Edition: U.S. / Global

Bankrupting Terror

Published: January 26, 1995

President Clinton's order to help curb terrorism by freezing the American assets of 30 Arab and Israeli groups and individuals raises two basic questions: will it work? And if it is such a good tool, why was it never tried before?

The executive order, signed by Mr. Clinton on Monday night and highlighted in his State of the Union Address on Tuesday, is intended to prevent terrorist groups and individuals or their supporters in the United States from using the American banking system or raising money to finance terrorism.

But Administration officials acknowledge that they do not know whether any of the 500 banks and financial institutions ordered by Mr. Clinton to take action will find any assets to seize, and that they do not have proof that all the people and groups on their list have used the United States to raise or transfer money.

"I don't anticipate seizing any large sums of money," said one Treasury Department official involved.

Similarly, experts on terrorism outside the Administration are puzzled by the timing and the chance for success of the new campaign.

"I wondered what -- other than terrible bombings in Israel -- brought the terrorism issue to such prominence in the State of the Union speech," said Philip Heymann, a Deputy Attorney General early in the Clinton Administration and a professor at Harvard Law School who frequently teaches about terrorism. "And I wondered why, if we knew there were assets in the United States and where they were, we hadn't seized them long ago."

The idea of freezing assets of terrorist groups or their supporters is not new. It was considered and rejected by the Reagan and Bush Administrations, when militant groups were holding American citizens hostage in southern Lebanon and American individuals and installations were regular targets of terrorist attacks.

At one point in the mid-1980's, for example, the State Department began to try to curb financing from the United States to both the Palestine Liberation Organization and Noraid, the Irish-American organization that has raised money for the Irish Republican Army. It went nowhere.

"One of the problems we faced when we tried this 10 years ago is that the money always seemed to go to widows and orphans, and stopping that money can be challenged in court," said David Long, who wrote a book on terrorism and served in the State Department's counterterrorism office.

But Secretary of State Warren Christopher has made the fight against terrorism a linchpin of American foreign policy, and has searched for creative ways to make it happen.


Although most financial aid for Hamas comes from the Persian Gulf states, particularly Saudi Arabia, some Administration officials estimate that as much as 30 percent passes through or is raised in the United States. Just a few weeks ago, Israel sentenced Mohammed Salah, a used-car salesman from Bridgeview, Ill., to five years in prison for carrying orders as well as thousands of dollars to Hamas leaders in Israel and the occupied territories in 1993.

Administration officials admit that some of their targets may seem a bit remote. The only common factor is that they are all using or are threatening to use violence to block peace between Israel and the Palestinians.

Mohammed Abul Abbas, the Palestinian leader who masterminded the 1985 attack on the Achile Lauro cruise ship in which an American tourist was thrown overboard, has never been accused by the United States of having American-based contacts or money.

As for the Palestinian terrorist Abu Nidal, American intelligence agencies do not know for certain where he lives, let alone where his money comes from.

But the Adminisitration hopes that the order will help deter potential fund-raisers for these groups inside the United States and inspire other countries to follow the lead. Last October, for example, President Clinton made little progress when he privately asked the rulers of Saudi Arabia, Kuwait and Syria to cut off funds for Hamas.