Category Archives: Terror

FBI, Shameful Treatment

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INTERIM REPORT ON THE DEPARTMENT OF JUSTICE’S HANDLING OF KNOWN OR SUSPECTED TERRORISTS ADMITTED INTO THE FEDERAL WITNESS SECURITY PROGRAM

So why is that important? The Justice Department is protecting terrorists while they have lost others around the country. But when it comes to our own citizens that are part of the free press, doing their jobs in foreign countries and they get taken hostage then escape, the Justice Department offers no protections.

Below is a shameful display of a government agency known as the FBI. The FBI is worse than al Qaeda? You be the judge.

Former al-Qaida hostage recounts nightmare of dealing with FBI after his return

By Nancy A. Youssef

WASHINGTON — The only thing as bad as being tortured for months as a captive of jihadists in Syria was dealing with the U.S. government afterward, according to one former American hostage.

Matt Schrier, 36, a freelance photographer held by extremists for seven months in 2013 until he escaped, has told McClatchy that the bureaucracy he endured upon his return home was a second kind of nightmare following the months of abuse he suffered while he was a hostage.

“I never thought it would get this bad,” Schrier said.

The FBI never told his father that he had been kidnapped. It waited six months into his capture to produce a wanted poster, and only after his mother prodded. It allowed jihadist forces to empty his bank account — $17,000 — with purchases on eBay, even as the government warned hostage families not to pay ransom so as not to run afoul of anti-terrorism laws.

After his escape, the government made him reimburse the State Department $1,605 for his ticket home just weeks after he arrived in the United States. The psychiatrist assigned to help him readjust canceled five appointments in the first two months. And when he had no means to rent an apartment, FBI victims services recommended New York City homeless shelters.

The FBI declined to comment on the specifics of Schrier’s complaints but said in a statement that “When an American is detained illegally overseas, the FBI’s top priority is ensuring the safe return of that individual.”

“To that end,” the statement said, “the FBI provides support services to victims and their families, to include help in meeting short-term exigent needs, and shares information about their loved ones that is timely and appropriate.”

There is no way to independently confirm Schrier’s version of events, and emails he shared with McClatchy make it clear that his relationship with his FBI handlers was, at best, acrimonious. But his telling of his experience is consistent with the anger relatives of other hostages have expressed in interviews with McClatchy when speaking of their interactions with U.S. government officials.

“The next time the FBI calls me will be the first time,” said Schrier’s father, Jeffrey, 67, who lives in Coconut Creek, outside Fort Lauderdale, Fla. “I thank God my son was able to escape, because if he was waiting for the government to spring him he would still be waiting in that hellhole.”

Spurred by the recent beheadings of three Americans who had been held hostage in Syria by the Islamic State, the Obama administration earlier this month said it is reviewing the way government agencies handle hostages and their families.

But none of the families of those who have been killed or are still missing have been asked to be a part of the review, which White House spokesman Josh Earnest said last week had begun in August. Schrier and another American who was released told McClatchy that they too have not been contacted. Some families said the administration has yet to reply to a weeklong request to give their input to the review.

“How can you change a policy where there is not one?” Jeffrey Schrier asked. “If there had been a policy, on what planet would you not notify the kidnapped person’s father?”

National Security Council spokesman Alistair Baskey said the White House would have no comment.

Schrier’s complaints are a symptom of a bigger problem, the families say — a government approach to retrieving hostages that gets lost among several government agencies, none of which is tasked with doing everything possible to bring an American home.

The FBI generally is a family’s main point of contact because it is charged with investigating overseas crimes against Americans, but the State Department, intelligence community and the National Security Council all have roles. Often, the agencies don’t share what they learn with one another — or the families.

How aggressively a family pushes for a loved one often shapes the U.S. government’s approach, several families have told McClatchy. Many alleged that the government’s approach appeared to be to do the minimum possible to secure an American’s return and that a hostage’s release appeared to depend primarily on the goodwill of whoever is holding him.

Often families said they feared that their loved ones’ cases were seen more as a way for the U.S. to gather intelligence on the groups holding American citizens than on actually finding and freeing the hostages.

Schrier is among those making the accusation. “They use us,” he said. “They use journalists as chum to bring sharks to the surface.”

Such handling not only hurts the chances of getting hostages home but the subsequent investigation into the effects of the kidnapping, Schrier said.

In his case, his kidnappers used his debit card to buy things overseas. They also paid off his Discover card, he said, leading the FBI to suspect he had joined the extremists. Then they created a clone of the card, which someone used as recently as this summer in Garden City, N.Y. Schrier fears that portends an extremist sleeper cell in the United States, funded in part by a card in his name.

But he’s never received a call from the FBI, though he has called them repeatedly to report the misuse. “I am the victim and I have been shut out of the investigation,” Schrier said.

Schrier was entering Syria for the second time in December 2012 seeking to become a news photographer when he went missing. At the time, there was little indication in news accounts that al Qaida-affiliated rebels were a significant presence in northern Syria, making it appear relatively safe for Westerners to cover the war there, and so Schrier went. Instead, a group of kidnappers surrounded his taxi and snatched him. He eventually would fall under the control of the Nusra Front, al-Qaida’s affiliate in Syria.

Back home, his mother called the authorities and reported her son missing. When the FBI arrived, she told them not to call his father as she was estranged from him and Schrier had not talked to him for years. They followed her wishes during the entire time he was a hostage, Schrier said.

Schrier’s mother did not realize at first that he was just one of several Americans being held hostage in Syria. When she realized there were other victims, she noticed that the FBI had created missing-person posters for the others, but not for her son. When she asked why, the FBI hurriedly posted one online, six months after her son’s disappearance, he said.

His mother also deferred to the FBI on how to get her son home. Every time she sought answers, however, the FBI gave her vague responses, Schrier said. They said, for example, that the government could not get into his email, but when she called AOL and explained the situation AOL gave her a temporary password. FBI agents made no mention of jihadists’ spending her son’s money.

She received poorly worded emails from her son’s account during his capture telling her he was all right. The agents told her they could not say whether he was writing the emails or still being held, Schrier said.

During his captivity, Schrier’s captors tortured him, whipping his feet repeatedly until he could not walk, giving him electric shocks and holding him in a dark room for extended periods, making it difficult for him to know how many days had passed.

He escaped through a window on July 29, 2013. Hours later, he met with American officials across the border in Turkey in what he thought would be a warm welcome home. Instead, the next day officials had him sign a document vowing to reimburse the State Department for his airfare back to the United States. He complied, as he said they told him it was only a formality. Less than a month later, officials said they would not help him get a new passport unless he paid.

The FBI’s Office of Victim Assistance is supposed to help American hostages who return home, but Schrier said that in his case it ignored his requests for help and valued him only as an intelligence source on jihadists in Syria. He briefed the office for weeks.

“I am the one who told the government that the (rebel) groups are fighting each other,” Schrier said. “I regret doing anything for them.”

With an al Qaida-affiliated group using his identity to make purchases, Schrier needed to get a new ID and Social Security number. It took five months for him to get a new identification card — and that was only after he cursed the agent who was supposed to help. He so far has not received a new Social Security number.

The FBI put him up in a hotel when he returned to the United States. But one month into his return, with his lack of valid identification contributing to his difficulty finding an apartment, the FBI suggested he move to a homeless shelter.

“I hear they are not that bad,” he said the victims assistance agent told him.

Schrier said his experience is a case study in how not to treat a hostage who’s returning to the United States.

“It is like a scam. I don’t understand what they do, victims services,” Schrier said. “The FBI has made it impossible for me to recover.”

 

UPDATE: No Access to 2,500 Documents IRS to WH

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Update:  12/3/14 It seems that Treasury Secretary Jack Lew has intervened with the court’s decision forcing release of these documents. The White House is also working over-time to ensure the Judge’s ruling is impeded. This is more law-FARE.

Here is the link for more on this developing matter. Collusion and obstruction are being realized.

http://www.washingtonexaminer.com/feds-balk-at-releasing-docs-showing-irs-sharing-tax-returns-with-white-house/article/2556890#.VH9yMn7mYv0.twitter

 

It begins with a FOIA lawsuit, then comes a ruling, then comes the Inspector General. It should be noted that those guilty is actually per document, per count. Congressional hearings are scheduled.

September 30, 2014                                                Mary Beth Hutchins, 202-400-2721

Cause of Action Defeats Treasury IG Tax Office in FOIA Lawsuit

Court Rules that TIGTA Must Process FOIA Request Regarding Investigations Into

Tax Records Improperly Shared with the President

WASHINGTON –The U.S. District Court for the District of Columbia ruled Monday that the Treasury Inspector General for Tax Administration (TIGTA) must process an October 9, 2012 Cause of Action Freedom of Information Act (FOIA) request seeking documents about investigations into unauthorized disclosures of taxpayer information to the Executive Office of the President.

Cause of Action’s Executive Director Dan Epstein said:

The court has ruled that the federal government cannot hide behind confidentiality laws to prevent Americans from knowing if our President has gained unauthorized access to their tax information. This is a decisive win for all Americans and for government transparency and accountability. The public already knows the President uses FOIA to shield his targeting of the press and this ruling prevents the President from using FOIA to shield his targeting of taxpayers.

Revealed: 2,500 new documents in IRS / W.H. harassment cases

In a shocking revelation, the Treasury Inspector General has identified some 2,500 documents that “potentially” show taxpayer information held by the Internal Revenue Service being shared with President Obama’s White House.

The discovery was revealed to the group Cause of Action, which has sued for access to any of the documents. It charges that the IRS and White House have harassed taxpayers.

In an email from the Justice Department’s tax office, an official revealed the high number of documents, suggesting that the White House was hip deep in probes of taxpayers, likely including conservatives and Tea Party groups associated with the IRS scandal.

In requesting a delay in the delivery date of the documents, Justice told Cause of Action, “The agency [Treasury Inspector General for Tax Administration] has located 2,500 potentially responsive documents and anticipates being able to finish processing 2,000 of these pages by the December 1 date. It needs the additional two weeks to deal with the last 500 pages to determine if they are responsive and make any necessary withholdings.”

Cause of Action, which calls itself “Advocates for Government Accountability,” wasn’t surprised by the number of documents. It had filed suit to win access to them and a federal judge shot down Treasury’s earlier bid to hide the documents.

“This disclosure, coming only after Cause of Action sued TIGTA over its refusal to acknowledge whether such investigations took place, and after the court ordered TIGTA to reveal whether or not documents existed, signals that the White House may have made significant efforts to obtain taxpayers’ personal information,” it said in a statement to Secrets.

The disclosure follows the agency’s recovery of 30,000 “lost” emails from former IRS executive Lois Lerner, the central figure in the IRS-Tea Party scandal.

Cause of Action said the latest finding renews their “concerns about the decaying professionalism of, and apparent slip into partisanship by, IRS’s senior leadership.”

Below is the full email from Treasury:

My client wants to know if you would consent to a motion pushing back (in part) TIGTA’s response date by two weeks to December 15, 2014. The agency has located 2,500 potentially responsive documents and anticipates being able to finish processing 2,000 of these pages by the December 1 date. It needs the additional two weeks to deal with the last 500 pages to determine if they are responsive and make any necessary withholdings. We would therefore like to ask the court to permit the agency to issue a response (including production) on December 1 as to any documents it has completed processing by that date, and do the same as to the remaining documents by December 15. I note that the court’s remand was for a “determin[ation],” which the D.C. Circuit has recently explained can precede actual production by “days or a few weeks,” but we would prefer to simply agree on a date for turning over any of the remaining 500 documents that may be responsive.

18 page lawsuit is here in full text.

Jihad John, the Beheader had Support Network

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Jihadi John’s British terror ring smashed as cops uncover a network stretching across the UK

An intelligence expert has told how evidence has been discovered showing a dozen or more suspects have been helping the ISIS executioner

Terror network: Jihadi John

Security agents who spent months tracking a UK terror network supporting Jihadi John uncovered a chilling web of evil stretching from West Yorkshire to the South East.

An intelligence expert has told how evidence has been discovered showing a dozen or more suspects have provided the Islamic State executioner with “money, contacts, and facilitated travel to Syria”.

The revelation comes after agents compiled one the “most extensive dossiers” on those behind the British killer whose identity is known by MI5 and the FBI.

Our source revealed all of his friends and contacts in Britain had been identified and that a web had been uncovered “stretching from Dewsbury to London”.

An intelligence expert commented: “Those supporting this terrorist face a simple choice – either co-operate with inquiries or face the full force of the justice system. There is nowhere to hide.”

Nowhere to hide: Jihadi John

Counter-terror police officers acting on US intelligence have found and tracked suspected members of his terror support network in the UK.

The Sunday Mirror understands up to a dozen suspects have already been targeted by the authorities.

Last month the FBI confirmed they knew Jihadi John’s true identity but details have deliberately not been made public while intelligence officers continue to monitor the movements and electronic ­communication of his alleged helpers.

Some of the suspects were already known to British security services and have been linked to previous UK-based Islamic terror plots.

It is also understood that friends of Birmingham-born Junaid Hussain, one of Jihadi John’s close associates in a gang of British IS fighters dubbed “The Beatles”, have been co-operating with intelligence officers.

A US intelligence source close to the investigation said: “The emphasis has been to track down the support network around the British IS executioner because we know they are still communicating with him.

“There has been success in this approach and our monitoring techniques have exposed British members of a tight network that is actively sending funds and resources to IS fighters in Iraq and Syria.

“Familiar names of known jihadists have cropped up again and again in this investigation.”

Former London rapper Abdel – Majed Abdel Bary, 23 – shares several physical attributes with the killer and had been considered a suspect.

But voice recognition experts believe it is not him.

There has also been confusion over whether the man seen talking in the beheading videos is the same person who carried out the executions.

Crucial clues have been provided by US analysts who have used advanced facial recognition technology to literally unmask the killer.

Using only the man’s eyes — the only part of his face left uncovered in the video – they have pieced together a photofit style picture of what they say lies underneath the mask.

The forensic officials created two versions of the likeness: one clean shaven and another with a moustache.

The US source said: “High-tech imaging techniques have been used, but it is still only a very good guess at what the killer could look like.”

Other experts are using the IS beheading videos to determine exactly where and when the Western hostages were beheaded.

US experts now say it is possible that two militants appear in the video. Both dressed in the same black garb, they could be switching places between frames.

In the James Foley video, the man speaking has a pistol holster underneath his left arm — a sign that he is right-handed. But the masked fighter who beheaded Foley did so with his left hand.

In another sign of inconsistency, the knife the man held at the start of the video does not appear to be the same  knife shown next to Foley’s decapitated body.

Two weeks ago Jihadi John, believed to have beheaded two British and  two American hostages, was reported to have been injured in a US-led air strike.

The masked ‘executioner’ with a London accent is believed to have narrowly escaped death when he attended a summit of the group’s leaders in an Iraqi town close to the Syrian border last Saturday.

Jihadi John is reported to have been rushed to hospital after the air strike in Al Qaim, in Anbar Province, Western Iraq.

The Foreign Office said: “We don’t have any representation inside Syria, so it is difficult to confirm these reports.”

The joint US-Iraqi mission left at least 10 IS commanders dead and around 40 injured.

IS members issued urgent calls through the local mosque’s loudspeakers, appealing for the town’s residents to donate blood at the hospital.

Jihadi John has become one of the world’s most hunted terrorists after the beheading of British aid workers David Haines, 44, from Perth, and Alan Henning, 47, from Manchester, as well as American journalists James Foley, 40, Steven Sotloff, 31, Peter Kassig, 26, and an unknown Syrian soldier.

Unlike most other western Muslim recruits, Jihadi John has risen to a ­position of some seniority.

Normally, Western fighters occupy lowly positions. He is believed to have been a prison guard for IS and has risen to be a member of a shura council, or governing body, of an IS ‘wilayat’, or province.

Jihadi John is aged between 28 and 31, and is fluent in English, Arabic and classical Arabic, the language of the Koran.

He first joined IS in Iraq when he left the UK, but then moved to Syria.

He is said to travel around in a black Audi jeep, and has six other British terrorists with him who act as his  bodyguards.

***

But America has the same issues as noted below.

U.S. federal prosecutors have charged two young American men from Minnesota, one of whom is in the Middle East fighting, with supporting the Islamic State of Iraq and Syria (ISIS) militant.

Somali Americans Abdi Nur, 20, and Abdullahi Yusuf, 18, were charged with “conspiracy to provide material support to a designated foreign terrorist organization, namely, the Islamic State of Iraq and the Levant (ISIS),” Assistant Attorney General John Carlin said.

Abdi Nur, who traveled on May 29 to Turkey, through which many Islamist militant pass en route to fight with ISIS, was to have returned to the United States on June 16 but did not, the statement added.

Yusuf was arrested on his way to school at Inver Hills Community College. His attorney argued for his release during a Tuesday hearing in U.S. District Court in Minneapolis, noting he had been going to school and work despite knowing for months that he was under investigation. But a magistrate judge ordered him held until a detention hearing Wednesday.

“More than 16,000 recruits from over 90 countries traveled to Syria to become foreign terrorist fighters with alarming consequences,” said Carlin.

“This is a global crisis and we will continue our efforts to prevent Americans from joining the fight and to hold accountable those who provide material support to foreign terrorist organizations,” he added. “With these two defendants, we have now charged more than 15 individuals with offenses related to the foreign fighter threat in Syria.”

Yusuf in Minneapolis sought an expedited U.S. passport for his trip to Turkey, but could not give an itinerary or explain the source of his funds for his trip, as he was unemployed, authorities said.

Yusuf’s parents – who authorities said didn’t know about their son’s plans – attended Tuesday’s court hearing but declined to speak to The Associated Press.
ISIS emerged in Syria’s war in the spring of 2013.

The militants proclaimed a “caliphate” in June after seizing swathes of Iraq and Syria.

UN Just Got the Memo on Ansar al Sharia

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The United Nations has something call Blue Sheets which are immediate notices of concern as they often reference threats. The UN also has their own list of terror cells, organizations and individual terrorists by name.

The State Department also authors a SETL, Security Environment Threat List and the United Nations is part of the distribution list. Libya has been included on more than one SETL. For reference, this is what action is required by virtue of a SETL.

While the United States was quite slow for unknown reasons to list Ansar al Sharia on the terror list until February of 2014, the United Nations did not add Ansar al Sharia until this month, November 2014. Why you ask? Ah, the short answer is diplomacy.

Alas, it appears that after years, Libya has been officially recognized by the United Nations, so now what is the solution? None on the horizon.

UN Security Council adds Libya Islamists to terror list

United Nations (United States) (AFP) – The UN Security Council on Wednesday added to its terror list a Libyan Islamist group accused of involvement in the 2012 attack on the US mission in Benghazi that killed the ambassador and three other Americans.

The council blacklisted Ansar al-Sharia for its ties to Al-Qaeda, slapping an arms embargo, assets freeze and global travel ban on the extremists at the request of Britain, France and the United States.

The measure targets Ansar al-Sharia Benghazi and its sister group Ansar al-Sharia Derna, which both have links to Al-Qaeda in the Islamic Maghreb (AQIM) and other violent radical outfits.

In October, Ansar al-Sharia Derna pledged allegiance to the Islamic State (IS), the Islamist group that has seized control of territory in Iraq and Syria.

French Ambassador Francois Delattre said the decision would provide a boost to efforts by UN special envoy Bernardino Leon to broker a deal between Libya’s many militias and the government.

“This is an important decision because it draws a clear line between, on the one hand, jihadists with whom there can be no dialogue, and on the other, those Libyan groups — Islamist and others — that must take part in talks launched by special envoy Bernardino Leon,” Delattre told AFP.

Since 2012, the Benghazi wing has operated several training camps mainly to help armed groups in Iraq and Syria and to a lesser extent in Mali, according to the request filed by the three countries.

Twelve of the 24 jihadists who attacked the Algerian In Amenas gas complex in 2013 trained in the camps of Ansar al-Sharia in Benghazi, Libya’s second city, documents said.

More recently, the group has conducted several attacks on Libyan security forces, it added.

Ansar al-Sharia Derna also took part in the September 2012 attack on the US mission and is operating camps in the northeastern Derna and Jebel Akhdar regions to train fighters for Iraq and Syria.

A third sister group, Ansar al-Sharia Tunisia, was added to the UN terror list in September.

French Foreign Minister Laurent Fabius told a meeting on the sidelines of the UN General Assembly in September that the group should face sanctions as part of efforts to prevent Libya from sliding further into violence.

The UN effort to broker a deal with various militias and the government on restoring order in Libya led to a 12-hour humanitarian ceasefire in Benghazi earlier on Wednesday.

Libyan authorities have struggled to assert control across a country awash with weapons and powerful militias after the ouster of longtime dictator Moamer Kadhafi in a 2011 revolt.

Libya’s internationally recognized government has been forced to take refuge in the country’s far east to escape a mainly Islamist coalition which seized control of Tripoli at the end of August.

***

Due in part to oil investments in Libya, the West takes extreme measures when it comes to Libya, while it is a failed state with no standing government.

So it takes experts to declare Libya is a rogue state? Just what experts exactly? Logical analysis is fleeting.

Islamic State has toehold in lawless Libya, experts say

TRIPOLI, Libya — With Libya engulfed in chaos, the town of Derna in the east of the largely lawless country is emerging as a new stronghold for the Islamic State jihadist group, experts say.

The North African state has been wracked by instability since the overthrow of autocratic leader Moamer Kadhafi in 2011, providing a fertile ground for Islamic extremists.

IS fighters have already swept across Iraq and Syria, and their leader Abu Bakr al-Baghdadi recently boasted of vows of allegiance from militants in Libya, Egypt, Algeria, Yemen and Saudi Arabia.

Some Western observers consider Derna, a town of 150,000, to be the home of a third IS franchise in North Africa, after Jund al-Khilifa in Algeria and Egypt’s Ansar Bayt al-Maqdis declared their support earlier this year.

“The Islamic State is in Derna. It’s well documented. There’s no doubt,” said Othman Ben Sassi, a former member of the now-disbanded Transitional National Council, the political arm of the rebellion that overthrew Kadhafi.

The jihadist group is exploiting “the absence of state authority and porous borders,” he added.

Statements and images have for several weeks circulated on extremist forums claiming to depict gatherings of “Libyan jihadists” belonging to IS — prompting concern in Washington.

“We have seen reports that violent extremists (in Libya) have pledged allegiance to IS and are looking to associate themselves with it,” said State Department spokesman Jeffrey Rathke.

Libyan authorities have struggled to control militant groups as well as powerful militias which ousted Kadhafi, and the internationally recognized government has been forced to take refuge in the far east of the oil-rich country.

‘Ideological fight’
Derna and large areas of Benghazi, Libya’s second city, have served as strongholds for radical groups including Ansar al-Sharia, which is classified by the UN as a terrorist organization.

In April, an offshoot of the group announced it had implemented Islamic sharia law in Derna.

The self-proclaimed “Shura Council of Islamic Youth” has reportedly opened Islamic courts and established a religious police force in the town.

Dozens of masked members have appeared in military fatigues, regularly parading in pick-up trucks brandishing rocket launchers and heavy machine guns and toting the black and white flag used by jihadists.

In August the Shura Council posted a video online appearing to show the public execution in a Derna football stadium of an Egyptian man accused of murder.

But the group has yet to formally pledge allegiance to IS, and analysts say there are divisions within its ranks.

“Several extremists in Derna are attracted to IS. But the majority of senior jihadists in Libya are former al-Qaeda members and there is an ideological fight between IS and al-Qaeda partisans,” said a Libyan expert on jihadists who did not want to be named.

The UN this month branded Ansar al-Sharia a terrorist organization owing to its affiliation with al-Qaeda’s North African franchise.

“The decision was based on reliable intelligence,” the Libyan expert said. “Ansar al-Sharia has closer ties to al-Qaeda than to any other group.”

‘Islamic emirate’
According to Claudia Gazzini, Libya analyst at International Crisis Group, some Derna factions have pledged allegiance to IS, but it is unclear which ones and how much support they enjoy.

“There is a misguided tendency to automatically associate the establishment of Islamic courts and the killings of soldiers with an IS agenda,” she said.

Derna was already considered by many analysts to be a de-facto “Islamic emirate”, entirely free from state control, before the reported claims of allegiance to IS.

The town has long been suspected of harboring and training foreign fighters who then go on to fight in Iraq and Syria, where IS has declared a “caliphate” and imposed its harsh interpretation of Islamic law.

“There are factions in Derna who reportedly swore allegiance to IS in the search for a group that could unify the Muslim community,” said a former Libyan official who also asked not to be named for security reasons.

“But ideological differences between jihadist groups and the international coalition offensive against IS means these factions have so far opted for discretion, or have gone to fight in Iraq and Syria,” the former official added.

According to one resident of Derna, life in the town goes on largely as normal — for most people.

“You go out, you do your chores, you visit friends. No one bothers you,” the resident said.

“But if you are a policeman, a soldier or a lawyer, you’re dead.

 

Money, People, Bribes, Politicians and Islamic State

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The U.S. Treasury maintains a sophisticated global banking network that tracks money for laundering, destinations, use, recipients and interim banks. But why is the top person in charge of tracking dark money not using the tools when it comes to the increasing wealth of Islamic State? The answer is chilling.

Corruption Currents: Islamic State Receives Millions in Ransom Payments

Bribery:

Brazil’s bribery probe of Petrobras SA is threatening the firm’s debt financing. A suspect in the scandal turned himself in. (Bloomberg, AP)

The former chief executive of a Virginia defense contractor pleaded guilty to providing gratuities to a federal contracting official, and the company agreed to pay a $300,000 fine. (Washington Post)

Fewer Filipinos are giving bribes, according to a survey, but opposition politicians doubted the findings. (Philippine Star, Philippine Daily Inquirer, ABS-CBN News, Manila Standard-Today)

Tom Fox navigates resource reductions, spots the Chamber of Commerce defending the FCPA and discusses doing business in India. The FCPA Blog notes a purge of ad men in China and reports on recent remarks from the SFO director. The FCPAProfessor runs a guest post about challenges in pursuing bribe-takers.

Fraud:

A grand jury found that fraud persists in programs meant to bring New York contracts to businesses owned by women and minorities. (NY Times)

Money Laundering:

An Indian regulator tightened regulations targeting money laundering. (Economic Times)

The founder and former president of a community bank was sentenced to two years in federal prison for bank fraud and money laundering. (AP)

A senior executive FIFA’s ticketing and hospitality partner could be jailed if he returns to Brazil to await trial for charges including money laundering, racketeering and illegally selling World Cup tickets. The executive denies the charges. (Bloomberg)

Iran and China agreed to fight money laundering together, Iranian media reported. (FARS)

A Thai court extended detention for family members accused of helping their “big brother,” a former top police official, launder bribes. The two denied the allegations. Thai police say the “big brother” confessed to the charges, including soliciting bribes for job appointments and allowing illegal gambling and oil smuggling. (Bangkok Post, AP)

Sanctions:

Republicans are fuming about the Iran nuclear talks extension. Both sides are racing to sign a deal before the new, Republican-controlled Congress takes office. Oman has played a low-key but important role in the negotiations. (National Journal, NY Times, Guardian, ABC News, BuzzFeed)

The extension in talks leaves a U.N. atomic agency probe in limbo; it needs more money to continue the investigation. (Reuters, Reuters)

A European court awarded damages, for the first time, in a sanctions case. (European Sanctions)

Terrorism Finance:

The Islamic State has received between $35 million and $45 million in ransom payments in the past year, a U.N. report said. (AP)

How can a bank know if it’s holding money for a terrorist? (Top Broker)

General Anti-Corruption:

China’s corruption watchdog launched a series of inspections of state-owned enterprises and government bodies, state media reported. (Reuters)

FIFA’s general secretary said the body will need years to repair its reputation. (NY Daily News, AP, Reuters)

The first tennis official to be banned for life from the sport for corruption said he’s innocent and is being used as a scapegoat. (Bloomberg)

What do you do when corruption is treated as part of the business process? (HR Reporter)

Corrupt politicians only suffer when there are local media organizations to report on it. (Nieman Lab)

***

No Blacklist Yet for Islamic State Banks

Why the United States isn’t using its biggest financial weapon against banks in the Islamist militant group’s territory.

In June, the Islamic State of Iraq and al-Sham (ISIS) militants inspired fear and awe when they swept into Iraq’s second-biggest city, Mosul, and reports spread that they looted the city’s banks and walked away with more than $400 million.

Those claims were later contested, but the group’s reputation for being not only savagely violent, but also incredibly wealthy, was already set. In July, the Financial Times reported that armed guards from the Islamic State, as the group later renamed itself, were stationed outside the banks, but that the banks’ coffers had not been pillaged.

Over the summer, the United States continued blacklisting members of the group and its supporters, but not the financial institutions in territory under Islamic State control. The Treasury Department traces its efforts against the group and its predecessor, al Qaeda in Iraq, back to 2004. In August, the United States froze the assets of three key terrorist financiers, one of whom allegedly helped funnel money through Kuwait to ISIL, as the U.S. government calls the group.

In September, 11 more names of individuals were added to the list for allegedly helping move funds and fighters to facilitate terrorist organizations from Iraq to Indonesia. Still, the banks that were so brazenly overrun in Mosul and those in the rest of Islamic State-controlled territory were never named. The reasoning behind that decision illustrates how fraught the U.S. fight to disrupt the Islamic State’s funding has been, as even the best U.S. tools for fighting terrorist financing are ill-suited to the task.

The Islamic State evolved out of earlier extremist groups in the region and improved upon their financial models as it grew. Instead of relying mostly on outside donations, the Islamic State earns most of its money through criminal activity — from oil smuggling to kidnapping — within the territory it controls, which makes it less reliant on the formal financial system. The group’s ability to make money in the illegal financial sector using cash for dealings in stolen oil and antiquities means it is less vulnerable to the biggest weapon the United States uses to go after its enemies’ finances: shutting down the banks, accountants, and middlemen that keep the money flowing.

On Thursday the Obama administration will face questions from Republican lawmakers about U.S. attempts to undercut the Islamic State’s funding. Treasury Department anti-terrorism finance chief David Cohen is set to testify before the House Financial Services Committee.

Texas Republican Jeb Hensarling, the committee chairman, said the hearing would “examine the adequacy of international banking policies to combat the new challenges that the Islamic State and groups like it present.”

In remarks prepared for Thursday’s hearing, Cohen states that the United States is working with “Iraqi authorities, Iraqi bank headquarters, and the international financial community to prevent ISIL from using the scores of bank branches located in territories where it operates.

“The results of this work have begun to show,” Cohen’s remarks state. “We’ve seen a decline in financial activity in areas where ISIL operates, and banks under ISIL influence are losing their access to the international financial system.”

Cohen is also expected to say that U.S.-led airstrikes are taking a toll on the Islamic State’s oil smuggling operations. Since mid-June, the group reportedly has been taking in $1 million a day in illicit oil revenue, but Cohen says that the bombing has lessened the haul to “several million dollars a week” — an imprecise figure, to be sure.

According to Cohen, the United States is also trying to improve its ability to track the extremist group’s money: “We are working with our counterparts in the intelligence community to ramp up collection on ISIL’s finances.”

In addition, the United States is combing through financial data for potential connections to the Islamic State. The Financial Crimes Enforcement Network is assisting in the effort by looking at the data the agency collects in the United States and through the agency’s connections with international financial intelligence-gathering institutions, a spokesman for the agency said Tuesday.

The risk of the Islamic State using the banks to move money internationally has to be weighed against the possible effect on the local population if Treasury tries to cut off those institutions. In a speech last month, Cohen acknowledged that the United States was not using its biggest weapon — shutting banks out of the financial system — against the institutions that had fallen into the hands of the extremists for exactly that reason.

“Our interest is not in shutting down all the economic activity in the areas where ISIL normally operates,” Cohen said. “They are subjugating huge swaths of the population, millions of people, who are still trying to live their lives. And banks, as everybody knows, are important lubricants for the economy.”

Vanda Felbab-Brown, an expert on illicit money at the Brookings Institution, said there are more than humanitarian factors to consider; the United States also doesn’t want to anger locals and push them closer to the extremists.

“At the end of the day what will make a difference in debilitating ISIL will be how much the local population turns against the group,” Felbab-Brown said. “This very tempting desire to shut down the financial system will tremendously worsen the lives of people that are already living in desperation.”

Felbab-Brown said that Somalia taught the United States that lesson. The United States sanctioned al-Shabab in 2010 as a terrorist group, but the move also scared humanitarian organizations out of the country just as a devastating famine was bearing down. Although many blamed the resulting suffering and starvation on al-Shabab, concerns grew that the anger and frustration would push more people toward the militant group.

Felbab-Brown praised the Treasury Department’s careful approach.

“The good thing about Shabab and ISIL is that they’re very heavy-handed and tend to really overplay their hand in terms of violence to the local population,” Felbab-Brown said. Without interference, that violence often becomes intolerable and eats away at the group’s local political support.

“One has to judge very carefully the likelihood of making a difference,” Felbab-Brown said. “And what are the political effects of any policy.”

Dennis Lormel, who led the FBI’s terrorism-financing investigations after the Sept. 11, 2001, terrorist attacks, said the United States doesn’t want to give the extremists an opening to demonstrate leadership.

“If they come out because they have the money to fund social programs that help the local economy and help the people, then they’re going to tout that and they’re going to demonstrate that they care and that the West doesn’t care,” Lormel said. “And they’ll use that as a recruitment tool.”

Perhaps acknowledging the importance of keeping the local economy going, if only so the group can continue extorting money from it, the Islamic State reportedly reopened the banks in Mosul in September, three months after it took control of them. Local reports said the Sunni militants allowed certain account holders to take out money, subject to the approval of an Islamic State committee and a hefty fee off the top.

Some analysts speculate that Treasury could also be keeping the banks open in order to glean intelligence that could help paint a clearer financial picture of the group.

“It’s considered to be more useful to try to watch what’s going on rather than to take some hard, punitive action right away and disrupt the process before you understand how it works and leverage your understanding,” said Patrick Johnston, a counterterrorism expert with the Rand Corp.

Even if the banks were blacklisted, though, it’s not clear that would keep the group from using them.

“They actually could be quite useful for ISIL without even having any real ability to transact with any foreign entity,” Johnston said.

Johnston said the conundrum for the United States is that even if they were to be cut off from the international financial system, the banks could be used to store and transfer money within the group’s territory for much the same reasons of efficiency and security that make banks a preferable way to move money in other countries.

“It really shows the challenge ahead of Treasury as much as anything else,” Johnston said.