Synopsis
In September 2002, President Bush unveiled his National
Security Strategy to address the unprecedented challenges
that are facing the nation. It outlined the new direction
in foreign policy required to respond effectively to what
occurred the previous September. Among the tools to be engaged
in the new war was 'development.' Indeed, it was elevated
as a 'third pillar' of our foreign policy, along with defense
and diplomacy.
USAID works in 75% of the frontline countries identified
as vulnerable to exploitation by terrorist organizations.
Our education programs provide an alternative to radical
Islamic madrassas; our skills training and economic enterprise
programs offer opportunities and alternatives to radical
clerics’ recruitment. Our financial reform programs
help combat money laundering and are helping reduce the
flow of funds to terrorist groups. Our democracy and governance
programs help build transparency in government that can
deny terrorist sanctuary and safe haven for their training.
These USAID efforts–ongoing for years–now have
a very specific focus in U.S. National Security.
Notes
Edwin Hullander, Senior Policy Advisor, USAID/PPC
Edwin Hullander described the changing nature of America’s
enemies—from states with large armies to regional
and local guerrilla groups—and subsequently the restructuring
of America’s defense strategy. Though terrorism has
existed for centuries, America lay outside its geographic
scope until September 11. In addition, the practice of terrorism
itself has shifted from ‘targets of opportunity’
to mass killing.
To address this new threat to our national security, our
strategy is based on diplomacy, defense, and development.
Hullander explained that Islamic terrorist networks function
and thrive by their common Muslim fundamentalist ideology,
resources (often procured through Muslim religious organizations),
common enemy (the ‘West’), mutual support, and
sponsorship. Terrorist cells are extremely well-structured
from logistical planning at the highest levels to support
from the local community (which is the greatest obstacle
to cell elimination). Fragile states, like Afghanistan,
present fertile ground for training of recruits, while financial
crimes, including narcotics trafficking, provide a substantial
pot of money for terrorist cells. All of these characteristics
contribute to the reach of terrorist activities into 77
countries globally.
The United States Government has formed a strategy for
combating terrorism, including a long- and short-term plan.
The short-term plan aims to defeat terrorist organizations
and protect the homeland. The long-term plan seeks to deny
terrorists resources and to mitigate the underlying socio-economic
and political factors that leave areas vulnerable to exploitation
by terrorists.
The Government has an operating plan in place that aims
to reduce the scope of terrorism at the state, regional,
and global levels and to decrease terrorist capability at
all levels. USAID contributes most to the longer-term attributes
of the plan. The Agency plays a crucial role at the grass-roots
level by working to deny terrorist resources by diminishing
the underlying conditions they exploit.
Hullander explained that reducing terrorism involves denying
terrorist organizations recruits, funds, and sanctuary.
Vulnerable people subject to terrorist recruitment can be
diverted through basic education, legitimate job skills,
and the presence of a microenterprise sector in the economy.
USAID plays a large role in denying terrorists sanctuary
by promoting good governance, conflict mitigation, public
communication, and administration of justice.
Robert Stapleton, Office of the Coordinator for
Counterterrorism, U.S. Department of State
U.S. Efforts to Combat Terrorist Financing
Robert Stapleton discussed the importance of the financial
aspect of terrorism, given the direct relationship of financial
capacity with the ability of terrorists to acquire resources.
The September 11 hijackers demonstrated the significance
of terrorist financial planning and networks in carrying
out the attacks. After September 11, the U.S. government
enacted two laws that dealt with terrorist financing: (1)
Executive Order 13224, to designate individuals and groups
that supported terrorism and (2) the USA Patriot Act, to
expand U.S. law enforcement capabilities. Government agencies—CIA,
FBI, DHS, DOJ—came together to form specialized units
and joint task forces.
The United States Counterterrorism Finance Strategy mission
statement is “to deny terrorists and their supporters
the financial means to plan and execute terrorist activities
by detecting, disrupting, dismantling terrorist financing
networks…” They use law enforcement and intelligence
operations, find and freeze terrorists assets, and work
to build counterterrorism finance capacity both globally
and domestically.
Stapleton concentrated on the methods of building counterterrorism
finance capability globally. First, it is important to identify
countries most vulnerable to terrorist financing. Second,
Stapleton pointed out that in some countries money laundering
has not been criminalized and therefore emphasized the necessity
of establishing a sound legal framework that criminalizes
dirty money and promotes responsible enforcement mechanisms.
He also advocated cooperation with allies through ratification
of UN instruments related to terrorism.
Third, an effective counterterrorist strategy involves
financial regulatory supervision in the form of stringent
regulatory and compliance measures to combat terrorist financing
and money laundering and bank employees which are aware
of financial system abuses by terrorists. Fourth, establishing
a financial intelligence unit facilitates international
knowledge sharing. Fifth, governments should organize specialized
units and interagency task forces geared specifically toward
terrorist financing cases. Finally, it is important to have
a prosecutory infrastructure for terrorist financing and
other complex financial crimes and well-trained prosecutors
to examine terrorist cases.
Stapleton discussed the October 2002 Bali bombings in Indonesia
as an example of a successful counterterrorism finance working
group after a terrorist incident. The culprits who carried
out the attack, members of Jama’ah Islamiyyah, had
a broad range of donors that financed a plethora of terrorist
activities. However, with post-incident international cooperation
(among the U.S., Australia, and Indonesia) in the implementation
of the aforementioned five-point CT strategy, 95 arrests
and 33 cases against Bali bombing suspects were underway
within a year of the attack and the JI cell responsible
was virtually dismantled.
Stapleton concluded his discussion by point out some positive
effects of building a counterterrorist finance regime, including
creating an environment of “good governance”
attractive to foreign investors and deterring organized
crime, narcotics, and terrorist organizations from using
the formal banking system to launder and move their funds.
Melissa Brown, Democracy and Governance Policy
Coordinator, PPC, USAID
USAID with the help of outside experts have come up with
a draft strategy for AID in fragile states. The strategy
covers two main affects: improve monitoring and analysis
to identify goals and programs oriented not only toward
mitigating the symptoms of fragility, but healing the underlying
conditions; and improve operational response in fragile
states.
A failing state has three characteristics: tenuous security
situation, failure of the government to provide basic services,
and questionable government legitimacy. Failed states include
those states in which all of the aforementioned aspects
have collapsed. Recovering states are those which embody
all of the above mentioned principles but are on an upward
trajectory.
There have been three major drivers of developing a USAID
strategy for fragile states. First, the Administrator, as
he is very commitment to this issue, established a Democracy,
Conflict, and Humanitarian Affairs Bureau, which deals with
key issues in fragile states. Second, USAID has recognized
as one of its many goals lasting recovery of fragile states.
Finally, AID has expertise related to the major security
threat of state failure in the form of the National Security
Strategy.
The USAID’s draft strategy includes:
- Recognizing a need to improve monitoring and evaluating
in fragile states. They have identified six trigger points
that tend to push a country into failure: democratic collapse,
reform crisis in an authoritarian state, religious or
ethnic conflict, corruption, guerrilla or regional rebellion,
and external shocks.
- Recognizing the importance of centrality of governance
as illegitimate and ineffective governments are key drivers
for state failure. They have developed a framework to
analyze this.
USAID has established the following goals in fragile states:
- To identify indicators for failing states and act preemptively.
- To focus on recovering nations—not just failed
or failing nations—in which stability is often taken
for granted and to continually monitoring conditions.
- To advance strategies that:
- promote stability,
- advance government reforms, and
- improve capacity
- To address both the short-term impact and long term
recovery of a failed state.
- To improve USAID’s operational capacity to give
an early response.
- To develop a fragile state business model for the purpose
of transporting resources quickly out to missions, quickly
deploy personnel, etc.
Brown pointed out several program issues in which USAID
needs more capacity, including security (legislative prohibitions),
job creation, and infrastructure (governance reform and
failed states institution building). USAID could also improve
capability in related policy initiatives, such as conflict
mitigation and management, fragile state governance, anti-corruption,
and Muslim outreach initiatives.
Jeff Denale, Counterterrorism Coordinator, Office
of Security, USAID
Denale opened with reminding the audience about the vulnerability
that charitable organizations face, including (1) source
of funding and (2) possibility of infiltration. In 1999,
USAID was found to be working (unbeknownst to the Agency)
with terrorist organizations. This finding raised the question:
how do we prevent government funds from going to terrorists?
Denale discussed two pilot programs; first, the National
Security Policy Directive; and second, a USAID vetting program
in which grantees applying for grants with USAID are required
to first be screened through the intelligence community.
Executive order 13224 and the Patriot Act maintain that
grantees have default obligation to ensure that their subcontractors
are not terrorists. Denale emphasized that there is no dollar
threshold for mandatory vetting because any small increment
of money may add up.
He lamented that it is hard to find a balance between no
security and invasion of privacy. He pointed out that much
controversy surrounds background checks for sub-grantees
and that input from the NGO community is important..
Ann Phillips, Political Economy Policy Analyst,
PPC, USAID
Strengthening fragile states, countering terrorism, and
Muslim world outreach are intertwined objectives. Many Muslims
live in states that could be classified as fragile. The
terrorist groups that have global reach cited in the previous
presentations identify themselves as Muslim. Phillips emphasized,
however, that only a small percentage of Muslims are part
of jihadist groups. The Muslim world is characterized by
enormous diversity—significant Muslim populations
inhabit five continents. Forty-nine countries have at least
50 percent Muslim population; of those, USAID has missions
in 27.
The diversity extends beyond geography to a wide range
of performance indicators, such as economic openness or
democratic governance. Moreover, Islam itself contains many
streams that vary in terms of tolerance and doctrine. This
diversity should disabuse us of any attempt to homogenize
the Muslim world. Although only a small percent of Muslims
are jihadist, tolerance of such groups in parts of the Muslim
world has increased because of growing antipathy toward
U.S. policies as well as deteriorating economic and social
conditions.
The two goals of countering terrorism and expanding Muslim
outreach to support moderates creates a real dilemma for
the USG, according to Phillips, Security requirements restrict
exchanges and limit the NGOs with whom we can work, in effect,
limiting our outreach. Survey data show that negative views
of the U.S. pervasive throughout the Muslim world are due
to US policies as well as perceived maltreatment of Muslims
in the U.S.
Question and Answer Session
There was an underemphasis on the role economic
growth in terrorism during your presentation.
Hullander: This was not an oversight by
any means. To divert potential terrorists you must provide
them alternatives in the form of jobs, an opportunity to
contribute to the community. I wanted to show the continuity
among education, skills and jobs. This was focusing more
on the short-term, immediate actions.
I’ve noticed that natural disasters, such
as the AIDS epidemic, that have created large populations
of unsupervised children. What are we doing for the next
generation, for the next 20 to 30 years, to mentor and to
give social support in order to socialize these kids?
Brown:
One of USAID’s core objectives is to deal with issues
surrounding the AIDS epidemic. There are a number of initiatives
in progress to address HIV/AIDS issues. In terms of the
fragile states strategy, to what degree do these health
failures contribute to state failure? We look at cross-sectoral
factors to try to catch the crisis at the earliest stage
before in becomes a full-blown crisis. We try to target
our programs on preventative measures, but sometimes we
are so focused on crisis we don’t have time for innovative
long-term programs.
Education is a key factor. In particular in the Asia Near
East Bureau and the Africa Bureau have two new initiatives
on education, including school to work programs.
Most of funding in the Global Health Bureau goes
to organizations that we have relationships and that are
U.S.-based. The risk of USAID funds being siphoned off to
terrorists is relatively low compared to the risk that other
donors face, like the World Bank. What kinds of lessons
have we learned here that we’re taking to other groups?
Denale: In terms of the vetting process
itself, it’s not just a USAID initiative, it’s
actually a national-level, government-wide directive. In
essence, if you are a government organization issuing grants,
you will have to essentially curate this type of vetting
process. On the international community level, I know Treasury
is heavily engaged with the international community on tracking
their own organizations and are attempting to expand the
programs that the banking community uses overseas.
Stapleton: On the international side,
we are trying to hold a few conferences regionally to talk
about the regulation of charities as a whole. Some countries
already have charity oversight boards, others don’t.
We bring our IRS charity oversight people overseas to help
other countries establish their own.
I’m with an NGO that works in post-conflict
situations. I think that a lot of USAID grantees have very
valuable experience to contribute to the U.S. government,
not only in terms of helping them achieve their development
goals, but in terms of security and intelligence. We’re
restricted in the way in which we use our funds. I think
it would be nice for the USG to fund a seminar series in
which NGOs can demonstrate their findings in these regions.
Another issue is getting the data from the informal sector.
It would be nice to have some coordination at the higher
level of government to organize the piecemeal informal sector
data that is currently out there.
Denale: That is a delicate topic. Feedback,
whether from mission employees or NGOs, is important, for
example, knowing where your funds are going and having sound
accounting principles. It is important to strike a balance
between allowing intelligence to do its job and protecting
people’s privacy.
Hullander: There are two activities that
touch base with what you said. Terrorist activity is targeted
toward civilians and that’s the group that NGOs are
trying to serve. On the other side, there has traditionally
been a separation between the development community and
the security community. Development and security are coming
together.
How is USAID planning on coordinating with the
new Stabilization and Reconstruction Office that’s
been established within the Department of State? They’ll
be dealing with a lot of post-conflict issues, so I’m
curious as to how you all can comment on that.
Brown:
Certainly there’s a nexus between what that office
is looking at and what I noted on the fragile states strategies.
That office is brand new. There is also recognition that
we have significant post-conflict operational capability
and we are working with that office to see how we can be
facilitators. Those connections between AID and the Stabilization
and Reconstruction Office have been made.
You mentioned the polls in the Muslim world, which
highlight negative views of the U.S. due the Iraq war and
the Israel-Palestine conflict, etc. I wonder if that is
creating more space for trying to think about those policies.
I was struck by Melissa’s comment that USAID is a
small player in the policy making process. It seems that
(as much good work as USAID does on the ground) if there
are broad overwhelming U.S. policies that are sweeping and
galvanizing populations against the U.S., were working at
odds there. Is there space attempting to address this problem?
Phillips: There
are discussions about these issues. There is a STATE/AID
joint policy council working group on Muslim issues, where
we talk candidly about a lot of things. The recognition
is there. It obviously doesn’t mean that the U.S.
is going to change all of its policies in those areas.
Office of Transition Initiatives question—If
Jeff can address the status of vetting process within AID.
Is the issue of vetting our partners being addressed more
broadly in the issues of monitoring and management tools
given to USAID staff overseas?
Denale:
Where its stands right now is a revised version of the National
Security Policy Record delivered to the NSC about 2 months
ago. Much of it is still in discussion right now regarding
legalities surrounding privacy and due process (if there
is a denial of a grant). Central Contractor Registry has
been expanded to include USAID grantees—it doesn’t
go as far as the sublevel. It’s difficult to say what
the mission or program officers will be given at this point
regarding the vetting process itself. A lot is involved
in gathering information about the organization itself.
We are using more tactical oriented activities, such as
knowing who sub grantee is on the ground, in this process.
Regarding the Zogby poll, since the percentage
of people with negative feelings against Americans are so
high, are there other aspects of American life, like social
and cultural issues, that we should look at as well as policies?
Phillips:
We want to look at all of those things. We also
want to look at a range of polls. What we can gather is
that most Muslims don’t feel comfortable feel saying
that they have a positive view of the U.S. so the negative
numbers might be inflated, we do need to be cognizant of
them. I agree that we do need to go in and look at those
other factors that may be contributing to those negative
feelings.
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