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Uprooting funding networks requires global muscle, time
To Kenneth Dam, Osama bin Laden and his Al Qaeda organization operate as "international venture terrorists," raising money from wealthy donors and Islamic charities to finance terrorist cells in more than 40 countries.
Shutting down this complex web will be long and difficult, said Dam, deputy secretary of the Treasury. It will require stronger efforts by U.S. allies and stronger laws by many developing countries to track down and shut off terrorists' funds, he said.
"We have to get to a position where there is no place for terrorist money to hide," Dam said. "We are just starting that."
He added that Al Qaeda money has seeded start-up terrorist cells in Europe, Asia, the Middle East and the Americas.
Dam should know. He is the Bush administration's point man in an international drive to track down and block funding for terrorist groups, with a focus on bin Laden and Al Qaeda. Since the Sept. 11 hijacking attacks, it has been the preoccupation of this 68-year-old, soft-spoken lawyer, a University of Chicago Law School professor with vast government experience that includes stints at the State Department and the White House.
Kenneth Dam profile
Dam took a leave of absence from the law school this year to return to government as the top assistant to Treasury Secretary Paul O'Neill, a man he met during the Nixon administration when both were assistant budget directors. During the Reagan administration, Dam was deputy secretary of state, a position where he also encountered terrorism when the Marine barracks in Lebanon was bombed.
In an interview and in a speech scheduled for Monday night, Dam underscored the intricacies and political sensitivities of cracking down on terrorist funding. "It is painfully obvious" that the allies must play a major role, he said, adding "we can't bomb a foreign bank account."
He said American allies in the Middle East, including Saudi Arabia, need to pay more attention to the role of Islamic charities. Many charities do admirable relief work, he said, but "some of them have another business going out the back of the store," directing money to terrorist groups like Al Qaeda. "The donors often don't know it's going out."
Dam cited his experience in cleaning up charities. In 1992, he served as interim president of the United Way of America to deal with a scandal involving the previous president, William Aramony, who was convicted for fraud, tax evasion and conspiracy. The United Way's board was unaware of the misuse of the charity's money, he said.
In the scheduled speech at the Woodrow Wilson International Center for Scholars, Dam is expected to say that bin Laden used his personal fortune to become the Taliban's "paymaster," but now he "has systematically forged relationships with numerous wealthy donors, a web of Islamic charities and relief organizations from which Al Qaeda today receives the bulk of its financial support."
They hide their money in ways that are hard to detect, he said, using suitcases stuffed with money, money orders and informal money transfers through the so-called hawala system of cash brokers in the Middle East. Front businesses also are employed along with Islamic charities, he said.
Some progress is cited
Dam said he is pleased with the progress so far, which has included blocking the assets of 66 individuals and organizations reportedly affiliated with the Sept. 11 attacks on the World Trade Center and Pentagon. He said that more names and groups will be added. Many developing countries do not have adequate banking laws to detect and halt terrorist financing, he said. Some will modernize their laws, but others will be slow to do so because their populations either do not like the U.S. military action in Afghanistan or their leaders stay in power through corruption and terrorist financing, Dam said.
Dam said America was unprepared for the Sept. 11 hijackings. Too much bureaucracy characterized U.S. anti-terrorism efforts prior to the attacks, he said, and that has to end.
"We cannot have the kind of open and free society we have with terrorism," he said.
O'Neill, who said in an interview Friday that he tapped Dam as his "partner" at the treasury because of his credentials and intelligence, added that the department must not let up in its efforts to trace and halt terrorist financing. "This is forever," he said of the government's campaign.
"It's an area where he [Dam] brings great strengths to the table," O'Neill said. "On international finance, he's an expert on a practical level. He knows a lot of these places and a lot of these people."
The 1983 Lebanon lesson
When he worked At the State Department, Dam became deeply involved in the Middle East, supporting the deployment of U.S. forces in Lebanon as peacekeepers. But a truck bomb at the temporary Marine barracks in Beirut killed 241 servicemen on Oct. 23, 1983. Weeks later, President Ronald Reagan withdrew U.S. forces.
"We had been right to go in," said Dam, but added that "the critics were right. We had no specific military role for them, other than their presence. That left us sitting ducks."
Over his career, Dam not only has been a high government official with international and economic expertise, but also a vice president of IBM, the provost at the University of Chicago, an arbitrator for the National Basketball Association, and the first director who O'Neill chose when he became chief executive officer at Alcoa.
Dam regularly attends meetings of the National Security Council, where the secretary of the treasury is a full-time member.
When President Bush sees him, said Dam, "he always asks me about the money. . . . He understands its place in the overall strategy."