was spotted from the air. so, that woman is fighting with all of her heart, bless her. [laughter] and so, people need to understand, these are not peaceful law enforcement operations. they become a bit normalized but we're talking about, aggressive paramilitary style raids. they're dangerous for the officers involved and dangerous for the people who live in these homes. so we're talking about showing up at your house at 3:00 4:00 in the morning, many cases not enoching on the door to announce themselves, battering ram in the door, throw everybody on the floor. shoot the dog perhaps, just a side note, how many dogs do you think the police kill in this country every year? the department of justice, the department of justice estimates police in america kill 10,000 sled a year during these police procedures. so again these are high-intensity, with high potential for violent escalation

and high potential for violence. what does it have to do with your bosses and the federal government? that is another myth, that the federal government does not have much to say about what goes on in local police department. while criminal justice historically a state or local practice, the war on drugs and more recently the war on terror have provided the basis for the federal government to become deeply entertaining gelled in state and local law enforcement. the result of that entanglement and is distorting of police priorities and through security initiatives, weapons transfer programs from the pentagon transferring military weapons and military equipment to local police through programs such as the 1033 program you are familiar with and aforementioned equitable sharing program. that is the federal government creating a legal regime to help facilitate state and local

police taking property, cash and property from people who are not charged with a crime or not convicted of a crime. they're merely suspected usually of a drug crime losing their property to the police. the federal government through this program provides incentives for state and local police to engage in this. the end result that state and local police because of incentive structure start to forsake local concerns and local priorities in the name of fighting the federal government's war. the federal government's war on drugs and federal governments war on terror. some examples of this distortion, police in keane, new hampshire, applied and received federal funding, almost a half million dollars for mine-resistant vehicle, that a keane pumpkin festival was target for terrorists. i'm sure it is a fantastic pumpkin festival. i've not been there myself. stands to reason the keane pumpkin festival was not al qaeda target.

a keane city councilman admitted as much we're not really concerned about the threat of terrorism, that is what you have to put on the application if you want the money. another refreshing bit of candor from the same official said, and by the way, what red-blooded american cop doesn't want to drive around in one of those? that is surely true. surely true, police and anyone would like to play around with these toys. that is not the purpose of law enforcement. that is not the reason justifies the existence of these federal programs or this federal intervention in state and local police. another councilman called it a tremendous waste of money which was also candid. the important thing to remember because these are federal grant programs, it was not taxpayers of keane, new hampshire. this did not go through the keane legislature. this did not go through the normal appropriations process. this is from federal taxpayers to go to keane to provide equipment otherwise they simply wouldn't have because nobody else would be paying for it.

another example, police in tacoma, washington, threat of ieds, i.e. d stands for improvised explosive device. these are the roadside bombs you may hear about in iraq and afghanistan. tacoma washington cited ieds for a federal funding for mine-resistant vehicle. there is little evidence in the near future there is a ied attack in tacoma washington. retired senator tom coburn from my state of oklahoma put out a report in 2012 to highlight the profligacy of terrorism grant programs. he targeted urban area security initiative. during at the time this study put out in 2012 given 7 or $8 billion to local law an forcement to terrorism grants. according to the report there was very little evidence to suggest the communities were any safer. this massive expenditure of

federal tax dollars and massive intervenges of the federal government into state and local policing was actually rousing anything on the back end except for enriching departments and producing this militarization effect. president obama commission attack force after events in ferguson to explore the 1033 program and weapons transfer programs. they concluded there was not adequate training. there were not adequate concern about civil rights. in fact per the recommendations of this task force the 10:30 three program were reformed. police were no, no longer given tanks or track vehicles. vehicles with wheels they can get but nothing on tank treads. can not have weaponized aircraft or rifles larger than 50-caliber and no longer have grenade lan customers and for the love of god can can no longer have bayonets. i still do this day found out why the federal government were

given local police bayonets or if they ever were actually deployed but no longer. we're skewing local concerns and priorities when the funding comes through the equitiable sharing program and federal grant programs you're not going through the local process and representative process and finding out what the community needs and what the community wants and you're getting incentives from the federal government instead. i do want to say, i just don't want to rip on abuses of this program. some police departments to their credit have rejected participation in these programs for exactly that reason. so brandon is the chief of police in burlington, vermont. he voluntarily removed his department from the 10:30 three program. he said i do not like the way my officers seeing things through military lens. this does not look like law enforcement to me. this looks like military. that is not what we want police in this community to be about. this is not just us up here saying this.

there are people in the police community, out on the streets say this is not what law enforcement should look like. we don't want to take part in this anymore. from equitable sharing to terrorism and drug war funding to outright military equipment transfers to secretive transfer of invasive surveillance equipment such as stingray cell phone trackers and some of the things such as drones that my colleague matthew has written about, the federal government has forcefully injected itself into everyday policing and priorities, tactics and most importantly the legitimacy of law enforcement has suffered greatly in this country as a result. so the federal government may not be able to solve all the problems with policing in america but it can stop exacerbating ones we have. some departments will have this equipment regardless. some of your bigger cities will have police departments that have well-equipped s.w.a.t. teams, mine-resistant vehicles things of that nature because they can go through their local appropriations process, can go to the community to convince

them they need this equipment. places like keen hampshire, i can say it because i'm from there, podunk little towns in middle america, will not have mine-resistant vehicles if they are forced to pay through the local process. instead of getting what one local police officer pennies from heaven to pay through this equipment from the federal tax budget. that is why the federal government does have a role to play here despite the history of criminal justice being a state and local issue. now i turn it over to my colleague, matthew feeney. thank you. >> good afternoon. this has been very cheerly so far, hasn't it? i hope to follow on what adam and jonathan are speaking about to discuss police body cameras and the role that the federal

government is playing in body cameras and possible benefits. if you're on the right side of the room you might be regretting you're not in view of my great power point presentation but i assure you mostly, won't be too much informative. mostly pictures so you don't have to stare at me the entirety of the talk. i thought to important to begin with a town that john and adam mentioned, ferguson. st. louis county grand jury declined to indict ferguson police officer, darren ferguson. brown's killing sparked protests. in the wake of news that wilson would not face charges three-year, 50% funding program for the purchase of 50,000 body cameras. and this isn't a surprise. body cameras have been a staple in police misconduct discussions. there is widespread belief they

have a observer effect. people behave better when they know they're under observation whether you're citizen or police officer. indeed there is some evidence to back this up. the most, the most study on this took place in rialto california. the new police chief came in and outfitted officers with body cameras, they recorded use of force incidents and complaints against the police and compared that number to the years before the body cameras, and what they found in the year where body cameras were deployed there was dramatic reduction of use of force incidents and complaints against the police. more recent study that was published last month examined 4200 officer shifts in seven sites in 1.7 million hours of body camera footage. they compared the year before and year of body cameras. and they found a 93% reduction in citizen complaints against the police. there are a number of reasons why it might be so dramatic.

for one i think this study requires officers to inform citizens they were on camera before the interaction took place. i don't want it to paint too rosy a picture. not all the studies have found as dramatic results. here are results from san diego. they found in the year when body cameras were used or time period when body cameras used increase in use of force although there were decline greater controlling use of force incidents. those are tasers, pepper sprays and things like that. but the only benefits might not be on behavior of police and citizens. body camera footage and other footage proven valuable into investigations into police misconduct. so many of you will be aware of the walter scott shattering that took place in south carolina. the officer involved, michael slager will have a murder trial at end of this month. the killing was captured on the cell phone footage although the officer involved in that was not

charged. and when it comes to body cameras i'm sure many of you are aware of the samuel debose shooting took place in cincinnati. the ray tensing, the officer involved is facing murder and manslaughter charges and trial will begin this month. the officers in that case described the body camera footage invaluable bringing charges. this is from albuquerque new mexico. this is killing of james boyd, homeless, paranoid schizophrenic was camping out in the foothills of mountains t was announced second-degree murder charges the trial here ended in a mistrial. this was announced yesterday. but the district attorney when this began said that we have evidence in this case to establish probable cause we didn't have in other cases. so, there seems to be pretty good evidence that body cameras have some beneficial effect on officers and citizens although to what degree it is affecting

citizens more than police officers remains to be seen. certainly the case that body cameras have proven very useful into investigations into police misconduct. it is worthying about the cost here. police regularly interact with people who are drunk, high mentally ill. they talk to children who have been sexually assaulted. they are first on the scene at many accidents. they talk to informants and under cover agents. when we're considering body camera policy we have to be careful about the privacy concerns associated. i have taken some pictures from body camera footages to highlight some of this. the top left. a man stabbing a police officer. the bottom left, a man undergoing a drug overdose in his car. the top right and bottom right pieces of footage show a swat raid that took place in indiana. i'm highlighting these screen shots because, they give i think a good idea what police are seeing. the swat raid footage is particularly i think disturbing because you're seeing interior

of someone's home. you can tell a lot about someone what they watch on television and bookshelves. political posters, religious icons things like that. the man in the car is not a violent criminal or anything. he is undergoing a medical trauma. yet i found that very easily on youtube. the man stabbing officer, his face has been blurbed but he has rather distinctive tattoos wouldn't be difficult if you knew the jurisdiction totic out who the man was. in light of these concerns i wrote paper for cato highlighting what i think the right policy should be to get the balance right between accountability and privacy. i think that the important thing is, that incidents that take place in private homes, that body camera footage should not be available to members of the public. it should be available to the homeowner, their attorney, next of kin but not anyone to request. i don't have the same view about incident that take place in public. if you don't have an expectation of privacy and officer doesn't

i think members of the public should be able to see body camera footage shows searches, shootings and detentions. you now, today we've been discussing law enforcement is primarily a state and local issue you but i think there is an important role here for the federal government. as i mentioned earlier the obama administration shortly after ferguson indicate ad strong interest in body cameras. and body cameras are not cheap. they impose a fiscal burden on police departments. the department of justice issued body camera grants. the department of justice issued body camera grants to departments that do not have good policies in place, that do not promote transparency. in 2015 the department of justice gave $23 million to 73 departments and 3states. los angeles police department was one. departments. it received one million dollars. despite the fact that the

los angeles policy requires police officers under investigation to view body camera footage before they make statements. the policy also did not explicitly have prohibitions on using body camera footage for general surveilance. this year there were $20 million awarded to 106 departments in 32 states. one of the states where these departments were is north carolina. and many of you will i'm sure followed the news out of charlotte and have heard something about the law on the books now in north carolina which prevents members of the public like you and me to access body camera footage absent without a court order. this is not a policy that promotes accountability or transparency and i think if the federal government is going to be involved in funding body cameras, the very least it can do insure money only goes to departments that demonstrated commitment to transparency and accountability while also protecting privacy. i will finish very quickly with this note.

body cameras are just a tool. they're not good or bad in virtue of their existence. they're made good or bad tools by the rules that govern them. with the right tools in place they are really great tools for accountability and transparency as the samuel dubose shooting i think highlights but we shouldn't forget without the right policies in place there are rather terrifying tool of government surveillance. and there a number of things on the horizon i want us all to keep in mind. very you few departments have policies explicitly banning the use of facial recognition software on police body camera footage. it is also very important that departments have policies in place that limit the access that officers have to body camera footage. we don't want police deciding in this time to sit down trolling through body camera footage to see who was where doing what especially if there was no probable cause. that i said i'm long-term

optimist when it comes to tools but i do worry about that and federal government's role. the policies it is adhering to but ultimately it is up to people who work up here on capitol hill to insure that those strict policies are put in place. thank you. [applause] >> all right. so we have 20 minutes or so to entertain questions about the topics we've discussed and, we can start with whoever is ready to go. anyone? you, sir. >> my question is directed towards adam bates but open to everybody if you wish to give an answer. it is regarding police militarization, i wonder if you can talk about whether civil

asset forfeiture funds are used to fund the militarization of police we see in some of these cases? whether -- [inaudible] militarization goes to those are related or not what nature they are related? >> they're absolutely related. and it is important to understand we talk about asset forfeiture. all 50 states have their own laws about forfeiture. where the money actually ends up going can differ by jurisdiction. by and large civil asset forfeiture money goes straight back into the budget of the police department. this is not going through the appropriations process. this is not goings back through the general fund. it is goes straight back to the police department and they can use the money in most jurisdictions for anything related to law enforcement. that includes, you know, paying for federal equipment transfers, paying for new equipment weapons, things of that nature. so yes, there are absolutely is a connection between the use of civil asset forfeiture and

militarization. it is not just the financial connection but it is also the separation of powers issue right? because now we're not going to the legislature to say, hey, we need a s.w.a.t. team, we need bearcat mine-resistant vehicle we need 50-caliber rifles. you're not going through the normal process you go through people have the ability to comment on acquisition of equipment. where you have public debates or public notices and comments to say hey maybe we don't need the stuff. we're skipping through all of that, all of that legislative appropriations process and we're going straight to buying the equipment. so there is that angle to it as well. >> also it is important to note that there has been some significant victories in the areas of civil asset forfeiture reform. new mexico abolished civil asset forfeiture. it is one of the legislative battles it was behind the scenes opposition. once it came up for a vote, the vote was unanimous in new mexico

to abolish this controversial practice n california, just a few weeks ago, they also significantly scaled back on civil asset forfeiture powers in that state. there is some momentum but there is clearly a lot more that needs to be done. >> yes. >> there are a lot of other developed countries across the world a lot less problematic to police practices. [inaudible] also look at those foreign countries, if so what do you -- [inaudible] >> well, the drug war has come up a few times and we've done some international comparisons looking at countries that take a difficult approach than the united states's historic hard-line approach to waging the drug war. for example, a lot of people do not realize that portugal decriminalized all drugs in the year 2000. and so, there was a lot of predictions that they were making a big mistake when they

went to de-escalate the war in that country. and we did a study by glen greenwald who went over there to study the results to see whether these dire predictions would come true. and he found they're doing very well there. there is no movement underway to say we have made a mistake. we need to reverse this policy to go back to the american approach of ramping up the drug war. so actually more and more officials from around the world are going to portugal to see what they have done, study results and de-escalate the drug war in places like brazil and other countries around latin america. of course we've got upcoming elections here where marijuana legalization is on the ballot in many states. so these are steps, in the right direction. moving away from the drug war approach, moving towards decriminalization and legalization. it is a tremendous waste of police resources to have agents

doing these s.w.a.t. raids. helicopters over the property of elderly women with a pot plant in the backyard. tremendous waste of resources. police resources should be redirected toward the fight against violent crime. >> am i cutting somebody off over there? another, a big aspect of this is, if, an interaction between the police and the citizenry doesn't happen, obviously it can't escalate into violence right? when we talk about things like marijuana legalization, we're not just talking about limiting drug-based interactions with the police but we're also talking about something that jonathan mentioned with the pretext all stops. if the scent of marijuana or dog hitting or car can no longer consider probable cause to search somebody's car and escalate scenario, the escalations we see in a lot of cases end up with people dying

simply don't happen. i understand, you hear argument police something dangerous job and it is a dangerous job. that police officer is worried about his safety but if we can limit interactions between police and the community by decriminalizing behaviors that shouldn't be criminal in the first place, those situations have a chance to blossom into violence, right? >> i will, yes, i actually have a uncle who served as a policeman in england and it is true that the united states does stand out among developed countries when it comes to the number of citizens unfortunately killed by law enforcement. i think everything adam and tim said is correct. i will only add i think it is worth examining treatment or response to calls that have to deal with people with mental illness and those kind of things, very disturbing footage that came out of dallas comparatively recently of a man, young man with a screwdriver who was shot and killed very quickly. that is something else when it

comes to training i think could also help. >> anyone else? yes, you, please. >> you mentioned the idea that militarization of police agencies is talk a little bit more of that kind of perspective on that. >> well, so, as tim mentioned in his remarks, many federal agencies, federal agencies that most people don't even know exist, for some reason have been part of this militarization ramp up in the federal government. it is not just the military equipment but also the surveillance equipment. i mentioned stingray cell phone surveillance devices used to track people's cell phones. irs has stingray devices. why? why does the irs have a s.w.a.t. team? why dawes the epa have a s.w.a.t. team? besides the general we want the stuff and it is available i don't have a lot of great ideas about why that came to happen

except that is the natural growth of government when nobody's, when it is not being checked in any way but yeah, if you live in d.c. and you walk around you start seeing police cars from government agencies. u.s. secret service has their own police. fbi has their own police. the treasury, the mint has their own police. yeah, i have the same reaction you have which is, wait, why? >> i think tangentially from at that, another thing about the mission creep is you have, as you're talking about surveillance, that the information that is collected from federal agencies can, sometimes trickling its way down into local law enforcement. they will be a doing a terror investigation. i come across some drug trafficking. the local law enforcement and say, this is the guy who is doing this. can you, we can't give you this information. we can't tell you how to get this information but you can set up what is known as parallel construction, come up with a

plausible way you came across this information and build a case that way. a lot of times because so many people plea out, they don't go to trial. they don't find out how they got the information. when the, when the government's called on it, they usually say we drop the charges. >> i should also mention back to a point raised earlier about the shooting of dogs, this is something that doesn't get enough attention in our view. you talk about why there is growing resentment against police, when you shoot the family dog, these stories ripple out among relatives, neighbors friends of people and when everybody agrees that officers have, have to be able to protect themselves but when more and more of these incidents are cause on tape, where you can see the situation and come to your own conclusion whether that dog was threatening or whether the officer overreacted and shot the

dog, these boilerplate language that used to go into police reports, the dog was threatening, therefore i had to shoot him. that is not cutting it anymore because some things are caught on tape. there was incident in new york city where civilian review board concluded that an officer overreacted in that city by shooting a dog. another one of here's things that is caught on tape. and, you know, this is an example where we can learn from what other agencies have been doing well. for example, the united states postal service, all these postal workers, thousand of them receive regular training how to deal with sled. they are dealing with dogs in the community too. turns out, there may be a few bites a year but no serious incidents involving postal workers because they have been given training how to handle recognize a threatening dog very as you dog that is non-threatening and what to do in these situations. so many local police officers don't receive this type of training.

so like, matthew was talking about, we do, there is lots of things to be done. how to handle people that are having some type of mental distress and learn about what the postal service is doing with their training, when you have that training done for local police officers so that some of these horrible, violent incidents in the community can be reduced. >> in the back. >> talking about foreign governments and relate some of the practices. it is my understanding that in london uniquely, i'm not sure applies throughout england, the police don't carry guns. i wonder if you can comment on success of that policy? >> no, no, not just london. generally british police don't carry guns anywhere. they can get access to them. there are specific units that

respond with weapons if they have to but britain is actually not unique but not necessarily the normal of the developed countries. there are other countries where police regularly carry guns. french police carry weapons pretty regularly as do finnish police. the discussion has to be when they use the weapons under what circumstances. disarming the police might sound like initial good idea but of course there are plenty of citizens in the united states who also have guns. that is something that police in most of these other developed countries don't regularly have to worry about. so i don't think disarming the american police is necessarily the right way to go but certainly training and under what circumstances they use the weapons is something that should be looked at. >> i would like to follow up on that a little bit. some people have, excuse me, some agencies tried to move more towards tasers and quote unquote, non-lethal uses of force. of course we also hear of stories of people being, dying

after excessive taser use. what some have found is that the use of a taser goes up when they're given tasers instead of guns or in addition to guns like, not as lethal, so i can use this also quick to escalate. i can only reiterate that training is just as important if not more important than whether or not they're carrying a firearm. >> one of the benefits of having a decentralized system of having police organized at local level is that they can try different policies and we can learn from one another. so, there may be a few jurisdictions out there may want to try the english approach of going unarmed. we learned from those type of experiences the same way we're learning from colorado and colorado stepped forward in the marijuana context. a lot of people said it would be a disaster. so policymakers around the country are closely following what is happening in colorado. the dire predictions have not come true. when a state experiments with a

policy we can learn from it. then other policy-makers and other jurisdictions can make their own decisions based on evidence. >> anyone else. one question i had, there is federal system to merits federalizing policeman's conduct. in terms of crimes, in terms of applying federal layer of penalties. >> i think given decentralized nature of law enforcement. i don't want to say that the federal government has no oversight role, especially when it comes to things that represent constitutional violations. i think it was tim that mentions the pattern or practices ensued things like section 1983 lawsuits that are federal causes of action against state and local officials.

i think those are necessary to protect the constitutional rights. as far as federalizing law enforcement or entirety of the oversight of law enforcement i think that is probably a bad idea. because the federal government itself is not, it is not very easy to hold those people accountable. it is not as easy to hold the federal government accountable as it can be at the state and local level, sole only word on police misconducted. >> we should maybe address. how about the war on, does it exist? what is the data on that? >> tim? >> well, yeah there is much discussion in the literature and in on television about a war on cops but, the evidence for that is rather thin. if you look at, for example, the violence against police officers despite the awful tragedy and

ambush in dallas this year, if you look at it overall, the statistics violence against police has been going steadily down. we're at very low levels. the word, or term or expression i think is more being used in the debate policing. how to handle police misconduct. we're having debate over what police tactics appropriate and should be implemented. we have people on different sides of these questions and some of the people who don't like policies being, demille at thattization abolishing civil asset forfeiture and these types of things upset about the way in which the debate is going and kind of mischaracterize i think that as being some kind of a war on police. i think it is an unfortunate mischaracterization because we all know other governmental

institutions like our schools and have to address them and it doesn't amount to a war on teachers because we want to reform our schools and same thing with our police institutions. we know many are dysfunctional. chicago, new orleans, some of these places have been dysfunctional agencies for long time, so moving to address them and fix them should not be mischaracterized as a war on cops. >> oh. >> [inaudible]. -- police miss conduct or what would -- [inaudible] >> i think it varies from department to department. running police misconduct website i find all sorts of different, how different departments handle it. sometimes small violation like you know, inflammatory facebook

post will get someone fired. other times, you know, like the dog that, officer that killed the dog in new york tim mentioned he got off, civilian review board said, yeah, he violated rules but got off with a light reprimand. depends on union protection. it depends on transparency in any given department with, you know, body camera policies and how this goes through but ultimately what it comes down to, people paying attention to their own communities an bringing political pressure on the prosecutor and the mayor to make sure most places don't elect a police chief. you get your county sheriffs and what not. a lot of people are thinking what did the sheriff do today? >> we have time for one more. if not, we're not done with this topic by a long shot. last year we did a full day conference on related issues and criminal justice reform, in fact

december 7th at cato institute. please go to kate tow.org. that will be on free trade on october 27th. check your email for that. i think we should thank our speakers today. [applause]

>> initially when i was trying to come up with my documentary for student camp, i was a little bit daunting, there were so many different elements i was trying to put into it. a lot of information to communicate in seven minutes. i kind of took a step back.

it is a visual essay all throughout high school. it is something came a little bit less daunting as i looked at it from that perspective of just gathering information. instead of writing that information i'm filming it. i think anybody interested making a piece with studentcam to reach out to many people as they can to get as many different perspectives as you can. because there are experts out there that are more knowledgeable about the subject than you you are. as many of those people you get in the piece the more credible it is. it will not be a high school student solving massive problem. you are contributing useful information by compiling all the perspectives. >> this year's theme, your message to washington, d.c. tell us what is the most urgent issue for the new president and congress to address in 2017? our competition is open to all

middle school and high school students grades 6 through 12. $100,000 can work alone or group up to 3, produce five to seven minute documentary on the issue. include c-span programing, and also include opinions. $100,000 cash prizes will be awarded between 150 students and 5teachers. grand prize $5,000 will go to the student or team with the best overall entry. this year's deadline is january 20th, 2017. so mark your call len darst and spread the word to student film-makers. for more information, go the website, studentcam.org. >> at the washington institute for near east policy assistant treasury secretary daniel glass glaser what is the they are doing to top isis from raising money through the global finance

system this is hour and 15 minutes? >> good afternoon. we're about to begin. if you can finish and take your seat, that will be great. good afternoon, everybody, welcome to the washington institute for nearest policy i'm matt levitt, stein program on counterterrorism and intelligence and this is the latest on counterterrorism lecture series. gives me a great pleasure to welcome my good friend and colleague, danny glaser. he is the assistant secretary for financing in the office of financial intelligence. once upon a time danny and i served as deputy assistant secretaries together. danny can tolerate bureaucracy much better than i can. he stuck it out. he is assistant secretary.

the i think longest serving person in the treasury department on this issue before there was a tfi at treasury. it's a great, great pleasure to have danny back here today. of the not the first time in the hot seat. today we'll be talking about the evolution of terrorism financing. in particular, this specific issues go into disrupting islamic state which has very different set of means of raising and moving, laundering and spending money. so gives me great pleasure to welcome you here this afternoon. those of you who are here in the room with us in person and those of you who are participating across the television screen with c-span. with no further adieu, please join me well coming assistant secretary danny glaser. [applause] >> thank you, matt, for that very nice introduction. matt and i were colleagues for treasury for a number of years. it was great working with him,

in that capacity and certainly been great working with him ever since. it is honor for me to be here today to see a lot of familiar faces out in the crowd. very flattered that people are interested to come and hear what we have to say about how we are approaching the issue of isil financing at treasury department and u.s. government more broadly. i think it is going to be, it is a positive story. i think this is an area where we have great challenges but we have also made tremendous progress. i want to talk about the challenges that we face. i want to talk a little bit how isil raises revenue. talk about our strategy to address those issues. and talk about where i things are going from there. that is going to be my remarks, my prepared remarks, when we get to the q&a, people have questions about terrorist financing more broadly i'm certainly happy to address any of those questions as well. so let me just jump right into

it, talk about the unique challenge isil does present us. when you think about the terrorist financing, it is actually pretty, it is conceptually pretty simple. there are infinite varieties. it is actually conceptually pretty simple how we tried to address terrorist financing. there are two parts. we tried to prevent terrorists from raising money and we try to prevent them gaining access to the financial system so they can't spend their money. that is it in a nutshell. interfere with a group's ability to generate revenues so they don't have money to spend and interfere with their ability to gain access to the financial system that they don't have. that is what terrorist financing, with infinite variety among terrorist organizations in different situations. that is conceptually how we approach any terrorist organization. when we think about disrupting financing. traditionally when we think

about terrorist organizations we use very similar tools to approach both, when you think about, you know, any number of terrorist organizations who primarily receive their funds externally. by attacking their access to the financial system, we can prevent them from generating, raising revenue and prevent them from using revenue. what is really unique about isil is the fact that it generates sufficient a substantial portion of its revenue internally. we've had, we do, there are terrorist organizations past currently that control terror. hamas controls territory. al-shabaab to certain extent controls territory. the sheer size, the vast wealth isil has been able to generate internally, makes it qualitative challenge than any organization we've seen before.

requires us to take qualitatively different approach than what we've done before. so let me talk a little bit the first part with isil, generating revenue. i will talk a little bit about the second part, interfering with their access to the international financial system. so sources of revenue for isil, the numbers, whenever i speak publicly about isil i give, i give some numbers. these are 2015 numbers. these are estimates that we have from 2015. what we've generally said, they generated a about a billion dollars in revenue. they created a little bit more than that in 2015. those are primary from three different sources. the first source is oil and gas, sales of oil and gas. and number that we have used for 2015 is $500 million. i think number is substantially less than that now. i explain why in a little bit.

the second important source of revenue, is taxation and extortion. people like to say extortion because we don't want to, use of the word taxation seems to legitimize isil as government. so we like to use word extortion. taxation is probably closer, more descriptive of what is going on. they really do levy fees and taxes among the populations that they control. again, our estimate for this for 2015 was $30 million per month. or $360 million per year from taxation. and again, that is internal source. so i have just, rattled off $860 billion, $860 million, of internally generated revenue for isil. and then finally in 2014, 2015

when isil came and took mosul there was in excess of $500 million worth of cash in bank vaults in mosul, primary in the state-owned banks and central bank branch in mosul. so that is, that is another approximately half a billion dollars that was available in mosul when isil came rolling in. and that really does, those three things together really make up the lion's, lion's share of isil financing. there is some external financing that comes. there is kidnapping for ransom. there is have right of other sources but those are all frankly quite small in comparison, can't emphasize vast wealth they're able to raise internally with their territory. so, that certainly create as challenge for organization like the treasury department as i said who, we have sort of traditionally specialized in preventing these groups from getting access to the financial

system but how do you, how do you prevent them from getting access to wealth internal to their territory. the answer is, more of a military solution to most terrorist financing issues. it is pretty unusual to have a assistant secretary of the treasury stand up before a crowd and talk about military operations. that is precisely what i will talk about for a few minutes. that is really important of a part of counterterrorism efforts within isil. the coalition has launched an air campaign, called title wave two. it began in november and ongoing. the purpose of tidal wave ii to attack entire supply chain, the entire supply chain of oil and gas sector, it is attacking the ability of isil to extract oil and gas, its ability to refine ability to transport. this is something we work very very closely with defense

department on, with the military on with the coalition. this is a very deliberate campaign, it is a very intelligent campaign and substantially able to extract oil and gas and make that available. so that's first, that's the first part and that's the military portion. there are other ways to prevent isil from getting, from gaining wealth from its territory. the most important of those is preventing liquidity from flowing into the area in the first place. if there is less liquidity in the less funds that could be taxed. frankly our view, our very strong view that the very large portion of isil ability to even get profit from its oil and gas, it is sold internally. we don't think there is lot of

smug beginning outside of isil territory. that significant amount is sole internally. if which can impact liquidity of isil territory we could impact ability to profit of off oil. we impact their ability to profit off taxation and extortion. the most important step in this direction was about a year ago when the iraqi government took the decision to terminate the payment of government salaries into isil controlled territory and instead those salary payments in escrow. prior to those decisions there was $110 million per month going into isil controlled territory in form of government salary payments. that is $2 billion a year. i don't know, we don't know for sure exactly what the tax rate is isil controlled territory but take conservative estimate estimate and say 10%? 10% of $2 billion is a lot of money to isil. the decision of iraqi government to terminate that was a very important decision an one we

continue to talk to them about and continue to work with them on. there continue to be challenges with respect to that decision. i think from terrorist financing perspective it was one of the most important steps anybody's taken in the area of counterterrorist financing with respect to isil. then finally, bulk cash. so the good news about the fact that, the good news about that in excess of half a billion dollars that was in the vaults for isil that was a one-time take for them. that is not renewable source the way oil is renewable source. the way taxation will be a renewable source. that way won't get $500 million from vaults. once they spend the money down that money will not be available to them. we've been helping on military side of things by targeting bulk cash sites. there has been, at least millions of dollars, phrase that we used, at least millions of dollars of bulk cash that has been literally incinerated as a

result of these, as a result of the air campaign. so, that is how we're approaching isil's ability to generate revenue. this is going to be an ongoing effort, but i do think that we can demonstrate that we had an impact in certain areas in raqqa, in the raqqa area for example, we've seen the salaries of isil fighters drop by 50%. . .

and territories they control and we have seen increase in taxation in the territories that they control in an attempt to make up some of the difference. we have seen signs of financial distress on isil and we are going to continue the campaign -- we are going to do everything we can to deprive them of access to as much resources as possible. that said, we are not going to be 100% successful. we are not going to bring them down to zero. we know that. it's important to focus on the other half, what i call the more traditional effort of terrorist effort, that's providing them to the access of financial system so they cannot make use of the money that they have. this effort really starts with the iraqis themselves and the --

we look closely with the iraqis and they take this issue seriously. the iraqis are quite focused on making sure they protect their financial system from access by isil. where that started was banks. there are approximately -- there were approximately 90 iraqi bank branches in territories that isil controlled when isil basically took mosul and that portion of iraq. nine iraqi bank branches and reworked to make sure headquarters were cut out. the goal was to make sure that they were cut off from headquarters in baghdad in so doing it cuts them off from the financial system as a whole because none of those banks have the ability to actually conduct

international transactions outside of going through their headquarters. there was actually one that did have that ability and iraqis forced that bank to move to baghdad precisely so what then became a branch did not have ability to conduct transactions. you know never say, never or something is not a risk or threat anymore. that's really not where the focus of our attention should be. i think the bank branches are -- to the extent that you could trust in anything, those bank branches are in pretty good place right now. where i think there's concern is exchange houses, there's approximately 1900 exchange houses in iraq as a whole and to the extent that isil is gaping access to financial system, i think that's really where we need to be looking and that's where the iraqis are looking as well. there's a short-term portion to

this problem and then there's a long-term solution to this problem n. the longer term, they need to shrink that sector down. 1900 exchange houses is not operate for iraq and the iraqis understand that and we are working closely with them, the treasure department working with iraqis to put them in a position where they could have a reasonable number of exchange houses that could be reasonably overseen and super vised and regulated. in the short-term making sure that the exchange houses in isil-controlled territory or willing to work with isil are dealt with appropriately. iraqis have been quite cooperative on this effort and the central bank of iraq has published list of excess of 100 exchange house that is are in isil control territory. this is a dynamic list. entities can get add today this list from time to time if we have concern of a particular entity and they come off astertory liberated.

there's an excess of a hundred exchange houses that's on the list, public list on the iraqi website and i talked about it with central bank governors and regulators around the world. it's important for financial institutions around the world to understand that they should be consulting that list and making sure that they are not doing business with any of the quote unquote, black-listed exchange houses. in addition, we have very, very active information exchange information sharing, a number of information sharing arrangement with iraqis so they can be alerted for any information or concerns that we have about particular exchange houses and of course, also quite important something that we work on closely with the iraqis to ensure that this is not a central bank effort. the central bank is obviously important as regulator of these institutions but this is something that law enforcement authorities need to be involved and security services need to be

involved and their justice ministry needs to be involved in. we've formed a group called the u.s.-iraq committee to counteract terrorist groups. we at the treasure department are part of that group as well. it meets periodically and one of the ways that we try to encourage iraq to take the government approach to all of these governments that it really needs to bear in order to be effective as we could do. so that's where it starts. that's iraq, and, again, we have seen results from this, millions of dollars have been blocked by the iraqis from these black-listed exchange houses. millions have been blocked. that's an important thing that they are taking quite seriously. we've also seen iraqis step regulations of their financial system, they've adopted

antimoney laundering and issuing regulations to make sure -- to implement them but it's not just as we know, it's not enacting laws and regulations, it is really at the end comes down to implementation and we have seen them take extraordinary steps to make sure that not only are the banks in baghdad appropriately regulated but they sent teams out to places like kirkuk and areas closer to ie sell control. they are working closely with the authorities in the kurdish region to ensure there's antimoney laundering system throughout the country. again, a lot of work to be done. there's a lot of capacity to be developed and this is a really really tough problem set. as we get information in the united states that gives us

greater insight into iraqi financial networks, we share those -- that information as much as we can. but that information is hard to come by and it's something that we are still developing and it's still a challenge for us. so i don't want to give you the impression that this is an issue that's been solved but what i do want to give you impression is well identified and that there's a lot of effort going into addressing. and that, again, is just talking about iraq. now, even it starts with iraq, it certainly doesn't end with iraq. we work closely with the governments throughout the region, whether it's turkey, whether it's jordan, uae whether it's lebanon, to make sure that they're doing what they need to do to make sure isil doesn't gain access to those financial systems. i will say, this issue is going to become as we succeed in the military campaign, as isil loses territory, this is only going to

become more important because what you see isil developing towards is, again, a more traditional terrorist organization that, again, relies -- will increasingly rely on access to the international financial system both to raise money and to spend money. and as that happens, as that becomes more important, as they develop towards focusing more on their affiliates, as they develop more on being a disbursed global organization that needs to maintain networks, the work that we do regionally and globally is only going to become more important. and so we work closely again with the emirates, with the jordanians and other countries in the region to make sure that that's -- that that's during addressed appropriately and as i said globally, as we focus on external plotting, as we focus on isil as a global organization, as we focus on isil evolving towards again a

more traditional terrorist organization, the global effort that we've been really engaged in since 9/11 becomes more important and organizations like the task force which sets international standards for antimoney laundering or terrorist financing becomes more opportunity. the coalition is not just the military coalition. it's a counterisil coalition with a variety of lines of efforts. one of those lines of effort is military line of efforts. one of those line of effort is counterfinance line of effort and i cochaired that line of effort along with saudi arabia and italy, we are, in fact meeting in a couple of weeks in kuwait and that will bring over 30 countries together to talk about the things that people are doing throughout the world whether in asia, whether in europe, the middle east, north america, south america to -- to

make sure that the global isil-financial threat is contained as possible. that's an important group and important line of effort and it's one that we take quite seriously. so, again, iraq, regional and then global and that's -- that's the plan. that's the secret plan that you guys are all clued in on now. you know, again, i was going to -- i was going to conclude by talking about the challenges that we see in front of us. i think i've already kind of touched on them though already. first in the area of challenges in front of us is the old challenge. so i'm glad i could paint a rosie picture on the impact we are having on oil and rosy picture on liquidity. i think it's important that we acknowledge the progress that we've made but i think it's also important to emphasize they're still making money on oil, they're still making money on gas, they're still making money

on taxation and they're making a lot of money and so this is -- there's -- this isn't about resting on our morals. we understand that this is an ongoing effort and frankly they're going to be making that money until they get pushed off the territory that they control, hopefully will happen as quickly as possible, but until that does happen, we are going to be focusing our efforts on the types of things that i talked about before. but in the terms of new challenges, again, it's what i was talking about before. as they evolve towards more traditional terrorist organization as they lose control of territory, it's only going to put more pressure on us to up our game with respect to depriving them from accessing financial system. that's going to mean working in organizations like the fatf and the un and the coalation counterisil finance group but it's going to involve a lot of work that the u.s. does

bilaterally with our partners around the world. again, similar to the work that we do with respect to al-qaeda or other terrorist organizations in terms of sharing information, in terms of identifying donors in terms of identifying charitable organizations that maybe on the wrong side of this issue. those are the standards things that we have done since 9/11 that matt when he was a treasury was doing as well and something that we are going to continue doing. it's going to become more and more important in the future. so with that, i'm going to conclude my remarks. again, happy to answer questions on this issue. i'm happy to answer questions on a broader terrorist financing issues. but thanks for your attention. [applause] >> excellent, danny, thank you very much. the podium is going to be magically be pulled back by somebody so the people can see and give you an opportunity to take a greater and have a glass a water. thank you. i will take the moderator's

prerogative and ask the first question. i will get you asia see. i would like you to answer what that might look like, what the consequences might be domestically in the areas that the islamic state still controls in terms of financing and what the nature of its financial relationship might be with its far-flung provinces. so domestically, if we think about this as the blown, -- ballon, we make it hard for oil and gas and other things and the logic that perhaps they would move to other areas that might be available to them including some that they haven't used traditionally like the donors and the abusive charity that you mentioned at the very end there. do you see those or other areas as places we need to keep an eye on -- areas for fundraising that they try to tap into now that are more traditional fundraising

tools they've had at their -- that they've been able to tap into are denied them? and in terms of their relationship abroad, the report talks about payments including through banks, klein -- including through exchange houses that despite all of our efforts have still been able to make for some of the far-flung provinces. might we see them trying to send money to some of the provinces as a place where they could kind of set up shop in isil 2.0 scenario? >> sure. so with respect -- with respect to the first part of your

question on sort of the way you described squeezing the ballon and domestically and what are the implications of that, we've already seen that. as they are losing access to oil wealth or other forms of wealth they are increasings taxation, there's limits to that. there's an upper limit to what they're going to be able to do on that. what we are trying to do is push on the upper limit again, why i focus on liquidity. at the end of the day, they can only extract resources to the extent that there's liquidity to extract. and so i think it's a combination of continuing to squeeze the ballon but making sure that the whole sort of potential level of resources available to them is as low as possible and then again, as the territory that they control continues to decrease, that's also going to be a separate check on their ability to expand

that. so then the question becomes as you said, do they turn to foreign resources. well, first of all, there's no level of external financing that's going to equal the billion dollars of more, that they can make a year off of controlling a territory like this. so there's really no substitute for that. now, that said, as i said, as they lose territory, as they, to use your term, move to post caliphate entity, whatever that entity may look like, it does come incumbent upon us to look even harder and looking pretty hard now to focus efforts even more on the ability to generate wealth through traditional, i say traditional, methods that we see al-qaeda using whether it's deep-pocket donors, charities, ngo's, whether it's criminal

activity and, you know, i do think -- as i said before, i think that that's as they lose the ability to gain wealth from the territory they control, we need to make sure that these other sources are deprived from them and we'll do that. but those resources will never equal what they could make with -- what they could make domestically now. with respect to your question about affiliates, i think it's a really interesting question. the affiliates themselves do not have the ability to generate resources the way isil within syria and iraq do. the only one that people are even a little bit concerned would be libya because they see similarities because isil-controlling territory within libya taking a city within libya, there being an oil sector within libya. we are talking a fraction, a fraction of the wealth. they don't make any money off of the oil -- the oil sector in

libya. with respect to their ability to extract wealth from territory within libya, as i said, when they went into mosul, excess of half a billion dollars dinars available to them. when they went into sirt $4 million available. i don't want isil to have $4 million but that's a different problem than $500 million. even in a scenario like libya, they do not have the ability to generate wealth. again, that brings us back to what we were just talking about so it's about identifying networks, this is what we do. this is what you did, matt. it's about identifying networks and them talking action to dismantle networks and undermine networks and that's something that we are working quite hard on and working quite hard on the u.s. government on it and

working quite hard with various countries in that region on it. >> excellent, thank you very much. really that whole question was a plug for a washington institute study, provinces to come out on the focus on financial side and so there was that plug. i would like to open it up for questions and answers from the audience. we're going to take the prerogative to starting with a former washington institute research assistant. >> hi. thank you very much, aj from bank of america. as you see isis kind of resorting to a more traditional financing model, do you believe u.s. financial institutions are doing enough to combat this sort of fundraising? >> again, i do want to emphasize that isil currently makes the vast majority of their wealth, continues to make the vast majority of their wealth from

internal sources. i think it's fair to assume that, again, as those internal sources are there deprived of access of those, they will turn to more traditional terrorist financing models. with respect to u.s. banks, i think banks around the world this gets to international laundering and i do think u.s. -- i think the u.s. regime is a strong, not stronger than any regime in the world in that regard and i think the banks take it quite seriously and i think that we have demonstrated that when we don't feel banks are doing the right thing, we are perfectly prepare today find them and to ensure that those deficiencies are addressed. yes, i'm comfortable that our banks are doing what they need to do. one thing i will note, because maybe people might think i'm biased on this question, is next

week, financial action task force is having a session in paris and the number one item on the agenda is the mutual evaluation of the united states and that will be publicly released at the end of next week and that will be an objective, objective assessment of where the u.s. is on mlft issues. so if you really want to know what people think, you should look at the facts but i think we are going to do very well in the review. we have deficiencies and customer due dill -- diligence. >> okay, right here, please. >> good afternoon, center on sanctions at the finance of

democracies. we appreciate the formal and informal sector, two things, one, could you share a little bit or give us assessment on the state of play for the particularly the informal financial sector in syria and other -- and affiliate places like libya and also your assessment of you already mentioned that the affiliates can't raise money but what about their ability to receive money from the home-base through these informal formal sector? >> yeah, sure. with respect to your question about syria, we obviously have less inside syria than iraq, we have in iraq a willing and enthusiastic partner that we don't have in syria. in fact, in syria it's quite the opposite. we have assad regime which through gas deals actually providing financing to isil.

that's a fundamentally different set of challenges that we have with respect to syria. fortunately, syria, the syrian financial system has been effectively cut off from the international financial system for some time based on international sanctions on syria that have been long-standing. so access to the syrian formal financial sector, i'm not saying theoretically -- i'm not saying that we could theoretically rule it out, but i don't think it's very attractive, if i were to opinion, i'm not sure that i would be most attractive to the financial sector. of course, if other forms of informal money in syria is a concerns. this is one of the important things since we don't have a partner in syria, this is one of the important things that we talk to the countries in the region about whether it's jordan whether it's lebanon,

countries with traditional traditionally have large trade with syria. there are preexisting and formal network and something that we work with countries in the region. with respect to your second question, in terms of the ability of isil to fund its affiliates from sort of central base, if you will, iraq and syria we have seen some of that. i think, you know, and again this -- this is classic counterterrorist financing. identifying the networks dismantling the networks and without getting into too many details on it, it's something that we are aware of and something that we are working very hard on. but it is -- it's a tough nut to crack. it is very, very hard to identify financial networks. it's hard to understand them but we're doing -- we're doing our best on that. i will say that these -- that i

think these affiliates have, you know, have the ability to self-finance to a certain degree, not on the isil model with respect to libya but with respect to local extortion rackets, criminal activity things that, you know, that terrorist organizations and criminal organizations do to sustain themselves. >> thanks. we will go here. >> thanks, matt. i'm barbara from the atlantic council, nice to see you, danny. a couple of questions. do you have an estimate for how much isil makes by selling, is it just gas or off oil to assad regime and how that number has been affected by u.s. action? can you talk a little bit about how nusra is funded? that's a more traditional terrorist organization.

where do they get their money from and finally, i can't resist, can you comment on how much progress iran is making on satisfying and i interviewed their economy minister saying that they're doing a great job on this and i would love your assessment on that, thanks. >> if he says so. i'm sorry what was the first part? >> the first question st how much money they get from selling oil and gas to assad. >> so it's just gas. it's not oil at all. that's what they do. it's a complex relationship that involves barter and exchange of services and there's probably some money involved there also but, no, i don't have an estimate on the dollar figure. i don't have an estimate to give you on that. second question was nusra. thank you for asking that question because i normally mention it in my prepared

remarks and i didn't this time. so i'm glad that you raided the question because i don't want to give people the impression that this campaign is just about isil. it's not just about isil. we talk about isil. and people say, al nusra and it sounds like it's exotic sort of thing. it's al-qaeda and syria. that's what we should call them. we should call them al-qaeda and syria because that's what they are. we have to treat them as such. and they are dangerous and they are threatening, and they are something that we do focus on. they do have -- so they have the ability to extract a certain amount of wealth from territory that they control but it's not the same sort of thing. as a result, i think your question implied, this gets to classical terrorist financing, this gets to working with our friends and partners in the gulf to make sure that gulf-based donors and organizations are cut

off from all nusra. it's about working with banks and other institutions to make sure that al nusra and al nusra related funds have access. i'm a frequent visitor to the gulf. i will be going to the gulf in a couple of weeks and one of the issues that we talked to our friends in the gulf is al nusra. so yes. >> any of the countries that are -- >> i don't think there's a particular country. i think that, you know, i'd be happy to talk about individual countries if somebody would like me to. i think -- i think that there's been a lot of progress in the gulf and a lot of progress in countries like qatar and kuwait but i also think that there are individuals operating in that region that need to be addressed pretty urgently. so i think it's a mixed bag but

i do want to emphasize particularly with respect to qatar and kuwait that they have made -- that we have seen a lot of positive steps from them recently to include criminal prosecutions of terrorist finance in qatar which is not nothing, which is actually a real sign of political wealth. third question was on iran and status. so there's really no update on it. in june, iran agree today -- agreed to and made a plan to address concerns that identify and temporarily suspended countermeasures and at the same time and same statement asserted that it remained concerned about the terrorist emanating from iran and said that it continue today call upon countries around

the world to exercise and have due diligence and that called for and would remain and concern with respect to terrorist financing. they will remain until iran had adjusted all the issues in action plan. there's no developments to -- to report. they told you they are making progress in the action plan, but if it's done, until recognized, it's not going to be considered progress. >> just to follow up one quick thing, danny. great question. i wonder if there's any plan by the u.s. government to designate an aka for the organization and if you think that's necessary or important?

>> well, as you know, i can't talk about plans on future designations. but i can assure you that whatever whatever its calling itself it's not going to limit enthusiasm in pursuing it. >> yes, ma'am, right over here. >> hi, thank you. i'm jenna with the weekly standard i also had an iran-related question. i read the new ofaq that came out and allowed business that are wholly owned by the irgc or irgc-controlled entities, is that true or accurate reading? >> i'm sorry, i'm not -- >> what i am here to talk about terrorist financing. if you want me to talk about iran with respect to status and terrorist financing, but i'm not

going to talk about that the nuclear deal. >> thank you. >> yeah. >> thank you. >> great. what concerns do you have of iran financing? >> they are state-sponsored of terrorism and they are the chief financier of hezbollah and keep them afloat and it's a grave issue and an issue that we take seriously and -- >> i'm done. [laughter] >> it's something that -- it's something that as you know matt, i work very hard on and we work hard with the lebanese on it, we work harder in the world around it in particularly implementing the legislation by congress that's designed to include hezbollah from financial system around the world but this

is something that is -- it's a priority at the treasury department and something that we are are going to continue to pursue quite aggressive and frankly something that i think we are having success on. i think that hezbollah is having a tren mendously difficult time gaining access to the lebanese financial system and i think that that's attributable to the hard work of people who participate and the cooperation and partnership that we have with them because they understand how important it is for their own access to financial system to make sure that hezbollah does not gain access through those institutions. and we've seen all various manifestations of hezbollah about that. >> well, that answer has led to hand-waving from a lebanese analysts. >> thank you very much, you see some success in hezbollah financing and you're talking

probably about the hezbollah international financing prevention act, right? >> right. >> and it's true that it's cause august lot of nuisance specially in charity institutions social and media institutions but the money is still coming and they're not going to go broke because of that and the problem they're having is not really about banks closing accounts in as much the spending policy shifted within the institutions. so are you going to do more about that, are you going to have more extreme measures to stop the financing coming from iran or this is the prevention act is like all you're going to do? thank you. >> so a couple of reactions, first of all, to the extent that i implied that terrorist financing is a silver bullet with respect to hezbollah, it's not. our test financing efforts aren't going to uproot hezbollah

from south lebanon. we understand that. what we can do and demonstrate that had we are doing and that we are going to continue to do is challenge hezbollah's access to the lebanese financial system and that's something frankly the people never thought we would be able to do. that we could -- but what we've shown in area of elicit finance, whether it's hezbollah or with respect to north korea or iran or whrcht -- with respect to any of our targets, we have shown that we can reach out and make our adversaries feel uncomfortable in areas that they always thought they were safe. i wouldn't characterize any of the efforts that we have done as extreme. i will say that our efforts against hezbollah financing and hezbollah financial access within lebanon predates hipfa.

lebanese financial authorities predate hifpa. it's not the only in our quiver and not the only one that we use and continue to use moving forward, but we have shown with the actions we took in 2011 with respect to lebanese canadian bank and with respect to ce -- executive 1224 and we have shown with various law enforcement actions that have been taken that we have a wide range of authorities that we are going to continue to bear. it's not just about lebanon. the word lebanon doesn't appear in hezbollah. this is about hezbollah access to the financial system and we

will pursue that and i think it's important that i emphasize that, this is not about lebanon obviously it impacts financial system disproportionately but it's not about lebanon and not about lebanon but it's about hezbollah and we will pursue that throughout the world. >> we will come up here. >> if i understood you properly you were saying that part of u.s. government counterterrorism strategy so to block the access to terrorist organizations international financial system. one of the organizations which u.s. designated as terrorist is the guard corp. i would be interested in your comment about government efforts to block irgcf access to the international financial system and in particularly access by companies that are partly owned

or controlled by the irgc. how would you -- what would you say to u.s. government efforts to block access to such companies to the international financial system? >> sure, so to be clear as far as terrorist designated terrorist, they're treated as terrorist organization in all of our terrorist financing laws and rules apply. and i think we have a fairly good track record of demonstrating zero tolerance for access to the financial system in any way, shape or form. obviously, we are also tremendously focused on the ability of the irgc to access the financial system. there's a variety of sanctions that remain in effect with respect to the irgc and frankly the fact that the irgc has -- operates through companies and

other forms of nontransparent ownership has created, you know, problems for the iranians. so it's something that we understand and something that we continue to be focused on. >> thank you very much for coming my -- i have two quick questions bringing the conversation back to iraq. if i understand correctly, you identified the structural issues of terrorist financing in iraq being the cash economy that iraq has and you also mentioned that you have good contacts inside the iraqi government and good relations with the central bank. is there any effort to help the iraqi government have a better financial system and away from cash economy as we start having the conversation about stability in a post isis iraq and as the liberation of mosulneers.

any efforts on curving the financing of the militias that are next in line for more stability in iraq? thank you. >> so with respect to your first question about broader iraqi financial system, i think you put your finger right on it. it's a primarily a cash economy. and that causes a wide problems relate today terrorist financing and not related to terrorist financing. modernizing that economy is -- needs to be job number one for the financial authorities in iraq, as i said, i think they understand that. we at the treasury department are providing assistance to iraq in a number of ways which i could rattle off but it's probably not the best issues of our time. they work with the imf and they work with the worldback and they work with a variety of countries around the world. this is a problem, i think

that's understood, it's easy to understand the problem than solve the problem because we are talking about building a modern financial system but we are talking about building a modern financial system that doesn't exist right now and that's going to be a long-term effort as i said even with respect to exchange which is the beginning of the issue. that's an aspect of the issue. it's going to take years to get that sector where it needs to be and we're starting right now. so i guess the short answer to your question is yes, we are providing assistance. the international financial institutions are providing assistance, the iraqis have recognized this as something they need to do and something that will happen over the course of years. with respect to militia financing certainly any entity that's designated terrorist

organization we will pursue with vigor. our priority right now is on isil and al nusra and making sure that those entities which demonstrated a will and ability. >> a year or so ago i was announced that the treasury department was going to look where the islamic state obtained the ford all the toyota pickups that it used trying to take over iraq. i think it was called the islamic state. whatever came of that investigation? >> so it wasn't before islamic state, those trucks in those videos go back to last summer,

summer of 2015, if i remember correctly is when there was a lot of focus on those trucks. to be -- to be honest with you i'm less concerned about those trucks right now than i am about their ability to generate vast amounts of wealth. there's a number of theories which have been put forward as to how they got their trucks. there's been a number of investigations which are continuing but i don't have any update for you on those truck videos. but that was from about a year and a half ago, not even. >> come over here to david all the way at the edge here. >> good afternoon, special agent david king with homeland security investigations. three part intertwine questions. you spoke about exchange houses. are you finding that the

exchange houses are basically doubling or are they separate? second part of the question for the hawalas, are they as effective in their structure within territories of syria and iraq as they are externally and lastly, what is the typical transaction capacity for these entities? how much cash do they have on happened? what are we seeing? >> so with respect to your first question, so technically they're not supposed to be conducting remit answers but it is obvious that many exchange houses there's an ability to transfer wealth. and that's -- that gets to some pretty fundamental regulatory and super vise ri issues which is going to be very difficult for the iraqis to tackle as long as there's 1900 exchange houses which is why i said that's the long-term, short-term we are trying to identify which exchange houses have the ability

to provide services to isil or are, in fact, providing them and making sure that those are publicly identified and then there's other wubz that we -- once that we don't publicly identify but we are working on identifying those too. i think that's the answer to your first question. i'm sorry, your question -- [inaudible] >> i didn't understand. >> is that structure not really there with limited recipients in iraq? >> again, it's hard for me to talk about syria. we have less insight into syria. i presume but i don't have anything to base that on other than just common sense. with respect to iraq, -- of

course, it's a common way of transferring wealth within that region and nothing theoretically wrong with it. there's historical trade relationships that existed prior to the war that were presumably financed through hawala. so these exist and these are something we look for and you guys look for. the -- if you want to know what i'm most concerned at the exchange houses, that's what i'm most concerned about. but certainly i never want to give anybody the impression there's anything that we are not concerned about. we've concerned about cash, we are concerned about exchange houses. and even banks, although i do think of all those banks are least likely to be abused at this point. and then your third, i apologize. i'm having a hard time. >> what is the transaction

capacity for hawala and exchange houses? i know it varies. >> some of them are quite large. they can have millions of dollars. >> up front, please. >> thank you. with the wilson center. >> i have an easy question for you. >> thank you. [laughter] >> what is the difference or similarities and differences between isil's terror financing and hezbollah's, what are the challenges to stop hezbollah's financing and isil's, thank you. >> it is an easy question. the primary difference is that hezbollah makes the vast majority of its wealth through state sponsor, that being iran and that's how isil generates its wealth, it does not have state sponsors.

so, i mean, that's the answer to your question. you know, hezbollah gets hundreds of millions of dollars from iran and that's the fundamental challenge that we were talking about before, is it's very difficult for us to interfere to disrupt that. the provision of cash to hezbollah by iran. it's a difficult for us to disrupt that. but what we can do is disrupt hezbollah's access to the financial system as much as possible and that's what we try to do. all sorts of way but it's a lot of cash. >> wait for a mic, please. >> thank you. mike craft, counterterrorism writer. since nobody else brought up saudi arabia, which somewhat to my surprise, i will bring it up in a couple of contexts. you kind of alluded cooperating on the efforts but also

long-time concern of saudi arabia financing and part of the concern calling it terrorist and violence programs. so it's not just centered on syria and iran a pakistan and perhaps north africa. i know the standard line is the government is not involved but there's wealthy individuals. are you making any success in cracking -- getting the saudis to crack down on them? are they enforcing the regulations vigorously? >> it's more of a standard line. look, i think the treasury department partly fairly credible voice with respect to saudi arabia. when matt was around, we were very publicly critical of saudi arabia and efforts with respect to terrorist financing. this is going back over ten years, ten years ago. i think we've seen over the past

ten years a huge shift in saudi's approach in financing and we really do regard them as number one partner in the gulf and efforts against terrorist financing. you have seen in recent months and past year we have done joint designations with the saudis. they are a very enthusiastic partner of ours in our efforts against terrorist financing. in fact, when i think about terrorist financing the gulf, my goal is to see that same sort of evolution in the other gulf countries that we have seen in saudi arabia. this is not to say that there's terrorist financing in saudi arabia. there's absolutely terrorist financing that goes on in saudi arabia and it's with respect to donors and it's with respect to people who come and abuse saudi hospitality and presents a lot of difficulties for them and for us. but what i can say is we have a

very willing and capable partner in the saudis in our efforts against terrorist financing. again, the goal, my goal, our goal is to see a similar evolution in countries like qatar and kuwait and i think we are starting to see that evolution, but what i'd like to see is that evolution come to sort of full -- to fully evolve. there was a second part of your question or was there? is there a point that i missed? >> so look, that's an important -- that gets into the whole as you yourself, have said, sort of more broadly of counterrerring violent extrialism and the challenges that saudi arabia faces in terms of ensuring that as they pursue what they believe to be their obligations that that doesn't come with it is the promotion of extremist and that

remains a challenge for them and something that they are going to be continue to go struggle i'm sure for quite some time. >> if i can follow up. some of the financing in saudi arabia because of reactions that have saudis have taken tend to involve donors in saudi arabia sending money to collectors or bundels and send them onward. can you talk about that and second, am i correct to assume that that more likely to be financing the al-qaeda in syria and less like lie to be financing islamic states who the last public estimate that no more than 5% of the islamic state's budget was assumed to have come from charity?

>> i agree with the statement. i agree with your first question. with respect to the percentage, yes. the center gravity of terrorist financing in the gulf is related to al-qaeda whether that's al-qaeda in syria ie al nusra or al-qaeda in yemen or al-qaeda -- or other al-qaeda-affiliated groups in the afghanistan, pakistan region. that -- that is where the center of gravity of terrorist financing is, and that's what's very important to focus the attention of our friends in the gulf on is taking steps against

isil financing is important and they need to be doing it and they are doing it, but isil doesn't really on that income stream. what is important is to continue to remind our friends in the gulf that's equally important that they be focusing on the al-qaeda portion of this because that's really what the terrorist financing issue in the gulf is all about right now. now, you know, again, over time, as your first question implied over time as isil begins to rely more on and more on external donors, will that become more of an issue? we will see. but it is important in the gulf for them to focus on al-qaeda with the same energy and enthusiasm that they focus on isil. >> a moment ago you were talking about the financing of hezbollah through state sponsors like iran, barbara asked earlier about compliance which leads me

to ask you about iran's ability to fully comply given very vocal insistence that it will maintain a cutout for what it calls resistance organizations but what you here have called terrorist organizations. do you think that's going to be a stumbling block moving forward specially as we go forward to the next meeting in a few weeks? >> don't preponderate there to be any news on iran. this is a long-term action plan and for those of you waiting some big news coming out of this in iran, you're going to be disappointed. i don't expect there to be much of a conversation at all. it would be more of a checking-in, status check that i don't -- this is a long-term project for iran. i don't want -- what i will say it's quite clear that exceptions

to terrorist finance laws that make exceptions to national liberations or other types of movements have not been accept nbl the past and i don't expect them to be in the future. and he has a record on this. there's other countries that had carve-outs and that they are not acceptable. >> right here. >> i was wondering if you can talk about the role that ransom payments particularly from european countries are playing in terrorist financing and how we are working to interdict those, thanks. in 2015 the ransom payment was $41 million; is that right yeah. 47million i think is the number that we have used for isil

ransom payments. maybe 20 to 40 million. i don't know. something in that area. so that's like a lot of money on the one hand, on the other hand, it's not a lot of money compared to what they receive from other sources. but it's something that we focus on. it's something that we focused on within the counterisil finance group. they're issued a few, maybe a year ago, you know reaffirming the principle that the country should not be paying ransom. the united states' position on this has been clear and quite consistent. it's -- you know, when you say disrupted, you know, it's really not a question of disrupting a ransom payment if it were coming from the united states, we would want to disrupt it. but it's, again, about depriving them of access to the financial system so they can't use the money.

you know, these groups whether it's isil or anybody else, they're going to make -- they're going to make a certain amount of money through criminal activities, whether it's kidnapping, bank robbery smuggling, whether it's -- whatever. there's a whole wide variety of criminal activities that they participate in and, you know, on a certain level that becomes a local law enforcement issue and how we respond to it on trying to deprive them to financial access systems so they can profit from them. we've had a very consistent position on kidnapping ransom. >> i can follow up with another kind of deep-dived question. one of the areas of islamic state financing that's been subject of particular debate has that traditionally been a significant source of revenue for them, is it still?

>> so i don't think it's ever been a huge source of income for them and you knew i was going to answer that that way. >> maybe they didn't. [laughter] >> but you did it with such a straight face. >> thank you. i have four kids, i have to play that game. >> look, as i said, isil profits from any economic activity that occurs within the territory that it controls primarily through taxation and fees. so to the extent that there's smuggling that occurs and i'm sure that there is, isil profits from that by taxing it. that's how they profit smuggling than from any other type of smuggling that goes on in their territory. ..

we appreciate the work you do day in and day out. and taxpayer i'm very pleased that you're only able to be with us for the couple of nowrps thank you all for joining us. have a great day. >> thanks. [applause]

the first of three live programs stars in about an hour as radio talk show host attacks the presidential campaign. that starts at 11 a.m. eastern. after that, government surveillance privacy concern and recommendation for improvement with intelligence and data specialist that gets underway at 12:20 p.m. and at the 7 p.m. to the campaign trail. as donald trump is in shaar is lot, north carolina if for recent polls collected by real clear politic this is month show him had trailing hillary clinton by about three points. candidate for michigan first dmbt and jack debate health care, the environment, national security, and the second amendment. >> this is an u up north live special presentation brought to

you by abc29 and 8 and seven and four news. welcome to the first congressional district debate from the campus of north michigan campus. moderator mark highman. >> good evening, and welcome to the only televised debate of michigan's first congressional district race between jack and -- [inaudible] supreme court retired, and johnson democratic nominee for the u.s. congress. the candidates agree to how they would be addressed this evening. the order in which candidates are seated and the order in which their deliver they opening remarks and closing statements decided first this evening bit campaign flipping of coin. the candidates agreed to tonight's debate format. after the questions to my colleagues, first lowe and mark main anchor of 74 news, and nick

chief political correspondent -- in michigan, each candidate has 60 seconds to respond to a question. they each have eight, 30 second rebuttal which is they may use at their discretion for answer or to extend their own remarks however, rebulletses must be used prior to opposing statements. as moderator i reserve the right to ask following question with if in my judgment it is needed in order to clarify an answer. we have a live studio audience who support to both candidates and some fun decided voters. i've asked audience to refrain from my reaction during the debate as it only takes time away from the candidates however, there are two exceptions. one, conclusion of the debate, and right now welcome the candidates. [applause]

[cheering] >> gentleman, good luck, let's get started. by a flip of coin, decisions are made on who will have the first opening statement. 60 second opening statement will start with mr. johnson. >> thanks mike. thank you to audience for being here tonight. you know, working hard playing by the rules, never giving up. those are lessons and values i learn from a family with five generations in northern michigan history. those lessons taught me think a life of work. i was first in any family to graduate from college. in 2005 i went to iraq as a civilian. came home in 2006, married my wife, and north port here, and worked to invest and grow u.s. manufacturing companies. i want to take those values to congress to do two major things. one, we need to protect what you've work at the lifetime to earn. your social security, where medicare and v.a. bibts and second when you look towards the future and create a northern michigan why our families can stay here and succeed and losing too many kids

and grand kids to down or out of state to do that we need to invest in and protect our greatest assets, our people, our land, and our great lakes and i look forward to having that debate with you to be tonight. thank you. >> general your statement. >> i'm jack byrdman i decided to run as a grandfather of eight. leaving our grandkids now is different than the one left to us by our grandparents who persevered through world war i and world war ii and we need to make sure freedom and opportunities for future generations are equal to or better than what we receive from the our parents and grandparents. we all, all of us need to step up to make the tough decisions for the future generation. my mother used to say when you sense a problem, look in the mirror. well i looked in the mirror folks and i'm ready to go to washington, d.c. and solve problems and i hope others stop politics as usual and move

forward with positive solutions. 40 years of experience in business and military rising to level of three-star general, i have experience and i'm accountable. military service taught us that service before self. i have lived a life of service and sacrifice like all of our veterans. marine corps. taught to fight for the marine on our left and right because then we all fighting together. we must keep our country safe and secure. we must provide an environment where the middle-class -- >> expired. >> thank you very much. >> go to mr. johnson -- [inaudible] >> both candidates have claimed strong ties to michigan and for congressional district. the questions have been raised by each campaign about the other. how do you respond to the accusations you're it [inaudible] >> i'm the fifth generation of my family and come up on weekends. i moved here in 2006. there were two significant