Finance Leaders on Performance Review of Office of Terrorism and Financial Intelligence
Baucus, Grassley Commissioned Report on Agency’s Efforts in Fight against Terrorism Financing, Urge Better Coordination among Justice, State, Treasury Departments
Washington, D.C. – Senate Finance Committee Chairman Max Baucus (D?Mont.) and Ranking MemberChuck Grassley (R?Iowa) commented today on a new Government Accountability Office (GAO) report onthe Treasury Department’s Office of Terrorism and Financial Intelligence (TFI). The TFI was created inMarch 2004 and is in its fifth year of operation. The TFI is primarily focused on freezing and seizingfunds suspected to be used for terrorist activities, enforcing economic sanctions against “rogue”nations, protecting the integrity of the financial system and fighting financial crime. Within the TFI arethe Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN).
The Office of Foreign Assets Control has the power to designate a person or organization as a sponsor ofterrorism. Subsequent to this designation, the target’s assets are frozen indefinitely and/or seized, anda request is made to the United Nations for similar action on a world?wide basis. FinCEN uses the BankSecrecy Act to investigate money laundering and counterfeiting, and issues regulations governing U.S.financial institutions. The Office of Intelligence and Analysis within the TFI provides informationsupporting OFAC’s designations of individuals and organizations. The TFI had 650 employees in fiscalyear 2008 and its budget for that year was $140 million.
“This is a generally positive report card from GAO as the TFI enters its fifth year of operation.Specifically, the report from Under Secretary Levey that Al Qaida is ‘in its worst financial position in atleast three years’ is encouraging. The TFI has applied the lessons learned from using financial tools inthe terrorism context to advance counter?proliferation finance strategy to isolate banks, companiesand individuals with ties to North Korean, Iranian and Syrian proliferation,” said Baucus. “However, Iam concerned that the GAO found declining collaboration between the Treasury Department and theState and Justice Departments on terrorism financing issues and the GAO finding that the TFI is at acompetitive disadvantage in hiring intelligence analysts was also troubling. I am also concerned thatOFAC continues to spend an inordinate amount of resources enforcing our outdated embargo withCuba, despite the national security imperative of enforcing our embargos with North Korea and Iran. Iwill discuss these findings with Secretary of Treasury Geithner.”
"This report raises some concerns about the effectiveness of Treasury's Office of Terrorism andFinancial Intelligence. Any evidence of interagency squabbling is always disturbing, and the failure todevelop consistent ways to measure success over the last five years is disappointing. As the amountof terrorist money seized or frozen has declined, the office has focused instead on participation ininternational forums and partnerships with mixed reports about the results, according to the report,"Grassley said. "I’ll monitor Treasury's response to the recommendations in this report. I hope there’sa serious effort to focus on the intelligence analysis function that includes developing more reliableways to measure and reward success."
Chairman Baucus and Senator Grassley requested the GAO study after a Senate Finance Committeeoversight hearing featuring Under Secretary Levey in April, 2008. The full report may be viewed here:http://www.gao.gov/new.items/d09794.pdf.
Next Article Previous Article