Federal News Service - Panel I of a Hearing of the House Financial Services Committee - Transcript

Federal News Service

HEADLINE: PANEL I OF A HEARING OF THE HOUSE FINANCIAL SERVICES COMMITTEE

SUBJECT: TERRORIST FINANCING, MONEY LAUNDERING AND THE 9/11 COMMISSION REPORT

CHAIRED BY: REPRESENTATIVE MICHAEL OXLEY (R-OH)

WITNESSES: LEE HAMILTON, VICE CHAIRMAN, 9/11 COMMISSION;

LOCATION: 2128 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

BODY:

BREAK IN TRANSCRIPT

REP. RAHM EMANUEL (D-IL): Thank you, Mr. Chairman.

Thank you, Mr. Hamilton, for your work over the last year. There's two questions, one on the issue of freezing assets and/or following the money. If you can shed some light whether, for organizations like Hamas and Hezbollah, where freezing assets may be a more accurate, more correct, better tool in the financial sense than an al Qaeda, which is more of an elusive organization where you want to follow the money and not get into this either/or/or strategy and then, as you use the term, be more opportunistic. That different terrorist organizations are going to require different skill sets and different tactics.

In Illinois, you know, just the other day a Hamas organization, we used the freezing of financial assets. It was a very successful legal tool as well as fighting terrorism tool. And I think that you have-if you think of it from outer circles going in, that Hamas and Hezbollah, with state sponsors like Syria and Iran, that freezing the assets is the right tactic, the right tool. Al Qaeda and some of its spin-offs and imitators are more elusive; that actually following the money will give you a way to literally unmask the organization and track it worldwide, not just here. And (any ability ?) to shed some light on that.

MR. HAMILTON: Well, I think it makes some sense to me. In other words, the equities shift depending on the kind of organization you're targetting. Hezbollah, as we all know, is supposed to be the most sophisticated terrorist organiazation in the world. And the necessity of following the money may be less in that case than it would with al Qaeda, which is very diffuse and dispersed.

So I think your point is well taken. I wouldn't want to generalize and put it into stone or to granite, but I thin the equities may very well shift in a case like Hezbollah.

REP. RAHM: Second question, and that will be the end, Mr. Chairman. Over at Treasury, for those who follow financing for terrorism, we have 25 individuals. And given that you said it's an organization that's always probing weaknesses in our financial system, I mean, I don't know if the number is 50, I don't know if the number is 40 -- you would think more than 25 would be necessary compared to some of the other functions over at Treasury that are staffed at a higher level.

And second, if you look at the IRS for following and its tools, only two-tenths of 1 percent is used for following terrorism, yet we have an entire operation-and that's, I think, $25 million out of $10 billion-yet we have an operation over there that is investigating individuals in America who make $15,000 to $30,000 in the Earned Income Tax Credit unit, and they are literally going over everybody's returns, and yet we have two-tenths of 1 percent of the IRS budget dedicated to looking into terrorism.

I would imagine that if you-if they're as Machiavellian as we say they are that more than 25 people over at the Treasury Department and some-and a little more assets of the IRS redirected-rather than investigating Americans could be used to be investigating how terrorists are using-and not paying their taxes or doing some interesting things as it relates to using the tax code from a financing perspective.

MR. HAMILTON: I didn't know those figures. I simply say --

REP. EMANUEL: The good news is either did I, until this morning.

MR. HAMILTON: Yeah, this is an enormously important, urgent business. I've already commented on the lack of experts that we have and the necessity to train more. Treasury and IRS will have to comment on the specifics about that. This is an urgent matter, and I would think there would be very few higher priorities for our government now or for Treasury or for the IRS.

REP. EMANUEL: Thank you.