Treasury Official Calls Iran 'Central Banker of Terrorism'

Tuesday, April 01, 2008

WASHINGTON — A senior Treasury Department official called Iran "the central banker of terrorism" in testimony Tuesday before the Senate Finance Committee, but said the United States is succeeding in chasing money tied to the Al Qaeda terror group.

Outlining some of what Iran is known to be doing to support anti-American and anti-Israeli fighters, Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey said Iran "uses its global financial ties and its state-owned banks to pursue its nuclear and ballistic missile programs, and to fund terrorism."

He also told lawmakers that Iran uses front companies and "cut-outs" to "engage in ostensibly innocent transactions that are actually related to its nuclear missile programs."

"We've seen Iran's banks request other financial institutions take their names off of transactions when processing them in the international financial system. This practice, which is even used by the central bank of Iran, is intended to evade the controls put in place by responsible financial institutions and has the effect of threatening to involve those financial institutions in transactions that they would never engage in if they knew who or what was really involved," Levey said.

Levey runs the Office of Foreign Assets Control, which is responsible for tracking money being filtered into State Department-designated terror groups, for purposes of weapons proliferation and for the narcotics trade. In March, Treasury froze assets of Future Bank B.S.C., for allegedly being controlled by Iran's Bank Melli, which was previously designated by the Treasury

Department for facilitating Iran's proliferation activities.

In all, since June 2005, OFAC has identified 51 entities and 12 individuals as proliferators of weapons of mass destruction, of whom 36 entities and 11 individuals were tied to Iran, nine entities and one individual were tied to North Korea and three entities were tied to Syria.
In February, OFAC froze assets of individuals said to be funneling weapons, money and terrorists through Syria to Al Qaeda in Iraq.

Levey told lawmakers that efforts to cut off money to Al Qaeda has shown success — especially in the last 18 months — and cited senior Al Qaeda leaders' complaints that they have suicide bombers ready to go, but no money to finance operations.

"Al Qaeda's expression of concern about its financial difficulties is not limited to this one comment," Levey said. "This concern has recently been echoed elsewhere in Al Qaeda's upper ranks.

"This, in part, is the impact of being forced out of the formal financial system. Al Qaeda has had no choice but to turn to less reliable methods of raising, storing, and moving money, giving rise to opportunities for fraud and distrust within its ranks."

Read also "Iran: Top U.S. Official Says Financial Clampdown Is Working" (RFERL)