'Catch the man who parked a car full of explosives and walked away, but nab the real culprit . the puppeteer'

Mr. Richard Stockdale, CEO of Lloyds TSB Global Services, speaking at the last meeting on 'Combating the financing of terrorism'

What is terrorism? Is it the result of a certain socio-political environment that most people do not understand?

Can terrorists be described simply as idealists gone awry, as people who cannot find any other means of expression?

And do the victims of terrorism really .deserve it. . in other words,do with ideals, ideologies and so on.

After doing that, he said, he would focus on the financing of terrorism . because unless the financers and the .puppeteers. of acts of terrorism were choked of their money supply, the menace of terrorism would not end.

Mr. Stockdale, who was born is the harm that befalls them justified in some convoluted way?

The answer to all these questions is clear . terrorism is not the result of the socio-political environment; it.s foolhardy to describe terrorists as idealists gone awry; and the victims of terrorism certainly do not .deserve. the bombs blowing up in their faces.

These are ill founded notions and need to be quickly disposed of, according to Mr. Richard Stockdale, the Dubai-based CEO of Lloyds TSB Global Services Pvt. Ltd., the Lloyds TSB Bank Group.s whollyowned Indian offshoring company.

Speaking at the last meeting on .Combating the financing of terrorism ., he said it was necessary to first get a clear understanding of terrorists and their intentions and whether terrorism had anything to and brought up in a part of Bihar that is now in Jharkhand, said the idea that terrorism was the result of a certain socio-political environment was just a convenient peg on which to hang an attitude of complacency and misplaced sympathy.

In truth, terrorism was an international and a political phenomenon .infecting across cultures, borders and belief structures.. Terrorism had no borders but many creators and many histories. Therefore, it was both foolish and dangerous to treat it simplistically and to pigeonhole its causes in a similar manner.

Secondly, since terrorism by definition was indiscriminate about its victims, there was no weight in the argument that its victims .deserved it.

As far as the perpetrator of the terrorist act was concerned, he (or she) believed that the harm that befell the victim, whether .deserving. or innocent, was just the .price. to be paid for the greater good.

But far more appalling was the notion that .terrorists are simply idealists who cannot find an alternative conduit of expression..

While it was true that some terror groups had arisen from a conventional political banner, the usual excuse was that they found the political process to be too congested, .too democratic. or too limiting. These sort of ideas later gave rise to the temptation of going in for bolder and louder statements about their agenda . and in a violent manner.

On the other hand, terror groups that evolved from half-hearted political groupings had started salivating when .the low-hanging fruits of terrorism and criminal-induced wealth. were dangled before them.

These groups were easily lured away from the legitimate but laborious political process and baptised into the crude agenda of criminal violence, thus turning into gangsters, albeit retaining the façade of a political agenda.

For example, many so-called .freedom fighters. in Europe had increasingly become brutalised and distanced themselves from their original political aims, transforming themselves into gangs of thugs and extortionists..There is no excuse for terrorism. It destabilises. We must not have any affinity towards terrorism. .

Having laid the foundation of his thesis, Mr. Stockdale turned to the crux, viz., that it was more important to go after the person providing funds to the perpetrators of terrorism. This person was best described as the .master puppeteer. of terrorism.

Law-enforcing agencies chased the perpetrators of terrorism but they could turn out to be people who had been sucked into the vortex, people who had no choice or little choice. They were not the planners and arresting them alone would not stop future acts of terror.

Looking at the issue through the eyes of a banker, it was clear that going after the financing of terror offered a possibility of trailing back (through a system of money movements) to the .puppeteer., because the person who funded the money and the person who set up the terror act was rarely the one who committed it.

.Without financing, most acts of terror will not happen. Happily, thanks to an alert and well-trained banking and financial workforce, the financial trail does leave clues or .fingerprints. for investigators to sniff back and to identify the real puppeteers..

Drawing an analogy, Mr. Stockdale said it was somewhat akin to a course of antibiotics prescribed for fighting an infection. If the course was not completed (if all the medicines were not taken as prescribed), then the ailment would not heal and the infection would mutate into something worse.

But if the entire course of antibiotics was taken in full, then not only was the existing infection cured, even future infections were taken care of and prevented.

.If you leave terrorism half undone, if you just go after the perpetrators and don.t go after the .puppeteer ., then you.re only taking half your course of antibiotics. It.s not a good analogy, but it.s one that may give you an idea of the need to have full coverage..

Mr. Richard Stockdale believes that not going after the .puppeteer. is as dangerous as not completing a course of antibiotics. Seen here with President Dr. Rumi Jehangir

The .puppeteer. of terrorism followed the modus operandi of money launderers who set up innumerable conduits, routed the money through safe heavens, spun it around the world and crossed as many jurisdictions as possible. It was possible to do this rather quickly with the help of modern money transmission methods.

In this way, by transferring money through two or more jurisdictions in a day, the .puppeteer. could easily overcome and swamp the investigating teams.

To unravel this complicated web of deceit, mounds of paperwork had to be undertaken and relentless efforts made to cross jurisdictional boundaries and persuade prosecuting authorities in another jurisdiction about it being a transactional (or serial) crime and not just one single act of crime.

Interestingly, those who funded the financing of terrorism were aware that no investigator ever gave up his job until he had completed it. The Indian Express had reported that morning (17th July, 2007) about the Americans having just finished tracking down a funding trail six years after the event . six years after 9/11. .And that proves the point that no investigator will ever give up on the trail of money..

Mr. Stockdale said that .hawala. was a useful tool for those financing terrorism because it helped in making money .disappear..

As another analogy, he said a person being chased through a forest by pursuers led by a pack of dogs, had no hope of evading them. The only way out for him was to jump into a river, swim ten miles downstream and then emerge on the other bank. .That breaks your scent. And .hawala. does exactly that. There is nothing wrong with .hawala., it is an excellent system used in societies which can.t afford anything better and it has been working for 2,000 years. But it can be overtaken and abused in a criminal or terrorist scenario because it leaves hardly any money or paper trail..

Global terrorists used the .hawala . and other similar systems. But generally, terrorist acts that did not require a large amount of money were carefully planned so that the money disappeared completely.

'Perpetrators & puppeteers of terror are disciplined, fire-walled people'

A well-trained workforce and good team of investigators could sniff out the money if it was noticed early enough. Sometimes, investigators managed to block the money before it reached the perpetrators. .You can always certainly get there after the act is perpetrated. But that is little consolation to those who have been killed or maimed..

Thus, Mr. Stockdale said, the first priority was to quickly get to the money and the second was to find out who eventually did it.

In order to distinguish dubious accounts and transactions, Mr. Rowan Bosworth-Davies, a financial expert, had listed certain characteristics of accounts that were possibly used in perpetrating the financing of terrorism.

The types of bank accounts used to collect and hold terror funds:

(1) Accounts with no criminal taint whatsoever . these appeared to be genuine accounts;
(2) Charitable accounts . since charities were usually trusted, money was often kept hidden in such accounts;
(3) Not-for-profit organisation accounts . in such cases, it was generally not necessary to prove anything; and
(4) Dormant accounts . no one looked at these very often. The money could sit in such accounts for quite a long time, often in many dormant accounts and filtered out slowly.

Some characteristics of how these accounts were operated:

(a) There was no apparent profit purpose, because if there was one, then one would have to account for where the money went; and one also came under the tax regime;
(b) The business always broke even . thus showing that the holder did not want profits;
(c) Financial transactions that .lost. money . this was very convenient, because one did not have to explain where the money had disappeared;
(d) Unconnected debit and credit flows; to investigators looking at such accounts, there was no connection between what was going in and what was coming out;
(e) Huge responsiveness of the account-holders to inquiries. Often, when inquiries were initiated in the Middle East, the holders turned up immediately, tried to be friendly and to explain many things.

.Normally, when you make an inquiry, it takes two weeks to get a response; but these guys are banging on my door or .phoning me in about ten minutes. That.s suspicious . I like people to be responsive, but I start smelling things when they are too responsive..

Turning to the sources of funds for financing terrorism, Mr. Stockdale said the perpetrators and puppeteers of terror rarely got involved directly in the raising of funds. They were disciplined people and well protected or .fire-walled..

But the possible sources were usually the following:

Drug trafficking; blackmail and kidnapping; robbery; fraud; gambling; prostitution; smuggling and counterfeit operations; donations from sympathisers.

Over the years, sympathisers of certain organisations in many countries had turned holier than freedom-fighters and picked up donations by waving patriotic flags.

Was the situation beyond redemption? And was there any hope to combat those financing terrorism?

Yes, said Mr. Stockdale, the outlook was quite grim but there were certain .tools. that could give results, as also some approaches that were yet to be statutorily implemented but which could give quicker results. had a third tool, which most banks were yet to acquire, viz.,

(3) Predictive software to track money movements across a wide range of transactions; it could look at volumes and where the money was going; it could help look at clustering; or at accounts that were inactive but had suddenly become active; and accounts where money was flowing in. Such information could help highlight certain trends.

(4) Suspicious Transaction Reports or STRs. It was absolutely essential to have a serious investigator and a serious central bank to look at the STRs being filed. Otherwise, the battle was as good as lost. .You must get that right, otherwise you are wasting your time, leaving the front door and the back door open, the front gate and the back gate open . and your house will be used as a conduit..

Sameer Tapia, who introduced Mr. Richard Stockdale, seen with him at the last meeting

Mr. Stockdale said there were other suggestions that would be useful They should be both required to exchange information and the receiving institution should be required to conduct a full inquiry before it decides whether to accept an account..

In summary, Mr. Stockdale said, it was possible to snuff out terrorism if the risk was made unacceptable to the perpetrator. That could be done if there was a significant chance of detection. But merely arresting and punishing the person who planted a bomb or parked a car full of explosives and walked away, would not stop terrorism.

He concluded by stating that the subject he had spoken on was considered a .dry. subject but sometimes it was even sensationalised. But, .I don.t see it as sensational . I see it as dynamic, disciplined, sad, but do-able, in terms of the solution we are seeking, if we work together in a non-politicised, systematic manner..

Answering questions, Mr. Stockdale agreed with PP Arun Sanghi that the number of bank accounts in India was so high that it could be difficult to ensure KYC norms, especially when there was high staff attrition and most accounts were opened through outsourcing.

This was an international problem. But the board of directors of a bank and the regulators themselves had to realise the need to be very, very careful about strict enforcement of KYC and KYCB norms even if it cost more money.

.You may have to licence the people who are doing it, which is going to make it much more expensive. It.s an area where outsourcing can.t work. In many countries you have people who are introducers but they don.t actually do the opening of accounts; introducing is fine, but in my view, opening of accounts and the interrogation systems must be owned by the institution..

Dr. Percy Chibber said it was true that an incomplete course of antibiotics could not cure an ailment. Therefore, it was necessary to find out the prevailing milieu, to know why a particular bug had re-surfaced. .You have only looked at financing and how to control it, but I don.t think that is going to solve terrorism. I think we should be looking elsewhere..

Mr. Stockdale said he had mentioned at the outset that he would only look at the financial aspects, but reiterated that .if we make this thing so damn dangerous for the puppeteer of terror to undertake, the risk then starts to get less than happening..

The vote of thanks was proposed by Pradeep Saxena.

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