The war on terror money

In Saudi Arabia, the government has banned cash contributions in local mosques and removed cash collection boxes for charities from local shopping malls. It surmised some of that money ends up in the hands of terrorist groups.

In Paris, an independent body called the Financial Action Task Force works with its 31-member nations to improve their techniques for ferreting out and eliminating flows of illegal funds to suspect groups.

And across the United States, federal investigators are getting more money and staff to track unusual financial transactions.

These activities are all part of the war on the financial side of terrorism.

Quietly and steadily, nations, police detectives, bankers, accountants, and others are striving to expose and trim back the shadowy networks that fund militant groups around the world. The campaign isn't likely to block all their attacks. Terrorist acts turn out to be relatively cheap to finance. But moves to deny funds to terrorist groups for recruitment and training could impede or limit future assaults. And the money-tracking efforts also sometimes provide leads to these violent groups.

"It's impossible to know what you don't know in the world of terrorist financing," says Lee Wolosky, former director for transnational threats at the White House. But the current effort "has achieved some successes."

Outside financial circles, the war on terror money gets little attention. Its operations are far more likely to involve tracking computerized or paper financial transactions than breaking down doors for raids on stores of arms or explosive materials. Yet it shows some results.

For example, the international coalition built to attack the sources of terrorist financing has frozen and seized approximately $200 million in terror-related funds, says Juan Zarate, head of the Office of Terrorism and Financial Intelligence at the Treasury Department. "Over 170 jurisdictions have issued blocking orders, and we have built a tighter international financial net through which suspect funds may be captured," he told Congress last month.

No one knows completely how effective such action is because, increasingly, terror money flows through nonbanking systems. These are extremely hard to track. The $200 million total is a drop in the bucket, compared to the $500 billion that Loretta Napoleoni, author of "Modern Jihad: Tracing the Dollars Behind the Terror Network," estimates terrorist organizations control.

But that tally may be overblown, other experts say. The United Nations estimates some $200 billion flows through informal banking systems each year. But only a minor part of that is terrorist-related. The World Bank and International Monetary Fund (IMF) pegs the total at tens of billions of dollars. In any case, a crackdown on funding can squeeze terrorists' ability to operate.

In rare instances, it can foil or limit actual plots. In the first attack on the World Trade Center in 1993, terrorists lacked the money to build as big a bomb as they hoped, according to Louis Freeh, former FBI director. They were so short of cash that they tried to recover the deposit fee on the rental truck used to transport the bomb - a move that later helped investigators track them down.

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