[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
TERRORIST FINANCING: KIDNAPPING, ANTIQUITIES
TRAFFICKING, AND PRIVATE DONATIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 17, 2015
__________
Serial No. 114-120
__________
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida BRAD SHERMAN, California
DANA ROHRABACHER, California GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio ALBIO SIRES, New Jersey
JOE WILSON, South Carolina GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas THEODORE E. DEUTCH, Florida
TED POE, Texas BRIAN HIGGINS, New York
MATT SALMON, Arizona KAREN BASS, California
DARRELL E. ISSA, California WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina ALAN GRAYSON, Florida
MO BROOKS, Alabama AMI BERA, California
PAUL COOK, California ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas GRACE MENG, New York
SCOTT PERRY, Pennsylvania LOIS FRANKEL, Florida
RON DeSANTIS, Florida TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina JOAQUIN CASTRO, Texas
TED S. YOHO, Florida ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida BRENDAN F. BOYLE, Pennsylvania
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
TOM EMMER, MinnesotaUntil 5/18/
15 deg.
DANIEL DONOVAN, New YorkAs
of 5/19/15 deg.
Amy Porter, Chief of Staff Thomas Sheehy, Staff Director
Jason Steinbaum, Democratic Staff Director
------
Subcommittee on Terrorism, Nonproliferation, and Trade
TED POE, Texas, Chairman
JOE WILSON, South Carolina WILLIAM KEATING, Massachusetts
DARRELL E. ISSA, California BRAD SHERMAN, California
PAUL COOK, California BRIAN HIGGINS, New York
SCOTT PERRY, Pennsylvania JOAQUIN CASTRO, Texas
REID J. RIBBLE, Wisconsin ROBIN L. KELLY, Illinois
LEE M. ZELDIN, New York
C O N T E N T S
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Page
WITNESSES
Mr. John Cassara (former Special Agent, U.S. Department of the
Treasury)...................................................... 6
David Andrew Weinberg, Ph.D., senior fellow, Foundation for
Defense of Democracies......................................... 17
Ms. Diane Foley, founder, James W. Foley Legacy Foundation Inc... 54
Michael D. Danti, Ph.D., academic director of cultural heritage
initiatives, The American Schools of Oriental Research......... 60
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Mr. John Cassara: Prepared statement............................. 8
David Andrew Weinberg, Ph.D.: Prepared statement................. 19
Ms. Diane Foley: Prepared statement.............................. 57
Michael D. Danti, Ph.D.: Prepared statement...................... 62
APPENDIX
Hearing notice................................................... 88
Hearing minutes.................................................. 89
David Andrew Weinberg, Ph.D.: Material submitted for the record.. 90
The Honorable Ted Poe, a Representative in Congress from the
State of Texas, and chairman, Subcommittee on Terrorism,
Nonproliferation, and Trade: Material submitted for the record. 95
TERRORIST FINANCING: KIDNAPPING, ANTIQUITIES
TRAFFICKING, AND PRIVATE DONATIONS
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TUESDAY, NOVEMBER 17, 2015
House of Representatives,
Subcommittee on Terrorism, Nonproliferation, and Trade,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 o'clock
p.m., in room 2200 Rayburn House Office Building, Hon. Ted Poe
(chairman of the subcommittee) presiding.
Mr. Poe. The subcommittee is called to order.
Without objection, all members may have 5 days to submit
statements, questions, extraneous materials for the record
subject to the length limitation in the rules.
The Chair recognizes itself for an opening statement and
when the ranking member, Mr. Keating, gets here he will be, of
course, allowed to make his opening statement. But we will
proceed at this time.
The terrorist attacks in Paris last Friday remind us the
damage a terrorist organization can do with even a little
money. ISIS, however, is the richest terrorist organization in
history.
Last year alone, ISIS made over $1 billion. That is more
money than some countries make in a year. Much of that money
was made from seizing state assets, selling oil on the black
market and taxing people living in its so-called caliphate.
Those sources of money are mostly internal and do not use
the international financial system. But other sources of
funding are more dependent on the outside world and may be
easier to cut off.
For example, ISIS made nearly $50 million last year from
kidnapping for ransom. Some estimates put kidnapping for ransom
as high as 20 percent of ISIS' revenue.
ISIS is not the only terrorist group kidnapping hostages to
make money. AQIM is said to rely almost exclusively on
kidnapping for ransom for funds.
This is the same terrorist group that attacked a gas plant
in Algeria and killed one of my constituents, Victor Lovelady,
after taking him hostage.
From 2008 to 2014, terrorist groups made roughly $165
million from ransom payments. To try and stop this wave of
payments in the last 2 years the United Nations passed three
Security Council resolutions condemning the payment of ransoms
to terrorists.
Our own country has a long history of countering this
barbaric practice. From the very beginning, the United States
has always refused to pay ransom to terrorists.
The Barbary Pirates captured American merchant ships and
demanded ransoms to release the crews in the early 1800s. Even
then, President Thomas Jefferson refused to pay the bounty.
Jefferson argued that doing so would only encourage more
attacks. Throughout history, terrorists have learned to demand
ransoms from those who will pay.
Also, I want to recognize that this issue can be complex.
We have the mother of James Foley here with us today. Mrs.
Foley, I want to express my condolences to you for the loss of
your son.
I think it is important that we hear from family members of
those who are kidnapped so I appreciate--the committee
appreciates the fact that you were willing to testify.
Terrorist groups have long depended on criminal activity
for funding including trafficking of cultural antiquities. ISIS
is currently in control of hundreds of sites throughout Syria
and Iraq.
These sites are the cultural heritage of humanity but ISIS
sees them as a financial opportunity. Declassified ISIS
documents show that the terrorists made hundreds of millions of
dollars from selling these antiquities.
According to some estimates, antiquity smuggling at one
point was ISIS' second largest source of funding. ISIS is
killing people with the money it makes from these artifacts
while also destroying history.
Believe it or not, there are some people who voluntarily
give their money to these murderers. ISIS has maintained
connections with wealthy donors for nearly a decade. Many of
these donors are based in Gulf countries like Qatar, Kuwait and
Saudi Arabia.
Between 2013 and 2014, ISIS received as much as $40 million
from these wealthy benefactors, and ISIS is not the only
terrorist group benefitting from these deep pocket donors who
give money to terrorist groups.
Wealthy individuals from these countries fund terrorists
all over the world including al-Qaeda and Al-Shabaab. They set
up charities and funnel the money directly to the terrorists.
The governments of these Gulf countries simply do not do
enough to stop the steady stream of terrorist financing that
seems to start from a handful of Middle Eastern countries.
These private donors are just as guilty as the terrorists.
Unless more is done, the governments of these countries are
complicit in the crimes.
These three sources of terrorist funding have given ISIS
hundreds of millions of dollars in the last year. Cutting off
even one of these sources could make a big difference. ISIS
thrives off the appearance that it is winning.
By cutting even a portion of ISIS' funds we can challenge
its narrative of victory. That will mean not only less money
for the terrorists but also possibly less recruits.
More importantly, it would mean less victims of ISIS'
barbaric terrorist attacks. We must use all the resources at
our disposal to target every source of terrorist funding no
matter where it comes from and that is the purpose of these
hearings to listen to these experts on this issue.
I will now turn to the gentleman from Massachusetts for his
opening statement, Mr. Keating.
Mr. Keating. Thank you, Mr. Chairman.
Thank you for conducting this hearing. Thank you to our
witnesses for being here today. This hearing is on terrorist
financing generally but in consideration of the recent events
it is an opportunity and an appropriate one to pay particular
attention to ISIL.
Friday's attack in Paris and recent bombings in Beirut, the
bombing, we can now say, of the Russian passenger Metrojet in
Egypt indicate that ISIL may intend increasingly to attack
targets outside of its basis of power in Iraq and Syria and it
is worth taking a moment to express on behalf of myself and I
think the committee, you know, our greatest sympathy for the
victims and their families of those terrible tragedies.
This worrisome development in the United States and our
allies must endeavor at all fronts--demonstrates we must
endeavor on all fronts to defeat ISIL.
In order to defeat ISIL, we need to continue to assist our
allies militarily to roll back the territorial gains made by
ISIL and in addition and not unimportantly we must work to cut
off ISIL's supply of money and manpower by more effectively
countering terrorist recruitment, terrorist travel and
terrorist financing.
According to a 2015 report by the Financial Action Task
Force, ISIL earns revenue from several sources including
various illicit proceeds derived from the occupation of
territory, kidnapping for ransom, donations by or through
nonprofit organizations, support from foreign fighters, and
fund-raising through the Internet.
One of the significant ways ISIL finances its activities is
through the illicit sale of antiquities. ISIL is directly
involved in the lootings of archeological sites in Iraq and
Syria, theft from regional museums and stockpiling of cultural
objects for future sale on the international market.
Further, ISIL earns money by charging others for licenses
they call taxes to loot archeological sites and by taxing
traffickers moving items through ISIL-controlled territory.
To date, ISIL has reportedly earned tens of millions of
dollars from the antiquities stolen in Syria alone. To counter
this threat, we need to do more to prevent the theft and
destruction of antiquities in countries like Iraq and Syria.
We also need to do more here at home to ensure that the
United States isn't importing stolen antiquities and financing
terrorism as a result.
I have introduced the bill H.R. 2285, the Prevent
Trafficking in Cultural Properties Act, that would enhance
coordination and training within the Department of Homeland
Security to stop stolen antiquities from entering the United
States and, even more importantly, to investigate and then
prosecute the smugglers, traffickers and other criminals that
participate in this illicit trade.
H.R. 2285 was recently reported out of the Committee on
Homeland Security and I urge my colleagues to support this
bipartisan bill, which is aimed at stopping terrorist groups
like ISIL from financing the murderous activities through the
sale of stolen antiquities and other cultural property.
I look forward to hearing from our witnesses today and
learning more about different forms of terrorist financing
including antiquities trafficking and how better to stop this
illicit stream of income.
Thank you, Mr. Chairman. I yield back.
Mr. Poe. I thank the gentleman from Massachusetts.
The Chair will now recognize members who wish to make
opening statements for 1 minute each.
Chair recognizes the gentleman from California, Mr. Cook,
for 1 minute in his opening statement.
Mr. Cook. Thank you, Mr. Chairman.
This is certainly a very timely hearing. I want to thank
Ms. Foley for being here. This past week many of us gave
speeches, talked about Veterans Day and the sacrifice that so
many Americans have given in wars.
And no matter how you slice it, this is a war that we are
waging with this group--ISIL, ISIS, Daesh, whatever you want to
call them.
Their tactics--you know, there are no limits to them and I
personally think that many people in the Middle East and
throughout the world have gotten a pass on this.
We know that there has been support of that through some
nations in the Middle East, the Gulf States--a lot of money,
all these different things that has already been mentioned by
my colleagues.
But without a doubt, we have to do something about this and
I think this, as I said, after what happened it is the most
timely hearing we could have on the Hill.
Thank you.
Mr. Poe. I thank the gentleman.
The Chair wants to recognize the gentleman from New York,
Mr. Higgins, and also I recognize the work that he is doing on
the issue of kidnapping of Americans for ransom.
So the gentleman from New York is recognized.
Mr. Higgins. Thank you, Chairman Poe. Thank you for holding
this, obviously, important and timely hearing.
Kidnapping for ransom, antiquity smuggling and private
donations represent an alarming and largely under appreciated
source of terrorist financing that has largely gone
unaddressed.
Further complicating our counter financing efforts, many of
these transactions are conducted without reliance on the
international banking system, rendering many of our tools such
as sanctions and terrorist designations ineffective.
In recent years, kidnapping for ransom has become an
increasingly lucrative enterprise with reports indicating as
much as $165 million has been paid to al-Qaeda and ISIS since
2008 for the return of hostages.
Unlike the United States and United Kingdom, many of our
allies continue to pay ransoms, resulting in a vicious cycle in
which terrorist groups specifically seek out citizens of
countries known to pay, resulting in more kidnappings.
We must ensure our friends and allies halt government-
sponsored ransom payments. Doing so will lead to fewer
kidnappings while also depriving terrorists of a major revenue
source.
I am pleased to be working closely with Chairman Poe to
develop legislation to address this issue and I look forward to
today's witnesses and I yield back the balance of my time.
Mr. Poe. I thank the gentleman from New York.
The Chair now recognizes the gentleman from South Carolina,
Mr. Wilson.
Mr. Wilson. Thank you, Mr. Chairman, for your leadership on
this critical issue of terrorist financing.
I would like to extend my sincerest appreciation to Ms.
Foley for the courage that you have shown in coming before the
committee today to share your story. Our hearts truly are with
you and your family.
The murderous attacks in Paris killing 159 citizens on
Friday, the Beirut killing of 41 persons last week and the
bombing of the Russian charter jet killing 224 innocent
passengers October 31st further highlight the fact that our
current methods of preventing Daesh ISIL's terror financing are
not working.
It is critical that America and its allies have the
necessary resources to cut off ISIL's funding from any source
that we can.
It is imperative that those who do business or provide
funding to the Islamic State in any way are able to be
accurately identified and that we have laws in place to deal
with them.
I look forward to the recommendations of the panel.
Mr. Poe. Do any other members wish to be recognized for an
opening statement?
Therefore, without objection all members will have 5 days
to submit statements, questions, extraneous materials for the
record subject to the length limitation in the rules.
And also without objection, all the witness' prepared
statements will be made part of the record. I ask that each
witness please keep your presentation to no more than 5
minutes. I will introduce each witness and then give him time
for their comments.
Mr. John Cassara is a formal special agent to the U.S.
Department of Treasury's Office of Terrorism and Financial
Intelligence. Mr. Cassara is considered an expert in money
laundering in the Middle East and the growing threat of
alternative remittance systems.
Dr. David Weinberg is a senior fellow at the Foundation for
Defense of Democracies where he worked primarily on Saudi
Arabia and the Gulf States.
His research in this area focuses on energy security,
counter terrorism, alliance transparency and human rights.
Ms. Diane Foley is the mother of James Foley, an American
journalist who was kidnapped and killed by ISIS last year.
She is the founder of James Foley Legacy Foundation to
continue James' legacy of freedom and justice for those without
a voice, and once again, Ms. Foley, thank you very much for
being here today.
Dr. Michael Danti currently serves as the academic director
of the American Schools of Oriental Research Cultural Heritage
Initiatives, which monitors and reports on the heritage
situation in Syria and northern Iraq.
He is a Near Eastern archeologist with experience directing
programs in Syria, Iraq and Iran.
Mr. Cassara, we will start with you and you have 5 minutes.
STATEMENT OF MR. JOHN CASSARA (FORMER SPECIAL AGENT, U.S.
DEPARTMENT OF THE TREASURY)
Mr. Cassara. Chairman Poe and members of the subcommittee,
thank you for the opportunity to testify today. It is an honor
for me to be here.
Mr. Chairman, I have submitted a written statement. I would
like to take just a few minutes to give a brief summary.
Kidnapping for ransom is a crime as old as antiquity.
Unfortunately, in recent years, terrorists and associated
criminal organizations have turned to kidnapping as a
relatively easy and lucrative source of funding.
The United Nations' estimates that approximately $120
million in ransom payments was paid to terrorist groups between
2004 and 2012. Some experts believe kidnapping for ransom is
our most significant terrorist financing threat today.
As the tragic events in Paris last Friday make clear, the
United States and the international community are rightfully
alarmed about ISIS.
The terror organization has kidnapped multi hundreds if not
thousands of victims including local Iraqis, Syrians, members
of ethnic minorities as well as Westerners and other foreign
nationals living in the region.
Some were brutally murdered to send a political message.
Others were used to extract ransom payments. According to the
Financial Action Task Force, in 2014 ISIS raised approximately
$45 million from kidnapping for ransom.
In fact, because kidnapping and associated crimes such as
extortion have been so successful, it appears the average
ransom payment is increasing. It is a vicious cycle.
There is no doubt that ransom payments lead to future
kidnappings, and future kidnappings lead to additional ransom
payments and, of course, the ransom payments eventually build
the capacity of terrorist organizations which fuels additional
terrorist attacks.
There have been several United Nation Security Council
resolutions attempting to curtail ransom payments into
terrorist organizations' coffers. Despite the restrictions, the
world has not stopped payment.
Of course, the complicating factor is our humanity. It is
difficult to turn away from the anguished cries of those
kidnapped and the frantic appeals of those--of their loved
ones.
Last week, a new book that I wrote was released, ``Trade-
Based Money Laundering: The Next Frontier in International
Money Laundering Enforcement.''
It is often overlooked but the misuse of trade and
associated underground financial systems are often part of the
kidnap for ransom equation.
For example, money and value transfer services are found
throughout Iraq and Syria, including areas where ISIS operates.
Sometimes they are called hawaladars. They are trusted brokers
and have established relationships throughout the region. They
operate on trust and secrecy.
Hawaladars generally do not conduct electronic fund
transfers as banks do but rather communicate via email, fax and
phone with a local or foreign associate to pay or receive
payment from a counter party to the transaction.
Eventually brokers have to settle their accounts. Sometimes
they use cash, sometimes the conventional banking system.
But I want to emphasize and something that is continually
overlooked and that is historically and culturally in all areas
of the world where terrorist adversaries opposite, trade-based
value transfer is used to balance the books or settle accounts.
So examining trade records for invoice fraud and value
transfer could be the back door into money and value transfer
systems used by terrorists.
Unfortunately, neither the United States nor partners are
doing this. Moreover, I can make the argument that if one
includes all its varied forms including underground financial
systems, trade-based money laundering could very well be the
largest money laundering methodology in the world and
unfortunately it is also the least understood, recognized and
enforced.
Yet, I am optimistic. By using modern analytic tools to
exploit a variety of relevant big data sets, I believe
international trade transparency is theoretically achievable or
certainly possible to factor many times over what we have
today.
As an added bonus, cracking down on trade fraud could also
be a significant revenue enhancer for the governments involved.
In my book and written statement I go into detail on many
of these issues and I provide a number of recommendations on
achieving trade transparency so as to combat trade-based money
laundering, underground finance and terror.
I appreciate the opportunity to appear before you today and
I am happy to answer any questions you may have.
Thank you.
[The prepared statement of Mr. Cassara follows:]
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Mr. Poe. The Chair will recognize Dr. Weinberg for your
statement.
STATEMENT OF DAVID ANDREW WEINBERG, PH.D., SENIOR FELLOW,
FOUNDATION FOR DEFENSE OF DEMOCRACIES
Mr. Weinberg. Chairman Poe, Ranking Member Keating and
distinguished members of the subcommittee, thank you on behalf
of the Foundation for Defense of Democracy's Center on
Sanctions and Illicit Finance for the opportunity to be here
today.
I will highlight some worrisome weak links in America's
efforts to convince our allies to target financial facilitators
and private donors to terrorism who often go unpunished.
I will also offer some policy recommendations to hopefully
help address the growing epidemic of kidnapping by terrorists
for ransom.
While I will defer to others on this panel regarding
antiquities trafficking, I would ask your approval to enter
into the record CSIF's new report by Yaya Fanusie and Alex
Joffe on antiquities trafficking in financing the Islamic
State.
Mr. Poe. Without objection, that will be made part of the
record. Thank you, Dr. Weinberg.
Mr. Weinberg. Thank you.
Several of America's Mideast allies, namely, Qatar, Kuwait,
Saudi Arabia and Turkey, unfortunately pursue problematic or
even adversarial positions over tackling private terror
finance.
Despite promises to do so, they have failed to effectively
obstruct the flow of such funds and to try punishing its
practitioners.
In my written testimony, I note dozens of reported examples
of such negligence. In many instances, these governments grant
legal impunity to people whom the U.S. and the U.N. have
sanctioned on charges of funding al-Qaeda.
In my written remarks, I also reveal new indications that
Turkey, Qatar and Saudi Arabia have let their territories
become major financial hubs for Hamas.
To ensure that our Government's terror finance sanctions
list isn't treated in the region as a mere toothless piece of
paper, the U.S. should develop a broader range of options for
when our allies refuse to do the right thing versus terror
financiers.
Congress can help sensitize members of the executive branch
outside of Treasury to these concerns. When the U.S. is
absolutely confident that an individual who enjoys legal
impunity in one of these jurisdictions is indeed a senior
financial facilitator for terrorism, the U.S. could privately
and then publicly seek that individual's extradition.
If that fails, the U.S. could even consider capturing and
killing them as it does toward other terrorist operatives.
Congress could help hold these governments responsible as
well for extending such impunity by restricting trade in dual-
use items as suggested under the Export Administration Act of
1979 and by, again, amending the Foreign Sovereign Immunity Act
so victims of terrorism and their families can sue foreign
governments in civil court for letting terror financiers and
other operatives enjoy local impunity.
As for the vicious terrorist tactic of kidnapping for
ransom, we should recognize that Americans are still evidently
being held hostage by terrorists today.
In 2012, Treasury described kidnapping for ransom as
``today's most significant source of terror financing.'' Now,
the volume of that income has only increased since then.
ISIS actually makes more money off of oil sales, but
ransoms have helped it and al-Qaeda conquer that territory in
the first place. The Obama administration announced a new
hostage policy in June which was mainly comprised of efforts to
be more responsive and effective at hostage recovery.
But there is little sign that this is being matched by
efforts to decrease the money that terrorists take in from such
tactics, even though the New York Times, AP, Reuters and the
Wall Street Journal have described allied governments in Europe
or in the Gulf as sources of such payments.
Although these states deny paying ransoms, the Journal
called such state payments game changers which can fuel the
growth in ransom payments and incentivize future kidnappings.
Doha's reported role is particularly striking. In my
written testimony I compiled press reports of 15 different
episodes within 3 years alone in which Qatar is reported to
have helped mediate hostage talks, typically with terrorists,
and often in which a multi-million-dollar ransom was discussed
or allegedly paid to the terrorists by Qatar.
The U.S. should stigmatize governments that pay state
ransoms. Congress could require the administration to expose
such governments in public, perhaps even imposing targeted
financial sanctions.
President Obama should also direct diplomats to prioritize
convincing those governments in several key countries to stop
paying such state ransoms and Congress can encourage policy
makers abroad to enact such prohibitions into local law.
The U.S. could also follow in Britain's steps, blocking
insurance companies from reimbursing ransoms to terrorists, but
only provided this can be done in a manner that would not
impose an undue additional burden on hostages' families.
Finally, Congress and the administration could consider
starting a fund with seized terrorist assets to compensate
kidnapping victims and their families for their suffering.
The good news is that the U.S. now has a plan to try and
improve efforts at hostage recovery and the proof will be in
how well those steps are implemented.
The bad news is that U.S. policy is failing to deter
foreign governments primarily our allies from paying multi-
million-dollar ransoms that enrich terrorists and incentivize
future attacks.
Our Government needs a new strategy to address this
critical part of the problem and Congress can help facilitate
that debate.
Thank you very much.
[The prepared statement of Mr. Weinberg follows:]
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Mr. Poe. Thank you, Dr. Weinberg.
Ms. Foley.
STATEMENT OF MS. DIANE FOLEY, FOUNDER, JAMES W. FOLEY LEGACY
FOUNDATION INC.
Ms. Foley. I am Diane Foley, mother of American journalist,
James Foley, who was publically executed by ISIS, as you know,
in August 2014.
And I certainly want to say that our thoughts and prayers
are with the people of France and who have suffered such tragic
loss at the hands of ISIS.
But we too as Americans have suffered from ISIS. Our son,
James, was tortured and starved by ISIS for nearly 2 years just
for being an American.
Our family's ordeal was made worse by our incoherent and
often ineffective hostage policy. Jim was the oldest of our
five children born into a very average American middle class
family.
He was well educated, holding two Master's degrees in
writing and journalism. But far more importantly, he was a man
of service--teaching in our inner cities in Phoenix through
Teach for America and later in Chicago and Massachusetts.
He was always passionate about those without a voice, be
they hostages, conflict journalists or disadvantaged children
in our inner cities. In fact, his belief in human rights
actually led him to become a journalist so that we Americans
might hear the unheard stories of suffering in conflict zones.
In my opinion, our current American hostage policy has not
changed. I am very aware that our U.S. public policy is no
concessions to terrorists to include no ransom or release of
prisoners.
However, our policy also states that the United States will
use every appropriate resource to gain the safe return of our
American citizens held hostage by terrorists.
During Jim's horrific captivity in Syria, our policy was
interpreted to mean no concessions, no engagement with his
captors. Since 9/11, our Government officials have often
mistaken no concessions for meaning no negotiations, leading to
an inconsistent and often unjust approach to the kidnapping of
our citizens.
The hands of our powerful FBI were tied during the 2014
Syrian captivity of our son, Jim, and three other American
citizens held by ISIS.
I am told that our strict adherence to this policy saves
lives by decreasing the rate of capture of Americans. But no
one has been able to show me the research behind our hostage
policy.
In fact, it would seem that Americans are becoming targets
at an alarming rate. I respectfully demand to see the proof
that our current hostage policy is truly protecting Americans.
It did not protect Jim or Steven or Kayla or Peter. In the
last 18 months, these four Americans have been killed because
our policy was strictly applied, whereas five other Americans--
Casey Coombs, Sam Farren, Scott Darden, Theo Curtis and Sgt.
Bergdahl--who were negotiated for by us or others have returned
home safely.
This inconsistent implementation of our American hostage
policy is unacceptable. Additionally, I would have you
gentlemen know that we were deceived as an American family.
We were told repeatedly that Jim was their highest
priority--your highest priority. We trusted our Government to
help him return home.
During the brief month that Jim's ISIS captors reached out
to negotiate for his release, our Government refused to engaged
with the ISIS captors, leaving us alone as parents to negotiate
for our son's freedom.
Eighteen months after Jim's captivity our family and three
other families of hostages held with Jim in Syria were
threatened by Col. Mark Mitchell, member of our National
Security Council, with prosecution by our Government, although
there was never any precedent, if we attempted to raise a
ransom to free our loved ones.
He also very clearly told us that our Government would not
ask allies to help negotiate release and would never conduct
any military operation to rescue them.
He made it very clear that our United States Government
planned to abandon these four Americans. Thus, it became clear
that Jim, Peter, Steven and Kayla were considered collateral
damage and that we families were truly on our own.
I had spent much of our family's savings, quit my job as a
nurse practitioner to travel monthly to Washington to beg for
help for Jim, to the United Nations, countless Embassies and to
Europe multiple times to speak to freed hostages, all to no
avail.
While our U.S. senators reached out to us and were
sympathetic, we never even heard from our United States
congressman. The family--the Foley family did try to raise a
ransom for Jim's relief in spite of threats of prosecution.
But because we believed in our Government to help, we
started much too late and were unable to raise the money to
interest ISIS. The reality is that very few families would be
able to raise money actually needed to free their loved ones.
Our U.S. Government also refused to engage at a high level
with our allies who also had citizens held by ISIS. At one
point, there were over 20 Western hostages held together and
all of them our allies.
In the spring of 2014, a freed French hostage had very
specific information from ISIS to negotiate for our four
American hostages and the three British ones. But our
Government refused to engage with the French or U.K. to save
our citizens.
The result is that all the European hostages are now home
whereas our son, the other Americans and British were brutally
killed.
Although we had specific information regarding the exact
location of their captivity beginning in the fall of 2013, a
military operation was not even attempted until July 2014 after
all the Europeans were safely home.
We are sincerely grateful to the brave soldiers making that
attempt but it was much too late. In our situation, our hostage
policy prohibited our Government from interacting in any way
with Jim's captors, prohibited even from investigating who our
son's captors were.
Had our Government been allowed to engage the captors,
perhaps vital intelligence about ISIS might have been gleaned.
Our Government's abandonment of Jim allowed their deaths to be
used as propaganda for ISIS recruitment, thus strengthening and
emboldening ISIS.
It surely helped in their recruitment of other violent
people who want to destroy us. As I said before, at one point
there were more than 20 Western hostages held together, all of
whom are citizens of our allies. All our Western allies value
their citizens enough to negotiate for their freedom.
Had Jim been French, Spanish, German, Italian or Danish he
would be alive today. You know, we form coalitions for war. Why
did we not engage with our allies to free all the Western
hostages?
I believe that much stronger coalitions with our allies are
essential to deal with the shrewdness and hatred of these
terrorist groups. I fear that our posture of no engagement with
Jim's ISIS captors led to our underestimation of their
intelligence and their deep-seated hatred for the United States
and our citizens.
What if we had been shrewd enough to engage Jim's Syrian
captors in the fall of 2013 to learn all we could about them
instead of ignoring them? Is it ever wise to ignore enemies of
freedom and justice?
You know, Jim believed in America. He believed that our
Government valued him as a journalist, as a citizen. I am told
he was hopeful until the very end of his 20 months of
captivity.
He and our family were truly abandoned by our Government.
How would you feel if one of your sons or daughters had been in
Jim's predicament and had been treated similarly?
Four Americans were publicly beheaded. Where is our outrage
as Americans? Is an individual American citizen no longer
valuable? Why would Jim and the other Americans in Syria
considered collateral damage?
If our United States of America truly wants to protect and
prioritize the return of its citizens, if so I ask you esteemed
Members of Congress to hold this new fusion cell accountable
for the return of our American citizens and to mandate a
thorough reevaluation of our current hostage policy to make
sure that recent validated research is being done to ensure
that our policy truly saves the lives of Americans.
Thank you for your attention. I appreciate it.
[The prepared statement of Ms. Foley follows:]
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----------
Mr. Poe. Thank you, Ms. Foley, very much.
Dr. Danti.
STATEMENT OF MICHAEL D. DANTI, PH.D., ACADEMIC DIRECTOR OF
CULTURAL HERITAGE INITIATIVES, THE AMERICAN SCHOOLS OF ORIENTAL
RESEARCH
Mr. Danti. Thank you, Chairman Poe and Ranking Member
Keating, for this opportunity to discuss terrorist financing
through antiquities trafficking.
It is an honor to be here among such esteemed company but,
of course, with a heavy heart and with very serious concerns.
Since the outbreak of the Syrian civil war in 2011 and
sudden expansion of the so-called Islamic State, or ISIS, in
2014, we have witnessed the worst cultural heritage crisis
since World War II.
On a daily basis cultural sites are being destroyed for
tactical, strategic, economic and ideological reasons.
Antiquities and other cultural property are being pillaged to
finance continued conflict and global terrorism.
As an archeologist who has worked in Syria and Iraq for the
last 25 years, there is not a day that goes by when I don't
anguish over the current plight of the Syrian and Iraqi people
and the atrocities ISIS and other groups are committing.
My colleagues and I at the American Schools of Oriental
Research work closely with Syrian and Iraqi cultural heritage
experts and other concerned parties who are daily risking their
lives to save heritage from systematic campaigns of cultural
cleansing.
These brave heritage professionals understand the
importance of ensuring a brighter future by preserving the past
and cultural diversity.
The current conflict in Syria and Iraq is a war over ideas
and cultural identity that is rapidly spreading to neighboring
countries.
The project I direct, the American Schools of Oriental
Research Cultural Heritage Initiatives, constantly monitors the
cultural heritage crisis in Syria and northern Iraq, implements
heritage projects in Syria and produces reports and conducts
outreach for the U.S. Government and the general public.
We have seen that most of the major combatants commit
cultural property crimes. But by far, ISIS is our greatest
concern. Over the last 16 months, ISIS has developed a highly
organized approach to looting, trafficking and selling
antiquities and other cultural property for funding.
ISIS also brazenly destroys heritage places to promote its
radical ideology and gain media exposure.
There is no doubt that terrorists derive significant
revenue from looted ancient antiquities and stolen cultural
property. Satellite imagery, in-country sources and open-source
information support this conclusion.
Information in antiquities recovered by U.S. Special
Operations forces during the Abu Sayyaf raid in May of this
year proves ISIS uses the illicit antiquities trade as an
important source of revenue.
To ISIS, antiquities are a natural resource to be mined
from the ground or pilfered from cultural repositories. This
criminal activity has increased as other revenue streams such
as oil have been targeted through air strikes or other counter
measures.
Antiquities trafficking is difficult to target and for ISIS
and other extremists it has the benefit of rewarding
collaboration with employment.
Antiquities trafficking doesn't make as many enemies among
the local population as other crimes but instead it exploits
poverty and hopelessness. Also, antiquities serve as
instruments for money laundering.
We don't know the total dollar values of the illicit
antiquities trade. There are too many unknowns. But ISIS and
other transnational criminal organizations certainly find it
crucial to their operations and the financial and cultural
costs of the destruction are manifest now and will have a
cascading effect for generations to come.
The current crisis requires increased and improved
capacities in the United States for cultural security and
cultural diplomacy. We need a more proactive and nimbler
approach that couples existing governmental and nongovernmental
capacities.
High level coordination would greatly enhance this work and
would facilitate containing, degrading and ultimately
destroying ISIS and other radical groups and transnational
criminal organizations operating in the Middle East, North
Africa and beyond.
Reducing global market space for conflict antiquities
should be one of our highest priorities. Legislation is pending
in the House and Senate that would help to achieve these goals.
Ultimately, the best solutions for the current cultural
heritage crisis in Syria and northern Iraq also contribute to
alleviating the humanitarian crisis, promoting conflict
resolution, strengthening counter terrorism efforts and
fostering peace building.
Thank you.
[The prepared statement of Mr. Danti follows:]
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----------
Mr. Poe. Thank you very much, Dr. Danti. Thank you all for
being here today. I recognize myself for some questions.
It seems to me, and I may not have all of their sources of
revenue, but we have heard that terrorist groups will do
anything for money. They will steal, like the robberies of the
banks in Iraq.
They will, as Mr. Cassara talked about--I call it money
laundering. I am a former judge. I call that money laundering
what you were talking about--cooking the books on trade. They
make money off of antiquities.
They make money off of hostages and they make money off of
their wealthy donors who want to send money to these terrorist
groups. And there are probably a whole lot more.
Let me try to address a couple of issues. Ms. Foley, you
gave us some remarkable information and if I understand the
current status of American hostage law or procedure, the United
States has always had a policy not to pay ransom.
Now it has changed that the government won't pay money for
ransom but if families or individuals do that law will not be
enforced as to that payment.
Is that your understanding of the current status?
Ms. Foley. Families, you know, in criminal activity--a
family has never been prosecuted for paying ransom to criminals
who have a loved one. So there is----
Mr. Poe. That is what I am asking. So as far as you know,
no family has ever been required----
Ms. Foley. No. I know that, because we researched it,
because we finally realized we were on our own and we had to
try to raise a ransom.
But of course we wanted to protect anyone, you know, who
would care to help us. So there is no precedent for that, sir.
Mr. Poe. So that portion of the law, as the President said,
is not being enforced as to prosecute families that pay for
ransom?
Ms. Foley. Well, it really was never meant to prosecute
families. It was meant to----
Mr. Poe. It has never--okay.
Ms. Foley [continuing]. Prosecute any groups that might
pretend to be a charity and instead give money to finance
terrorism or something. It was never meant to be----
Mr. Poe. Was your son kidnapped for ransom or was he
kidnapped as a propaganda tool or both?
Ms. Foley. That is a good question. Only God would know
what might be--might have might have been in their heads. He
was a Westerner.
They don't check passports when they kidnap people, sir.
You know, he was obviously a Westerner. He had been in and out
of Syria.
He had been there over a year and more and more of the
jihadists had come in in 2012. Jim had made very good relations
with a lot of the family there and was trying to expose the
atrocities of the Assad regime so felt, you know, protected.
A lot of the rebels really welcomed journalists early on so
that their plight might get out to the world. But some people--
--
Mr. Poe. He was used as a propaganda tool, too, though,
wasn't he?
Ms. Foley. I think--I think initially they wanted to make
money off of him.
Mr. Poe. Okay.
Ms. Foley. Oh, yes. Oh, yes. The propaganda only came when
our Government would not engage in any way. Nobody would
negotiate for him. No one cared. So they thought well, hey, we
can make a spectacle of this. We can really use--get a lot of
PR out of killing these Americans.
Mr. Poe. Dr. Weinberg, let me ask you some questions about
the Gulf States. I am going to be real specific here, probably
going to hurt somebody's feelings in the Gulf States.
We have a military base in Qatar that we use to fly
aircraft in the Middle East when we are engaged in military
activities in Afghanistan or Iraq. Is that right?
Mr. Weinberg. That is correct.
Mr. Poe. So Qatar helps us out with that. But we know that
Qatar has donors there--wealthy donors who give money to
terrorist groups. Is that correct?
Mr. Weinberg. It has certainly been correct in the past.
Mr. Poe. Do we know who those donors are? Do we know their
name, rank and serial number, so to speak?
Mr. Weinberg. The United States has sanctioned a number of
Qatari nationals----
Mr. Poe. What does that mean--don't do this anymore? I
mean, what is a sanction against a national in Qatar who gives
money to terrorist groups?
Mr. Weinberg. That is exactly the problem, sir. They----
Mr. Poe. Don't do anything, don't do it again, it is not
nice.
Mr. Weinberg. And the problem is that they--the local
government often doesn't do anything about it. In fact, I have
seen not a single indication of Qatar prosecuting anybody and
convicting them under terror finance laws that have been on the
books.
Mr. Poe. Do we pay to have our military base in Qatar?
Mr. Weinberg. No. The Qataris pay for it.
Mr. Poe. Okay. So you think Qatar is playing both sides?
Mr. Weinberg. I think Qatar is absolutely playing both
sides in this regard and I think the United States----
Mr. Poe. So they harbor people who give money to terrorist
groups but they also have a military base where the United
States can go and attack terrorist groups?
Mr. Weinberg. Yes, and individuals the United States has
sanctioned live just down the road from where this U.S. base is
and if the United States chose to do so it would not be too
difficult to launch air strikes if we were convinced or, you
know, conducted some sort of operation.
Mr. Poe. You mentioned that the United States has the
authority to go after these people who are contributing to
foreign terrorist organizations.
Mr. Weinberg. If it chooses to use that capacity it is hard
to envision----
Mr. Poe. To your knowledge--this is my last question--to
your knowledge of those different--I have two questions.
How many people are we talking about that are contributing
money to terrorist groups?
Mr. Weinberg. The people sanctioned in Qatar, it is--you
can count them on a single hand.
Mr. Poe. It is not very many?
Mr. Weinberg. No.
Mr. Poe. And, second, have we ever extradited, prosecuted
or taken out somebody who is giving money to terrorist groups,
to your knowledge?
Mr. Weinberg. Have we ever prosecuted, extradited? Well,
the United States sought to capture Khalid Sheikh Mohammed from
Qatari territory in the 1990s.
He was a senior al-Qaeda operative responsible for attacks
linked to the 1998----
Mr. Poe. Did we ever get him?
Mr. Weinberg. He--according to former U.S. officials cited
in press reports, a senior Qatari, either royal family member
or government official, tipped him off and he fled the country
when we went to find him.
Mr. Poe. So my question is--just answer the question. Have
we ever captured, extradited, brought back one of these
moneybag guys who are giving money to terrorist groups to the
United States to prosecute them?
Mr. Weinberg. Well, ultimately we caught KSM himself, who
was a senior money man as well as operational man. But we did
it in Pakistan.
Mr. Poe. All right. Mr. Keating from Massachusetts.
Mr. Keating. Thank you, Mr. Chairman.
I think one of the most important things any of us can do
as Americans is get to the root issues of what is going on even
though it is dangerous, even though they risk their lives doing
it and get that message out to the U.S. and the world.
And Ms. Foley, your son did that and your testimony--I
think he inherited a lot of his courage from his mother but--
and thank you for being here.
I know that there are things we can do tangibly in terms of
antiquities. I know there are things we can do in terms of
trade-based money laundering. I know there are things that we
can do to sanction some countries. But it is really troubling
on the issue of kidnapping, ransom.
Could you tell me a little bit about the James W. Foley
Legacy Foundation you are so involved with, Ms. Foley? One of
the things they do is hostage support. Could you describe what
kind of work you do there and what the foundation is doing?
Ms. Foley. In truth, we are just beginning. Jim was very,
as I said, concerned about people without a voice. So one of
the big issues, obviously, I have been concerned about are
American hostages.
They end up in a truly gray zone, and gray meaning that
nobody knew whose job it was to try to get them out and no one
really wanted to touch the issue. It is a hot potato.
So one of the first things we have done this past year is
we have raised funds for something called Hostage U.S., which
will be similar to Hostage U.K. which will support American
families in this predicament.
But the James W. Foley Foundation wants to go further. We
want our Americans home. So whereas Hostage U.S.--we are going
to continue to support them because families need support but I
couldn't have cared how I was treated if Jim were home and I
really feel as Americans we need to be shrewder.
We need to find a way to get them home, and I recognize
that it is complex because of our--because we certainly don't
want to fund terrorists. But is it wise to not even engage
these people? Then we don't have a clue.
We don't know what is going on. We don't know what they
want. We don't know who they are and, you know, I don't think
so. I just think we have to be a lot shrewder. Otherwise, we
are going to be out of luck.
So as far as the foundation, yes, we are working very
closely with the fusion cell and Lisa Monaco, Jen Easterley,
trying to find ways to hold them accountable for gee, a lot of
U.S. assets have been given now.
Fifty individuals have this mission to bring Americans
home. None are home yet since they have been started.
Granted, it is new but I am concerned because I think their
hands are tied in a lot of ways. So that is one thing.
The other issue is conflict journalism. These days--it used
to be in World War II journalists and aid workers were off
limits. People--they had a certain neutrality. Not so anymore.
I mean, journalists and aid workers are targets and we have
to be aware of that. So as a democracy ourselves, unless we
come together for global safety for people who are giving us
information, who dare to go where many don't dare to go, that
is a huge concern of ours.
So we are really--we are working with an international
coalition for safety and journalism and continue to be
concerned about children without access to education, because
Jim loved children.
He really felt education was the only way to--for societies
to get out of poverty. So we are looking at that.
Mr. Keating. One of the things I hope we can do is not have
others experience everything that your family experienced and
as you go forward with the foundation's work if you could keep
us informed about some of the areas you think that we can get
involved with as you go forward.
Please do that. Feel free to do that because I think we can
certainly do better.
Ms. Foley. We better do better, sir. You know, it is
frightening if we can't do better in that regard.
Mr. Keating. I agree, and thank you----
Ms. Foley. Thank you.
Mr. Keating [continuing]. For that. Just another question
for Dr. Danti. The May 15th raid on ISIL leader Abu Sayyaf--you
called that a game changer at a certain point.
What did we learn from that that we didn't know before?
Mr. Danti. We learned that antiquities were very important
to the organization and they were the functional equivalent of
other natural resources.
There were emails. There were documents indicating that Abu
Sayyaf had been put in charge of that trade because it was
important to the organization.
He was found to be in possession of hundreds of
antiquities, some of them looted from the Mosul museum, and he
also had, disturbingly, photographs of other high-end items on
his laptop. Some of those items we had been tracking are known
to have been sold through Turkey.
Mr. Keating. Okay. I don't know if anyone else wants to
comment on that briefly. But I will say this, that many times
in this very turbulent time of terrorism we are so frustrated
we put up our hands and we can say what can we do.
I think you four as witnesses have given us things we can
do to further fight this effort and I appreciate it and I think
these are very tangible real suggestions that can go forward on
all fronts.
Thank you. I yield back.
Mr. Poe. I want the members to know that we are in the
midst of voting. We will continue after votes. We have one
vote. But we will not recess until we have at least one more
member ask questions and then we will come back. I apologize to
our panelists but that one vote shouldn't take a long time.
Mr. Wilson from South Carolina.
Mr. Wilson. Ms. Foley, again, thank you for your courage,
and as a former reporter myself so many points you have made--
that indeed in other conflicts the journalists have been
noncombatants.
But it is such a chilling reminder that we are dealing with
illegal enemy combatants not in uniform. This is just so--to
me, so extraordinarily unprecedented and putting the American
people at risk, and we are at a time even today, within the
last 48 hours, that ISIL Daesh issued a statement that
Washington and Rome are the next targets and so we have just
got to be vigilant.
That is why I appreciate the point that you are making too
that where we all support no concession, no tribute, that
doesn't mean not negotiate. So I--you are making a difference
by raising these issues.
And then it is appalling to me that there was not an effort
of military rescue. Was there any reason--particularly when you
indicate that it was an exact location of 20 together.
With that information, it is just appalling to me that
action was not taken. And that is one question. Then the next
question why was that not done, and then, you know, with the
attack in Benghazi we are still discussing who did it. What?
This should be determined, and then there should be efforts to
find them.
So on both--why was there no action and what is the status
of determining who these murderers are.
Ms. Foley. Well, those are all good questions--questions
that I truly don't have the answers for.
All I know is an American citizen--we started to have
eyewitnesses as of fall--early fall of 2013 of exactly where
Jim was and our Government knew that there were three other
Americans and British with him and where--quite sure that they
also realized how many other of allies were also together
because slowly the other--their allies were negotiating all of
these people out.
Jim had already been held a whole year before all these
other peoples were added. Jim was one of the first--Jim and
British citizen John Cantlie and, of course, Austin Tice, who
was taken in August 2012.
They were the first ones that I know of that were taken in
Syria. But then gradually all these others were taken, most of
them in later in 2013, and--but the other European countries
got right on it and started negotiating with the captors so
that their citizens came out.
As far as where they were held, we had information
throughout starting in the fall of 2013 and then again December
2013. They were moved, but because hostages started coming out
in early 2014 we were--we received very detailed information.
As a matter of fact, it became clearer and clearer as the
spring of 2014 went on because these European hostages came out
with very specific information and some of them--one Italian
citizen came to the U.S. twice on his own dime trying to get
somebody to hear the specifics he had in terms of exact
location of where they were being held.
But no one wanted to hear it, and this--particularly
Federico came more than any of the others. Some of the others
hesitated to do that because their governments had figured out
a way to get them out.
So they, understandably, expected our Government to work
with theirs to collaborate, if you will, to get our citizens
out. But it didn't happen, sir.
Mr. Wilson. Well, and it is inconceivable with the released
captives that there couldn't be an effort to determine who the
perpetrators are and so----
Ms. Foley. Don't you think? I agree with you. I am appalled
as an American, sir.
Mr. Wilson. Well, I want to work with our chairman and get
this straight. So thank you very much. I yield.
Mr. Poe. The Chair will now go to Mr. Higgins for his
statement.
Mr. Higgins. Thank you, Chairman.
Mr. Poe. Or questions. Excuse me.
Mr. Higgins. Ms. Foley, in your testimony you had indicated
that you and your family were left to negotiate with your son's
captors. With whom would you negotiate and what was the nature
of that discussion?
Ms. Foley. Well, the only--the only opportunity we had, Mr.
Higgins, was for a month in 2013 end of November we out of the
blue got an email saying that they had Jim and they would send
us--they wanted some questions, proof of life. Pardon?
Mr. Higgins. Who is--who is they?
Ms. Foley. They really didn't want us to know. They said
they were Syrian rebels. They didn't identify themselves
anymore than that.
Mr. Higgins. So they initiated contact with you and your
family?
Ms. Foley. Mm-hmm. Absolutely. But it was through a very
encrypted email that our FBI had no way of tracking. So they
are very shrewd, sir. Very shrewd. They knew how to reach us
but we didn't know how to reach them.
Mr. Higgins. So you couldn't respond back?
Ms. Foley. Well, I could--I could only respond through that
email. But what I meant to say is we couldn't find out who was
sending it. It was obvious that they were English speaking,
however, because, you know, of the command of language.
Mr. Higgins. And was there specifics about a ransom number
or conditions?
Ms. Foley. When they initially reached out to us, yes, it
was ridiculous--like, it was--they wanted 100 million euro or
all Muslim prisoners kind of thing and, you know, FBI--you
know, of course, we right away sent it to FBI and they just
said, oh, keep them talking--keep them talking.
But within a few emails when they realized they were just
talking to the family they had absolutely no interest and so
they cut off discussions until the only other time, sir, was
when the French came out in March 2014 they came out with
another very specific offer to negotiate for all Americans and
all the British.
Mr. Higgins. And your primary source of contact in the
United States was the FBI?
Ms. Foley. We had no primary source. I did have one--we had
one FBI agent who debriefed me all the time. But----
Mr. Higgins. Debriefed you on what?
Ms. Foley. Anything. I mean, I was--I was talking to
anybody--all the freed hostages that I could. I said earlier a
lot of times FBI couldn't even get to them. So----
Mr. Higgins. At any point during your ordeal did you get a
sense that your son was going to be freed at some point or----
Ms. Foley. Not at all. However, our Government told me,
anyone I talked to at State or FBI, that Jim was the highest
priority. So we were deceived throughout the first 18 months.
Mr. Higgins. You never believed that?
Ms. Foley. Oh, I believed it totally, sir.
Mr. Higgins. How long----
Ms. Foley. That is why I didn't--we didn't try to raise
ransom or do anything privately. Oh, we totally believed it.
Mr. Higgins. When did you stop believing it?
Ms. Foley. By the--by the late spring of 2014 when I
could--primarily when Mark Mitchell threatened us three times
and made it very obvious that our Government was going to do
nothing for those citizens.
Mr. Higgins. And what was the nature of Mark--what was
his--what was his threat?
Ms. Foley. Oh, that first of all as Americans if we dared
to raise a ransom to get our loved ones out we would definitely
be prosecuted and, secondly, there is no way our Government
would ever ask another country.
You know, he was going by the law and I know that the law
says we are not--you know, we don't want Qatar to do these
things and I--but what he was saying essentially is your
government will do nothing to get your people out. Nothing.
And he just said it in a very--I mean, God bless that man
anyway. I don't know. It is just very appalling that as an
American that we would do nothing for some of the best of
America, some of our journalists, some of--people who care
about the suffering of the people in Syria.
It was appalling to me, sir.
Mr. Higgins. I have no further questions.
Mr. Poe. I thank the gentleman from New York.
We will be in a short recess until the members vote and
quickly come back and we will continue this.
I want to thank the witnesses for your patience. But your
information is so important that we don't want to--I don't want
to end this hearing at this point.
So we will be in recess until--for 15 minutes maximum.
[Recess.]
Mr. Poe. The subcommittee will reconvene.
The Chair recognizes the gentleman from California, Mr.
Sherman.
Mr. Sherman. Thank you.
Qatar doesn't just allow its citizens to give money to
terrorist groups. Government money is going to Hamas and other
terrorist groups.
I think we have to get serious about this war. I will give
you some examples of where at least some of our friends are not
serious.
The Iraqi Government pays salaries to former civil servants
who live in ISIS-controlled areas. I do not remember General
DeGaulle sending gold coins to French teachers in Normandy or
Bordeaux.
The oil fields controlled by ISIS we don't bomb. We bombed
World War II oil fields. We don't bomb these. Some say it is
because the Iraqis want to get them back intact. Some say it is
because the Iraqi Government is making a lot of money on this
war and doesn't want to see ISIS lose the revenue.
But you have something which by the definitions of a war we
took most seriously--World War II--is a strategic target. We
know that ISIS is pumping the oil. We hit their mobile
refineries but we won't hit the oil fields.
We are not hitting the dams. We are not hitting their
electric generation facilities and I can't get a straight
answer out of either our Government or the Iraqi Government as
to whether Iraq is providing free electricity to Mosul.
But the lights are on for--and they are not on all the time
but they are on for a reason. The biggest score--and I realize
it may be slightly outside the definition of this hearing,
although we do have the word donations in this--is ISIS has got
its hands on $500, $800 million of Iraqi currency.
Now, what other countries do for various reasons is that
they issue new currency. You do a recall of the greenbacks and
you issue bluebacks.
Iraq didn't do that because that is a technique that is
used to go after corrupt politicians and organized crime and
when you have a Baghdad government installed by us, protected
by us, financed with our money that is pretty dependent upon,
infiltrated by, controlled by Iran, the Quds Forces and
organized criminal and corrupt elements, they are not going to
recall the currency.
So the--as to hostages, we definitely should not do
nothing. The raid didn't work but it shows a U.S.
determination. We need to sanction Iran for holding five
American hostages.
The President made it clear that the deal in Geneva related
only to nuclear weapons and if any other country was holding
five of our hostages we would--we would certainly sanction
them.
Dr. Weinberg, does Qatar even pretend to outlaw voluntary
contributions made by its citizens to Hamas? Is that a
violation of Qatari law?
Mr. Weinberg. So Qatari law doesn't discuss specific
organizations in terms of the legislation. They have had
several laws on the books, one actually approved by the emir
this week banning individual--banning citizens from collecting
money without authorization for donations.
But this is the----
Mr. Sherman. Well, that is collecting from others. What--is
it illegal to just send your money directly--Hamas donation
fund care of Gaza?
Mr. Weinberg. The Qatari Government has given itself the
authority to list terrorist groups or----
Mr. Sherman. Have they listed any?
Mr. Weinberg. Not to my knowledge. There--of the four laws
intended to combat terrorism finance in the country the U.S.
has yet to see serious convictions under----
Mr. Sherman. So it is illegal to give money to anyone on
the list, and the list is a blank piece of paper?
Mr. Weinberg. The latest law, theoretically, means that you
need to get governmental authority to collect donations for
anybody. The question is----
Mr. Sherman. To collect. But if--I mean, it is--if Qataris
see that there is a disaster in Bangladesh and they give to the
Bangladeshi Red Crescent Society or the--or UNICEF or something
like that, they don't need government permission to write a
check to UNICEF, do they?
Mr. Weinberg. The--I think the most striking evidence in
this regard is that the United States sanction to Qatari
nationals in August, I believe, who, as I understand it, were
running the most high profile fund-raising organization for
Syria relief in Qatar.
The U.S. alleged that they both were high level al-Qaeda
financial operatives. It took the Qataris almost a year after
the organization was allegedly, according to the Washington
Post, endorsed by the Nusra Fund on social media for the
Qataris to shut it down and a year after that when the U.S.
actually sanctioned them, U.S. officials indicated the Qataris
still had not arrested the two men.
Mr. Sherman. Nor would we expect them to. I would point out
to our friends in Qatar that just because you host a U.S.
military base does not mean that the United States has to
preserve your regime.
We have a military base in Cuba. That doesn't mean we are
supporters of the government in Havana--our policies changed
from this way or that way. But it is nice to have the base
there. That doesn't mean we have to support their government.
I would also point out, and with Ms. Foley here, you know,
I feel bad saying it but I don't think that we should be
allowing--paying money--give ransom to terrorist organizations.
From an emotional standpoint you want to. From an emotional
standpoint it may get your--the particular loved one back. But
it is just a while before they kill some other Americans or
seize some other American hostages and, of course, with money
that gives them both an incentive and a capacity.
So I yield back and thank you for time.
Mr. Poe. The Chair recognizes Mr. Keating from
Massachusetts.
Mr. Keating. Thank you, Mr. Chairman.
A question about the nonprofit again--not just Qatar but
particularly, Mr. Cassara, Dr. Weinberg, what other nonprofits
are there in the world?
Are some people donating unwittingly, not knowing where
some of the money is going? Are we able to do this? If you
could, just enlighten us on some of those sources of
financing----
Mr. Weinberg. Sure. Absolutely.
Mr. Keating [continuing]. That the terrorists get.
Mr. Weinberg. So this has been a longstanding practice
among financiers of--financial operatives for al-Qaeda for
years, which is basically while we can't openly practice what
we do in many regards so let us cloak it in a veneer of
charitable relief.
There is a particularly noteworthy case in Kuwait as well
and there was a fund-raising outfit operated by an individual
named Hajjaj al-Ajmi, which was presenting itself in most of
its presentations as relief for the Syrian people, support for
legitimate resistance.
But in practice, according to what the U.S. Government has
designated, he was basically funding al-Qaeda in very large
amounts and since then he has been called in for questioning by
Kuwaiti authorities----
Mr. Keating. Are donors aware--are some of them innocently
being----
Mr. Weinberg. Some of them are innocently being exploited.
There are--the--this tribe in Kuwait as well as another tribe
have been exploited by people trying to play on their
sympathies.
The challenge is that once these sorts of frauds are
exposed the penalties are inconsistent at best in some of these
places.
And so the United States can work to try and build leverage
to motivate the host governments to act because apparently so
far they don't seem to be sufficiently consistently motivated.
Mr. Keating. And I imagine if you just go with a nonprofit
name and not the people behind, sort of like Whac-A-Mole
because they can do this and start another nonprofit.
Mr. Weinberg. Exactly. One of--in that instance one of the
individuals--that individual is under sanctions but his co-
captain in one of his main fund-raising networks is still a
senior operative in a Kuwaiti political party.
Mr. Keating. Dr. Danti, just quickly. I am curious, too.
With the--you know, the passageway for the antiquities what are
some of the transit countries involved?
What is being done there and are they following the say
routes of other illicit activities like drugs or money
laundering?
Are there parallels and how can we--I think we can do
things here at home to, you know, tamp down on demand, talk to
people in the U.K. similarly, you know, motivated to do that in
terms of final destinations but what about the transit
companies--countries, rather, and what about--what can we do to
disrupt that chain?
Mr. Danti. Right. So in the cases that we have seen over
the last 16 months, the primary trafficking points were
antiquities coming out of Syria were Lebanon and Turkey, and
from that point much of the material was going to Bulgaria and
Greece and then with the objective of moving the material into
the Schengen zone--the free border zone.
Those are the cases that we were looking at. There were
allegedly routes taking material to Jordan, Israel and the Gulf
as well.
Since, let us say, October some of those routes have
shifted as the Turks have taken military action. Some of the
border crossings that Islamic State was using have fallen to
YPG, or Turkish forces, and we see initial indicators that some
of the Sunni Arab and Islamic State ISIS trafficking is moving
out toward Lebanon.
There has been a shift in the markets there presumably to
take the material from Lebanon to either Cyprus, Greece or
Bulgaria.
I would say that in terms of trying to shut that trade down
what could be done is to limit the number of ports that are
involved in illicit trade in antiquities and also to limit the
number of people who can legally import antiquities.
Mr. Keating. Are they following other illicit activities
like drugs or money laundering? Any of those?
Mr. Danti. Yes. In looking at the--into the routes that the
material was taken through Turkey and Bulgaria it was following
a lot of other contraband out of the country--for example,
stolen automobiles, their stolen capital goods, and following
the routes that fighters--Islamic State fighters were entering
the country through and in illegal weapons the same border
crossings--for example, the Tell Abyad-Akcakale border crossing
that the--that ISIS told its would-be migrants to use to come
and join the caliphate in a PDF that was posted online.
Satellite imagery, in-country sources indicated that was a
route that the antiquities were leaving the country from to
ports in western Turkey and in southern and western Turkey
where Islamic State essentially is surely alighting with or
joining up with organized crime units within Turkey to move
that.
Islamic State is essentially new management taking
advantage of existing looting networks and existing trafficking
networks that predate the conflict period and they have
essentially just encouraged additional--far more looting and
trafficking of antiquities.
But these routes existed in the pre-conflict period.
Mr. Keating. Just quickly, any human trafficking involved
in that?
Mr. Danti. Not that I am aware of.
Mr. Keating. Okay. Thank you. I yield back, Mr. Chairman.
Mr. Poe. Chair recognizes the gentleman from New York.
Mr. Higgins. Thank you, Mr. Chairman.
I just--you know, kidnapping for ransom has, you know,
become a significant source of terror financing. In 2003, al-
Qaeda would get about $200,000 per hostage. Now, they are
getting about $10 million.
Over half of al-Qaeda's operating revenue comes from ransom
from kidnapping. But ISIS seems to be different. ISIS seems to
be involved in other activity and a lot of their ability to
raise funds is locally--terrorizing the local population,
taxing people.
Every activity that is done there is taxed and results in a
revenue source for ISIS. Any thoughts about that distinction
and what is gleaned from it? Anybody on the panel.
Mr. Weinberg. So I think it is--it is certainly important
to contextualize this, like you said, and to say that the
primary sources of revenue that ISIS in particular have are
derived from controlled local territory.
I think it is also important for us to recognize that
Treasury has indicated ISIS as well as branches of al-Qaeda in
Yemen and north Africa have been able to conquer territory in
part because they have used private donations as well as
ransoms to fuel and to fund that territorial conquest.
Particularly as the United States and our allies work to
cut off their income from oil smuggling and from other--and
from their ability to even hold territory in the first place
they are going to fall back on these other sorts of revenue as
well. And so if we really want to conquer this phenomenon we
need to address this.
We have also learned that ISIS and al-Qaeda frequently will
use these private donations and other sorts of external funding
to particularly pay for moving recruits from other countries,
which they have done in the tens of thousands, to battle zones.
And so if we can cut off these two other sources of funding we
may be able to limit the abilities--the ability of the
organization to function even if it still has other sources of
revenue.
Mr. Cassara. It is not only sources of funding, it is
laundering money. I would just like to share a quick anecdote.
About 2002, not too long after 9/11, I had a conversation
with a Pakistani gentleman who I guess you could charitably
describe works in the gray markets.
And I was talking to him about things we are talking about
today. I was talking to him about trade-based money laundering,
over and under valuation, hawala, the misuse of the Afghan
transit trade, et cetera, et cetera.
And he finally turns to me, he says, Mr. John, he says,
don't you know that your enemies are transferring money in
value right under your noses but the West doesn't see it. Your
enemies are laughing at you.
And I think that kind of encapsulated a lot of what this
issue is all about. We have spent an incredible amount of time
the last 14 years since 9/11 looking in many of the wrong
places.
We have been concentrating on financial intelligence,
setting up financial intelligence units, filing suspicious
activity reports, sanctions and designations. We are a nation
of laws.
Our adversaries, the terrorists, they are not. They are
laughing at us, okay. We need to start thinking how they
operate, all right. We need to understand their cultures, their
methods of doing business, their values.
We are making progress but it has taken far too long. I
think we are kind of emphasizing the wrong things. Just an
observation.
Ms. Foley. I would concur with that in a big way. I mean, I
just feel that they have the upper hand because they are
shrewder.
They are--they have studied us. They know how to use
Twitter. They know how to use PR, video, et cetera, to get
their message, to recruit people who hate us, and we--you know,
we won't even talk to them.
I mean, we have got to know our enemies. We have got to use
our cultural expertise to really get serious about engaging
with us.
You know, I mean that is why, you know, I realize Jim was
just a young American but he--they didn't--our FBI and State
didn't use that situation with four Americans being held there
to find out who are these people that are holding our four
Americans.
Why are they holding our--what do they want? They didn't
even try, and how are we going to understand and engage this
enemy if we don't even try to know them? Thank you.
Mr. Higgins. Yield back.
Mr. Poe. Chair recognizes himself for two more questions in
closing.
In addition to the list we started out making about where
terrorist organizations get their money we have to now add
wildlife poaching is another way they get their money, and as
my friend from New York mentioned, human trafficking--they make
money off of human trafficking as well and charities.
Let me ask you something, Dr. Weinberg. You mentioned
specifically about charities in other countries. Do we have
charities in the United States that are not really charities--
they are just a front for money laundering or donations that go
to charity but ends up in the hands of these bad guys?
Mr. Weinberg. Yes. The--most recently U.S. law enforcement
authorities I believe pressed charges against a network of
several Yemeni nationals who were using illicit methods within
the United States to fund-raise for al-Qaeda in the Arabian
Peninsula including defrauding credit card companies, taking
out money and then closing down the accounts.
Also, if you look back historically Hamas used U.S.
territory quite deftly in methods that were exposed during the
Holy Land Foundation trial and many of those individuals have
gone on abroad--people who are linked to the Holy Land
Foundation--to continue to be parts of Hamas' regional
financial network including one case I identified in my written
testimony.
Mr. Poe. And once again, the handful of individuals who do
most of the contributing to foreign terrorist organizations,
giving them money, we know who those people are.
Is that right or not?
Mr. Weinberg. Sometimes.
Mr. Poe. We know who some of them are?
Mr. Weinberg. Right. Part of--part of the challenge is that
the donors are often harder to track down than the operators
themselves, right.
If you look at it almost as a pyramid or something----
Mr. Poe. I understand.
Mr. Weinberg. Right. But if you take out the people in the
middle----
Mr. Poe. Like in a drug trafficking we get the guy who is
selling drugs on the corner. We don't get the guy who is
bringing it into the country or making the money.
Mr. Weinberg. Exactly. The more we can take out the
operatives in the middle. The people at the bottom of the
period are more prone to sting operations and things like that.
Mr. Poe. And Mr. Cassara, going back to your comments,
United States has a financial investigation of money going from
banks to banks, trying to track it to see if it is legitimate
or not.
But your testimony--the terrorists don't operate that way.
Is that--is that a fair statement? They operate through trade
and how much illicit money have they been making with the money
laundering through trade that you discussed?
Mr. Cassara. First of all, I would like to explain that, as
we have talked about here today, terrorists are adversaries.
They diversify just like any criminal organization does, just
like--just like a good investor does, if you will.
You don't put all your eggs in one basket. They diversify.
So they use a wide variety of funding methods and laundering
methods.
Yes, they use banks. They do. But I think there has been an
overemphasis on us targeting Western-style financial
institutions.
In effect, we are still fighting the war on drugs where
large amounts of dirty money sloshed around through Western
financial institutions. In fact, our anti-money laundering
counter measures were put in place, you know, a generation ago
when we were fighting the war on drugs. We have to be a little
bit more nimble right now. Yes, I believe trade is a huge
issue. The Financial Action Task Force calls it one of the
three largest money laundering methodologies in the world.
Mr. Poe. How much money are we talking about?
Mr. Cassara. You are talking--the magnitude of money
laundering in general, according to the International Monetary
Fund, is about 3 to 5 percent of the world GDP or, roughly
speaking in rough numbers, say, $5 trillion a year, okay--
roughly, the size of the U.S. budget.
Mr. Poe. Give or take a trillion or two?
Mr. Cassara. Give or take a trillion or two. You are
talking real money here. They further think that is about
equally divided between--talking suspicious--SUAs, suspicious
unlawful activities, predicate offenses to charge money
laundering, the criminal side--fraud, antiquities smuggling,
human trafficking, narcotics, et cetera, and tax evasion.
So it is about equally divided. Say, it is $4 trillion a
year--about $2 trillion tax evasion and about $2 trillion
traditional criminal predicate offenses. How much of that
involves trade-based money laundering, my personal opinion is,
and I detail that in this book, is--that is the largest money
laundering methodology in the world.
But we don't know because it has never been systematically
examined. We haven't done it in the United States. Our
Department of Treasury has never taken a look at it.
I mean, the Financial Action Task Force did a money
laundering methodology back about 2006 and, you know, they kind
of threw up their hands.
But this--it is not a solvable problem but it is something
that we can do a great deal more to combat because the data
exists in many hidden money laundering systems methodologies
out there today. Say, for example, bulk cash smuggling--it is
very, very difficult to follow that trail.
But this type of thing has data and with modern analytics
today we can do a much better job.
Mr. Poe. All right. I want to thank all four of you for
being here. Oh, you want to ask some more questions?
Mr. Sherman. Yes.
Mr. Poe. Mr. Sherman.
Mr. Sherman. I am inspired by this work. I just want to
bring to the attention of the subcommittee it is not just Qatar
that takes a blind eye. It is also the U.S. Government.
I brought to the attention of both the attorney general and
the IRS the fact that there is a group based in Britain called
Viva Palestinia that gives money to Hamas.
Now, you got to understand that in liberal circles it is
kind of--very liberal leftist circles--it is kind of acceptable
to give money to Hamas.
It is not al-Qaeda, not ISIS but Hamas, okay. And so
brought to their attention the Viva--and then the Web site of
the Interreligious Foundations for Community Organization that
said we will help you get a tax deduction for giving money to
Viva Palestinia so that they can give the money to Hamas.
Brought this to their attention. Not only was there no
criminal action taken but after 5 years there is just a review
of the Interreligious Foundations and if there is anybody in
this room who wants to give a--get a tax deduction and give
money that they can be certain will go to Hamas the Web site is
available to you right now.
So I know we are the international affairs committee and we
criticize a lot of foreign governments. Our own is in this, and
I will say this.
The IRS has published the fact that they are doing a study
on this and they may eventually turn to the Interreligious
Foundation for Community Organization.
In spite of the fact that it has the word interreligious in
it and deny their 501(c)(3) status, maybe by then we will see
peace in the Middle East and Hamas won't be a problem.
Second, on cultural awareness I know Ms. Foley brought that
up. I have been on--the double entendre would be I have been on
a jihad to get the State Department to hire just a few people
who are hired not because they can pass the Foreign Service
exam but because they are real experts in the theology and
jurisprudence of Islam because you do have to understand not
just your enemy but the group that we are trying to win over,
which is the 1.2, 1.3 billion Muslims who ISIS would like to
win over to their side.
And they are pretty rigid over there. You know, if you go
to Princeton they will hire you but if your knowledge--if you
reach one of the highest levels of knowledge in the theology
and jurisprudence of Islam they won't and so their arguments
are basically to tell people ISIS is bad because they kill men,
women and children Yazidis without being in a position to argue
as to whether--to deal with the argument from ISIS that--well,
that is a good thing. Look at their twisted interpretation of
Islamic jurisprudence and theology.
So just when we--while we criticize other governments we
have got a government that will still to this day give you a
tax deduction for giving money that you know goes to Hamas and
we do have some people in the State Department that know some
things about Islam, whatever you can learn kind of from the
outside in a couple of graduate seminars, and we have religious
Muslims but they may be working on trade issues.
There is no department there that says here is how we can
frame our arguments to Islamic governments based on--based on a
real knowledge of Islam.
With that, I think I have gone over time. I yield back. I
haven't gone--I am yielding back a minute early. Put that on
the record. Thank you.
Mr. Poe. I will put it down because that is a record.
But I do want to thank the Members of Congress. I want to
thank you all for being here. I can't emphasize enough how
valuable the information that you have given us is.
We--Ranking Member Keating and I were talking during the
break that we could have a hearing on each one of the issues
that the four of you talked about because it is important
information and we appreciate the fact that you have been here
and have given us this information.
Once again, Ms. Foley, thank you so much for being here. I
agree with the comment that was made--your son probably got his
spunk from you, which is--that is a compliment, by the way.
So I thank all of you all and if you have any other
information that you would like to share with the committee
feel free to do that. Give it to me and I will share it with
the other members of the committee.
The committee now is adjourned.
[Whereupon, at 4:10 p.m., the subcommittee was adjourned.]
A P P E N D I X
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