Tracking Terrorism: Follow the Money?

By Kevin Coleman

-Terrorism is a phenomenon that is still often widely misunderstood.Defining just exactly what falls under the heading of "terrorism" has become so subjective an undertaking that it is much more an art rather than a science.In recent years, increasing non-state sponsored violence manifested itself under the heading of terrorism.That being said, the Oklahoma City bombing was also grouped under the heading of terrorism which was not a state sponsored act.Failure to have a uniform and accepted definition of terrorism adds to the confusion, and increases the difficulty in tracking terrorism and acts of terrorism domestically and globally.For the purpose of this article the following definition applies to "terrorism." This is the definition used in Executive Order 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism).

The term "terrorism" means an activity that:
  1. Involves a violent act or an act dangerous to human life, property or infrastructure; and
  2. Appears to be intended
    • to intimidate or coerce a civilian population;
    • to influence the policy of a government by intimidation or coercion; or
    • to affect the conduct of a government by mass destruction, assassination, kidnapping or hostage-taking.
There are many different aspects to tracking terrorism. If you examine the motive for this violence, you will discover that fanaticism, religious extremists and activism are increasingly recognized as the primary motivating factor behind them.The unique characteristics of these groups, coupled with the clandestine nature of their activities and in some cases their very existence, make difficult the task of tracking terrorism.

This article offers quite a few definitions of terms used in the Intelligence field, and discusses the difficulty of trying to "following the money" in a non-location-enabled system.

Basic intelligence gathering consists of collecting facts (data) and observations from open sources or clandestine sources.Intelligence provides the raw materials needed to track terrorists and terrorist activities around the globe.The overall intelligence gathering process involves three steps: 1) obtaining; 2) analyzing; and 3) synthesizing. In other words, all methods usually involve collecting the information, interpreting what it means, and using it for something.Modern intelligence gathering has both an electronic and human face. Intelligence is collected from many different sources.For the purpose of this article we will focus on four of the main categories of intelligence: 1) sensory intelligence; 2) electronic intercepts; 3) open source intelligence; and 4) human intelligence.I'm going to describe each of these below.

Massive amounts of data are collected each and every day.All the data must be processed, analyzed and turned into information that is transformed into intelligence.Once the accuracy of the information is assessed, it is then put into context and turned into intelligence. There are six different categories of intelligence.
  1. Current - intelligence looking at day-to-day events
  2. Estimative - intelligence looking at what might happen
  3. Warning - intelligence giving urgent notice that something might happen
  4. Research - intelligence is an in-depth study of an issue
  5. Scientific and technical - intelligence is information on foreign technologies
  6. Derivative - intelligence that is indirectly synthesized from facts and events
Now we will examine each of the four main sources of intelligence.While examining these four categories, I'll give special attention to electronic intercepts as they relate to financial transactions.

Sensory Intelligence
The remote acquisition of information. There are two main categories of sensory intelligence: imagery intelligence, and measurement and signature intelligence.Imagery intelligence is collecting, mapping and interpreting photographs and images from radar and other types of remote observation from aerial units or satellites. Sometimes this specialty is also called PHOTINT.Measurement and signature intelligence consists of acoustic intelligence, radar intelligence, nuclear radiation detection, infrared intelligence, electro-optical intelligence, radio frequency, unintentional radiation, materials, effluent, and debris sampling, and electro optical and spectro-radiometric sources.This is commonly referred to as MASINT.

Electronic Intercepts
There are four subfields associated with electronic intercept intelligence.
  1. Communications intelligence. This involves intercepting and processing foreign communications passed by radio, wire or other electromagnetic means, and by processing foreign encrypted communications, however transmitted.Interception comprises search, intercept, operator identification, signal analysis, traffic analysis, cryptonalysis, decryption, study of plain text, and the fusion of these processes and the reporting of results.Excluded from this definition, but included in the open source intelligence area are the interception and processing of unencrypted written communications, press and propaganda broadcasts.
  2. Electronics signals analysis. This involves collecting (observation and recording) and processing for subsequent intelligence purposes of the information derived from foreign non-communications, electromagnetic radiations, emanating from other than atomic detonation or radioactive sources.
  3. Foreign instrumentation signals intelligence. This includes technical and intelligence information derived from collecting and processing foreign telemetry, beacon and associated signals.
  4. Information derived from the collection and processing of non-imagery infrared and coherent or non-coherent light signals hidden by such techniques as spectrum-spreading or frequency-hopping, usually referred to as signals conversion analysis.
Open Source Intelligence
Open Source Intelligence (OSI) is collected from thousands of reports, documents, news stories and other credible sources of information.OSI is information of potential intelligence value that is available to the general public.This includes newspapers, the Internet, books, phone books, scientific journals, radio broadcasts, television and others. Every piece of information must be assigned a confidence factor as to its accuracy and credibility.

Numerous publicly available web sites provide a wide variety of information, resources and capabilities for tracking terrorism.Two of these web sites are listed below.
Human Intelligence
Intelligence is the process and result of gathering and analyzing difficult to obtain or altogether secret information.Human Intelligence (HI) is a category of intelligence derived from information collected and provided by human sources and is also referred to as HUMINT.HI is collected by a trained HUMINT collector of foreign information from people and multimedia to identify elements, intentions, composition, strength, dispositions, tactics, equipment, personnel and capabilities of entities under scrutiny.HI uses human sources and a variety of collection methods (both passively and actively) to gather information to satisfy the commander's intelligence requirements and cross-cue other intelligence disciplines.

Covert operations are the underlying basis of HI gathering in the world of espionage.It involves using people and methods to break through the distrust of a subject and, in most cases, trick or steal information out of them or their cohorts.Gathering HI consists of a multitude of practices used for reasons similar, yet sometimes more complicated and risky, than straight forward interrogation

Follow the Money?
Terrorist money has been difficult to identify, much less seize, in part because terror operations are conducted on relatively modest budgets.The Bush administration is developing a plan that will give the government access to possibly hundreds of millions of international banking records in an effort to trace and deter terrorist financing. Overseas financial transactions are believed to have provided part of the estimated $400,000 in funding used to carryout the September 11th attacks in the United States.These actions taken by the government will increases the burden on financial institutions due to government antiterrorism rules.Recent legislation created new offense for financing terrorism and contains measures forcing a number of designated bodies to adopt measures to prevent and detect attempts to finance terrorism.Designated bodies include:
  • Banks
  • Credit card companies
  • Insurance companies
  • Financial advisors
  • Tax advisors
  • Accountants
However, even with the expanded monitoring and reporting requirements, other areas that could easily be used to transfer money to help fund terrorist acts go left unchecked.It is estimated that only $10,000 was needed to carry out the attacks on US embassies abroad.Take for example eBay and PayPal.Terrorist could establish accounts, fictitiously sell merchandise on eBay and transfer small amounts of money, less than $3,000, via PayPal.These transactions spread across three or four accounts would be enough to fund another embassy-scale terrorist attack.This non-traditional means of transferring money is the most difficult to detect, monitor and trace.Consider these three facts.
  • In the last several years there were five criminal enforcement actions against banks for failing to comply with laws to combat money laundering.
  • Compliance with anti-money laundering and detecting suspicious transactions that could be related to terrorism conflict with some US and EU privacy laws.
  • The U.S.Embassy in Lebanon asked the Lebanese authorities to investigate eight cases and 31 people involved in money laundering and terrorist funding in 2004.
All the actions of the government could have a negative impact on the fight against terrorism.There is a significant chance that increased monitoring and reporting of financial transactions will force terrorist financiers out of financial institutions and into underground black markets.This would make it far more difficult to monitor and track the flow of money.

Financial transaction data fused with classified governmental intelligence has created a powerful weapon to fight terrorism.Specific transaction attributes associated with money laundering and funding of terrorism are codified in software that sorts through the millions of financial transactions looking for suspicious activities.If you cut off the funds, you significantly restrict the ability of militant groups to operate and fund attacks.A computer program automatically identifies, classifies and reports suspicious activities for faster access to critical information and great accuracy.

With all this data coming from all these sources representing events and transactions that are occurring around the world, graphic representation of the geo-space is required to view the social network of terrorist activities.Events, activities, individuals, transactions and other intelligence data becomes fused together and represented in a GIS system to allow various views of the data based on location, time, individual, event etc...Further enhancement of intelligence collection capabilities and financial transaction monitoring applications will increase the tools in our arsenal to combat terrorist activities.

Published Saturday, May 14th, 2005

Written by Kevin Coleman

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