Treasury's 'Chief Thug' Goes After Al-Qaeda

Wise to U.S. intelligence tactics, terrorists are now harder to track

Daniel Glaser is a man with many titles. His official one is Assistant Treasury Secretary for Terrorist Financing. But his boss, Timothy Geithner, likes to call him something else: Treasury’s “chief thug.” He means it as a compliment. An intense, broad-shouldered lawyer, Glaser is known for his zealous efforts to track and seize the money al-Qaeda and other groups use to fund attacks around the world. Glaser prefers the title that South Korean newspapers bestowed on him a few years ago, when he was working with a Treasury team pursuing North Korea’s rogue nuclear weapons program: “The Missionary From Hell.” The Korean journalists meant it as a compliment, too. “I like that even better than chief thug,” Glaser says, “because missionary implies a core set of beliefs.”

While drone strikes and daring operations such as the raid that killed Osama bin Laden get the headlines, Glaser, 43, and his colleagues at the Office of Terrorism and Financial Intelligence go after the world’s worst people in a less dramatic way: by choking off their means of support. They trace cash transfers, freeze bank accounts, and expose financiers and money launderers. The goal is to “gum up the works” and “isolate bad actors from the international financial system,” says David Cohen, the Treasury Under Secretary who leads the 42-person office.

After a decade of relentlessly chasing terrorists, the U.S. government now faces an unexpected problem—success. America and its allies have been effective at cutting off terror groups from funds and killing many in their top ranks. Not as much money has been flowing from wealthy Persian Gulf sympathizers to the remaining leaders in Pakistan, says a senior U.S. intelligence official, who spoke on the condition of anonymity. That has left them weakened and less capable of financing and carrying out a Sept. 11-scale attack—but it has also driven them further underground, where they are less visible to U.S. intelligence. As al-Qaeda’s financial backers have dwindled and moving money has become riskier, the group’s affiliates in sub-Saharan Africa, Yemen, and Iraq have been forced to become self-sufficient and to cut back on recruitment and training, says a second U.S. intelligence official, and there’s less profit-sharing going on among them and what remains of the core group in Pakistan.

Many terrorists have also stopped using bank accounts, wire transfers, and other easily traceable means of shifting cash. Now much of it is funneled through front companies, drug cartels, and terror-friendly governments that are more opaque to intelligence gathering. In Africa, the militant group al-Qaeda in the Islamic Maghreb relies heavily on ransoms from kidnappings. Al-Qaeda in the Arabian Peninsula, based in Yemen, supports itself by extorting money in neighborhoods where it’s taken control, the first intelligence official says. Somalia’s militant Islamist group al-Shabaab, the official says, controls a third of the country’s ports, and makes money from piracy and local rackets. “What concerns me the most, particularly among al-Qaeda affiliates, is resorting to crime to raise funds,” says Glaser.

For these ragtag organizations, access to large amounts of cash isn’t always important because their smaller-scale strikes can be carried out without a big budget. In October 2010 intelligence agencies thwarted a plot to bring down two overseas flights, bound for Chicago, with explosives concealed in printer cartridges. The scheme cost $4,200 to put together. “Most terrorist operations that are big enough to get our attention are pretty cheap,” says Paul Pillar, a longtime senior intelligence official who now teaches at Georgetown University.

The U.S. has responded in part by further attempting to isolate countries that harbor and fund these groups. Since September, Cohen’s office has imposed sanctions or taken punitive measures against Iran and Syria, two states designated by the U.S. as supporters of international terrorism. Washington has leaned on once-reluctant Middle Eastern allies to step up their antiterrorism efforts. The printer cartridge plot was unraveled when Saudi intelligence tipped off U.S. authorities.

Cohen and Glaser also got a boost from an unlikely source—bin Laden. The May 1 raid on the terrorist leader’s compound in Abbottabad yielded a trove of financial information that they say is helping them track down his supporters. “If I were a donor to al-Qaeda, I’d be worried,” says Cohen. There were a lot of documents.”


    The bottom line: Cut off from leaders in Pakistan and pressed for cash, al-Qaeda affiliates in Africa are kidnapping for ransom to pay for terror strikes.

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