Mr. AUFHAUSER. Perhaps, but let me build down. One of the questions that you all said you were going to pose here is what are the Treasury Department's equities at the table if you were going to have terrorist financing, one general and one command post and an aggregation of resources. One of the problems I found at the Treasury Department in pursuing terrorist financing is it was not a fully integrated member the intelligence community. So is was not always made aware of the full panoply of counterterrorism activity and relationship that was going on with any country that I was visiting. So, as a consequence, you could find yourself across the table from folks who thought they were trading different poker chips and equities about cooperation when I was demanding cooperation for terrorist financing. As a consequence of that, I pushed, and Secretary Snow pushed, for the creation of an Assistant Secretary for Intelligence so that we could be more integrated into the intelligence community, subject to oversight by the Intelligence Committee here on the Hill. That was passed by Congress, I think wisely passed, and someone will soon be named to that post. Obviously something less formal was in the offing for the integration of local law enforcement but getting them to the table with the information that they are developing about the petty crimes that are perhaps tied to terror, and marrying that information with what the Federal Bureau of Investigation and what the CIA is developing, is absolute critical in my judgment. Madrid was financed with false passports, smuggled aliens, and the sale of hashish, all of it known to the local police and most of it not known to the national intelligence officials. National intelligence officials were aware of activity at the area. If the two had been married, maybe something could have been prevented. It is not unlike the quandary we find the 9/11 Commission facing. Senator COLEMAN. The challenge we have, though, is how to marry that. I come from a local prosecutor perspective, Attorney General's Office in Minnesota. We have our Joint Task Force now and we seem to be making headway. But both structurally and practically there are barriers. I am looking for practical suggestions on how to overcome those. Mr. AUFHAUSER. Let me give you one possible vehicle. FinCEN is responsible for the compilation of currency transaction reports and suspicious activity reports. It is all put into a computer and it is all made available by access to local cops, cops in Toledo or cops in Minneapolis. If they have an inquiry about Aufhauser, they can ping the FinCEN database. That FinCEN database is in the process of also being married, in a more secure sense, with what the agency is developing from abroad. This is also being married, in a more secure sense, with what has been developed by the FBI with regard to intelligence issues, terrorism issues. If local law enforcement could somehow have classified online access to that kind of information it might materially advance our defense of the Nation. In addition, this is most important and I am talking to you like a local prosecutor, you guys have to share towards Washington, too. Because I am finding, from what I am reading and what happened in Madrid, is that the better information was known locally. Senator COLEMAN. That is very helpful. I am trying to somehow weigh Mr. Factor's testimony with Mr. Wolosky's. Mr. Factor, you noted what I would say structural changes in the relationship dealing with the Saudis, that if we had a certification regime that would be helpful, that you recommend the Saudi's fully implement new laws and regulations. The concern I have in terms of dealing with terrorist financing, as does Mr. Wolosky, listening to your testimony, there seems to be a fundamental lack of commitment on the part of the Saudis to actually confront this evil. Are looking for structural changes enough? Or are we simply changing the shape of the box? Mr. WOLOSKY. It is a good question. It is a difficult question. Of course, we are reporting to you on the same report, so the fact that our testimonies are somewhat schizophrenic is a reflection of the fact that much has been done, as I said, but much work remains. As you point out, we do recommend a fundamental change in the nature of the bilateral relationship. As Mallory described, one which is more declaratory and one which focuses-or at least does not put off of the table-issues that historically have been considered purely domestic ones in Saudi Arabia. We have come to the conclusion, as have many Americans and Members of this Committee, that after the murder of 3,000 Americans with respect to issues that implicated domestic Saudi problems and concerns, that those issues can no longer be off of the table. But your question is a good one. Ultimately, in issues of political will, as we have pointed out in our report and in our testimonies, welcome the aggressive pursuit of al Qaeda cells. We condemn the fact that financiers have not been arrested. Those are different issues. They go to issues in my judgment, and in our report's judgment, of political will. It is relatively easier to go after people who are socially marginalized, members of cells. It is much more difficult to go after financiers who are members of the economic and political establishment. Mr. FACTOR. I would add on to that that it may seem schizophrenic but it really is not, it is very consistent. We are calling for a new framework for U.S.-Saudi Arabian relations. For decades U.S.-Saudi Arabia relations have been built upon a consistent framework well understood by both sides. Saudi Arabia would be a constructive actor with regard to the world's oil and markets and regional security issues. And the United States would help provide for the defense of Saudi Arabia, work to address the Israeli-Palestinian conflict, and not raise any significant questions about Saudi Arabian domestic issues, either publicly or privately. That has changed. We have to bring these things into the open light of day. We are an open society, they are an opaque society. If you want to change, you need political will to have those changes, as Madam Chairman pointed out. And we have to work with them to force that issue. Senator LAUTENBERG. Thank you, Madam Chairman. Once again I want to express gratitude for the fact that you are holding this hearing. We have a very good panel of witnesses. Their statements are extremely interesting and I think you have furthered the cause and the fight against terrorism. I greatly respect and appreciate that. I want to get a couple of things out in public view. Mr. Aufhauser, I am sure you heard about the amendment that we passed, and as I mentioned in my opening remarks, that would shut down subsidiaries, either real or sham, that are then in turn used to do business with rogue states. Have you been aware in your previous government service or since then that these things exist? Mr. AUFHAUSER. Yes. Senator LAUTENBERG. Is it important Mr. AUFHAUSER. In a broader context, if I can say. Generally speaking, the economic sanctions laws and OFAC regulations for which I was responsible have enormous loopholes for subsidiary conduct abroad. Senator LAUTENBERG. So let me extend your comment a little bit and say I take an implication there that we ought to close it down wherever we can do it? Mr. AUFHAUSER. If you believe in the effectiveness of the economic sanctions programs which are part of our law, yes. Senator LAUTENBERG. It was disappointing that we lost that amendment by a single vote but that is what happened. Mr. Wolosky, are we doing enough—and Mr. Factor may have just mentioned-to put public pressure on the Saudis? Do you think that we can ratchet that up substantially for the benefit of the elimination of this financing route that encourages terrorism? Mr. WOLOSKY. Certainly we can, in some instances, yes. The report recognizes that some issues are best dealt with privately. But it also strongly urges a more declaratory policy when the U.S. Government finds significant and enduring shortcomings in the response of Saudi Arabia to terrorist financing issues. Benchmarks need to be set out publicly if they are not being met privately. Individuals, who the United States has designated as terrorist financiers and has indicated in no uncertain terms part of the al Qaeda financial network, and who have not been incarcerated in Saudi Arabia, those are the very issues that need to be brought to the fore of our public statements and respect of these matters. Senator LAUTENBERG. The private discussions do not have the same effect. And I think we ought to declare once and for all that if Saudi Arabia has to dial 911, as they did in 1990, do not call us. The phone is going to be out of order. And that we have to say that every dollar, let the word go out of this Committee and across the media. Let the word go out that if you contribute to anything that encourages terrorism that it is pointing a gun at the head of our people. And we are going to think of it that way and our punishment is going to be swift and full. It is bothersome as the devil to me that-and I was early on the ground in the Gulf War, and I have been to Iraq since then, and I know a lot of people associated with the Saudi government and had some semi-friendly relationships with them. But for them to pass off the blame, it is in print and the news, when the Crown Prince Abdullah statement after the May 24 attack at Yanbu says "Zionism is behind terrorist actions in the kingdom. . . . I am 95% sure of that." And the Foreign Minister then affirms these comments, says the affirmation of these comments is again absolutely correct. 95 percent. And then Adel Jubeir declined to repudiate these statements at a June 2, 2004 press conference. And the State Department has been silent on them. And they have to speak out. I think Mr. Aufhauser made a very important statement. He talked about the fact that we have to recognize that this is far beyond the normal activities that we see these oblique apologies, etc. Because it is inherent in the culture. When you teach little kids to hate other little kids, that is the beginning of the end. It is the end of their lives and the end of peaceful lives around the country. And we have to make sure that they understand that in public terms, and denounce that kind of educational thrust. It just is not going to work and it is not helpful. I would ask one last question here. I know that you have seen the report that was issued in the New York Times, on June 12. It talks about some internal dispute within the task force. And perhaps some redaction or reduction in terms of the comments that the task force report was going to carry. Mr. Factor, I would ask you, you are very much a part of the activities that go on in our government and I say that respectfully, and you are also a businessman that knows very much about how things operate in terms of financing and investor relationships and things of that nature. So when you see a report issued and it is suggested that you thought maybe this report was too critical, is that the context of the article that was printed in the New York Times that suggested there was dissension and some alteration made by you to get this report in acceptable fashion for the Administration, as well as for the mission? Mr. FACTOR. I can only answer that this report is a consensus report. We all had various beliefs and feelings and we talked those out very thoroughly. Our project directors' position was to try to reach a consensus and try to put together the fairest, most accurate, bipartisan report possible. We believe we have achieved that. And I believe all of us unequivocally support the findings and recommendations in this report and we are very proud of it. There were many discussions on a host of topics. We solicited information from a host of people-the Administration, Saudi Arabia. We, at one point, planned a trip over there which never came about. It is very common for all task forces at the Council on Foreign Relations to solicit input from the subjects of those task forces. So this is a common thing. Senator LAUTENBERG. Even after the report is complete, a report is not complete? Mr. FACTOR. A report is not complete until everybody signs off on it. Senator LAUTENBERG. Thank you. Chairman COLLINS. Thank you, Senator. Mr. Wolosky, before I turn to Senator Specter, I want to give you an opportunity to discuss the issue that was just raised, as well, since you were one of the two principal authors of the report. Mr. WOLOSKY. Thank you. First, I would like to respond to another point that Senator Lautenberg made concerning the anti-Semitic statements made by the Crown Prince and consistently reaffirmed by other Saudi officials, including just a few days at a press conference in Washington. In my view, and in the view of our task force, they call into question the commitment of Saudi Arabia as a reliable partner in the war on terror. They cloud its efforts in moral uncertainty. And they must be immediately retracted. The U.S. Government, the President of the United States, in my view, should immediately condemn those statements and urge the Saudis to condemn those statements. I personally was very distressed to see a senior State Department official stand by on June 2 in Washington and not repudiate those comments in response to a question from a reporter. In my view, that is a disservice to many people and to the war on terror. Now as to the New York Times report, as I have discussed with your staff, I wish to clarify that the language that was in the first draft of the report I distributed to the full task force membership on May 2, 2004 was as follows: "There is insufficient evidence to conclude Saudi Arabia has fully implemented its new laws and regulations and important questions remain. As part of Saudi Arabia's offer of assistance to the work of our task force, we sought to visit Riyadh to discuss, among other things, the state of the implementation of these new laws, regulations and oversight mechanisms." Senator LAUTENBERG. Madam Chairman, I appreciate the clarification. Thank you. Chairman COLLINS. I thought it might be helpful to you, Senator. Senator LIEBERMAN. Madam Chairman, I join you. Tomorrow morning, when we open our New York Times, I expect the headlines to say "Times Snookered." Chairman COLLINS. Senator Specter. OPENING STATEMENT OF SENATOR SPECTER Senator SPECTER. Thank you, Madam Chairman, and thank you for scheduling these hearings. I compliment the Council on Foreign Relations for undertaking this kind of study. I am very interested in all of your findings. I focus for just a moment on the one that Saudi Arabia, whose people and organizations contribute 60 percent of the annual budget of Hamas, does not recognize Hamas as a terrorist organization. Mr. Factor or Mr. Wolosky, do you know what their factual basis is for that kind of a statement, when Hamas admittedly target civilians? Mr. FACTOR. I do not know what their basis is for that. I can only speculate. Senator SPECTER. Mr. Wolosky. Mr. WOLOSKY. My own personal view is that one man's terrorist is another man's freedom fighter. |