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Homeland Security

Statement of Susan M. Collins

Senate Committee on Governmental Affairs

"Combating Terrorist Financing: Are We on the Right Track?"

September, 23 2003

          Two years ago, on September 23, 2001, President Bush opened a new front in the war on terrorism by signing Executive Order 13224.  At the time, President Bush stated that he was launching a strike on the financial foundation of the global terror network.  This executive order allowed the Secretaries of State and Treasury to freeze the assets of terrorists and their supporters. 

            Two years later, it is clear that we have made considerable progress against the sources of terrorist funding.  Almost 1500 accounts containing over $130 million in assets have been frozen worldwide.  Over 300 individuals have been designated as terrorist financiers by the U.S. government.  It is undoubtedly more difficult today than it was two years ago for terrorist supporters to funnel money to those who would do us harm.

            Yet, questions remain about our efforts and those of our allies.  Many of those questions concern terrorist funding originating in Saudi Arabia.  Two months ago, David Aufhauser, General Counsel of the Treasury Department, who is a witness here today, stated that in many cases, Saudi Arabia is the "epicenter" of terrorist financing.  At our last hearing on this issue on July 31st, we heard testimony indicating that prominent Saudi individuals and charities continue to support terrorist causes. 

            Former Israeli Ambassador to the U.N. Dore Gold testified that Saudi sources currently provide 50 percent of the funding for Hamas, a percentage which is growing.  Terrorism expert Steven Emerson testified regarding links he has found between terrorist supporters and prominent Saudi charities like al-Haramain and the International Islamic Relief Organization.

            What have we done to stop terrorist funding coming from Saudi Arabia?  At our last hearing on this issue, I asked Richard Newcomb, Director of the Office of Foreign Assets Control, how many times he had recommended Saudi entities to be publicly designated to have their assets frozen.  Mr. Newcomb declined to provide the answer in open session, but I have now received a classified response, about which I have many questions.   If the government is not publicly designating Saudi individuals and entities suspected of funding terrorism, how is it handling them?  Have these actions been effective?  How are the FBI, CIA, and State Department working with the Treasury Department to ensure that funds do not flow from Saudi Arabia to terrorist groups? 

            What have the Saudis been doing to stop the flow of money from their own country to Al Qaeda and other terrorist groups?  The Council on Foreign Relations has reported that for years, Saudi officials have turned a blind eye to the problem of terrorist financing.  There are numerous reports of how prior to May 12, 2003, the Saudis may not have cooperated fully with U.S. efforts.  However, since the May 12th bombings in Riyadh, there has been a change at least in Saudi rhetoric, and perhaps in their actions.  The Saudis have announced numerous raids and arrests, as well as significant changes to their financial regulations and their oversight of charities.  I would like to ask today's witnesses whether the reality of Saudi cooperation now matches their rhetoric.  Even if the Saudis have changed their attitudes about cooperation with the United States, it is clear there is still a long way to go before terrorism financing is fully addressed in Saudi Arabia. 

            I am pleased again to pass the gavel to Senator Specter.  He has been a leader in the Senate in the fight against terrorism financing, and I look forward to working with him as the Governmental Affairs Committee continues to examine this critical issue in the coming months.

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