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Treasury's quiet war

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Treasury Undersecretary Stuart Levey heads the financial intelligence office, which brimming with unattached professionals.
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WASHINGTON (CNNMoney.com) -- You probably know the Treasury of the best and strangest town festivals.
Department as the agency that brought you the bank bailout, the AIG rescue Play
and, of course, the IRS.

But Treasury is also one of the key players in the war on terrorism and Mortgage & Savings Center
smack in the middle of nearly every major international conflict in which the
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United States is involved. The office is also playing an increasingly critical Mortgages Equity Loan Insurance Credit Cards CDs
role at the center of U.S. foreign policy strategy in Korea, Iran, Afghanistan
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Inside Treasury, the work is done by a low-profile but high-impact unit known
as the Office of Terrorism and Financial Intelligence.
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"Years ago, if anybody had said that Treasury would be at the center of all
these national security issues, we wouldn't have believed you," said Key to NBA's success? Embracing tech NBA
Matthew Levitt, who used to help run the department and now directs the Commissioner David Stern says the basketball league is
Washington Institute's Stein Program on Counterterrorism and Intelligence. looking to expand its use of technology to improve
gameplay and increase its audience.
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Treasury is the world's only government finance agency with its own in-
house intelligence unit. It has offices as far flung as Riyadh, Islamabad, Unique Homes
Kabul and Abu Dhabi. Selling Roy Rogers' former ranch With 67 acres of
land and room for 150 horses, the former ranch of the
They're the ones seizing or freezing assets of suspected bad guys -- from 'King of the Cowboys' sold at auction for $640,000.
terrorists to drug runners. They're a part of the U.S. intelligence apparatus, Play
sharing information with the CIA and the FBI, among others.
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"Treasury is the only finance ministry in the world to have an intel shop that
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is very much focused on financial intelligence, getting access to information right ones for your car is so important.
about the networks that support terrorists, weapons proliferation or narcotics Play
traffickers," said David Cohen, assistant secretary for terrorist financing.
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'Crippling the Iranian economy'
For the past few years, the intelligence office has been pressuring big banks
worldwide to stop doing business with Iran. The aim is to cut funding for
Markets
Iran's nuclear efforts and groups like Hezbollah and Hamas.

US Indexes Market Movers International

"They're really responsible for crippling the Iranian economy," said Glenn Index Last Change % Change

Simpson, a senior fellow in corruption and transnational crime at the Dow 24,307.18 35.77 0.15%
International Assessment and Strategy Center. Nasdaq 7,567.69 57.38 0.76%

S&P 500 2,726.71 8.34 0.31%

The department is headed by Treasury Undersecretary Stuart Levey, who
has become world renown. He was among the few high-ranking Bush Treasuries 2.87 0.02 0.60%

administration appointees that President Obama asked to stick around. Data as of 12:44am ET

symbol

In 2008, Levey was decried by an ousted Iranian finance minister who in a

farewell speech publicly complained about Levey and an "exhausting chess
battle with the U.S.Treasury," according to a translation provided by an
American Enterprise Institute policy analyst.

Michael Jacobson, a former senior adviser in the intelligence office, said that
the president's decision to keep Levey on sent a powerful signal abroad.

"It was definitely a message, particularly to Iran: We're talking about

engagement but we're keeping on the guy who is responsible for the tougher
moves as well," said Jacobson, a counterterrorism and intelligence senior
fellow at the Washington Institute's Stein Program on Counterterrorism and
Intelligence.

Sanctions have always been a big stick available in the U.S. foreign policy
arsenal, but the Treasury's intelligence office goes further, Cohen says.

It pressures international banks to cut ties that the United States believe are
tainted by terrorism.

"Frankly, you don't have to tell them the next point: That it would be really
bad for their reputation if it turned out they were involved in illicit
transactions," Cohen said. "Financial institutions recognize that their
reputation is probably their most critical asset."

Treasury's pressure often has a ripple effect. After the office blacklisted two
state-owned Iranian banks, Britain, Australia and other countries followed
suit.

Following the 'illicit' money

The Office of Terrorism and Financial Intelligence was put together six years
ago following the big federal agency shuffle that created the Department of
Homeland Security.

The office has more than 700 attorneys, investigators, analysts and financial
experts. And the financial intelligence unit is housed with other Treasury
teams, such as the financial crimes unit, that need intel on alleged dirty
money transactions.

Among their jobs is leading the Illicit Finance Task Force, which works with
Afghanistan and Pakistani officials to disrupt improper financial transactions
and help the governments build up their own financial crime-fighting teams.

One of their biggest accomplishments came in December when the Credit

Suisse Group agreed to pay a $500 million penalty for violating U.S.
sanctions against Iran.

The Credit Suisse settlement was the largest the office had ever reached. It
came about in no small part because Treasury, working with the Justice
Department, had turned up evidence that the company had developed a
how-to pamphlet for Iranian clients explaining how to fill out payment
messages in a way that avoided triggering U.S. filters.

Sometimes the office's work has drawn controversy.

For example, since the Sept. 11 terrorist attacks, Treasury has had access
to a database of intra-European financial transactions, despite protests
about privacy violations. The United States has been working with the
European Union council to come up with a final agreement that would allow
Treasury continued access while assuaging privacy concerns.

Cohen assures that Treasury only uses the database when it has a reason
to believe a person is involved in terrorism and takes safeguards to assure
privacy protections.
International
Ferreting out information about potentially illegal financial transactions has
become highly valued by the U.S. intelligence community. One reason: It
can prove to be powerful evidence because there's less room for
misinterpretation, as opposed to wire taps of conversations that might be
held in code.

"The nice thing about the transfer of funds is, it doesn't lie," said Levitt, the
former director of the office. "Just knowing a transaction happened tells you
a lot."

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Low oil prices: A tool to control Iran

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First Published: February 16, 2010: 7:37 AM ET

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