Despite the Bush administration's pledge to battle terrorist financing, the government's average penalty against companies doing business with countries listed as terrorist-sponsoring states fell sharply after the Sept. 11 attacks, an Associated Press analysis of federal records shows.

The average penalty for a company doing business with Iran, Iraq, North Korea, Sudan or Libya dropped nearly threefold, from more than $50,000 in the five years before the 2001 attacks to about $18,700 afterward, according to a computer-assisted analysis of federal records.

After the attacks, Bush grouped North Korea, Iran and Saddam Hussein's Iraq together as an "axis of evil" countries with both weapons of mass destruction and links to terrorists.

A Treasury Department spokeswoman said that despite the smaller average fines, the administration was doing a good job of enforcing economic penalties against nations considered sponsors of terrorism. Molly Millerwise said the department's Office of Foreign Assets Control (search), or OFAC, "is committed to ensuring that U.S. entities abide by U.S. sanction laws. We are not in the business of making money."

The smaller average fines could indicate that companies are making fewer large deals with terrorist countries, said Adam Pener, who advises businesses on how to avoid dealing with terrorist nations.

"I would argue this is a good sign OFAC is doing its job," said Pener, chief operating officer of the Conflict Securities Advisory Group (search). "OFAC in a lot of ways is a deterrent. Especially in the post-9-11 era, companies are policing themselves a lot more."

Vice President Dick Cheney was a vocal critic of trade embargoes while he headed Halliburton, a Houston-based oil services conglomerate, from 1995 to 2000. Under Cheney, Halliburton expanded its trade with Iran through an offshore subsidiary. That arrangement is now being investigated by a federal grand jury.

Nineteen executives or directors of companies fined by OFAC for dealing with state sponsors of terrorism were top campaign fund-raisers for Bush.

One example is Joseph J. Grano Jr., chairman of the federal Homeland Security Advisory Council, which the president created by executive order and whose members he selected. Grano formerly headed the U.S. subsidiary of the Swiss bank UBS AG. It paid more than $100 million in fines for trading U.S. currency to Iran and other nations and for transferring funds to Iraq during Saddam's rule.

Bush renewed the ban on trade with Iran in March 2001. Since Sept. 11, 2001, the Treasury Department has added hundreds of names to the list of people and businesses whose U.S. assets are frozen because of suspected links to terrorism. The department also has traced terrorist financing and seized more than $200 million in terrorist assets.

OFAC is the agency that enforces U.S. restrictions on trade with drug traffickers, terrorists and countries on the State Department's list of state sponsors of terrorism. Part of that job involves investigating and punishing companies that have outlawed transactions with such countries, organizations or individuals.

U.S. laws such as the Trading With the Enemy Act prohibit most trade with those designated countries: Iran, North Korea, Sudan and Cuba. Libya was on the list until this year, after its government agreed to disclose and dismantle its clandestine nuclear and chemical weapons programs.

The Bush administration also removed Iraq from the banned list this year after the U.S.-led invasion that ousted Saddam.

The AP used publicly available OFAC records to compile a database of penalties paid by companies for doing business with terrorists or their state sponsors. The database includes entries for more than 500 such cases since 1996.

Analysis of the database showed average penalties for violating the embargoes fell for every terrorism-sponsoring country after the attacks:

— The average corporate penalty for doing business with Cuba was four times higher before the attacks. The pre-attack average penalty was nearly $98,000; the post-attack average was about $23,500. The State Department accuses Cuba of bankrolling some terrorist groups and sheltering members of Basque and Colombian terrorist organizations.

— Penalties for prohibited business involving Iran were nearly twice as high before the attacks. The pre-attack average penalty for an Iran transaction was more than $33,500; the post-attack average fine was about $17,300.

— Fines for trading with Iraq while Saddam was in power averaged more than $101,000 before the Sept. 11 attacks, then fell by more than a third to about $74,800 afterward.

— Companies accused of dealing with Libya paid fines averaging more than $41,000 before the attacks, a figure more than three times higher than the postattack average of about $12,800.

— There was only one fine since 2001 involving a deal with North Korea. It was for prohibited transactions from the 1990s. The State Department says North Korea shelters members of Japanese terrorist groups, although the communist North is not known to have sponsored any terrorist acts since the 1987 bombing of a Korean Air Lines flight by North Korean agents.

The Treasury Department previously had kept most of OFAC's fines secret. The office released documents detailing its enforcement cases in 2002 under a Freedom of Information Act lawsuit and agreed to begin posting monthly lists of companies which paid penalties. That process began in April 2003.

The AP database includes all penalties detailed in those documents but does not include fines assessed for deals solely involving drug traffickers or embargoed countries not directly linked to terrorism such as Yugoslavia and Haiti.

OFAC does not release information detailing fines against individuals accused of violating the embargoes. Those fines also were not included in the AP database.