[inaudible conversations] >> good morning. i would like to call to order the 23rd annual review of the field of the national security law. my name is harvard for the standing committee on law and national security and i did that with jim mcpherson has the chair the committee. i want to get a few administrative issues out of the way. the first is for everyone in the room c-span is here so when you ask your questions we appreciate it if you would identify who you are and speak clearly in a short crisp question for the panel. i have a number of other administrative announcements. the first is cle for continuing legal education. we would like you to make sure you fill out the forms and give them to holly. you will also notice we have the scale of sheets that are on your

table. they are reviews. we use them -- we review them very carefully afterwards. that is why we think our programs have improved over the years because we listen to what you have to say and try to give you the type of programs you really are interested in. we would also have another announcement. our committee will be having on friday november 15 an address addressed by ambassador marc grossman. he is the vice-chairman of the cohen group. he will be speaking about the diplomatic campaign in afghanistan and pakistan. he will be at the university club at 8:00 a.m. on november 15 so please take out your black areas in iphones. we also have another speaker. the senior adviser for transnational homeland security and counterterrorism program at the center for strategic and international studies. that will be wednesday december 4. also at 8:00 a.m. to 9:00 a.m.

and that also will be held at the university club which is on 16th street in the northwest. i also have a very special announcement. as many of you know the aba standing committee is the oldest standing committee in the american bar association. we actually just celebrated our 50th anniversary in 2012. it's a committee that was started by then aba president lewis powell who then went on to have more of an extraordinary career with the supreme court. there was another major individual who is a force in setting up our committee and that was a man named lloyd. he is one of the founding fathers of the committee and was a force in national security law and the understanding of the rule of law and civil liberties. we have created an award and

it's one of the most prestigious awards are committee can give out. as i look around the room i see friedman is in the audience and he was a recipient of the word but i have the great pleasure of announcing that this year's award winner is john norton borg and i'd like you to give a round of applause. [applause] john has had an amazing career. he got a lot of applications for the award but i'm holding up his cd which runs 22 pages. small print. i'll give you the table of contents. 47 books, five accord views and apparently is spending so much time writing books he does not have time to read books he could see only has five look reviews. 88 articles monographs and book chapters 33 newspaper articles and letters 58 testimony statements including government

testimony and statements. one arbitrary of decision and eight i'm published papers that soon may be published now that you are an award winner. he has had an extraordinary career of such dedication to the rule of law and national security. it's hard to think of someone who would be a more worthy carry on traditions and i can't thank you enough john for doing what you have done for our committee and what you will continue to do for the rest of this panel and what you will continue to do for us as long as you still have rest and you so thank you so much. i also want to point out that today we are going to have a full day. john is going to be doing his panel with an extraordinarily extinct -- distinguished group of people who i think have the tradition of we stand tall and we swing hard and we call it as we see it. that's why so many people come to us because of our bipartisan approach.

later in the day we will be having cybersecurity future challenges with mary derosa and it may well have a keynote address by jeff smith a partner and porter talking about the national security london will be ending with the applicable issues facing lawyers would tell harvey and we'll be having the honorable james baker from the u.s. court of appeals for the armed forces and dutch blakey who will be discussing ethics. those of you have to stay for your ethics cle that will be coming on at 2:15 to 4:00. with that it's my distinct pleasure to pass the podium on to john who will running -- be running a panel for which we are looking forward to extensively and thank you again john. >> harvey thank you so much for the honor of perceiving the

lehman award. i knew maury liebman very well, a recipient of the presidential medal of freedom and maury had just done extraordinary things for this country and for the rule of law and the world. so it is a very special pleasure for me and a the special honor to have an award named after this great american. we have a particularly important subject matter to discuss on the first panel today. it is that of the nexus between transnational crime and terrorism and other issues in national security. this is an issue that i think is not really understood. there has not been the kind of focus on this as there has been in many other areas of national security law in recent years. and yet the magnitude of this

problem is one that has been growing and is today a very serious issue. the director of national intelligence testified with the congress of the united states last year that the nexus between crime and terror was in fact one of five key threats to the united states national security today. now there are many different parts of that nexus and i will leave it to our panel to really discuss that for you in depth, but part of it of course is the ability of groups that are using organized crime and using crime to raise money to finance a variety of terrorist activities and other national security threats including insurgency. in addition to that there is going to be a sharing of

logistics. there is going to be a learning of tap tics from one group to another. we see particularly the nexus of this in terms of locations in areas for example of collapsed government and failed government or areas such as venezuela which have regimes that are in fact very difficult for the united states in foreign policy. so there are many different interrelations here that unfortunately seem to be getting more serious by the day and we have a panel that i think is certainly one of the best panels one could possibly put together to talk about this. the real top experts in the united states on this subject. our first panelist is spike

bowman who is a specialist in national security law and policy. most recently he served as the deputy of the national counterintelligence executive. he served before that is the senior research fellow at the national defense university and prior to that he was in the senior executive service federal bureau of investigation is the senior counsel for national security law and is director of the intelligence issues group at the national security branch. please join me in welcoming spike bowman. [applause] >> thank you, john. when we think of organized crime i think most of us incorporated about the east coast of the united states when we look at the crime families and things like that and we tend not to really look at it as a national security issue.

after all what disorganized crime do lex it's money and it takes money from people and takes money from organizations from institutions. it corrupts police and officials in the government at officials and engages in arms trafficking and so forth. the problem you have with looking at it as simply a criminal enterprise is that you can't have effective organized crime if you don't have corruption somewhere along the line. in addition to that if you have anyplace in the world which is unstable you have a breeding ground for organized crime and if you think about it depending on how you count it there are 195 countries in the world a great majority of which are failed states which gets a lot of opportunity and breeding ground for organized crime. instability in any region is a

threat to all of us. instability also allows organized crime to flourish in these areas and organized crime doesn't want the rule of law to be well protected or established in these areas. after all the rule of law is an enemy of organized crime. so this is one of the problems that we face. now we started looking at organized crime as a national security issue rather tenuously quite some time ago. everyone in this room is familiar with executive order 12003 which was written in 1981 and when that order came out one of the things that the order established as a national security threat was international drug and international terrorism investigations. not for cicely organized crime but of course what are

international drug organizations engaged in? international organized crime. as you move forward in time you begin to look at it a little more specifically as a national security issue. the presidential decision in 1995 clearly declared international crime a threat to national security and the same year 1995 the national security strategy recognized organized crime as a national security issue. in 2002 the national security strategy again recognized it as the social security issue. the same in national security strategy in 2006 and then in 2009 and national intelligence estimate recognized it. by 2010 the national security council was heavily invested in transnational organized crime. so this is basically something

that has been growing and evolving and it's something we need to look at as a national security threat terry at if we think of the traditional methods of organized crime we can begin to see that this is something that really does affect us on a transnational issue. for one thing trying to combat it and trying to combat any transnational threat is difficult because you start as lawyers thinking about how you manage transnational threats and for us it is the rule of law. the rule of law requires courts and requires prosecution and requires witnesses. it requires evidence. it requires choice of law when you're talking about different borders. so that is a major issue. one other thing that has come up in a very short period of time and by that i mean about 20 years is the influx of cyberissues into organized crime.

i don't want to take up the next panels discussions on cybersecurity but pink about this for a minute. since about the mid-1980s to about around 2000, we began to occupy -- all of us began to occupy or live our lives in cyberspace. probably there may be a few of you out there that don't have a facebook account. but basically we began to live our lives in cyberspaccyberspac e and this is one of the things that organized crime is beginning to take significant advantage of. because it is easier and safer and cheaper to try to steal money electronically than it is to go rob a bank or set up a traditional fraud scheme organized crime has invested

very heavily in cybercriminal activity. one of the consequences of that is we have seen an increasing number of organized crime groups form around the influx of cyberissues in our lives. if you think about it for a minute, you think about all the things that you do in cyberspace that criminals can take advantage of. you buy things on the internet. all of us buy things on the internet in the year credit cards out there and those of you and probably everybody in this room as hot something from athens on. you go back to amazon and buy something new and amazon says do you want to use the same credit card as last time? they don't ask you for your credit card number. you select the one that you want them to use. when these organizations get

hacked you tend to lose things. i used use the example of my daughter. i have a 25-year-old daughter who doesn't like to carry cash around and she uses a credit card or atm card for everything. a couple of years ago christmas she visited some friends of mine in honolulu and as she took off from san francisco airport and was airborne out of san francisco i got a call from her credit card company saying that -- asking if she had just charged something on her atm in illinois. ..

we spend 25% of the world's research and development dollars. so we are the biggest target in the world for proprietary information, and we are we are losing billions of dollars each year in -- from pro -- proprietary thefts. they have gone actively to the area. and businesses are the only beginning just to try to cope with this.

only a few years there when we go to businesses and say you're going to be -- here is what you need to do. they would say, well, i have to spend money to do that. my obligation is to give my dividends to the shareholders. or that have to go to the board of directors and ask permission to spend money for something that doesn't come to the bottom line. we're seeing that change a little bit today. you know, when olympics were held in china a couple of years ago -- we didn't want them to take the blackberry and come back and plug it in to the system. we if get bill gates not to take the computer. linda took hers. [laughter] so anyway. i think that one of the things that what is the actual threat

of organized crime to us today? and i think very clearly it has evolved in a short period of time to something that is more than just violence and racketeering, but something that becomes very personal to all of us. with that, i think i will stop here and let the next panelist speak. >> thank you very much. [applause] our next panelist is thomas, who is president of international. a consulting firm based in washington. he previously served as assistant director of the federal bureau of investigations office of international operations from 2004 until his retirement in november 2008. his 29-year career in the fbi included 11 years as a member of the u.s. government senior executive service.

he directed the office of international operations which included officers at fbi headquarter in washington, d.c., and 76 legal offices in us embassy and consulate worldwide. he served as a member of the executive committee of inter poll. >> thank you. i would like to -- i guess amplify what spike talked about in term of organized crime and basically the evolution of the u.s. efforts to combat it. both domestically here and working throughout the world with other organizations to try to stop it. much has been made over the years that organized crime and terrorist groups were going to form a partnership that would be devastating to the united states, developed countries, and developing countries. what we have seen over the years it's not exactly worked out that

for several reasons. in the areas where they cooperated a great deal they have expertise in explosive i have, creating fax travel documents, accessing the global financial networking, committing violence -- white collar-type crime. all of those type of things to go against the government regulations in laws that exist in various countries. frost groups do the same thing. where they differ is that the leaders of organized crime not trust jihadists. at all. the reason for that is they're in business to make money. they will use violence and the threat of violence and absolutely depend on public corruption from police, judges, legislator, they require corruption to exist and flourish, but they're in the business to make money. if you're in the business of using violence or committing crimes to sustain a political

motive, a religious motive, other reasons than greed, they don't trust you. you don't think the way they think. they don't want to hear about it. in term of what spike mentioned about cyber. this part is true. one of the things we talked about -- i took over the fbi organized crime program in 1997 and ran it for five years until 2002. so i was running that during the transition what occurred after 9/11 in term of government programs. and, you know, we saw many things. spike mentioned some of the legislative changes and decision directors that went out in the '90s. that part was true. when i took over in '97. it was right after the time period where in addition to international terrorism and international narcotics trafficking, organized crime was then deemed and labeled a threat to united states national security. therefore, the directive stated that in certain circumstances

law enforcement and the intelligence community could cooperate. itthis was a huge difference given that with the creation of the intelligence community by the national security act of 1947, you had basically a wall go up. and during that era, this was the fear of not allow a cans top piece of equipment to be created in the united states. a japanese-sometime secret police. the difference it created the cia among the other community agencies at the time and directed they would not work closely with the fbi to prevent the two from forming a partnership and becoming all powerful type. in other words if i'm running organized crime, i can say this gangster declare him a threat to national security and do every kind of meta data collection and other secret intelligence work that not be discovered later and

help us in the criminal case. that have the barrier that went up. after 9/11 much was made about the culture agency. they don't like each other. they don't share information. that was nonsense to the public officials that said it over the years, were not aware of what they were talking about. spike and i formed partnership in the late '90s. after the directors had gone out and become law and presidential directors, nobody addressed a fundamental, legal fact of our system. that is called the fourth amendment. when you are going prosecute someone for a criminal case in the united states, the defendant is entitled to know how you investigate. what was the predication of the information. why did you open it? what techniques did you use? if you used title iii authorized electronic surveillance, wiretapping, what was the basis of it? reveal the avid, motions are filed under discovery to reveal all of these facts and only a very limited minuscule amount of

information basically the identity of a considerable informant that might have been used in an of a david can be withhold. otherwise the defendant is pretty much entitled to everything. the agency is pretty much required to open the book to the defense attorneys to allow the defendant to see. it the directives, including later the patriot act, did not, in my opinion, should not and will never address the fact the defendant in the system has a right. when we started to try to develop the system to work together law enforcement and the intel community, we were trying to find out how exactly was it going to work? at the time running the organized crime program. i ran an operation of -- still a top ten fbi fugue fitch we were working together many aspect of it with the intelligence community. and spike and i attended

probably 50 to 100 meetings at nsa headquarter at langly at fbi headquarter where all of the attorneys and all the leadership of the criminal programs and intel programs got together and trying to figure out under what circumstance could we work together? how could we share information and gain assistance from the intel community without cardiovascularring them and forming the secret alliance that was not required. now, later the fbi indicted the organization dismanhattan th -- dismantled them. he was trying to perpetrate $150 million fraud on nasdaq. we prevented that. we did a great deal of good in the case. everything was going just wonderfully until -- it wasn't even the defense attorneys, it was doj attorneys going prosecute and oversee the prosecution and show up and say, hi, cia, open your books. we want to see what help you

gave the fbi. sources and methods. well, their welcome was soon wornout when they did that. rightfully so. you have two competing interest in the system. a right of a defendant know what the government did to him or her and why. and how and when. on the other hand, the need for our intelligence agencies to protect the very sources and methods they need to ensure our national security. of it not resolved completely in the late 'out. it was not resolved by the patriot act. i don't think fundamentally that part will be resolved. it's a very difficult issue. and fortunately for us, terrorist organizations and organized crime organizations throughout the world have not formed the allegiance that we thought they might. thankfully. and in term of cyber crimes, some of the groupser. traiting cyber crime they haven't the leader, the gangsters are old fashioned and

autocratic, some cases just plain stupid when it comes to the potential use of the global financial market. stock market and other means other than violence. so that's the interesting thing about them. as long as they are stuck in the world of trying to resolve to the knuckle dragging, racketeering meths that are -- methods tried and true for the last 75 years in organized crime, that's a benefit for us. as we used to say -- as i used to say when john goty and kevin get together, lookout. in other words a leading gangster or organized crime group -- if they team up with level-a hackers and use their ability to penetrate, computer networking, data base systems as spike mentioned when able to do that and commit extortion against the amazon and the banks and the security companies, we will really see the jeopardy to our

system and our government and the economic engine that drives not just the u.s. but other companies. and if i could have one more difference that is important with the jihad. the jihady groups, in many cases, they want to overthrow the government and replace it with whatever system they believe in a fundamental system they want to install. organized crime doesn't want to go that. the gangster in the country want the united -- they are patriotic. they want the u.s. to survive and stay well. it's the cash cow. if the cow dies, no more milk. they really want to just suck off and bleed off money from our system and other companies. where it hurts overseas particularly we have seen in eastern european countries after the fall of the soviet union. we see it in africa, asia, other part of the world. there are many countries that don't have the ability to absorb that kind of loss financially or

the degree of penetration of corruption within the system. it jeopardizes their entire government system. we don't see that ability here. it took the fbi a long time, i will admit, to get off the bureaucratic rear end in the days. then starting in the late '60s, '70s, '80s. go after -- asian organized crime other groups from around the world african organized crime from getting the same foothold here that they were able to do all those years. so, you know, we were proud and fbi to be able to have such a role in dismantling and weakening will closet is a know stray and preventing the groups taking over. enabled in 2001 the redeployment of many resources to the counterterrorism program. i think i'll leave it at that.

thank you very much. [applause] now we'll come to somewhat narrow geographic focus. we're going look at the experience of new york city. largest city in the united states. how is this an ex sis between transnational crime and security issues affecting knox -- new york city. i'm delighted we're able to have with us douglas who was appointed the new york city police department deputy commissioner for legal matters in jafn 2013. he's a former law partner. cohead of new york litigation section. as, of course, deputy commissioner he also served for that as associate general counsel of time and before that as an assistant united states

attorney from the southern district of new york. much of his crime fighting background comes from that role of assistant u.s. attorney. the period from 1990 to 1996. he prosecuted investigated a wide range of federal crimes including rico violation, narcotics trafficking, bank fraud, and mail and wire fraud. he prosecuted a number of major russian organized crime cases. then at that time, of course, major international crime problem. those cases involve murder, extortion, drug trafficking, and other crimes in u.s., europe, and asia. he coordinated with european officials to extradite criminals. nothing stays limited in a particular geographic area. it is truly transnational crime and the interface with security

problems. thank you. >> new york city may be geographically smaller. it's inherently international city to the bones. therefore all the international problems are our problem as well. let me suggest that the overlap on the nexus between organized crime and terrorist groups is not limited to two separate groups coming together but terrorist groups and others like them uses the means of organized crime including just flat old fashioned criminal conduct. let me suggest that the phenomena presents a useful tool to law enforcement in an effort to disrupt in this dismantle some of the terror groups. and at the n.y.p.d. we are ideally situated to take advantage of that opportunity. we i think we are seen as a legendary law enforcement agency of the most traditional type. in addition to september 11th under mayor bloomberg and commissioner kelly, the police department developed an

extraordinary intelligence capability. and the two can work hand and hand together. more so over recent years, as i said, we've made an effort to take advantage of our ability to investigate traditional criminal activity. we expend enormous effort to do our best to prevent any future terrorist attacks on our city. and a big part of that is gathering intelligence but prosecuting where we can. including when the crimes are not specifically in terror crime. but other criminal conduct. i thought one way to talk about this was give a recent example and talk about a case which we indicted this year called the people versus ram dan. it's a state case. it was indicted of may of this year. basil ram dan was the main defendant. there were 15 others indicted with him. it's an enterprise corruption case.

it was involving massive money-laundering charges. the case grew out of an investigation that was semi mundane. it was involving stole, goods in particular baby formula in upstate new york. it turned in to a year-long investigation involving hsi, n.y.p.d. and others using traditional. using traditional law enforcement maineds of undercover, surveillance, court-authorized wiretap. it was, in the end, massive cigarette smuggling enterprise bringing untaxed cigarette from new york to virginia. done on a large scale. we think it netted over $50 million in illegal proceeds. during the take down $1.4 million in cash was taken out of the resident. another seizure of $200,000 of

cash was made in new york city. the interesting thing -- the reason relevant to this discussion, some of our original suspects in the case had ties or connections to -- convicted of murdering a student name -- in 1994. he was in a school bus crossing the brooklyn bridge. i don't think people u understood the significance of the event. it was in 1994 only after -- what was beginning to cook at that time. other original suspects in the case had ties to blindshake. one of the most significant terrorists to inhabit new york city. people close to the chic invested in the baby formula businesses. there were connections to top ho mas officials. we know that similar schemes are used to enrate sometimes massive amount of fund that can be used

to support terrorist organizations. it's difficult to know where the money went. it's more difficult investigate the events overseas particularly in unstable countrieses. so you a hard time finding with things go. one of the things we conclude sometimes you act before you are perfect information. you have an opportunity to disrupt a -- you take it. we indicted the case. i think the violent potential violate nature of the group was revealed in last month in october. the leader of the group one of the other defendants were indicted on conspiracy to commit

murder charges. they were plotting to kill several people they thought were witnesses in the money-laundering case against them. so they have been indicted on those new charges. so, begun, i think it's an interesting example of the opportunity that can be present bid the criminal conduct again, sort of traditional criminal conduct. it is often used by people who either are or have ties to maybe related to terrorist operations. [applause] >> thank you very much. prior to asiewmenting her teaching responsibility she was a judge in colombia.

and when she came to the united states she served -- i'm delighted to say, as one from the university of virginia, as law clerk to the supreme court of virginia. she has an extraordinary background including works as an undercover agent. she's an external researcher in the strategic studies of the united states army war college. she participated in rule of law, judicial reform, and hemispheric security projects sponsored by the u.s. department of justice, defense, state, and -- she's a person of enormous courage. and standing up for the rule of law in very difficult circumstances.

>> thank you. [applause] how the organized crime in the americas is a threat to the united states national security. it's going to be difficult because i have only ten minutes. i will -- i'm going to generalize. it's not because every country or every organized enterprise works and behalves the same way. it's just because i have to do it to be able to tell you what is going on in the region. and one of the things i want to emphasize as i mentioned some of the aspects that are going on in the americas is, yes, organized criement is about money. we are living in times of economic crisis.

and the fact we are having an economic crisis needs to be something important for us as we hear what i'm going tell you. why? because what is going on in the region has encouraged us to invest money in helping the countries that are suffering the most amount of violence due to organized crime presence. also because a lot of enterprise that the organized crime has today is competing with our corporations. so let me just give you a trek through the americas. organized crime in the americas is a threat to democracy. the economic and public

stability of the region. the integrity of the institutions, and increases violence. and all of these has a direct security implications for the united states. eight nations, brazil, columbia, ban -- are among the 50 nations worldwide that spent the most amount of money on combating violence. that's according to the 2014 global index. the region has a second largest number of internal displaced people in the world. in 2012, with aet total of $5.8 million it increased by 3% from the prior year. columbia remains the country with the highest number of ipd

in the world. with a total of between 4.9 to $5 million. the year alone is an estimated 230,000 people flee their homes. that is not just because of internal arm conflict. it's because of lot what has happened today with the internal arm conflict is triggered by the presence -- which are already cat logged as organized crime by the united states. about 160,000 displaced people in mexico since 2007. that's because of the drug violence. organized crime is very sophisticated fire power.

lot tick america is a wash in legal weapons. i'm going give you example of illegal weapons you find in latin america. brazilian gains have class three weapons. and columbia there -- [inaudible] they come back with weapons and money. the growing --

activity of organized crime takes advantage of weak and frag tile constitutions. it allowed organized crime to pen at a time the state institutions and benefits from the geostrategic position. organized crime have a very diverse portfolio. today i'm going give you the diversification is not just the drug trafficking, laundering money, human trafficking, and smuggling is huge. weapons trafficking, document forgery, pirated good, illegal mining, illegal logging, illegal ranching. drug trafficking is flexible and in constant evolution. one of the things that seems to tell us that it's evolving is

because? the united states the consumption of cocaine seems to diminished upon the other hand it increased in europe and africa. in the united states, we estimate that 90% of the illegal drugs that are entering the united states borders pass through central america and mexico. half of them come through central america. participation in hon honduras is connected to human trafficking. the trafficking roots now run through brazil, going through europe, and --

africa. the suez canal is used to access the mediterranean. and most of these rely on maritime transportation. shipping containers are used to transport illegal drugs, and here we go with cyberattacks. to move drugs today, organized crime is hacking shipping containers. it may sound like science fiction. this year the police in the netherlands seized one ton of cocaine, one ton of heroin in a suitcase with $1.3 million recovering a massive drug smuggling operation that broke in to the shipping companies.

according to the prosecutors -- two containers terminals by using mall war attacks directed a authority workers and shipping companies. we know -- [inaudible] moving on to another -- counterfeit goods. larger than the national gdp of 150 economies, according to the

oecd. they give high profitability because they are more risk detection and relatively penalty for these. $200 billion of international trade has been pirated or counterfeit products. there's a study in brazil that show the connection between pirated good and organized crime. nine out of ten in mexico are pirated. counterfeit pharmaceutical in columbia has 1,000% profit margin. and is more profitable now since the illegal drugs. lelt move to illegal ranching and logging. it's known as a [inaudible]

for the legitimate economy. in guatemala, calf doirn, mention, and chinese gain are laundering money through ranching. they are cleaning vast areas of land and destroying the environment. they are selling cattle on the mexican side for profit. and of course, they are competing with a legal companies. chinese gangs are also involved in illegal logging. and the wood is sent to asia. illegal logging is going on in columbia and brazil and also connected with organized crime. moving on to illegal mining. organized crime in colombia is -- operations in the country. including the unlicensed extraction of gold and other metal.

gold is used to launder money through other illegal activities like drug trafficking. those are just a trip through some of the diversification of the -- [inaudible] we also have found link between organized crime and organized crime from other regions. i'm just going mention a few. [inaudible] has been present in mexico, colombia, and seems to also be present in argentina. doing what? human trafficking. russian -- also human trafficking with

chemicals for meth. the nigeria criminal gang control 30% of cocaine. it's a lot to be concerned about. i think that we need pause and think can't we compete with organized crime? i think they are a huge national security threat to the united and a secured threat to the world. thank you. [applause] i'm going pose a few question to the panelist before we open it to up to the floor. i'm going start by noting that there was recently june 2013 a

crs report for congress on terrorism and transnational crime foreign policy issues for congress. and country of the tendency to the document basically lists a variety of terrorist organizations around the world and links to criminal financing. some of these organizations, it's very clear, are summerly being funded by the iranians and others and may be purely state sponsorship. many of them on the list going for page after page are, in fact, fund themselves in substantial part, at least, with criminal activities. my first question for the panel is what can be done in dealing with the problem of terrorism going after the funding and

trying to cut off the criminal funding part of support for terrorism. as many of you know, the treasury department has had an outstanding program. one of the most effective things we do against terrorism that goes after the money of terrorist organizations. so the question is, what can we do that we're not doing that perhaps may be more effective or additional efforts to try to go after the criminal funding operation of terrorist groups? let me open it up to any member of the panel that would like to respond to that. >> i'll take a shot. i think one idea, i was talking about earlier as seen an as opportunity if the conduct itself is criminal it with be an opportunity to disrupt the pattern by prosecuting investigating and prosecuting people. you can seize, money, of course, as well as criminally charged participates. it probably requires greater

cooperation between agencies, which i gather, you know, is sort of the holy grail. i agree with tom it's not as bad as often portrayed. it's always an issue. i think there are opportunities even at the local level sometimes to actually investigate and prosecute people for the conduct. decide whether you can prove anything directly related to terrorism. if you have reason to believe it's related it makes it that much more important a case to prosecute. to sustain themselves or obtain funding to operate. if you go back, i was in high school in the '60s but can remember the days of the liberation army conducting bank robbery and armored car robbery to sustain their terrorist

objectives. in the mid '90s had the fbi an an enormous case based in charlotte, north carolina division involving the smuggling of cigarettes by hezbollah to obtain funding to basically create the international smuggling of contraband on taxed groat raise money and send to the middle east. it goes back to the thick of not wanting to kill the cash cow. for decades the only the two bombings by hezbollah. but they never conducted any such operation in the u.s. because they didn't want to draught attention of law enforcement. it finally came through the cigarette smuggling case and a few other criminal cases in chicago. we had food stamp fraud and

things like that being conducted by middle east organizations. and sending the money back to support hezbollah or hah mas or other groups. bank robbery, armor cared robbery, have been used for decades by terrorist organizations to fundraise. that is not the same as having a direct partnership with russian organized crime or the south american cartels back in those days the other groups. the mexican cartels we see today are operating and undermining mexican and u.s. interests. that's an important distinction to keep in mind. criminal activity is a great source of money from john dill german philosophy on up to agree haddists. that's going continue.

we cannot just look at one and overlook the other one. i think we need to also look at&t the enablers a little bit more careful. we need to look at accountants, brokers, bankers, lawyers. going after the money that organized crime has alone is not going fix the problem. if they are flourishing it's because there's corruption. and i think it is really important that we -- with corruption. >> thank you very much. rete go to a second question nap is given the way in which this an ex sis crosses two community. the law enforcement community and the national security community, are we effectively

organized to deal with the problem and the special issue of this an nexus. how should we be changing our organization nationally or internationally to be dealing with these issues? any thoughts from the panelists? we should not go to knee jerk reaction when a major disaster happens. back in the day of my partnership here of trying to bridge that gap between intel and law enforcement work together. during the time, we had an organization at cia headquarter called the organized crime operations group. 85 people had about 15 at any given time 15 to 20 fbi we actually in the organized crime program with regard to human trafficking internationally did

two renner dedication in the program for major international human smugglers working together. 9/11 happens. two month after 9/11 that no longer exists. it's gone. because we have to address counterterrorism. everybody do this. it's the top priority of the government. wait a minute. everything over here. we need keep at the policy maker level. it requires advocacy at the law enforcement and intel community level to maintain a balanced approach to this. what was mentioned was exactly true. the focus on organized crime has to be everything from the bank robbery and cigarette smuggling to the public corruption requires is to a variety of other criminal activity. but we need to maintain a balance.

because e thought criminal programs don't matter. you are find bank fraud. who needs that. many of the thicks that became too min call to get the attention of federal law enforcement proved later to be critical to the fundraising activity of terrorist organizations or the fundamental fundraising for international organized crime groups. and so that would be my word of advice to policy makers and the hope they listen is really take a look. when you sacrifice one program for the sake of another, really stake a look -- yfs the program created and what benefit comes from it?

with the law enforcement agents themselves. sometimes i think they operate in separate spheres. for good reason sometimes. if you want to get practical and be able to take law enforcement steps and make sure you're focused on the right people, the integration of those two efforts can be extraordinarily powerful. as i said before robust intelligence effort. there a lot of in-house analysts. very brought -- bright young people who focus on intelligence analysis and integration of them with street wise detective is a potent combination. things like that and sounds like suggesting this sort of operation was prior to september 11th. it's a strong combination. i think people should look at that.

we had an organization working pretty well. one of the things we sort of did in getting rid of it was recreated for in front of me -- tropical storm center. it's bigger and more robust than it was. the point of the matter. if you put the resources together. they tend work. we already have direction from every president going back for years now to work together on organized crime. we don't have direction to put ourselves together in the way we did at one point. i think we need to reestablish that for organized crime. >> thank you. >> i agree with everything that has been said.

among so many agencies that could be coming together to try to help and determine what is going on with organized crime. we need to try to use tech neeblg that will be preventive. we need to prevent instead of always reacting when it's too late. could you tell us how effective the international level of cooperation is and what needs perhapses to be done there to enhance this? >> there are a number of multinational organizations, and probably interpoll is the largest and most relied upon by other countries.

which covers basically everybody but iran and north korea. for the most part. the other federal agencies, custom, a couple of others have it. dea has it. the rest of the world can't afford it. some 50 countries have their police here in washington at their u.s. embassies here. but that may cover all of north america. not just the fbi or dea or certain federal agencies. overseas they rely on it. interpoll has 190 member countries. and what it basically is a 247 communication networking to pass information among those countries and ensure cooperation in assistance in marshall resources should they need it. interpoll does not contrary to some of the movies you may have seen. it does not have a team of investigators with the natch run out and investigate crimes.

but what they do is through the communication networking it's get countries one or more in a major situation to send the resources to another country that may be in need. that can be, you know, a wide variety of law enforcement or national interest such as the tsunami. get additional countries to send resources to asia countries that were victimized to help identify victims or in some cases try create task forces to assist in trying to address the mali pirates which is affecting commerce in the indian ocean bordering country. or other issue like that. prior to -- ryan in the last year as general secretary he's a former -- at the time of when atf was under him. but he that i had to piggyback

on the international air travel reservation system. it cost money to get on it. just like the travel agency sincerity. like -- they download the messages and upload the turn it off until next week. if you have internet access you can access the system. they don't pass classified information on it. you're not giving away the key to the kingdom. but enable the sudan of the world to basically be on their much longer. they may not have a 24/7 law enforcement. they may be only 9-5 but better

than 15 minutes a week. it proved the two adults posing as parents were not their biological. they had no clue as to her identity because she had been abducted as an infant. huge worldwide organized crime all the way through movies seen as sex trafficking organizes other businesses that use illegal aliens coming to the

country. in this case they couldn't identify it. they put the messages out. all the details go over the networking. the girl has been identified. the country where shoves abducted from has been identified. they know the information. they do not know the identity specifically of her parents yet. but the investigation is ongoing with the other countries. it shows probably her mother sold her when she was pregnant. sold her to an unorganized crime group that tasked her to greece. that's an example how it works. in the u.s. here, it is administrated by under the command of the deputy attorney general. the officers here in washington, national central bureau have about 120 full-time employees from 22 different agencies. we don't have a single national police agency contrary to what some fbi agents think. [laughter] but the 1900 member networking.

thank you. this agreement covers under which conditions the united states can access that is intended to [inaudible]

and keep a lot of money in civil all the talk about the international nature of the problems. it's central part of the problem. and in light of september 11th and the threat of terror to the city, i think it's worth noting that the police department has 11 detectives stationed overseas who work closely with local law enforcement and the 11 countries in order to understand the conditions. in those cubs they may well directly impact new york city because the diverse nature of our population.

that's -- that international part is a key part of our efforts. >> i had two last questions for the panel before opening it up to the audience. one of those is if we look now to substance -- change in the law and policy to enable us to do effectively deal with the neck us is. i'll make a point.

it makes it difficult to prosecute terrorist cases in new york state and a lot of good statutes available in the federal system. and it's a minor point. but i guess the larger point it's used important to kind of exam the laws that are on the books and see what can be approved to help combat the problem. >> thank you. i can add another point to that. that's an ongoing situation of -- stupid if i on the part of the government. that's sequestration. much was made about the government shut down and potential of not paying our bills and all of that. and the crisis has been averted for 90 days. the crisis isn't completely averted. i can give you an example. since last year the fbi had an hiring freeze of $750 million cut through u the budget.

through attrition is downsizing by 3,000 positions. not a word about the publicly. we don't hear a word about the other federal agencies intel and law enforcement that are affected right now by sequestration and the inability of our policy makers and i'll blame congress and the white house and everybody included to allow sequestration to continue without a sthowghtful -- thoughtful process. there was a thoughtful process that went to the budgeting of the agency. it goes out the window when we take agencies and cut them. it's occurring right now. again whrab is the agency sacrifice? is if going to sacrifice the major counterterrorism cases? no, food stamps, cigarette traffic?

yes. that needs to be brought to an end. >> tom, thank you very much. a fundamental point to be made to us. let me shift the last question. that is simply the counter part to the last question. has the issue ever been taken to the security counsel of the united nations? it's one of the possibilities. if we took it to the security counsel what is the level of cooperation that might be improved? ..

>> we've had experiments, and tom can address it better than i, but, for example, in hungary, we had fbi agents there working with the police to shut down organized crime in hungry which was remarkably successful. there are a number of things we could do on an international scale that we do here in the united states like as we started exchanging hostages and different agencies, but we could work more closely, and we could also have, try to institute a better way of international investigations, not just communications of interpoll, but europol has gone a long way in international investigations

within the european community, so -- >> other comments, tom? >> if i could add one more thing to that relating to sequesteration. headquarters and discussions on the hill over the last six months has been the tremendous expense of having the fbi in 76 offices overseas, including, i had agents assigned at europol, interpol, u.n. headquarters in new york. among discussions was either to eliminate or cut by 50% the fbi's international offices. again, another act of absolute stupidity. i want to go to the hill and argue anybody who raises the issue to tell them how stupid it is, why we need the relationships, why we need representations, and how every day it affects u.s. and health of the u.s. national security. an example of that, a particular u.s. senator i will not name, landed once in a foreign

country, greeted by the fbi agent there, and his remark was, well, i guess the fbi's sun never sets on the fbi. the agent was polite and everything, but he could have said, the sun never sets on u.s. interests either, pal. [laughter] thank you. [applause] >> we have a lot of agreements and initiatives that i had to talk about the americas with the americans. i'm concerned about how demanding that it's been used to help been misused, and who -- a lot of money has been lost, and more concerning to me is to see

that a lot of people that we have trained to combat organized crime, they, themselves, have become the supporters, the promoters of organized crime. when that is in the united states, they knew the how and who to communicate. i'm very concerned, and i think we are wasting a lot of money, and we need to pay attention as to how the money is invested. >> thank you very much. the floor is now open for questions, and if you could please state your name and question and if you would like to address it to a particular member, please do that. yes, sir, right here. >> this is for all panelists.

i'm with the transportation security administration. over the past several years, a number of u.s. jurisdictions have established fusion centers which are intended in part, at least, to put law enforcement and intelligence analysts together. could you comment on the effectiveness of this approach so far and give us some idea what kind of institutions gnarlly and internationally could be built on that foundation going forward. >> well, the fbi has two types of fusion centers, and dhs has yet another one. they have, basically, different tuckses. the fbi has the joint terrorism task forces. before 9/11, i believe there were 4 # in existence, and today, there's 103. they have been a tremendous

success story. building on that, the fbi has built a field intelligence groups, and -- which are more oriented, and the best of the understanding, i've been away from the fbi for a whim now, but it's been equally successful. the home land security fusion centers have a different focus, and i'm probably going to do dhs a disservice here, but what they basically do is they work more with the politicians, the mayors and the governors to help them understand what the problems are in their area so that they can take the actions on their own. could that be done on an international scale? problem that you have is basically the problem, the failure from 1648, and hears

that everybody is sovereign and incorporated in the article, article two of paragraph four of the united nations charter, territorial integrity and political independence of every country is sang, and if tom, an fbi agent, goes to great britain, can't take his gun with him. that's app act of sovereignty there. that's the sort of thing you have to get passed. it was not until thatcher and reagan allowed the secret service to be armed when the president went there. that's a sort of problem that you look at. could it be overcome? it can, if a country wants to sacrifice sovereignty as hungary did at one point, and there are other instances of that. the italians and spanish can search ships on the high seas without asking permission.

some of this can be done, but it's really quite difficult if you want to preserve the idea of sovereignty as it is incorporated in the united nations charter. >> if i could add, having been in charge of trying to set up fusion centers at state and local level as special agent in charge of indiana, one of the dill idifficulties is, for dug, there's no trouble convincing new york city police there's a terrorist threat here, they might attack here, really. if you're in other parts of the country, the police there and governors and mayors say, you know, we're worry about mexican drug trafficking organizations and drugs brought into our junior high schools or our high schools. we don't think there's a major terrorist attack from a middle east based terrorist organization in the territory. why should we, in their view, wait, police officers, on a fusion center to address federal or national security issues, and the fusion center, in turn, is

not going to address what we really care about at the state and local level. that's part of the difference with local fugs centers opposed to jttfs, that the local jurisdictions out in the rest of the country just may not think it's a wise use of their resources to devote investigators and analysts to the national programs or fusion center programs if it's not going to also address their local issues too. >> next question, sir, over here. >> thank you, i want to pursue a question i started yesterday and directed to mr. puetes, the remark of keeping the eye on the ball and not swinging the pendulum in response to crisis, pursuing routine criminal investigations and criminal activity is not only an important task in its own right,

but leads to greater discovery with respect to international crime and international terrorism. the question to you is, do you think that the fbi's morphing into and intelligence agency focused on ct and issues related to it? in fact, encouraged the -- encouraged taking the eye off the ball? >> to an extent, yes, it somewhat has. it should be noted even after 9/11, 50% of the first fbi agents work the cases, and counterterrorism and national security related investigations have increased as a percentage, but not completely. criminal investigations are still ongoing, but the thresholds to work the perceived white collar crimes are not, and in terms of initiatives or new programs, when you're on the hill trying to justify something, again, it's much of the focus is going to be counterterrorism as opposed to other benefits that come.

a quick story, in 2002 in beijing at the time i lobbied for the opening, and we worked organized crime together with the chinese, intellectual property was worked, human trafficking was worked together, and when i lobbied for that office, the questions i would get from the hill was why -- there's no counterterrorism there, no jihad organization or south american drug cartel, none of the organized crime in china that we worry about from the middle east. i said, well, you know, we still need this for a variety of other u.s. interests. two years later after we open in 2004, a human trafficker at the mexican border walks into fbi loredo office age says, i have just trafficked four chinese terrorists across the u.s. border, and this was a democratic convention in boston. they are on the way to boston to

commit a terrorist act. wow. you know, this gets defather and mother nateed, and be on the lookout, stand on the bridges, airports, train stations, you know, lock down boston because the four terrorists en route that we know of. there's 30 police officers from beijing from the province they were from. we had the identities because the traffickers had their documents. forty-eight hours later, the government comes back and says, they are not terrorists. they were just your typical pes cant trafficked by the snake heads to the west, and these four people coming out of the rice patties and in that province wouldn't know confu confucious from bin laden. within 48 hours, it was eliminated. the thousands of man hours that

would have been wasted had it not been for them giving us that information, they probably would be standing on the bridges. maybe they could have prevented the bombing by being there looking for the terrorists, but that was a tremendous day, and in my view, the costs of opening that office and putting two fbi agents and some other analysts in beijing paid for itself in savings to u.s. taxpayers because resolving the issue of terrorism when there was no intent or knowledge that that office would be a key player in the war on terrorism. next question, here. >> john dunkin, texas a&m school of law. we talk about the mafia in the u.s., but what about gangs overseas, not only cooperation

with other gang, but also the national security impacts on us, and because i say, you know, a lot of the new millionaires will be in china and russia, and that's where the money is going. >> anybody want to take on that one >> >> well, yes, organized crime today is just national. it's not just one-way street. it goes both ways. we have our own gangs, the baker gangs, and i have to add are gangs, and so, yes, we had that threat also to other countries, and it is a vicious circle because it comes and it goes, it comes and it goes. as you well know, they just go

to mexico, trafficking weapons, drugs, and the circle goes back and forth, back and forth. to the point that some of them say that they with caught because they will be deported allowing them just to have a free trip back home and just come back again. yes, we have that problem. >> okay, thoughts on that? if not, opening it up to another question here. yes, lady over here. >> i'm dennis with the law firm, and my remark is addressed to commissioner maynard. i'd like your personal opinion, not that of the department, as to whether stop and frisk will be sustained, and if it is, what

action the mayor will take? >> well, i'm not sure it's appropriate for my personal opinion or that i understand the question to be candid. there was a major ruling yesterday, i don't know if that's what you're referring to. i can't predict what the mayor will do if he wins and when he takes office if he does win. i personally, my personal opinion, have hopes that upon, if he wins election, upon realizing that he is responsible for the management of the city as he will realize that it's in everybody's interest, including his own, to be able to manage the police department on his own without the interference of a federal judge. i don't know if that addresses the question. stop and frisk is a pregnant topic. people use it, i think, with very different understandings of what they are referring to. i think we all know it is a

standard traditional law enforcement practice, like that in new york city like every other department in the country. we believe it's done properly. i don't think that will change. >> okay, another question. there was a lady here, yes. >> hello, katherine from the treasury department. first of all, thank you for your courage and your dedication. it's much appreciated. i had a quick comment and a question. the comment is, really, the agreement only covers terrorism, not organized crime, but luckily, not for treasury, but for other people, on the same day the european parliament voted to suspend the recommendation, votedded to recommendation suspension of the agreement, they also passed a piece of legislation recognizing asset freezing and expansion of resources into organized crime networks so it's very good for organized crime, not so good for treasury. in the area of terrorism. good in the area of organized

crime. i did, actually, have a question about corruption. i think corruption is a really big issue. as you know, as mentioned, treasury has a robust transnational organized crime, but you can only do so much solely from within the united states. you want transnational partners, people in countries that you can partner with and work with, but the problem is, of course, who do you work with? who is your natural partner? you can offer assistance, but who to? is that really the appropriate recipient of that assistance? i would greatly appreciate any of your thoughts on how to tackle corruption and practical cases or lessons learned that you guys have had. thank you. >> tom? >> i can answer. a couple great questions. first is to recognize the difference between the united states and almost other country in the world, and that is in our

country, you are not immune from prosecution if you're a public official while you hold office. in the rest of the world, that's not the case. the wealthiest countries in the world, and developing countries with oil, gas, and other mineral resources in the ground, if you're a public official, you're -- you have immunity from prosecution while in office. what they do is they take the money they get through corruption, send it overseas to a safe haven, and as soon as they leave office, they join their money and spend it in the safe haven or elsewhere in the world. the country is victimized while they are in office by bad governance, and when they are out of office, the fact the money is gone from the country. at least they were good enough to hate travel and spend money in the u.s. that they made. [laughter] but in terms of your question about dealing with the officials in that country, the problem is that they may be the only

officials. you are trying to deal with an administration and some of the small countries or developing countries, even larger countries where there's a choice. as long as the country allowed the people in office to have the immunity, you're really are going to have a difficult time ever getting rid of corruption, and if you don't get rid of corruption, or at least neutralize it or reduce it, you're not going to get rid of organized crime and the other threats. you'll notice and the reason it's important is if you look at the united states, if you look at the corruption cases, and, again, the fbi has, you know, primary jurisdiction for corrupt public officials, if you look at it here, if the republicans are in power, the republicans are in a position of power to hand out, to do other things, and some people within the republican party will take advantage and steal, and the fbi will investigate and put them in prison. when the democrats are in power, they have the ability to have a lot of influence, the control

committees, to do other things that help steer contracts to their pals, so, really, you need -- this happens both ways. what i say is the corruption is an equal thing, and, also, by the way, public corruption and greed is not, oh, those chinese, they are greedy, or oh, those guys in nigeria, no, it's a human nature phenomena. we have as much corruption or would have as in this country or any other culture in the world, it's just that this country does more to take it on than anybody else in the world. it is an important factor, but, you know, you almost have to deal with who you have to deal with overseas. that's the problem. >> okay. another question. yes, sir. the gentleman back here. >> yes, if drugs were legalized and tasked, would it damage -- >> state your name, please. >> sorry. i'm michael from los angeles, and if drugs were legalized and tacked, would it damage organized crime taking away the

revenue and allowing law enforcement to go after other crimes such as human smuggling and intellectual property theft? >> well, certainly, it would change the situation there. there's been a mixed message sent for places where drugs h