Dislocations within the executive branch and poor coordination with financial institutions have complicated efforts to track down how terrorists move their money, a former anti-terror official in the Clinton and Bush administrations said Wednesday.
Richard A. Clarke (search) also told the Senate Banking Committee that the United States should initiate a sanctions system, as it has for narcotics, to punish countries that don't cooperate in the search for terrorism financing.
Clarke, who served as Bush's counterterrorism coordinator (search) until last January, said that while significant progress has been made since the Sept. 11 attacks in pursuing terrorist financing, the government reorganizing that accompanied the creation of the Homeland Security Department (search) had been a setback for the campaign.
"Reorganizing in the middle of the war on terrorism was perhaps not the brightest thing to do," he told the panel.
In particular, he said the decision to give the FBI exclusive lead in the terrorism financing investigation was a "recipe for failure." The FBI, he said, "by tradition doesn't cooperate well with other agencies."
Others with considerable expertise in the area, including the Secret Service (search) and the Customs Service, should not be neglected, Clarke said.
He also noted that the reorganization had eliminated the senior position in the Treasury Department for enforcement although two offices critical to the campaign -- the Office of Foreign Assets Control and the Financial Crimes Enforcement Center -- remain in the department.
He recommended the creation of a single fusion center to coordinate activities among the different agencies.
Clarke also said that while the Patriot Act (search) requires the government and financial institutions to exchange information on possible terrorist financing, the lack of information going from the government to financial institutions has hindered the effort. He suggested a program of increasing security clearances for banking officials to make it easier to communicate.
On the idea of sanctioning countries that don't help in terrorist financing, Sen. Paul Sarbanes, D-Md., said that sanctions available in the war on drugs had been "rendered sort of useless" because presidents tended to cite national interests in waiving punishments for most countries.
Committee Chairman Richard Shelby, R-Ala., said there are now only two countries -- Burma and Haiti -- subject to sanctions because they aren't doing enough to stop trafficking.
Clarke acknowledged that while few nations might actually be subject to sanctions, "the threat that you could be put on the list helps enormously" in encouraging cooperation.
The Treasury Department, in a report last month, said that in the two years after the Sept. 11 attacks, 1,439 accounts containing more than $136.7 million in assets belonging to Al Qaeda and other terrorists had been frozen worldwide.