23 April 2004
The Patriot Act, Terrorists, and the Financial System
Op-ed column by Secretary of the Treasury John Snow
(This column by Secretary of the Treasury John W. Snow was published
in the Wall Street Journal April 23 and is in the public domain.
No republication restrictions.)
By John W. Snow
One of the most critical things the 9/11 Commission hearings have
brought to light is the important role the Patriot Act plays in
helping to win the war on terror. We have heard a lot about "the
wall" -- a conceptual barrier that prohibited agencies such
as the FBI and CIA from communicating freely with each other. That
wall was knocked down when President Bush signed the Patriot Act
in October 2001.
Sept. 11 compelled our nation to identify the areas we needed
to bolster in order to secure our homeland. We have learned a number
of very important lessons about the vulnerabilities in our financial
system. First, that our ability to combat terrorist financing is
linked with our ability to combat money laundering. Second, that
we must remain vigilant in our continuing efforts to identify new
ways in which terrorists and criminals will attempt to use our
own financial system to fuel their agendas. And third, that our
ability to obtain and share financial information is critical to
our success in identifying and bringing down terrorist networks.
Money is the lifeblood of terrorists because, like any businesspeople,
they cannot sustain operations without it. A lack of finances can
hinder or thwart short-term goals, and dismantle long-term agendas.
Without funds, terrorist groups suffer disarray, defection and,
ultimately, demise. The Patriot Act aids the ability of the government,
along with our partners in the financial sector, to identify dollars
flowing through our financial system in support of nefarious acts,
and to prevent new dollars from entering the system. Notably, the
act has helped the U.S. and our international partners designate
361 individuals and organizations as terrorists and terrorist supporters
-- and to freeze and seize approximately $200 million in terrorist-related
Under the Patriot Act, banks and other financial institutions
are directed to bolster defenses in potentially vulnerable areas.
As we strengthen our defenses against financial crimes in traditional
financial institutions, such as banks, criminals and terrorists
will look to other types of financial institutions or methods through
which to move or launder their money. With that in mind, we continue
to bring additional types of businesses under the umbrella of anti-money-laundering
and anti-terrorist-financing regulation, thereby raising awareness
of the issues and equipping these businesses with the tools to
We are committed to balancing the weight imposed by these regulations
with our mission of ensuring that we are taking all appropriate
steps to keep our citizens safe. We believe that financial institutions
should have the flexibility to design programs custom-tailored
to address their business, the products they offer and their customer
base. This reflects the Treasury Department's judgment that those
dealing directly with the public are in the best position to make
such decisions, and that this flexibility ultimately enhances the
effectiveness of the regulation.
Additionally, the Patriot Act authorizes the sharing of critical
information about suspected terrorist or money-laundering activity
-- not only between the government and financial institutions,
but also among financial institutions themselves -- by allowing
them to register with the Treasury Department.
As a first step to expand its information-sharing capabilities,
Treasury has asked law enforcement authorities to provide the names
of suspected terrorists and money launderers. We then review the
names and, if appropriate, send them on to financial institutions
to search their account and transaction records for potential matches.
Matches are forwarded to law enforcement authorities through Treasury.
At that point authorities must follow the appropriate legal process
to take further steps.
This process has been incredibly helpful to law-enforcement officials'
efforts by saving them critical time and resources. In addition,
the financial community has done an exemplary job; institutions
large and small have committed themselves to the task, provided
valuable leads for law enforcement, and our country is safer because
Since September 11, there has been a tremendous resolve in the
financial community to deny terrorists access to the financial
system. However, the Patriot Act was essential to first put in
place the procedures needed to follow through on that resolve by
providing innovative and essential tools to eliminate known risks
to our financial system, as well as to identify and halt new risks
As I mentioned before, the Patriot Act also lowered a wall that
prevented the intelligence community from supporting our administrative
authority. For example, when the Treasury Department had information
indicating that two U.S.-based charities -- the Benevolence International
Foundation and the Global Relief Foundation -- might be supporting
al Qaeda, the Patriot Act gave Treasury clear authority to block
the assets of these organizations while they were under investigation.
This action prevented those assets from being dissipated or diverted
to support terrorists. The U.N. ultimately joined the U.S. in designating
these entities as supporters of Osama bin Laden and al Qaeda.
Cutting off terrorists from the financial system is fundamental
to disrupting their activities. Through our efforts, we continue
to make it more difficult for terrorists to move money through
formal financial systems, thus exposing them to greater risk of
detection. The results are crippling to the networks that want
to do us harm.
Perhaps the most important result of the Patriot Act has been
the strengthened partnership among the financial community, the
government's financial agencies, and law enforcement, much to the
detriment of terrorists. This partnership is the key to our success
in choking off the blood money used by terrorists to fuel their
agendas of hatred.