-- businesses --seem to be doing some wheeling and dealing with pension funds. we came across the work of a wall street reporter who had done a fair amount of writing on this. she is not talking about all of the businesses in the industry. she is saying there are some who have taken billions of dollars from pension funds to finance down siding and a sold the assets in merger deals. loopholes and discrimination rules that permit pension plans to be tapped to pay for executives, executive parachutes. they talk about the exportation --exploitation of new accounting rules and cutting benefits when there was an argument that

pension had enough money. account and by this clearly this reporter is not saying this is every business where everyone in the retirement industry. i would be interested and start you, mr. mr. baker and biggs. how serious is this problem of siphoning dollars from pension ofds to finance, the kind wheeling and dealing that was described and specific kind of instances. effortnd of enforcement could be put in place to deal with this? this really looks to me like it is way over the line if not looting of private pension funds

is pretty serious financial misconduct and should not be tolerated. we will start with mr. baker and then mr. biggs. >> i do think it is a serious problem. i do not think that explains the issue in terms of workers facing in adequate retirements. you have a number of instances where certainly people were violating the intent of the law. ite money is in a pension, is supposed to stay in the pension. she gives several accounts in which companies were able to pull money from those pensions to finance a merger or downsizing. that should not happen. that requires greater scrutiny and probably greater penalties

so when you can determine that someone has violated the law it is not just a slap on the wrist. you might risk some time in jail. >> let's have your colleague it into this, mr. biggs. >> one of the problems with defined benefit pensions is it is easy to not do their -- it is easy to promise benefits but nobody wants to pay for them. defined benefit plans are very complex and require a whole range of assumptions about what is going to go on in the future. it is easy to avoid doing the right thing. if your employer says i am going to put x into your 401(k) this year, they are either going to put x in or not.

that is not to say there are not similar problems with 401(k)'s. one group was accused of funding contributions into stock. that kind of thing can happen and i think it should be punished. it is not a major explanatory factor. >> let's do this. i ask it the way i did because whatreally is useful about senator brown and senator casey are trying to do. this is the kind of fact-finding effort we should be doing more of. is an award-winning journalist. she is not saying this is going on with every cup at a plan -- with every company plan.

ofyou have the kind documented examples here and you do not have enforcement against those kinds of instances, that is an invitation to others to try to skirt the rules. mr. baker, have you done some suggestion with respect to penalties and consumer protections for workers that should be put in place? >> i have not written directly on this issue. i do have to say i look at this as part of a set of malfeasance and probably criminal actions that were taken. almost no one has gone to jail in connection with that. that raises a serious issue. the question of incentives. people think they can violate

the law and the company at worst faces a modest fine. you are not discouraging that behavior. >> i am over my time. thank you. i would be open to suggestions. its truck me as an important -- it struck me as important for this debate. people talk about the recession and aging workforce. then people talk about their pension melting away. they have questions about how that happened. i think we should be looking at some of those issues. >> thank you, senator wyden. senator nelson. >> there is nothing like focusing the mind when you realize that you are facing the

situation. a lot of americans do not face the fact of retirement until it is way on down the road. and the question is, i would going to have enough money in retirement? have we saved enough? several of us are sponsoring the .ifetime income disclosure act way of showing people what the savings would look like in retirement as a way to get them to save more money today for retirement. i want to ask mr. sweeney, can you explain the innovative tools that fidelity has in order to show your clients what their savings will look like at retirement?

and what else you think you need from the government to get people thinking about this so that they can plan for retirement. >> i would say we develop a lot of tools we make available for customers who work with fidelity and also to the general public. will allow them to aggravate holdings that are kept at other forms. es of ae find two halv couple that comes in. both halves are gearing towards a common retirement and they want to be able to see how they can achieve those goals. we conducted a retirement preparedness measure and calculated the readiness for people to attack you wait exactly what you say. that is an important disclosure.

we are doing a lot to educate investors. our job is to simplify those problems. rates,ing saving particularly for younger investors. we think they have to save more on their own. them or we can help people with copperheads of education, we will have an america that is better prepared for retirement in the future. >> what are the savings rates in america compared to other industrialized countries? >> australia has a mandated system which people are forced to put into a private system of their choice. the thing that is perhaps mask is they have higher debt rates. this seems to be some correlation. we think there is an opportunity for people at all income levels

to take some money aside and save. it is a difficult decision for a howg worker and they say, can i possibly save 10%? they would make some trade-offs that they would figure out how to live on $.90 on the dollar. >> your particular tools other than aggregating all of their savings so they have a comprehensive view, what does it basically do? savings their composite and then project at their retirement age how much that is going to give them each year for the actuarial length of their life, is that what it is? >> we have several different

tools. we have planning tools and we have investment tools. i want to make sure i am saving enough so i am accumulating a nest egg. for a 25-year-old, they are much more focused on accumulation. more 65-year-old, it is about managing expenses. we look at the accumulated benefits they have either through the dc, and we say how can you clear your monthly hurdle each month? we want to plan for the retirees. 1/4 of a couple will live into the early 90's. >> let me just take a pure hypothetical. agerson who is retiring at

65 that has a salary in the range of $150,000. ok? see if you can't interpolate this for me. what basically is the nest egg of savings that they need to take them in their average situation of lifetime expectancy? a nest egg ofwith about eight to 10 times their salary. you would want them to be about million, aon to $1.5 pretty substantial number. we find that customers at the higher earning levels do not need those hurdles to clear -- the hurdles are not as high. we assume people at those income levels are actually saving.

if i am saving 10% of my salary before i retire, i only need to clear a hurdle of $.80 on the dollar. if i paid off my mortgage, that you do notbig nut need to clear. the dollarom $.68 on and up into the 90's for people what lower income levels. >> ok. thank you very much. you directly answered what i wanted to find out. thank you. >> good to know. >> we have a lot of witnesses that do not answer. >> this is a very good panel. thank you, senator nelson. casey'siated senator

comments about your personal story. paint a picture of a couple of stories that are not as personal for me as there were for you, mr. romasco, but of people i've gotten to know. 10 years ago, i lived next door -- i was in my late 40's and early 50's. he was about my age and had been a carpenter. not union carpenter so is retirement was not organized and lucrative, not as generous. he had worked for 30 years. there were a lot of things he could not do. he had trouble lifting things. he was doing pretty well with his income but his body was breaking down.

i was in youngstown. a woman put her hand up. "i have worked all my life and now i am working two jobs. i just have to live another year and a half so i can get health care." imagine somebody thinking -- she had no insurance. her goal was to live long enough to get health care, not to see her grandchildren or to complete some hobby or work twice success, but just to get to. when we think about retirement age, we need to think in terms of personalizing. we know that the gap in life expectancy. those two people i mentioned. on the average they will live not nearly as long as those of us who dress this way and have

jobs like us. we know those same people, what they represent a much less havey than seven of us to leg oft the three -- the stool of social security but some other kind of pension and some significant savings. the increase in jobs in this country is mostly in low income areas. fast food workers, health-care workers, people who often do not have insurance. most of them want to have insurance because of the aca. they are unlikely to safe or have some kind of employer pension. with all of that, we are seeing

to raise the retirement age. raise the we should retirement age. talk that through. what do we do about people that are retiring, people that are low income, do not live as long, do not draw as much social security? they live longer and have had more comfortable lives, are living longer and getting higher social security. how do we deal with this in light of low income workers generally? >> we have to understand what the reality is. you have corporate executives arguing to raise it to 70. they should go to lake erie and toledo and talk to these people. all those who want to live on

$14,500 a year, raise your hand. that is the average social security benefit. we need to ground people on what the reality is. we have to be aware of averages. i think that is so important. i think you parse the numbers correctly. dean made the comment there is a very uneven situation going on here. if you are white, well-educated and affluent, you're going to live longer and benefit more. if you don't have those tools, you'll be challenged. younger workers have a one in three chance of not reaching retirement age because of some problem. that goes up in communities of color. let's get the reality and the

data out there. retirement. strengthening the system at the low end. we should look at that. we can all do a better job of saving. what are the mechanisms that 's toe in mr. sweeney encourage savings and build on that foundational piece, which is social security. it is the foundation piece. we have to face the reality of what is going on. savings under and challenge. think about what we just had. the average income in this country is $50,000. $400,000 into have

order to take care of themselves in a lifetime. >> what is the reality of that? a vast number of americans are not close. some are. >> others in the, want to respond to that? >> the point he made about the affordable care act is an important one. there are going to be people who are struggling who now will be able to get health care insurance. that is going to make a huge difference in their life. there are these huge differences. people are indifferent circumstances. we could work until 70. it is a different world for most of the workforce. if you read the bowl system --

bowls simpson, they say we should not raise it for them. that was the thing that greece was ridiculed for when they had that huge deficit. you could retire at age 50. i have no idea about the truth of that. that was the kind of thing that bowles and simpson were proposing. at least they recognize the problem. i give them credit for it. >> this goes back to the example from senator nelson and mr. sweeney and the comments that you made. somebody making $50,000, they need eight times their savings. they are getting social security . it is a big heart of their

retirement. retirement planning is really complicated. it depends on how many kids you have, all you single, are you married? it is easy to take these rules of thumb and misapply them. you how much savings a person should have. it is not eight times. we lower the retirement age back in the 1960's for precisely the reasons you pointed out. they cannot make it to 65. for those folks, i agree with you, 62 is fine. what do we do then? i propose limiting the social security payroll tax for workers aged 62 and over.

the point is to give people a carrot as well as a stick. >> that would mean their monthly check would not grow. i understand the difference now 66.3 and a 70 oh gets more because they have paid in. >> that is not true. i did a study looking at a 62- year-old who chooses to delay retirement and pay an extra year of taxes. for each additional year of tax, s back inabout two cent additional benefits. >> do it so there is no penalty involved. is that the case? if you retire at 66 and you're paying into social security those four extra years, does

that mean your retirement does not go up? >> it goes up because you delay claiming the benefit. it goes up almost nothing because of the additional taxes you pay. social security is based on your highest 35 years of earnings. is likely to raise your benefits. if the spouse works longer, they essentially get nothing. i was shocked when we ran the numbers. the fairest thing is to illuminate the payroll tax. that is something that would have a real big response in terms of labor supply. these are folks that can work a

little bit longer. might help somebody, they might say, i do not want to be a walmart greeter. they could stay in the workforce a little bit longer. try to use a carrot as well as a stick. i understand people need to retire early. how do we encourage that? >> thank you. comment?u want to >> we look at retirement plans. i sat with a client in california who retired at age 62 and came in to talk about his options. pay down his living expenses so he could take social security at 65.

"this is going to be really challenging. oft will put the tail end your retirement plan at risk." he has already decided to retire. he could have work for another three years and have been in a good place. he could have downsized his home and paid off his mortgage. >> thank you. senator casey. >> thank you very much. i was looking at your testimony on page two. startling numbers on a couple of segments of the population. we look at the unemployment rates monthly or poverty rates. the data you have here indicates or senior nonmarried women, it is 16.3%.

27.3%. have improperly -- african american seniors, 28%. i think the same calculation, poverty and near poor for hispanic seniors, 20.2%. just startling numbers and another reminder as to why social security it's so important for folks across the board. anything you want to say about that. >> i appreciate you bringing that up. increasing benefits for those at the bottom can make a big difference. if you could raise benefits for people at the bottom, that makes a huge difference in their standard of living. the cost for that is very low.

i know the long-term projections for social security, that is affected very little. indicatedgs, you benefits for low earners probably should be enhanced. >> i have argued for a more far- reaching reform, some are -- similar to what you have in new zealand or the u.k. you take poverty among seniors. if you want -- we need to sign people up for ira's or something along those lines. social security -- i am not going to say it is not cut poverty. is it the most effective way to reduce poverty? no. we can give every senior a benefit for half of what we

spend on social security. we can do better. it is saying who is being poorly served? why are some people not receiving the benefits they should? ses your benefits on the lifetime earnings. lifetime earnings were not the most important determinant of your benefits. it is not i well targeted and if it. is a risky benefit for low- income people. >> mr. romasco, i want to commend you for doing calculations for our states. in pennsylvania, social security 470,422 jobs, and for

billions in local state and tax output. that is very helpful to have that information. your calculations will be used at another time. we are grateful for that. sometimes it is difficult for people -- and sometimes for elected people to clearly in aulate the benefits broader based way. for the to use bang buck calculations all of time. we appreciate that. mr. sweeney, i'm not going to go through too many questions for you. mr. sweeney went to the greatest undergraduate into tuition in the world, holy cross. >> with a name like sweeney,

that is shocking. >> i have four daughters. chart,alizing with your you indicate generation y, i realize our oldest daughter is generation y and the next three are millennials. gen ye chart you have on tells a lot and you have a lot of red there, the likelihood of saving is not very high on this scale. what would you say to the gen y's and the younger folks? >> that was surprising. >> so i can tell my daughters. >> we were surprised to find gen

y was so red. they had more time to correct the trajectory they were on. it meant they were not on track to recover or cover their essential expenses in retirement. they are not saving enough. there goalpost has been moved further down the field. they are not going to be covered by defined benefit plans to the degree that today's retirees are covered. your daughters will live longer than your parents. the time frame is going to be longer. those are the biggest drivers of success or predictors and factors. andeed to make sure gen y the lineals -- and millennials start saving today. >> thank you very much.

>> a couple more questions. the generalyou know statistics. respondents were asked if there will be enough money to provide social security and medicare benefits at their current levels. 41% answered likely. 36% answered likely. heard for some years the line that young people feel -- this was a survey. young people feel more likely they will meet elvis presley then to draw social security. not particularly funny, i think. thature us, mr. baker, that is not going to be the case. questions, dothe

you think you can get social security? nobody raises their hand. at some point we will stop paying benefits and they start nodding their heads. we still have congress? yes. military, roads? and retirees will be twice as large and you think members of congress will vote to get rid of social security? most of them are convinced no. the shortfalls, it is easy to make the sound very large. they talk about tens of chileans and hundreds of trillions. these shortfalls are not very large relative to the size of the economy. we are talking about a shortfall of about one percentage point of

gdp. hardly trivial. spendingse military and it did not wreck our economy and we have a longer time frame to adjust to this. we do face large costs with health care. we spend more than twice as much per person as people in germany, france, canada. the key is fixing our health care system. , then theot fix that costs are easily manageable. there has been a sharp swelling of cost over the last five years. if that does continue, health care is going to be very much a manageable problem. we can make these scary numbers if we express these shortfalls as a share of income.

these are expenses we have dealt with in many other contexts. >> thank you for that. let me ask a question of all of you. you have testified about the challenges. you have disagreed on some things. you have laid out the issues and the options pretty well. give me a couple of minutes each. center casey asked a question, lightning round squared on short-term what do we do now? for usfor us -- paint on what a retirement system in this country would look like five years from now. what you would like us to work toward. mr. sweeney, why don't you start? >> the education and guidance issued is of paramount importance.

help."say, "i need take a to make sure we client-oriented view to that. how can we solve the multiple needs that we have. what do we think about these features are successful and we want to do more of those. we want to create another round of that, which will put people in the right products and help them stay invested in equities. people who have stayed the course through the downturn are in much better shape than those who panicked and pulled out. the more we can help people understand the timeframe is fairly long and the better we can do to get them enrolled and be well invested, the more successful our american workers are going to be. >> a couple of points.

i think we can do steps to enhance social security, particularly with low income workers. the other point, i think we can set up a system of portable universal accounts with a strong default contribution. people can carry these place to place. have very limited option at no cost. there has been support in a number of states. some states were stopped passing them because of the recession. the main supplemental vehicle for middle and upper middle income people. one final point that does not get appreciated.

we see huge fluctuations in asset prices that dwarf the deficit and debt on future generations. it is great news for your kids. same story with the stock market. greate with a 401(k) is to see the market go up. anyone investing tomorrow can see lower returns. percent realen return in the stock market. overan count on roughly 5% the long term. the somerset return will get you $16,000. five percent would get you 8000. people are worried about generational equity. they should be looking at the stock market. >> i would agree with dean and

john with starting to enhance the savings done by folks to their retirement plans. the auto enrollment, lifecycle, these sorts of things we talked about today. that is the easiest way to ensure people's adequate savings. we have done the research. we know more about what goes into retirement savings today that we did 10 or 20 years ago. that would solve the vast majority of the problems we face. if people just saved as they should. it makes life easier for social security. social security doesn't then have to worry about paying a big benefit for somebody making $150,000 a year. that is the first thing that is achievable today. in terms of social security, i think we need a more robust safety net on the bottom. we agree that it should be a

better safety net. the country should not be allowed so many people to retire into poverty. i think we need to make middle and high income folks rely on themselves a little bit more for their retirement savings. the challenges of medicare and medicaid are still out there. >> thank you, mr. biggs. mr. romasco. >> i think we have seen a broad set of ideas. we have to change the conversation, as these hearings are designed to do. let's look at social security. people need to understand social security. that is a step first. unless we clarify that, people will still have misperceptions. we have to clarify social security. we have to ask the right

questions. it is not about solvency only. we have to look at the other two legs of the stool. i have heard suggestions to make that personal responsibility as robust as possible. until we come to a place where we put the conversation certainly, we look at retirement as a whole and understand the value of social security. this together throughout our working lives. we will be dealing with a lot of unnecessary noise. the clarification of that in terms of the reforms that we have heard. we can have a good conversation. i have confidence will come to a good resolution. >> senator cardin. >> i was following your comments. >> three rounds of questions.

>> let me apologize for not being at the hearing. challenges is that they put you on a lot of committees with a lot of hearings. i think this hearing is very important and i thank senator brown for convening this hearing and the importance of not just social security but private savings and retirement, which is critical. then congress and parliament worked on these issues when we were in the house. during the most robust time of our economic growth, american saving ratios were incredibly low. in fact negative in many years. at that time we were told do not worry about it because people were saving through their equities in their homes. we saw what happened to that.

i just wanted to thank the witnesses and thank the chairman. it is critically important that we not only preserve the strength of social security. it is the only guaranteed lifetime inflation proof annuity that people cannot outlive and they do not have the check to see how the stock market is doing to know what the benefits will be. is important we preserve that. it is important we improve incentives for retirement savings and it starts with doing no harm on the tools that are currently available and to build on that. 6 million americans have taken advantage of the saver's credit. we can strengthen that. as has been pointed out, there has been discussion about the need for middle income and lower income working families, how they can do better in the retirement. isfound the way to do this

to make it easy for people to save for their retirement is that the tax incentives are important what you need to but something else on the table. that is why employer sponsored plans are important. where i work, we have that. federal employees take advantage of that. they do not want to leave money on the table. the saver's credit is money on the table and 6 million americans have taken advantage of that. two factors i would mention is that it is important to strengthen these tools. americans make a lot of decisions by inaction. automatic enrollment programs work. people get involved in the programs. the the fold investment options which are sensitive to their age provides for the rebalance, which they do not do on their

own. the second point is if we were fortructing the incentives private savings and retirement today, i think we would have done a better job to put incentives in for a lifetime income options rather than the ease of taking money out of retirement plans today. there are two areas we should look at as ird's for improvements -- as priorities. i have a minute and 21 seconds left on my first run and i still rounds.r more about income for life. we talk about longer life expectancies that people need to for.for -- need to plan

we try to have a core foundation in building from the employer- sponsored retirement plans. with the concept of private annuities, we find about 14% of americans have an annuity. the challenge is i have to write you a fairly large check. people who won't annuity fine great benefits in them -- >> annuities are one form of lifetime income. is it is easynt to take retirement money and use it for other purposes today. without penalty. having different incentives. retirement.nt is

have outlive their ever -- all of a sudden that 90 they are still active and do not have income. this should have been greater concentration on lifetime income rather than allowing them to take out the money due to economic recession, they wanted to buy a home, or grandchild needed money for school, there were other ways to deal with that. >> it look like you were agreeing with me. -- we have taxto incentives in place to encourage retirement saving. i tend to think that they are pretty weak in the terms of tax deferrals on tax deductions, in theory you could wind up paying more taxes either virtue of savings. making that more robust might make sense. a gooding credit is idea, but i also think that more

incentives to encourage motivation makes sense. i think there is probably never an area where economists are more divided from up the public than annuities. you should essentially make annuities from all your wealth, almost no individual in the general public will do this willingly. very few people want to annuitize their 401(k)s. if you give them the option of a lump sum, they will take it and walk away. it is just the human nature kind of thing. an annuity turn to from a millionaire and to someone getting $50,000 per year and no one likes it. but something along those lines to encourage default could make sense. once people have them, they will be happy with them, but the initial decision to do it is such a high hurdle to get over. >> i came back to listen to the

chairman's closing comments. >> yes, you did. thank you. >> few in the senate no return -- no retirement issues like ben cardin does. thank you for testifying, members of the subcommittee or full committee may have more questions for you. if you could get written answers to us -- the hearing was a success in many ways, because the debate should be about the issue of how to achieve retirement security. think that is particularly important. these are not budget issues the way that they are issues of how to debate how we actually do this, especially for low income anders, and when mr. big mr. big agree, that is consensus . so, all kinds of things could happen. thank you so much. special thanks to all four of wyden, cardin, nelson, and to jennifer and elaine on my staff, i am appreciative. thank you.

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[inaudible conversations] >> all right, welcome, everyone, to today's panel own private gulf donors and extremist rebels in syria. i direct the brookings project on u.s. relations with the islamic world. i'll be moderating today's panel. to the left is elizabeth dickinson, a gulf correspondent becaused, author of the new brookings paper: playing with fire: why rebels risk igniting conflict at home," and to her left is kris tin, an assistant professor forever comparative and regional studies at the american universities school of international service. she's also a nonresident fellow, senior fellow, at the atlantic council career center. to her leaf, tom keeting, a formal managing director for jpmorgan and scholar of terror threat financing.

beth, i want to start with you. when i began to look at this issue back in 2012, i didn't start looking at foreign financing for extremist groups in syria. i was mainly focused on the groups in syria, particularly one of the larger groups, and they are one of the more vocal groups op line. they put a lot of material out on facebook and on twitter, and i noticed several times they would give very public shoutouts to individuals in the gulf, and thanking them for money and material they were sending to the group in syria. i was looking around trying to find more information. there was not a lot in the press. you had to follow this stuff in arabic on social media. yours was the only article i found, and this was back, i think, in early 2013, one of the

first mention of this fund jpmorgan raising going on in the gulf, and for that reason, that's why mark lynch and i collaborated to send you over to kuwait to do honest to god field work to see what the funding networks are like. how did the kuwaiti fund raising network for syria first get on the radar, and why did you pursue it? >> well, i think we had a similar experience. watching through the social media surrounding the syria conflict, you could see, occasionally, particularly beginning in the summer of 2012, a lot of mentions of kuwait, and there was no clear connection or no one put the pieces together. i started hearing this more and more and decided that, you know, someone who would be in kuwait, it's worth following up. it took the first six months to piece together social networks, and as you said in early 2013, we were really, really able to

definitively say kuwait emerged as defunding hub for the syria rebels. we had a particularly striking first, and it gave my the insight to the mentality of how this began. the first time i sat down with the donors himself, i was, of course, firm he was not going to admit to me what he was doing. i concocted a strategy to extract information from him, and i had the interview set, you know, the questions to ask, you'll be broad softball, you know, i hear you're interested in syria. he said, oh, yeah, oh, yeah, come here, i'll show you op the iphone, scrolls through, and, oh, yeah, last week i was giving these arms that you see in this picture to these guys. yeah, you know, he's -- so this is the attitude that you very quickly up cover when you dig into the networks.

these are individuals who really believe in what they are doing, and they have really gone all in in supporting opposition groups. >> why did the funding and the fund raising get started in kuwait, and then other gulf countries, but particularly in kuwait, why did they get started? >> well, this is a really important story. you know, we've been able to now, establish what's going on, go backwards in time and see how it did begin. like the syria uprising itself, the involvement began out of a hope that something could happen in syria, and so beginning in the summer 2011, long before it was militarized at all, a lot living in kuwait and elsewhere in the gulf where there's a large syria diaspora, they began raising funds to send back into syria. at some point, the syria donors in kuwait began to communicate with one another and form a

group of people who would go around, pool their none and pool their efforts. at some point, a decision made to reach out to the kuwaitis who had access to far larger amounts of money, far more important businessmen in kuwait. they had a network of people who had been giving to the causes in the past, and so they tapped into that network, and this fusion of syria expatriate involvement started the movement forward into funding the rebels on the large scale. >> and that was 2012? >> yeah, this began in, actually, in the fall of 2011 #, so very early. at some point during the meetings, a decision was made to begin partitioning the money between humanitarian relief and arms -- lethal aid, if we can say, and at this point, something very critical happened, and that decision was that donors themselves said we

want an armed uprising, and the way that one syrian described it, they said to him, you know, we want to shorten the duration of your suffering. to do that, we have to have armed groups. i'm certainly not trying to suggest that the syria conflict is armed because of the kuwait, but i think it was a significant factor in forming early brigades they brought grumes together and armed them in a very particular way. >> and what's the ideological flavor of the people doing the fund raising? is it a mix of secularists and ultraconservatives? >> we've seen an interesting wave in the ideology of the people involved, so at the beginning, syria was the cause that invigorated people across the spectrum. you saw donors, you know, from the sort of secular, maybe mild islamists to thal sighs

involvedded. this is the popularity of the funding gaining and gaining. as the conflict itself was complicated, there was a huge drop off in sort of the public's support, the broad base, and it really wiggles down to just the true believer types of sort of real extremes of the spectrum that were very interested in an ideological, sectarian agenda for the conflict. >> and why was it kuwait in particular that emerged at the hub for the fund raising? >> they are the perfect storm of conditions among countries in the gulf. the first and very obvious way kuwait is very different from the rest of the gulf is it's sort of -- it's thee most democratic country in the gulf which is something very beautiful. you go to kuwait and talk about politics in a way you can't in saudi arabia or in the uae. political parties, political groups are legal, freedom of association, all sorts of

political activity that we would recognize ngos, all legal in a way it's not in the gulf. that's the initial condition. the second component of that was a very, very weak counter terrorism financing law passed in 2002 that failed to criminalize counterit -- counter terrorist financing. the most extreme case, caught sending a thousand dollars to al-qaeda, the kuwait government had no tools in the tool box to go after that person. given that, kuwait really emerged assort of a place in the gulf war where people knew that this could happen in an easy way. i think something that i have grown to understand more as i become more, you know, deeper involved in researching this is that the networks sort of existed in kuwait that exist in kuwait for the financing on syria have likely shifted for a decade or longer before syria. we now have access to those

because a lot of the people have children to broadcast fund raising on social media in a public way that allows us to literally map out the social networks of the groups, but it's very clear that these guys have been operating for a very long time. i'll give you a very brief example. in the early days of the conflict, one of the reasons that particular syria told me he approached a donor was he had a reputation of being a very effective jihadi funder and knew the man was involved # in the past and the reputation was widely known among a particular ideological circle. >> i know this when i look on twitter and follow hash tags of the funding that a lot of the people responding to the pleas for funding are not necessarily in kuwait. they are from the surrounding gulf countries. why is it the case that a lot of

gulf say from qatar or saudi arabia find it more convenient or necessary to send money to the bundlers in kuwait rather than the local fundraisers? >> yeah, well, for all the reasons that i mentioned, you know, kuwait is just a place where you can operate and sort of not get caught. ..

>> i remember it was $300,000 for one night. and that is the huge amount of money. and what scared me more is that i asked him, whether the money go? and he said he had no idea. and to answer your question, how much is being raised? well, this is the guess work. and people are hiding their transactions and one of the main reasons for that is fear of the syrian regime, who is thought to have very good contacts. and we are moving in very strange ways to be a part of these contacts. based on a number of individual offends that i know have taken place, i would estimate that it is hundreds of millions of

dollars. >> there is a "washington post" article, saying that you had talked to a washington intel official. and that you had quoted the same kind of figured. so can you give us a sense for how the mechanics of how the money is raised. if someone going door to door, are they asking for donations? our folks writing a check to some anonymous address? and how is the money actually being gathered? >> way that i like to think about it the solicitation is public but it's oftentimes very private and very close and sometimes in person or managed in a specifically controlled way. for the way that it solicited is something that is similar to what we would like recognizes a good ngo campaign. let's say you want to support someone in that it something

that costs you a great deal of money. so the earmarks are very effective way of to give people a clear idea of what exactly they are going for and what their donations are. and another great example is an 800-dollar rpg. so this would be like something that is on posters, signage, twitter accounts, it's very well known, hundreds of thousands, if not more than a million followers are following this. there are signs posted physically in kuwait. go to some of the neighborhoods that are known to be sympathetic and they will have huge banners that they come to this part of bets. it has happened in a number of ways.

and they would say this is the bank information and i know there would be a screen shot right there with the account information and the routing number and the amount of currencies that were accepted. and it's gotten less so. they will use -- instead of doing that, they will say that this is -- here is an instant message account. and you can help hold an event and you can put a box in the middle. but if it's overseas, you are afraid to make a bank donation,

and it is just, it won't happen. so this is increasingly frequent as people are becoming nervous. >> does it get repurposed or is it and what do you feel about this >> a lot of the advertising uses all of the forms of what is considered part of this. so it is for the orphans and widows and to feed the hungry and to help gr. and it's separate these things

is very difficult. i spoke with one don't we spend a lot of time in hospitals. but he does that specifically working with one particular brigade. and to answer your question, it is very much intertwined and these are some of the most competent and extremely effective charities. these registered charities are not what i'm talking about and it's an important distinction

because kuwait is the single largest humanitarian donor and i want to make sure that this is not something that is part of this. but otherwise i don't know of any crossover. >> the flavor of this current fundraising for the private donor seems to be very much the ultraconservative sunnis. so was there ever a time in 2012 where you had -- where you have the more moderate elements of the kuwaiti society that were raising money in kuwait to send more modern elements in syria? >> absolutely, and at the peak of the funding in 2012, it was a broad base of people. what has been alarming to watch over the last year as i have followed this is that those

people who were involved in the modern elements have backed away partly because they are disillusioned. because they haven't been able to sort of effect a change, but also because they are scared of what is happening in terms of the more extreme elements. and they are very nervous about these elements targeting them and this is mirrored to what is happening where you have fighting between the more extreme and more rebel forces. and this is happening in the donor community as well were a lot of the donors are going to be targeted or isolated socially. >> okay, you talked about how the money is gathered in kuwait. how is this move into syria? i get the sense that it is not quite as simple as making a wire

transfer. >> yes, this is a harder thing to talk about her that we have clues as to how it's happening. some of it is probably moving to through exchange houses. so the place that you would go to change your dollars into kuwait currency. you can actually make a deposit and then clear that deposit in syria and this is one way to do it. and it will be partitioned into lots of different accounts. so you would have maybe 100 recipients. there are increasing amounts of cash, particularly through turkey. for some time, the money can no longer go directly to kuwait or syria, it stops in turkey where it can go over the border. in the final way that we think it's moving is through traditional moneylenders that are very common across the globe.

these are basically -- i hope my colleague can give you a means of this, or no cash actually crosses a border physically. so basically i run up a tab of how much i have sent to syria and he will run a sub and then based on transfers back and forth, they will equal out. if there is a lack of this but that is the basic system. >> i want to talk about the fact that this has had on the insurgency in syria. but it seems to me having watched the conflict began in a much more -- it has become so

much more sectarian. in one of the things that seem to be driving that is the perception that the world had abandoned the sunni and muslim community to the winds of this regime and that this fueled a lot of the activism to raise this money. would you agree with that? and also, what effect has that had on the insurgency? >> i agree with that completely. i think one of the main motivations and motivating causes for what you hear is that syria, everyone has abandoned you, but kuwait will not. so these sorts of things -- these appeals to the forgotten of the conflict. but they have also exacerbated in other ways as well. and i will give you one specific example where feuding between two main donors may have

contributed to the fracturing of the rebels on the ground. between two men outside of syria, one of them was a kuwaiti donor. and the other was a cleric in syria. two clerics, they had a high-profile argument on twitter over who should join the military council. the city's western backed groups that the official opposition was trying to create in 2012. they said no way, no way are we working with the west. this is not -- this is not something that we want to do. and the sunni clerics said yes, we should do this community is a good thing. so they have this very high-profile clash. but what they had is that the rebel but graves, the two men can work together because they're donors basically said no, we are not working with that guy. so this is a huge split between

us. and so they have sort of a dispute between the two of them and it was largely in part because of this feud that the donors themselves had. and there is a large degree of adaptation and that is sort of a self-fulfilling prophecy. it's kind of like if this guy wants me to act a certain way it's like, okay, i will do it. we will make this video, fine. but i think that, as you mentioned, as the conflict has gotten so much more difficult. some of the ideologies have taken hold and they have begun to stick. and it is so hard to grapple with what is happening to my community if i can reach out and have this exclamation that it's

this divine fight that i'm fighting. it makes it easier to sort of settle. and and of course, going along with that there has been an active ideological propagation from kuwait into syria in the lot of the brigades have specific units that were intended to sort of codify their particular beliefs. >> it is also the case that the money can be quite attractive. because there is not a lot of strings attached. the money is just being delivered in suitcases or in garbage bags and -- particularly when the same kind of money is not coming from other allies of the syrian opposition. >> right, it's the only thing in

town. for a very long time this was the only way to get funding. and, you know, there are lots of rumors and we know that this is happening with private donors. from everything that i know, it's been on and off situation. but the private donors have not stopped and we need consistency. so these guys have been absolutely elemental in building those groups. >> your paper that you wrote is very much about the sunni fundraisers in kuwait. primarily because they are the most public about it. but the shia citizens are also raising money as well. and i know it wasn't the subject of your paper. but i'm wondering if you caught a glimpse in what your thoughts are about that?

>> yes, this is something that needs to be further investigated. and it's not just the sunnis, i could never find us and the evidence. but on this last trip i did find evidence and i do believe that it could be a significant amount of money. basically the shia community in kuwait is fairly small. and i don't want to say that it is particularly insular, but it's an extremely strong community and i believe the way of the fund-raising is probably happening on the side of this, it is much more private. personal connections, one businessman will call and say we need to do this to support this or that. to support our brothers in syria. and so we are sort of talking about how it's quieter. but a number of the most

prominent businessman in kuwait who are shiites, they have significant foreign investment in syria. so they have the personal and business stakes with the maintenance of the status quo. which goes a long way to blame some of the cash flows that i believe are moving. and this funding, what i have so far captain to, i want to stress that this is equally secretary and the nature and i don't think that either side is an angel here. both sides are employing rhetoric that is truly despicable and is really demeaning to other people that live in their own country. >> yes, that is the final question i would like to ask you. what risk is there to the gulf

societies of allowing this kind of sectarian activism, even though it is being aimed abroad. >> i think it's a great risk. i think it would be very naïve to think that something that is happening so close to home, the people are so actively involved in, that it really can be kept out of the borders of kuwait. but i do think that there is a good intention between the communities and people that i will speak to will say that we are so scared of what is going on. we are scared of retribution. and they are going to come and attack us. and it's very strange to hear about in kuwait and the very messy society, certainly like

every society is. so i do think they have been exacerbated by people's involvement. >> kristin, can you give us a sense of the political and social context for this and why is it happening now? is it different than the kind of sectarian activism that you might have seen in the '90s or the two thousands? >> sure, i would like to say that i really enjoyed reading all of this work and the support was so exceptional. a lot of the things we will be doing is amplifying things because she covered a lot of ground and one thing i think is worth this is that kuwait has served as a center for fund-raising and that has been there for a long time.

quaid is really rich and not only that it's rich, but a it's been rich for a long time but of course, in addition to being really wealthy, kuwait also has a long history of activism in the political space to do that. way back to the 1930s, they were the first to have an elected parliament and later with the state achieving independence and to put forth a constitution that allowed them that allows them to have an impact. in all of that means that there is a lot of space as well. and this includes a lot of the

longtime. >> and this includes syrian opposition, especially early kuwait. and i mean, i was really impressed when i was in kuwait in the late 1990s and early two thousands, just the pervasiveness of collecting money at that time. any store that you run into would have part of this one collecting money. but i will never forget seeing this one in the society having a huge this huge sign written in blood across the top of this reading chechnya. so they were collecting money and not only have they had this

and also this experience in afghanistan and this is part of the cause. and this is not just the main presence. i know the names of the problem once and the charities and they are not the ones that are getting the money. but they are not in this thing.

and we basically have individuals that arose and this includes individuals to reach out to others than enough to maintain. it's not actually coming from a big institution.

>> so how would this might complicate the government's efforts to weigh in this fund-raising? >> sometimes they would come to quaid and he would have this long flow of people and ideas flowing across the golf and again, because it was more open and provided this place of refuge. in kuwait has this and many other things even beyond.

and we have these movements that would be pro-monarchy related to movements like that. then we have oppositional movements. and those that are trying to fuse some of these ideas of democracies. all of these elements are present. and you also have a lot of movements amongst some of the more tribal areas and we are putting pressure right there. and these are not people that i would run across.

and they are speaking about this when there are much more active movements and the international issues are part of this and we are working on the sectarian issues, looking at her on these kinds of things. >> i think they title that plane that this kind of sectarian activism risks stirring this up.

>> i think it started before this was happening. insurgents started happening after the iraq war and you have a lot of sunni individuals who came to kuwait at the time that were displaced in the conflict that happened. and i think that they have a lot of influence actually and as he said, kuwait has open politics and there has been some situations. and they actually broke down in the middle of these issues and what escalation was part of sm and also in lebanon as well.

and this includes the parliamentarians in their support for them as well which i think tells you something about how the sectarian policies of the region are becoming much more prominent and syria takes that too much higher level. and everyone actually has their own players and a lot of the fears that were built up from these other things than that includes what it means and they have their own actors and it will now be a part of another foreign setting. it's just as we talked about. and i think the problem in kuwait is that the politics are

much more open. at the same time it allows the space with a sectarian rhetoric. >> tom, turning to you now. and that points this out. it became attractive as a hub for this kind of situation. and could you put kuwait in kuwait's laws in the context of the golf in the region? and are they particularly lax? >> i think to answer that question, we need to go back to 1989 and at that time, it was

set up initially set up to counter money laundering from latin america. one of the things that is overlooked is the first part of the global war on terror. and i basically put in place the sanction of organizations and at the same time they were told that you need to come up with an addition to your money laundering regulations and guidelines. and they were monitored and this

implementation in the most recent valuation is done in 2010. in the context of this, it is fair to say that kuwait did not -- they were not doing a good job. and it was very frustrated by the lack of progress in the report at that time highlighted what they called many shortcomings in this includes finance and a poor level of preventative measures. and from this constant perspective, many of them are beauties on and they fall into four categories and 47 of the 49

categories rated noncompliant or partially compliant. >> how does that compare with the other countries? >> during this period, other gulf countries made in the thick make up the ground and if you look at the noncompliance and high-risk jurisdiction which was published in october this year, kuwait is noticeable for still being on the list and it probably wouldn't want to be in the same places like that. now in 2012, kuwait made an effort to try to make up for these deficiencies. and there then there is now the law that is referred to in this is all stuff that other countries did many years ago.

and i think there is some frustration that these issues haven't been addressed and even if laws are put into place and it is known that things will happen, concludes the rules and the laws to deal with illicit finance and because what is being conducted -- it is actually terrorist finance. and we have also talked about the way in which the politics works that they may not favor implementing and enforcing information. >> yes, it seems to me that a lot of the fund-raising the best talks about in her paper, i mean, you can probably consider it as financing for terrorist organizations because a lot of the groups and syria have not been designated an most of it's

not going the strong, for example. and so what tools does the international community and kuwait have for curbing some of this funding if they feel that it needs to be curbed in one way or another. and that is focused on terrorist organizations. and the hard weight is clearly if one can prove that money is going to the organizations that are designated including yesterday by the u.s. treasury, by designating this with those who were providing this as well. there is an alternative way. and that is that financial institutions are very concerned

about the reputation untainted by anything that would damage their reputation. so while he may not be able to directly be a part of this, you can let it be known that these individuals are perhaps not doing what would like to be done. and it will start to be withdrawn. and that will potentially inject a fear factor, which may make you think twice before continuing to do what they are doing. >> and if you look at the paradox to 9/11, and very effectively curtailed the donations that were going on.

and then something might happen, which turns over to sympathy or puts forward this to donate money so you saw the situation where the documents were found in saying that we are having a little bit of trouble with money, could you send us 100 grand. because he was very effective raising money at that time. so i think it is possible to curtail donors. but it will require the kuwaitis to perhaps be more aggressive than they might want to be with these individuals. >> okay, thank you so much. we'll we will open it up for questions, and i think that we have microphones around the room. if you could raise your hand and wait for the microphone to come view, that would be wonderful. and we have one kind of over the air.

[inaudible conversations] >> thank you. good afternoon. hello, i'm with the european council on foreign relations and i thank you. i think it's interesting and i'm curious as to whether you or any of the individuals have looked at the creation of the islamic front and the attempt to bring these groups together and they basically don't work. but do you think that this is going to in some way be a part of this? because obviously there is a kind of open question as to the behavior and how it may come back to bite them. and i'm wondering what your thoughts are on that. it's not a core focus of your research, but is there any reflection on how this kind of proliferation of arms and militias in this country ultimately affect what happens in the long-term? we have seen -- we have seen

what an impact has and is there any consideration that this can do more harm than good? because there is no clear way of understanding where the money flows going. and the most destructive groups certainly are getting tons of money and they can still do a lot of damage. this curious if you can reflect on this point. >> yes, absolutely. i was looking at this over the last few days and a lot of the backers have come out in support of the islamic front and i suspect that what we will see is that everyone is equal but some are more equal than others in this situation. so i think that although they are under the same umbrella, i think that many of them will continue to receive better funding through some of these individuals and other brigades. so i would not expect and i

don't know -- but i wouldn't expect these donors to change their financing in any way and i would expect them to continue in a network that they have already established and work with this and they will continue to work together. >> how they reacted to the formation of islam? >> yes, they have. one of the most prominent donors, has come out and support the islamic front. and we have seen these alliances in the past. it seems that it has a bit more coherent. but there's no evidence that he was involved in brokering an arrangement between himself and other individual groups at different points in time. so the big question is whether this alliance is different from other alliances as it has this kind of pattern.

but i would not expect the pattern to change. in terms of regret of what this could do in the future, i think this is one of the main reasons that the broadscale funding has sort of dropped off and it's the hard-core elements that remain. so for example, if you look at those that have this, there's a quote on the first page from someone who raises money for moderate brigades and he was basically lamenting the fact that basically his and others' support has gone in so many different directions that it's really just sort of destroyed the opposition by making them totally incoherent and unable to work together. >> the question in the back? >> hello, i just recently came back from the hamas area and i

know what you're talking about, a lot of the funding here. because i have seen the kuwaiti and saudi things and there is nothing about the weapons which threw my experience have been a part of this and are really from the syrian army. most of the sophisticated ones, they have been captured and really you cannot talk about, you know, favoring this group or that group. because one example, the headquarters, we knew that they suddenly overtook the headquarters and i am saying that they refused to give them, even a weapon, but not saudi

arabia and positively not wait. and i know that we have so much propaganda from the other side. but it's all nice, you know? most of this is from the syrian army. >> i really appreciate you making this point and i would emphasize again just how much humanitarian aid the kuwaitis are doing and how much work they are doing in these charities are doing this and it's really that they are the unsung heroes of this crisis and they are the only, you know, they are the ones in every case for humanitarian work and there is an effort of this as well, that where do you draw the line on this? and if you are supporting a

hospital that is run by a particular brigade, does it have a legal component? it is a very sort of -- it is a spectrum. it is not black-and-white. and he raised the questions that make this so complicated. a lot of this does go to things that are very much needed on the ground and these rebel brigades understand that if they are controlling an area, that also means that it's part of the hospital and providing for people and no one else is doing that, quite simply. because these groups are the only ones that have access to these areas and i really appreciate your point. >> i would also like to add that the paper was not about data systems, but private individuals and a lot of the assistance comes in the form of money so the groups can buy the weapons they need, whether they do deals with these in the syrian army or

they do this, the money to buy this as well. >> yes, i am in touch with a guy who has this kind of fund-raising and people giving money and specific towards weapons. one case in kuwait, he had attended where he aimed to raise money for his money as possible and they raised enough money and there was a certain amount of this going on amongst the home high-profile individuals who attended this event and that kind of constitutes as part of it. and so i think that money is given specifically for purchasing weapons. >> ma'am, you had a question

here? >> hello, i have two quick questions. there was a report this week about 10 kuwaiti shiites were killed and i was wondering if you could elaborate more without the help and what kind of funding and fighting with the syrian regime is about. and isn't there a part of this? when you concentrate on this, between the legitimate organizations that are healthy and the ones that are raising money for weapons. there is a fear that the government of kuwait will crack down and then the syrian people

on the ground are going to suffer as well. >> thank you. >> i don't know much more than i havarti said. and especially in determining the amounts of money. but i believe that there is a long-standing historical tie between support for hezbollah and i have seen lots of reports going there to fight. and i don't have anything confirm that i can tell you. >> i don't have any specifics on what is happening now. but it isn't just is coming kind of parallels a and it was a real

center for a and especially across the gulf coast and we have prominent activists that settled in kuwait and had influenced in some of them and syria as well and those who parlayed into the business contacts on the other side. so there are activist communities and the higher-level businessmen as well and during the time we were looking to invest abroad and those were established and can be instruments allies. >> on the second question, can you talk to me about what they have attempted to do and they

have also attempted to get on the other side of this. can you talk about that a little bit? >> yes, i can. when it comes to the bowl, stir in crisis is really striking a chord with people. it is such a terrible conflict humanitarian wise and eventual conflict. and that was a very close personal conflict. and i think that every country's government has been deeply motivated and it has taken an interesting strategy to channel that energy into one public campaign. and they had this gigantic

telethon with a couple of religious the establishment of it all in the tv networks and just everybody was getting into this one pot. and i think this was their way of channeling the emotional responses and the very sincere desire into one way that they could've been used for humanitarian purposes that was a bit more controlled. and anyone who's trying to do fund-raising outside of that was apt to join this into an inclusive way and i believe it would be moved into the humanitarian way. many citizens know they want to help and they have taken these strategies is sort of a way to be a part of this. and it's very important, you know, to turn that around and do the best that we can.

and this is very important. >> okay, can you make a recommendation that indicates that the ngos are going to be a vulnerability with the effort? and i would really like to discuss where the monies are going, not just where they are going, but where they have been received from, which is something that the global finance committee look that closely at their unintended consequences of that the monitor charitable donations and where they are going and trying to control this, making it go through safe corridors, it is

something that are incentivized if they want to get a clean bill of health. >> have a question here. >> okay. >> thank you very much. i thank you for the informative manner that you are presenting. and one question that may be part of personal experience, i was part of the uprising in iraq and our problem was more support and there is more to supporting an insurgency than giving the weapons back and it is captured, as we did from the army, but there is more to supporting it

as well and this money can go to the nonlethal supports of the insurgencies. and my question is it's very hard to draw the line in countries like the gulf states between what is private and public as you already alluded to the fact that some parliamentarians would support this work and etc. those who either went to syria and my question to the panel is about the attitude of the kuwaiti government that is less sanguine and public and the countries who are talking daily about things. but what is happening, is it a structure of problems and this is the federal government that implements it is a marginal