[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
DOLLARS AGAINST DEMOCRACY: DOMESTIC
TERRORIST FINANCING IN THE
AFTERMATH OF INSURRECTION
=======================================================================
VIRTUAL HEARING
BEFORE THE
SUBCOMMITTEE ON NATIONAL SECURITY,
INTERNATIONAL DEVELOPMENT
AND MONETARY POLICY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 25, 2021
__________
Printed for the use of the Committee on Financial Services
Serial No. 117-6
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
43-993 PDF WASHINGTON : 2021
HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado ANN WAGNER, Missouri
JIM A. HIMES, Connecticut ANDY BARR, Kentucky
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
JUAN VARGAS, California TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey LEE M. ZELDIN, New York
VICENTE GONZALEZ, Texas BARRY LOUDERMILK, Georgia
AL LAWSON, Florida ALEXANDER X. MOONEY, West Virginia
MICHAEL SAN NICOLAS, Guam WARREN DAVIDSON, Ohio
CINDY AXNE, Iowa TED BUDD, North Carolina
SEAN CASTEN, Illinois DAVID KUSTOFF, Tennessee
AYANNA PRESSLEY, Massachusetts TREY HOLLINGSWORTH, Indiana
RITCHIE TORRES, New York ANTHONY GONZALEZ, Ohio
STEPHEN F. LYNCH, Massachusetts JOHN ROSE, Tennessee
ALMA ADAMS, North Carolina BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan LANCE GOODEN, Texas
MADELEINE DEAN, Pennsylvania WILLIAM TIMMONS, South Carolina
ALEXANDRIA OCASIO-CORTEZ, New York VAN TAYLOR, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
Charla Ouertatani, Staff Director
Subcommittee on National Security, International
Development and Monetary Policy
JIM A. HIMES, Connecticut, Chairman
JOSH GOTTHEIMER, New Jersey FRENCH HILL, Arkansas, Ranking
MICHAEL SAN NICOLAS, Guam Member
RITCHIE TORRES, New York LEE M. ZELDIN, New York
STEPHEN F. LYNCH, Massachusetts ROGER WILLIAMS, Texas
MADELEINE DEAN, Pennsylvania TOM EMMER, Minnesota
ALEXANDRIA OCASIO-CORTEZ, New York WARREN DAVIDSON, Ohio
JESUS ``CHUY'' GARCIA, Illinois ANTHONY GONZALEZ, Ohio
JAKE AUCHINCLOSS, Massachusetts VAN TAYLOR, Texas, Vice Ranking
Member
C O N T E N T S
----------
Page
Hearing held on:
February 25, 2021............................................ 1
Appendix:
February 25, 2021............................................ 35
WITNESSES
Thursday, February 25, 2021
Boukadoum, Iman, Senior Program Manager, Fighting Hate and Bias,
The Leadership Conference on Civil and Human Rights............ 4
Brooks, Lecia, Chief of Staff, Southern Poverty Law Center....... 6
Gartenstein-Ross, Daveed, CEO, Valens Global..................... 12
Glaser, Daniel L., Global Head, Jurisdictional Services, and Head
of Washington, DC Office, K2 Integrity; Senior Advisor at the
Foundation for Defense of Democracies; and former Assistant
Secretary for Terrorist Financing and Financial Crimes, U.S.
Department of the Treasury..................................... 8
Rogers, Daniel, Co-Founder and Chief Technology Officer, Global
Disinformation Index........................................... 10
APPENDIX
Prepared statements:
Boukadoum, Iman,............................................. 36
Brooks, Lecia,............................................... 42
Gartenstein-Ross, Daveed..................................... 58
Glaser, Daniel L............................................. 97
Rogers, Daniel............................................... 102
DOLLARS AGAINST DEMOCRACY: DOMESTIC
TERRORIST FINANCING IN THE
AFTERMATH OF INSURRECTION
----------
Thursday, February 25, 2021
U.S. House of Representatives,
Subcommittee on National Security,
International Development
and Monetary Policy,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:02 a.m.,
via Webex, Hon. Jim A. Himes [chairman of the subcommittee]
presiding.
Members present: Representatives Himes, Gottheimer, San
Nicolas, Torres, Lynch, Dean, Ocasio-Cortez, Garcia of
Illinois, Auchincloss; Hill, Zeldin, Williams of Texas, Emmer,
Davidson, Gonzalez of Ohio, and Taylor.
Ex officio present: Representative Waters.
Chairman Himes. The Subcommittee on National Security,
International Development and Monetary Policy will come to
order. Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time. Also, without
objection, members of the full Financial Services Committee who
are not members of this subcommittee are authorized to
participate in today's hearing.
As a reminder, I ask all Members to keep themselves muted
when they are not being recognized by the Chair. This will
minimize disturbances while Members are asking questions of our
witnesses. The staff has been instructed not to mute Members,
except when a Member is not being recognized by the Chair and
there is inadvertent background noise.
Members are also reminded that they may only participate in
one remote proceeding at a time. If you are participating
today, please keep your camera on. And if you choose to attend
a different remote proceeding, please turn your camera off.
If Members wish to be recognized during the hearing, please
identify yourself by name to facilitate recognition by the
Chair.
Today's hearing is entitled, ``Dollars Against Democracy:
Domestic Terrorist Financing in the Aftermath of
Insurrection.''
I now recognize myself for 4 minutes to give an opening
statement.
As we heard from Merrick Garland during his confirmation
hearing earlier this week, the country faces a, ``more
dangerous period in the wake of January 6th than we did after
the Oklahoma City bombing, the single deadliest act of domestic
terrorism in American history.'' This threat is real and it is,
therefore, incumbent on all of us on this subcommittee to look
at the ways that these extremist groups fund not only their
violent activities, but their recruitment and radicalization
efforts as well.
In the wake of the attacks of September 11th, we recast the
entire Federal Government, and worked feverishly to defund
terrorist extremes. To effectively disrupt domestic extremist
groups, we need to better understand their financing.
In today's hearing, I want us to focus on three important
areas.
First, to better understand how these groups are raising
money. Unlike ISIS, for example, these organizations are not
pyramid-shaped, where funding comes from a handful of easily
disruptible areas. An online fundraising drive for a legitimate
charity, and one that helps support an extremist group, can
look very similar. Some extremist groups are eschewing the
traditional banking sector in favor of cryptocurrency, thereby
avoiding our traditional methods of disrupting extremist
financing.
Second, to give serious thought to where our efforts on
disruption are best spent. Terrorist attacks rely on their
asymmetrical nature to be effective. Many of the domestic
terrorist attacks in recent memory have been self-funded. The
bomb constructed by Timothy McVeigh cost less than $5,000.
However, recruitment and radicalization efforts are often more
resourced and time-intensive. Targeting these efforts may
provide an avenue for preventing future attacks.
Third, we need to be conscientiously mindful of the civil
liberties concerns at play here. Unlike international extremist
groups, law enforcement is constrained by the Constitution when
dealing with domestic extremists. Balancing the desire to give
law enforcement the tools necessary to disrupt these groups,
with the need to respect the rights of all Americans in the
Constitution to which we have all pledged an oath, is
essential.
I will quickly note, in the spirit of my opening statement
and the subcommittee's first hearing, that this hearing is not
about, ``what-aboutism'' or ``both-sidesism.'' The topic is
domestic terrorism, and it must be divorced from any specific
ideology.
While we all lived through a brutal event on January 6th
undertaken by right-wing extremists, no location on the
political spectrum has a monopoly on extremism or violence.
Focusing on one group to score political points doesn't do
anything to help us solve the very real problem at hand, a
problem that could get worse over time, as January 6th
demonstrated to so many groups that they could, in fact, make
the news and be effective in their dark ways.
Finally, I would like to thank our panel of witnesses whose
expertise and experience in their respective fields is
unparalleled. I sincerely appreciate your assistance in
tackling this difficult issue.
The Chair now recognizes the ranking member of the
subcommittee, Mr. Hill, for 5 minutes for an opening statement.
Mr. Hill. I thank the chairman, and I appreciate you
holding this hearing, and for your opening statement, and I
appreciate the witnesses lending their expertise today.
I know this is a topic that touches all members on this
subcommittee and across the Capitol, for the events that
transpired on January 6th affected all of us deeply. While we
have discussed domestic terrorism financing in the past, this
hearing will hit closer to home than the previous ones.
I look forward to the constructive dialogue on this topic
as a way to bring both sides of the aisle closer together. The
Majority has made the decision to convene this hearing in the
aftermath of the horrific destruction and mayhem of January
6th. All of us are saddened and outraged by the actions of
those involved in that evil and devastating act. All of us
condemn the rioters' destruction and malice towards the
peaceful conduct of the business of democracy here in the
people's House.
But I would be remiss if I didn't note that extremist
events like this have been caused by both the far left and the
far right all across our country. Even this week, in Senate
testimony, we are learning important details about the
premeditation of the attack and the weakness in the Capitol
security planning and preparation.
To honor the rank and file men and women of law
enforcement, I have sponsored a resolution with my good friend,
Representative Ed Perlmutter, to celebrate the bravery of the
Capitol Police, the D.C. Metropolitan Police, and other law
enforcement officers. These men and women protected us with
courage, and they should not be overlooked. I am pleased to
report that this resolution has strong bipartisan support, with
over 133 co-sponsors.
It is important to note, though, that this is not the first
time that our Nation's Capitol and elected officials have been
targeted. I will spare the committee a long history lesson, but
I will mention that prior to the events of January 6th, there
have been 6 other attacks on the Capitol involving extremists,
ranging from White supremacists to anarchists. Most in this
room will remember the members of this committee and our
colleagues who were attacked during the Congressional baseball
game practice in 2017, committed by a terrorist fueled by rage
against Republicans.
Unfortunately, as the chairman said, extremism, on both the
radical left and radical right in our country, is not new, and
it affects all Americans. It is important that we investigate
the funding for such attacks and mitigate extremists' ability
to access it. Cutting off funding will inhibit their ability to
grow and expand their abilities and scope.
We need to craft bipartisan solutions to ensure that the
violence and hatred that fuel the attacks does not happen
again. We must use our existing extensive laws and law
enforcement operation and cooperation to identify and prosecute
those on the left and right who attempt to use terror and
violence.
I appreciate the chairman, and in a final comment, I would
hope--I see our distinguished Full Committee Chair on the
call--I would urge our Chair, when we are in Washington to--I
would invite her consideration of an in-person hearing.
And with that, Mr. Chairman, I yield back the balance of my
time.
Chairman Himes. The Chair thanks the ranking member for his
statement, and now recognizes the Chair of the Full Committee,
the gentlewoman from California, Chairwoman Maxine Waters, for
1 minute.
Chairwoman Waters. Thank you very much, Mr. Chairman. I
think this is extraordinarily important. I thank you for
holding this hearing.
We are here against the backdrop of the January 6th
insurrection, a deplorable, yet predictable, display of White
supremacists such as the Proud Boys, the Oath Keepers, QAnon,
and others, and nationalist violence incited by President Trump
against the members of this body and against democracy itself.
Unfortunately, the violence that we saw on the 6th is not
new, but arises from our nation's legacy of violence towards
people of color, religious minorities, LGBTQ persons, women,
and immigrants; from the KKK and lynching, to the terror in
Charlottesville, Pittsburgh, El Paso, and Escondido, White
supremacists and nationalism are not new threats.
But there is hope. The radicalization, recruitment,
training, and operations that made January 6th possible also
had a money trail, which can and must be targeted to turn the
tide against future attacks.
Thank you. And I yield back the balance of my time.
Chairman Himes. Thank you, Madam Chairwoman.
We now welcome the testimony of our distinguished
witnesses, and we have five witnesses today. First, Ms. Iman
Boukadoum, who is a Senior Program Manager at The Leadership
Conference on Civil and Human Rights; second, Ms. Lecia Brooks,
who is Chief of Staff at the Southern Poverty Law Center;
third, Mr. Daniel Glaser, who is Global Head of Jurisdictional
Services and head of the Washington, D.C., office of K2
Integrity, a Senior Advisor at the Foundation for Defense of
Democracies, and a former Assistant Secretary for Terrorist
Financing and Financial Crimes at the U.S. Department of the
Treasury; fourth, Dr. Daniel Rogers, who is co-founder and
chief technology officer of the Global Disinformation Index;
and fifth, Dr. Daveed Gartenstein-Ross, who is chief executive
officer at Valens Global.
Witnesses are reminded that your oral testimony will be
limited to 5 minutes. You should be able to see a timer on your
screen that will indicate how much time you have left, and a
chime will go off at the end of your time. I would ask that you
be mindful of the timer, and quickly wrap up your testimony if
you hear the chime, so that we can be respectful of both the
witnesses' and the committee members' time.
And without objection, your written statements will be made
a part of the record.
Ms. Boukadoum, you are now recognized for 5 minutes to give
an oral presentation of your testimony.
STATEMENT OF IMAN BOUKADOUM, SENIOR MANAGER, FIGHTING HATE AND
BIAS, THE LEADERSHIP CONFERENCE ON CIVIL AND HUMAN RIGHTS
Ms. Boukadoum. Chairman Himes, Ranking Member Hill, and
distinguished members of the subcommittee, thank you for
holding this timely hearing today.
Last month's violent insurrection, heavily fueled by White
supremacy and White nationalism, shocked the world, but it
didn't shock me. It didn't shock my community or other
marginalized communities, because we are not new to White
nationalist violence. Personally, as a Muslim and an Algerian
American, I appreciate the opportunity to be heard today as we
wrestle with the aftermath of this horrific day.
We echo the sense of urgency shared by many of you today in
Congress regarding the very real threat of White nationalist
violence, and I would just note that our coalition has been
ringing the alarm relating to White nationalist violence for
generations.
We know, however, that even well-intentioned national
security laws are invariably weaponized against Black, Brown,
and Muslim communities, and that White nationalist violence is
not prioritized, making that policy failure the fundamental
reason for what transpired on January 6th, not a lack of legal
authority.
For this reason, we oppose any legislation that would
create new charges for domestic terrorism or any enhanced or
additional criminal penalties. The Federal Government,
including the Treasury Department, has many tools at its
disposal to investigate. And also, the FBI and DOJ have 50
terrorism-related statutes and over a dozen criminal statutes
that they can use. They just need to use them to target White
nationalist violence.
And, of course, we know that White nationalist violence and
violence inspired by Muslims or ISIS and al-Qaida-inspired
violence is very differently treated in this country. Global
policing of charitable giving by Muslims, for example, in my
community, which is a core part of my faith, has led to the
effective forfeiting of our First Amendment rights.
The failure to prioritize White nationalist crimes and the
over-policing of innocuous financial transactions by mosques or
those originating from the Middle East or people with Middle
Eastern names, has taken attention away from the clear and
present threat of White nationalist violence percolating all
around us, and countless innocent people, particularly in the
Muslim community, as I said, have effectively lost their right
to perform religious duties for decades.
What is clear is that the Treasury Department and other
Federal law enforcement agencies already have vast
administrative and statutory authorities at their disposal
which they routinely use to disrupt financing relating to
clandestine activity by freezing bank accounts and stopping
those transactions.
And what history demonstrates is that providing additional
national security authority to fight domestic terrorism would
devastate already over-policed and over-surveilled communities
of color and Muslims.
I would like to sum up with a few recommendations.
First, the Jabara-Heyer NO HATE Act is an important piece
of legislation that must be passed. It centers communities, and
it would help with information-sharing relating to hate crimes,
and would allow the Treasury Department to trace financial ties
to White nationalist violence.
Second, the the Domestic Terrorism Prevention Act (DTPA) is
a piece of legislation that we have endorsed and we believe
will also help with information-sharing, including with the
Treasury Department, to enhance clamping down on White
nationalist violence.
And, third, we believe that hate crimes data must be
reported and mandated for public consumption and that
government leaders must be able to see what is happening across
our country within the hate crime space.
I will just conclude by saying that history has taught us
that national security laws invariably harm the very
communities they are supposed to protect. From COINTELPRO, the
FBI's unlawful domestic surveillance operation that the church
committee demonstrated in Congress, was shamefully used against
Dr. Martin Luther King, Jr., and other civil rights leaders in
the 1960s; and it, too, was justified as a national security
program.
And now, after 9/11, we have seen similar frameworks used
to unjustly target and harm Arabs, Muslims, and others,
treating us and our religion as suspicious, and compromising
our First Amendment rights, freedoms, and due process rights.
Adding national security authorities will only exacerbate
these challenges.
Thank you. And I am happy to answer any questions.
[The prepared statement of Ms. Boukadoum can be found on
page 36 of the appendix.]
Chairman Himes. Thank you, Ms. Boukadoum.
Ms. Brooks, you are now recognized for 5 minutes.
STATEMENT OF LECIA BROOKS, CHIEF OF STAFF, SOUTHERN POVERTY LAW
CENTER
Ms. Brooks. Good morning, Chairman Himes, Chairwoman
Waters, Ranking Member Hill, and members of the subcommittee.
My name is Lecia Brooks, and I serve as the chief of staff for
the Southern Poverty Law Center (SPLC).
For 50 years, SPLC has been a catalyst for racial justice
in the South and beyond. We work in partnership with
communities to dismantle White supremacy, strengthen
intersectional movements, and advance the human rights of all
people. The SPLC began tracking White supremacist activity in
the 1980s. Each year, since 1990, we have conducted a census of
hate groups operating across the U.S. as part of our annual
Year in Hate Extremism report. Our 2020 report, released this
month, documented a decline in the number of hate groups, but
not a decline in the strength and momentum of their movement.
As the January 6th Capitol Hill siege affirmed, their
threat to our democracy has not diminished. Far-right
extremists are exploiting internet technology to create a
broader, more decentralized, and more dangerous movement. The
proliferation of numerous internet platforms has allowed
individuals to engage with potentially violent movements, like
QAnon and Boogaloo, without being card-carrying members of a
particular group.
Our testimony outlines how this movement finances itself in
the decentralized way in which they now operate. The funding
and financing of hate groups in this decentralized landscape is
also changing in important ways. In the past, hate groups
raised money by charging dues, selling products, or requiring
the purchase of uniforms. Today, some White nationalist groups
and personalities are raising funds through the distribution of
propaganda itself.
In November, SPLC researchers reported that dozens of
extremist groups were earning thousands of dollars per month on
a popular live-streaming platform called DLive. As the post-
election period became dominated by former President Trump's
false assertions that the election was fraudulent, these DLive
streamers shifted to video streaming at in-person events
branded with the slogan, ``Stop the Steal.'' Some of these same
individuals were featured by House impeachment managers as key
perpetrators of the violence on January 6th. You see, they had
used DLive to live-stream the events inside the Capitol and on
the grounds.
Crowdfunding is also being exploited by hate groups to earn
money in this new decentralized landscape. Crowdfunding sites
played a critical role in the Capitol insurrection, providing
monetary support that allowed people to travel to Washington,
D.C. They have also played a crucial role in raising hundreds
of thousands of dollars in legal fees for extremists.
The violent insurrection at the U.S. Capitol on January 6th
should serve as a wake-up call for Congress, the Biden
Administration, internet companies, law enforcement, and public
officials at every level. But we had wake-up calls before, many
of them, in fact: Charleston, in 2015; Charlottesville, in
2017; and Christchurch, New Zealand, and El Paso, in 2019.
As we all saw last month, we can no longer afford inaction.
Some technology companies have taken steps in the right
direction to combat the rise of hate and extremism on these
platforms, but both government and internet companies must do
far more.
Let me close by highlighting five policy recommendations we
included in our testimony:
One, tech companies must create and enforce terms of
service to ensure that they do not become platforms for hate.
They should prevent their sites from being used by extremist
organizations to raise money for their illegal actions.
Two, these companies should commit to much more
transparency and regular outside audits to measure financial
harms caused by their platforms.
Three, Congress should prioritize the funding of programs
for research into technologies that can be used to detect and
prevent online financial harms while preserving human rights.
Four, Congress should reject legislation to create a new
Federal criminal domestic terrorism statute. If passed as
prologue, such a statute could be used to expand racial
profiling, or even be wielded to surveil and investigate
communities of color and political opponents in the name of
national security.
Finally, we should make concerted efforts across the
government to improve Federal hate crime data collection,
training, and prevention. Data drives policy. We cannot address
hate violence unless we measure it properly.
Thank you for holding this important hearing. The SPLC
looks forward to working with you as you continue to focus your
urgent attention on this important issue.
[The prepared statement of Ms. Brooks can be found on page
42 of the appendix.]
Chairman Himes. Thank you, Ms. Brooks.
Mr. Glaser, you are now recognized for 5 minutes.
STATEMENT OF DANIEL L. GLASER, GLOBAL HEAD, JURISDICTIONAL
SERVICES, AND HEAD OF WASHINGTON, DC OFFICE, K2 INTEGRITY;
SENIOR ADVISOR AT THE FOUNDATION FOR DEFENSE OF DEMOCRACIES;
AND FORMER ASSISTANT SECRETARY FOR TERRORIST FINANCING AND
FINANCIAL CRIMES, U.S. DEPARTMENT OF THE TREASURY
Mr. Glaser. Thank you, Chairman Himes, Ranking Member Hill,
and distinguished members of the subcommittee. Thank you for
the opportunity to appear before you today to talk about how
the U.S. Government can employ similar tools and strategies
against White nationalist and other domestic terrorist groups
as it has employed against global jihadist groups over the past
2 decades.
This is a personal issue for me. During my time at the
Treasury Department, I fought to cut off funding to terrorist
groups such as al-Qaida, the Islamic State, and Hezbollah. As a
Deputy Assistant Secretary in the Bush Administration, and
eventually as the Assistant Secretary for Terrorist Financing
in the Obama Administration, my primary responsibility was to
lead the design and implementation of strategies, to attack the
financial networks of these groups, and other threats to our
country's national security. And while we should never let down
our guard with respect to those still-potent terrorist
organizations, it has become tragically clear that there are
domestic extremist groups that, in some ways, present an even
greater threat to our ideals and our democracy. We have the
responsibility to target those groups with the same
determination, creativity, and sense of purpose that we
displayed in the years following 9/11.
To be sure, counter-illicit finance strategies are not
silver bullets, and there are practical and constitutional
limitations to domestic action that do not arise in the global
context. But any comprehensive response to a national security
threat must include a strategic financial component. It is my
hope and expectation that the new leadership at the Treasury
Department will turn its attention to precisely that challenge.
From the outset, let's be clear, that the purpose of a
counter-illicit finance strategy is not to replace the
traditional law enforcement tools which will remain the
foundation of any domestic effort.
Supplementing those efforts, a counter-illicit finance
strategy should seek to hinder the ability of extremist groups
to use the financial system to mask their identities and to
raise and move funds. The first step must be to understand the
typologies and methods by which such groups raise and move
funds and to map out their financial networks.
This first step should be followed by two general
categories of actions: first, offense, undermining the
financial networks that support these groups; and second,
defense, taking systemic action within the financial system to
make it less vulnerable to abuse by these groups.
It is sometimes stated that extremist groups are less
vulnerable to financial measures because of their informal and
decentralized structure. I believe that this is a hypothesis
that is yet to be tested. Any group that engages in organized
activity needs to raise and move funds, and when those
activities extend nationwide or globally, it only increases
such groups' reliance on the financial system.
The U.S. Government should undertake a comprehensive effort
to understand how these extremist groups are accessing the
financial system and, to the extent possible, to map their
financial networks. Once the financial networks and activities
of the extremist groups are better understood, the U.S.
Government should consider the application of targeted
financial measures. The U.S. currently has all the authority it
needs to apply targeted financial sanctions against foreign
extremist groups, and it began to do so last spring with the
designation of the Russian Imperial Movement.
Unfortunately, the U.S. has yet to target additional
foreign groups. And in contrast to previous campaigns against
jihadist groups, Treasury has not followed up the initial
Russian Imperial Movement designation with a financial pressure
campaign involving waves of sanctions seeking to dismantle
facilitation networks. I encourage the U.S. Government to
pursue such campaign as a priority matter.
Practical and constitutional constraints give the U.S.
Government far less ability to apply targeted financial
measures against domestic groups. Congress should consider
legislation allowing for sanctions like authorities to protect
the U.S. financial system from abuse by domestic extremist
groups. Such authorities will need to be tailored to ensure
that the government complies with constitutional requirements,
including First Amendment restrictions on how groups are
targeted and due process restrictions on how such measures are
applied. One consideration could be to forego the asset freeze
that is usually associated with sanctions in favor of some more
limited measures.
There are also measures that the U.S. Government can take
today to make the U.S. financial system less vulnerable to
abuse by extremist groups. The United States has a robust anti-
money-laundering and countering the financing of terrorism
regime, but it can always be fine-tuned and adjusted to address
new vulnerabilities, including those presented by domestic
extremist groups.
The potential measures in Treasury's toolbox include: the
issuance of guidance to financial institutions on financial
typologies, methodologies, and red flags; the establishment of
private-public partnerships; the use of information-sharing
authorities; and the use of geographic targeting orders.
Taken together, these measures will strengthen the ability
of financial institutions to identify, report, and impede the
financial activity of domestic extremist groups, and will
ensure that the U.S. financial system is a hostile environment
for these groups.
Thank you, again, for the opportunity to testify, and I
look forward to answering your questions.
[The prepared statement of Mr. Glaser can be found on page
97 of the appendix.]
Chairman Himes. Thank you, Mr. Glaser.
Dr. Rogers, you are now recognized for 5 minutes.
STATEMENT OF DANIEL ROGERS, CO-FOUNDER AND CHIEF TECHNOLOGY
OFFICER, GLOBAL DISINFORMATION INDEX
Mr. Rogers. Chairman Himes, Ranking Member Hill, Chairwoman
Waters, and members of the subcommittee, good morning, and
thank for the opportunity to speak before you and discuss the
funding mechanisms of these domestic violent extremist groups.
I am the co-founder and chief technology officer of the
Global Disinformation Index (GDI), a nonprofit focused on
catalyzing change in the technology industry to disrupt online
disinformation.
Last fall, my colleague, Ben Decker, and our team at the
GDI collaborated with the Institute for Strategic Dialogue to
conduct a study entitled, ``Bankrolling Bigotry'', to examine
the funding mechanisms of American hate groups.
Many of the groups implicated in the events of January 6th
are the same ones that we examined last year in our study. This
is why I sit before you today to discuss a little bit about
what we learned about how technology and payments companies
enable groups like those that participated in the insurrection
to operate.
These groups leverage the internet as a primary means of
disseminating their toxic ideologies and soliciting of funds.
One only needs to search Amazon or Etsy for the term,
``QAnon'', to uncover shirts, hats, mugs, books, and other
paraphernalia that both monetize and further popularize the
domestic violent extremist threat. Images from that fateful day
last month are rife with sweatshirts that say, ``Camp
Auschwitz'', that, until recently, were for sale on websites
like Teespring and CafePress.
As we speak, at least 24 individuals indicted for their
role in the January 6th insurrection, including 8 members of
the Proud Boys, have used crowdfunding site GiveSendGo to raise
nearly a quarter of a million dollars in donations. And it is
not just about the money. This merchandise acts as sort of like
a team jersey that helps these groups recruit new members and
foment further hatred towards their targets.
We analyzed the digital footprints of 73 groups across 60
websites, and 225 social media accounts and their use of 54
different online fundraising mechanisms, including 47 payment
platforms in 5 different cryptocurrencies, ultimately finding
191 incidences of hate groups using online fundraising services
to support their activities.
The funding mechanism included both primary platforms like
Amazon, intermediary platforms such as Stripe or Shopify,
crowdfunding sites like GoFundMe, payment facilitators like
PayPal, monetized content streaming services such as YouTube
Super Chats, and cryptocurrencies such as Bitcoin.
All of these payment mechanisms were linked to websites or
social media accounts on Facebook, Instagram, YouTube,
Telegram, LinkedIn, Pinterest, Gab, BitChute, and others. The
sheer number of companies I just mentioned is the first clue to
the scale and the scope of the problem. This is not an issue of
any one individual company, but, rather, a systemic problem of
hate and bigotry exploiting an entire industry, and even
government policy, to raise funds, peddle extremist ideologies,
and commit acts of violence.
A number of conclusions stood out to us in performing this
work. For starters, over half of the platforms we identified
already have explicit policies against hate and extremism that
are simply not enforced. We also found that a large fraction of
the groups we studied have approved tax-exempt status with the
IRS. A full 100 percent of anti-Muslim groups, 75 percent of
anti-immigrant groups, and 70 percent of anti-LGBTQ groups have
501(c)(3) or 501(c)(4) status.
Over 1/3 of the militia groups that we identified,
including the Oath Keepers, whose leadership was recently
indicted on charges related to January 6th, have tax-exempt
status.
This status gives them access to a whole spectrum of
charity fundraising tools from Facebook donations to Amazon
Smile to the point where the most common fundraising platform
we identified across all of our data was Charity Navigator.
These platforms are reticent, to say the least, to make
unilateral decisions that go against IRS determination.
The problem of hate groups exploiting the Tax Code goes
back decades, and stems from a combination of a lack of
resources at the IRS to properly enforce compliance, as well as
long-standing efforts by some to exploit the charity rules for
political, and, now, extremist purposes.
But the issue has become more urgent in the wake of January
6th. In the days leading up to the insurrection, the Oath
Keepers' founder, Stewart Rhodes, appeared on a podcast and
solicited charitable donations to the Oath Keepers Educational
Foundation. It can only be presumed that these funds, which
listeners were notably able to deduct from their Federal taxes,
went to transporting and lodging members of the group slated to
participate in the ensuing riots.
Private industry must also step up and do more. Since the
publication of our report last October, we have documented at
least 17 actions taken by platforms against the groups we have
enumerated. For example, four of the six payment mechanisms
routing funds to the Oath Keepers have been blocked. Amazon has
even removed them from Amazon Smile. But 17 actions out of 200
instances we observed speaks to the rampant way that it has
been allowed to persist. In fact, while most platforms have
removed the Oath Keepers, payment facilitator RallyPay still,
to this day, services the group's fundraising needs, and has
shown no signs of responding to public pressure to stop.
More must be done. Industry-wide standards must be set, and
enforcement across both the private and public sector must be
stepped up.
Chairman Himes, Ranking Member Hill, Chairwoman Waters, and
members of the subcommittee, thank you for your time, and I
welcome your questions.
[The prepared statement of Dr. Rogers can be found on page
102 of the appendix.]
Chairman Himes. Thank you, Dr. Rogers.
Dr. Gartenstein-Ross, you are now recognized for 5 minutes.
STATEMENT OF DAVEED GARTENSTEIN-ROSS, CEO,
VALENS GLOBAL
Mr. Gartenstein-Ross. Domestic violent extremism is today
uniquely posed for growth. Opportunities are given by our
information environment by seemingly intractable global
problems that governments appear incapable of addressing, by a
nation riven by its differences, and by an age where ethics and
identity are in constant flux.
Chairman Himes, Ranking Member Hill, Chairwoman Waters, and
distinguished members of the subcommittee, on behalf of Valens
Global, it is an honor to appear before you today. I think it
is obvious how the backdrop I describe represents an attractive
recruiting environment for any extremist group.
This panel's consensus is that White supremacist extremism,
or WSE, is the most pressing present threat. This is not just
the panelists' opinions. Multiple U.S. Government assessments
validate this view, as do relevant statistics, but White
supremacist extremism is not the only concern in the domestic-
violent extremist, or DVE space.
In addition to documenting relevant WSE threat actors, my
written testimony details street violence, assaults, arson, and
intimidation employed by another militant stream. There has
been a general rise in extremism.
The opening remarks of the chairman and the ranking member
rightly emphasized that we are living through a dynamic
multifaceted ecosystem of extremism. Our divisions could plunge
the U.S. into serious conflict, or even fragmentation.
Scholars have discussed reciprocal radicalization, where
opposite extremes strengthen both sides and give average people
a reason to drift toward extremes. Reciprocal radicalization
shows that the power and success of groups aligned with one
extremist ideology fuels ostensibly opposing groups. Though
different forms of extremism can thrive off one another,
society suffers.
Our policies must be appropriate to this environment. Any
policies to combat DVE should be narrowly targeted and rights-
protected. Unfairly targeting only one ideology, or seeking to
criminalize constitutionally protected behaviors, may push the
country into deepening conflict. So, what can be done?
First, the U.S. Government should consider designating
additional WSE groups as terrorist organizations. I single out
WSE groups here because of the level of transnationalism in the
movement, which is a prerequisite for designation under current
law. The State Department's designation last year of the
Russian Imperial Movement was significant, and it is worth
considering further designations of violent groups that satisfy
the criteria.
Second, any current discussion of DVE financing will touch
about a domestic designation statute allowing designation of
purely domestic groups. This is the most direct way of
addressing DVE groups' financing, potentially criminalizing the
act of funding them and letting authorities clamp down on their
assets. Yet, such a statute would be fraught with civil
liberties concerns. Any such statute must be viewpoint-neutral
with designations corresponding to the threat groups posed, not
to the ideas that they espouse. The statute must be clear about
predicate acts that could result in designation, and that
threshold for designation should be relatively high.
Third, [inaudible] more rigorously mapped relevant DVE
groups and their finances. The current consensus among DVE
experts is that these groups are relatively fluid and devoid of
organizational hierarchy. This may be so, but there is a
tendency for experts to see groups as disorganized or non-
hierarchal, when they have a hidden structure, something to
which Mr. Glaser's testimony alluded. Our current understanding
of DVE group structure and funds may be incomplete, and in the
digital age, fluid structures can quickly morph into more
concrete ones. Further research may present further policy
options.
Finally, the U.S. Government should devote resources to
better understanding reciprocal radicalization and related
phenomenon, fringe fluidity, the transition of an individual or
group from one extremist ideological stream to another. Better
understanding of these dynamics would afford us a better
understanding of how violent extremists interact with each
other.
In conclusion, this hearing refers to the events of January
6th as an insurrection. Anybody who has been in an insurgency
or a civil war situation knows that it is essential to reduce
the potential pool from which militant factions can draw.
Everyone who is a part of this hearing--Members of Congress,
experts, media, spectators--should understand that we are all a
part of this story. Our work is not to score partisan points,
but to make this democracy more resilient to the challenges it
confronts.
With the divisions we have, with today's unprecedented
ability to mobilize for good or ill, we need to reduce the
number of people who might try to impose their will on the rest
of us by force.
Thank you.
[The prepared statement of Dr. Gartenstein-Ross can be
found on page 58 of the appendix.]
Chairman Himes. Thank you, Dr. Gartenstein-Ross.
We now come to the member question portion of the hearing.
I thank all of the witnesses for that comprehensive testimony,
and now recognize myself for 5 minutes for questions.
One thing that struck me is that we heard from five
excellent witnesses, and I don't believe I heard the word,
``cybercurrency'' once. It comes up a lot with my constituents.
It comes up a lot in different contexts. So just to keep some
organization, let me ask two of the witnesses to just offer a
brief perspective on how the committee should think about
cybercurrency as an anonymous and potentially untraceable
source of financing.
Let me start with Ms. Brooks. Any thoughts?
Ms. Brooks. I invite my colleague, Dr. Rogers, to take the
first shot at that.
Mr. Rogers. Okay. Thank you. Thanks, Congressman. That is a
very interesting question, and one that was included in our
study. We looked at five different cryptocurrencies and their
involvement in transferring funds to these groups. They are
definitely there. They are definitely part of the fundraising
strategies. What we noticed was that there was a strong
correlation with the kind of explicit extremism of the group
and their use of cryptocurrencies. So, maybe less extreme
groups, or more cryptically extreme groups, for lack of a
better word, had a more dominant use of traditional fundraising
platforms that touched the kind of mainstream financial system.
And what would happen is as they were deplatformed off of those
tools, those sites, they would migrate into the use of
increasingly anonymized cryptocurrencies.
I should also point out that cryptocurrencies, I like to
call them pseudonymous, not necessarily anonymous, and there
are efforts and ways to track transactions, the challenge being
attributing, say, a particular cryptocurrency wallet to a
particular actor, but we definitely saw the use of
cryptocurrencies generally behind the most extreme groups that
we studied.
Chairman Himes. Thank you, Dr. Rogers.
I do have one other question, if any of the other witnesses
have a different or additional perspective on cryptocurrencies,
let me just invite anyone who wants to chime in.
Mr. Glaser. If I could chime in, Mr. Chairman?
Chairman Himes. Yes, please.
Mr. Glaser. This is Danny Glaser talking.
With respect to cryptocurrencies, I think it is important
to remember that if you want to be able to use a cryptocurrency
in the real economy to any scale, at some point, it does need
to be converted into actual currency, into dollars. That is the
place where the Treasury Department does regulate
cryptocurrencies, and cryptocurrency exchanges are regarded as
money services businesses. They have full customer due
diligence requirements. They have full money-laundering program
requirements. They have reporting requirements.
The U.S. Treasury Department, just last month, issued a
proposed rule relating to unhosted wallets of cryptocurrencies,
and that is out for notice and comment right now. It addresses
the particular issue of wallets that are not hosted on a
particular exchange. I think it is an important rule that is
out there, and I do encourage people to take a look at it. The
comment period closes in May, and then, hopefully, Treasury
will be able to take regulatory action to close that particular
vulnerability.
Chairman Himes. Thank you, Mr. Glaser.
I actually have an additional question for you, and I don't
have a lot of time. One of the things that struck me about the
testimony is that there weren't really calls for additional
laws. In fact, two of our witnesses urged us to avoid that.
Mr. Glaser, you, though, suggested something new that I
would like to give you, maybe, the 42 seconds I have left to
elaborate on. You said you were hopeful for sanctions like
authorities against domestic actors. You did nod to
constitutional and civil liberties concerns, but give us
another 30 seconds on exactly what you mean and, perhaps, most
importantly, what sort of Fourth Amendment overlay should
accompany such authority?
Mr. Glaser. Thank you for the question.
The fact is that the Treasury Department really does not
have a lot of authority to go after purely domestic groups in
the way that it goes after global terrorist organizations. It
simply doesn't have that authority.
You could imagine an authority that does allow for the
designation of domestic organizations. It would have to take
into account, certainly, constitutional restrictions. When you
read a lot of the court decisions, there are concerns relating
to notice. Those concerns could be addressed in a statute.
There are concerns that a lot of the scrutiny is heightened
because sanctions are usually accompanied with asset freezes.
But you could imagine sanctions that don't involve asset
freezes that involve--transaction bans that involve regulatory
type of requirements that you see in Section 311 of the PATRIOT
Act.
So, there is a variety of ways that the due process
standards could be raised from what we see in the global
context and the--
Chairman Himes. Thank you, Mr. Glaser. I hate to cut you
off, but I have to be a little disciplined on time. I am very
interested in that, so let me encourage you, if you want to
submit additional testimony, to do so.
And before I recognize the ranking member, it was
startling--not startling, it was interesting to me that there
were apparently no strong dissenting views on the concept of
additional legislation. So if the witnesses have additional
thoughts on that, the chairman would certainly welcome that in
written form.
And with that, the Chair now recognizes the distinguished
ranking member for 5 minutes for questions.
Mr. Hill. Thanks, Chairman Himes. This has been an
excellent panel, with really superb presentations, and it has
been very informative.
In looking at the draft legislation that the Majority
noticed with this hearing, one bill stuck out to me, and I
think it is a good follow-up from your most recent exchange. It
seeks to amend Title 31 to require the Secretary of the
Treasury to establish a program to allow designated employees
of financial institutions to access classified information
related to terrorism, sedition, and insurrection.
Now, over the past three Congresses, we have talked about
the concept of a fusion center, not unlike we do in monitoring
cyber risk and cyber crimes, for this terror finance arena. We
have never been able to come ashore on it legislatively, so I
found that interesting; however, I am concerned when you
deputize bank employees without any oversight as to how the
information would be protected, or if there is really even a
need for that, so I would like some comments.
Dr. Gartenstein-Ross, could you describe how banks share
information with law enforcement today, and then provide
feedback on how we might change these protocols, or if that
protocol change is necessary?
Mr. Gartenstein-Ross. Thank you, Ranking Member Hill.
There are four primary ways that banks share information
now. The first is suspicious activity reports (SARs). Financial
institutions have to file these documents with the Financial
Crimes Enforcement Network (FinCEN) when there is a suspected
case of money laundering or fraud. The SAR is designed to
monitor activity in finance-related industries that are out of
the ordinary, or a precursor to illegal activity, or could
threaten public safety.
Second, there is law enforcement's Section 314(a) power
under the PATRIOT Act, in which it obtains potential lead
information from financial institutions via FinCEN.
Third, law enforcement can use its subpoena power if a
court issues a subpoena pursuant to an investigation, or to an
administrative proceeding.
And, fourth, where there are blocked assets, pursuant to
the Office of Foreign Assets Control (OFAC) authorities,
sanctions, or otherwise, banks are required to report blocked
assets back to OFAC.
The information-sharing, in my view, is currently quite
effective. Treasury, in particular, has a very strong
relationship with the U.S. financial institutions.
Mr. Hill. Thank you. And we made one tweak that was passed
into law, signed into law last year, a bill of mine, called the
Cooperate with Law Enforcement Agencies and Watch (CLAW) Act,
which encouraged cooperation on accounts kept open so that they
could be pursued by law enforcement investigations. And I
appreciated the bipartisan support for that.
On Section 314 in the PATRIOT Act, is that a place where we
could, in a protected, appropriate way, make a change that
relates to this domestic issue, or is that, in your view, too
challenging?
Mr. Gartenstein-Ross. No. I think it is a place where you
could definitely make a change. The 314(a) process allows an
investigator to canvas financial institutions for potential
lead information that might otherwise never be uncovered. It is
designed to allow disparate pieces of information to be
identified, centralized, and evaluated.
When law enforcement submits a request to FinCEN to get
information from financial institutions, it has to submit a
written certification that each individual or entity about
which the information is sought is engaged in or reasonably
suspected of engaging in terrorist activity or money
laundering.
I think that in some cases, 314(a) may already be usable,
but I think it is worth looking at the 314(a) process to see
if, in this particular context, when you are looking at
domestic violent extremism, as opposed to foreign terrorist
organizations, there are some tweaks that would provide the
ability to get leads in this matter.
Mr. Hill. Yes, I share all of the chairman's concerns about
this, but I would invite you to write to the committee with
more details about how one might make a regulatory or
procedural change there at Treasury on that topic.
Let me switch subjects. You made a very interesting point
in your comment about mapping these extremist groups'
organizational capability. Can you expand on the mapping part?
We have about 30 seconds, and I will turn it to--
Mr. Gartenstein-Ross. Yes, sir. Basically, right now--and
you heard several witnesses say this, and I am not disputing
this--the view of these groups is that they tend to be rather
hierarchy-less. They are not very vertical in structure. And
what I have noticed in the realm of extremist groups is
sometimes there are hidden structures that we experts are slow
to recognize. I know that one of the proposed bills on the GAO
would look in more detail into the assets that DVE groups have.
I think that is a good idea. I think that we could do more to
map the assets and understand the flow of funds to these
organizations, sir.
Mr. Hill. Thanks for your time.
Mr. Chairman, thank you for your leadership, and I yield
back.
Chairman Himes. Thank you, Mr. Ranking Member.
The Chair now recognizes the Chair of the Full Committee,
Chairwoman Waters, for 5 minutes of questions.
Chairwoman Waters. Thank you so very much for allocating
this time.
I would like to direct a question to Mr. Glaser and,
perhaps, Ms. Brooks also.
As you know, Henry Enrique Tarrio is known as the national
chairman of the Proud Boys, and he was in town prior to January
6th, and he was ushered out of town by the local metropolitan
police. But what is interesting about him is he had a
relationship with the FBI, and he became an informant for the
FBI, and he informed on people for drugs and gambling and human
smuggling, and some other things; but it appears that they
turned a blind eye to the fact that he was a domestic
terrorist, and, basically, was participating in terrorist
activities, et cetera, and getting away with it, and said that,
before going into rallies, they would inform law enforcement
that the Proud Boys were going to be involved.
Now, even though this hearing is based on financing, I
guess my question, Mr. Glaser and Ms. Brooks, is this: Should
we look at public policy that would not allow the FBI to have
these kinds of relationships where they would turn a blind eye
to domestic terrorism in exchange for information and informing
on drugs and gambling and that kind of thing?
Mr. Glaser?
Mr. Glaser. Thank you for the question, Chairwoman Waters.
I certainly don't think the FBI should be turning a blind
eye to White supremacy and to domestic terrorism of any kind.
Of course, the FBI has a difficult job to manage in terms of
figuring out the best way to collect information that it could
act upon. I don't know that I know enough about the internal
deliberations within the FBI that led it to make the decisions
that it made, but I certainly do agree that we should be--and I
don't think we have been, and when I was in government, we
certainly--I will take that as a criticism of myself as well.
We certainly did not prioritize efforts against White supremacy
as much as we should have. I think that is changing now, and I
think it needs to continue to change, and I think it should
change throughout the government.
Chairwoman Waters. Okay. Thank you very much. It is, I
think, very important to understand whether or not the FBI will
use criminals and domestic terrorists and turn a blind eye in
exchange for information about drugs, gambling, and other
things. I knew that happened in dealing with drug dealers,
where they let some drug dealers stay free if they turned in
other drug dealers but this makes it appear they don't care
about domestic terrorism.
Do you know anything about this? Ms. Brooks, have you heard
about the Proud Boys and their relationship to the FBI?
Ms. Brooks. Yes, ma'am. Thank you. Thank you, Chairwoman
Waters.
I completely agree with my colleague, Mr. Glaser, that they
should not turn a blind eye. The Southern Poverty Law Center
would say that it is because we failed to take the threat of
White supremacy and White nationalists, we failed to recognize
the importance of it. And, so, that the FBI would engage in
some information-sharing at the risk of our democracy is
untenable, and I believe that solely because, as we saw on
January 6th, we failed to recognize the threat. I believe we
have learned some things, and hopefully, the information-
sharing will be taken seriously, and we will recognize that the
greatest threat to our homeland is from White nationalists with
a White supremacist ideology.
Chairwoman Waters. Do you think that I, or Chair Himes, or
anyone should pursue public policy in this area of turning a
blind eye from our law enforcement in exchange for information
that they could give them on other kinds of crimes?
Ms. Brooks. Yes, ma'am. I do think that it is something you
should look into. The Southern Poverty Law Center is happy to
assist in that, and we can bring some research together and add
it to the record if you would like.
Chairwoman Waters. Thank you very much.
Mr. Chairman, I yield back the balance of my time.
Chairman Himes. Thank you, Madam Chairwoman.
The gentleman from Texas, Mr. Williams, is now recognized
for 5 minutes.
Mr. Williams of Texas. Thank you, Mr. Chairman, and thank
you, Mr. Hill.
Unfortunately, January 6th was the second politically-
motivated attack that I have been involved in, in the past 4
years. As we talked about already this morning, on June 14,
2017, a crazy Bernie Sanders supporter opened fire on a
Republican congressional baseball practice and injured me,
along with five other individuals. Because of the heroic
actions of Capitol Police Special Agents Crystal Griner and
David Bailey, and with God being in charge, the only fatality
that day was the crazed shooter.
Now, this was a politically-motivated attack driven by
anger and extremism, where signs were posted on social media
beforehand, and some of the posts read, ``Republicans are the
Taliban of the U.S.A.'', and, ``It is time to destroy Trump and
company.'' Unfortunately, if you went on Twitter or Facebook
right now, you would find similar messages from hundreds of
people spewing this type of hate.
So, Ms. Boukadoum, how could we possibly monitor everything
posted on the internet without greatly expanding the police
state, and significantly infringing on our First Amendment
rights and all Americans' constitutional rights?
Ms. Boukadoum. Thank you for the question, Congressman.
I believe that there was a fundamental breakdown in law
enforcement response on January 6th, and also, when the attack
happened by that Bernie Sanders supporter, because the law
enforcement agencies in our country have disproportionately
prioritized the wrong thing. This is a question of
prioritizing. We have not prioritized White nationalist
violence. We have not prioritized violence that is motivated by
actions. We have prioritized ideology, and that is deeply
troubling, and, in fact, as you said, Congressman, it's a
violation of the Constitution.
And so, our position is that we must follow the acts of
people. So if there is a threat made by people, whether it is
the Proud Boys, or whether its Bernie Sanders supporters, then
law enforcement must follow that. What we have seen is a
fixation on a certain type of terrorism that is inspired by so-
called Muslim ideology, and that has blind-sighted us. And,
unfortunately, we missed a huge attack on January 6th, and many
people died, and many people are shocked still.
So, that is my answer to you.
Mr. Williams of Texas. Okay. In 2019, the City of San
Francisco voted to label the NRA as a domestic terrorist
organization. In August of 2020, Speaker Pelosi called
Republican lawmakers, ``enemies of the State.'' Now, with
people being so quick to judge their political opponents as
domestic terrorists, it makes me very uncomfortable to expand
the powers to go after our own citizens.
So, Dr. Gartenstein-Ross, what safeguards are in place to
make sure that any additional powers granted to the State are
not abused for political gain?
Mr. Gartenstein-Ross. Thank you, Representative Williams.
That is a great question, and I share your concern about people
throwing the word, ``terrorist'' around, or overlabeling in
this regard. This is why when I emphasized, and to be very
clear, I am not advocating a domestic designation statute. I
was simply making the case both for and against it. But for any
additional powers that are given to the State, I think what is
important is: first, setting a clear threshold for what
designation, or who the predicate of the crime would be; and
second, making sure that it is keyed to actual terrorism.
One thing we have seen over the course of the past year is
that we have an unprecedented ability to mobilize for a variety
of causes. Some mobilizations result in violence being
inflicted by a variety of actors, and I think we are going to
see more mobilizations around a variety of causes that end up
with violence being a part with the mobilization. I think we
need to understand any powers given to the State against that
context and against the context that you emphasized that there
are a variety of groups, a variety of individuals who
increasingly see their opponents as evil, and harming them as
something which naturally flows from their very binary world
view.
Mr. Williams of Texas. Okay. Throughout the COVID-19
pandemic, I have been very concerned about having our kids out
of school and learning remotely, but the social skills that our
children learn through interacting with other people their age
cannot be replicated over a computer, and never will be. We
have already seen reports of increased mental health issues,
depression, and suicides as a result of the COVID-19 lockdown.
So, Dr. Rogers, can you talk about the role that isolation
and mental health play in radicalizing individuals to carry out
these horrible attacks?
Chairman Himes. The gentleman's time has expired, so the
witness will have to provide that statement as an amendment to
the witness' testimony.
Just for clarity, since we are getting started on these
hearings, the Chair will allow the witnesses the courtesy of
finishing an answer that they have begun before the timer goes
off, just as a matter of courtesy and good transmission of
information, but that courtesy will begin to be revoked 15 or
so seconds after the timer.
So with that, the gentleman from New Jersey, Mr.
Gottheimer, is recognized for 5 minutes.
Mr. Gottheimer. Thank you, Chairman Himes, Chairwoman
Waters, and Ranking Member Hill. Thank you very much for
putting together this important hearing, and thanks to all of
our witnesses for being here today.
I proposed bipartisan legislation called the Freezing
Assets of Suspected Terrorists and Enemy Recruits (FASTER) Act,
featured in today's hearing. This bill will help law
enforcement to freeze the assets of domestic terrorists facing
Federal charges for insurrection and seditious conspiracy, like
those who stormed the Capitol, but also like ISIS-inspired lone
wolf terrorists, and others of that ilk.
Mr. Glaser, given your experience in the private sector and
as the former Assistant Secretary for Terrorist Financing and
Financial Crimes, you know that for foreign terrorist
organizations, the threshold for asset seizure is low. Given
what transpired at the Capitol, do you believe that law
enforcement could make use of greater authorities in certain
cases for domestic extremism, such as insurrection or seditious
conspiracy?
Mr. Glaser. Thank you for the question, Congressman. And to
be clear, I think we need to make a distinction between seizure
and forfeiture on the one hand, and freezing assets on the
other hand. The standard for seizing and forfeiting assets
under any circumstance is the same under criminal or civil
forfeiture. It is relatively lower with respect to freezing
assets for foreign organizations. And as I was saying, when I
talk about a domestic terrorist financing authority, I am
talking about the application of sanctions like authority in
that case, but it doesn't necessarily have to involve a freeze.
But to answer your question with respect to your
legislation, I do think it addresses a lot of concerns with
respect to immobilizing assets quickly. It is linked to the
criminal justice system. It is not linked to more traditional
terrorist financing types of activity in which the Treasury
Department would be involved.
I guess my question is whether or not an asset forfeiture
count within an indictment would serve a similar purpose, but I
do certainly applaud your effort to ensure that assets relating
to insurrection are quickly immobilized, and it seems to me
that is what the statute is trying to do.
Mr. Gottheimer. Thank you, sir. And just to follow up, do
you believe that the current financial intelligence system we
have in place is effective in providing the proper data to law
enforcement to combat the financing of these attacks?
Mr. Glaser. I think that our anti-money-laundering
counterterrorist financing system does generate an enormous
amount of information for the government to analyze and then
use. I think there are ways that it can be improved. Public-
private partnerships are very important. Daveed talked about
the use of 314, both A and B to transfer information, and I
think there are maybe tweaks we can make to the suspicious
activity reporting that would provide, not necessarily more
information, but better information.
Certainly, there is technology that also could be employed
by the government and by financial institutions to allow them
to go through the massive amounts of data that banks need to go
through to file quality suspicious activity reports.
I think there are plenty of ways the system can be
improved, but the fact is that Treasury has access to massive
amounts of financial information, and I think the focus should
be on improving the quality, not necessarily the quantity.
Mr. Gottheimer. Thank you, sir.
Ms. Brooks, in the work that the Southern Poverty Law
Center has done to track domestic extremist groups like the
ones that attacked the Capitol on January 6th, have you
observed increased use of 21st Century technologies to enable
these groups? For example, using websites that are outside of
the mainstream to organize and spread hate, and fundraising
tools like cryptocurrencies that are more difficult for law
enforcement to track?
Ms. Brooks. Yes, sir. Thank you for the question, and this
really speaks to the earlier question as well. As I mentioned
in my oral testimony, we note a massive decentralization of
these groups and a disbursement of groups, so it makes it
harder to track them and harder to follow the money. And we
have noticed that the groups are continuing to self-disburse.
Mr. Gottheimer. Are they using cryptocurrencies? Do you
notice them using cryptocurrencies?
Ms. Brooks. Oh, yes, sir. Hold on one second. I have
something on that. Yes. Monetized propaganda has continued to
increase and we see a lot of personalities distributing--I'm
sorry. I apologize. I am looking for my notes on that. Hold on
a second.
On December 8th, someone from the far right personalities
distributed--oh, sorry. I will stop.
Mr. Gottheimer. Mr. Chairman, will you allow the witness to
answer the question? Is that okay?
Chairman Himes. Oh, yes. If the witness would like to
quickly conclude her answer, that is fine.
Mr. Gottheimer. Thank you, Mr. Chairman.
Ms. Brooks. Thank you. In a single bitcoin transaction, we
noted about $523,000 exchanged on blockchain. The recipients
included Nick Fuentes whom, as you know, is a far-right
internet personality who is banned from YouTube and other
platforms because of his hateful content. And so, we continue
to see this money transferring across lines.
Mr. Gottheimer. Thank you, Ms. Brooks. And thank you, Mr.
Chairman.
Chairman Himes. You are welcome.
The gentleman from Ohio, Mr. Davidson, is now recognized
for 5 minutes.
Mr. Davidson. I thank the chairman, and I thank the
witnesses for the expertise you have provided for this hearing
and the preparation that goes into it. With each passing
Congress, I want to share a concern, that really, with each
passing Congress, we further erode the Fourth Amendment under
the guise of promoting national security. This has evolved from
a trend to a real tradition.
As an example, the Corporate Transparency Act took a large
chip out of the Fourth Amendment last year. I fear that January
6th will be used as another reason to further destroy the
Fourth Amendment and the protections it provides.
Mr. Glaser's testimony states that the U.S. anti-money-
laundering (AML) CFT regime can always be fine-tuned and
adjusted to address a variety of vulnerabilities, including
those presented by racially- and ethnically-motivated violent
extremist groups.
Mr. Glaser then lists different tools the Treasury can use
to fine-tune and adjust. Let's take a moment to translate what
it means to fine-tune and adjust this AML toolbox. It really
means that we are further intruding on individual privacy by
handing the government more and more of a person's financial
record. At what point do we draw the line?
January 6th cannot and should not be used to destroy our
right to privacy even further. And, frankly, I was encouraged
by Ms. Brooks' notion that we should resist the temptation to
further empower the Federal Government because it has been
abused and, frankly, it has been abused heavily towards
minority groups in the past, and now under the guise of
protecting them, it would be a shame to see further powers that
erode privacy protections.
So, I urge my colleagues to speak up on this topic and the
narrative that really attacks the Fourth Amendment right to
privacy. Mr. Glaser, in your testimony you said that the
government should consider legislation to protect the U.S.
financial system from being abused by domestic terrorists. You
acknowledge that the legislation would have to be tailored to
comply with the Constitution, specifically the First Amendment,
but you really don't make mention of the Fourth Amendment
anywhere.
My question is, what constitutes an unreasonable search of
an American citizen? Should Americans have any expectation of
privacy with respect to their personal finances? Where is that
limit, because it sounds like there might not be one. In fact,
the word, ``privacy'' isn't even mentioned in your testimony.
Mr. Glaser. Thank you for the question, Congressman. In my
testimony, I did make reference to constitutional due-process
requirements. I didn't specifically mention the Fourth
Amendment, but, of course, the Fourth Amendment is where many
of those constitutional due process requirements are contained,
so it certainly wasn't my intention to imply that the Fourth
Amendment shouldn't be--we shouldn't ensure that the Fourth
Amendment protections adhere.
I would also note that with respect to the Anti-Money
Laundering/Combating the Financing of Terrorism (AML/CFT)
measures that I recommend be taken, none of them involve
providing the government with more financial records.
Mr. Davidson. I appreciate that. I do get that. And, look,
you served in a very important post, one of the most important
in our government, for that matter, in my view, in terms of
overseeing this part of Treasury, which is really vital for our
national security, and I think it is relevant for Chairman
Himes to be holding this hearing on the topic.
So, the tension is just so incredibly important. I guess,
the core question is, do you believe that Americans should have
an expectation of privacy with respect to their personal
finances?
Mr. Glaser. Yes, of course, I think Americans should have
an expectation of privacy with respect to their personal
finances. As with every other privacy consideration, it is a
question of balancing where the liberal limitations of that
privacy begin and end, and I think it is certainly possible and
I think we do so every day to respect people's privacy on the
one hand, but also give the government the tools it needs to
protect its citizens from other threats. Because threats to
civil liberties come in all direction--
Mr. Davidson. I appreciate that. I apologize. I have to get
at least one more question in. I have about a dozen, so. But
Mr. Gartenstein-Ross, according to the LexisNexis report last
fall, the scope of AML is huge. So my question is, should we
double down on a static AML system in an ever-evolving industry
that is growing compliance costs or should we try to overhaul
it?
There was a really good BuzzFeed article last year that
talked about the problems where the biggest banks, frankly, are
the biggest money launderers, how do we address that--
Chairman Himes. The gentleman's time has expired.
The gentleman from New York, Mr. Torres, is recognized for
5 minutes.
Mr. Torres. Thank you, Mr. Chairman. Both the Code of
Federal Regulations and the PATRIOT Act provide the Federal
definition of, ``domestic terrorism'', but as has been noted,
there was no Federal designation of domestic terrorism nor was
there Federal prosecution of domestic terrorism as a crime unto
itself, all of which has me wondering, what is the point of
defining domestic terrorism in Federal law if it doesn't result
in designation for prosecution, what practical impact does the
Federal definition have on domestic counterterrorism and, in
particular, counterterrorism finance?
Mr. Glaser?
You are on mute, Mr. Glaser.
Chairman Himes. The Chair will instruct that 25 seconds be
added back to the gentleman from New York's time.
Mr. Torres. I appreciate that, Mr. Chairman.
Chairman Himes. Mr. Glaser, are you with us?
Mr. Torres. Mr. Glaser, you are on mute.
Is there anyone else on the panel who can address this
question?
Ms. Boukadoum. I am happy to jump in. The domestic
terrorism definition that is in the PATRIOT Act is really
defined for FBI investigatory purposes. And you are absolutely
right, Congressman Torres--and it is good to see you, again--
that there is no parallel charge that goes with the domestic
terrorism definition. So, it is really designed for
investigatory purposes.
What we submit is that the material support for terrorism
statute--as we know, there are two of them. There is one with
an international nexus that is required and there is one that
allows for investigating material support for terrorism,
domestic terrorism, in particular, as defined in the PATRIOT
Act with underlying statutes that allow for any crimes that
take place within the United States that have no international
nexus.
And we believe that second piece of the material support
for terrorism statute has been neglected, and can be nicely
used with the domestic terrorism definition as laid out in the
PATRIOT Act, and we hope that statutory framework will be used
to actually go after violent White nationalists and others.
Mr. Torres. Much has been said about the First Amendment
and domestic counterterrorism. I have a hypothetical. Suppose
there were a White supremacist organization with a publicly-
stated mission of murdering minorities, overthrowing the
government, and establishing a White ethnostate, could the
Federal Government legally open an investigation into the
membership and financing of such an organization without
running afoul of the First Amendment?
Ms. Boukadoum. That is an excellent question and it is not
a hypothetical, Congressman. It is actually a fact. We have
seen, as my friends and colleagues at the Southern Poverty Law
Center who are part of our coalition have highlighted time and
time again, that there are myriad organizations that have
absolutely espoused violence out in public on Facebook, on big
tech platforms, that have not been taken seriously. And so,
yes, absolutely, the financial institutions and financial
enforcement apparatus can trace those groups and should be
tracing those groups, frankly.
But as I said, there has been a deprioritization of White
nationalist violence at the expense of our collective security.
So I would submit that there is nothing wrong, or that there is
nothing that runs afoul of the First Amendment to go into
investigating those types of groups.
Mr. Torres. I want to make one observation, and let me know
if you agree or not, but it seems to me there is a cognitive
dissidence or double standard on the part of law enforcement.
If you are a member of a violent enterprise like the mafia or a
gang, you can be prosecuted under the RICO law, but if you are
a member of a violent White supremacist enterprise, then
somehow you are protected by the First Amendment. Can anyone on
the panel explain the disconnect there?
Ms. Boukadoum. I think that is an excellent point. And in
my written testimony that we submitted for the record, we
highlight that RICO and conspiracy statutes are extremely broad
and should absolutely be used against particularly organized
White nationalist groups that, as you mentioned, espoused an
ethno-national state that wants to get rid of and kill millions
of people, but I would love to open it up for the other
panelists.
Ms. Brooks. Thank you.
Thank you for the question, Representative Torres. And I
completely agree there. The Southern Poverty Law Center
documents White nationalist groups today to be clear their
mandate is to create a White ethnostate, and they have proved
time and time, again, that they will carry out violent means to
reach that end.
I would also offer that the Southern Poverty Law Center has
used RICO statutes in the course of our civil suits against
hate and extremist groups over the past couple of decades and I
think that--those are the laws that we mean when we say that
there exist current statutes that law enforcement could use to
address the real threat of domestic terrorism.
And for me, and I agree with my colleagues in the
Leadership Conference, it is important that we educate
ourselves and recognize the very real threat of domestic
terrorism. That is why the Southern Poverty Law Center supports
the Prevention Act.
Law, as you know, is a very, very blunt tool and we
advocate for further education and communication between and
coordination between the Department of Homeland Security, the
Department of Justice, and the FBI. And they could really work
together to lower the threat level and strengthen a partnership
that would blunt these hate and extremist groups.
So, thank you for the question.
Chairman Himes. The gentleman's time has expired. The
gentleman from Ohio, Mr. Gonzalez, is recognized for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Mr. Chairman, and thank
you to our panel for today's testimony. It is an important
hearing and, Mr. Chairman, I do appreciate your comments at the
beginning about how this shouldn't have a political lens on it,
and I think we need to be honest with ourselves about that.
I want to start by referencing the testimony of Dr.
Gartenstein-Ross. You talked about, in chilling fashion, how
extremism is poised for growth. Unfortunately, I agree with you
100 percent, for a variety of reasons, and you also highlighted
reciprocal radicalization, and I think that is right.
I would argue that there is an escalating component to it
as well, one side does one thing, the other side escalates and
radicalizes, and there is a countermovement that does the same.
And we are in this Ping-Pong of extremism, unfortunately.
So with that as my first question for Dr. Gartenstein-Ross,
in your research, did you find that any of the political
violence from the summer--and I am not creating an equivalency,
so let's just get that clear. What happened at the Capitol is
far worse. I am not creating an equivalency, but I am trying to
understand the mechanisms.
In your eyes, did the political violence from the summer
inspire or activate some of the far-right nationalist movements
that we saw at the Capitol?
Mr. Gartenstein-Ross. Thank you, sir, for that question. I
would say it is unsettled, but I believe that the answer is
yes, in a rather subtle way. There is a really good book
called, ``How Terror Evolves'' by Yannick Veilleux-Lepage,
which looks at airplane hijackings. And it argues that tactics
evolve from one group to another regardless of ideology, and it
even looks at criminal groups that have used airplane
hijackings.
I think what we saw over the course of the past year is a
number of different mobilizations, starting with the anti-
lockdown mobilization, then there is a racial justice
mobilization, then an anti-fascist/anarchist mobilization, and
finally a pro-Trump steal an election mobilization, and those
aren't all extremist mobilizations by any means, but all of
them were mobilizations that were very powerful.
And I think that each mobilization learned from the other
ones, and the lesson that was learned by the time of the
Capitol attack is that attacking a symbol of government is
extraordinarily dramatic, and there are multiple examples of
that from attacks on mayor's offices to autonomous zones and
attacks on police precincts that provided some tactical guide
for what occurred.
So I do think that different groups, both extremist and
nonextremist, are learning to mobilize faster than before. And
all of them are learning from one another's tactics, and
tactics that we may applaud today may be used tomorrow by a
group that we utterly despise and that despises us.
Mr. Gonzalez of Ohio. Thank you for that answer.
And a follow-up, what role do public figures, politicians
or otherwise, play in contributing to the violent behavior that
we have seen across society over the last year? And how can we
be better leaders?
This is where I want you to lecture us and tell us how we
have failed the American people.
Mr. Gartenstein-Ross. I love the question. And we are in an
extraordinarily polarized environment where even the slightest
differences of point of view can lead to recrimination, fear,
calls for people to be fired, different labels being thrust
upon other people. I think now is the time for political
leaders to show wisdom, and let me applaud this subcommittee
for the bipartisan way that it put this hearing together.
I applaud it for getting witnesses who can speak to both
sides of the aisle, but I agree with the premise of the
question that ultimately, we need to figure out how to step
back from the precipice. We need to figure out how we live
together within a system that we all support.
We need to figure out how the fact that the person next to
us disagrees on some issues doesn't cause us to think of that
person in a binary way as being evil or beneath us or someone
who is our enemy. We are struggling with that, and part of it
is politicians, and part of it is the systems of communications
that we have.
It is a complex, multifaceted problem, but the question you
asked, sir, is the exact right question, and politicians have
often been a part of the problem.
Mr. Gonzalez of Ohio. Thank you. And with my final 30
seconds, I am going to share a brief story. I voted for
impeachment, as most of you know, and I am a Republican. So, I
have been the subject of threats in two different instances in
the last year, one from the left and one from the right. And I
will tell you my personal opinion is if this body and some of
us on this committee don't start acting more responsibly, what
happened in January is only the beginning, and that is up to
us. That requires real leadership.
And so, I thank you for your answers, and I hope we will
heed those lessons.
Chairman Himes. The gentleman's time has expired.
The gentleman from Massachusetts, Mr. Lynch, is recognized
for 5 minutes.
Mr. Lynch. Chairman Himes, first, I want to congratulate
you on your chairmanship. I am proud and happy to be a member
of this subcommittee, and thanks for putting this hearing
together. Congratulations to the ranking member as well.
I want to talk about cryptocurrencies a little bit. The use
of cryptocurrencies by terrorist networks, drug traffickers,
and other illicit activities is well-documented. I know Mr.
Glaser, we worked together when I used to Chair the Task Force
on Terrorist Financing back in the day, but we had experts from
FinCEN to the RAND Corporation. They have all expressed
concerns about the use of cryptocurrencies by criminals, and we
do have some examples that haven't been mentioned here.
One example is the far-right group, the White supremacist
platform, The Daily Stormer. They actually solicit donations
from users by cryptocurrency. They use Monero, but there have
been high-profile, high-value bitcoin transfers to a number of
these U.S.-based groups. These are domestic far-right extremist
wallets.
As a matter fact, earlier this month, Treasury Secretary
Yellen said, ``I see the promise of these new technologies, but
I also see the reality. Cryptocurrencies have been used to
launder the profits of online drug traffickers and they have
also been used as a tool to finance terrorism.''
So Mr. Glaser, and also Dr. Rogers, I think you could speak
to this as well, how does the use of cryptocurrencies--and I
Chair the Task Force on FinTech, and we are worried about this.
We are trying to adopt some of these technologies, but this is
one of those double-edged swords, I guess. How does the use of
cryptocurrencies affect the ability of law enforcement agencies
and research organizations and financial institutions to
identify and trace the funding of domestic extremists?
Mr. Glaser. Thank you for the question, Congressman Lynch,
and it is good to see you, again, and thank you for your
leadership on these types of issues over the years.
After 9/11, all of the focus was on Hawala, and there was
this notion that it was some sort of magical, mysterious system
that nobody could comprehend and it was impossible to trace
through. And in the end, we found out that really wasn't the
case; it operated based on the same principles as a lot of
other financial transfers, and it was just a matter of bringing
it into the system in an appropriate way. And I think that
there is an analogy between that and cryptocurrencies.
Cryptocurrencies aren't inherently bad and, in fact, as
Secretary Yellen said, they have a lot of useful purposes and
could really help on issues such as financial inclusion.
That said, they are also subject to abuse, so the challenge
is to bring them into the system and regulate them in the
appropriate way. I do think that the Treasury Department
approaches it the right way through the regulation of
exchanges, applying customer due diligence, programmatic
requirements in suspicious activity reporting requirements to
the exchanges which is where the cryptocurrencies are
ultimately transferred into Fiat currency and where Fiat
currency is transferred back into the cryptocurrency.
Again, I highlight that FinCEN has a rule out right now, a
proposed rule, related to unhosted wallets, which is a loophole
in the system right now and that is a place where I think
people should be focusing.
But the fact is that there are some cryptocurrencies out
there which try to design themselves along the fault lines of
the AML/CFT restrictions. We need to look at those. We need to
make sure that those types of cryptocurrencies are banned, but
we also need to provide opportunities for the sector to grow in
a supervised, regulated way as I think it is, for the most
part, right now.
Mr. Lynch. Wouldn't it require getting rid of the
pseudonymist nature, where we don't have digital identities?
Isn't that the core of the problem? And that is what the users
or the advocates of crypto, a lot of them, cling to that; that
they want to decentralize anonymous or pseudonymist systems. Is
that part of the problem?
Mr. Glaser. Yes. Anti-money-laundering, countertrust
financing rules and regulations at the end are about
transparency. It is about transparency in the international
financial system and the domestic financial system. And in
certain ironic ways, cryptocurrencies provide enhanced
opportunities in certain ways for law enforcement agencies to
be able to trace transactions that aren't there and sort of
bulk transactions in the private sector.
But, again, I come back to, [inaudible] And I think the
point of entry is at the exchanges, which is where we are
trying to regulate it now.
Mr. Lynch. Thank you, Mr. Chairman.
I yield back.
Chairman Himes. The gentleman's time has expired. The
gentleman from Texas, Mr. Taylor, is recognized for 5 minutes.
Mr. Taylor. Thank you, Mr. Chairman. I appreciate this
hearing, and I appreciate the witnesses and the expertise that
they bring to this important topic. Domestic terrorism
obviously is something that I think, with a little historical
perspective--I think we remember Puerto Rican separatists
shooting Members of Congress on the Floor of the U.S. House
back in the 1950s, so this is a long path that we have been
going down in trying to fight this.
And, obviously, I was intrigued, Mr. Chairman, by your
comments about the domestic terrorism being more difficult
because they have First and Fourth Amendment rights.
But I remember my own time as a Marine on the U.S./Mexican
border contending with the Foreign Intelligence Surveillance
Act (FISA), and the Posse Comitatus Act, dealing with the
international component and really the PATRIOT Act, dealing
with that and trying to figure out, well, okay, where does the
international stop and the domestic begin, and how do we share
data between the CIA and the FBI, and how is that legal, when
is that legal, which, unfortunately, 9/11 really revealed to us
we had some problems there.
So just going down the path of making sure that we are
sharing information across platforms at the same time,
protecting peoples' rights, and I think that is something that
we are all conscious of, that push/pull.
Dr. Gartenstein-Ross, just in terms of the way you think
about this, is there enough sharing between the FBI, the
Department of Homeland Security, and local law enforcement? Are
there regulatory or statutory changes that we can make at the
congressional level to encourage information-sharing so that we
can actually stop/prevent terrorist actions?
Mr. Gartenstein-Ross. That is an excellent question. As you
know, sir, DHS, one of its mandates is to share information
with local law enforcement, which is a relatively effective
system; although, you have had a number of times where some of
the information shared ends up getting leaked to the press,
which, in turn, causes controversy and then impedes sharing.
One of the reasons why we were so slow to look at WSE
extremism as the government relates to a 2009 controversy about
a report on what was dubbed right-wing extremism at the time.
So, it is not clear to me that there are specific fixes that
can immediately leap to mind, but I will say that this is
something that we should look into to see if there are things
that impede the flow of information. Anything that will allow
information to be shared more widely will be a positive.
Mr. Taylor. Mr. Glaser, just given your experience in
government, what would you say to that in terms of information-
sharing between--again, I saw the restriction when it went from
international to domestic. There were definitely some walls
that were created there in the 1970s that were knocked down a
little bit after 9/11, but do we have those in terms of dealing
with this problem?
Mr. Glaser. Thank you for the question. And I agree with
your premise that there needs to be a vibrant partnership
between the public sector and the private sector to attack
these sorts of issues. In fact, when I was in--
Mr. Taylor. We will get to that in a second, but the
question is, within the Federal Government and local law
enforcement, are there walls that we need to break down
statutorily or by regulation?
Mr. Glaser. With respect to financial intelligence, I think
that there is very good information-sharing between the Federal
Government and the State Governments. State Governments have
access to suspicious activity reports, so I think that there
are probably mechanisms that we could implement to improve
them, but they wouldn't be legislative in nature.
Mr. Taylor. Okay. And then Ms. Boukadoum, this is something
you are concerned about, is the role of private companies
taking it upon themselves to report to the authorities what
they perceive to be problematic when they are not required to
do it, right?
And so I am thinking recently there was an allegation that
Bank of America went in, pulled all the data from their
customers, and reported that to law enforcement without having
a warrant, and that--in assisting the Fourth Amendment
question, should the government even be willing to accept data
that they don't have the right to get, that the Fourth
Amendment precludes them from? Your opening statement leads me
to believe that you are concerned about this as well.
Ms. Boukadoum. Absolutely, Congressman. I think that civil
liberties have to be protected, and I think that the private
sector, Bank of America, big tech have to really make sure that
there is a notice requirement that is provided to customers and
also that there is, yes, a warrant from the FISA court, even
though, it is a secret court, but there are mechanisms for
making sure that due process and transparency to the extent
possible are complied with.
Mr. Taylor. Thank you.
Mr. Chairman, I yield back.
Chairman Himes. The gentleman yields back. The gentlewoman
from Pennsylvania, Ms. Dean, is recognized for 5 minutes.
Ms. Dean. Thank you, Mr. Chairman. I thank you for hosting
this important hearing. I will get right to some questions. I
thank all of those who are testifying today to help us
understand this better.
Mr. Rogers, if I could start with you, what evidence is
there of alternative financing platforms contributing to
expanded recruitment or radicalization of domestic terror
groups? Do we have any evidence of alternative financing
platforms?
Mr. Rogers. Thank you, Congresswoman, for the question. And
if I may clarify, by alternative financing platforms, can you
provide more detail about exactly the sorts of platforms you
are referring to?
Ms. Dean. Fundraising.
Mr. Rogers. Okay. That is sort of the core of our entire
research, how extensively those sorts of platforms are being
used, and it speaks to a lot of the discussion today that most
of the financial activities not through the kind of,
traditional banking, there is a lot of other sort of companies
and chokepoints being involved whether you are talking about
crowdfunding platforms--I mentioned GiveSendGo as an example,
Rakuten Pay, all of these companies, they sit on top of the
larger kind of payments in banking.
At the end of the day, the money lands somewhere that is a
more traditional bank or payment provider, but even before you
get to those companies, there is a whole host of smaller and
alternative, what you may call, tech companies, that are
facilitating these payments and we outline close to 100 of them
in our report.
Ms. Dean. And would you say that those digital fundraising
platforms are contributing to the diffusion of harmful
ideologies?
Mr. Rogers. Absolutely. As I mentioned in my testimony, not
only are they just helping or facilitating raising funding for
these groups, but merchandising platforms. Go to Etsy.com and
type in, ``QAnon'', and the sale of merchandise helps further
the ideology, kind of creates that, as I call it, that team
jersey to help the group recruit and further whatever ideology
they are peddling.
Ms. Dean. Thank you. I appreciate that.
Mr. Glaser, if I could turn to you. FinCEN, at the
Department of the Treasury, is at the forefront of detecting
illicit financial transactions involving potential crimes in
terrorism, and I am thinking of, for example, advisories
regarding possible human trafficking or drug trafficking. But
does FinCEN provide this type of guidance related to armed
domestic extremists or mass shooters in terms of potential
purchase of weapons, amassing of arsenals of guns, or other
weapons for attacks?
Is there such an advisory alert? We are examining
communications and gaps in communications--is there such an
advisory around the amassing of weapons?
Mr. Glaser. FinCEN does not currently have an advisory
relating to domestic terrorism. I would not be surprised if
they were working on one right now, and I think it is a great
question. In my testimony, I specifically reference that as one
of the things that FinCEN could be doing.
And as I said, I wouldn't be surprised if they were working
on one right now, but there is not currently one out there.
Ms. Dean. There was legislation that was introduced last
session by my friend, Representative Wexton--perhaps you are
familiar with it--the Gun Violence Prevention Through Financial
Intelligence Act. It was a bill in simplicity that would
develop an advisory notification to assist financial
institutions in detecting and then reporting suspicious or
illegal financial activities around firearms.
Do you think that legislation is worthy, and would be a
step in the right direction?
Mr. Glaser. Thank you, Congresswoman. I must admit that I
am not familiar with that specific legislation. I will say that
banks already have the obligation to report suspicious activity
to FinCEN, but there are holes in it relating to illegal
activity relating to firearms, I am sure that is something that
should be addressed.
Ms. Dean. Thanks so much.
And maybe Ms. Brooks, I will go for a quick question to
you. How can the Federal Government provide better tools or
facilitate coordination, again, about communication with State
law enforcement agencies, prosecutors, the Federal Government--
what should we be doing to share information more efficiently?
Ms. Brooks. Thank you for the question. The Southern
Poverty Law Center, of course, supports the Domestic Terrorism
Prevention Act because it really is about improving
communication and coordinating communication in response across
agencies.
Of course, it doesn't provide for additional Federal
criminal enforcement power, but we believe that improved
communication and coordination was the big part of the issue on
January 6th, so we support that, just the sharing of
information and acting upon that information.
Thank you for the question, Representative Dean.
Ms. Dean. Thank you.
I yield back. Thank you, Mr. Chairman.
Chairman Himes. The gentlewoman's time has expired. The
gentleman from Illinois, Mr. Garcia, is recognized for 5
minutes.
Mr. Garcia of Illinois. Thank you, Chairman Himes and
Ranking Member Hill, for convening this hearing, and thank you
to the witnesses for joining us today and sharing your research
and knowledge.
We know that racism and right-wing extremism have long
histories in this country. As an immigrant, I have seen it for
most of my life. Donald Trump tapped into that from the very
start of his campaign, and what happened here on January 6th is
a symptom of something very serious.
Like many of you, I was locked down in my office that
afternoon. I didn't know whether or not armed militia had
entered my office building. I didn't know if they were looking
for me as a proud immigrant, Mexican-American Congressman, but
I knew they wanted to stop a Democrat from being elected
President.
It is easy to say that the people who stormed the Capitol
last month represent a small fringe in our politics, but they
have allies and friends in high places.
I have a couple of questions. Ms. Brooks, in your
testimony, you gave us a good timeline of how racist extremism
has connected to party politics. Could you talk a little more
about how the radical right entered the mainstream and what we
should be worried about moving forward?
Ms. Brooks. Thank you so much for the question. As the
Southern Poverty Law Center has documented over the last couple
of decades, there has been an increase in the number of active
hate groups in the United States. We found about 10 years ago,
maybe 15 years ago, that that increase is directly connected to
the shifting demographics within the United States.
And so, the decrease in the White population serving as a
numeric majority has served to create fear and anxiety in the
White population. As we saw with the ascension of President
Obama, that was kind of a peak moment, and an example, if you
will, for Whites who were beginning to think that they were
being displaced, and feeding into a White nationalist trope
around the great replacement or White genocide.
So, we have seen an increase in that rhetoric. What we saw
over the last 6 years was an increase in that rhetoric that was
echoed from the highest office in the country, from the
President, and that served to kind of fuel and carry the
disinformation, fear, and anxiety to this fever-pitch position
in which we find ourselves in today.
Mr. Garcia of Illinois. Thank you.
Dr. Rogers, you studied radicalization and terrorism in a
number of countries and your report on bankrolling bigotry
mentioned that far-right groups use the 501(c)(3) nonprofit
status to look legitimate. What role does money in our
political system play in fanning the flames of right-wing
extremism? Do all of these nonprofits and shell companies make
it harder to track their role?
Mr. Rogers. Thank you, Congressman, for the question. For
starters, I am not an expert on tax exempt organizations, and I
am certainly happy to point you to ones that I have worked with
in the past.
But it is my understanding that the abuse by some of the
charity and the nonprofit tax-exempt rules has grown over time
as political campaigns and what-not have become more expensive
as a way to shield identities involved in political donations
and things like that.
And so, that abuse has grown over the past decades, while
at the same time, the resources for enforcing the 501(c)(3) and
501(c)(4) rules to say that if a group applies as a supposedly
educational charity, to enforce that they actually are engaging
in educational charitable activities and not say, secretly a
violent militia, the resources that the IRS has to fulfill that
regulatory compliance role have decreased over time for a whole
host of reasons.
So one of our recommendations that we have taken from one
of our experts is to actually break out that function from the
IRS. The IRS is ultimately a revenue-generating organization,
and this part of the IRS is not, by definition, revenue-
generating, so it tends to be kind of ignored.
If you took that regulatory function out, much as the
charity commission in the U.K. as an independent organization
to fulfill that role, that might help with the compliance and
the enforcement problem. So, just one idea related to that.
Mr. Garcia of Illinois. Thank you very much.
Mr. Chairman, I yield back.
Chairman Himes. The gentleman yields back. And the
gentleman from Massachusetts, Mr. Auchincloss, is recognized
for 5 minutes.
Mr. Auchincloss. Thank you, Mr. Chairman, and thanks to
those who are testifying today. As part of our ongoing
investigation into the insurrectionist attack on the Capitol on
January 6th, the attack laid bare our vulnerability to domestic
terrorism, and we need to examine solutions to stop future
attacks before they happen.
I believe it would be a grave mistake, however, to maintain
permanent fencing around our Capitol. Constituents, advocates,
have the right to visit the home of our democracy and speak
with their Representatives to share their thoughts, agreements,
and concerns. We need innovative tools to root out domestic
terrorism, and protect Members, staff, and visitors without
turning this building into a fortress surrounded by fences
topped with barbed wire.
And, indeed, we also need to find ways to protect places of
worship, including in my own district, without them having to
resort to a military posture as well, in particular, Jewish
places of worship.
I represent one of the most densely-populated Jewish
districts in the country, and I know that my Jewish
constituents who go to places of worship are increasingly on
edge and increasingly concerned about the threats of domestic
terrorism targeted and fueled by anti-Semitism.
I wonder if, first, Ms. Brooks, and then, Mr. Rogers, might
speak for 30 seconds to a minute each about the intersection
between anti-Semitism and domestic terrorism in this country
and whether they have seen a rise in both intent and actions
targeted against Jewish people.
Ms. Brooks. Thank you so much for the question. And we
don't talk about this enough, but there is a direct link and a
connection between White nationalism, White supremacy, and
anti-Semitism. It should not be separated at all. There has
been an increase in anti-Semitism in this country and globally
for the last couple of decades, and people have failed to pay
attention.
We have these major violent events like the Tree of Life
Synagogue, like what happened in Escondido, and then we move
on, but we are not connecting the dots. We are in this
together, and a White supremacist agenda would separate
everyone from who they are. So to be clear, we should stand
together against White nationalism and anti-Semitism in support
of the Jewish population. Thank you for the question.
Mr. Auchincloss. I just want to state, for the record, how
much I agree with standing together. I think the Jewish people,
as well as my African-American constituents know that where
there is conspiracy theorizing, where there is extremism, it is
just a matter of time before they come for Black Americans and
for Jewish Americans, such has been our history. So, thank you
for saying that.
Mr. Rogers, I welcome your thoughts as well.
Mr. Rogers. Thank you, Congressman. And I could not agree
more with both your thoughts and Ms. Brooks, your statement on
the subject, another subject that I am passionate about as
well. As you say, if history is any guide, hate is hate, and it
always comes for people of color and the Jewish community as
well.
One other point I would add is that in many ways, the QAnon
conspiracy theory phenomenon is itself a kind of remix, if you
will, or a mash-up of historically all of the various sorts of
anti-Semitic Jewish blood libels. The idea of the cabal at the
top, et cetera, et cetera, that if not explicit, is a very
thinly veiled version of the same blood libel that has been
circulating for a hundred, if not, hundreds of years.
And so, yes, I think they go very much hand in hand whether
explicit or not, and I think they are linked and solidarity is
obviously of utmost importance.
Mr. Auchincloss. Mr. Rogers, are there particular actions
that you would recommend Congress pursue relative to anti-
Semitism and the intersection of anti-Semitism and domestic
terrorism, in particular, and the spread of disinformation
about that?
Mr. Rogers. I think there are a number of regulatory fronts
that all go to the general problem of disinformation as a
whole, and I don't know that we have the time to get into all
of them here, but I think they certainly fall into three big
categories, with the one most relevant to today's discussion
being this idea of government platform liability, that our data
is showing what a key role these sorts of platforms play in
facilitating the activities of these groups.
And the fact that the liability is so nebulous or
nonexistent through things like Section 230 and what-not, what
we found is that there are already policies in place against
all of these hate and extremist groups, but they are just
simply not enforced.
So updating that kind of platform liability to help drive
enforcement, I think is one of the key areas that we can focus
on.
Mr. Auchincloss. Slightly--
Chairman Himes. The gentleman's time has expired.
Mr. Auchincloss. Okay. Thanks.
Chairman Himes. I believe that every present member of the
subcommittee has had an opportunity to ask questions. If that
is incorrect, speak up now or forever hold your peace.
Hearing no one, I would like to thank our witnesses for
their testimony today and for an excellent, excellent
discussion.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
I ask our witnesses to please respond as promptly as you
are able, and I noted a couple of questions that sadly were cut
off by the timer, and I will ask the staff to facilitate that.
With that, I will thank our excellent witnesses one more
time, and the hearing is adjourned.
[Whereupon, at 11:51 a.m., the hearing was adjourned.]
A P P E N D I X
February 25, 2021
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