Pubdate: Wed, 07 Nov 2001
Source: Wall Street Journal (US)
Copyright: 2001 Dow Jones & Company, Inc.
Authors: Jennifer Clark, Alessandra Migliaccio
Bookmark: (Terrorism)

Special Report: Aftermath of Terror


ROME -- Italy's financial police face a huge challenge unraveling the
money trail from the Mafia's illegal drug trade to find the strand
that leads back to the Taliban in Afghanistan.

"You'd need a crystal ball to tell how much of the money generated
from the Mafia's illegal activities can be traced back to the
Taliban," said Sandro Senatore, head of the Guardia di Finanza's
operations to combat money laundering. "There's no way to tell until
you get to the very end of the money trail."

With the U.S. bombing of Afghanistan entering its fifth week, new
urgency is being applied to efforts to strangle the financial network
that supports Osama bin Laden's al Qaeda network and provides the
Taliban with money from the drug trade. U.S. authorities believe Mr.
bin Laden and al Qaeda are behind the Sept. 11 terror attacks and that
the Taliban provided shelter and training to al Qaeda terrorists.

About 70% of the world's opium is produced in Afghanistan, some of
which is shipped through Italy in the form of heroin. From Italy,
Albanian gangs or the Mafia deliver the drug to markets across Europe
and the U.S. So far, investigations haven't turned up any direct links
between terrorists and the Italy's organized crime groups

"Investigations into Mafia-related money laundering are under way as
we speak, and if something related to terrorism turns up we'll jump on
it," Mr. Senatore said.

If they find that link, Italy's finance police will be able to act
quickly and assertively, thanks to a recently approved package of laws
allowing investigators to seize assets they believe tied to terrorism.

The finance police are following up a series of tips on
terrorist-related financial networks, said Mr. Senatore. He said he
couldn't provide any further details.

His unit, working with stock-market regulator Consob, has already
turned up possible financial links between terrorist groups and a
Milan-based Islamic center described by the U.S. Treasury as al
Qaeda's main base in Europe.

Money trails aren't new to the Guardia, whose members can often been
seen carrying sub-machineguns. In 1995, its antimoney laundering unit
followed one particularly complex trail all the way -- from trucks
carrying drugs in the region around Naples to money laundering in some
of the country's main banks.

"It was a big case for us. In particular there was one large bank of
national importance involved," said Mr. Senatore, declining to provide
more details. "We arrested several directors of the banks. The trials
are still in progress."

Among the most impressive gains are those in the fight against the
Mafia, which intensified in the early and mid-1990s, after the murders
of prominent anti-Mafia judges Giovanni Falcone and Paolo Borsellino.
Subsequent investigations in conjunction with Italy's other police
corps resulted in the arrests of many well-known mafiosi, including
top boss Toto Riina, known for conducting his business out of a bunker.

In the early 1990s, several tough anti-Mafia laws were introduced,
enabling police to seize assets before an indictment is handed down
and making it possible for police to access data normally protected by
privacy laws.

Last month, two antiterrorism laws passed by the government extended
the provisions of the anti-Mafia laws to include terrorism-related
crimes. The Guardia's years of experience in cracking money trails
will come in handy when trying to track down terrorist-related finance
networks, Mr. Senatore said.

"With respect to other countries, Italy has an edge, not so much
because of its laws, although some of them are ahead of norms in other
countries, but because of its investigative techniques," he said.
"Both the police and the magistrates are used to concentrating on this
type of phenomenon, first, terrorism in the 1970s, then the Mafia in
the 1980s."

Operations often start with a tip from an informer, or sometimes in
the case of the Mafia, a former clan member turned state witness. From
there, wire taps and bank checks begin, and if something looks
suspicious, undercover operations may follow. The new decrees also
call for the creation of a Financial Intelligence Task Force that
combines the efforts of the Guardia, the Bank of Italy, the Treasury
Ministry, and the Secret Service.

Established as a special financial border patrol by the King of
Sardinia in 1774, the Guardia now has a force of roughly 64,000 men
and women fighting tax evasion, fraud, contraband, money laundering,
drug trafficking and other financial crimes.

A visit from a Guardia agent strikes fear into the hearts of Italian
businesspeople, since the finance police have the power to seal
offices for weeks while inspectors comb through stacks of books and
tax audits to look for irregularities.

The Guardia carried out checks on more than 1,300 people and 236
companies in 2000 alone. The result: 480.5 billion lire (248.2 million
euros or $224 million) of real estate, and 11.90 billion lire of
liquid assets were seized.

When Schengen accords freed up the movement of populations within
Europe, much of the Guardia's original land border patrol duties
ended, but it still patrols the seas, particularly the strip of
Adriatic that separates Italy from Albania. It is there in the
speedboats, which sometimes smuggle drugs and, occasionally, refugees,
where the money trail links Italy and Afghanistan.

This Balkan route starts with opium sold in Afghanistan, carried
across Turkmenistan and the Caucasus into Turkey, where the substance
is processed into heroin, according to Mr. Senatore. From Turkey the
drug goes to Albania and through the hands of local organized-crime
figures before being smuggled into Italy. The Italian Mafia ships it
to other European countries. "Drug trafficking plays a big role in
terrorists' finances," Mr. Senatore said.

But drugs are not all that connects organized-crime members with
terrorists. A certain sophistication in covering their financial
tracks distinguishes both types of criminals.

"It is not a coincidence that terrorist money goes through Switzerland
and Mafia money also goes through Switzerland," Mr. Senatore said.
"It's not like these people take their money and invest it in bonds --
that would be too simple."

Given the complexity of networks involved, exchange of information
becomes essential, with every country holding a different piece of the
puzzle. In 2000 there were 1,630 exchanges of information between the
Guardia and other organizations like the European Commission
Anti-Fraud Office, on issues connected to money laundering, and 2,049
exchanges on drug-related issues.

But at a time when cross-border competition is crucial, Italian
magistrates have complained that a law passed on Oct. 3 by Italy's
center-right government is making it more complicated to carry out
cross-border investigations.
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MAP posted-by: Richard Lake