE, Rhode Island, Chairman 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

DICK DURBIN, Illinois 

AMY KLOBUCHAR, Minnesota 

CHRISTOPHER A. COONS, Delaware 

JON KYL, Arizona 

ORRIN G. HATCH, Utah 

JEFF SESSIONS, Alabama 

LINDSEY GRAHAM, South Carolina 

STEPHEN LILLEY, Democratic Chief Counsel 

STEPHEN HIGGINS, Republican Chief Counsel 
(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Kyl, Hon. Jon, a U.S. Senator from the State of Arizona .................................... 2 

prepared statement .......................................................................................... 60 

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, prepared 

statement and August 3, 2011, letter ................................................................. 64 

Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode Island ...... 1 

WITNESSES 

Boelter, Ralph S., Acting Assistant Director, Counterterrorism Division, Federal Bureau of Investigation ............................................................................... 6 

Glaser, Daniel L., Assistant Secretary for Terrorist Financing, U.S. Department of the Treasury ........................................................................................... 8 

Monaco, Lisa O., Assistant Attorney General, National Security Division, 

U.S. Department of Justice ................................................................................. 4 

QUESTIONS AND ANSWERS 

Responses of Ralph S. Boelter to questions submitted by Senators Grassley 

and Kyl .................................................................................................................. 21 

Responses of Daniel L. Glaser to questions submitted by Senators Grassley 

and Kyl .................................................................................................................. 28 

Responses of Lisa O. Monaco to questions submitted by Senator Kyl ................ 39 

SUBMISSIONS FOR THE RECORD 

Boelter, Ralph S., Acting Assistant Director, Counterterrorism Division, Federal Bureau of Investigation, statement ............................................................ 44 

Glaser, Daniel L., Assistant Secretary for Terrorist Financing, U.S. Department of the Treasury, statement ........................................................................ 48 

Monaco, Lisa O., Assistant Attorney General, National Security Division, 

U.S. Department of Justice, statement .............................................................. 68 

Weich, Ronald, Assistant Attorney General, Department of Justice, Washington, DC, August 12, 2011, letter .................................................................... 73 

(1) 

COUNTERING TERRORIST FINANCING: 

PROGRESS AND PRIORITIES 

WEDNESDAY, SEPTEMBER 21, 2011 

U.S. SENATE, 

SUBCOMMITTEE ON CRIME AND TERRORISM, 

COMMITTEE ON THE JUDICIARY, 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 10:58 a.m., in 

room SD–226, Dirksen Senate Office Building, Hon. Sheldon 

Whitehouse, Chairman of the Subcommittee, presiding. 

Present: Senators Whitehouse, Klobuchar, Blumenthal, Kyl, and 

Grassley. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, A U.S. 

SENATOR FROM THE STATE OF RHODE ISLAND 

Chairman WHITEHOUSE. The hearing will come to order. 

Today’s hearing considers a central element of the fight against 

terrorism: the disruption and dismantling of terrorist finance networks. I am very grateful that the Ranking Member, Senator Kyl, 

is here. I know he has significant duties elsewhere as one of a certain group of 12 who are getting considerable attention in Washington these days, and I appreciate that he has taken the trouble 

to be here for this hearing. I will make a brief opening statement, 

yield to the Ranking Member, and then if nobody else is here, we 

will proceed to the witnesses. 

It is obvious that terrorists need funds to maintain their organizations, to recruit and train new members, and to conduct operations. To meet this need, terrorists have sought funds from various sources: states hostile to our country; wealthy individuals who 

share their extreme ideology; charitable donors who may not know 

that their donations will end up in the hands of violent terrorists; 

corruption or even criminal activity such as drug production, kidnapping, or other cooperation with international organized crime 

groups. 

Terrorists also have used various methods for moving their 

money, including through use of the American financial system, as 

well as through informal channels, such as hawalas and cash 

smuggling. Terrorists may deliver it into the United States to fund 

an attack against our homeland, launder it through our financial 

institutions, or move it from so-called charities in the United States 

to fund terrorist attacks abroad. 

This diversity of sources of terrorist financing and means and 

purposes for moving terrorist cash makes the vital challenge of 
2 

choking off terrorist funds highly complex. It demands an integrated and well-coordinated response by the U.S. Government. 

To that end, the United States has brought a sharpened focus to 

this fight in the decade since the 9/11 attacks. New legal authorities provided by statute and by Executive order have given the executive branch powerful tools to designate terrorist organizations 

and stop their use of the American financial system. 

Reorganizations of departments and agencies have prioritized the 

fight against terrorist financing to ensure sustained effort in this 

crucial task. The Federal Bureau of Investigation and the Department of Justice have investigated and successfully prosecuted cases 

of material support for terrorist groups. The Treasury Department, 

State Department, and other agencies have worked to identify terrorist groups and freeze their assets in the United States and overseas. 

Disrupting terrorist financing requires sophisticated analysis of 

bank records, meticulous study of available intelligence, careful assessment of foreign groups that may support terrorist organizations, and international partnerships that allow insight into the 

movement of terrorist finances abroad. 

As I saw in a recent visit, this international work has reached 

as far as Afghanistan. Corruption, the diversion of funds from military contracts, and the poppy trade provide ready cash for terrorists in Afghanistan and the region. So I was glad to meet in Kabul 

with representatives of the Afghan Threat Finance Cell. The testimony provided today by the Treasury Department describes the 

ATFC’s efforts to improve the targeting of insurgents’ financial 

support and to disrupt other illicit financial activities. Their work 

throws into stark relief the tight relationship between terrorist finance and terrorist violence. 

This close connection with terrorist violence is the reason we 

must sustain focus against terrorist finance. In that spirit today’s 

hearing will assess our past performance in the effort to disrupt 

and interdict terrorist funds, and it will evaluate our Nation’s readiness for future challenges. 

This is no partisan issue. Every member of this Committee and 

of the Senate as a whole shares a commitment to disrupting and 

dismantling terrorist financing networks, and Congressional oversight, I believe, plays an important role in ensuring that we are on 

the right track. 

With that in mind, I am happy that we are joined today by representatives of the Department of Justice, the FBI, and the Department of the Treasury. The responsibilities and expertise of the witnesses here today promise a full discussion of where we stand in 

the fight against terrorist financing and how ready we are to take 

on the challenges ahead. 

I thank the witnesses in advance for their participation, and I 

yield to the Ranking Member for any statement he might like to 

make. 

STATEMENT OF HON. JON KYL, A U.S. SENATOR FROM THE 

STATE OF ARIZONA 

Senator KYL. Thank you, Mr. Chairman, and because of the commitment the Chairman mentioned, I will have to depart after this 
3 

statement. But I want to make a point to the witnesses in particular. I really appreciate your presence here and hope that you 

will convey to your colleagues our appreciation for the work that 

has been done by all three of the entities with whom you work. 

I share all of the views that the Chairman just conveyed and 

would just comment on a couple of things, and I will put my full 

statement in the record. 

Chairman referred to the material support statutes. I am delighted that they have been upheld in the Holder v. Humanitarian 

Law Project decision because they are a very important work horse 

in our efforts against al Qaeda, Hamas, and other terrorist organizations. 

Since we make it a crime to knowingly provide material assistance to these and other terrorist groups, these statutes have helped 

starve those groups of resources, as the Chairman noted, and it 

makes it more difficult for them to carry out their attack plan and 

to do business with others. And they critically recognize that 

money is fungible, an important principle here, because it is impossible to give money to al Qaeda or Hamas, for example, without 

furthering these organizations’ terrorist goals, regardless of how it 

is done. Not only is any dollar given to Hamas’ so-called charitable 

wing a dollar that can be diverted to terrorism, but donations to 

this and other groups also enhance their power and prestige, which 

in turn makes it easier for them to recruit terrorists. 

So the rigorous enforcement of the material support statutes can 

make these groups radioactive, deterring others from working with 

them, and ultimately cripple them entirely. As the Chairman pointed out, finances are such a key part of this that this is the way 

to go right to their bread basket, in effect. 

The second thing I want to mention is the Comprehensive Iran 

Sanctions Accountability and Disinvestment Act, a long name for 

the CISADA acronym. Here we have aimed particularly at Iran, 

but there are others as well, but the Treasury Department is required to prescribe regulations that require our banks here in the 

United States to maintain—the banks that maintain foreign correspondent relations to have an audit or a certification requirement 

that neither they nor their correspondents abroad are servicing 

designated Iranian banks. Now, I really appreciate the effort that 

Treasury has made in this regard, but it did take nearly a year to 

draft the rule, and we still await the issuance of the final rule to 

implement Section 104(e) of the Act to address the vexing problem 

of foreign correspondents’ accounts. And so I want to urge the Office of Management and Budget to complete an expeditious review 

of the final review and get this done so that we can take advantage 

of the tools that we passed here in the Congress and confront these 

illicit financing activities head-on. 

In addition, we continue a bipartisan effort to strengthen the economic and political tools available to the administration to confront 

other illicit financial activities. For example, Senators Menendez, 

Lieberman, and I introduced S. 1048, the Iran, North Korea, and 

Syria Sanctions Consolidation Act of 2011, which would enhance 

existing measures, and it targets the nexus of proliferation between 

States like Iran and Syria and North Korea, and I would hope that 

my colleagues would consider and potentially act on this legislation 
4 

so that we can continue to try to close all of the loopholes that we 

have identified that enable illicit financial activities. 

Again, I want to thank the Chairman for calling the hearing, for 

getting a good group of witnesses here, for all of those who are interested in the subject that are here. I will have questions for the 

record, Mr. Chairman, but I am going to have to depart in about 

10 minutes. 

Chairman WHITEHOUSE. Understood and appreciated. 

[The prepared statement of Senator Kyl appears as a submission 

for the record.] 

Chairman WHITEHOUSE. If we are ready to go to the witnesses, 

then I will first introduce Lisa Monaco, who is the Assistant Attorney General for National Security. She previously served as Principal Associate Deputy Attorney General, and prior to joining the 

Deputy Attorney General’s office, she was chief of staff to FBI Director Bob Mueller. Ms. Monaco has also served as special counsel 

to Director Mueller and initially joined the FBI on detail from the 

U.S. Attorney’s Office for the District of Columbia. Ms. Monaco 

served with me in the Department of Justice under Attorney General Janet Reno, where she served as counsel to the Attorney General, providing advice and guidance on national security, law enforcement, budget, and oversight issues. We are delighted to have 

her here today. You are invited to proceed. 

STATEMENT OF LISA O. MONACO, ASSISTANT ATTORNEY GENERAL, NATIONAL SECURITY DIVISION, U.S. DEPARTMENT OF 

JUSTICE 

Ms. MONACO. Thank you very much, Chairman Whitehouse, 

Ranking Member Kyl, and Senator Grassley. I have a brief opening 

statement, with your permission, and if I could ask for my full 

statement to be entered into the record. 

Chairman WHITEHOUSE. Without objection, it will be. 

Ms. MONACO. Thank you, Chairman Whitehouse and Ranking 

Member Kyl, for holding this hearing and for inviting me to testify 

today regarding the Department of Justice’s role in combating terrorist financing. 

The Department’s efforts to combat terrorist financing are closely 

coordinated with those of our interagency partners, including, of 

course, the gentlemen who are here with me today. Our common 

objective is to deploy our counterterrorist financing tools in a coordinated, integrated way to disrupt the flow of funds and other 

material support to terrorist organizations. 

Our efforts in this regard fall into three general categories: investigating and prosecuting terrorist financing and material support to 

terrorism, as the Chairman mentioned; foreign capacity building 

and technical assistance; and defending the laws and regulations 

designed to disrupt and punish terrorist financing. And I will just 

briefly mention each of these. 

Perhaps the Department’s principal role in countering terrorist 

financing is to work with the FBI and our other law enforcement 

partners to investigate and prosecute the individuals and networks 

who are engaged in it. Prosecution not only disrupts terrorist financing networks; it often permits us to gain valuable intelligence 

about terrorist networks. 
5 

My full statement for the record cites several cases in which we 

have disrupted fundraising activity, and in some cases those funds 

were actually earmarked to support specific violent acts of terrorism like the attempted assassination of the Crown Prince of 

Saudi Arabia. 

Our ability to investigate and prosecute these cases relies on 

working with the Congress to ensure that our investigative authorities, our evidentiary rules, and the substantive criminal provisions remain effective and up to date, and I want to thank the 

members here today for your assistance, and I want to thank 

Chairman Whitehouse for your leadership in holding this hearing. 

Although domestic prosecutions are important, the Department 

also recognizes that because the networks that finance and support 

terrorist organizations are international, so must be our efforts. To 

disrupt terrorist financing networks and bring their members to 

justice, we rely on cooperation with capable foreign partners. Toward that end, the Department currently has a network of 55 resident legal advisers in countries around the world, and those who 

are stationed in Bangladesh, Kenya, Turkey, and in the United 

Arab Emirates are expressly focused on the problem of terrorist financing. 

We also frequently provide technical assistance to foreign countries who are drafting or amending their own terrorist financing 

laws, and we support and participate in training foreign governments and their investigative and prosecutorial services so that 

they, too, can mount effective terrorist financing cases. 

Finally, the Department, as Ranking Member Kyl mentioned, defends the laws and Executive orders used to disrupt terrorist financing. You will hear from Assistant Secretary Glaser about how 

the Department of the Treasury uses Executive Orders 12947 and 

13224 to designate individuals and entities that support terrorism 

and to freeze their assets. 

In addition, under the provision of the Antiterrorism and Effective Death Penalty Act, which was enacted by this body, the Secretary of State, in consultation with the Departments of Justice 

and Treasury, designates foreign terrorist organizations, or FTOs. 

FTOs’ assets are then frozen, and their members and supporters 

are barred from admission to the United States. And as the Committee well knows, it is also a Federal crime under one of the material support statutes to provide anything of value to an FTO, and 

the Department has successfully defended these and other terrorist 

financing laws and Executive orders against legal challenge. 

As you will hear from my colleagues here today, our efforts to 

counter terrorist financing have had some significant success in the 

past decade, but we have work yet to do. Terrorist organizations 

and their supporters continue to adapt and evolve their operations, 

and in order to be effective, we must work with the Congress to ensure that we maintain our authorities and capabilities necessary to 

counter terrorist financing. 

Thank you very much, Chairman, and I welcome the Committee’s questions. 

[The prepared statement of Ms. Monaco appears as a submission 

for the record.] 
6 

Chairman WHITEHOUSE. Thank you very much, Ms. Monaco. We 

are delighted to have you here, and we will hold questions until all 

the panel has had the chance to provide their testimony. 

Our next witness is Ralph Boelter, who currently serves as Acting Assistant Director of the FBI’s Counterterrorism Division. Mr. 

Boelter began his career at the FBI up in New England as a special agent in the Boston division, investigating white-collar crime, 

violent crime, and criminal enterprise matters. He has since served 

at FBI headquarters in the Criminal Investigative Division, as supervisor of the Los Angeles Division’s Violent Crime and Criminal 

Enterprise Squad, and as special agent in charge of the Minneapolis Division, where he managed a number of high-profile investigations, including significant corporate fraud and counterterrorism matters. We are delighted he is here and ask for his testimony. 

STATEMENT OF RALPH S. BOELTER, ACTING ASSISTANT DIRECTOR, COUNTERTERRORISM DIVISION, FEDERAL BUREAU OF INVESTIGATION 

Mr. BOELTER. Thank you, Senator, Chairman. Good morning, 

Chairman Whitehouse, Ranking Member Kyl, Senator Grassley. I 

appreciate the opportunity to testify before you today regarding the 

efforts of the FBI to combat terrorist financing. 

As we commemorated recently the tenth anniversary of the tragic events of September 11, 2001, we are reminded that the FBI’s 

No. 1 priority is the prevention of terrorist attacks against the 

United States. The mission of the Terrorism Financing Operations 

Section within the FBI—the TFOS, as we call it—is to ensure that 

financial investigative efforts and techniques are applied in all 

counterterrorism investigations and to manage investigative efforts 

into individuals and entities who provide funding to terrorists. 

TFOS carries out this mission through the application of financial investigative techniques and the exploitation of financial intelligence. To improve its ability to detect and disrupt those with the 

intent and capability to conduct attacks against the United States, 

TFOS has undergone a significant shift in the way it addresses the 

threat of terrorism financing. 

Rather than solely collecting evidence to solve a particular case, 

this new approach prioritizes the collection and utilization of intelligence to develop a comprehensive threat picture, enabling strategic disruptions of terrorist financing operations. Thus, TFOS exploitation of intelligence not only seeks to identify the scope and 

breadth of terrorist financing, but also it seeks to identify the members of the terrorist network. This enables the FBI to enhance indicators and tripwires and develop actionable intelligence to identify 

and prevent terrorist attacks. 

To more fully utilize the intelligence we receive from our domestic intelligence and law enforcement partners, TFOS recently added 

a Targeting Unit. The Targeting Unit works to identify currently 

unknown fundraisers and their associates. 

In addition, TFOS added a Strategic Intelligence Unit to monitor 

threats, financial trends, and methodologies which are key to identifying possible terrorist financing transactions at their earliest 

point. 
7 

In May of this year, Hor and Amera Akl pled guilty to conspiring 

to provide material support to Hizballah. The Akls claimed to an 

FBI informant that they had moved money to Lebanon and had 

high-ranking contacts with Hizballah. Amera Akl told the informant that she ‘‘dreamed of dressing like Hizballah, carrying a gun, 

and dying as a martyr.’’ 

Posing as an individual with access to investors, the FBI informant delivered $200,000 to Hor and Amera for delivery to Hizballah. 

Both were arrested after the two were observed attempting to hide 

the money in a vehicle destined for shipment overseas. 

In addition, in the last year, the FBI conducted terrorist financing investigations that led to the indictment of individuals for providing funding to the Pakistani Taliban, al Qaeda in the Arabian 

Peninsula, and Al-Shabaab. These cases, among many others, highlight the importance of applying financial investigative techniques 

to counterterrorism investigations. 

Of course, we cannot accomplish this mission alone. Our close 

partners in these efforts are members of the Treasury Department, 

and in particular the Financial Crimes Enforcement Network within that Department. Working closely with the Treasury, the FBI 

conducts significant outreach to our financial industry counterparts. Through these continuing partnerships, the financial industry is better able to identify and report trends or patterns of suspicious activity around the country. 

In addition, TFOS coordinates efforts with our foreign intelligence and law enforcement partners around the world. Through 

all the FBI’s 62 legal attache offices, TFOS jointly investigates terrorist financing matters with our foreign counterparts. These relationships are key to the FBI’s efforts to stem the flow of financial 

support to terrorists and protect the United States from terrorist 

attacks. 

In conclusion, the efforts of TFOS, in close coordination with our 

Federal, State, and local partners, the financial industry, and our 

international partners, have established an increasingly difficult 

environment within which terrorist financiers can operate undetected. We believe these efforts have reduced the funding available 

for terrorist operations and have made the concealment and transfer of terrorism-related funds more difficult. 

As the terrorists adapt their methods to raise and transfer funds, 

the FBI—and its partners—has also adapted its efforts and its capacity to detect and disrupt these financial networks. To identify 

new and emerging networks and currently unknown subjects, 

TFOS systematically tracks and analyzes intelligence to guide terrorist financing investigations. TFOS’s cooperative efforts with our 

Government and private sector partners ensures an ongoing and 

coordinated approach to terrorist financing to prevent future terrorist attacks against the United States. 

Chairman Whitehouse, Ranking Member Kyl, I appreciate the 

opportunity to come before you today to share the work that the 

FBI is engaged in to address terrorist financing and counterterrorism in this country and around the globe, and I am happy to answer any questions. 

Thank you. 
8 

[The prepared statement of Mr. Boelter appears as a submission 

for the record.] 

Chairman WHITEHOUSE. Thank you, Mr. Boelter. I appreciate 

your testimony. 

Our final witness on the panel is Daniel Glaser, who is the Assistant Secretary for Terrorist Financing at the Department of 

Treasury’s Office of Terrorism and Financial Intelligence. He has 

also served as Treasury’s Deputy Assistant Secretary for Terrorist 

Financing and Financial Crimes. In addition to his prior roles at 

the Treasury Department, he has served as an attorney for the 

United States Secret Service and as the head of the U.S. delegation 

to the Financial Action Task Force, an intergovernmental agency 

charged with formulating policies to combat international money 

laundering and terrorism financing. 

Mr. Glaser, welcome. 

STATEMENT OF DANIEL L. GLASER, ASSISTANT SECRETARY 

FOR TERRORIST FINANCING, U.S. DEPARTMENT OF THE 

TREASURY 

Mr. GLASER. Thank you, Chairman Whitehouse, for the opportunity to discuss our efforts to combat terrorist financing. 

In the decade since the tragic attacks of September 11th, the 

U.S. Government has worked toward developing a comprehensive, 

whole-of-government approach to combat terrorist financing. Critical to this evolution has been the recognition that the Treasury 

Department—and the financial tools it wields—is central to our 

counterterrorism efforts and, indeed, to our National security as a 

whole. 

Money is vital to terrorist organizations. The monetary cost of 

executing an individual attack may be low, but terrorists require 

substantial sums to recruit, train, and sustain operatives, procure 

weapons, compensate families of so-called martyrs, and garner support from local populations. This need to raise and move funds is 

a significant vulnerability that can be exploited. The financial networks of terrorist organizations are susceptible to identification 

and disruption. It is our efforts to do just this that I would like to 

discuss today. 

Prior to 9/11, the U.S. national security community had yet to 

grasp the full significance of the terrorist threat. Not surprisingly, 

terrorist financing was not high on the national security agenda, 

but that changed quickly 10 years ago. A galvanized U.S. Government recognized the importance of attacking terrorists’ financial infrastructure as a critical component of an effective counterterrorism strategy. 

Treasury, armed with new authorities to freeze terrorists’ assets, 

played a significant role in this response. We designated various 

terrorist-affiliated entities, crippling the financial nodes of al 

Qaeda, Hamas, and other foreign terrorist organizations. Today I 

can confidently say that the U.S. no longer remains fertile ground 

for terrorist fundraising. 

Despite our initial success, though, we recognized that Treasury’s 

full potential remained bridled without a more comprehensive strategic approach and the institutional framework to implement it. 

Accordingly, in 2004 the Treasury Department, working with Con-
9 

gress, created the Office of Terrorism and Financial Intelligence, or 

TFI. The creation of TFI, the first office of its kind in the world, 

was a revolutionary development in the national security arena, 

and in less than 8 years, TFI has had a dramatic impact on our 

National security and become a fixture within our foreign policy establishment. Our mission is clear: Marshal the Treasury Department’s policy, enforcement, regulatory, and intelligence functions to 

sever the lines of financial support to international terrorists, 

WMD proliferators, narcotics traffickers, organized criminals, and 

other threats to our National security. 

We advance this goal in many ways. For example, we work 

through multilateral bodies such as the Financial Action Task 

Force to establish a global framework that promotes transparency 

and which enables us to identify and address the various forms of 

terrorist financing vulnerabilities and threats. 

We have also sought to mitigate the risks posed by hawalas, 

charities, cash couriers, and new payment methods. And we have 

systematically undermined terrorist financial networks by imposing 

targeted financial measures. 

We have coupled these instruments with sustained outreach to 

the international and private sectors seeking to freeze terrorist 

groups out of the international financial system. Of course, in 

achieving these successes, cooperation from foreign counterparts is 

essential. Our engagement with Saudi Arabia exemplifies this approach. Though our partnership in combating terrorist financing in 

earlier years with Saudi Arabia had not always been good, sustained engagement over the years has produced strong progress. 

Moving forward, we must continue to build on this relationship and 

to encourage other regional players, in particular Qatar and Kuwait, to follow Saudi Arabia’s lead in prioritizing the fight against 

terrorist financing. 

Of course, considerable challenges remain ahead. We are, as Secretary of Defense Panetta has said, within reach of defeating al 

Qaeda. Their financial situation is indeed dire, and our goal is to 

make it worse. 

But some pillars of financial and logistical support remain intact. 

Even as we make progress against core al Qaeda, we are finding 

that with the rise of al Qaeda affiliates, the terrorist financing 

threat has changed and, in some ways, become more intractable. 

Issues such as kidnapping for ransom and other terrorist groups 

that rely on non-traditional sources of funding, such as Al-Shabaab 

and Hamas, will require innovative approaches. We must continue 

to work with our interagency partners, the private sector, and our 

international counterparts to advance our mission. With the comprehensive strategic approach I have outlined here today, we will 

move forward to meet these challenges. 

Thank you, Mr. Chairman, and I look forward to answering any 

questions you might have. 

[The prepared statement of Mr. Glaser appears as a submission 

for the record.] 

Chairman WHITEHOUSE. Thank you very much, Mr. Glaser. Let 

me turn right away to your observation that some pillars of financial and logistical support for terrorist organizations remain intact. 
10 

What are those pillars? And in what way are they resistant to our 

previous efforts? What do we need to do to bring them down? 

Mr. GLASER. Well, thank you for the question, Mr. Chairman. I 

think we have made—we have to be vigilant across the board on 

every way terrorists raise funds and move funds, and all the ways 

that they have traditionally raised funds and all the ways they 

have traditionally moved funds, all the ways they continue to do 

so. But I think we have had a lot of success and made a lot of 

progress on the more traditional ways of fundraising through charities, moving funds through the formal financial sector, we have 

made a lot of progress, and I think we really have made it, as I 

like to say, costlier, riskier, less efficient for terrorist organizations 

to move their funds—raise funds and move their funds around the 

world. 

One of the results of that success has been to transform the problem, and one of the things we have seen, particularly, as I said in 

my opening statement, with the reliance—with the emergence of 

not just al Qaeda core but al Qaeda affiliates, groups like al Qaeda 

in the Islamic Maghreb, al Qaeda in the Arabian Peninsula, AlShabaab, is an increased reliance on localized criminal activities to 

support themselves—in particular, with respect to al Qaeda in the 

Islamic Maghreb, kidnapping for ransom from which they derive 

substantial sums, so much so that it really-you know, they could 

survive on it. 

So while we need to continue to sort of look at the deep-pocket 

donors and look at the ways that money moves into those regions, 

it is also important that we come up with new ways of thinking 

about how a group like AQIM is raising their funds. 

I think it is important that we engage with our partners in Europe, for example, on the very substantial ransom sums that are 

paid and come up with a common view and a common approach on 

ransom sums that are paid. That would be something that I think 

we need to focus on. 

There are other ways these groups raise funds. You have groups 

that are controlling territory, so you have Al-Shabaab, not an al 

Qaeda group, but Hamas who could raise funds the way the U.S. 

Government does through taxation. And, again, that presents challenges, and how do we target those financial systems? How do we 

find a way in to doing that? You know, these are some of the challenges that we face. 

Chairman WHITEHOUSE. The more geographically local ones provide new types of challenges. 

Mr. GLASER. One of the successes has been, you know, you 

smash the center, you make it harder for them to exert command 

and control and deliver potentially devastating attacks. One of the 

consequences of that that you have to face is a more dispersed 

threat with its own sources of financing, which are in some ways 

smaller—and that is a good thing—and harder to sort of coordinate 

as an overall global strategy. That is a good thing. And in a lot of 

ways poor, and that is a good thing. But, you know, then you have 

your new challenges of going after the localized ways that they 

raise funds. 

Chairman WHITEHOUSE. Ms. Monaco, tell me a little bit about 

how we are doing against the hawala networks. These are financ-
11 

ing networks that have lasted for hundreds, perhaps even thousands of years, supporting the trading communities in that area of 

the world, and they have developed an informal means of operating 

that does not require reporting and is hard to penetrate. Given 

that, what are the techniques you find that we are using that have 

generated some success, and can we be optimistic about encouraging further success against them? 

Ms. MONACO. Well, Chairman Whitehouse, I think we have had 

some success, as you alluded to, and as Assistant Secretary 

Glaser’s testimony discusses, we have also made some headway in 

ensuring that informal networks like hawalas are subject to registration requirements and trying to build in some of the same requirements that surround the formal system into the more informal system. So I think that is a success and that is a point of 

progress that we can recognize. 

I think we have been successful in some cases, and some of the 

statements submitted for the record recognize this as well. I would 

point to the Younis case, an individual who pled guilty just earlier 

this summer in New York. I think that is an example of the great 

efforts of the FBI and the Assistant U.S. Attorneys in New York 

in focusing on all aspects of a particular threat and following each 

thread, including the financial thread, and the defendant in that 

case pled guilty to operating an unlicensed money-transmitting operation in which eventually some of that money found its way to 

Faisal Shahzad, the plotter of the attempted car bomb, of course, 

in Times Square. So that is an instance where FBI investigators 

very diligently followed every aspect of that operation, including 

where the funding was coming from, and in that case identified the 

use of the informal money-transmitting system and disrupted that 

operation going on both here and in Pakistan. 

So I think we have had some successes. I think the Treasury Department’s efforts to impose some of the requirements that exist in 

the formal system onto the informal system I think is a tremendous step in the right direction. 

Chairman WHITEHOUSE. Very good. Thank you. 

Let me turn to Senator Grassley and then, in order of arrival, 

Senator Blumenthal and Senator Klobuchar. Senator Grassley. 

Senator GRASSLEY. I probably will not have an opportunity to 

ask all of you questions because I can only stay for one round, but 

I appreciate it and I will submit some questions for answer in writing. I will start with Ms. Monaco. 

I sent a letter to the Department of Justice requesting information about the non-prosecution agreement entered into with the Islamic Investment of the Gulf Limited. I think it was an unusual 

move when the Department issued no press release about this 

agreement. The agreement was the conclusion of an investigation 

that moved around the Department from the National Security Division to the Criminal Division’s Terrorism Financing Section to 

the Tax Division. As of today I have not had a response to the letter because—well, you know, I just kind of expect answers to my 

letters, but maybe it is a little soon to get them, so I am going to 

ask you. But I hope that we can get answers because I want to 

make sure that the Department is not trying to hide something. 
12 

The silence on this issue of not issuing a press release I think 

kind of runs afoul with the claim that this administration is going 

to be very transparent. 

So what role did the National Security Division play in this investigation and in the non-prosecution agreement with the Islamic 

Investment? 

Ms. MONACO. Senator Grassley, I do understand that the Department has received your letter, and I was informed about that in 

preparation for this hearing, and I will certainly take back the urgency with which the Senator has expressed a desire to get a response to that and ensure that we get a prompt response, that the 

Department gets a prompt response to you. 

With respect to the National Security Division’s involvement, I 

am not aware of a particular involvement in that matter, but, 

again, I am happy to go back and review that. 

Senator GRASSLEY. Then you cannot answer the question who 

were the individuals at the Department that approved of the nonprosecution agreement? Or that is probably separate so you probably cannot answer that. 

Ms. MONACO. I cannot, Senator. 

Senator GRASSLEY. You can answer this: At any time did you 

offer an opinion on it? 

Ms. MONACO. I did not, Senator, no. 

Senator GRASSLEY. OK. There are reported connections between 

the Islamic Investment and known terrorist groups. Surely the National Security Division would investigate those connections, 

wouldn’t they? I mean just as a matter of procedure. 

Ms. MONACO. Senator, I would not want to speculate in this particular case. Again, I am not aware of what involvement, if any, the 

Division had in that matter, but I would be happy to go back and 

take a look at that, and we will ensure that we try and get a response to your letter promptly. 

Senator GRASSLEY. Well, it would seem to me like they would 

have something to do with it. You may not know specifically what 

they had to do with it, but they surely had something to do with 

it. 

Ms. MONACO. Again, Senator, I am not aware, and I would not 

want to speculate to the Committee. 

Senator GRASSLEY. You can answer this question: How much 

money did the non-prosecution agreement involve? 

Ms. MONACO. I do not know. 

Senator GRASSLEY. Well, can you tell us why they did not publicize the agreement when they normally would? 

Ms. MONACO. I am not aware of what the practice—if it would 

be normal practice to disclose that information, Senator. 

Senator GRASSLEY. Well, would it be possibly because the Department got a bad deal and they are trying to hide it? 

Ms. MONACO. Again, Senator, I am not sure if it is, in fact, normal practice to disclose the terms of any particular settlement 

agreement in that regard. 

Senator GRASSLEY. In keeping with the spirit of openness and 

transparency that the President and the Attorney General promote, 

will you provide my office with a copy of the non-prosecution agree-
13 

ment with the Islamic Investment as well as answers to my questions contained in the letter of September 7th? 

Ms. MONACO. Senator, I will absolutely go back and ensure that 

we get a response to your letter and provide whatever information 

is appropriate to provide to you and to the Committee. 

Senator GRASSLEY. Could you tell me when I could expect an answer to that letter? 

Ms. MONACO. I would not want to overpromise, Senator, but, 

again, I would certainly go back and make sure that we do get a 

prompt response. 

Senator GRASSLEY. As far as you know, there would not be any 

national security implications about releasing the information I 

have asked for? 

Ms. MONACO. I am not—— 

Senator GRASSLEY. I mean, after all, it was a grand jury situation that was investigated. 

Ms. MONACO. I am not aware of what the national security implications would be. It certainly would not be outside the realm of 

possibility that there would be national security implications in a 

grand jury investigation. But, again, I would not want to speculate. 

Senator GRASSLEY. I had my staff ask the Justice Department 

yesterday whether the matter involved national security and if that 

was the reason for silence on the non-prosecution agreement. The 

Office of Legislative Affairs did not answer my staff’s question despite notice that I would bring it up today. We have the capacity 

to review classified information, and if there is something about 

this that involves national security, since I have the capacity for 

classified information, I would urge you to use those channels to 

provide me with the information. 

Ms. MONACO. I understand, Senator. 

Senator GRASSLEY. OK. And then I will stop with this: On a related matter, I understand that, despite the hiring freeze at the 

Justice Department, more staff have been hired for the National 

Security Division. How many people do you have in the National 

Security Division Policy Office? How many were hired since the 

hiring freeze? And who approved the hires? 

Ms. MONACO. Senator, the Department is under a hiring freeze, 

as you know, given the current budget situation. There are, however, exemptions that have been granted based on—to that hiring 

freeze where Department components can demonstrate that they 

have the funding and the allowable positions that have been provided by the Congress. I would have to double-check on the precise 

number, but I would say in the neighborhood of 30 individuals in 

the Law and Policy Office. 

Senator GRASSLEY. OK. Thank you very much, Mr. Chairman. 

Chairman WHITEHOUSE. Thank you very much, Senator Grassley. 

The next questioner will be Senator Blumenthal of Connecticut, 

who has a distinguished career in law enforcement, as you all well 

know. 

Senator BLUMENTHAL. Thank you, Mr. Chairman, and thank you, 

Chairman Whitehouse, for your distinguished career in law enforcement and for holding this hearing. 
14 

I think that we are all gratified by the progress that has been 

made in this area, particularly in combating the financial institutions’ potential complicity in these transactions that involve financing terrorism. And I recognize that progress has been made in that 

area, and I want to thank each of you and the people who work 

with you for your continuing work and your accomplishments. 

All three of you, I believe, have made reference to the guilty plea 

by Mohammad Younis and the information that was developed 

about the sources of funding for the Shahzad plot. And apparently 

a major source was in Pakistan, possibly with the complicity of the 

financial institutions there, possibly with the knowledge of officials 

in Pakistan. I wonder if you could comment on what information 

has been developed about the Pakistanis’ involvement in financing 

terrorist organizations and what steps can be taken to combat it. 

Ms. MONACO. I will just comment briefly on that, Senator 

Blumenthal. First I want to make clear that in the Younis case 

that individual was prosecuted and has pled guilty to operating an 

unlicensed money-transmitting operation, which I mentioned previously. He was not witting in the guilty plea—in that case did not 

demonstrate that he was witting of the purpose of those funds but, 

rather, the unlicensed transmission operation. So I just wanted to 

make that clear for the record. 

As to development of information with regard to the Pakistani 

end of that operation, I do not have anything that I would be able 

to offer to the Committee. I am not sure about my FBI colleague. 

Mr. BOELTER. Yes, Senator, I would just say generally that one 

of our great challenges is a lack of visibility in the financial institutions and entities overseas. That is a challenge, I would not limit 

that to Pakistan, but globally. 

With respect to this case in particular, I think I would defer to 

speak to that issue in a more—— 

Senator BLUMENTHAL. In a different setting. 

Mr. BOELTER. Yes. 

Senator BLUMENTHAL. Well, I appreciate the reasons for your 

preference, although your testimony does say, and I am quoting, 

‘‘Shahzad advised that the funding was arranged in Pakistan by 

associates of the... (TTP).’’ And I take it from that fairly general statement that perhaps a follow-up in a different setting would 

be worthwhile because I would be very interested in this instance 

and others where Pakistan perhaps played a part with degrees of 

knowledge and intention that may be open to question about the 

terrorist financing. 

And let me follow up with you in another related area. What 

other countries would you say would bear scrutiny and perhaps 

could cooperate more fully in making their systems more transparent and, therefore, aid us in tracking down and stopping this 

kind of financing? 

Mr. BOELTER. Well, Senator, I think I would defer to my Treasury colleague to speak on that point, if I may, Senator. 

Senator BLUMENTHAL. Sure. 

Mr. GLASER. Thank you, Senator. We spend a lot of time at the 

Treasury Department on precisely this issue, trying to work with 

other countries on what should be the international standards for 

anti-money-laundering and counterterrorist financing and then 
15 

putting systems in place to ensure the countries are actually taking 

steps to comply with those standards. And we do that through an 

organization called the Financial Action Task Force. 

The Financial Action Task Force has what is called the FATF 

40∂9, which is the 40 recommendations on money laundering, 9 

special recommendations on terrorist financing, and taken together 

they represent a comprehensive framework for combating money 

laundering and terrorist financing. It includes criminal laws, regulatory laws, and international cooperation. 

And then we have worked with the IMF and the World Bank and 

FATF to make sure that every country or virtually every country— 

North Korea, for example, has not been reviewed, but virtually 

every country in the world is subject to a very rigorous review process. 

FATF has on its website identified the countries which in particular have performed very poorly on those. Pakistan is one of 

those countries that has been so identified by the FATF, and there 

are about 25 countries. I could tell you a few. I cannot rattle them 

all off, off the top of my head, but it is publicly available on the 

FATF website which countries still have a lot of work to do. I am 

just getting this basic structural framework in place. 

Senator BLUMENTHAL. I know that that information is available 

publicly, and just one last question because my time is about to expire. Does that list coincide with the list of countries that are actually responsible or without perhaps the knowledge of the governments themselves, does that list of the least transparent coincide 

with the list of countries that also are the most complicit, perhaps 

unwittingly? 

Mr. GLASER. Exactly, and that is—— 

Senator BLUMENTHAL. I am not framing the question very artfully, but you get the—— 

Mr. GLASER. I know exactly what you are asking. I was about to 

make that distinction as well. That group of countries that I was 

mentioning are countries that need work on their basic framework, 

on their basic regulatory structure, their basic legal structure, and 

a lot of them are working to put those in place. 

Then you get to the more difficult question of which countries are 

actually implementing it, which countries are actually doing what 

they need to do. 

For example, Kuwait is a country that does not even have a terrorist financing law, the only country in the gulf that does not have 

a terrorist financing law. Kuwait is a country that has some work 

to do. 

Qatar is making progress, but Qatar has a lot of work to do in 

implementing its terrorist financing laws, and I am going to be visiting Qatar and Kuwait later this month or the beginning of October—the end of September or beginning of October, to talk to them 

about the steps that they still need to take in order to make 

progress. 

And then, of course, you have your state sponsors, countries like 

Iran, which we have recently designated an al Qaeda financial support network supported by Iran. Iran is the chief donor to 

Hizballah, to Hamas. So, I mean, you know, once you get to the 

state sponsorship arena, it is a whole different level. 
16 

So as you point out, I would say there are sort of three levels: 

the countries that still need work on a framework, the countries 

that simply do not have the political will or need more political will 

to implement, and then the countries that are actually actively part 

of the problem. 

Senator BLUMENTHAL. Thank you very much. 

Thank you, Mr. Chairman. 

Chairman WHITEHOUSE. Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much. 

I first wanted to welcome the Assistant Director, Ralph Boelter. 

He was a special agent in charge of the Minneapolis office and did 

an amazing job with our FBI there, and we have a very close law 

enforcement community in Minnesota. My favorite story of that 

was the Secret Service once had a holiday party, and I will never 

forget the invitation: ‘‘You’re invited to the Secret Service Open 

House,’’ which I thought was sort of funny. And when we got there, 

they would not tell you how many agents worked there because it 

was a secret. But I have really enjoyed working with you, and I 

welcome you here today. 

Mr. BOELTER. Likewise, Senator. Thank you. 

Senator KLOBUCHAR. Thank you. 

I wanted to first start and follow up a little with you, Assistant 

Secretary Glaser. You were talking with Senator Blumenthal about 

some of the work that you are doing. I was just curious, from sort 

of a bigger picture question, what are the most common—like the 

two or three most common forms of fundraising you are seeing to 

finance these terrorist entities? And I know that in your testimony 

you talk about how it has become more intractable, more difficult 

to find. So what are you seeing now? 

Mr. GLASER. Thank you for the question. As I said before, all the 

methodologies that we have traditionally seen for raising and moving terrorist funds we are still seeing. So terrorist organizations 

continue to receive money from deep-pocket donors in the gulf. 

They continue to receive money through charities. They continue to 

move money through both the informal and formal financial sectors. So all of that continues to go on, even though we continue to 

make tremendous progress in those areas. And I would just again 

point to Saudi Arabia as a good example of that progress. 

I have been at this for a long time, and several years ago we 

were quite frustrated with what we thought was Saudi Arabia not 

taking as much action as it should be taking. In recent years we 

have seen Saudi Arabia have investigations, real law enforcement 

investigations into terrorist financing and real prosecutions in terrorist financing, and it put in place some of the strictest laws in 

the world with respect to how it regulates and oversees its charities 

with respect to their international disbursements of funds. So that 

is progress, and that is one of the ways that we have made it harder for terrorist groups to access the international financial system. 

As a result, we have seen the problem disperse and become more 

localized, which has its advantages and disadvantages. One of the 

disadvantages is some of the more traditional tools we use in terms 

of sanctions, in terms of engaging with governments, and in terms 

of confronting governments are less effective, and we have to come 

up—— 
17 

Senator KLOBUCHAR. Because it is more dispersed and it is—— 

Mr. GLASER. Because it is more dispersed, it is more localized, 

and it becomes almost a local law enforcement issue. One of the 

things I pointed to is kidnapping for ransom. I know I keep mentioning it like a broken record, kidnapping for ransom, because it 

is really, really important and it is—— 

Senator KLOBUCHAR. And so that money is going from these 

looser groups into terrorism. 

Mr. GLASER. Well, these looser groups are terrorist organizations, 

and this is how they are funding themselves, but oftentimes—— 

Senator KLOBUCHAR. Right, so they just do it themselves. They 

kidnap people, they use that money, and then they commit acts of 

terrorism. 

Mr. GLASER. These are terrorist organizations that raise—yes, 

that in part, and to a large part, support themselves through that 

criminal activity. 

Senator KLOBUCHAR. Right. Could I turn to Assistant Director 

Boelter? Sort of combining your old job and your new job, organized 

crime, what do you see as the relationship between financing terrorism and organized crime? 

Mr. BOELTER. I do not see a strong connection there. I think organized crime is not—it is not naturally paired with terrorism because the objectives of organized crime are to make money, frankly, 

and the objectives of terrorists are really to inflict harm on this 

country and our interests, and other countries as well. So I think 

there is not a natural relationship between those two entities, and 

likewise, I am not saying there is no connection, but I do not think 

it is a significant connection. 

Senator KLOBUCHAR. And do you see some of the same things 

that Mr. Glaser was talking about with the funding? 

Mr. BOELTER. In the different modes of raising—— 

Senator KLOBUCHAR. Yes, that it is more dispersed with individual terrorist groups funding themselves. 

Mr. BOELTER. Absolutely, and I think to some extent that we 

have moved them in that direction over the last few years by shutting down the formal financial network or access to it, to them. So 

I think that is a product somewhat of what we have done, but, yes, 

it is a changing landscape in terms of how they raise money. I 

would not suggest that engaging in kidnappings would be their 

first choice, but it is something that—because that is a high-risk 

activity, but that is clearly overseas in particular something that 

we are seeing. 

Senator KLOBUCHAR. Assistant Attorney General Monaco, you 

talked about training and working with our partners internationally. What response have you received? Have there been changes 

over the last decade? Have you seen changes to the foreign laws 

that make it easier for us to work with them? 

Ms. MONACO. I think we have seen a growing level of cooperation 

and particularly in those areas where we have targeted our efforts. 

I mentioned Bangladesh, Kenya, and some other areas where we 

really are focusing almost exclusively with personnel in those areas 

on terrorist financing. 

I think in areas like Indonesia there have been good strides 

made, and I think while we are working in those targeted areas to 
18 

bring up the level specifically on terrorist financing in the areas I 

mentioned, our resident legal attache program across the world 

with the 55 folks I mentioned is something we are trying to buildup our counterterrorism cooperation generally, buildup the level of 

attention and cooperation across the board. 

Senator KLOBUCHAR. You know, I spent the evening of September 11th this year with the family of Tom Burnett, who was 

one of the passengers on that flight and one of the four guys that 

decided in that split second to wrestle the terrorists in the plane 

and then landed in a field in Pennsylvania instead of in one of our 

buildings here, which could have killed thousands of people, and 

his parents actually are—Mr. Chairman, I am glad you held this 

hearing. They are very focused on this financing issue and trying 

to go after who financed this terrorism act and working on it. So 

I just want to thank you for your work on their behalf and everyone else in this country. Thank you very much. 

Ms. MONACO. Thank you, Senator. 

Chairman WHITEHOUSE. Thank you, Senator Klobuchar. 

I have a statement from Chairman Leahy on this hearing. With 

unanimous consent, I will put the statement into the record, and 

it has two letters attached, which I will also put into the record. 

[The prepared statement of Chairman Leahy appears as a submission for the record.] 

[The letters appear as a submission for the record.] 

Chairman WHITEHOUSE. Ms. Monaco, I will summarize its conclusion, which is that the Attorney General should issue prosecutorial guidelines that remove the uncertainty over the scope of the 

material support law. I will hope very much that the Department 

takes that advice to heart. We have just had a vote in the last 

markup where the Department was invited to issue prosecutorial 

guidelines and did not, and the result was that a measure passed 

through the Judiciary Committee that the Department disapproves 

of. When the Chairman of the Judiciary Committee invites the Attorney General to issue prosecutorial guidelines on a matter, I 

think that is something that the Attorney General should attend 

to with considerable dispatch and attention because it is a device 

that leaves the control over this in the hands of the Department 

as to how to design the very best response. If you fail at that, then 

you end up with us. So please take that as a very positive step, and 

I would urge the Attorney General to respond quickly and affirmatively to the Chairman’s request. 

Back to the hawalas for 1 second. It strikes me from the description of the areas in which we have had success that it has been 

in this country where the operation of the hawala violates in essence our banking laws—they are operating an unauthorized financial facility. Once you get outside of that geographic boundary and 

into the area, say, between Afghanistan and Saudi Arabia, where 

funds are floating back and forth, or other gulf states, have we had 

any success dealing with the hawala system? 

Ms. MONACO. I think that some of our efforts have been in the 

intelligence-gathering vein and have allowed us some insight—and 

I think my colleagues may have more to offer on that—has allowed 

us some insight into those activities overseas, but I do think it 
19 

poses one of the challenges we face in terms of the transparency, 

or lack thereof, of the operation of formal and informal networks. 

Chairman WHITEHOUSE. Mr. Glaser, would that be one of your 

pillars of financial and logistical support that remain standing? 

Mr. GLASER. Well, sure. As you noted, the reason hawala and 

other forms of informal remittances and informal money services 

exist is because there are large communities throughout the world 

that do not have access to formal financial services or affordable financial services. So the long-term ‘‘solution’’ to hawala is a 

generational one, and it is about building an international financial 

system that everybody around the world has access to. 

Now, since that is a long-term solution, we need shorter-term— 

we need to address the problem in a shorter-term way as well. As 

you point out, the first prong is having an appropriate regulatory 

regime. I do think we have an appropriate regulatory regime in the 

United States, and money service businesses—and hawala would 

be a money service business—are required to register; they are required to have an anti-money-laundering program, and they are required to report suspicious transactions. 

There are international standards that I mentioned before 

through the Financial Action Task Force that apply to all countries 

to have similar sorts of systems, and we are working with other 

countries to ensure that those around the world. 

The next prong would be enforcement, and I think that we have 

taken—you mentioned Afghanistan. We have tried to be very aggressive with respect to international hawaladars that we think are 

problematic. In February of this year, under the Kingpin Act, 

under our kingpin sanctions, we designated the New Ansari Network, which is a major hawala operation in Afghanistan, which is 

moving billions of dollars in narcotics proceeds into and out of Afghanistan. So there is a particular hawala network that we went 

after, and we continue to follow up on that. 

You mentioned the ATFC, the Afghan Threat Finance Cell. They 

have worked directly with special units of the Afghan police to conduct raids on hawaladars within Afghanistan. So there is an important—in addition to the regulatory component, there is an important enforcement component. 

The way we try to approach it beyond the sort of long-term effort 

to make financial services available to everybody, you know, is a 

regulatory prong, enforcement, international standards, and general economic development. So that is at least how we think about 

the issue, but I do not want to give the impression that we have 

the issue cracked. It is there. It is a tough issue, and it is a largely 

non-transparent system as it exists today, and that is something 

that we focus on very intently. 

Chairman WHITEHOUSE. Thank you. 

A final question probably to Ms. Monaco. I believe that one of the 

great attributes of American democracy in this wonderful balanced 

system that has been handed down to us from the Founding Fathers is the jury and the right that every American has, when 

harmed, to go before a jury of their peers and plead their case and 

stand equal before the law with whoever may have harmed them. 

Americans have clearly been harmed by terrorist organizations. 

They have been harmed in America by terrorist organizations. And 
20 

some have sought to vindicate their rights by bringing private actions to establish the scope of those terrorist organizations, to establish the scope of the networks that support them, financially 

and otherwise, and to seek the redress that is every American citizen’s right. 

Do you find that a helpful element of the various ways in 

which—it is a nongovernmental element to a significant degree, but 

is it a helpful element in trying to identify and bring to justice people who are financing terrorist activities that harm Americans here 

in our home country? 

Ms. MONACO. If I understand the Chairman’s question, the right 

of individuals or organizations to challenge their designation? 

Chairman WHITEHOUSE. The right of victims of terror to go after 

those who finance the terrorist plotters who harmed them and seek 

to bring them to justice in our civil courts. 

Ms. MONACO. Certainly, Senator, there are a number of those 

cases in which individuals have, as you say, sought redress in the 

courts. I certainly agree with you as a lawyer and as a former prosecutor about the jury system and its importance in our system. And 

I think the ability of individuals to seek redress in the courts is absolutely a founding element of our democracy. 

Chairman WHITEHOUSE. And so the Department of Justice is perfectly comfortable with the notion that people can proceed in that 

way to vindicate their rights against those who have harmed them 

in the American civil court system? 

Ms. MONACO. Well, I think equally so the Department plays a 

role in defending statutes, in defending—in acting in litigation. 

Great career members of our Civil Division, as you know as a 

former denizen of the Justice Department, tremendous lawyers 

there who seek to uphold statutes passed by this body and to vindicate the interests of the Government in the courts, and I think they 

equally play an important role. 

Chairman WHITEHOUSE. Very good. I appreciate everybody’s testimony. I know that you have important responsibilities, and for 

you to take the time to come up here and share with all of us the 

work that you are doing and the concerns and challenges that you 

face is very helpful to us as we try to provide you the necessary 

material support to do the jobs that you have to do to protect us. 

So let me close by thanking you for your diligent service on behalf 

of our Nation, recognizing what every member who has been here 

has noted, which is the vital importance of the task that you have 

made it your purpose and mission to accomplish and to wish you 

well as you go forward. Please feel free to come to us with any specific requests you have to strengthen the hand that you have 

against those who are providing this kind of material support to 

the terrorist networks that still are targeting our country and our 

people. 

Thank you very much. The record of the hearing will remain 

open for an additional week in the event that anybody wishes to 

add anything, but subject to that, the hearing is now adjourned. 

Ms. MONACO. Thank you, Senator. 

[Whereupon, at 12:03 p.m., the Subcommittee was adjourned.] 

[Questions and answers and submissions for the record follow.] 
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