I Got Caught in the Feds’ Terror Finance Net

Tim Hamilton cover.

Tim Hamilton cover.


I went to Congo to write a comic book about a terror group — and ended up being labelled a terror supporter myself by the Treasury Department.

The bizarre tale of my graphic novel Army of God, the Lord’s Resistance Army in Congo and Treasury’s Office of Foreign Assets Control (OFAC) is a window inside a little-known counter-terrorism campaign that captures more than a few innocents in its wide net.

Nearly 12 years since the massive expansion of federal powers in the wake of the 9/11 attacks, OFAC’s collateral damage — myself included — is a reminder that defeating terrorists can come at the cost of our freedom.

It began two years ago. In the fall of 2010 I spent a month in the Democratic Republic of Congo reporting on the Lord’s Resistance Army, a brutal Ugandan rebel group that was chased from its homeland and has spent the last decade hiding out in the forests of eastern Congo. Led by charismatic madman Joseph Kony, the LRA pillages farming villages for supplies, kills or mutilates the adults and enslaves the children.

Washington has designated the LRA a terror group. And late last year Pres. Barack Obama ordered 100 U.S. Special Forces troops to Congo to help hunt Kony and his men.

Returning home from Africa, I penned a graphic novel based on my reporting — the latest in my series of nonfiction war comics. Edited by cartoonist Matt Bors and drawn by Tim Hamilton, Army of God debuted online early last year on the Dutch Website Cartoon Movement. A few months later book publisher Public Affairs acquired the paperback rights, aiming to release a much-expanded edition in March 2013. The book deal came with a cash advance. And that’s when the feds got involved.

In early December our agent wired Hamilton his share of the advance, but the money never reached the artist’s account. After a few weeks the agent made some calls. “He was told that the party holding the funds was the federal wire fraud unit which suspected that they were laundering funds for a terrorist organization,” Hamilton says.

OFAC clearly has that power. Founded in 1950, the unit enforced U.S. economic sanctions against embargoed nations such as Cuba and Iran. And 12 days after the 9/11 terror attacks, then-President George W. Bush signed Executive Order 13224, authorizing OFAC to enforce “economic sanctions on persons who commit, threaten to commit, or support certain acts of terrorism.”

Prohibited recipients, called “Specially Designated Nationals” or SDNs, number in the thousands. “No U.S. person can engage in business with any individual or entity on the list,” Treasury warns. “If they do, they may face civil monetary or criminal penalties.” Just this month the feds fined a Japanese bank $8.5 million (.pdf) for multiple sanctions violations while conducting business in the U.S. in 2006 and 2007.

“It is essential to keep in mind the importance of OFAC sanctions programs,” Treasury spokesman John Sullivan tells me. “The SDN list is updated and maintained regularly to ensure that the U.S. financial system is not abused by criminals and terrorists or other individuals that are involved in human rights abuses like Joseph Kony.”

In fact, banks do much of OFAC’s work for it, using government-certified software to screen transactions. If a money transfer gets flagged for some reason, the funds can be diverted into a “blocked account” at the originating bank that only the feds can access. That’s apparently what happened to us.

What’s not clear yet is why OFAC and the OFAC-approved software believe we are laundering money or which terror group is allegedly benefiting. As it happens, there is a domestic terror group called Army of God, which has been connected to abortion-clinic attacks dating back to the mid-1980s. Sullivan says it’s possible the agent’s transfer was flagged because the title of our comic book was in the documentation.

But who knows. No one answered when Bors called the OFAC hotline late — and besides, the assets-control unit is not legally required to justify its actions. OFAC is allowed to “change its previously stated, non-published interpretation or opinion without first giving public notice,” according to the agency Website.

“In the past banks have encountered false positives of names or identifiers of Specially Designated Nationals,” Sullivan says. “In most cases the bank will complete its review, confirm the false positive and complete the processing of the payment in a prompt manner.”

Not in our case. The block on our funds was still in place weeks later. A couple federal agents — not OFAC employees — got in touch with me, expressing their alarm over the block on our funds and volunteering to pull whatever levers they could to expedite some kind of resolution. Whether through their action or the bank’s processes, sometime around the new year the funds were released. I haven’t heard a full explanation yet for what went wrong and how it got resolved.

False positives and other screw-ups like ours are only the beginning. Lots of other folks have been unfairly but legally netted in the OFAC trap. Humanitarians, in particular, have been fined for distributing aid in embargoed nations. Court rulings in 2009 and 2011 (.pdf) found aspects of OFAC’s operations to be unconstitutional.

In light of these challenges, terror-related counter-finance efforts “face a number of daunting policy trade-offs — personal integrity versus data access, financial integrity versus investor friendliness, due process versus being able to freeze very liquid assets, among others,” according to the Combating Terrorism Center (CTC) at the U.S. Military Academy in West Point.

For that reason the money-intercept practice “seems unlikely to yield any dramatic achievements in the future,” the CTC concluded. In the meantime, the feds and the bank can, and do, take people’s money on the flimsiest of justifications. Our money was just one small, and fortunately temporary, installment on the price of defeating terrorists.


This entry was posted in David Axe, English, Terrorism.

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