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Panel I of a Hearing of the House Financial Services Committee - Terrorist Financing, Money Laundering and the 9/11 Commission Report

Location: Washington, DC

Federal News Service August 23, 2004 Monday








Thank you, Mr. Hamilton. And also I thank our chair for holding this hearing this morning, or now this afternoon.

I come away from this hearing so far with a couple of thoughts on it that I've taken notes down as it went along. One initially, when you talked about who these terrorists are, that they're entrepreneurial in nature and smart and keen and able to look into different areas. You opened up your comments with regard to the book and how well it's selling. I'm not sure how many of the average Americans are buying and actually reading through that entire book, but I'm sure you will agree that the terrorists, whoever they may be and wherever they are, are buying that and will be getting the supplemental reports and following up on that just to, as you say, find the gaps. If we are learning anything from all this as far as where the gaps are, I suppose that the terrorists are also learning to that extent as well.

I take your clarification, I guess, if you will, as far as your comment about not calling for any new legislation, and I appreciate that. And I think this committee has taken that charge as far as oversight with regard to other agencies. I know Ms. Kelly has held hearings that I sit in on on some other agencies, a little bit outside of this area, where they may have been overextending their authority. So I commend the committee-other members of the committee (having taken that steps ?).

I also take from your comments, repeatedly stated, no substantial domestic source of funding, and from that, a comment from my colleague from the other side of the aisle, who is no longer here right now, but who-his long tenure here with regard to the war on drugs, and perhaps-his comment was-what we've done over those 30 years may have played some (element ?) as far as deterrent effect as far as the ingress and egress both in the materials and also the dollars.

One of my questions to you, though, is where the burdens should be placed, and maybe from your past experience here to address the issue of the political will that is necessary to address (one of ?) these and also the pragmatic approach, as well.

And as far as following the chain of money, we have had a number of hearings already on this topic. The burden seems to be placed right now on the so-called law-abiding citizen as far as the chain is concerned. We've already heard about the Bank Secrecy Act and the suspicious activity reports, so there's already a burden placed on our financial institutions. There's already a burden placed on the individual as far as his transactions being monitored up to the $10,000 range. We've questioned others on that. I don't know if you have a specific recommendation as far as raising that threshold. You can comment on that if you'd like.

But also I'll tell you this little story in 30 seconds. Recently I went to my local bank, where I've been known for some 40-odd years, where I grew up, to open up a new account at that bank. And my banker had told me that she had to get proof of identification, who I was, even though she knew who I was for all those years. And I had to give her a driver's license, which some people say is easy to counterfeit in New Jersey; whereas if you had someone come into the country tomorrow, legal or otherwise, they are are able to go into the same institution with a matricular consular card, not produced by the state of New Jersey or any other-by any federal office, but produced by a foreign country, without any proof as to where that person's coming from or the legality of that person being in the United States. And this administration says that is a proper and adequate source of identification. I would appreciate your comment on that.

And finally, I'd be curious on your thoughts on the impact of this on other aspects of law enforcement as we go forward. You made the comment that there is a degree of inertia in past aspects of law enforcement; that once they were set up years ago, they continued to go down that same road. Obviously, we've got 30 years of drug enforcement as far as a focus of law enforcement. Local law enforcement has their own charges. Will we see the same systemic placement be created here, as we're directing all our attentions and energies in this one area, not that I'm saying that we should not be doing so; and will it have any impact, negative or otherwise, on our other areas of law enforcement, be they federal or local?

Thank you.

MR. HAMILTON: Well, I worry about this question of degrading capabilities with respect to the FBI. This is outside our mandate. But the director of the FBI said continually, I'm shifting the focus of the FBI from law enforcement to prevention of terrorism. We all applaud that. But what does the bank robber think about that? I mean, what happens on drugs? If you go to-talk to federal judges today, they'll tell you that their dockets are overloaded with drug cases. What does it mean if the FBI moves away from drug enforcement laws? I think these are things that have to be worked out.

Director Mueller's response to that, I think, is returning a lot of these responsibilities over to the DEA, that they'll develop the capabilities. I hope he's right there. But you do have to be aware when you focus on terrorism, terrorism, terrorism, and you tell all of these agencies and departments that this is your number one priority, the question you raise, I think, is a very, very good one. What happens then in terms of the other responsibilities that department has? We can't answer that right now, but we know what the political signal is now, and that is to put your emphasis, put your resources on fighting terrorism. And we have to look at the consequences of that down the road.

You asked about-where does the burden lie here? It lies, as I'm afraid you correctly point out, with the American citizen. How do you get the information you need, however, without asking the law- abiding American citizen? I don't know how you get it. You have-if you want to get information with regard to financial flows, and everybody agrees that you need that information in order to fight terrorism, you've got to ask somebody, and the only people that really know it are the people in the financial institutions. And so you do put a burden on them. Now, I don't know how you avoid that burden; my guess is they're prepared to accept that burden to some degree and your job then is to say well, let's make sure that burden is not an excessive burden, however you may define "excessive." And do they, in fact, collect information that is valuable to the government, or is it just paperwork?

The other point I want to make in response to your question is the importance of secure identification. This gets into some pretty ticklish areas we've been talking about of civil liberties here; this is a civil liberty area. But again, from the standpoint of fighting terrorism, you have to have secure identification of people. And that's why we recommend that there be federal standards with regard to driver's licenses and passports and the like.

All of the hijackers except one had American identification papers -- 18 out of 19 of them-and what that meant is that some of these identification papers were issued pretty sloppily. Now we've got to correct that, and secure identification-I don't know how you work through this question of civil liberties, the national identification card and all the rest of it. We have to work through that. But I don't have any doubt at all that if you're going to effectively fight terrorism, you've got to have secure identification.

REP. OXLEY: Gentleman's time has expired.


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