FROM THE OFFICE OF PUBLIC AFFAIRS

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Mr. Chairman, I want to thank you for holding this hearing on an issue central to the war on terrorism.  I hope that my presence here will aid in your inquiries.

When I joined the Department of the Treasury two and a half years ago, I was already well aware of a deficit of hope in much of the Islamic world, the most visible symbol of which has been the failure to resolve the question of Palestine.  I had traveled in the Middle East on behalf of the World Bank and my assignments at that time were straight-forward, but a forensic challenge - try to figure out why rivers of money intended to build dams, to irrigate land, or to establish an effective stock market in the Gulf had failed in their mission, with much left unaccounted for.

When Paul O’Neill asked me to join him, he gave me a related challenge - help the President make every dollar of development aid count, not only because we are stewards of the taxpayer’s money, but because effective aide is the most promising tonic to hate.  Despair is hate’s crucible, and our ambition was to eliminate it, not with any romantic notion of changing minds, but by changing opportunity.  No man kills who sees a future for his family.

Others, however, have sought to exploit despair and to teach people how to kill. 

They have financed the venture by defiling charitable purpose.  And they have found a convenient means to do so in the Middle East and, particularly, in the theocracy of Saudi Arabia.

I want to be clear.  We are not at war with a faith, nor with any particular sect.  The war is with those who would seek to compromise faith, who counterfeit it, who champion the death of innocents in the name of faith.  And here, the austere and uncompromising literal Salafist Wahabi view of the Quran has been wrongly invoked by would be false prophets like Osama Bin Laden to legitimize terror.

Still, it is a very important factor to be taken into account when discussion terrorist financing.  The principal of charity is central to Islam, and with unimaginable oil wealth has come a commensurate amount of zakat that has flowed into prominent Saudi based NGOs.  Those NGOs have offices disbursed in the outposts of the world populated by the Islamic diaspora - places where need is infinite and where hopelessness preys on the night’s sleep.  There are, moreover few financial or human resource controls on those frontiers, and little sophistication for dealing with the diversion of charitable money for violent purpose.

It is a combustible compound when mixed with religious teachings in thousands of madrassahs that condemn pluralism and mark nonbelievers as enemies.  Fundamentalism is too easily morphed into a chilling mission of hate and terror.  And it needs to be dealt with.

Much of our dialogue with the Saudi government on terrorist financing has focused on the misuse of these religious and charitable missions and the need to tighten controls.  The result has been a far reaching charities initiative that bars all cross border giving absent Saudi government oversight and vetting; the closing of 10 offices of the largest and most far reaching Saudi NGO - al Haramain - each office demonstrated to be underwriters for terror in the Balkans, East Africa, Indonesia, and Pakistan; the reconstitution of al Haramain’s board of directors; the arrest of a significant number of prominent fundraisers known to us; an on going dialogue on additional NGOs and donors; and work towards establishing a framework for sharing more financial intelligence on a near real time basis.

This last development is critical.  Much of the evidence in this shadow war is suspect, the product of interrogation, rewards, betrayals, deceits.  But a financial record doesn’t lie.  It has integrity.  And it is enormously useful - helping to identify, locate and capture bad guys, mapping out a network of connections that tie an anonymous banker to a suicide bomber, helping to evaluate the credibility and immediacy of a threat, and preventing a calamity by starving the enterprise of terror of its fuel.

This brings us back, ironically, to why I came to Treasury.  As I told you, I did not know then whether my words or advocacy could change people’s minds.  I did, as I told you, believe that a dollar well deployed could enhance opportunity and thereby diminish antipathy to our values.  But I now know that preventing a dollar from being misapplied can be of equal service and is, perhaps, the surest weapon we have to make the homeland secure and to let our kids go to schools that teach tolerance and respect for people of all faiths.

Related Documents:

• Written Testimony