U.S. House legislation aims to cripple Islamic State’s financing | McClatchy Washington Bureau

U.S. Rep. Robert Pittenger of Charlotte, North Carolina, is behind three bills designed to cripple the Islamic State’s ability to wage a global war by giving the Treasury Department new methods for cracking down on the group’s illicit funds.

Expanding the Treasury Department’s role in fighting terrorism is crucial to diminishing the ability of extremist groups to fund their terror campaigns, said Colin Clarke, a RAND Corp. political scientist with expertise in terror financing who’s a Carnegie Mellon University professor. Typically, Congress and the Defense Department invest in tanks, bombs, guns and “things that go boom” because it is easier to calculate success through those methods, he said.

The three bills approved by the House of Representatives this week would give U.S. officials new tools for combating terrorism just as NATO and the Defense Department are moving toward expanding the scope of Operation Inherent Resolve, the U.S.-led war in Iraq and Syria:

▪ One bill calls for the president to create a national strategy for combating the financing of terrorism in consultation with the federal banking agencies, the U.S. attorney general, the secretary of state, the defense secretary, homeland security secretary and the director of national intelligence.

▪ A second bill requires the treasury secretary to submit to Congress a report with recommendations on how department attachés can better coordinate with foreign financial ministries. The legislation also directs the secretary to look into the possibility of merging two Treasury agencies – the Financial Crimes Enforcement Network intelligence unit and the Office of Foreign Assets Control sanctions enforcement unit – into a stand-alone bureau similar to the FBI.

▪ A third bill instructs the department to include electronic transactions when it conducts searches in specific cities for illegal finances. That means when the Financial Crimes Enforcement Network orders financial institutions to track money laundering trends in a certain part of a city, those institutions will need to track electronic transactions in addition to hard currency.

“Terrorism financing is an evolving threat,” said Pittenger, a Republican. “When we successfully cut off one avenue, the terrorists search out a new means of funding their acts of evil. We are continuing to monitor terrorist financing and meet regularly with our allies around the world, and will continue to introduce new legislation to address this threat as it evolves.”

The legislation would have little day-to-day impact on Bank of America, Wells Fargo or any other major banks in Charlotte, Pittenger spokesman Jamie Bowers said. The existing Financial Crimes Enforcement Network statute for reporting suspicious transactions to the Treasury Department is “from the era when people wrote more checks and did banking in person at the branch,” he said. The legislation would expand those requirements to include electronic transactions and wire transfers, he said.

American Bankers Association spokesman Jeff Sigmund said his group would continue to analyze the bill to determine the impact on banks.

Pittenger crafted the bill that would expand the parameters of financial record-keeping requirements and also proposed a bill that would have expanded the sharing of information among government agencies on the funding of terrorist activities.

That bill failed because of concerns that it “could compromise and impede upon the privacy of Americans who are law-abiding and have no criminal connections whatsoever,” said Rep. Tony Cárdenas, D-Calif., who voted against it.

Rep. Loretta Sanchez, D-Calif., voted against the bill because, she said, “It irresponsibly expands the overreach of the Patriot Act.”

The Patriot Act provides tools to the government that it can use to intercept and obstruct terrorism. It defines the rules for detecting and preventing money laundering and the financing of terrorism.

Over the past two years, Pittenger has been advocating for an increased focus on terrorism financing as the chairman of the Congressional Task Force on Terrorism and Unconventional Warfare. He has also been advocating for an increased focus on combating terrorism funding as vice chairman of the Task Force to Investigate Terrorism Financing.

Now his role has become more pivotal. Defense Secretary Ashton Carter announced Monday that he is preparing to send another 560 American troops to help the Iraqi army retake Mosul, the country’s second largest city, from the Islamic State. NATO Secretary-General Jens Stoltenberg said Saturday that the multinational military alliance would begin supporting efforts to stamp out the terrorist group by using sophisticated surveillance airplanes to track the movements of its fighters.

Pittenger has been flying overseas to meet with the senior officials of Middle East countries to drum up cooperation in tracking terrorism financing.