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Follow the money

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I first met Paul Wolfowitz many years ago when he was an academician and then again when he was a minor functionary in the government. He always seemed to be intense without being histrionic, even on subjects about which he was quite passionate.

I met him yet again when he was Deputy Secretary of Defense, and he didn’t seem to have changed much: always practical, even perhaps a pragmatist. His ignominious departure from the World Bank demonstrated that his practicality had its limits, and the limits were set tragically low, demonstrating yet again that even very smart people have the capacity to be puerile and foolish.

WhenWolfowitz was named to become president of the World Bank, many observers were surprised at the appointment because theory and policy, not money and banking, seemed to be his interests.

But as I had learned while speaking with him in the past, the observers were wrong.

Wolfowitz recognized that money is the nexus of everything, even terrorism. A few years ago, when he was still Rumsfeld’s deputy, I asked him what was the single most important route to defeating terrorists, and he unhesitatingly replied that his focus was on cutting their money supply.

Wolfowitz is not likely to be treated well by either history or historians. His concepts were among the intellectual underpinnings of both the war in Iraq and, perhaps as well, the inept way in which we have planned and attempted to execute it. But he was right about the money.

I am not a fan of single-factor analysis, and there is probably no unitary, proximate cause of anything, terrorism included. But you can’t do anything without money. Terrorists need cash for everything they do, and they spend lots of time and effort to find chinks in the armor of the international financial system, to circumvent controls and to launder money. Impeding these efforts contribute substantially to thwarting terrorism, but we who are threatened must do much more to make it difficult for the enemy to accomplish its mission.

Last Thursday, at the Council on Foreign Relations, Secretary of the Treasury Paulson delivered an address on the subject.

“We have a shared responsibility for our mutual security,” he said, but our allies “must find the political will” to make their banking systems more resistant to the terrorists’ efforts. It is both unfortunate and dangerous that our allies don’t demonstrate much will, nor are they likely to display it any time soon.

He didn’t name the slackers, but I can tell you that Great Britain is not among them. In many respects, it’s at least as difficult to launder money in the UK as it is in the United States. Everyone else trails far behind.

There are many third-rate countries that have no impediments at all to the money transfers that terrorists need, but, considering the threat to Europe, it is startling how little the EU is doing to stop the flow of money. Some of Europe’s motivation is an innate dislike of America’s foreign policy generally, and that dislike spills irrationally into their thinking on other matters.

But part of Europe’s reluctance to act is a function of domestic politics, too. Demographically, European countries are increasingly Muslim, and they all have large, and largely unassimilated, populations of émigrés from Arab and other Muslim countries. Many of these people are socially and economically marginalized, unemployed and very restive, open to the entreaties of demagogues at home and abroad.

European governments do not know how to deal with such problems, and almost all possible solutions are at odds with their superficially socialist view of politics. They are paralyzed by a combination of fear and political disagreement. Exacerbating the problem is that the EU, which is probably unworkable economically as a political federation, can do nothing as a body unless there is unanimity. So far the only unanimous decision in the realm of putting financial institutions off-limits to terrorists has been inaction.

In the end, victory over the terrorists will take a long, long time, and making cash unavailable to them is only one of a number of very important tasks. But if we can’t get allies to commit to useful and reasonable measures to control terrorists’ money, it’s impossible to see how we can get them to do anything else until it is too late for anything but guns.

Jack Jacobs is an MSNBC military analyst. He is a retired U.S. Army colonel. He earned the Medal of Honor for exceptional heroism on the battlefields of Vietnam and also holds three Bronze Stars and two Silver Stars.