[Congressman Patrick Meehan]: President Obama recently signed an executive order allowing the Treasury Department to freeze US-based assets of persons who the White House has identified as a “threat to the peace, security and stability” of Yemen. Do you think this is an effective use of the designation authority? Especially when a group such as Boko Haram – who have killed thousands of civilians and are in constant contact with AQIM – remain undesignated?

[Dennis M. Lormel]: If evidence exists to support designations, I am an ardent supporter for the designation process. Such actions disrupt funding flows and serve as a deterrent. Boko Haram is a violent and dangerous group. They have been very active and pose a formidable threat in Nigeria. With respect to designating other groups, I would not make designation decisions by comparing one group, such as Boko Haram, to other groups. A number of factors must be taken in consideration in the decision process to include the level of overall terrorist threat, threat to the United States (US), diplomatic considerations, and the need to continue the classification of intelligence information.

[PM]: In 2011, the US Government revealed the findings of a multi-year law enforcement operation to dismantle a complex, transnational network involved in money laundering and drug trafficking. The case involved Hezbollah, Mexican and Colombian drug trafficking organizations, the Taliban, Lebanon, Colombia, Panama, several countries in West Africa, US car buyers, a US shipping company, bulk cash couriers, plans for weapons trafficking deals, and the Beirut-based Lebanese Canadian Bank (LCB). Does the fact that groups such as Hezbollah and the Islamic Revolutionary Guard Corps continue to use criminal ventures create opportunities for US enforcement mechanisms – such as our robust counter-narcotics tools – to roll up these vast networks?

[DML]: All criminal activity undertaken by Hezbollah, the Islamic Revolutionary Guard Corps and other terrorist organizations leave them vulnerable to detection by law enforcement and intelligence services. Law enforcement, particularly the DEA and FBI, deserve considerable credit for conducting a well-disciplined, focused and comprehensive investigation that tied transnational criminal organizations together with terrorist groups and a number of facilitation tools to include the Lebanese Canadian Bank. Through comprehensive investigation and financial tracing, multiple funding streams between Central America, the United States, Lebanon, West Africa and Europe were identified and dismantled. There have been at least four other significant investigations conducted by the FBI and other agencies that exposed Hezbollah’s involvement in raising large amounts of money through criminal activities in the US. The most notable of these cases was the North Carolina cigarette smuggling case known as Operation Smokescreen. A Hezbollah cell operated an elaborate scheme to smuggle cigarettes from North Carolina to Michigan. This cell generated approximately $25 million in illicit funds.

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[Congressman Patrick Meehan]: With our military successes against al-Qaeda core leadership in Afghanistan and Pakistan, there is a growing trend of al-Qaeda affiliated groups and adherents filling the void and taking the lead in launching attacks against the homeland. Given the relatively low amount of money required to plan and launch a terrorist attack, how realistic is it to expect U.S. and international counterterrorism entities to identify funds that might be used to undertake terrorism-related activity?

[Dennis M. Lormel]: Nominal funding requirements to support terrorist activity can be very challenging for U.S. and international counterterrorism entities to identify. It is possible to identify such funding but highly improbable. Counterterrorism entities need to develop and implement investigative and analytical methodologies to increase the probability factor. Few, if any, entities existed before 9/11 that were dedicated to identifying, investigating and disrupting terrorist financing. Since then, many entities were established with the mission to investigate terrorist financing. By using the combination of financial intelligence, human intelligence, and signal intelligence, mechanisms have been, and will continue to be, developed to identify even nominal amounts of money. By analyzing case studies, ranging from grand to simple, such as the Mumbai bombing and lone wolf schemes like that of Farooque Ahmed, who planned to detonate a bomb in the Washington, D.C. Metro Transit System, counterterrorism entities responsible for terrorist financing can build typologies and develop proactive and progressive investigative strategies.

[PM]: What are some of the persistent challenges in identifying and investigating an activity suspected of financing terrorism? What are some of the trends in how terrorist groups acquiring funds to support their objectives?

[DML]: One of the persistent challenges I encountered in the FBI, and that I would continue to be concerned about today is the timely collection and assessment of financial intelligence. Did my FBI Section, the Terrorist Financing Operations Section (TFOS), have intelligence information that we did not identify that could have led us to a plot or potential attack? We collected and assimilated a tremendous amount of intelligence information that we endeavored to turn into actionable intelligence for field investigators. This is particularly important in cases where a lone wolf operative did not have a record, was unknown to intelligence agencies, and used funds from a legitimate job to finance terrorist plans. Time sensitivity in these matters was always challenging.

A trend that has continued since 9/11, and has grown significantly since then, has been the movement to criminal activity as a fund raising mechanism for terrorists. In the aftermath of 9/11, the U.S. and our international partners made a concerted effort to cut off the flow of legitimate money from wealthy donors and charities. The more these efforts succeeded, the more terrorists were driven to criminal activity. This continues today. It will be interesting to assess the success of the sanctions against Iran and the revolution in Syria, two State sponsors of terrorism. This will probably result in the continued increase in criminal activity.

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