[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
A PERSISTENT AND EVOLVING THREAT:
AN EXAMINATION OF THE FINANCING
OF DOMESTIC TERRORISM AND EXTREMISM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON NATIONAL SECURITY,
INTERNATIONAL DEVELOPMENT AND
MONETARY POLICY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
JANUARY 15, 2020
__________
Printed for the use of the Committee on Financial Services
Serial No. 116-76
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
42-746 PDF WASHINGTON : 2021
HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California ANN WAGNER, Missouri
GREGORY W. MEEKS, New York FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut SCOTT TIPTON, Colorado
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
DENNY HECK, Washington TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
RASHIDA TLAIB, Michigan DAVID KUSTOFF, Tennessee
KATIE PORTER, California TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts BRYAN STEIL, Wisconsin
BEN McADAMS, Utah LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota
Charla Ouertatani, Staff Director
Subcommittee on National Security, International
Development and Monetary Policy
EMANUEL CLEAVER, Missouri, Chairman
ED PERLMUTTER, Colorado FRENCH HILL, Arkansas, Ranking
JIM A. HIMES, Connecticut Member
DENNY HECK, Washington FRANK D. LUCAS, Oklahoma
BRAD SHERMAN, California ROGER WILLIAMS, Texas
JUAN VARGAS, California TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey ANTHONY GONZALEZ, Ohio
MICHAEL SAN NICOLAS, Guam JOHN ROSE, Tennessee
BEN McADAMS, Utah DENVER RIGGLEMAN, Virginia, Vice
JENNIFER WEXTON, Virginia Ranking Member
STEPHEN F. LYNCH, Massachusetts WILLIAM TIMMONS, South Carolina
TULSI GABBARD, Hawaii
JESUS ``CHUY'' GARCIA, Illinois
C O N T E N T S
----------
Page
Hearing held on:
January 15, 2020............................................. 1
Appendix:
January 15, 2020............................................. 43
WITNESSES
Wednesday, January 15, 2020
Brooks, Lecia J., Chief Workforce Transformation Officer and
member of the Senior Leadership Team, Southern Poverty Law
Center (SPLC).................................................. 8
Maples, Hon. Jared M., Director, New Jersey Office of Homeland
Security and Preparedness...................................... 6
McCord, Mary B., Legal Director, Institute for Constitutional
Advocacy and Protection, Georgetown University Law Center...... 12
Miller, Rena S., Specialist in Financial Economics, Congressional
Research Service (CRS)......................................... 11
Selim, George, Senior Vice President for National Programs, Anti-
Defamation League (ADL)........................................ 9
APPENDIX
Prepared statements:
Brooks, Lecia J.............................................. 44
Maples, Hon. Jared M......................................... 55
McCord, Mary B............................................... 62
Miller, Rena S............................................... 73
Selim, George................................................ 80
A PERSISTENT AND EVOLVING THREAT:
AN EXAMINATION OF THE FINANCING
OF DOMESTIC TERRORISM AND EXTREMISM
----------
Wednesday, January 15, 2020
U.S. House of Representatives,
Subcommittee on National Security,
International Development
and Monetary Policy,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
room 2128, Rayburn House Office Building, Hon. Emanuel Cleaver
[chairman of the subcommittee] presiding.
Members present: Representatives Cleaver, Perlmutter,
Himes, Sherman, Vargas, Gottheimer, Wexton, Lynch; Hill, Lucas,
Williams, Gonzalez of Ohio, Rose, Riggleman, and Timmons.
Ex officio present: Representatives Waters and McHenry.
Also present: Representative Barr.
Chairman Cleaver. The Subcommittee on National Security,
International Development and Monetary Policy will come to
order.
Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time.
Also, without objection, members of the full Financial
Services Committee who are not members of this subcommittee are
authorized to participate in today's hearing.
Today's hearing is entitled, ``A Persistent and Evolving
Threat: An Examination of the Financing of Domestic Terrorism
and Extremism.''
I now recognize myself for 3 minutes to give an opening
statement.
Domestic terror poses a persistent and evolving threat of
violence and economic harm to the United States. These are not
my own words. That was said by senior leaders within the FBI on
the state of our country when appearing before Congress in
June. The rate, pace, and lethality of domestic terrorist
attacks have only grown more devastating since this testimony
was delivered.
In July, at California's Gilroy Garlic Festival, 4 people
were killed and 17 were injured. In August, in El Paso, Texas,
22 people were killed and 24 were injured. In December, in
Jersey City, New Jersey, as one of our witnesses is most
painfully aware, six people were killed, including one police
officer.
2019 saw the highest number of mass killings recorded to
date: 211 killed in 41 incidents, according to data compiled by
the Associated Press, USA Today, and Northeastern University.
Acts of domestic terror were the driving force behind these
numbers.
This hearing presents us the unique opportunity to look
past the politics that surround this issue to explore how we
can confront and overcome this crisis. How may we most
effectively follow the money to disrupt the financing of these
crimes? How can we enable law enforcement and the financial
services institutions to counter domestic terror financing?
Congresswoman Wexton has a bill before us today, H.R. 5132,
the Gun Violence Prevention Through Financial Intelligence Act,
which requires the Financial Crimes Enforcement Network
(FinCEN) to issue an advisory to financial institutions about
how lone actors and other domestic terrorists procure firearms.
Congressman Gottheimer has a bill that would freeze the
assets of suspected terrorists and those who show support for
terrorism. The bill would also create a clearinghouse for
incidents of terrorism to be used to assist law enforcement as
they try to follow the money.
There is also a bill calling for the U.S. Government
Accountability Office (GAO) to study funding of domestic
terrorism.
The Wall Street Journal reported in 2018 that banks and
credit card companies were discussing ways to identify
purchases of guns in their payment systems as a means of
directly confronting the issue of mass killings. We must have a
robust conversation on all of the contours of this issue,
including guns.
I would remind everyone of the sensitivity surrounding this
issue. There is a man today serving a 10-year sentence in
Leavenworth Federal Prison for having tried to firebomb my
district office in Kansas City. Our Chair had two bombs mailed
to her. Our House Minority Whip was shot and carries the wounds
of that violence with him today. With these incidents in mind,
I implore witnesses and members to participate thoughtfully as
we explore this issue.
The Chair now recognizes the ranking member of the
subcommittee, Mr. Hill, for 5 minutes.
Mr. Hill. I thank the Chair. Thank you for convening this
hearing.
And I thank our witnesses for taking time today to be with
us and present your views.
This is a topic that members of the committee care deeply
about. Over the past 5 years that I have served in Congress, I
have served on the Illicit Finance Subcommittee during that
entire period. I know we have had many hearings about terror
financing and related topics, but I don't remember us focusing
on and analyzing the issue from a domestic perspective. I look
forward to a constructive dialogue about this pending threat.
Violent extremism is considered a growing problem in this
country. FBI Director Chris Wray testified before the Senate
last year, stating that, ``homegrown violent extremists are the
greatest, most immediate terrorism threat to the homeland.''
That is a big statement.
Furthermore, a report released by the Department of
Homeland Security in September 2019 outlines, ``Domestic
terrorism and mass attacks are as great a threat to the United
States as foreign terrorism.''
Since 9/11, there have been 85 incidents of violent
extremism committed, according to the GAO.
This extremism has been impacting constituents in Arkansas
all the way back to the 1980s. In 1985, current Arkansas
Governor Asa Hutchinson, who was then a U.S. Attorney, helped
dismantle the operations of The Covenant, the Sword, and the
Arm of the Lord, a militia-style white supremacy group
operating in north Arkansas.
More recently, in 2009, a domestic radicalized Islamic
extremist opened fire at the military recruiting station in my
district, in Little Rock, Arkansas, killing Private William
Long of Conway, Arkansas, and wounding my friend, Private
Quinton Ezeagwula from Jacksonville.
These attacks are not isolated incidents, and we need to
ensure, as policymakers, where we can better assist law
enforcement efforts to track their funding and monitor their
internet usage to inhibit the growth.
Recent anti-Semitic attacks in the New York area are deeply
concerning. The continued demonization of Israel through
initiatives like the Boycott, Divestment, and Sanctions (BDS)
movement in this country are contributing to that anti-Semitic
sentiment across our nation. I am disappointed to report that
last May, in my home State, protesters interrupted a Holocaust
Remembrance Day in Russellville, Arkansas, bearing signs with
anti-Semitic language.
I have long opposed the BDS movement, and I have
cosponsored several bills to that effect, including our ranking
member, Mr. McHenry's, legislation in the 115th Congress. While
I applaud the House for passing H. Res. 246 last July, which
opposes efforts to delegitimize Israel, personally, I don't
think it went far enough. A watered-down, nonbinding resolution
isn't sufficient.
I believe we should pass H.R. 336, the Strengthening
America's Security in the Middle East Act, being led by my
colleague, Mike McCaul of Texas. Title 4 of this legislation
includes the Combating BDS Act, which would allow a State or
local government to adopt measures to divest assets from
entities using boycotts, divestments, or sanctions to influence
Israel's policies.
We need to create bipartisan solutions to ensure that
violence and hatred does not continue to grow. I applaud the
joint efforts of the Department of Homeland Security, the
Department of Justice, the FBI, and the National
Counterterrorism Center and what they have done to implement
efforts to counter this violent domestic extremism. I encourage
my colleagues today to think about ways the House Financial
Services Committee can help underscore and contribute to the
great work being done.
Thank you, Mr. Chairman, and I yield back the balance of my
time.
Chairman Cleaver. Thank you.
The Chair now recognizes the Chair of the full Financial
Services Committee, Chairwoman Maxine Waters, for such time as
she may consume.
Chairwoman Waters. Thank you very much, Mr. Chairman. I
thank you for convening this hearing on combating the financing
of domestic terrorists like the white supremacy and sovereign
citizen groups.
While the U.S. has long focused on international terrorism,
the FBI and DHS have confirmed that domestic extremists are now
as big a threat here at home. We easily recognize their stain
on cities across the U.S., in Charlottesville, Boston, Gilroy,
Pittsburgh, El Paso, Portland, and on and on and on.
Barely a day goes by before we hear of another violent
attack on African Americans, Jews, Muslims, Latinos, LGBTQ
persons, immigrants, women, and others targeted by, most
frequently, far-right hate groups. My staff and I were the
targets of a recent domestic terror attack, receiving two pipe
bombs from a right-wing Trump fanatic, who also sent more than
a dozen of these weapons to Democratic Party figures.
President Trump's language that there are, ``fine people on
both sides,'' and his willfully blind statements asserting that
there is no global rise in white nationalism should concern all
of us. Trump has not only failed to forcefully condemn the
extremists, but he often encourages their abhorrent behavior.
America cannot tackle the threat if we refuse to recognize
it, and I am eager to hear from the panel about what Congress
should do to act forcefully where Trump has refused to do so.
Our panel of experts today will help us to identify the bad
actors and cut off funding for their radicalization and bad
acts.
And let me just say, Mr. Chairman, that fresh on our minds
is the march that took place in Charlottesville, where we had
white supremacists who were marching and chanting, ``You will
not replace us. Jews will not replace us.'' And in light of all
that, the President of the United States thought there were
good people on both sides.
This is a serious hearing, and I am very pleased that you
are spending time to identify what is going on right here in
our own country. And I look forward to working with everyone to
ensure that we cut off all funding--not cut off funding, but
deny funding, find funding, identify where the money is coming
from, and do everything that we can to stop it.
I yield back the balance of my time.
Chairman Cleaver. Thank you, Madam Chairwoman.
Our first witness will be introduced by Congressman
Gottheimer.
Mr. Gottheimer. Thank you, Chairman Cleaver, for affording
me the opportunity to introduce our first witness, Jared
Maples, the director of the New Jersey Office of Homeland
Security and Preparedness.
And thank you, Chairwoman Waters, for your leadership to
help combat domestic terror.
Prior to joining Homeland Security, Director Maples spent
more than a decade at the Central Intelligence Agency in
several leadership roles, and previously worked at the Pentagon
in the Office of the Secretary of Defense. He leads an office
on the front lines of the effort to protect New Jersey
residents from a range of threats and especially threats
against our State's diverse religious communities.
According to the New Jersey Office of Homeland Security
annual reporting, homegrown violent extremists inspired by ISIS
and al-Qaida and other terrorists remain the number-one threat
to New Jersey. And in recent years, his office has ranked white
supremacists as one of the highest threats as well.
In recognition of his extraordinary leadership against
domestic terrorists, white supremacists, anti-Semites, and
other homegrown terrorists, the Anti-Defamation League of New
York and New Jersey awarded Director Maples with its 2018 ADL
Making a Difference Award, noting that, ``Director Maples has
made great strides in connecting communities of faith with each
other and with law enforcement, bridging gaps in communication
before emergency situations happen so that the New Jersey
community can work together instead of individually before
calamity strikes.''
On many occasions, unfortunately far too many, including
just after the attack in Jersey City, and in all of the
counties that I represent in my district, we have stood
together and worked closely together to make sure that our
first responders and our religious institutions--our
synagogues, our churches, our mosques--and all of our
communities have what they need to protect the State and all of
our residents against the next terrorist attack.
We are very, very lucky to benefit from his expertise and
leadership, and I look forward to hearing from him today on
this issue that affects all Americans, Democrats and
Republicans.
And I am very, very grateful that you are here today.
Thank you.
Chairman Cleaver. Thank you, Mr. Gottheimer.
Our second witness is Lecia Brooks, who works in senior
leadership as the chief workplace transformation officer at the
Southern Poverty Law Center. Ms. Brooks previously served as
the Center's outreach director, traveling around the U.S. and
abroad to counter hate and extremism and to promote the
celebration of differences.
Our third witness is Rena Miller. Ms. Miller is a
specialist in financial economics at the Congressional Research
Service, focusing on anti-money-laundering and countering
terrorism financing. Previously, Ms. Miller has worked as a
financial services attorney and at the Department of the
Treasury.
Our fourth witness is George Selim, who is currently the
senior vice president for programs at the Anti-Defamation
League. He has previously served in both the Bush and Obama
Administrations, as the inaugural Director of the Department of
Homeland Security's Office for Community Partnerships, as well
as in various other leadership positions.
And our final witness is Mary McCord. Ms. McCord serves as
legal director at the Institute for Constitutional Advocacy and
Protection, and as a visiting professor of law at Georgetown
University Law Center. She has previously served as Assistant
Attorney General for National Security at the DOJ, and as an
assistant U.S. Attorney in the D.C. appellate and criminal
court.
I want to thank you all for being here today. Witnesses are
reminded that your oral testimony will be limited to 5 minutes.
And without objection, your written statements will be made a
part of the record.
Mr. Maples, you are recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF THE HONORABLE JARED M. MAPLES, DIRECTOR, NEW
JERSEY OFFICE OF HOMELAND SECURITY AND PREPAREDNESS
Mr. Maples. Chairman Cleaver and Ranking Member Hill, thank
you for the opportunity to testify before you today. It is an
honor to speak with you and to share information gathered by my
office regarding sources of domestic terrorism funding as it
impacts New Jersey and the country as a whole.
The New Jersey Office of Homeland Security and Preparedness
(NJOHSP) is tasked with coordinating counterterrorism,
resiliency, and cybersecurity efforts across all levels of
government, law enforcement, nonprofit organizations, and the
private sector. Furthermore, we are charged with bolstering New
Jersey's resources for critical infrastructure protection,
preparedness, training, and Federal grants management.
Many domestic extremist attacks are committed by
individuals unaffiliated or unassociated with a larger group or
network. Most of the cases I will discuss today highlight lone
offenders who do not need large amounts of funding to conduct
their operations, making it difficult to detect and prevent
attacks. Common tactics in domestic extremist attacks include
easily obtainable weapons such as knives, small arms, and
vehicles.
The cases I will mention have a direct nexus to New Jersey
but serve as examples of the kind of activity prevalent
throughout the United States.
My office assessed that many of these organized domestic
extremist activities are funded through criminal enterprises,
such as the illicit sale of counterfeit goods, drug and weapon
trafficking, cigarette smuggling, and various fundraising
methods.
Lone-wolf offenders will likely be self-funded in order to
carry out their goals. Additionally, we cannot discount the
future role of cryptocurrencies in funding acts of domestic
extremism, both within New Jersey and across the United States.
NJOHSP has worked with many Federal, State, and local
government agencies during the course of investigations. While
we provide details on our ongoing efforts, be mindful that we
always seek to improve our approach towards preventing these
incidents from occurring in the first place.
The New Jersey Suspicious Activity Reporting System
(NJSARS) is part of an ongoing effort in New Jersey to increase
our threat reporting, which is directly linked to the FBI's
national SARs system, known as eGuardian.
Today, I will only highlight a few relevant case examples,
starting with a recent tragedy.
On December 10, 2019, two perpetrators killed three people
and injured three others when they targeted a kosher grocery
store in Jersey City shortly after killing Jersey City police
detective Joseph Seals at a nearby cemetery. The shooters
espoused anti-Semitic and anti-law-enforcement views prior to
the attack. This is an ongoing investigation, and we expect to
learn more about possible funding sources once it has
concluded.
We do know that at least two Black separatist extremist
groups are active in New Jersey: the New Black Panther Party
(NBPP), and the Israelite Church of God in Jesus Christ
(ICGJC). Both groups promote violence and hate-based rhetoric
against law enforcement, government officials, the Jewish
community, and other ethnicities.
In November 2016, the FBI served a search warrant related
to financial irregularities at the ICGJC's organization
headquarters in New York. The leader is a New Jersey resident
who oversees churches in at least 10 States. The group is
financially sustained through donations from members, and there
have been allegations that the members are involved in
financial scams that prey upon other members and sects.
On April 13, 2018, the leader of Aryan Strike Force, Joshua
Steever, in Phillipsburg in Warren County, was arrested along
with five other members of the group for conspiring to sell
methamphetamine, firearms, and machine gun parts to fund the
organization's activities. They stored firearms and ammunition
at locations in New Jersey and Pennsylvania and transported
methamphetamine across State lines. They laundered the illicit
proceeds from the drug sales by purchasing Target gift cards,
which they traded for illegal weapons.
Sovereign citizens continue to engage in harassing tactics,
such as bogus liens and a variety of scams and fraud. Threats
and ultimatums, attempted citizens arrests, takeovers of
government or other buildings, and acts of violence, especially
during traffic stops and resident visits, are common among the
sovereign citizen movement.
In May 2017, detectives from my office arrested a professed
sovereign citizen for filing fraudulent liens, a first in New
Jersey. Several of the largest scams involving sovereign
citizens have brought in more than $100 million. Among the most
common types of scams used are pyramid and other investment
schemes, trust scams, real estate fraud, and various types of
tax fraud, amongst immigration fraud and malpractice insurance
fraud, as they get more creative.
In conclusion, we assess that organized domestic extremists
will continue to fund activities through criminal enterprises,
and lone offenders will likely be self-directed and self-funded
in order to carry out their goals.
Additionally, we cannot discount the future use of
cryptocurrencies as a means to fund acts of domestic extremism
within New Jersey and across the United States. Foreign
terrorist organizations have used such platforms as Facebook
and Telegram to solicit funding through Bitcoin. In 2017,
Andrew Anglin, publisher of neo-Nazi blog The Daily Stormer,
received a donation after the Charlottesville attack in the
amount of 14.88 Bitcoins, or approximately $60,000.
We remain dedicated to continuing efforts to combat
domestic terrorism and its sources of funding, to further
collaborating with our law enforcement and private-sector
partners, and to working toward addressing threats with a focus
on prevention.
Chairman Cleaver, Ranking Member Hill, and distinguished
members of the subcommittee, I thank you again for the
opportunity to testify today. I look forward to your questions
and I yield back to the chairman.
[The prepared statement of Mr. Maples can be found on page
55 of the appendix.]
Chairman Cleaver. Thank you very much.
Ms. Brooks, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF LECIA J. BROOKS, CHIEF WORKFORCE TRANSFORMATION
OFFICER AND MEMBER OF THE SENIOR LEADERSHIP TEAM, SOUTHERN
POVERTY LAW CENTER (SPLC)
Ms. Brooks. Thank you, Chairman Cleaver, Ranking Member
Hill, and Chairwoman Maxine Waters.
For more than 3 decades, the Southern Poverty Law Center
has been monitoring, issuing reports about, and training law
enforcement officials on far-right extremist activity in the
United States. Each year since 1990, we have conducted a census
of hate groups operating across the United States.
I would like to make three main points today.
First, we are witnessing a surging white nationalist
movement in the United States that is part of a larger global
movement linked by the idea that white people are being
displaced in part by migrants in countries they believe should
belong to them.
Second, this movement is rooted in a toxic, antidemocratic,
white supremacist ideology that is metastasizing on social
media networks and other websites that traffic in hate. These
networks are not only radicalizing people but are, in effect,
incubating new terrorists.
Third, we would like to recommend ways in which technology
companies, including social media sites and online pay portals,
can disrupt the funding, organizing, and recruiting efforts of
hate groups and bad actors who seek to normalize hate.
On August 3, 2019, the United States witnessed yet another
mass shooting, this time in El Paso, Texas, where 22 people
were killed and more than 20 were injured. Shortly before the
shooting took place, a four-page manifesto appeared online,
reportedly written by the shooter. The manifesto contained
white nationalist talking points on demographic displacement,
white genocide, and illegal immigration.
Technology companies, especially social media platforms,
play an enormous role in the spread of hateful rhetoric and
ideas, which can lead to the radicalization of people online.
Though the United States has since 9/11 devoted enormous
resources to fighting international terrorism spawned by
radical forms of Islam, it has done relatively little to combat
another increasingly virulent source of terror, one that has
claimed more lives in recent years: the white nationalist
movement.
According to SPLC's analysis, more than 100 people in the
United States and Canada have been killed in attacks committed
by extremists linked to the white supremacist movement since
2014. All of the perpetrators interacted with extremist content
online.
Nothing has helped facilitate the process of far-right
radicalization like the internet. The online radicalization
narrative is now a terrifyingly common one. Before the days of
the internet, far-right extremists typically had to publish and
disseminate propaganda in printed form. Most Americans were
simply never exposed to this material. Now, white nationalists
commonly develop their views by coming into contact with
extremist content online.
Most people who associate with the white nationalist
movement do not belong to a formal hate group but act as a part
of a loosely organized community of extremists who congregate
around online propaganda hubs. There are entire online spaces,
including the forum Fascist Forge, threads on the social media
sites the Gab and Telegram, and many others, that exist solely
to provide training and advice on how to carry out acts of
violence, to disseminate texts that promote racial terrorism,
and to encourage followers to commit their own violent attacks.
These online spaces are incubating future terrorists.
For decades, the SPLC has been fighting hate and exposing
how hate groups use the internet. We have lobbied internet
companies one by one to comply with their own rules to prohibit
services from being used to foster hate or discrimination. A
key part of this strategy has been to target these
organizations' funding.
Hate group sites are primarily funded by peer-to-peer
interactions, not by large donors. Even a small amount of money
can go a long way in spreading hate online. These groups and
individuals are able to spread their toxic ideologies far and
wide through ads and events that cost relatively little. Public
exposure is half the battle. Our campaign must continue in
earnest.
In October of 2018, the Change the Terms coalition set
recommended policies for technology companies that would take
away the online microphone that hate groups use to recruit
members, to raise funds, and to organize violence. We encourage
this committee to do further research and encourage online
platforms to remove their funding sources and prevent these
ideas from reaching a wider audience, and disrupting their
networks.
Thank you.
[The prepared statement of Ms. Brooks can be found on page
44 of the appendix.]
Chairman Cleaver. Thank you very much.
Mr. Selim, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF GEORGE SELIM, SENIOR VICE PRESIDENT FOR NATIONAL
PROGRAMS, ANTI-DEFAMATION LEAGUE (ADL)
Mr. Selim. Chairman Cleaver, Ranking Member Hill,
Chairwoman Waters, thank you for this opportunity to present
before the subcommittee this morning. As stated, my name is
George Selim, and I currently serve as the senior vice
president for national programs at the ADL.
For decades, ADL has fought against anti-Semitism and
bigotry in all forms by exposing extremist groups and
individuals who spread hate and incite violence. Today, ADL is
the foremost nongovernmental authority on domestic terrorism,
extremism, hate groups, and hate crimes. ADL sits at the nexus
of helping secure our communities from hate and extremism,
protecting civil liberties, and advocating for change.
I have served in multiple roles in our government's
national security apparatus at the Departments of Justice and
Homeland Security, and at the White House on the National
Security Council staff. Today, I oversee the efforts at ADL to
investigate and expose extremism across the ideological
spectrum.
The threat of domestic extremism in the United States today
is severe and urgent. In 2018, domestic extremists killed at
least 50 people, a sharp increase from the 37 murders
documented in calendar year 2017. Recent tragedies have struck
in the form of attacks against Jewish worshippers inside a
synagogue in Pittsburgh, and against the Latinx community at a
Walmart in El Paso, Texas.
We all must come together to comprehensively develop new
approaches to keep our communities safe. While the financing of
domestic terror organizations is much smaller than
international terrorism, with organizations using inexpensive
methods, cutting off their resources should nevertheless be a
top priority.
Domestic extremists, such as white supremacists, may use
funding for organizational operations, attacks, or for more
indirect threats, such as propaganda that can motivate others
to commit acts of violence.
Domestic extremists typically fund their operations through
a range of measures, including self-funding and using their own
finances, a variety of criminal activities, bartering and other
in-kind relationships, and other methods that they apply, such
as direct contributions from other individuals, crowdfunding,
advertisements, and the proceeds of merchandise sales, and,
lastly, anonymized transfers and transactions such as
cryptocurrency.
We urge companies to independently act to prevent
extremists from using their services to bring harm to our
communities. Research supported by Congress can help companies
determine the best way to address today's challenge.
Some of the promising practices for the financial industry
include crafting more effective terms of service; improving
reporting mechanisms; maximizing transparency; ensuring
appropriate training for trust and safety teams; collaborating
across industry, including with civil society; and putting
appropriate limitations on actions to protect civil liberties
and prevent discrimination.
We look to you in this committee to use your authority to
support cutting off financial flows to mitigate extremist
threats. We ask you to support research on the threat of
domestic terrorist financing and what works to counter it. The
FBI and the Department of Justice should prioritize their
efforts and transparently share their view of what the domestic
threat picture is, including financing and terrorism generally.
There are a range of steps Congress can take to help
counter domestic terrorism threats, some of which are ready for
your immediate action.
First and foremost, we implore you to use every opportunity
to speak out loudly against all forms of hate.
Second, we need the Executive Branch to be held to a higher
standard of transparency on domestic terrorism issues, and to
further examine options under current law, such as whether
overseas white supremacist groups meet the criteria to be
designated as foreign terrorist organizations, or FTOs.
Third, we urge Congress to immediately pass the Domestic
Terrorism Prevention Act, pass the Jabara-Heyer NO HATE Act,
and increase funding for the Nonprofit Security Grant Program
and the DHS Office of Targeted Violence and Terrorism
Prevention.
And, finally, in light of the lack of a prosecutable
domestic terrorism charge, Congress should examine whether a
rights-protecting domestic criminal charge is, in fact,
necessary.
Government cannot address today's threats alone, and we
need whole-of-society approaches to today's challenges. And
financial services firms, technology companies, and other
members of the private sector should be urged to improve how
they can address harmful content on their platforms.
Thank you for this opportunity to present before you today.
[The prepared statement of Mr. Selim can be found on page
80 of the appendix.]
Chairman Cleaver. Thank you.
Ms. Miller, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF RENA S. MILLER, SPECIALIST IN FINANCIAL ECONOMICS,
CONGRESSIONAL RESEARCH SERVICE (CRS)
Ms. Miller. Thank you.
Chairman Cleaver, Ranking Member Hill, Chairwoman Waters,
and members of the subcommittee, thank you for the opportunity
to testify today. My name is Rena Miller, and I am a specialist
in financial economics at the Congressional Research Service.
Today, I will discuss the regulatory tools on which our
counterterrorism financing system relies, as well as ways in
which these existing tools are challenged to address domestic
terrorism. I will also touch upon changing technologies and new
proposals.
I would note that CRS is nonpartisan and does not advocate
for any particular policies or proposals.
The existing U.S. regulatory regime to combat terrorism
financing was not set up with the challenges of today's
domestic terrorism in mind. The existing regime draws heavily
upon the Bank Secrecy Act of 1970 (BSA), and the USA PATRIOT
Act, passed in the wake of 9/11.
Their key requirements include record-keeping and reporting
for financial institutions, which I will call ``banks,'' and
due diligence on customers opening accounts, as well as on
terrorism designations. These requirements can be powerful
tools to track foreign terrorists, but they may be less
relevant for flagging a potential domestic terror attack in
advance, particularly for small-scale attacks that may not
require large sums of money, such as those involving retail,
firearms, or a rented car.
Another pillar of our counterterrorism financing regime, or
CFT regime, has been the designations of foreign terrorist
organizations and the freezing of their assets. But such
designations apply only to the financing of terrorists abroad,
not to domestic groups. This may reflect First Amendment
concerns.
Although there is very little public information, domestic
terrorists appear to require relatively limited funds to
finance their operations, may rely on crowdfunding, and may be
harder for banks to screen--assuming they use banks--absent
designations or other public information.
In sum, although the U.S. may have potent regulatory tools
against international terrorism, these may be harder to
leverage against domestic terrorism.
Current threats from domestic terrorism underscore these
challenges. In recent testimony, FBI Director Wray noted that
lone offenders represent the dominant trend for lethal domestic
terrorists and that, frequently, they act without a clear group
affiliation or guidance, making them challenging to identify,
investigate, and disrupt.
Bank Secrecy Act reports can provide valuable information
to law enforcement, particularly following such attacks, even
if their usefulness in flagging potential attacks is still
debated.
There is little in the way of public, systematic studies of
domestic terrorism financing. The Anti-Defamation League's
study provides one of the few relevant public sources. Their
study found that such groups tend to be poorly funded,
decentralized, to be early adopters of new technology, and to
often rely on crowdfunding and cryptocurrencies.
Evolving technology and use of new data sets may
potentially be employed to address these challenges as such
cross-cutting issues that span different areas of congressional
oversight may become more important. For example, access to
data provided on social media sites and payment platforms may
become relevant.
Some argue that expanding the data sources examined, such
as through automated text analysis of social media or
increasing the interoperability of systems that examine the
data, such as between government agencies, can help in
identifying domestic terrorists. Others, however, oppose an
expansion of monitoring or surveillance for domestic groups,
citing constitutional issues.
An approach Congress may choose to pursue is an
interdisciplinary, interagency study to examine the use of new
technologies in both the spread and financing of domestic
terrorism. Such a study may also be used to survey what data
sets exist, who has access to that data, and the potential uses
of such data.
Thank you very much.
[The prepared statement of Ms. Miller can be found on page
73 of the appendix.]
Chairman Cleaver. Thank you.
And Ms. McCord, you are recognized now for 5 minutes to
give an oral presentation of your testimony.
STATEMENT OF MARY B. MCCORD, LEGAL DIRECTOR, INSTITUTE FOR
CONSTITUTIONAL ADVOCACY AND PROTECTION, GEORGETOWN UNIVERSITY
LAW CENTER
Ms. McCord. Chairman Cleaver, Ranking Member Hill, and
distinguished members of the subcommittee, thank you for
inviting me to testify about some of the challenges of
investigating the financing of domestic terrorism and
extremism.
There are marked differences between the tools available to
investigate the financing of domestic terrorism and those
available to investigate international terrorism. This is
because the First Amendment protects the freedom of speech and
peaceful assembly of U.S. persons and organizations while
providing no such protections for foreign persons and
organizations.
Thus, U.S. law provides for the designation of foreign
terrorist organizations, like ISIS and al-Qaida, even if those
same organizations might engage in some nonterrorist activity
that would be protected by the First Amendment if they were
based here in the United States. A foreign terrorist, or FTO,
designation allows the United States to enforce criminal
statutes that prohibit providing material support or resources
to designated FTOs.
The material support statute provides a basis for law
enforcement and the intelligence community to open
investigations on suspicion that a person or entity may be
financing a foreign terrorist organization, regardless of the
purpose of the financing. In other words, even if a person
wants to fund only the ``humanitarian operations'' of an FTO,
it is prohibited.
The material support statute, therefore, drives U.S.
financial services providers to implement sophisticated risk
management protocols for detecting potential misuse of their
services for foreign terrorist financing.
By contrast, because of the rights protected by the First
Amendment, there is no comparable designation scheme for
domestic extremist organizations. Hateful speech, even if
abhorrent to the majority of the population, is protected by
the First Amendment, as is assembling with others who share the
same hateful views.
Unless an organization engages solely in unprotected
activity, such as committing crimes of violence, any
designation of a U.S. organization as a terrorist organization
would likely run afoul of the First Amendment. Thus, law
enforcement cannot open an investigation merely based on
suspicion that someone is providing financing to a U.S.-based
extremist group.
Moreover, the FBI is prohibited by its own internal rules
from opening investigations based purely on First Amendment
activity. To use investigative tools like undercover and sting
operations, sometimes criticized as overly aggressive but
important in any crime prevention program, the FBI must have
reason to believe that a crime is being or may be committed.
For the reasons just discussed, providing material support
for a designated terrorist organization is not an available
option for opening an investigation into the financing of
domestic extremist organizations, but there is another gap in
our criminal laws that impacts terrorism investigations.
Currently, there is no Federal law prohibiting what is commonly
thought of as domestic terrorism when committed with a firearm,
a knife, or a vehicle, all of which have been used in recent
domestic terrorist attacks in the U.S., when that crime is not
connected to a foreign terrorist organization or committed
against a U.S. official or U.S. Government property.
Likewise, there is no Federal criminal terrorism
prohibition on stockpiling firearms with the intent to commit a
mass attack to further what we think of as domestic ideologies
like white supremacy, as long as it is unconnected to a foreign
terrorist organization. This gap has several important
implications.
First, it fails to accord moral equivalency to terrorist
acts regardless of the ideology motivating them. This leads to
a double standard that perpetuates the misconception that all
terrorism is Islamist extremist terrorism, even when the
lethality of domestic terrorism in the homeland exceeds that of
international terrorism.
Second, it results in inaccurate and inadequate data about
incidents of domestic terrorism that could be used to develop
measures to counter the threat.
Third, and most salient for today's hearing, it fails to
integrate domestic terrorism investigations into the U.S.
counterterrorism program, which is based on prevention of
terrorist acts rather than prosecutions after the fact.
Filling the gap in our terrorism statutes, as explained
more fully in the paper I provided as part of my written
testimony, when coupled with appropriate oversight to ensure
that resources are being used to combat the most significant
threats and not to infringe on First Amendment rights, would
provide more flexibility for law enforcement to open
investigations into those who may be acquiring or providing
resources, financial or otherwise, for potential terrorist
attacks.
Thank you again for the opportunity to address the
subcommittee.
[The prepared statement of Ms. McCord can be found on page
62 of the appendix.]
Chairman Cleaver. Thank you, Ms. McCord.
And I thank all of you for your testimony.
I now recognize myself for 5 minutes, and what I would like
to do is just follow up with you, Ms. McCord, because you
raised an issue that we have tried to address.
In August, right after the El Paso murders, I sent a letter
to Treasury Secretary Mnuchin, Secretary of State Pompeo, and
Attorney General Barr, asking that the Department of the
Treasury and the Department of State designate the El Paso
shooter as a specially designated global terrorist, consistent
with Executive Order 13224, and to develop a list of other
potential white nationalist individuals or organizations in an
attempt to prevent future attacks.
And what we have now, most of the things that we
concentrate on domestically are not domestic. We are still
responding to 9/11. Are we moving in the right direction? The
FBI still recognizes--and you mentioned it--the paramount
threats based on outside, international bad actors. What can we
do? You raised the issue, but do you have any specific
recommendations for us?
Ms. McCord. Thank you, Mr. Chairman.
I have recommended in writing, in public speaking that I
have done, and in consultations with Republicans and Democrats
in both the Senate and the House of Representatives--I have
suggested consideration of a domestic terrorism statute.
Now, I say, ``domestic terrorism,'' but really, I think the
distinctions between domestic and international terrorism have
pretty much fallen by the wayside for the reasons you just
indicated. We have seen domestic terrorist attacks here where
the attacker is referencing the Christchurch, New Zealand,
shooter, for example; people in the Netherlands and Western
Europe, Southeast Asia, et cetera, they all are referring to
each other. And we know that there are white nationalist and
white supremacist extremist groups operating and advocating
violence in other countries.
So, in addition to potentially creating a domestic
terrorism statute--and by that, I don't mean designation of
domestic organizations as terrorist organizations, because I do
think that presents very fraught First Amendment problems, as I
indicated in my oral statement--but criminalizing the actual
commission of violent acts when done with the intent to
intimidate or coerce a civilian population or influence the
policy of government through intimidation or coercion, which is
the current definition of terrorism in the U.S. Criminal Code.
That would drive more resources toward prevention and
investigations, using proactive techniques like undercover
operations, sting operations, et cetera. It would need to be
accompanied by oversight, reporting to Congress and to the
public, to ensure that those resources are not misused.
I think also worth considering, and particularly pertinent
to your question, is whether there are foreign organizations
that are white supremacist, white nationalist organizations
engaging in terrorism that would meet the criteria for
designation as a foreign terrorist organization. They just have
to be foreign, they have to engage in terrorist acts or have
the capability and intent to engage in terrorist acts, and
present a threat to U.S. nationals or the homeland. With a
designation of a foreign terrorist organization for a white
nationalist group, that group would become poison, just like
al-Qaida and ISIS.
Chairman Cleaver. Thank you very, very much.
Ms. Brooks, Mr. Selim, I don't have a lot of time left, but
the whole social media issue is chilling. On April 9th, we had
a hearing on hate crimes, and we had testimony from
representatives from Google, which owns YouTube. And it was
reported that YouTube was forced to turn off comments sections
of its live stream less than an hour into our hearing because
it was flooded with hate speech and racist comments.
The First Amendment issue is something we all in this
country respect, but when human life hangs in the balance, what
is the right balance to respect civil liberties but at the same
time preserve life?
Mr. Selim. Mr. Chairman, thank you for that question.
ADL believes very firmly in protecting the right of free
speech of any person or any group in the U.S., irrespective of
how abhorrent those beliefs can be. But there is indeed a line,
which we have seen crossed in recent years, where hate speech
leads to hate violence and violent extremism in the U.S., as
the other panelists here have documented extensively in their
testimonies.
Some of the measures that YouTube, in particular, and other
social media companies are starting to employ are a step in the
right direction, but it is our belief that more needs to be
done.
Chairman Cleaver. I am going to return to this if we have a
second round of questions.
Right now, I would like to recognize the gentleman from
Arkansas, the ranking member of the subcommittee, Mr. Hill.
Mr. Hill. Thank you, Mr. Chairman. And thanks again for
this hearing.
Ms. McCord, just following up on that theme, we obviously
have a statute against hate crimes in the United States, and it
includes planning one, in addition to committing one.
Is that a place where you would go to work on this
definition of domestic terror, effectively? Tell me the
distinctions there between committing a hate crime, which is
against Federal law, and the more complex conspiracy aspect of
domestic terrorism?
Ms. McCord. Certainly.
I look at this as a Venn diagram. There are certainly many
cases in which a crime that would qualify under the definition
in the Federal Criminal Code as domestic terrorism might also
be a hate crime.
For example, the Pittsburgh synagogue shooter at the Tree
of Life is now charged with multiple Federal hate crimes. I
would say that his crime also very well qualifies as domestic
terrorism under the U.S. Criminal Code, and that is, again, a
crime of violence that violates State or criminal law and that
is done to intimidate or coerce a civilian population or
influence a policy of government through intimidation or
coercion.
I know many people have said more rigorous enforcement of
our hate crime statutes and investigations predicated on those
statutes might be a gap-filler, and I do think it would be
helpful, and more resources should be put toward that.
But there are things that would not fall into the center of
that Venn diagram. Anarchist violence, sovereign citizen
violence, violence that is not based on race, religion, or one
of the other protected categories of hate crimes would fall
outside of that. And so, it is not a perfect fit.
It is also not a perfect fit just as a practical matter,
because the investigators, at least at the FBI, which is the
ones I am the most experienced with given my career at the
Department of Justice, those who are in the counterterrorism
branch are specialists in terrorism, and they are specialists
in the types of investigative techniques used to ferret out and
prevent terrorist acts. The investigators, wonderful
investigators, in the Hate Crimes Branch are, within the
Criminal Division, focused--and their own Assistant Director, I
believe, has testified to this effect--on justice after the
fact.
I understand that those two branches now have a joint task
force and are working more together, and I applaud that and I
think it is a great idea, but there are still some gaps that
remain.
Mr. Hill. Thank you.
And, Mr. Selim, you wanted to add to that, please?
Mr. Selim. I would only add to the last point that Ms.
McCord made, that this new joint fusion cell at the FBI--ADL
has worked closely with both sides, both the Counterterrorism
Division and the criminal side, which investigates hate crimes.
We have been a firm supporter of increased resources for
Federal Government enforcement of hate crimes laws, as well as
resources that would be devoted to the FBI and the Department
of Justice's ability to collect information and data related to
hate crimes and bias-based crimes.
There is a lot more that we believe, as part of the gaps
that Ms. McCord alluded to, that DOJ and FBI can be doing to
incentivize State and local municipalities for increased
reporting on hate crimes. The joint fusion cell that they have
established is a step in the right direction, but more
resources and data needs to be collected to help fill those
gaps.
Mr. Hill. Thank you.
Ms. Brooks, are there any States that have a domestic
terrorism statute in the United States?
Ms. Brooks. No, sir.
Mr. Hill. We do have State hate crime laws, I guess.
Ms. Brooks. That is correct.
And I agree with Ms. McCord and Mr. Selim. There is that
nexus, but it doesn't always, kind of, fit together. If we were
to provide consistent protections around hate crimes and the
investigation of hate crimes, then we could make headway.
I do note that the Department of Homeland Security did
disband a group of intelligence analysts who focused on
domestic terrorism. So, when we take steps back in that way, I
think we lose ground.
Mr. Hill. Okay. Thank you for that.
Mr. Chairman, frequently in Congress, we put things into
buckets, and sometimes people attempt to introduce bills in
their committee they serve on, the committee of jurisdiction,
when the problem really should be solved elsewhere, in another
committee, occasionally.
What is good about this, I think, is the illicit finance
aspect of it and calling attention to it, so I commend the
hearing, but I am concerned that we have to go to first
principles. Before we go around and try to get FinCEN involved
in something that they are probably not the right place for, we
ought to make sure that we look at this legal basis to deal
with the First Amendment, deal with the constitutionality, deal
with the definitional issues. Because it is really a domestic
issue. We need domestic laws that deal with it.
So I would hope Homeland Security and the FBI would make
recommendations on this so that we can get first principles
right before we deal with some of these derivative potential
issues. But this has been very helpful, and I look forward to
the continued discussion.
I yield back.
Chairman Cleaver. Thank you. I am on the House Committee on
Homeland Security, and I do think we probably ought to try to
do something jointly.
Mr. Hill. Yes.
Chairman Cleaver. I would like to recognize now the Chair
of the Full Committee, Chairwoman Waters, for 5 minutes.
Chairwoman Waters. Thank you so very much, Chairman
Cleaver.
This is a very important hearing, and President Trump has
consistently downplayed the threat of domestic terrorism,
especially the violence from the right-wing extremists among
his supporters. The Trump Administration has undermined the FBI
and other law enforcement agencies by cutting budgets,
eliminating staffers, and terminating programs to counter
radicalization. His Administration, I believe, is harming the
government's ability to respond to the growing threats from
domestic terrorism.
I would like to know what the panel thinks about this
President's denial that there is a threat from right-wing
extremists and how his thinking and his actions affected the
Federal Government's efforts to fight domestic terrorism.
Let me just start with asking for a response to this from
Ms. Brooks, who is the chief workforce transformation officer
for the Southern Poverty Law Center.
Ms. Brooks. Yes, ma'am. Thank you so much.
Certainly, President Trump's acceptance and encouragement
of this rhetoric around hate and the whole notion of a white
genocide, these ideas are--he picks them up and carries them
into the public square.
The Southern Poverty Law Center would say that one of the
biggest drivers in the increase in hate and hate activity is
this whole notion of shifting demographics. It plays into the
false notion and the false narrative that there is a white
genocide afoot. Unfortunately, President Trump, because that is
a large amount of his base, he doesn't counter that narrative.
The truth of the matter is that when he says that there are
fine people, when he says that there is no threat, there is no
real threat, they are troubled people or troubled individuals,
he is rejecting the facts, the research that shows that there
has been an increase in these hate attacks, not only
domestically but internationally as well.
We also know it is not helpful to have senior advisors
within your Administration who are seen as advancing a white
nationalist agenda.
Chairwoman Waters. Are you referring to Mr. Miller?
Ms. Brooks. I am referring--yes. As you know, the Southern
Poverty Law Center released a number of emails between Mr.
Miller and Breitbart News, which was known as the platform for
the alt-right.
I would remind us that, within this Administration, he
started out with Steve Bannon, who is also an avowed white
nationalist.
These kinds of relationships make it hard, I think, for the
President to take one stand or the other. You cannot hold
people close to you and then take a stand against their very
actions.
So, I would agree with you, it is problematic, it is
troublesome. We look to the Congress and the rest of our
leaders to hold the Administration to account.
Chairwoman Waters. Thank you.
Mr. Selim, do you agree with that?
Mr. Selim. Chairwoman Waters, thank you for that question,
and thank you for raising these issues. I would like to offer a
few concrete facts and statistics that I think can help address
this issue.
Over the course of the past decade, between calendar year
2009 and 2018, domestic extremists of all kinds killed nearly
430 people across the United States. Of those deaths, 73
percent were at the hands of right-wing extremists, such as
white supremacists, sovereign citizens, and militia adherents,
as a number of the members of this committee alluded to.
In 2018, there were nearly 50 deaths, which was the fourth-
deadliest year on record for domestic extremist-related
killings since 1970.
Ma'am, the conclusion of these statistics is that, when it
comes to white supremacist and white nationalist violence that
results in the loss of life in the United States, it is
impossible to blame one specific person; there are a range of
different factors that can be attributed to the loss of
American lives. But I would say that it is the responsibility
and it is incumbent on leaders at all levels--Federal, State,
and local--to stand up and forcefully speak out against bigotry
and intolerance of all forms.
Chairwoman Waters. Do you attribute to the President a lack
of leadership in this area?
Mr. Selim. I would say that any time an elected or
appointed official has the opportunity to condemn bigotry and
intolerance, they should do so.
Chairwoman Waters. I yield back the balance of my time.
Chairman Cleaver. Thank you, Chairwoman Waters.
I appreciated very much the Houston Texans being beaten
soundly by the Chiefs on this past Sunday. And now, I recognize
the gentleman from Texas, Mr. Williams.
Mr. Williams. Thank you, Mr. Chairman, and thank you, Mr.
Ranking Member, for this hearing.
I must say, I am disappointed that we are taking political
shots at our President when the threat of domestic terrorism is
real. And what we are doing is reducing the true impact, I
believe, of this hearing today. So, I am sorry that we are
going down that road.
With that being said, I am sure you all remember, just a
few years ago, the congressional baseball team, of which I was
a member, and I was one of six who were wounded, targeted by a
left-wing, deranged shooter who was specifically targeting the
Republican team because of his political beliefs. Also, Fort
Hood is in my district, and you are familiar with some of the
instances we have had at Fort Hood. So, this whole thing is
really personal with me. I may see it differently than others.
And with that being said, we, as Americans, must always be
able to speak about our differences and carry unwavering
beliefs without resorting to violence. So, I want to thank our
witnesses for coming here before us today to share your
expertise so that we can all ensure that the horrible instances
we are talking today about will never happen again.
Many of you have referenced in your testimonies that these
attacks often do not require many resources to carry out. As we
debate various proposals to try to stop these attacks before
they occur, we need to take into account the constitutional and
privacy concerns that would come if there was increased data
collection by our government or financial institutions. We, as
lawmakers, must debate these issues in full transparency, in
front of the American people, as we try to strike the correct
balance.
Make no mistake: Domestic terrorism is horrible in all of
its forms, and I am not calling for inaction. But we must make
sure that we understand all the repercussions before passing
new laws.
So, Ms. McCord, I would like to get your thoughts on what
you believe is the appropriate balance between free speech,
privacy, and security.
Ms. McCord. Thank you, Congressman. The Supreme Court has
been very clear that violence and incitement to imminent
violence is not protected by the First Amendment, and so I
think that is a good place to start when we talk about drawing
the lines. And I mentioned earlier in today's testimony that I
have advocated for Congress to study whether a terrorism
offense should be created that applies to all terrorism that
occurs here in the United States, regardless of its ideology.
And it would apply to crimes of violence that are criminal
under Federal or State law, so we are talking about murder,
kidnapping, assault, aggravated assault, assault with a
dangerous weapon, those types of serious crimes, when done with
the intention to intimidate or coerce a civilian population or
influence a policy of government through intimidation or
coercion. These are the acts that are being then investigated.
It is not First Amendment-protected activity that would be
being investigated, and so I think that draws that line.
Now, to get to the latter part of your question about, how
do we ensure privacy, as I have alluded to--and also just civil
rights and civil liberties, as I have alluded to before, I
think it is important, particularly when we are talking about
investigations here in the homeland of U.S. persons and U.S.
entities, that there be rigorous oversight to ensure that if
there were a new terrorism statute applicable to terrorism here
at home, again, it would be--regardless of ideology, it could
be Islamic extremist terrorism, white nationalist extremism,
animal rights extremism--that there is reporting of the
investigations opened by category on a sort of a yearly basis
so that Congress and the American people can ensure that these
tools are not being misused by law enforcement to go after
individuals whose views they disagree with.
Mr. Williams. Okay. Ms. Miller, on page 4 of your
testimony, you state that white supremacist groups tend to be
early adapters of new technologies to finance their activities.
Do you think the government procurement process operates at a
pace that hamstrings our agencies for monitoring and combating
these new funding streams as they come to market?
Ms. Miller. Congressman, thank you for that question. I am
an expert in financial regulation but not in government
procurement, but we do have experts at CRS who follow
government procurement issues. So if you would like me to
follow up on that, we could get a written answer back to you.
Mr. Williams. If you could, I would appreciate that.
Director Maples, in your testimony, you say the New Jersey
Suspicious Activity Reporting System collects and analyzes over
a thousand SARs per year. While this number seems manageable
for your team, FinCEN collectively receives well over 1 million
SARs every year. With such a high volume of suspicious activity
being reported, it seems like finding the credible threats
would be obscured amongst all the other data. Really quickly,
how can we better tailor our SARs regime to expose legitimate
threats?
Mr. Maples. First of all, New Jersey is unique in that my
agency coordinates it, and that goes to the Federal eGuardian
system, as I mentioned in my comment, but it goes down to the
local level. So that, I believe, can be replicated nationally
and supported. We have a smaller number, because we are not
dealing with the entire nation, we are dealing with New Jersey,
but the model we have as far as integrated in one central
location versus multiple fusion centers, multiple areas, just
the Federal side, we think our model is effective. And if that
can be replicated, we would be happy to partner and push that
narrative out there.
Mr. Williams. Thank you. I yield back.
Chairman Cleaver. Thank you.
The gentleman from New Jersey, Mr. Gottheimer, is now
recognized for 5 minutes.
Mr. Gottheimer. Thank you, Mr. Chairman.
Director Maples, I proposed bipartisan legislation called
the FASTER Act to help law enforcement freeze the assets of
ISIS-inspired lone wolf terrorists and other extremists on our
soil, to prevent these funds from being used to carry out
another attack by friends, family, or unknown accomplices
operating in a small cell. It also calls for a national
homegrown terrorism incident clearinghouse for law enforcement
to collect and share information on incidents to help
investigate and thwart future attacks.
Director, given your experience in New Jersey, do you
believe that establishing a national clearinghouse for
incidents of homegrown and domestic terrorism would help
Federal, State, and local governments, and the private sector
collect, share, and mine data to help identify patterns?
Mr. Maples. Thank you, Congressman. And I also want to
thank you for your comments at the beginning and your
partnership and leadership in this area. It has been vital to
our efforts in New Jersey.
Mr. Gottheimer. Thank you, sir.
Mr. Maples. I do think so. I think--and as I just mentioned
to the gentleman from Texas, we do think we have a great model.
And the more we can do a clearinghouse and remove stovepipes
and eliminate those threads that may not be being connected
amongst Federal, State, and local entities, the better and
safer we will be, obviously, mindful within the rights of the
citizenry and our visitors here, but we want to make sure that
we connect those dots, and doing something like a clearinghouse
is definitely an effective way to do that.
Mr. Gottheimer. Thank you. In recent years, your office has
determined that homegrown violent extremists inspired by
foreign terrorist organizations such as ISIS and al-Qaida, are
among the highest threat to New Jersey. In 2017, our State's
one-of-a-kind suspicious activity reporting, as we were just
talking about, the SARs program, helped lead to the arrest of a
New Jersey man planning to help build and detonate a pressure
cooker bomb in New York on behalf of ISIS. How does financial
information, do you think, such as suspicious wire transfers or
large cash transactions, play a part in NJSARs program and
other gaps when it comes to gathering this information that
could help lead to an arrest or prevent a potential terrorist
attack?
Mr. Maples. One, it is effective. It is a fantastic case
example, I think, of this happening and working in real time.
As far as the financial pieces go, we do get reports on those,
and as the gentleman from Texas also mentioned, there is a
large variety of financial suspicious activity reports
throughout the country and the world. I think we can better tie
into those and make clear articulations as why those are
suspicious activities, and that can help our State system in
making sure that we are getting that out there to local
financial institutions but then also our communities. That is
that connection point that may help us head off another
incident.
Mr. Gottheimer. Speaking of new trends and threats, from
2013 to 2017, terrorists carried out 25 known vehicle ramming
attacks in North America and Western Europe, resulting in 156
fatalities and 790 injuries. This includes the Halloween 2017
terrorist attack in lower Manhattan, which killed 8 people,
including my constituent, Darren Drake, of New Milford, New
Jersey. Since that tragic day, I have worked closely with the
Drake family to stop terror truck attacks and, recently, we
reintroduced the bipartisan Darren Drake Act, H.R. 4942, with
Congressman Fitzpatrick, to ensure rental companies report
suspicious behavior at every point of sale.
Director, do we see domestic and homegrown terrorists
increasingly resorting to terror trucks attacks in public
space, and how can we stay ahead of this particular threat?
Mr. Maples. It is a fantastic point, and yes, we do see a
direct nexus. We are starting to see domestic groups. And I
would also mention Mr. Selim and the work of the ADL, we
partner with the ADL and multiple groups throughout the
country, FBI, et cetera, in determining the nexus. We see a
clear nexus of domestic terrorism groups starting to look
towards foreign terrorism organizations for methodologies,
tactics and practices (TTPs), and what we are trying to
observe, mass gathering attacks, vehicle-borne attacks, using
knives. They are seeing that those are effective, and you are
starting to see an online presence in some other areas that we
know of that they are talking about using those tactics here in
America.
Mr. Gottheimer. Thank you.
Mr. Selim, I want to recognize the ADL for years of
sounding the alarm on the threat of violent anti-Semitism and
attacks on religious groups. We recently experienced, as you
know, the horrific act of domestic terrorism targeting the
Jewish committee in Jersey City. We know the assailants had
been planning for months, acquired supplies, and practiced at a
firing range in the days before the shooting. Do you believe
that there was any information that could have tipped off law
enforcement that the couple was planning an attack? How can we
find this sort of information out going forward?
Mr. Selim. Congressman, thank you for that question. And
thank you for acknowledging both the award and the close
cooperation between ADL and the New Jersey Homeland Security.
The way that radicalization and recruitment and mobilization
like we saw play out in Jersey City has been playing out in
recent years has continued to evolve. ADL believes that there
can be more done to prevent and intervene in the cycle of
radicalization and recruitment.
Fundamentally, better data drives better policy and better
security. So the ability for Federal, State, local, and
nongovernmental entities to collect information, to get better
reporting on suspicious activity and a range of other factors
can lead to more comprehensive security procedures. And also,
it is our belief that we need a comprehensive set of solutions
that includes mental health, social service, education
providers, not limited solely to law enforcement, but in
partnership and in concert with law enforcement prevention
services.
Mr. Gottheimer. Thank you. I yield back.
Mr. Selim. Thank you.
Chairman Cleaver. Thank you.
We have a unanimous consent request from Chairwoman Waters.
Chairwoman Waters. Thank you very much.
I ask unanimous consent to enter into the record a report
compiled by the Southern Poverty Law Center on Stephen Miller's
affinity for white nationalism as revealed in leaked emails.
Chairman Cleaver. Without objection, it is so ordered.
Chairwoman Waters. Thank you.
Chairman Cleaver. The gentleman from Virginia, Mr.
Riggleman, is recognized for 5 minutes.
Mr. Riggleman. Thank you, Mr. Chairman. And thanks to all
of you for being here.
Before I start my questions, my background was foreign
terrorism, kinetically and nonkinetically, for a long time. So
I have some questions on that, but also this hits close to my
heart.
Specifically, thank you, Representative Williams, for what
you said today. Any time you see political violence like that
is abhorrent, and the reason I can speak to that also is, in my
district, that is where Charlottesville is, and as you know,
August 12, 2017, was an awful day for my district with what
happened there. And for me, as far as white supremacists are
concerned, I really wish they would just go back to their
caves.
That is really pretty blunt and what I can say about that
specifically, because I got the chance to see ethnic cleansing
for real and ethnic violence during Operation Allied Force when
I was on the Romanian-Serbian border, and we were trying to
protect the Kosovars from ethnic cleansing there. So this is
something that gets me angry, and I think you see a lot of that
here, on our panel today.
Some of the things--you know, we are the National Security
Subcommittee in Financial Services, and in talking about
Ranking Member Hill's comments about other things that could be
done first, I actually have some specific questions about how
we can thwart domestic terrorism and homegrown violent
extremist attacks, but it is actually how we can help. I know
that is scary. We are Congress and we are here to help, but I
do want to ask these questions, as we go forward, on how we can
help.
And I had some incredible questions here, but listening
to--and, Mr. Maples, talking about you and also the incredible
work that you are doing in New Jersey, and really, Josh, great
job. I think he already left. Where can we go? And I am going
to have a lot of questions here. When you are talking about
gaps in enforcement--and I want to talk illicit finance with
Ms. McCord also and Mr. Selim and Ms. Brooks.
But as far as gaps, when you are talking steganography,
when you are talking all the things you are doing with
cryptocurrency utilization, gaining command and control, social
media radicalization, and the TTP similarities are--tactics,
techniques, and procedures, similarities between domestic
terrorists and foreign terrorists organizations, which I really
would love to have a talk with you about that one day, but also
social network analysis and pattern analysis.
When you are talking about what you are doing for that
specifically, where are the gaps that you are seeing even in
fusion center types of activities when you are looking at
targeting, when you are looking at intelligence analysis? Is
there something that Congress could be doing better with
resources or information sharing, title authority information
sharing? Where do you see those roadblocks? And is there
something specific we could do on the Financial Services
Committee to help you in trying to get through those
obstructions?
Mr. Maples. Thank you, Congressman. Ms. McCord, I think,
hit it exactly on the head regarding the ties with the
financing aspect of it. When financial systems are used to fund
these terrorist activities, right now, largely, certainly by
Federal statute, they are seen as criminal, and they are
independent of the acts, potentially. I think a tie between
those, when you have--whether it be material support, whatever
you want to call that side, bridging that gap, and when you
have used illicit funding streams, all the ones that we have
listed, every one up on stage and the schemes that are used
there, and it ends up resulting in a violent act or in a way
that we can prevent that violent act from occurring when we
find out about a financial tie, it should be treated as
terrorism, we believe.
Mr. Riggleman. Yes.
Mr. Maples. I think from that perspective, the support--and
I think what every speaker has talked about in getting your
support on that side would be huge for us.
Mr. Riggleman. And that is what I want to do. Ms. McCord,
and we can go back to Mr. Maples, too, I want to ask this
question because there are experts up here, and everybody might
have something to say on this. Do you see a rise in
cryptocurrency utilization over, say, fiat currency? Are you
seeing something, based on, say, goodness, the way to transfer
money? And I did some steganography. Are you seeing a rise in
cryptocurrency utilization as something that we don't have the
place to resource, or do we need to resource that, or do you
see that that is a huge limiting factor, or a LIMFAC, for law
enforcement right now?
Ms. McCord. I don't have good data on the extent to which
domestic extremists are using cryptocurrency. It is not my area
of expertise. I think it is something that definitely needs
study.
If I could answer your question about another gap--
Mr. Riggleman. Yes.
Ms. McCord. --very quickly, because I know time is short. I
also think we need more government to government sharing of
information.
Mr. Riggleman. Yes, ma'am.
Ms. McCord. As we discussed, this is not just a domestic
problem. And NCTC, for example, historically has shared only
sort of international terrorism information and not this type
of information. And that could help not only ferret out the
tactics and plans and plotting but also financing.
Mr. Riggleman. A loaded question about NCTC, because I have
worked with them also. Do you see that they don't have the
resources for domestic terrorism information sharing or do you
actually see government gaps or actually authority issues with
sharing that information across law enforcement agencies?
Ms. McCord. I know that they have recently, through their
lawyers, done their own sort of review of their authorities and
have concluded that they can move into this space. I haven't
done my own separate analysis of that, and I believe that the
director late last year announced that they were going to be
trying to develop protocols for sharing more information with
respect to threats other than your typical foreign terrorist
organization threats.
And I can't answer the resource question. You would need to
ask that of NCTC directly, but I think it is a very good
development if we start sharing more information government to
government and then within government, Federal down to State to
local on domestic threats.
I was down in southern New Mexico last spring and meeting
with local officials there about issues happening on the border
where completely unlawful private militias were unlawfully
detaining migrants at the border. And I was talking to their
local sheriffs, police departments, et cetera, and they said,
``I get a briefing every day about what is happening in Yemen,
but I don't know what is happening 2 miles away at the
border.''
Mr. Riggleman. Thank you. My time is up. I want to help all
of you all with the stovepipes. I love breaking stovepipes
apart and crushing them. So, thank you very much, and I yield
back.
Chairman Cleaver. Thank you.
The gentlewoman from Virginia, Ms. Wexton, is recognized
for 5 minutes.
Ms. Wexton. Thank you, Mr. Chairman. And thank you to the
witnesses for appearing before us today and for all the great
work that you are doing in this area.
As most of you have already pointed out, domestic
terrorists have been responsible for more murders in the United
States than have international terrorists in recent years. The
FBI released a report in November that looked at lone wolf or
lone offender terror attacks from 1972 to 2015, and found that
firearms were by far the most common weapon used in such
attacks, followed by explosives. Nearly 70 percent of the
firearms used in those attacks were legally purchased.
Now, many of you brought up the shootings in El Paso where
the shooter purchased an assault weapon online from Romania and
thousands of rounds of ammunition from Russia, which he was
able to pick up at a local gun store. The New York Times did
some reporting on the financing of these attacks and found that
in 8 of the last 13 mass shootings in which more than 10 people
were murdered, the murderers, in most cases, relied upon credit
cards in order to amass their arsenals.
The attacker in Las Vegas spent nearly $95,000 on firearms
in just the year leading up to the attack, almost exclusively
with credit cards. The Pulse nightclub shooter opened 6 new
credit card accounts over 8 months and spent over $26,000 on
firearms and ammunition in the 12 days prior to the shooting.
Mr. Selim and whomever else can answer this on the panel,
can law enforcement generally and Treasury and FinCEN
specifically do more to detect and disrupt these types of
attacks?
Mr. Selim. Ma'am, thank you for your question. And it is a
critical issue that I think goes back to a number of issues
that the panelists here have brought up specifically related to
law enforcement information sharing and tips and tools between
private industry and financial institutions.
To specifically answer your question, yes, we believe more
can be done. The illustrations that you just described with Las
Vegas, El Paso and others, there can be more information
sharing, gap analysis. There can be more transparency reporting
as well as training for trust and safety teams at financial
institutions that may see abnormalities in purchases of
firearms or bulk purchases of ammunition, et cetera.
We think that there are a number of steps, which I have
outlined in my written testimony, which can be taken to
strengthen the relationship to prevent, God forbid, another
type of attack like the ones you just described.
Ms. Wexton. Does anyone else wish to chime in on that or
opine about what can be done?
Ms. Brooks. I would add that the banking institutions, I
would hope that they would also kind of monitor large purchases
like that. It was fascinating the way you laid out, $95,000,
$96,000, I believe you said. That should set off some check,
some alarm. It is just very interesting.
Ms. Wexton. Speaking of the data that would need to be
collected and the parties that would need to be involved in
such reporting, it is not exclusively the banks, although they
are the ones who are the holders of those credit cards. That
would also require buy in and sharing of data from the
retailers.
Ms. Miller, are you aware of any gaps that exist in that
reporting from the retailer side of things?
Ms. Miller. Let me just say, stepping back a moment, the
issue has received a lot of attention in the press, in The Wall
Street Journal, The New York Times, and some Washington Post
reports about the role of credit cards in financing some of
these mass shootings.
In terms of the data and standards that apply, there is a
voluntary standard within the credit card industry called the
PCCI standards. And it is not currently clear, at least to me,
whether and to what degree financial institutions have access
to the types of data that retail merchants obtain, so I think
that question certainly remains.
Ms. Wexton. So retailers don't necessarily automatically
disclose these purchases to banks in a way that they would be
able to gather that information and report it were they
required to do so?
Ms. Miller. My understanding is that financial institutions
that provide credit cards to merchants, I believe that they say
they don't, as a normal course of business, get that
information. I think the question would probably go to the
payment card industry for more detail.
Ms. Wexton. Thank you.
Now, given the sophistication of AI and a lot of the
existing programs that we already have in place to combat money
laundering and other illicit financial activity, it is clear to
me that we can do more using financial intelligence to
intervene in these kinds of attacks and hopefully be proactive
and stop them from happening before they take place. Thank you.
And with that, I yield back the remainder of my time.
Chairman Cleaver. The gentleman from Tennessee, Mr. Rose,
is recognized for 5 minutes.
Mr. Rose. Thank you, Chairman Cleaver. And thanks to the
panel for being here today to discuss this important issue of
homegrown radicalization and terrorism finance.
To tackle domestic terrorism more effectively, many experts
say the United States needs increased cooperation and
collaboration among all law enforcement, the Department of
Homeland Security and other agencies.
Mr. Maples, how would you describe information sharing
between government agencies today?
Mr. Maples. Thank you for the question, Congressman. I can
only speak for New Jersey and my optic in New Jersey, but I can
tell you that our information sharing is unique in New Jersey
in that we are directly tied and integrated from Federal,
State, and local levels. We are proud of that in New Jersey,
and we do believe it is working effectively.
One area, and it gets to a couple of the questions that
have come about, is in the technology behind it. And some of
the sharing that we are hearing about from the financial
sector, I think we can do better at that. There are a lot of
tools, there are a lot of resources available on the Federal
side. I know I mentioned that I worked in charge of
cybersecurity in New Jersey. For example, JPMorgan Chase spends
about $775 million a year on cybersecurity.
I think there can be better ties into some of those
networks, resources, and tools, and that will promote
information sharing in a way that hasn't been done before
specifically to finance, and I think that can be more
effective.
Mr. Rose. Are there barriers that need to be addressed,
that you are aware of?
Mr. Maples. Right now, I don't know that there is a direct
tie into those financing pieces. It is really tied around
physical security, critical infrastructure security, but on the
physical side, and there is a gap there that I think we can
address together. And it has really been highlighted, I think,
by the panelists, and that can be an area where we would see an
increase in threat prevention and threat detection.
Mr. Rose. Are there currently instances where private
entities such as banks proactively share information, in your
experience?
Mr. Maples. There are, and I don't want to speak on behalf
of the FBI, but they do have a program that is helping with
that. In the State of New Jersey, we are working towards that,
and we have a great infrastructure program that my agency runs
where there are mandatory tie-ins. But again, it has largely
been based in the physical threat realm up until this point.
And what we are seeing with finance is it is not just the
technology but also the money transfers, et cetera, and I think
that is an area where we can expand. But we are going to need a
little tighter definition of that, I think, from the Federal
side to get the funding tied to that and additional funding.
Mr. Rose. One of the bills before us today is H.R. 5132,
which would require FinCEN to issue an advisory about how
homegrown violent extremists and other domestic terrorists
obtain firearms. I have some very serious concerns about this
bill. First, the bill requires FinCEN to define various terms,
including firearm accessory, homegrown violent extremist, lone
wolf, and lone actor.
Ms. McCord, have these terms already been defined by other
agencies such as the FBI, DOJ, DHS or others? And what would
the benefit of FinCEN developing its own definitions be, in
your estimation?
Ms. McCord. Some of those terms are defined in current
criminal statutes, like firearms and accessories. Others are
terms of art used by FBI and DOJ for their own internal
purposes. I would have to look at each term to see whether
there were already definitions in the code.
I think as a matter of avoiding confusion, when there are
already preexisting definitions in the U.S. Code for a term,
that is probably the one you want to turn to when you are
looking at new legislation. But I do think there is certainly
value to collecting information related to firearms purchases
and firearms accessory purchases.
Taking my experience prosecuting international terrorism
for several years, oftentimes when we are talking about
terrorist acts occurring here in the United States, these
involved acquiring firearms for use in those attacks. And many
operations that the FBI undertook, investigative undercover
operations, involved engaging online in an undercover capacity
with individuals who were seeking to acquire firearms in
particular for use in terrorist attacks.
Mr. Rose. Thank you. I just want to say as kind of
reiterating my concern about 5132 and coming from a background
with the private banking industry, financial institutions, I am
deeply concerned that we continue to call on private sector
players to, at their expense, which, of course, ultimately is
at the consumers' expense, provide information and conduct law
enforcement activity in gathering information without really
any consideration for the cost that it imposes on those
institutions. And so, that adds to my concern. Thank you.
And with that, I yield back.
Chairman Cleaver. Thank you.
The gentleman from California, Mr. Vargas, is now
recognized for 5 minutes.
Mr. Vargas. Thank you very much, Mr. Chairman, and thank
you, Mr. Ranking Member, for bringing this forward. I think it
is very important to talk about it and try to find solutions. I
also want to appreciate what Mr. Riggleman said, the issue of
ethnic cleansing, because we do see in other societies and
other countries what happens when you have extremism. It runs
afoul.
For example, we were very fortunate, my family, in being
able to adopt a Muslim family from Kosovo. They lived with us
for 2 years because of ethnic cleansing, a beautiful family who
never caused anyone any harm, but again, they were driven from
their property, from their home, simply because they were
Muslim, by the Christians who didn't want Muslims in their
area. And again, they lived with us for 2 years. I think Bahim,
the husband, is like a brother to me now, and certainly, his
girls see me as an uncle. And it has been a wonderful thing,
but it is terrible how it began.
And so this is something, again, that I think we have to
take very seriously. And I think normally, in our country, we
are doing actually a pretty good job with diversity. Most of us
like each other. In fact, most of us love each other and get
along pretty well. I have to say that I was at Mass this past
Sunday and I looked around and saw how diverse--I am from San
Diego--we were, different races, ethnicities, cultures. And I
think we do a pretty good job.
However, I do think that there is an uptick at the moment
of violent extremism. I think the numbers point it out, as we
were talking about today, and then how do we address that in a
way that doesn't violate our civil rights? One of the beautiful
things about our country is we do have freedom of speech. And,
in fact, some of the views of the minority over the years have
become now the views of the majority, and some of the views
that we really cherish, for example, all men are created equal,
we had to kind of spell that one out a little bit to mean not
just white men with property, but also women and everybody
else. We are all created equal.
But I do see an upswing. And one of the things that we
haven't talked about too much today that concerns me is the
issue of cryptocurrency and how monies could be used without
anybody following them. I think we have done a good job of
talking about everything else, the gaps, but we haven't talked
much about that.
Director, I would like to ask you about cryptocurrency and
how it could be used. I know it is used certainly in foreign
extremism and terrorism, but what about domestic experience?
Mr. Maples. Thank you, Congressman. We brought it up. We
felt it was important to bring it up. It is something we are
tracking as a potential trend in domestic terrorism because of
the traceability. It is encrypted. The technology behind it
makes it very difficult to track and interrupt those plots, the
money transfers, et cetera. As you all know on this committee,
the financial transfers end up being a huge tool that we have
in the law enforcement and Homeland Security sector at
intercepting and detecting, deterring, stopping these events
and incidents from happening.
It's very effective overseas at the traditional money
channels. But when you talk about bitcoin and you talk about
any of the online encrypted currencies, they become very
difficult to track as the transfer is happening and who is
doing it, where they are coming from. It can bounce off of all
the different--the tactics that are used online to mask the IP
addresses and the locations of the routers, et cetera. And
because of that, the domestic terrorism perpetrators in our
country are aware of that. They are seeing that from a foreign
side that they are using.
Again, I mentioned Facebook and Telegram, but there are
plenty of other mediums that we are aware of and are working
with our Federal partners to detect. They are seeing the
effectiveness of being able to mask those movements. And so as
cryptocurrency becomes more prevalent, and the technology
becomes easier to adapt and use, we do believe we will see more
use of that in the domestic terror realm.
Mr. Vargas. And that is one of my concerns. I do think that
it is going to grow as we see that our financial system becomes
more and more dependent on cryptocurrency. It is very small at
the moment, but again, it is a perfect medium to be able to
hide money moving around, as you just said. And I think it is
already used in human trafficking. We know that. And I think it
is also going to be used in domestic terrorism more and more,
unless we are able to do that.
I do have the same concerns, though, that some of my
colleagues have on the other side. I trust government
generally, but I don't want government to be so intrusive that
it is in everybody's lives at all the moments and all the time.
I think a lot of Americans are concerned about that also. How
do we do it in such a way that we are able to track this money,
but at the same time not be so involved in their lives,
Americans' lives, that they feel that it is government
intrusion that shouldn't be there?
Mr. Maples. I will start by saying that my agency and I
respect the rights of Americans, first and foremost. That
becomes part of our goal. We need to protect and defend our
homeland, but we need to be mindful of those rights that are
guaranteed to us in our Constitution, Bill of Rights, et
cetera. So, we will start out with that.
But the second piece is, we have to, one, put stringent
oversight in place. I am supportive of that, making sure that
the right people are aware of what is happening in a way that
represents our country and our citizenry.
And two, is the processes that we put in place to detect
those, to monitor and track the transfers and all those
online--the online presence we talked about. If we get the
processes right, and in conjunction with the right amount of
oversight, I think we can get to the right answer to protect
and defend our country.
Mr. Vargas. Thank you. My time has expired. Thank you very
much.
Chairman Cleaver. Thank you.
The gentleman from South Carolina, Mr. Timmons, is
recognized for 5 minutes.
Mr. Timmons. Thank you, Mr. Chairman. I would like to thank
all of you for taking the time to come and testify before us
today on this important issue.
As part of myy background, I was a prosecutor for 4 years.
I prosecuted domestic violence, white collar crime, and I had a
number of murders and armed robberies. I was a State senator
for 2 years, and I have spent a lot of time thinking about how
to make our society safer. I am convinced that one of the
biggest challenges we face right now is a lack of
interconnectivity and standardization of law enforcement.
So Federal, State, and local agencies, particularly in
South Carolina--and I will use domestic violence as an example.
When we pull the reports Statewide for domestic violence in
South Carolina, you will see arbitrary lines that are--there is
no socioeconomic, there is no justification for the difference
between one neighborhood versus another, other than the fact
that the incident reporting system is vastly different. The way
that law enforcement is operating is vastly different.
And I am just convinced that if we can get all the law
enforcement in this country, at all of the different levels to
work together in a meaningful way, to share information, to
standardize and integrate their efforts, we will take the
biggest step forward. And then, at that point, if we are able
to get additional information from financial institutions, we
will be in a better position.
But I think that this is a step ahead of where we need to
be focusing. I am of the opinion that the first thing we can do
to make us safer is something similar to after 9/11. We have
all of these law enforcement failures. After 9/11, we had
intelligence failures, so we created a new framework. We
encouraged them to share more. Whether that worked is another
conversation.
But I am convinced that we need to have that conversation
with law enforcement in this country, and it seems that New
Jersey is doing a good job at this. Could you talk more about
the way that you all have increased interconnectivity between
the various law enforcement agencies?
Mr. Maples. Sure, I can. Thank you, Congressman. And
Congressman Gottheimer knows this from being a champion of law
enforcement in New Jersey, certainly, so I am sure he can add
some color to my comments as well.
I will tell you this. I mentioned it was unique. In other
States, there are multiple fusion centers, oftentimes multiple
entities responsible for a variety of suspicious threats. You
named a lot of them just from the criminal side, but then
bridge it into the terrorism side.
In New Jersey, every single suspicious activity report that
is filed from the local level, be it from the community to law
enforcement, and then all the way up to the Federal side, so
including the FBI and our key Federal partners, all of that is
funneled into one location at our State's fusion center. It is
called the Regional Operations Intelligence Center (ROIC). My
detectives sit co-located with the New Jersey State Police, and
every single suspicious activity is filed in one system. And
when they hit the button that says, we have accepted it as a
suspicious report, it goes to every single entity that needs
it. So if it is a small local township, if it is the FBI, they
all will see it immediately. And if it becomes a Federal case,
the FBI can then pull it into the eGuardian system and make it
a Federal case. But it is all done in coordination, so there
are zero gaps between those two, and that is how we handle the
suspicious activity reporting.
But the other piece revolves around how we operate in blue
sky days, the good days, and that becomes very important. And
what I mean by that is, we all know each other. We are not
exchanging business cards in a command post. As was mentioned
in my biography, I worked for the CIA, not the Culinary
Institute of America, the other one, and I can tell you that
any successes that I was a part of in my career were because of
teamwork and partnership, and because we knew our counterparts,
again, foreigners and our key colleagues in America, we knew
them beforehand. We knew the plan, we knew what we were going
to talk about, what we were going to have to do objective-wise,
and we bring that same mindset to the table in New Jersey. I
think those two things combined really are effective.
Mr. Timmons. So you would say that the tragedy in Parkland,
the law enforcement failures in Parkland, would not be possible
in New Jersey because of the systems you all have in place?
Mr. Maples. I am reticent to say that something would be
impossible. It is a hypothetical. I can tell you that our
systems are in place are robust, and I am confident in their
ability to prevent one of these attacks from happening.
Mr. Timmons. And when you all were going from the previous
system which was, I would imagine, far less connected and far
less integrated, to this system, what were the challenges? Was
it money? Was it power, that all of the different law
enforcement agencies don't want to give up their area?
Mr. Maples. Yes.
Mr. Timmons. What were the biggest challenges to
transition?
Mr. Maples. I think you just hit it right on the head. It
becomes a political equation of people and ownership of
information, the information sharing, et cetera, and those
stovepipes can be very difficult to break down. The
personalities got in place, I think, at the right time in New
Jersey, and have continued to be in place to help work and
guide our agencies--again, Federal, State, and local--together
to work towards that common goal.
And the money piece is huge. Again, it has been very
focused on specific acts of terrorism, physical threat. That is
where broadening out and getting more funding available towards
some of the other pieces, the online side, some of the
technology behind AI and the database network, et cetera. That
money can go further and be applied in a better way. But the
funding at the front end, while there, wasn't as coordinated. I
think we have really tightened that up over time and I look
forward to more.
Mr. Timmons. Thank you for sharing a success story.
And I yield back. Thank you, Mr. Chairman.
Mr. Maples. Thank you.
Chairman Cleaver. Thank you.
The gentleman from Connecticut, Mr. Himes, is recognized
for 5 minutes.
Mr. Himes. Thank you, Mr. Chairman.
I have just one question, and I apologize if you covered
this in your earlier testimony. I was at a different hearing.
My question is--I think I will direct it first to Ms. Miller.
The CRS report makes reference to the fact that domestic
terrorist financing is really fragmented and probably not very
large. But I am just wondering, are we seeing any indications
that any of these groups have access to resources in excess of
5 figures that would come from wealthy individuals, from
businesses, or perhaps from sources abroad?
Ms. Miller. Thank you for that question. First,
specifically for the CRS domestic terrorism report, I am not
the author of that, and the specific question to that, I will
route to that author. But I would like to say one of the key
studies that is public on financing of domestic terrorism was
done by the ADL.
Mr. Himes. Yes, I saw that. I was going to go to Mr. Selim
next. Yes, it is referenced in the report.
Ms. Miller. From the public information I have seen, the
study that they conducted said that there wasn't a lot of
evidence of wealthy benefactors, although there were a few
individual cases, which maybe you would like to elaborate on.
Mr. Himes. Mr. Selim, your organization wrote the report.
Do you want to add anything to that?
Mr. Selim. Congressman, thank you for your question. We
have done a lot of robust research and analytics on this, as
cited by Director Maples and others here on this panel. There
are four categories I would just point out to answer your
specific question. The majority of funding that we have seen
has, in fact, been self-funding with individuals' own finances
from their jobs, businesses, et cetera.
Director Maples had some excellent examples of criminal
activity, illicit criminal activity to finance extremism across
the ideological spectrum, as well as another key example that
he used was the bartering, the use of different types of cards,
gift cards, et cetera. And last, but not least, which is kind
of the crowd platform to fund this type of extremism.
Mr. Himes. Thank you. My question was more, are we seeing
capability or any of those sources capable of generating, just
to pick an arbitrary number, anything over, let's just say,
$100,000 in assets?
Mr. Selim. I would have to double-check. I don't believe we
have documented any such individual single contribution.
Mr. Himes. And do you feel like we have the capability,
through the banking monitoring systems and whatnot, that if all
of a sudden one of these capabilities developed--a dark
philanthropist wanted to inject $5 million into some group, or
all of a sudden, businesses around the country in some
networked way were providing cash, would we see that?
Mr. Selim. Sir, it is my assessment that the command and
control structure of extremist movements is extremely limited,
and the websites and the entities that they have put out to
solicit funding have failed, not because financial institutions
have taken robust measures or those security procedures are in
place; they failed because their business models are
fundamentally bad and morally bankrupt. So, they are not able
to get the crowdsourcing and the funding and the push behind
it. Credit card companies won't finance them. They can't link
to PayPal and other sites, so their business models are really
bad. In kind of a dark web covert scenario that you are
alluding to, if there is a cash injection, I believe that could
be a significant threat stream, but we have yet to see that to
date.
Mr. Himes. Yes. It sort of feels like for all the reasons
you are outlining that some organized financing structure would
be hard to build, but it is not impossible that somebody
internationally, individual or a sovereign, acting covertly or,
again, some maligned philanthropist might decide to do it
domestically. But we are not seeing that right now?
Mr. Selim. Not to my knowledge.
Ms. Brooks. May I add something?
Mr. Himes. Yes, of course.
Ms. Brooks. The Southern Poverty Law Center is beginning to
look at donor advised funds which, from our initial analysis,
is showing that that very thing is happening. A report showed
that $11 million went to 34 different organizations that the
Center identifies as hate groups. Now, they may not be the
domestic terrorist groups, they may not be the people on the
ground--
Mr. Himes. I'm sorry, did you say $11 million?
Ms. Brooks. That is correct.
Mr. Himes. From a single source?
Ms. Brooks. Between 2014 and 2017 to specific donor-advised
funds, charitable contributions. So when you asked your
question, could there be a philanthropist who is seeking to
fund a particular maybe ideology as opposed to a specific group
on the ground, that is happening with the VDare Foundation.
VDare is a quite popular white nationalist group. We showed
that they received about $50,000 through these donor-advised
funds, because there is no--people are able to keep their
anonymity when they are contributing to these funds.
So there is a connection but not directly to what we could
call the domestic terrorist groups. But it is important to note
that they influence those people on the ground. If they can
give money to the more legitimate organizations who produce and
distribute the rhetoric, then it will get to domestic
terrorists on the ground.
Mr. Himes. Okay. Thanks very much. My time has expired.
Chairman Cleaver. Thank you.
The gentleman from Ohio, Mr. Gonzalez, is recognized for 5
minutes.
Mr. Gonzalez of Ohio. Thank you, Mr. Chairman. And thank
you to our panel for being here today.
First, I want to commend Mr. Selim on what you said at the
very end of your written testimony, which I think speaks to the
heart of this, which is that it requires a whole of society
approach, what we are talking about.
And additionally, Director Maples, I read your testimony. I
thought it is just the facts. You go through different
organizations, right and left, which I personally don't think
is a useful way of categorizing these people, but that just
says this is the extremist activity that is taking place in the
homeland writ large and providing that. Because extremism of
all kinds is on the rise, and that has been documented, and it
is something that we should be equally outraged about, whether
it happens on the left or the right. We should be equally
disgusted when El Paso happens as Dayton, which are two
different ideologies. And I think the fastest way to make sure
that we do absolutely nothing on this issue is to politicize
it, which I have seen, unfortunately, from some in this hearing
today.
I believe in my heart that the vast majority of my
colleagues on the other side of the aisle do not support, for
example, Antifa, or other organizations, or the comments from a
Bernie Sanders surrogate that showed up on the internet. I know
that. And I know that on this side, we are outraged over white
nationalism. And if we can't have that dialogue in concert, we
will not solve this. And so, I hope that we will be able to put
the partisanship aside and actually work on it.
When I look at the challenge, at least with respect to this
hearing, I think there is a definition question, and then there
is a technical question. The definition question is, what are
we going to qualify as domestic terror?
Ms. McCord, I want to start with you. You talked about
changing the definition and basically saying killing,
kidnapping, maiming, committing assault resulting in serious
bodily harm, et cetera, et cetera, with the intent to,
``intimidate or coerce the civilian population to influence the
policy of the government,'' et cetera. In your estimation, if
we made that change, I think that would certainly pick up some
of the white nationalist groups. Would that also pick up, for
example, inner-city gang violence, in your estimation?
Ms. McCord. First of all, thank you for your question. That
is actually not a change in the definition. That actually is
the definition of domestic terrorism in the U.S. Criminal Code.
It is just that there is not an offense connected to it.
Mr. Gonzalez of Ohio. Got it.
Ms. McCord. It is the same definition as the definition of
international terrorism in the criminal code. The difference is
that international terrorism either occurs abroad or occurs
here domestically, and this is where so much confusion arises,
but it is inspired by or on behalf of a foreign terrorist
organization, therefore, having international connections.
Mr. Gonzalez of Ohio. Got it. Let me ask it differently. I
think we are in agreement that some of these white nationalist
extremist groups should be in that bucket. Do you believe
inner-city gangs should be in that bucket as well?
Ms. McCord. It is not about a bucket of groups because the
definition does not designate groups or organizations. What we
are talking about as the definition and with the potential
domestic terrorism statute or just terrorism in the U.S.
statute is criminalizing activity, which may be of individuals
or it may be of groups.
If you are talking about an inner-city gang, we are not
talking about designating a group. If you are talking about
white nationalists--
Mr. Gonzalez of Ohio. The individuals, right.
Ms. McCord. If the individuals were committing their crimes
of violence with the intent to intimidate or coerce for
purposes of sending sort of a political or ideological message,
then maybe they would fit. That is not what we typically see
with inner-city gangs. In my experience as a prosecutor, it was
usually drug-related or something like that.
Mr. Gonzalez of Ohio. Right. But to intimidate or coerce a
civilian population.
Ms. McCord. Yes, or influence the policy of government
through intimidation or coercion.
Mr. Gonzalez of Ohio. Okay. Now, shifting to the technical
side, Ms. Miller, how could FinCEN leverage emerging
technologies to help us overcome the needle in the haystack
challenge, sort of the small-dollar fragmented financing
component? Do you see FinCEN as being able to accomplish that?
Ms. Miller. This is a difficult and challenging question
that I am sure FinCEN has grappled with. The challenge, as you
phrase it, the needle in the haystack, you are referring to
using financial intelligence prior to an attack to prevent one?
Mr. Gonzalez of Ohio. Yes. Basically, this notion that
there are a lot of people online and in our society who are
saying a lot of things, but the gap between the rhetoric and
the action, I think, is sort of what I am trying to get at,
where you go from, okay, this person has been talking about
different things online--and I am running out of time, so I
will follow up in writing, but that is what I am trying to get
at. How can we determine using technology tools, tech tools,
how to solve that? There are a lot of people talking. There is
a lot of anger and vitriol, but sort of that gap. How do we get
there so that we stop the action from actually occurring?
And I yield back.
Chairman Cleaver. Thank you.
The gentleman from Colorado, Mr. Perlmutter, is recognized
for 5 minutes.
Mr. Perlmutter. Thank you.
And Mr. Gonzalez and I are pretty much on the same page as
to left, right. I am in Colorado. We had an environmental group
that burned up a big restaurant at the top of Vail, called Two
Elk, a number of years ago in a way to try to send a message
about policy of our national forests. And obviously, just
looking up at this board, we have had anti-Semitic, we have had
murders related to abortion. We have had all sorts of things.
And I apologize for missing most of your testimony. I am
just curious in all of this whether the RICO statutes could
assist in any of this domestic terrorism type of policing, if
you will. And it may be a completely off-base kind of question,
but we used those certainly against motorcycle gangs back in
the day. And I don't know that we have used RICO too much for
anything lately, but I am just curious if anybody has a
response to that? And then, because I have missed so much, I am
going to let you all talk about anything you want that you
haven't been able to address through the questions. So does
anybody have an answer to RICO? Yes?
Ms. McCord. I do think RICO is an important tool that law
enforcement should be looking at using, and I am sure the FBI
is doing that. I think there are a couple of distinctions to
draw, though, between using those type of criminal tools versus
tools that are really directed at terrorism. And in part, it
goes back to something I did mention earlier, who are the
investigators and the prosecutors? The FBI, even before 9/11
but certainly since 9/11, has put tremendous resources into
studying the terrorist threat, primarily studying the
international terrorist threat, but more and more, due to the
needs, frankly, and the threat here in the homeland, studying
the domestic terrorist threat.
Terrorism is unique and it is different than other types of
criminal gangs or continuing criminal enterprises and those
that engage in serial acts of violence and other types of
crimes oftentimes for financial gain, which is really what RICO
has been directed to, predominantly.
The motive for a terrorist offense is not financial gain at
all. It is to intimidate and coerce. And so, the experts who
have spent their careers--
Mr. Perlmutter. Yes. But under RICO, does it have to be for
financial gain? Is that an element of the statute? I don't
think so.
Ms. McCord. No, it wouldn't be. I was really trying to make
a point about centering the investigations among those who are
the most equipped to deal with them and study them.
And I think the second point I wanted to make is something
we have glossed over a little bit, which is that there are
extremist groups here, but most of the acts of extremist
domestic violence motivated by domestic ideologies that we have
seen are not being perpetrated by people who say, I am a member
of X group, and maybe have never even done anything to suggest
they are a member of the group. They are very much inspired by
rhetoric out there, maybe inspired by other groups. Maybe they
visited their Facebook page. Maybe they have posted once or
twice, but mostly these are people who, on their own, consume
the rhetoric of hate groups and extremist groups and are
motivated and inspired by that, much like homeland violent
extremists (HVEs) sometimes are inspired by ISIS and al-Qaida
and foreign terrorist organizations; similar type of
inspiration usually over social media, and then they go out and
do something on their own.
Mr. Perlmutter. Okay. Mr. Selim?
Mr. Selim. Sir, if I may just weigh in, the point you made
on the map above us and here in the hearing room, this is
actually ADL's HEAT map. And HEAT in this context stands for
hatred, extremism, anti-Semitism, and terrorism. ADL has
pioneered this type of proprietary data collection and digital
visualization for partners at the Federal, State, local, public
sector, and private sector levels to use these type of tools to
inform, as Mr. Gonzalez pointed out, how communities can really
come together in order to combat the threat of extremism and
terrorism comprehensively.
Sir, in your specific question, you said, what can we do? I
would like to offer three specific recommendations. Having this
body closely examine and pass the Domestic Terrorism Prevention
Act, passing the Jabara-Heyer NO HATE Act, and significantly
increase funding for the Nonprofit Security Grant Program in
the DHS Office of Targeted Violence and Terrorism Prevention.
And I will yield to my co-panelists.
Mr. Maples. I will just add--
Mr. Perlmutter. You have 17 seconds.
Mr. Maples. Okay. I will be brief.
Just one quick point that I wanted to make is that ADL and
the work that they do is truly supportive of what we are doing
in New Jersey to get ahead of these incidents, and I want to
make sure I cite Mr. Selim's work personally, and then also
from an organizational perspective. Thank you.
Mr. Perlmutter. I yield back.
Chairman Cleaver. Thank you.
The gentleman from Kentucky, Mr. Barr, is recognized for 5
minutes.
Mr. Barr. Thank you, Mr. Chairman.
I appreciate my friend, Chairman Cleaver, for holding this
important hearing, and I appreciate my friend, Mr. Hill, as
ranking member, for allowing me to weigh in on this important
topic.
I want to focus on this recent wave of anti-Semitic
violence, the attacks in New York, New Jersey, and Pittsburgh
last year, and San Diego. I don't care if it is right-wing
extremism or left-wing extremism; this is extremism. It is
wrong. It is not, and shouldn't be, a partisan issue. It is
right versus wrong. And I am greatly concerned with the growing
network of nongovernmental organizations in the United States
and other western countries which, in recent years, have
engaged in an organized and well-coordinated boycott,
divestment, and sanctions, or BDS, campaign against Israel.
Mr. Selim, I know your organization is very focused on
this.
These NGOs often claim to stand for Middle East peace or
against Israel apartheid or for justice for Palestinians in so-
called occupied territory. But the reality is that many of
these NGOs have direct financial ties to designated terrorist
organizations, including Hamas and the Popular Front for the
Liberation of Palestine.
I want to draw your attention to Executive Order 13224,
which is a post-9/11 Executive Order that President Bush
signed. It directs the Treasury, State, and Justice Departments
to coordinate in order to cut off funding to designated
terrorist organizations, block their assets, and prohibit any
U.S. person or business from transacting with them.
The current list of specially designated nationals contains
thousands of individuals and entities that have ties to
terrorism in Israel and in the Middle East. There is evidence
that certain grassroots organizations based in the United
States may have financial ties to Hamas and other SDNs.
For example, the American Muslims for Palestine (AMP)
organization is headquartered in Palos Hills, Illinois, and
describes its mission as, ``supporting campus activism as well
as working in broad-based coalitions focused on BDS.''
According to testimony to Congress from a former Treasury
Department terrorism finance analyst, at least seven
individuals who work for or on behalf of AMP have worked for or
on behalf of organizations previously shut down or held civilly
liable in the United States for providing financial support to
Hamas. And AMP is a prominent financial backer of Students for
Justice in Palestine, a network of more than 100, ``pro-
Palestinian student groups across the U.S. which disseminate
anti-Israel propaganda, often laced with inflammatory, and at
times, combative rhetoric.'' That is from the Anti-Defamation
League.
Identifying and countering these types of groups through
available authorities under 13224 must be a high priority for
the Federal Government.
Ms. McCord, in your testimony, you discussed some of the
challenges with identifying and countering domestic extremist
organizations due to, among other things, the First Amendment.
How can the government do a better job of identifying and
countering domestic groups like the ones I just mentioned,
where there is evidence of financial ties to SDNs?
Ms. McCord. When you are talking about organizations like
Hamas, that is a designated foreign terrorist organization. And
if there are organizations or individuals here in the United
States that are providing material support or resources to
Hamas, that is a very easy investigation for the Bureau to open
and for Treasury and State to look into that, because that
would directly violate U.S. criminal law.
If we are talking about independent advocacy by U.S.-based
organizations that might support ideologies of foreign
terrorist organizations, if it is not directed or funded by a
foreign terrorist organization, that is a First Amendment right
because the Supreme Court has said so.
Mr. Barr. Sure. And I understand that. I am sensitive, and
I am an advocate of the First Amendment, as we all are. The
problem here is that there is documented evidence of financial
support from designated terrorist organizations to some of
these NGOs. And in July, Congressman Stivers and I sent a
letter to OFAC asking for a briefing on their process for
designating entities and how they use their authorities under
13224. And during that briefing, they made it very clear that
in addition to OFAC, the FBI plays an important role in
investigating domestic entities that may have ties to these
foreign terrorist organizations. We have sought a follow-up
briefing from the FBI to learn more about their procedures and
made numerous requests for information, and they have yet to
provide it.
The FBI has a lot of problems right now. And we know that
it is an important element of the construct of combating
financing for terrorist groups that the FBI investigate this,
so I am very disappointed that the FBI is not being responsive
to us and that they declined to participate in this hearing.
And we are going to continue to push the FBI to investigate
this.
I yield back, and I appreciate being able to participate in
this hearing.
Chairman Cleaver. Thank you.
The gentleman from California, Mr. Sherman, who is also the
Chair of our Subcommittee on Investor Protection,
Entrepreneurship, and Capital Markets, is now recognized for 5
minutes.
Mr. Sherman. Thank you.
I want to pick up on the comments of the gentleman from
Kentucky. A decade ago, I brought to the attention of the IRS
an organization who was advertising on their website that you
could get a tax deduction for giving money to Hamas. I still
don't think they have acted--well, I think they acted a few
years ago, but it took them many years.
But speaking of Hamas, if you go to a Hamas website, they
will instruct you as to how to make a donation using
cryptocurrency. And so I want to focus on cryptocurrency a
little bit, because if it works for Hamas, it will work for the
Nazis too.
I have criticized cryptocurrency in this room before. A few
of you are aware of that. And I have been deluged with all of
the argumentation of the fervent supporters of cryptocurrency.
And if you read it, it is clear that one of the big pluses they
have is that it weakens the U.S. Federal Government, evades the
U.S. Federal Government.
Mr. Zuckerberg was at that table just a couple of months
ago. He says that, when he creates a new cryptocurrency,
Facebook will follow the know-your-customer rules and the anti-
money-laundering rules, but then the paper published by his
company says, ``And then, we will have other business partners
who will allow for anonymous accounts.''
So if the Libra ever becomes an efficient currency, Mr.
Zuckerberg can say that he is not facilitating anonymous
accounts; he is just having his business partners do it as part
of a structure that he has created. And I would say that
anonymous accounts and Know-Your-Customer (KYC), there is no
way to square those two things.
On October 21st of last year, FinCEN Director Kenneth
Blanco gave remarks at a Georgetown University event where he
discussed cryptocurrency and illicit finance. During his
remarks, he indicated that those in the crypto businesses are
arguing that they are incapable of complying with FinCEN's
anti-money-laundering and know-your-customer rules and,
therefore, should be exempted.
I will ask the entire panel: Have you seen evidence of
domestic extremist organizations moving toward or exploring the
use of cryptocurrencies in order to disguise their financial
transactions?
Mr. Maples. I will begin by saying I did cite that in my
opening remarks and certainly in my written testimony in a
little more robust way. We have seen evidence of that. One
clear-cut example is the Charlottesville example that I cited.
There was a cryptocurrency exchange.
And we do see evidence that domestic terror groups are
realizing that foreign groups, like you mentioned, foreign
terrorism groups like Hamas, like you mentioned, have been
operating using Bitcoin due to the encryptions, due to the
difficulties in tracking those transactions. So, we are seeing
it.
Cryptocurrency, of course, is a small subset of the
American financial system, the world financial system.
Mr. Sherman. If I can interrupt, I am not sure that you
will ever be able to buy a ham sandwich for a Bitcoin, but
Facebook is a powerful organization. If they go with the Libra,
it will no longer be an inefficient system.
I also want to point out that we really have to focus on
preventing these organizations from getting military-style
weapons. We have seen a lot of terrorist attacks. They don't
involve an amount of money that is hard to get--they should--
but they involve weapons that should be impossible to get. And
while we have to turn off the finances to these organizations,
we also have to focus, or at least another committee has to
focus on that.
I am also concerned about the definition of what is a
terrorist group. This country could move radically to the right
or the left. In fact, I think it may be given that choice in
just a few months. It could move--we on the left think it is
going to move that way. It could move as far to the right of
Trump as Bernie is to the left of Trump.
Do the statutes allow a President to designate pro-choice
organizations or abortion providers as terrorists if they
declare that the unborn is somehow a group subject to
oppression? Are our statutes clear enough on that to prevent
that from happening no matter who is elected President?
Does anybody have a comment?
Ms. McCord?
Ms. McCord. Yes. Thank you.
Right now, there is no authority, statutory or otherwise,
for designating domestic organizations as terrorist
organizations. And as I indicated in my oral testimony, even if
such authority were provided, either through statute or through
Executive Order, I think it would run afoul of the First
Amendment in most circumstances.
Mr. Sherman. Thank you.
Mr. Cleaver. Thank you.
The gentleman from Massachusetts, Mr. Lynch, is recognized
for 5 minutes.
Mr. Lynch. Thank you very much, Chairman Cleaver, and I
appreciate the work that you have done on this issue. It is an
important issue, but it is tough to get at.
So, as the Chair of the Task Force on FinTech, and someone
who has worked with FinCEN in the past on terrorist financing,
we have a whole framework there where the KYC that we use in
the international context is also assisted by suspicious
transaction reports that are filed with FinCEN, cash
transaction reports that are filed with FinCEN. I think there
were 15.8 million CTRs filed by financial institutions in 2019
and 1.5 million suspicious activity reports.
FinCEN, in the past, has said that in order to find a
needle in a haystack, you need a haystack. So they get all this
data, and then they are able to dig through it.
We don't get nearly the volume of information on the
domestic side. I am trying to figure out how do we get at this,
in terms of trying to identify a prospective domestic
terrorist? We don't have a similar mechanism to do that, do we?
We don't ask local banks, even traditional banks--let's put
mobile banking aside for a minute. We don't even get that
information from our local banks, do we?
Mr. Selim. Sir, if I may?
Mr. Lynch. Yes.
Mr. Selim. Thank you for your question, Congressman.
I think there are a number of steps, to address your
question, that can lead up to reporting that eventually creates
a better ecosystem of data to prevent domestic terrorism and
extremism: improving reporting mechanisms; increasing
transparency; and enhancing the training for trust and safety
teams across financial institutions and financial service
platforms online.
These are the core building blocks to ensure that, if and
when reporting to regulatory or State and local law enforcement
is required, that that reporting is accurate and substantively
helpful.
Mr. Lynch. I see.
I am not saying we should go there in terms of vetting
domestic, U.S. citizens without probable cause or anything like
that in a fashion that would be intrusive. I am just trying to
get my arms around, how do we, for these low-dollar amounts and
with the emergence of mobile banking, which doesn't readily
acknowledge the existence of borders, how might we better
approach this problem from a domestic standpoint?
Are there other measures out there that you think might be
helpful, Ms. Miller? And we greatly appreciate the support that
Congress gets from CRS, we really do, the Congressional
Research Service. We all utilize your subject-matter experts on
a regular basis. We really do appreciate your great work.
But are there specific measures that you might suggest
Congress might take up in order to more accurately predict and
prevent something like this from emerging?
Ms. Miller. I am going to make two points. One, which I
will make first, is about the financial system writ large.
Mr. Lynch. Yes.
Ms. Miller. It is that the more transparency there is in
the financial system, the easier it can be for law enforcement,
FinCEN, intelligence agencies to track the financing of
individuals, whether it is international or domestic terrorists
or others.
There is an issue with legislation in this Congress, the
beneficial ownership bills that your committee worked with,
that does address, in a way you have chosen, the issue of
financial transparency in the system as a whole. The purpose of
it is to try, as I read it, to prevent illicit actors or others
from using legal entities to store money, move money, or hide
money under assumed names without any sort of identification
procedures about who really controls those.
Mr. Lynch. Yes.
Ms. Miller. It is possible that other prosecutors or law
enforcement officials might have something to say. There have
been views on both sides, concerns about privacy or cost. But,
again, that issue of financial transparency in the system writ
large is relevant here.
On the question of data and preventing the next attack, I
would say it is also important to think, first, what type of
data, what type of information is it that would be most useful,
and then, second, who in the current system has access to that
data and at what point in time?
It seems to me that, with changing technology, we are less
constrained if data itself is standardized. In looking at very
large amounts of data, the bigger question is, what type of
data is useful, who has access to that data, and when and how?
Mr. Lynch. That is great.
Mr. Chairman, thank you for your indulgence, and I yield
back.
Chairman Cleaver. Thank you.
I want to really, really express our appreciation to the
witnesses. You have been great, and we appreciate the
information you have given us.
The Chair notes that some Members may have additional
questions for this panel, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
I would also like to say that we are going to receive some
additional information from other religious organizations not
necessarily represented here, and judicatories.
The hearing is now adjourned, unless there is any critical
information that you can give us that we don't already have.
Thank you. We are adjourned.
[Whereupon, at 12:12 p.m., the hearing was adjourned.]
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