An Online Journal of Political Commentary & Analysis
Volume VI, Issue # 57, March 19, 2004
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
Home Page   Main Menu   Recent Articles   Site Map   Website Index   Issues & Controversies
  Cyberland University   Political Science, Philosophy, & History: Lectures   U.S. Constitution
  American Constitutional Law   American Constitutional System   American Political System
  Conservatism, Liberalism, & Radicalism   How America Goes to War
  World War IV: Islamist Terror War Against the U.S.A. & the West


Summary Account By Robert Blum & Gil Marder

During my three years as general counsel for the U.S. Treasury, I witnessed four wars: the global war on terror, the conflicts in Afghanistan and Iraq, and the war between Israel and the Palestinians. In all of these, I noted the central role of money.

We have become more sophisticated in fighting the unorthodox war on terror. If these conflicts have taught us anything, it is that controlling the financing of terror substantively diminishes, and is instrumental in extinguishing, the threat of terrorism.

The Failure of the UN Oil-for-Food Program

The Iraqi case represents an indictment of the casualness of our approach to issues of finances where terrorism is concerned. In the aftermath of Desert Storm, far-reaching international sanctions were implemented to ensure Iraq would never pose a similar threat in the future.

The sanctions, however, had the perceived effect of harming ordinary Iraqis. To reform the sanctions, leading states conceived and implemented the United Nations oil-for-food program. An apparently simple program, permitting Iraq to barter oil for humanitarian purposes, it initially seemed a great success. More than $10 billion worth of humanitarian care, food, and services were indeed delivered from over 25,000 different distribution centers throughout the country. The program became a staple of Iraqi civilian society and the UN food-rationing card was traded regularly for goods other than food.

The oil-for-food program was, however, designed by bureaucrats rather than businessmen. Integrating himself as an intermediary in the program, Saddam Hussein was, astonishingly, able to skim over $6 billion in cash. By 1999, unchecked by the outside world, he began acting with impunity -- selling oil directly for money outside of the program.

What haunts us today is the knowledge that Saddam took the illicit money and bought prohibited goods, including the wherewithal to arm himself. The purchase of these goods and services led us to a realistic conclusion that Iraq possessed weapons of mass destruction. Thanks to the still unaccounted funds from Saddam's unsanctioned, illicit sale of oil, Iraq is currently the magnet for international jihad, a venue where enemies of the United States of America hope to demonstrate the limits of American power through insurgency.

The Insufficiency of Military Power in Winning the Global War on Terror

After 9/11, the President and the Secretary of the Treasury recognized immediately that, if you could stop terrorist groups' cash flow, you could substantially diminish their whole enterprise.

Seized financial records provide far more reliable information than evidence gathered through intelligence based on treachery, deceit, bribery, and interrogation. Stopping the money trail also yields a double dividend of not only bankrupting terrorists, but also alerting us to and allowing us to preempt potential calamities that are being planned.

The U.S. Treasury now commands a corps of law enforcement, intelligence, military, diplomatic, and financial specialists. Its goal is to allocate good money to good purposes and stop the flow of bad money intended to finance the killing of innocent people.

Exposing the Financiers of Terrorism

We have found that, while a man with a bomb strapped to his back will not be deterred by the threat of jail, his financier is a coward. Bankers love anonymity, so exposing those who finance terrorism is effective. These bankers include merchants and various Muslim charities. Thanks to the wealth of Saudis and that of the subjects of other Persian Gulf countries, great amounts of money flow through these "charities" to Muslims around the world, providing humanitarian services and support for militant Islam.

Distinguishing between finances intended for militant Islam and terror is difficult, but new laws criminalizing individuals and entities that fund terrorist groups have been sanctioned in 90-100 countries. The U.S. government has a major program in place to help developing countries build up resources and sophistication in the forensics of financial accounting.

We also changed certain standards of conduct. A new executive order gives the President authority to freeze the assets of entities, shareholders, offices, and directors through which terrorist money passes. The threat of executive action has been enough, allowing us to gain insight and even access to books and records around the world.

There have been concrete results. Indeed, our efforts are responsible for reducing the cash flow to Al-Qa'ida by two thirds.

Structural Challenges and Changes

The greatest structural difficulty in halting the financing of terrorism and Islamic fundamentalism is that many in the Muslim world use an unrecorded, informal banking system based on trust rather than a formal records of financial transactions. There are just two ways to deal with this system intelligence or structural macroeconomic change. The latter is more effective and implies creating an economic climate in which people switch to a formal banking system.

One extraordinary example of large-scale structural change took place in Saudi Arabia. Mosques have long collected cash in collection boxes, which then fund militant Islamic entities like Al-Qa'ida. Collection boxes may sound trivial, but 40,000 of them raise significant amounts. These funds are easily diverted. The Saudis noted this threat and recently have banned the collection boxes in mosques.


The war on terror, an unprecedented war against an enemy without geographic conquest in mind, requires more than military power. We must make use of all the elements of our national power in this conflict. Along with military, diplomatic, law enforcement and other intelligence, we must utilize financial experts to discover, expose, and halt those who finance terrorism. Stopping the flow of cash has already done enormous service. If executed well, the campaign against terrorist financing will bring more peace than any army of soldiers.

Islamism & Jihadism -- The Threat of Radical Islam
Page Three    Page Two    Page One

War & Peace in the Real World
   Page Two    Page One

Islamist Terrorist Attacks on the U.S.A.

Terrorism & U.S. Homeland Security

Osama bin Laden & the Islamist Declaration of War
Against the U.S.A. & Western Civilization

Islamist International Terrorism &
U.S. Intelligence Agencies

The Middle East & the Problem of Iraq

The Problem of Rogue States:
Iraq as a Case History

U.S. National Security Strategy

The paragraphs above constitute a summary account of the December 11, 2003, briefing presented by David Aufhauser to the Middle East Forum. The summary was written by Robert Blum and Gil Marder, research assistants at the Middle East Forum. The original version of the briefing can be found on the Internet website maintained by the Middle East Forum.

Republished with Permission of the Middle East Forum
Reprinted from the Middle East Forum News (MEF NEWS)
March 16, 2004

David Aufhauser served as the U.S. Treasury's chief legal advisor and senior policy advisor to the Secretary of the Treasury. Aufhauser regularly testified before Congress and oversaw its economic sanctions program, financial crime investigations, and USA Patriot Act regulatory responsibilities. Prior to his post at the Department of the Treasury, he practiced law for over 20 years in Washington, D.C., with the firm of Williams & Connoly, LLP. He spoke to the Middle East Forum in New York on December 11, 2003.

Return to Top of Page


Return to Beginning of
Public Issues & Political Controversies

Return to Beginning of
Volume VI, 2004

Return to Beginning of
Subject Matter Highlights, Page Two

Return to Beginning of
Subject Matter Highlights, Page One




Africa: Black Africa * Africa: North Africa * American Government 1
American Government 2 * American Government 3 * American Government 4
American Government 5 * American Politics * Anglosphere * Arabs
Arms Control & WMD * Aztlan Separatists * Big Government
Black Africa * Bureaucracy * Canada * China * Civil Liberties * Communism
Congress, U.S. * Conservative Groups * Conservative vs. Liberal
Constitutional Law * Counterterrorism * Criminal Justice * Disloyalty * Economy
Education * Elections, U.S. * Eminent Domain * Energy & Environment
English-Speaking World * Ethnicity & Race * Europe * Europe: Jews
Family Values * Far East * Fiscal Policy, U.S. * Foreign Aid, U.S. * France
Hispanic Separatism * Hispanic Treason * Human Health * Immigration
Infrastructure, U.S. * Intelligence, U.S. * Iran * Iraq * Islamic North Africa
Islamic Threat * Islamism * Israeli vs. Arabs * Jews & Anti-Semitism
Jihad & Jihadism * Jihad Manifesto I * Jihad Manifesto II * Judges, U.S. Federal
Judicial Appointments * Judiciary, American * Latin America * Latino Separatism
Latino Treason * Lebanon * Leftists/Liberals * Legal Issues
Local Government, U.S. * Marriage & Family * Media Political Bias
Middle East: Arabs * Middle East: Iran * Middle East: Iraq * Middle East: Israel
Middle East: Lebanon * Middle East: Syria * Middle East: Tunisia
Middle East: Turkey * Militant Islam * Military Defense * Military Justice
Military Weaponry * Modern Welfare State * Morality & Decency
National Identity * National Security * Natural Resources * News Media Bias
North Africa * Patriot Act, USA * Patriotism * Political Culture * Political Ideologies
Political Parties * Political Philosophy * Politics, American * Presidency, U.S.
Private Property * Property Rights * Public Assistance * Radical Islam
Religion & America * Rogue States & WMD * Russia * Science & Ethics
Sedition & Treason * Senate, U.S. * Social Welfare Policy * South Africa
State Government, U.S. * Subsaharan Africa * Subversion * Syria * Terrorism 1
Terrorism 2 * Treason & Sedition * Tunisia * Turkey * Ukraine
UnAmerican Activity * UN & Its Agencies * USA Patriot Act * U.S. Foreign Aid
U.S. Infrastructure * U.S. Intelligence * U.S. Senate * War & Peace
Welfare Policy * WMD & Arms Control

This is not a commercial website. The sole purpose of the website is to share with interested persons information regarding civics, civic and social education, political science, government, politics, law, constitutional law and history, public policy, and political philosophy and history, as well as current and recent political developments, public issues, and political controversies.

An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic, Cultural, Military, International, Strategic, & Geopolitical Issues

Website of Dr. Almon Leroy Way, Jr.

Government, Politics, Public Policy, Legal Issues, Constitutional Law, Government & the Economy, Cultural Values, Foreign Affairs, International Relations, Military Defense & National Security, Geopolitics, Terrorism & Homeland Security, American National Interests, Political Systems & Processes, Political Institutions, Political Ideologies, & Political Philosophy