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  Terror Asset Tracking Center Delayed

By Ken Guggenheim
Associated Press Writer
Friday, Oct. 26, 2001; 3:22 a.m. EDT

WASHINGTON –– Just three days after the Sept. 11 attacks, the Treasury Department announced it was creating a new team to fight terrorists: an asset tracking center that would work to cut off their funding.

It sounded like a new idea, but it wasn't: Congress had agreed almost a year before to fund the Foreign Terrorist Asset Tracking Center, but Treasury hadn't set it up yet.

"It just wasn't given the kind of priority it should have been, frankly, by the outgoing administration or the incoming administration," said Stuart Eizenstat, deputy Treasury secretary in the Clinton administration.

Past and present government officials, some speaking on condition they not be identified, cited several reasons for the delay:

–Bureaucratic snags in setting up the center, especially a lack of access to classified materials at Treasury's Office of Foreign Assets Control, known as OFAC, where the center is based.

–The normal delays that occur during a presidential transition were compounded by the hold Sen. Jesse Helms, R-N.C., put on the confirmation of a key official.

–A perception at Treasury that the Bush administration was less interested in financial investigations than the Clinton administration had been.

No one suggested that if the center had been established earlier, the attacks could have been prevented.

But some said if it had been set up earlier, Treasury would have had a head start in identifying the financial network of Osama bin Laden, the main suspect in the attacks.

Eizenstat said with "20-20 hindsight," it's clear that the center shouldn't have been delayed.

"But people don't have 20-20 hindsight," he said. "There are a lot of competing pressures."

Since Sept. 11, the Bush administration has made the freezing of terrorist assets a top priority. On Thursday, it announced that the U.S. Customs Service would lead a new multi-agency team to investigate how terrorists move their money.

The team will be the investigative arm for the terrorist asset tracking center, which is working with other agencies to cut off financing for terrorist groups.

The Treasury Department declined comment on the record for this article, but a Treasury official said that at the time of the attacks, the center was about ready to begin operations. Funding hadn't become available until January and it took time to coordinate the work of eight agencies, finding out what each had to offer, she said.

"They put a lot of thought into what exactly is this going to do, how is this going to differ from what is already out there," she said, speaking on condition of anonymity.

But another longtime Treasury official, also speaking on condition of anonymity, said that before Sept. 11, "this thing had been wallowing, trying to get up and running."

He said key employees lacked the security clearances needed to see highly classified documents. OFAC also lacked secure facilities or computer terminals to receive classified materials. Bureaucratic bottlenecks slowed or blocked the flow of information, he said. The situation hasn't improved much since Sept. 11.

"People trying hard to track information cannot do it because they have no access," he said.

Jonathan Winer, deputy assistant secretary of state for international enforcement in the Clinton administration, said Treasury has had problems getting intelligence information for 20 years.

"It began to be an obvious problem" in President Reagan's first term, "and it hasn't been solved, near as I can tell, prior to Sept. 11," he said.

Winer and others said OFAC doesn't have enough personnel. A report last year by a terrorism panel set up by Congress found that "OFAC's capabilities and expertise are underutilized in part because of resource constraints."

Lacking staff, OFAC has had to depend on information from other law enforcement and intelligence agencies. But those agencies haven't always been enthusiastic about OFAC taking the lead in pursuing terrorist assets.

Some have been concerned that criminal investigations could be undermined in efforts to freeze terrorist assets, former officials said.

"There's an inherent difference on what the purpose is of going after the money," said William Wechsler, a top Treasury official in the Clinton administration. "Is the purpose to bring a case or to disrupt the network?"

In May 2000, President Clinton asked Congress for $6.4 million to set up the terrorist asset tracking center. Congress approved that amount in October, three months before the presidential transition.

That left it up to the Bush administration to set up the center. But at Treasury, there was a perception that Secretary Paul O'Neill was less interested than his predecessors in financial investigations, officials said.

O'Neill had publicly questioned the need for some rules designed to fight money laundering because of their costs to the government and to banks. And he opposed international efforts to curb tax havens, saying that could violate the sovereignty of other countries.

Moreover, the Treasury official responsible for overseeing OFAC, Undersecretary of Enforcement Jimmy Gurule, wasn't confirmed by the Senate until August. His nomination was held up by Helms in a dispute over textile rules.

Little was said publicly about the center until Sept. 14, when Gurule announced that Treasury had set up a team to disrupt terrorist fund raising. This team would be transformed into a permanent Foreign Terrorist Asset Tracking Center, he said. Four days later, he said the center was operating.

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On the Net:

OFAC: http://www.ustreas.gov/ofac/

© Copyright 2001 The Associated Press

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