The second major point on which the principals had agreed on March 10 was the need to crack down on terrorist organizations and curtail their fund-raising. The embassy bombings of 1998 had focused attention on al Qaeda's finances. One result had been the creation of an NSC-led interagency committee on terrorist financing. On its recommendation, the President had designated Bin Laden and al Qaeda as subject to sanctions under the International Emergency Economic Powers Act. This gave theTreasury Department's Office of Foreign Assets Control (OFAC) the ability to search for and freeze any Bin Laden or al Qaeda assets that reached the U.S. financial system. But since OFAC had little information to go on, few funds were frozen. In July 1999, the President applied the same designation to the Taliban for harboring Bin Laden. Here, OFAC had more success. It blocked more than $34 million in Taliban assets held in U.S. banks. Another $215 million in gold and $2 million in demand deposits, all belonging to the Afghan central bank and held by the Federal Reserve Bank of New York, were also frozen. After October 1999, when the State Department formally designated al Qaeda a "foreign terrorist organization," it became the duty of U.S. banks to block its transactions and seize its funds. Neither this designation nor UN sanctions had much additional practical effect; the sanctions were easily circumvented, and there were no multilateral mechanisms to ensure that other countries' financial systems were not used as conduits for terrorist funding. Attacking the funds of an institution, even the Taliban, was easier than finding and seizing the funds of a clandestine worldwide organization like al Qaeda. Although the CIA's Bin Laden unit had originally been inspired by the idea of studying terrorist financial links, few personnel assigned to it had any experience in financial investigations. Any terrorist-financing intelligence appeared to have been collected collaterally, as a consequence of gathering other intelligence. This attitude may have stemmed in large part from the chief of this unit, who did not believe that simply following the money from point A to point B revealed much about the terrorists' plans and intentions. As a result, the CIA placed little emphasis on terrorist financing. Nevertheless, the CIA obtained a general understanding of how al Qaeda raised money.

What gave the Treasury Department's Office of Foreign Assets Control (OFAC) the ability to search for and freeze any Bin Laden or al Qaeda assets that reached the U.S. financial system?

The Bush administration in its first months faced many problems other than terrorism. They included the collapse of the Middle East peace process and, in April, a crisis over a U.S." spy plane" brought down in Chinese territory. The new administration also focused heavily on Russia, a new nuclear strategy that allowed missile defenses, Europe, Mexico, and the Persian Gulf. In the spring, reporting on terrorism surged dramatically. In chapter 8, we will explore this reporting and the ways agencies responded. These increasingly alarming reports, briefed to the President and top officials, became part of the context in which the new administration weighed its options for policy on al Qaeda. Except for a few reports that the CSG considered and apparently judged to be unreliable, none of these pointed specifically to possible al Qaeda action inside the United States-although the CSG continued to be concerned about the domestic threat. The mosaic of threat intelligence came from the Counterterrorist Center, which collected only abroad. Its reports were not supplemented by reports from the FBI. Clarke had expressed concern about an al Qaeda presence in the United States, and he worried about an attack on the White House by "Hizbollah, Hamas, al Qida and other terrorist organizations." In May, President Bush announced that Vice President Cheney would himself lead an effort looking at preparations for managing a possible attack by weapons of mass destruction and at more general problems of national preparedness. The next few months were mainly spent organizing the effort and bringing an admiral from the Sixth Fleet back to Washington to manage it. The Vice President's task force was just getting under way when the 9/11 attack occurred.

What types of reporting surged, did the CSG deem all of the reports reliable?

Michigan will lose $2 million in federal funding and $600,000 in state funding to provide legal aid to the poor in 2003, according to Deierdre L. Weir, executive director of the Legal Aid and Defender Association, Inc., the state's largest provider of legal services to the poor. Current federal funds of nearly $10.7 million from the Legal Services Corporation (LSC) will drop to $8.7 million for next year, according to Weir. She said that the reductions reflect a decline in the number of persons in the state who are living in poverty, according to the U.S. Census Bureau's 2000 census. LSC uses census data to determine funding across the nation, and according to the census, the state's poverty population fell from an estimated 1.2 million in 1990 to an estimated 968,000 in 2000. The state's legal aid agencies are also bracing for yet another cut in 2003 of some $600,000 of state funding. A portion of filing fees paid by litigants in the state's circuit courts, and a portion of interest on lawyers trust accounts (IOLTA) are earmarked for Michigan legal aid programs. These funds are expected to drop from currently $7.5 million in 2002 to $6.9 million when the Michigan State Bar Foundation makes distributions next year. Most of the decrease is attributed to the past year's low interest rates. "The irony of these funding cuts is that while there may be fewer poor people in Michigan today, the demand for service will not change because the poverty population remains so large and the legal aid funding so little that local providers will never able to serve all who need our service," said Weir. "It's as if the poor will be victimized twice-once for being poor and again as victims of these funding cuts." The U.S. Census Bureau, in spite of its best efforts, cannot locate every poor person living in a census tract, therefore the poor are also undercounted, added Weir. The brunt of these cuts will be felt most in Wayne County where according to the census some 333,000 poor people live, the largest concentration of poverty in the state. LAD will lose more than $870,000 for legal aid in Wayne County, nearly half of the state's total loss, said Weir. While difficult to measure, the loss of funds will mean that several thousand of Michigan's poor in need of legal service will not receive it, or they will receive significantly limited service. Cutbacks will include service in such civil legal matters as landlord-tenant, bankruptcy, consumer, child custody, predatory lending, mortgage foreclosure, utility shutoffs, social security, wills, and probate. "Local providers will have to work harder and smarter and use more technology instead of staff to provide as much service as we can with fewer dollars," said Weir. "We will be providing more selfhelp training to clients enabling them to navigate the legal system on their own in routine matters, more assistance on the telephone, and less direct representation by attorneys in specific, high impact matters. Currently, Michigan has 13 legal aid agencies covering the state's 83 counties.
What are the consequences of LAD funding cuts and who will be affected most?