Sol Sanders Archive

'Jaw!-Jaw!' – but with teeth!

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No one discounts negotiation and conciliation, of course. Churchill at the height of the Cold War said that “Jaw!-Jaw!” [negotiations] was preferable to “War!-War!”. But in the confrontation with the mullahs of Iran and North Korea’s Communists, diplomatic gobbledygook — inherited from the Bush Administration — has failed to defuse the threat to peace. Although historical analogies should be eschewed — different times, different tempers, different tests — it’s increasingly difficult not to draw analogies between the democracies’ sacrifice of Czechoslovakia in the late 1930s and the Obama Administration’s support of UN policies which would dismember Israel. [Then too, there was the problem of the Sudeten German minority, discrimination against the Slovaks, etc., etc.]

Churchill knew whereof he spoke. Throughout the 30s he was mocked for his campaign against false peace efforts. Later at the 1945 Yalta conference, Churchill [and U.S. Moscow Ambassador Averill Harriman] again was unable to convince his partner, friend and close ally, FDR, of the necessity of bite as well as jaw in dealing with the man Rosevelt jocularly called “good old Uncle Joe.” Concessions to Soviet Dictator Josef Stalin were later to threaten nuclear holocaust.

That’s why it comes as a breath of reassurance that Washington has scored a round. This time it is about money, as it is for so many things, the lifeblood of terrorism.

Much of the terrorists’ funding flows through traditional networks — hawala or hundi, based on ethnic, kinship and criminal ties as old as the Near East and South Asia caravan routes. But as sums have grown larger so has the sophistication of the terrorists’ finances — for example, Islamic welfare organizations have parallel “feeds” to the terrorists, as in the indicted American Holy Land Foundation for Relief and Development or the Turkish Nsani Yardim Vakfi [Humanitarian Relief Fund, or IHH]. The U.S.-based fund supported Hamas, and the Istanbul outfit was the terrorist wedge in the recent “peace flotilla” confrontation with the Israelis. The vast evangelical operations of the Saudi fundamentalist clerics throughout the Muslim world often tail off into local terrorism.

But as international terrorism takes on heft, it is becoming more and more attuned to sophisticated finance — whether Pakistani and Afghanistan drug traffickers supporting jihadists or a “lone wolf” seeking ways to back his often dramatic operation.

The European Parliament, trying late in the game to assert its authority against the Community bureaucrats, had blocked Washington’s access to information on financial transactions. The tussle was over The Society for Worldwide Interbank Financial Telecommunication [SWIFT], a cooperative of some 9,000 financial institutions in 209 countries. In false modesty, the outfit claims: “SWIFT enables its customers to automate and standardise financial transactions, thereby lowering costs, reducing operational risk and eliminating inefficiencies from their operations.”

Without SWIFT international banking as we know it today could not function. And as with so many effective international institutions, it grew from U.S. origins. Because of that and the paramountcy of Silicon Valley, it is still dependent on American information technology although it headquarters in Belgium.

After a game of hide and seek, the Strasbourg assembly has now acceded to permitting American officials to continue to scrutinize SWIFT transactions. This is tacit admission of the former relationship despite a new [and hopefully vague enough] agreement to aid the organization [and the Europeans] toward “independence”. Not only do the Europeans not have the ability to sift data that American technology provides, but as the Financial Times reports, only recently was its data storage moved out of the U.S.

One can only hope that the Obama Administration will maximize this tool. Recent UN and intensified American sanctions seeking to force Iran to back away from nuclear weapons will be effective only if they are enforced not only among the major financial centers but through threats of secondary and tertiary boycotts. Front organizations for Iran’s Revolutionary Guards in the United Arab Emirates and members of the Iranian Diaspora [avoiding U.S. taxation] will attempt to cream the more stringent sanctions for even more profit.

But there is, too, another poignant political lesson in this whole affair. If there were ever need for proof of the U.S.’ power when it chooses to exert it — even in its current gigantic economic difficulties — it is this little brush with sincere European advocates of privacy and their nefarious allies who would protect financial greed. [Even the vaunted Swiss banks recently have had to let Washington look for taxdogers in their numbered accounts.]

Frequently, as in the case of threatening Chinese banks operating with North Korean fronts in Macao or in forcing oil giants like Mitsubishi and Total [as well as more recently BP] to halt desperately needed investment in Iran, these financial strictures can be powerful weapons. But it takes political will and realism about the U.S. role to use them.