Think we should tell the Swiss to start cooperating or face some economic and military tough love from us? They sure get away with a lot for that neutrality bullshit.
THURSDAY, AUGUST 27, 1998
Why It's So Hard for US to Pick Terrorists' Pockets
US vowed to shut down Osama bin Laden's assets, but stealth world of offshore banking is hard to crack.
Scott Baldauf
Staff writer of The Christian Science Monitor
Send e-mail to: baldaufs@csps.com
From the moment American officials identified Osama bin Laden as the man behind the East Africa embassy bombings, they knew the best way to get to the man was to go for his piggy bank.
Take away Mr. Laden's estimated $1 billion in oil inheritance, the theory goes, and all he would have left is his anger.
"He himself doesn't have the intestinal fortitude to commit an act of terrorism," says Buck Revell, a former counterterrorism expert for the FBI and now a security consultant in Dallas. "He doesn't have the religious affiliation of [Iran's Ayatollah] Khomeini. He doesn't have the political clout of [Palestinian terrorist] Abu Nidal."So if you take away his money, he would be just an ordinary radical. Almost a nonentity."
But as Mr. Revell and other denizens of the intelligence community acknowledge, raiding Laden's piggy bank will be easier said than done. According to one self-identified associate, Laden's money is scattered among secret financial and commercial agencies in Europe and the Arab world, and many of his "partners" may not even know that they're working with him.
It's a challenge that will require all the intelligence the intelligence community can muster, and it underscores the difficulty of financial sleuthing in an age of ultrasecret, computerized banking."The way these things are set up, there's no way to get behind the curtain," says Jack Blum, a New York attorney who specializes in cracking money-laundering cases. The exception is "if you have hard intelligence signals, where you can hear bin Laden talking to his bankers, then you begin to have a trail to follow. Absent that, it's nearly impossible."
To get a sense of how pervasive the offshore banking industry is, and how difficult it will be for investigators to find Laden's mother lode, just log onto the Internet. There are more than 60 nations, from Andorra to Western Samoa, that offer a variety of untraceable financial services.
The mother of all bank secrecy, of course, is Switzerland, even after the nation's two largest commercial banks admitted their role in financing Hitler's war machine and paid restitution to the descendants of Holocaust victims who were former customers. Strong Swiss support for the current system shows that there is unlikely to be any push to change banking laws anytime soon.
The Seychelles Islands last year passed a law that gives immunity to investors from all outside criminal charges. Investors can place $10 million or more into approved investment schemes, even if that money was originally obtained through acts of violence or drug trafficking. The government requires only that the investor not engage in illegal activities on the Seychelles chain itself.
Throughout the British Virgin Islands, investors can set up an "anonymous corporation," where owners can make deposits and withdrawals without being traced. The account is set up and managed by a bank-selected attorney, which means all the proceedings are protected by attorney-client privilege. Some banks even offer an "Anonymous ATM" card that allows unlimited withdrawals anywhere in the world.
Terrorists with credit cards
So does this mean that Laden and his associates can buy Stinger missiles the old-fashioned way, with a credit card? Well, yes.
"I'm not sure that he does spend money with a credit card, but quite frankly, there aren't that many outlets in Afghanistan that take Visa," says Mr. Blum. "But terrorists can get cash from teller machines just like anybody else. If you have a debit card, what more do you need?" (According to a Visa-card Web site, the closest ATM to Laden's base in Jalalabad is the Hongkong and Shanghai Bank in Islamabad, Pakistan.)
Of course, the same system that serves a terrorist also benefits more legitimate businesses. The Belfast-based magazine Offshore Investment recently conducted a survey of 1,500 regular readers. Some 81 percent were chief executive officers or senior partners; 63 percent were bankers, lawyers, accountants, and trust company officers. Many are trying to shield their assets from the high-income tax rates of their European homelands. Even with these technical and legal difficulties, some former CIA officials note that ultrasecret banks are penetrable. After all, hackers broke into the Pentagon's computers. And with time, Washington should be able to gain more support for its financial attack on terrorists.
"The thing about terrorism is that it afflicts us all," says Stanley Bedlington, a former counterterrorism expert in the CIA and now a security analyst in Washington. "You've got right-wing terrorists, and left-wing terrorists, religious fanatics, ethnic nationalists, all of them upset about something."
Financial pressure
Even Afghanistan, currently under the sway of the radical Islamic Taliban, may find a financial incentive for cracking down on terrorists inside their borders, Mr. Bedlington says.
Two oil companies are bidding to build an oil pipeline through Afghan territory, and the Taliban would be unhappy if the US government puts pressure on one of the companies, the US-based Unocal, to drop the project. "The Taliban are very keen to push for this, and what Osama bin Laden is doing is giving Afghanistan a bad name," says Bedlington. "The Taliban will soon realize they need the money."
If investigators are looking for hopeful signs in breaking the Laden case, they might want to avoid recent history. The hundreds of millions of dollars Philippine dictator Ferdinand Marcos allegedly looted from the country's treasury has never been recovered. Alan Garcia, former president of Peru, remains on that country's most-wanted list after a decade on the lam. The billions of Zairean dictator Mobutu Sese Seko are still unrecovered.
"When I find money, it's usually because of gross stupidity, of which the world is full," says Mr. Blum, the attorney. |
