This Week in AML

National Security and Homeland Security

It has been a busy week for US government pronouncements on national security and terrorism. The Secretary of the Department of Homeland Security gave a speech at the Center for Strategic and International Studies and the majority staff of the Senate Committee on Homeland Security & Governmental Affairs issued a report on The Rising Threat of Domestic Terrorism. The remarks and the report each look at the challenges faced by governments in identifying and responding to terrorist threats and how to deal with the changing threat landscape. John and Elliot look at key points of the speech and the report. They discuss the increasing risks presented by domestic terrorism, the recommendations in the report, and the evolving view at DHS on the dangers we face and how partnerships among government agencies, international partners, and the private sector are critical to long-term success.



National Security and Homeland Security TRANSCRIPT


Elliot Berman: Hello, John. How are you today? 

John Byrne: Good morning, Elliot. How are things? 

Elliot Berman: Good. It was, so you're here in Milwaukee this week, and we had dinner earlier in the week. It was nice to see you in person. 

John Byrne: Yep. Same here. It was great. Great catching up. It's not as cold the past couple of days, so I really appreciate it when you guys churn it up to 35 degrees.

Elliot Berman: That's true. You can go outside running and not have to put six layers on. 

John Byrne: That's exactly right. 

Elliot Berman: Yeah. So this week, while you've been here in Milwaukee and we've been working away, a number of things have come out. Both the congress Senate committees and DHS remarks have to do with terrorism and particularly how national security and homeland security come together and domestic terrorism and how we can get better.

One was that the DHS secretary, Mayorkas, gave a speech at the Center for Strategic and International Studies, and the other was that the Senate, Homeland Security and Government Affairs Committee issued a long report. It was actually the majority of staff. I wonder if you saw those items?

John Byrne: Right. You know, and as we mentioned last week, we said Homeland Security had a new bulletin that focuses on extremism in terms of risk. So yeah, I saw that, and it was interesting. I know you looked at what the secretary said cuz Homeland Security is obviously one of the center points of this besides obviously FBI and the other law enforcement agencies.

But he did mention a bunch of things in his presentation, and I think one did focus on the issue we continue to grapple with, and that's domestic terrorism. 

Elliot Berman: Yes, he talked a lot about the challenges of the evolution of DHS, which was formed in the wake of the 9/11 attacks, bringing as, you know, many agencies together that had been.

In other parts of government and expanding certain roles, he talked a lot about, and I think that it's a good thing to talk about the importance of partnerships, both international partnerships with our allies, as well as partnerships within the government and partnerships between the government and the private sector.

Something you and I have talked about a lot on this podcast and in other venues, and then he talked about, you know, some of the challenges of cyber attacks and the fact that they're borderless. Which, you and I have also talked about how to manage all of these things on a day-to-day basis.

John Byrne: Right? Yeah. And, going back to the senate committee report, they put this together over the course of several years. There's some criticism in there, but there are findings of fact, and there are recommendations. It's close to 130 pages, so there's a lot of good information in there for our community.

But a couple of the things that they highlighted in terms of domestic terrorism are no surprise. Cause we've seen this in other data releases before this, and that's that domestic terrorism surpasses international terrorism as the most significant threat. In 2015, white supremacist extremists posed a primary threat.

Homeland Security said that data shows that white supremacists are responsible for 51 out of 169 domestic terrorist attacks for the past decade. And, also that they do focus quite a bit on the inspiration, these terrorists get from social media. So there's a lot in there which isn't directly relevant.

It's all relevant to us, but I mean, it's not directly relevant to financial institutions specifically, but I think that's interesting and that series of statements regarding how the agencies respond. And so there is some, some criticism. They do acknowledge that DHS, back in 2019, said that white supremacist violence is a major threat, and that was the first time that was identified.

They do talk about, you know, since 9/11, many laws were changed obviously to deal with certain issues, so they've mentioned that, but they also say that DHS and FBI have not, in their words, fully complied. Requirements in federal law to collect and report data on domestic terrorist attacks.

Now again, you and I have no idea whether what's the scope of that, but obviously, the committee believes that's problematic, and so you'll see in the recommendations more push toward analyzing and collecting data. They also talk about, again, how agencies can and do monitor social media for domestic terrorism. Still, obviously, you have to be careful because of the First Amendment, the Privacy Act, and those sorts of things.

Right now, I don't think we should focus so much on social media. People can take a look at that, but I do think that warrants your attention as well. And I'll say that some of the recommendations we've heard before, but I think it gets a little greater weight when a committee issues them and they want a top-down review of how do you handle counterterrorism at the federal level. And I think that's probably a good thing because 9/11 told us to do one sort of focus or maybe a couple, but what's happened in the past, you know, five to ten years is another. So I thought that was interesting.

And the last thing I'll mention and turn it back to you is, in terms of DHS, they say they should get a counterterrorism coordinator there. It'll be interesting to see the response. Cause I don't think we saw a response to this report from the agencies. Cuz typically, when the GAO issues a report, the back of it has here's what the agency said in response.

I didn't see that. So it may exist, and maybe in future conversations, we could find that out. But, you know, having a coordinator, it's not just a title. I think it shows a resource focus, and it sounds like what the secretary said the other day. That should be, as they say, a no-brainer. 

Elliot Berman: Yes, there clearly was one of the consistent themes in the committee staff report was the fact that post 9/11 anti-terrorism resources were heavily focused internationally. Given what had just happened made sense, but with the shift, as you pointed out over the last five to ten years or at least the recognition of the shift over the last five to ten years, there is a significant risk. And now, by some agencies' analysis, the biggest risk is domestic terrorism. Efforts, resources, and focus need to be aligned.

To take that into account. And it struck me in reading those parts of the report that's essentially the risk assessment process that our audience members go through all the time, right? You take a look at what are the risks. You try to give them relative weights. You figure out how you're mitigating them, whether it's through processes or systems.

Deciding not to go in that space. And then, with what's left, you figure out how to allocate the resources you have to the biggest risks. And I think one of the statements in the report is that we haven't made that shift in allocating resources to what is now being recognized as the biggest risk.

That doesn't mean that we stop looking internationally. I don't think the report in any way says that it's a more complicated world. We know that every day and we have to take into account those additional complications. And in this case, it's ideally getting more resources, but it's also taking what you have and figuring out how to allocate it to make sure that you're not under-allocating to the biggest.

John Byrne: Right. And you know, going back to the data, there's a lot in the recommendations regarding doing better, better categories of data, making sure that they are, quote, "relevant," which I'm sure means updating the different definitions. And then, if you go back to the secretary's speech, it's not a direct response to the report, obviously, but he does mention quite a bit that DHS is playing.

Critical role in terms of counterterrorism, but also working with new technologies, making sure they have the tools they need, but also, as you say, work with the, collaborate with the private sector so, you know, the more, the more ways in you can identify solutions, you can deal with a lot of what the committee suggests, slightly are critiques that perhaps the government can do better.

So I think there is some connection between the report and the speech. But again, I'm looking forward, and we could actually talk to some of our colleagues and friends in law enforcement and see if there's been an official response. In fact, we have an event this week in DC for the local ACAMS chapter where I'll be interviewing Daniella Lindholm from the House Financial Services, and I'll ask her specifically in terms of oversight from Congress. We'll let you know what we find out. 

Elliot Berman: That sounds good. So what's in the pipeline besides our weekly chat? 

John Byrne: So next week, the 15th, one o'clock Eastern time, we're going to be doing a conversation with two investigative journalists on the broad category of corruption, but specifically on some of the cases, they've worked on, some of the investigations. So I'm really excited about that. We also have just recently posted an interview I was able to do with Debra LaPrevotte, a former FBI investigator who has done a lot of work in dealing with kleptocracy.

So that's also available. And then, as you know, because you're spearheading it, we're working on our programs for 2023 and more to come on that as we identify the topics, identify the panelists, and look for them on our website.  

Elliot Berman: John and I will post a new edition of This Week in AML next week. And then, as we come into the holidays, we'll do a couple of archived sessions, and then we'll be back live in January. So one more live one. And then a couple of archives and then fresh material in 2023.

So John, travel safely back to Washington, and I will talk to you next week. 

John Byrne: Take care, Elliot. See ya. 

Elliot Berman: Bye-Bye.