U.S. trying to stop money flow to terrorists, reporting progress to Congress

Wednesday, October 3rd 2001, 12:00 am
By: News On 6

WASHINGTON (AP) _ The Bush administration told Congress on Wednesday that it was using every means at its disposal to halt the flow of money to terrorist organizations. But it appealed to lawmakers for increased powers to close major loopholes in current law.

Treasury Secretary Paul O'Neill and top officials at the Justice Department said that America's allies were providing helpful information in the effort to dissect the complex financial network of Islamic militant Osama bin Laden.

``Currency can be as lethal as a bullet,'' O'Neill told the House Financial Services Committee. ``If we are to root out terrorist cells that threaten to do violence to our people and our communities, we have to hunt the financial benefactors and the willfully blind financial intermediaries that underwrite murder and mayhem.''

President Bush moved last week to freeze assets of bin Laden, an exiled Saudi multimillionaire, and 26 other people and organizations with suspected links to terrorism. On Monday, the Bush reported that some $6 million had been blocked and 50 bank accounts frozen.

O'Neill told the committee that the administration had ``taken decisive action domestically and, just as importantly, scores of countries have followed suit with bank freezes and pledges to take measures to heighten scrutiny of suspicious transactions.''

Both O'Neill and Assistant Attorney General Michael Chertoff told the committee that legislation was needed to close loopholes in current law that terrorists were using to transfer funds without detection.

``We are fighting with outdated weapons in the money laundering area today,'' Chertoff testified. ``When the money laundering laws were first enacted in 1986, they were designed to address what was primarily a domestic problem. Since 1986, money laundering increasingly has become a global problem.''

Committee Chairman Rep. Michael Oxley, R-Ohio, and Rep. John LaFalce of New York, its senior Democrat, said they were introducing legislation that would expand the government's authority. The measure contains similar provisions to those being sought by the administration.

The House bill, which would be directed at money laundering by drug traffickers as well as terrorists, would make it a crime to smuggle currency in excess of $10,000 or to knowingly falsify a customer's identity when making a transaction with a bank or other financial institution.

Bin Laden and his al-Qaida network raise money through a variety of legitimate and illegal sources _ charities, business enterprises and wealthy supporters as well as illegal opium and weapons trafficking, the U.S. government believes. Investigators and experts say members of the network make money any way they can to support the cause.

Bush told lawmakers Tuesday that he wants anti-money-laundering provisions added to his administration's anti-terrorism package, proposed to Congress in the wake of last month's attacks on the World Trade Center and the Pentagon. Some of the proposals have sparked opposition from liberals and conservatives alike, who said they would infringe on civil liberties.