In the aftermath of the September 11 attacks, an oft-repeated truism emerged in law enforcement circles: “We cannot afford to become complacent.” It’s a statement worth revisiting today as we mark 12 months since the attack on the US Capitol last January. The mob violence inflicted on Capitol police officers and the shocking desecration of one of the most famous buildings in American history felt like a heartbreak to most Americans. On its first anniversary, we should collectively ask ourselves if we are not letting our guard down yet.
The world has been on a war on terror footing for decades and fortunately no attack of the magnitude of 9/11 has succeeded on American soil since 2001. This has no doubt led some to conclude that the threat terrorism has declined in recent years. . Such error stems from a fundamental misinterpretation of truth, however. Terrorism is not disappearing, it is evolving. Today, the danger comes as much from lone wolf actors and domestic violent extremists as from foreign terrorist groups. As FBI Director Christopher Wray told lawmakers in March of last year, the threat of domestic terrorism is now ‘metastasizing’.
To protect ourselves from these risks, we will need to revive and revise some of the tactics deployed after 9/11, and that includes following the money. Twenty years ago, the FBI didn’t need to turn to the financial industry for help. Within hours of the World Trade Center collapse, many of the nation’s largest banks contacted the bureau to find out how they could help. This simple proactive step proved critical to subsequent collaboration between financial institutions and federal investigators, including agents from the FBI’s new counterterrorism financing branch, the Terrorist Financing Operations Section ( TFOs). Through these public-private partnerships, banks have received invaluable advice on how best to mitigate their regulatory exposure to terrorism-related transactions, while investigators have benefited from direct channels to industry financial intelligence flows. .
But as other financial crime priorities have emerged in recent years, these task forces have lost momentum. Within the FBI, TFOS was folded into the larger counterterrorism section of the bureau, depriving the team of strong reporting and executive ownership. These developments are troubling, especially in light of the recent takeover of Afghanistan by the Taliban and the increased possibility that al-Qaeda or a similar organization will again use the country as a base of operations. Backups aren’t just necessary for external threats. The rise of domestic extremist groups, both in the United States and abroad, demands that we consider what more can be done to track terrorism fundraising within our own borders.
The most comprehensive look at how this could be accomplished is in a report released in July by the Paris-based Financial Action Task Force, or FATF. The intergovernmental watchdog noted in the report that ethnically or racially motivated extremist groups raise funds in a variety of ways, including through crowdfunding campaigns, property rentals, membership fees and events, in addition to illicit activities such as drug trafficking, fraud, and the exploitation of non-profit organizations. Once raised, the funds are usually transferred to banks, money services businesses and cryptocurrencies, or kept in cash, the FATF concluded. The groups then spend the money on weapons, equipment, propaganda efforts, recruitment campaigns and training.
Each of these stages – fundraising, movement of funds and spending – are touchpoints where public-private partnerships (PPPs) can be effective in targeting extremist groups. Each of the steps is associated with transactional red flags that can be identified by financial institutions and reported to law enforcement agencies. But there are challenges specific to domestic terrorism that must be taken into account. For one thing, domestic violent extremists (DVEs) are largely self-funded through legitimate sources, including donations and personal wages and salaries. Further, not all individuals associated with a DVE group fall under the rubric of “terrorist”. In most cases, there is a process of radicalization whereby a person first becomes a supporter of a cause, then an activist, then an extremist. But it is only at the fourth and final stage of radicalization, when an extremist becomes a violent extremist, that he is considered a criminal by law. To overcome these obstacles, financial institutions will need ongoing guidance and clear communication with law enforcement officials.
Past collaboration between the public and private sectors was a critical factor in preventing another 9/11-type attack. In light of the January 6 attack and the growing risks of terrorist activity in Afghanistan, it is time to consider the formation of new PPP task forces that can function as financial SWAT teams targeting terrorism. The task forces recently hosted by ACAMS, a global association of more than 89,000 compliance professionals from around the world, provide a potential model of how this could work. Convened in November in Washington, DC, the rallies brought together high-level representatives from federal law enforcement, nongovernmental organizations and some of the world’s largest financial institutions. The result of these early meetings: Participants identified several ways to share intelligence more quickly and effectively on topics such as drug trafficking, modern slavery and the illegal wildlife trade. We can do the same for the financing of terrorism.
Shortly after the 20and september 11 anniversary, Director Wray informed Congress that the FBI had seen its number of ongoing domestic terrorism cases skyrocket from about 1,000 in early 2020 to about 2,700 in the fall of 2021 — a trend, he noted, that coincided with heightened risks of attacks by groups operating overseas.
The warning signs are clear. But are we doing enough?
Dennis Lormel is president of the Society of Former FBI Agents and Scott Liles is president and CEO of ACAMS.