The report, "Terrorist Financing: U.S. Agencies Should Systematically Assess Terrorists' Use of Alternative Financing Mechanisms," found that terrorist organizations such as Al Qaeda, Hizballah and Hamas are making millions of dollars through crimes using commodities like precious stones and metals, drugs and counterfeit goods.
"These terrorist organizations are the money laundering experts. They are switching from one method to another when the need arises. If the U.S. is going to get a handle on these organizations, they need to operate smarter and be better coordinated that they are today. Without improvements, we can't keep up with them," Grassley said. "I hope this report opens peoples' eyes and we can put terrorist organizations out of business once and for all."
"The grim conclusion of this report ? that our federal government has no clear picture of the extent of the terrorist financing problem ? should make all of us stand up and take notice," said Durbin. "We have failed to recognize the extraordinary financing schemes that terrorists are using to fund their efforts. If the 9/11 terrorist attacks taught us anything, it is that the U.S. government must not remain complacent in this matter."
The report indicated that the U.S. federal agencies have difficulty infiltrating terrorist and criminal networks to conduct effective investigations. The report also states that the terrorist organizations are using a variety of methods to obtain funding and are adept at switching from one method to another as it becomes necessary.
The Government Accounting Office (GAO) also gives several key recommendations. The first recommendation is that the FBI should collect and analyze alternative money laundering mechanisms. Currently the FBI cannot furnish the total number of open or closed terrorist financing cases, nor can they break down the number of cases by funding sources.
GAO's second recommendation is that the Treasury and Justice Departments should produce a report that was required in the 2002 National Money Laundering Strategy. The report to Congress, which was due in March 2003, was required to analyze the links between terrorism and the use of precious stones and commodities in money laundering.
The GAO'S final recommendation is that the Internal Revenue Service should establish procedures and guidelines for overseeing and investigating charities to ensure that donations are not being funneled to terrorist and other criminal organizations.
Click here for a copy of the report