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Context of 'Late 1998: US Initiates New Effort to Stop Financing of Al-Qaeda, but to Little Effect'

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In 1994, Congress passes an anti-money-laundering law that requires unregulated financial services, like currency exchanges, check cashers, and the money brokers known in the Arab world as hawalas, to register with the government and report large and suspicious transfers of cash. However, proposed rules to implement the program are not written until 1997, and the regulations do not take effect until 2002. [Los Angeles Times, 10/15/2001] According to another account, the law is passed in 1993, but the rules are not published until 1999. Then the Bush administration orders a further delay, until June 2002. [New York Times, 9/20/2001] In late 1998, it will be determined that there is only one person in the US government with any expertise about hawalas, but he will be let go before 9/11 (see Late 1998).

Entity Tags: US Congress, Bush administration (43)

Timeline Tags: Complete 911 Timeline

President Clinton signs a classified presidential order “directing the Departments of Justice, State and Treasury, the National Security Council, the CIA, and other intelligence agencies to increase and integrate their efforts against international money laundering by terrorists and criminals.” The New York Times will later call this the first serious effort by the US government to track bin Laden’s businesses. However, according to the Times, “They failed.” William Wechsler, a National Security Council staff member during the Clinton administration, will say that the government agencies given the task suffered from “a lack of institutional knowledge, a lack of expertise… We could have been doing much more earlier. It didn’t happen.” [New York Times, 9/20/2001]

Entity Tags: National Security Council, William Wechsler, Osama bin Laden, US Department of Justice, US Department of the Treasury, Central Intelligence Agency, William Jefferson (“Bill”) Clinton, US Department of State

Timeline Tags: Complete 911 Timeline

Bombings of the Nairobi, Kenya, US embassy (left), and the Dar es Salaam, Tanzania, US embassy (right).Bombings of the Nairobi, Kenya, US embassy (left), and the Dar es Salaam, Tanzania, US embassy (right). [Source: Associated Press] (click image to enlarge)Two US embassies in Africa are bombed within minutes of each other. At 10:35, local time, a suicide car bomb attack in Nairobi, Kenya, kills 213 people, including 12 US nationals, and injures more than 4,500. Mohamed al-Owhali and someone known only as Azzam are the suicide bombers, but al-Owhali runs away at the last minute and survives. Four minutes later, a suicide car bomb attack in Dar es Salaam, Tanzania, kills 11 and injures 85. The attacks are blamed on al-Qaeda. Hamden Khalif Allah Awad is the suicide bomber there. [PBS Frontline, 2001; United States of America v. Usama Bin Laden, et al., Day 38, 5/2/2001] The Tanzania death toll is low because, remarkably, the attack takes place on a national holiday so the US embassy there is closed. [Miller, Stone, and Mitchell, 2002, pp. 195] The attack shows al-Qaeda has a capability for simultaneous attacks. The Tanzania bombing appears to have been a late addition, as one of the arrested bombers allegedly told US agents that it was added to the plot only about 10 days in advance. [United State of America v. Usama bin Laden, et al., Day 14, 3/7/2001] A third attack against the US embassy in Uganda does not take place due to a last minute delay (see August 7, 1998). [Associated Press, 9/25/1998] August 7, 1998, is the eighth anniversary of the arrival of US troops in Saudi Arabia, and some speculate that is the reason for the date of the bombings. [Gunaratna, 2003, pp. 46] In the 2002 book The Cell, reporters John Miller, Michael Stone, and Chris Miller will write, “What has become clear with time is that facets of the East Africa plot had been known beforehand to the FBI, the CIA, the State Department, and to Israeli and Kenyan intelligence services.… [N]o one can seriously argue that the horrors of August 7, 1998, couldn’t have been prevented.” They will also comment, “Inexplicable as the intelligence failure was, more baffling still was that al-Qaeda correctly presumed that a major attack could be carried out by a cell that US agents had already uncovered.” [Miller, Stone, and Mitchell, 2002, pp. 195, 206] After 9/11, it will come to light that three of the alleged hijackers, Khalid Almihdhar, Nawaf Alhazmi, and Salem Alhazmi, had some involvement in the bombings (see October 4, 2001, Late 1999, and 1993-1999) and that the US intelligence community was aware of this involvement by late 1999 (see December 15-31, 1999), if not before.

Entity Tags: Hamden Khalif Allah Awad, Mohamed al-Owhali, Salem Alhazmi, Khalid Almihdhar, Azzam, Al-Qaeda, Nawaf Alhazmi

Timeline Tags: Complete 911 Timeline

On August 20, 1998, President Clinton signs an Executive Order imposing sanctions against bin Laden and al-Qaeda. The order gives US officials the power to block accounts and impose sanctions on any government, organization, or person providing “material assistance” to al-Qaeda. Beginning in 1999, mid-level US officials travel to Saudi Arabia and a number of Persian Gulf countries seeking information about charities supporting al-Qaeda and attempting to put pressure of governments allowing such charities to operate (see June 1999). But these governments provide little to no assistance. The New York Times claims that by the end of 1999, “with the [US] embassy bombings receding into memory, the [Clinton] administration largely moved on. ‘These visits were not followed up by senior-level intervention by the State Department, or for that matter by Treasury, to those governments,’ [says] Stuart Eizenstadt, a Treasury official and a participant in the trips. ‘I think that was interpreted by those governments as meaning this was not the highest priority.’” William Wechsler, one US official involved in these efforts, will later claim, “We had only marginal successes.” He will cite the United Arab Emirates imposing money laundering laws for the first time in 1999 and efforts to ban flights by Ariana, the Afghan national airline (see November 14, 1999; January 19, 2001), as the main successes. Counterterrorism “tsar” Richard Clarke later notes that the Saudis promised information and support, but in the end gave little of either. He will claim that they “protested our focus on continuing contacts between Osama and his wealthy, influential family, who were supposed to have broken all ties with him years before. ‘How can we tell a mother not to call her son?’ they asked.” The New York Times concludes that by 9/11, “the assault on al-Qaeda’s finances had largely fallen by the wayside.” [New York Times, 9/20/2001; New York Times, 12/10/2001; Clarke, 2004, pp. 190-195]

Entity Tags: William Wechsler, William Jefferson (“Bill”) Clinton, Al-Qaeda, Saudi Arabia

Timeline Tags: Complete 911 Timeline

William Wechsler.William Wechsler. [Source: CAP]Shortly after the US embassy bombings in 1998 (see 10:35-10:39 a.m., August 7, 1998), the US launches a new interagency effort to track bin Laden’s finances. There had been a previous interagency effort in 1995 but it had fizzled (see October 21, 1995). Counterterrorism “tsar” Richard Clarke sets up a task force. He orders it to find out how much money bin Laden has, where it comes from, how it is distributed, and to stop it. Clarke appoints William Wechsler, a National Security Council staff member, to head the task force. The task force begins an investigation of bin Laden’s finances (see Late 1998). Clarke later writes that he and Wechsler “quickly [come] to the conclusion that the [US government] departments [are] generally doing a lousy job of tracking and disrupting international criminals’ financial networks and had done little or nothing against terrorist financing.” [New York Times, 9/20/2001; Clarke, 2004, pp. 190-191] Clarke will later claim there was only limited effort from within the US government to fight bin Laden’s financial network. He will assert that within weeks of setting up the interagency effort, it was determined that only one person in the US government, a lowly Treasury Department official, appeared to have any expertise about the hawala system, an informal and paperless money transfer system used by al-Qaeda that is popular with Muslim populations worldwide (see 1993-September 11, 2001). Clarke will later write that the “CIA knew little about the [hawala] system, but set about learning. FBI knew even less, and set about doing nothing.” The FBI claims there are no hawalas in the US, but Wechsler finds several in New York City using a simple Internet search. Clarke will say, “Despite our repeated requests over the following years, nobody from the FBI ever could answer even our most basic questions about the number, location, and activities of major hawalas in the US—much less taken action.” The efforts of other departments are not much better. The one Treasury official with some expertise about hawalas is eventually let go before 9/11. [Clarke, 2004, pp. 192-193] Efforts to pressure governments overseas also meet with little success (see August 20, 1998-1999).

Entity Tags: William Wechsler, Richard A. Clarke, Federal Bureau of Investigation, Osama bin Laden, Al-Qaeda, Central Intelligence Agency, US Department of the Treasury

Timeline Tags: Complete 911 Timeline

In October 2000, Congress authorizes a new unit within the Treasury Department called the Foreign Terrorist Asset Tracking Center. Its task is to blend the expertise of the Treasury Department, CIA, FBI, and NSA in tracking and disrupting the finances of US-designated terrorist groups. Similar efforts had been tried twice before and fizzled out (see October 21, 1995; Late 1998). However, the unit is still getting organized at the time of the 9/11 attacks. Spurred by the attacks, the unit gets up and running on September 14, 2001. A Treasury spokesperson cites the logistical difficulties of bringing together representatives from different agencies in explaining the delay. [Los Angeles Times, 10/15/2001]

Entity Tags: US Congress, Foreign Terrorist Asset Tracking Center, Central Intelligence Agency, National Security Agency, Federal Bureau of Investigation, US Department of the Treasury

Timeline Tags: Complete 911 Timeline

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