Tracking terrorist funds demands technology, Treasury official testifies

Technology that can synthesize banking data and identify possible movement and use of disguised illegal funds is a must if the government is to successfully combat terrorist financing, a senior Treasury Department officials told House lawmakers.

'It is crucial to remember that the horrific end results of terrorist activities require the raising, movement and use of large volumes of funds,' Lee Jeffrey Ross Jr., senior adviser in the Treasury Department's Executive Office for Terrorist Financing and Financial Crimes, said yesterday.

Ross testified in Tampa, Fla., at a joint hearing of the House Government Reform Committee's subcommittees on Government Efficiency and Financial Management and Technology, Information Policy, Intergovernmental Affairs and the Census.

His comments echoed parts of a report Treasury released last month that recommended the need for a special emphasis on interagency coordination and technology.

Treasury and other agencies have been developing systems to improve data gathering and analysis since passage of the USA Patriot Act of 2001. Congress expanded the law this year. It gives law enforcement and intelligence agencies more authority to access and share financial information in terrorist investigations.

The department's Financial Crimes Enforcement Network is in the first phase of developing technology that will let financial institutions report suspicious transactions more easily and quickly, Ross said.

FinCEN also is creating a new system to manage the Bank Secrecy Act database. BSA Direct will upgrade the platform on which the data is maintained and will provide users with secure Web access for faster and easier searches. The Bank Secrecy Act requires financial institutions and money service businesses to register with FinCEN, implement anti-money-laundering programs and report suspicious financial activity.

To spot the movement of terrorist funds, the General Accounting Office last week urged Treasury, the Justice Department, the FBI and the IRS to systematically collect and analyze data from alternative financial services, such as charities and hawalas, unregulated international banking networks. The IRS is developing procedures with states to establish data-sharing systems about charities.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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