>> rose: welcome to our program. from washington, stuart levey, he is undersecretary of treasury for terrorism and financial intelligence. he's the man in charge of finding out where the money that supports terrorism comes from. >> if you put pressure on their financial network, is it going to be the case that you're going to prevent all attacks? no, i don't think so. but you make their life much more difficult, they spend more of their time thinking about raising money, moving money, storing money. they're worried about their financial stress that they're under. you end up making them less capable. they're less able to train operatives. they're less able to pay their families, that causes tension within these organizations if they can't pay the operatives' families. all these things they're not the end... they're not a strategy in and of themselves, but pressuring the financial network

of the terrorist organization is an important part of the overall counterterrorism strategy. >> rose: stuart levey for the hour, next. captioning sponsored by rose communications this is charlie rose. >> rose: stuart levey is here,

he is undersecretary for terrorism and financial intelligence at the treasury department. he has held that position since 2004 when president george w. bush created it in the aftermath of 9/11. he is one of very few senior bush administration officials to be retained by president obama. he oversees the office that makes it hard for terrorist networks in countries like iran and north korea to conduct business. treasury secretary tim geithner has called him the chief architect of the u.s. effort to cut iran off from the international financial system. i am very pleased to have with me here in washington stuart levey. thank you for coming. it's a pleasure to have you on the program. >> well, thank you for having me charlie. >> rose: let's just start with this: tell me what your job is. >> the title is a mouthful. i'm the undersecretary for terrorism and financial intelligence. the job was created in 2004 and it's my job to look at a whole variety of threats to the united states, whether they're terrorist organizations, drug trafficking organizations,

proliferation of weapons of mass destruction, rogue regimes. other challenges to the united states: money laundering, and look at the networks that underlie those threats. i develop especially the financial networks, try to develop the intelligence on those financial networks and then use that advantage point to both map out the network so we learn more about it and pressure the target, whether it's in any one of those examples. and we have found that by focusing on the financial networks of these various threats that we're able to both learn a tremendous amount about them-- financial intelligence is really quite reliable and actionable and concrete-- and that it is a real vulnerability that we can use to pressure them. we've seen that in a number of contexts. >> rose: one of the things that you seem to have done-- which gets a fair amount of attention-- is appreciate the pressure that can be brought on the private sector, on corporations that do business with a regime. >> uh-huh.

well, i think that's exactly right. one thing that we have learned over time is that when you're trying to generate pressure on a particular regime that is violating its international obligations, for example, like iran and north korea, that in order to make that pressure really work, you need not only a coalition of government bus you need a coalition of the private sectorment and by focusing on that private sector aspect and focusing in particular on things that will make the private sector work with you, we can dramatically increase our success. to be more specific about it, it usually means focusing on particular bad conduct by the target. so in the case of iran or north korea, we focus on their nuclear program, their missile program. in iran's case their support for terrorism. and we expose it and we bring that to the attention not only of governments, but we bring it to the attention of the private sector.

particularly financial institutions that are very sensitive to their reputational concerns and we find that when we do that, they will work with us and amplify the effect of our sanctions. >> rose: this would include banks, this would include oil companies, this would include a range of businesses that have a relationship? >> it would. but i have to say that the financial institutions are perhaps the most sensitive and a lot of it depends on the financial services industries which maybe why... >> rose: you can shut that down to companies in trouble. >> exactly. exactly. if a country that we're targeting-- like iran in this case-- can't getting access to financial services from banks around the world, then that has a dramatic ripple effect across its... across a whole commercial sector and that is exactly the effect that we're seeing now in some respects. >> rose: so where do sanctions work? >> well, look, this is a very important question and nobody

says it's easy. and i'm not here to say or going anywhere to say that this kind of thing is easy. what i can say is that sanctions can help us create leverage for diplomacy so that we have a better chance of achieving peaceful diplomatic outcome. and by focusing on the conduct that a regime like iran is engaged in, we can bring pressure on the people who are engaged in it and have these ripple effects that we just talked about, that's the first thing. and then generate the kind of discussion internally where they want to get out from under that pressure. and that is the process by which we do obtain leverage, and i think that we are already obtaining leverage in the case of iran. now, in the end, you have to admit that there's a certain uncertainty here. i mean, there is a decision that their leaders will have to make, but what we are doing is making a very stark choice, presenting

them with a very stark choice. they can either proceed down the path that president obama and the other allies have offered-- which is one that offers integration and commercial and political integration back with the international community predicated on them living up to their international obligations, or they can continue down this path of increasing isolation and heartship. and the more stark we make the choice, the better chance we have of achieving the leverage we need. >> rose: does the argument have merit that you are playing into their hands in part? they will use this in order to build their own support internally saying look at those bad americans what they're trying to do to us? >> look, there's an argument that says that. i don't think it's an argument that's ultimately persuasive because in this case, first of all, we don't see the people of iran rallying against the united states because of sanctions. i think iran right now is feeling a tremendous sense of

isolation from the financial sector, from the banking sector in particular. if i look back and think about when we first started looking at iran's financial misconduct and, as i said before, pointing out their illicit conduct to governments in the private sector around the world, when we first started doing that, iran had access to financial services from all the major financial institutions across europe and asia. i look now and they essentially don't have access to financial services from reputable banks anywhere. that has a tremendous impact on their commercial sector and ultimately the kind of ripple effect we've talked about. and it's precisely because the way iran is reacting to the sanctions that i don't think it will have that solidifying of power effect that you've talked about. >> rose: okay. the supreme leader singled you out as evidence and you see that as for you as reflective of the

fact that they're feeling the pressure. >> i think that's true. i think that they have been focusing a little bit on this. >> rose: on you. >> i don't want to... i don't want to over... i don't want to overemphasize that. but they're certainly feeling the pressure. i think thing that's more interesting is when someone like rafsanjani says, look, you really need to take these sanctions seriously, you're acting as if they're a joke, they're not a joke, they're serious. >> rose: exactly what he said "they're not a joke." >> and he said-- and i think this is more significant-- every time we try to find a loophole around it, they figure it out and block us. is that means that the kind of dynamic that i'm talking about-- where the private sector is working with us, where governments are working with us-- is working. when they identify ways around it, we can expose their evasive tactics and close it off. >> rose: at the heart of your strategy is that there is in iran specifically enough people

of rational thought who will say this is not what we want iran to be-- a pariah nation, an isolated nation. >> i think that we do believe that that's the case. this is... you know, if you think about it, it's not the same thing as a saddam hussein-run iraq where you have a single decision maker that has total power. there's a supreme leader in iran of course. >> rose: who has the most power. >> but i think you know that there are centers of power in iran and there are ways of generating this kind of discussion and i think the kind of... especially the kind of public criticism that we see from rafsanjani does suggest that that debate is ongoing and we have other indications that that debate is on goeng. and iran continues to act in a way that will increase the pressure. so, for example, as i mentioned, they continue to try to evade and then they engage in deceptive conduct to try to

evade. we expose the deceptive conduct and it increases the disinclination of the private sector to want to do business with them and therefore it increases... >> rose: because you present the evidence to the private sector that this is what they're doing and they say "i get it therefore i'm willing to participate in the sanctions you want"? >> exactly. so like shipping companies when they try to set up... they set up front companies to own their ships and they rename their ships so they don't appear to be iranian anymore. we keep acting against that kind of conduct, exposing it, taking actions as the united states sometimes unilaterally, sometimes bringing it to the united nations, but exposing this deceptive conduct, enforcing the law against those that cooperate with them in this deceptive conduct and that increases this kind of aversion to doing business with them. and then internally they're left having to turntor the i.r.g.c.. >> rose: the revolutionary guard. >> the revolutionary guard. now the i.r.g.c., they've diverted a lot of economic

opportunities, a lot of major infrastructure projects are given on a sole source basis to i.r.c.g. companies. >> rose: meaning they are now in control of these economic entities. >> exactly. exactly. and they're trying to use the i.r.g.c. for things like building the tehran metro, for building major airports, even developing oil and gas fields. the i.r.g.c. doesn't have the ability to do most of these projects itself. they then try to outsource and subcontract to companies outside of iran who won't do business with the i.r.g.c. anymore. why because the i.r.g.c. is the perfect conduct-based sanction target. >> rose: so in other words it played into your hands-- and the u.s. government and the treasury department and the united states-- for them to shift this emphasis to the revolutionary guards because you can exert more leverage against them than other entities. >> exactly. and so the i.r.g.c. is

responsible for their missile program which is under u.n. sanctions. it is the organization through which they export their support for terrorism. and people forget about this. this is not just about their nuclear program. this is the country that is by far the leading state sponsor of terrorism in the world. and it's not just hezbollah. everyone focuses on hezbollah. but they're not just the funder of hezbollah. >> rose: who else is it? >> it's hamas. it's the palestinian islamic jihad, it's the p.f.l.p.g.c. it's even support-- as i know you've talked about-- for elements of the taliban. this is a state enterprise for iran. this is part of their budget, essentially, that they're going to support these terrorist groups around the world. by exposing that, we're able too increase the effect of what i'm talking about and the i.r.g.c. is the principal organization through which they do this. so when i say we want to pursue a conduct-based sanctions policy

one that will generate a coalition of governments and the private sector around the world, we point to their nuclear program, we point to their missile program, we also point to their support for terrorism and the i.r.g.c. is the focus of it. so the more they rely on the i.r.g.c., the more it's self-isolating. and we saw an example of this. so over the summer they were unable to develop a particular part of their gas field, which is a major gas field in iran. and so they gave the opportunity if you will, to a company called cata mallambia. that's an i.r.g.c. company. it couldn't develop the gas field itself. frankly, if it had been able to develop the gas field itself that's probably how they would have pursued it in the first place. >> rose: right. >> instead, cata mallambia was looking for an external partner to work with in developing the gas field. but we sanctioned cata

mallambia, the european union did and ultimately the united nations sanctioned them because it's an i.r.g.c. entity and they're engaged in illicit conduct. the cata mallambia couldn't do the project and it had to withdraw. this is the kind of effect that is going on across the board in iran because of the overall effect of the strategy we're pir suing. >> rose: how bad is their economy today? >> it's interesting because i think it's worse than they say it is. >> rose: ahmadinejad will say it's fine. >> right, they want more sanctions. >> rose: i asked him. he said sanctions will make them stronger. you yet rafsanjani and he said, well, of course there's always somebody who will say something. >> of course there's no... they don't want sanctions and sanctions... >> rose: clearly they don't want sanctions. >> clearly.

>> i think the key thing to look at in their economy, the isolation from the financial system a very significant. it has an effect on. >> rose: they can't get credit, working partner and a whole lot of stuff. >> they can't donor mall transactions. and while they may be able to obtain... they may be able to do certain transactions in cash or the informal financial system, they can't run an economy like that. they're unable to attract investment. s herbal isly in their oil and gas industry and this had been... that effect has been accelerated by the sanctions over the summer both by the u.n. then by the e.u. which has forbidden new investment in iran's energy sector and then by unilateral sanctions from the united states congress which has imposed the possibility of sanctions for anyone who participates in the sector. so they're unable to attract this investment.

their oil production was already stagnating prior to this sanction because they were unable to attract investment. this is by their own admission and then you add on top of it sanctions and they're unable to develop these oil and gas field which is is their future. this is their primary economic enterprise in iran. >> rose: right. >> so they're not getting... >> rose: it operates at what percentage of its capacity do you think now? >> i don't know. but it's interesting, i saw a news report from this studio this morning where... predicting that their oil exports would drop precipitously in the next few years because of the combination of sanctions and the investment environment in iran. the thing to note is that even before these sakss iran was a difficult place for companies to invest. it was kind of a bad investment environment for a lot of different reasons, but you add on top of it the reputational harm that comes with the investment, now the possibility of sanctions, especially

sanctions from the united states it becomes al very, very grim situation for them. >> rose: let me talk about how you do this. i mean, my impression is from reading about you that the best way to do is for you to get on a plane and go see somebody who's in charge and say "i'm here and this is what i do and i represent the treasury department of the united states government and this is my... these are my marching orders and i just want to show you what's going on and can i get you to cooperate." and you have found out that if you do it person to person it's the only way to achieve the kind of results you want. >> well, it's certainly best way. >> rose: the best way. the better way. >> i do think that we have developed a really good dialogue with particularly the financial industry around the world. they... you know, at bottom here the financial industry does not want to be part of illicit conduct.

whatever the short-term gain for one transaction or one client is not worth it for them. there's enough business out there that's legitimate. they don't want to take the risk of harming their reputation. so if you go to them and you say "listen, i have an intelligence community that helps me. i'm in a better position to acquire this information. here's what we're seeing. we're seeing the following ways that they're trying to work around your controls. we know you have good controls, but they are trying to penetrate your controls and get you to participate in transactions that if you knew the truth about them you never would participate in." if you share that information in that way, approach them as the allies that they really are we get a very dramatically positive reaction. and they realize, look, that they can't differentiate when it comes to iran or north korea, they can't differentiate the legitimate from the illegitimate business and so their best bet is to give it up all together. >> rose: okay, you know and it's

obvious, everybody knows, that the chinese government has been more reluctant to engage in sanctions against iran specifically. they have a special relationship with the north koreans but to engage in sanctions. do you find the same kind of resistance with chinese companies because there is a developing commercial relationship with china? >> i think that what we find with chon on this variable is more similar than different, okay? it's not exactly same dialogue, but to the extent they are financial institutions, for example, are aspiring as they are to a global network, to be global financial institutions, they also have similar reputational concerns. and they also don't want to be involved in this sort of activity. and so when it comes to that aspect of it, we're able to generate the same sort of effect

to the extent we're able to share real information. you know, it all depends on our correct. it depends on our ability to be persuasive and to show that there really is a risk there. there doesn't work... this only works because iran engages in bad conduct. you can't make it up. so because they're engaged in all the conduct that we've talked about-- terrorism and proliferation and they hide what they're really up to and they use front companies and they try to keep their names off of transactions and they use accounts for purposes other than the ones they opened them for, all that stuff, it works we have been the chinese. >> rose: is this the ticking clock? in other words, are they trying to do all these things because there is a window for them to develop before the pressure perhaps gets too difficult? >> i personally feel that urgency. i do feel that urgency. and, you know, i have a tremendous team and they all feel that urgency with me and this is an urgency that we feel we. >> rose: we can't be complacent about this, we have to push faster because at some point if they can resist they'll what v

what they want? >> i think we have to assume that that's the case. and one thing that i think partially explains the broad coalition that we are able to generate-- when i say "we, i mean the state department, the treasury department, the president, the government as a whole-- we're able to generate a very broad coalition to do a lot of things that people hadn't been willing to do in the past is that sense of urgency, the sense that, you know, time is short, i don't know exactly how short it is, but time is short and so we need to be... >> rose: do you have a date in mind? do you have a number of years in mind? >> i don't have a particular date in mind. i just know that we need to get on with this right now. >> rose: because they're thinking about it every day of their own existence? >> i think so. and i certainly don't spend any days where i'm not worried about that. >> rose: what about turkey? i mean, there's a country that is increasing its economic relationship with iran.

>> or they say they are. >> rose: or they say they are. so you... wait? meaning they're not? >> well, i think that there's two variables here: one is what the government says and the other is what the private sector does, okay? we've seen over the last few years, we've seen a lot of political statements that indicated a desire to increase trade, a lot of m.o.u.s signed saying "we're going to do this deal or that deal." but what we're seeing over the last few months-- and it's still new so i don't want to say how this is going to sort out-- this latest pressure that we're talking about really started in sort of july. so it's fairly new. but what we're seeing is that the private sectors around the world don't want to go along with these sorts of desires of... >> rose: the companies may not believe many what their company believes in, that it's important to increase the commercial relationship? >> or that it's worth it. >> rose: there's a cause factor for them now?

>> exactly. >> rose: let me go to dubai. >> i think we've seen a very substantial cooperation from the u.a.e. in general. >> rose: united arab edge ritz which dubai is part of. >> exactly. they very much feel the threat of a potentially nuclear-armed iran. they see that as a real threat to them. i think that that they've been even stating that publicly. they also have a desire to remain and even improve their status as a global financial and commercial center and the possibility of iran using it as a back door to the rest of the world, that poses a threat to that ambition in a way even more stark now than it has in the past. so i think that we've worked very, very closely with the united arab emirates, that's the place that i probably visited most of any place in the world

since i started this job. >> rose: interesting. it's almost like the american military makes more trips to pakistan than any other country, probably, and you're saying "i go to dubai more than anywhere else." >> well, if you think about the range of issues that i'm focused on-- whether it's terrorism or proliferation with iran-- then of course this is a desired entry point that a lot of these financial networks that i'm focused on pressuring that they're trying to use as access and i think we've developed a very, very good relationship over the last couple of years on a whole range of issues and the u.a.e. is very sensitive and very strong in trying to make sure that they're not being abused by iran or anyone else for illicit purposes. we have to work closely with them and share information and so forth because it's a challenging environment but the commitment to do it and the nature of the relationship is very, very strong.

>> rose: did you know of-- not suggesting you knew personally, but was the hamas financial person who was assassinated in dubai on your radar? >> i don't think i want to get into a particular case so i just... i apologize but i... >> rose: okay. i hear you. i understand and i respect that. on the other hand, it's the kind of thing that you do is to make sure that people are engaged in the process of raising money and put money in the hands from iran to hamas or somewhere else to somewhere else. that's what you are doing. >> when it comes to terrorism, yes, exactly. i'm much more comfortable now. (laughs) >> rose: fair enough, that's what i'm asking. that's the kind of thing that you ought to be doing is knowing where the players are and who they're seeing and what they're getting. >> and so one thing we do is we try to share... to the extent we have information we try to share it with allied governments and say, look, this is how the fund

raising is occurring and so forth. i mean... >> rose: we have evidence that so and so is going to beat so and so and meeting so and so and that's part of the sharing of intelligence information. >> exactly. that's part of it. part of it is making sure that we're... yes. that's part of it and we look at other sources of information as well but, you know, whenever we have information about someone who is facilitating terrorism we have a decision to make. we can do a number of things. we can take unilateral action ourself and i have financial tools and i can identify a person put them on our sanctions list. >> rose: right. >> which for all the reasons we've discussed, banks around the world. if i say this person is supporting a terrorist organization, even if it's hamas okay, and not viewed as a terrorist organization in their home country, the banks don't want to deal with that person and they'll stop. >> rose: what would they do? they would basically say "we're not loaning you anymore?" >> we'll have no commercial transactions with you? >> exactly. it can be that.

it can be a situation where-- and this happens a lot of times-- the justice department wants to bring a prosecution and we wait and help them develop the case and they would take the lead. it may be that we just pass as you indicate in your question, maybe the best thing to do is provide the information to another government and let them take action. and it may be that we just keep watching and keep developing the intelligence and that's the kind of decision... what i actually do during the day, why my job is such a privilege, you know, we pull together this intelligence and we sit around the table first within the treasury department but then ultimately with other agencies and we say, okay, what's the information that we've got? what do we think we should do about it? and then if we have our own preferred way forward we then go talk to other agencies in the white house and say this is what we think we should do, what do others think we should do? and we talk it through and try

to reach a consensus. and sometimes it's iran, sometimes north korea, sometimes hezbollah, sometimes hamas, sometimes al qaeda, sometimes the taliban. i mean, we cover all of these bad guys, if you will. >> rose: and you say we're prepared to give this information to another government and whatever action they take is whatever action they take in order to kind of thwart whatever harm to them it might bring? >> right. >> rose: if actions are carried out by somebody we think is up to no good. >> exactly right. and part of that is persuading other governments that the mere fund raising in their... i say "mere" i don't think it's mere. but what they might do as the mere fund raising in their country is a threat to them. persuading them that, you know, it's not just about stopping attacks within your borders, it's about going after this entire network. it's about shutting them down

even if the person is there to fund raise this is something we need to be working together on the stop. >> rose: where is the money coming from? >> there's not one answer to that. there's some terrorist organizations from... which the bulk of their money comes from iran. so hezbollah is a perfect example of that. >> rose: the bulk of hezbollah's money is from iran? >> yes. >> rose: okay. who is funding al qaeda? and let's just take a note of the fact that it was said that from foundations in saudi arabia and places like that were in a sense channeling money to al qaeda. >> well, the... it's changed some since 2001 certainly. >> rose: and even later the saudis got serious about trying to stop the flow of money-- or not? >> yes. so the way al qaeda is funded largely is still from individual donors that choose to give to al qaeda or sometime us there the

abuse of charities as you indicated. that is still the way al qaeda gets most of its money, it's not from osama bin laden's personal fortune or something like that. >> rose: well, his family has cut him off, haven't they? >> well... >> rose: is that a correct assumption? his family has cut him off? >> yes. so the challenge is to try to identify that sort of fund-raising activity and stop it. and as you indicate in your question, part of that is working with the countries in the region where this fund-raising can occur and trying to get them to work with us. and i think it's been fair to say we've been very successful with respect to saudi arabia especially over the last couple years. >> rose: if you go to the saudis, to the royal family and king abdullah head of the interior minister and the rest of them and say "here is the evidence that money by one of

your citizens, one of your... maybe somebody you know well is getting in the hands of al qaeda" are they responsive in your experience and do they act on it to shut it down? >> yes. and i think that's something we have worked on very, very hard over the last few years and i don't say that lately but we have developed a good relationship when it comes to al qaeda. not just on the operational side which we had for a number of years. for a number of years the situation was that that they were working very hard on the prevention of attacks and they view viewed potential attacks in saudi arabia which is one of the major targets of kaeltd and they attempted an assassination... you talk about the interior minister, they talked about the assassination of mohammed binnai in charge of counterterrorism in saudi arabia. but what has... what we've been very successful in in the last couple years is developing a

good partnership on looking at if financial network of al qaeda the collaborative way you indicated. that doesn't mean we don't have continuing challenges it can still happen and they're still trying to raise money in saudi arabia. >> rose: here's one thing that used to be... at least conventional wisdom which may long be dead. iran didn't support al qaeda, they had no special affection for al qaeda. in fact, they had put under house arrest some al qaeda people in tehran. what part of that is not true? >> i'm in a difficult situation because everything i know about this i'm not allowed to talk about. i think there's a more ambiguous sense about what iran's... a more ambiguous relationship than simply that. >> rose: and they're within elements that may or may not be represented by the iranian... of

the government per se that engages in these kind of activities? >> i think it's fair to assume the type of people you're talking about are under control of the government so if they are released it's probably a governmental decision not an independent entity. >> rose: what about yemen? where does he become a leading as a $25 million-- i think-- target on his head, is it not? >> i don't want to talk about target on his head. (laughs) that's a sensitive issue. but i will say that anwar al-awlaki, who is the... >> rose: an american citizen. >> an american citizen who's now we believe in yemen who has been trying to recruit people into terrorism support in the many ways, he's one of the examples of people we have now put on our list of terrorists that

terrorist supporters that it would be a crime for any u.s. person to do business with anwar al-awlaki. and one of the ways he had been raising money is simply through his selling his c.d.s or speeches... >> rose: her sons. >> his sermons on the internet. >> rose: whatever they call it. using the internet to raise money and also to expand his reach and gather followers. >> exactly. exactly. so when we take this action, people might think this guy's in yemen freezing has assets in the united states, what are you doing? but it does create deterrent effect for anyone who is thinking "maybe i want to buy this guy's sermon" or ""to send money to him" that now we've created the situation where that's now a crime for any u.s. person and, frankly we've raised his awareness around the world

about what this guy is up to. i say often we don't let the perfect be the enemy of the good. just because we can't stop all of the money from gong to someone like this doesn't mean we shouldn't stop whatever we can. because... and this gets back to my original point. if you put pressure on their financial network, is it going to be the case that you're going to prevent all attacks? no, i don't think so. but you make their life much more difficult, they spend more of their time thinking about raising money, moving money, storing money. they are worried about their financial stress that they're under. you end up making them less capable, they're less able to train operatives. they're less able to pay their families. that causes tension within these organizations if they can't pay the operatives' families. all these things, they're not the end... they're not a strategy in and of themselves but pressuring the financial network of the terrorist

organization is an important part of the overall counterterrorism strategy. >> rose: in terms of cooperation you get very good? good cooperation from intelligence services, from... i'm talking about now government to government around the world for the most part. most of them are helpful for you in terms of the kind of information you need to make your case and information you need to follow the flow of funds. yes? i mean, it seems like it's not quite as good as i thought it might be from your facial response. >> oh, i need have a better poker face. >> rose: (laughs) no, no. >> it depends on the terrorist organization. so when it comes to al qaeda, i think what you've said is largely true. but not every terrorist organization is viewed simply in every country. >> rose: clearly hamas is not viewed by... not only by iran by

a number of places in the middle east don't view syria, for example, as they view hamas. >> and so i think we have to play the hand we're dealt and do the best we can under the circumstances. but we also have developed good information sharing. for example, with the europeans where we are able to look globally across the internationalable if system to identify leads and so forth by sharing information between the european union and the united states. and so we are able to develop the information that we need. we can always do better but we're able to do a pretty good job of developing the information that we need and we do also rely on governments around the world and we have developed very good relationships but you have to take each country individually and says where the... you know, where are we going to get the strongest cooperation and do the best you can. the beauty with terrorism that we've been able to draw upon

since 9/11 is that a... 9/11, i think, changed the amount of focus and urgency that governments felt around the world. it was a catalyzing event for that. but also there are u.n. obligations that go beyond al qaeda. the u.n. security council does have obligations on all countries to work together to share information on counterterrorism, including on the financing of terrorism and it doesn't just say "al qaeda." having said that, we have to deal with the political realities in each place. >> rose: and what about private databases? do you have the kind of access to private databases that you need? (laughs) >> (laughs) look, i don't want to go into too much detail here. >> rose: but, i mean... >> one thing that has been exposed... >> rose: yes, i know. go ahead. >> that's been what we call the terrorist financing tracking program where we're subpoenaing information from a message... financial message provider that had global access. >> rose: right. right. >> this is something i alluded

to before we came on the air. this ultimately got exposed in the press. >> rose: right. >> that was something i regret very much you can never say what the effect of that kind of exposure is it clearly made the program less effective, didn't make it more effective. but that program has generated very valuable leads for a number of counterterrorism investigations and we'd like to think has even helped us prevent terrorist attacks because we have... it's been important in investigations where we ultimately did disrupt it. i don't know for sure and one never knows for sure whether you could have disrupted it without the lead you had, but this program has been very, very valuable and it's one that we've been working hard on it 2001. >> rose: but since it was eck posed it's less? >> well, i think that any time you expose to the terrorists exactly how you're collecting

your information, you make that source of information less robust. and i think it was clear to people that we were looking at the money and trying to follow the money. i mean, that was the nature of or the kind of guiding principle of my office when we first set up where we follow the money. but that's not the same thing as identifying precisely the source that you have. and once the source is exposed then it makes it easier for people to avoid. >> rose: what do you need can make your job easier and more effective? >> you know, i think it all comes down to getting the right sort of cooperation around the world. and i think we're on a good path in... we've covered a number of different possibilities here from terrorism to iran.

we are able to get that cooperation in general. i think that it's... we're just at the beginning, though, of other countries seeing the... we're the only country has this much focus in our finance ministry on this particular issue. >> rose: your operation comes under the treasury department? >> right. so my boss is tim geithner. he has... we have an assistant secretary for intelligence in the treasury department. >> rose: right. >> as far as i know, we tier only finance ministry this the world that has that kind of intelligence function in our treasury department. in our finance ministry. >> rose: but it would be better if the rest of them did. >> i think that as we're... as i think the world is seeing the value of this enterprise, i think we're starting to get more interest in it in other places. whether they'll do it the way we do it is not necessarily

desirable. but the more other countries see the value of this... look, when you have the kind of conflicttor kind of problem that we have with iran, if we can solve this the way we're pursuing it with financial measures, diplomacy, pressure, getting the private sector to amplify these financial measures, that's much better than any other possible outcome that i can see and i'm often confronted with the question. >> rose: that's the reason the president would like to see sanctions and diplomacy even though military is not off the table he and every leader i know would rather see those kinds of sanctions and diplomacy work and not have to resort to a military, if that is an option for them. >> exactly. so now they're willing to cooperate more in making them work. but i'm often confronted with the question where people say "look, these kind of financial measures that you're imposing,

they impose costs not just on the people of iran but they impose costs on innocent businesses." >> rose: uh-huh. >> and so... i can't deny that, it's true that people are giving up the short-term money that they could be making on the commerce that they would be doing if they didn't pull out of doing business with iran. but my view is you've got to compare that not with the cost of imposing pressure shouldn't be compared with the cost of not imposing pressure. you know, in the short term you have to think about what would be the consequences in the long run if iran got nuclear weapons. >> rose: orb, b, there was a military action to try to prevent them. either of those are much worse options. >> either of those are much, much worse than doing an effective set of sanctions and getting cooperation. >> rose: so you're saying there's more receptivety to using financial pressure and therefore more people are willing to cooperate with you, share information with you because they see the ticking

clock. >> they're starting to, yes. >> rose: and the alternative of that is much worse than helping you use the financial squeeze, right? >> exactly. yes. >> rose: okay. what is it about terrorism that we don't understand in terms of how it works? >> in the short run, we've identified lots of ways to disrupt. we look at the whole operation, how they're communicating, how they're moving money, where their safe haven is and we're able to target that in a tactical way. i think that we need to be thinking more and i think in the government we are about where are these terrorists coming from? how are they being created? what are they being taught... what is being taught in schools around the world that generate this is kind of outcome where we have terrorist it is developed? what's being taught in madrassas

in places in pakistan, for example. >> rose: or in saudi arabia. >> how are we going beyond the short-term tactical picking off the... this financial facilitator or that financial facilitator. i had a meeting with counterterrorism officials from another country and we were reflecting on the fact that some of the people that we're going after now in 2010 were adolescents on september 11, 2001. you know, this is another person who's been doing this since 2001 with me. so how are we going to stop that pipeline? how are we going to make this that we're not sit hearing ten years from now, 15 years from now in the same mode. and that's something i think we need to think about not just in the united states, because i'm not so sure that we are in the position to be the ones to solve this but with our allies around

the world who can help us on the ideological side to prevent this. >> rose: well, what's the answer to that? that's really a big question in terms of... because the answer always is if you kill one terrorist here then four more emerge over here. >> i think a lot of it has to be... >> rose: get the source of what it is that turns someone into a receptive brain or this kind of thing? >> and what are they being taught? what's being taught. >> rose: that makes them receptive. >> that makes them receptive. there's certain things that maybe outside of that... that's one part of it. one part is what they're being taught. i think there are certain influences that have nothing to do with what people are taught in school and so forth but that's one part of it that i think should be a major focus. >> rose: where are terrorists being created? i mean, we know that there is a story that there may be... you know, that a great concern on

the part of the military is-- and this comes out in bob woodward's book-- is the number of sort of people who are american citizens but people who have certain kinds of passports that give them an opportunity to go... to to move around perhaps not as noticed as those otherwise. >> that's a big risk and one of the things that we have to worry about is you can think in the strategic sense like we're talking about, like how do you get at this in the big way? but we can't lose our focus, we have to do the tactical and the tactical... meaning, you know, what is the current threat. we have to be focused on the fact that al qaeda will prefer operatives that have u.s. passports or european passports so they can travel more freely and that they can blend in, etc. and so we can't keep... we can never take our eye off of that ball. i'm just saying that we need to at the same time that we're focusing on the here and now also be focusing on the future

or else we'll be constantly in this tactical operational mode. >> rose: what's the biggest unanswered question for you about all of this? >> look, i... i don't know. i think we've got to... i guess one worry i have is whether our urgency can maintain itself, you know? that, you know, on terrorism in particular it's something which the country has focused on since 9/11 very... you know, before as well, but certainly since 9/11 much... very intense. is that something that can be sustained in a way that we need it to be without creating... without creating kind of unnecessary fear out there? >> rose: how do you define "terrorism"? simply... people say we don't have a war against terrorism because terrorism is a tactic. how do we treat it? i mean, and will it... will we

always have it and we just have to make it manageable? >> i think it's... whether we use the word war or not is for someone else's... that's semantic. but the point is we do have a threat to us that's disproportionate to the amount of people on the other side and, you know, a small group of people can inflict very significant arm on us and so as a government official with... as one of a number of government officials with responsibility here, we have to do everything we can to protect the american people have from that sort of threat. you know, that's something that we can't afford to let up on, nor can a government official take the attitude that, look, you know, we'll just have to manage it if it happens. you know, that... we've got to say we're not going to let it happen. >> rose: exactly. i was just in europe and we have the warning there, you know, the

watch and all of that and you ask... all of us were saying how serious is this? is this a case of where there's some information out there that somebody is worried something and therefore it's imperative that they say we're worried about this because, you know, if you don't tell somebody and then something happens you're in a bad place. >> look, understand the frustration the public has about kind of warnings that don't... aren't specific. but i don't think the reason that they happen is becau someone is trying to protect themselves from the it are schism if there is a terrorist attack. i do think that as governments start to work together on a particular threat stream, inevitably and unfortunately things start to leak so it gets into the public domain whether you want it to or not. and secondly there is an advantage that we have, there is some benefit to kind of raising awareness. i know it doesn't feel that way to the average citizen and, you know, the average citizen says,

well, what am i supposed to do with that. but increased vigilance when you start to have a greater security presence, police presence in certain places it does create harder targets and therefore it can dissuade or deter... >> rose: it's like that c.i.a. will always tell you, nobody knows about the successes we have, you only hear about where we fail. >> of course. that's one of the advantages of public... (laughs) >> rose: well, first of all, you must love the job you have because it's an instant challenge everyday. you get up every morning not knowing what developments and you're operateing with a huge kind of public purpose. it these do with proliferation, it has to do with terrorism, it these do with, in a sense, creating a safer world. so that stuff... >> look, i... there is no person with a better jb than i have. i honestly believe that. it's for all the reasons that you said, but it's also because what you don't know is that i

have a tremendous team of people that sit around the table with me and we're all motivated by the same purpose and we have tremendous support from, frankly all the secretarys that i've worked for. i've been tremendously supported and so it's very, very satisfying. i kind of joke sometimes that i remember hearing... this doesn't happen anymore but i remember professional athletes used to say things like "oh, heck, i'm a lucky guy, they pay me to play baseball." >> rose: (laughs) exactly. i know what you're going to say. "i'd do this for free if they didn't pay me." >> i honestly feel that way about this. i hope... i think the secretary is too busy to be watching this tonight so i hope he doesn't take me up on that. (laughs) but that's the way i feel about this. it is an honor to get to do this and, you know, the subject matter may be sobering, but i find it... you know, i don't want to use the word "fun" but i

find it very satisfying to get to do this on a daily basis. >> rose: thank you. and i think your message is clear that financial... finding out... more and more people understanding what the risk is and more and more people understanding that within... especially within the financial community you can have an impact. the more people understand that, the more they may be receptive to. >> and i think we're on a good path. i think this iran issue right now is opening up everyone's eyes around the world. it is having a much more dramatic impact than anyone expected. it surprised the iranians, it surprised everyone around the world just how powerful these sanctions were. they underestimated the u.n. security council resolution. they underestimated what the european union would do. they underestimated what the private sector would do. they underestimated what other countries around the world that they thought were going to stand with them were going to do and it's having a much more dramatic impact and it's precisely for the reasons we've discussed. i hope that it not only has

desired outcome in iran by giving us the leverage we need but it would be nice also to have it have the effect that you just mentioned, which is that we see this as a valuable tool for future. >> rose: thing for coming. stuart levey for the hour. thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org