We should not forget. This is when everything started to exchange for treasury, changed for this country but in particular everything changed in the department. Financing its import and its iconic shift in how many of our government looked at the tool checks we had amassed in order to confront al qaeda and what would change and what is chronicled in this book and the tectonics shifts that happened that the Treasury Department. I would love to start back, rewind the clock 12 years, we were at treasury at the time of the september 11th attacks. I wonder if you could start by giving us a sense of those early days and when it became apparent to people sitting in the building that there was going to be didnt have a role to play, that there was going to be financial warfare that was launched in response to these attacks. Before i ask the question, thank you for doing this. Even before you took your role on sunday edition you have been phenomenal on National Security issues which is admirable, i want to thank john hamre, tom sanders and and others for all their support. Would not have been able to do this polk or crafted without help. This is a little bit of a reunion and part of the Community Working on these issues before and after 9 11 conlan honor and a privilege you attended today so thank you for that. It was a dramatic day not only for obvious reasons, the tragedy we all experience, it was a shift in how the government thought about the use of power and president bush not only articulator we were going to be at work but brought that war to new york this and pennsylvania and washington but had to think creatively and differently for all elements of National Power. It is significant the first real step the president took, the u. S. Government took was a signing this executive order, announced on september 24th, 2001, gave the secretary of the treasury enormous powers, powers that are new and amplified. And the new age of financial warfare and what it did, secretary of the treasury and tools in the Treasury Department, regulatory function and sanctioned gift abilities at the time guns and badges for Law Enforcement, and the isolation of al qaeda, both formal and informal opening the door to a new way of thinking out these treasury powers. And we just arrived at the Treasury Department before the department of justice, and that current inspector who is with us, and others, i didnt know what treasury did. It is implementing of the government red large, and the directive from the white house is bring powers to bear, a figure out how to go after al qaedas money, isolated internationally as build an international coalition, deepened the standards on moneylaundering to go after terrorists financing and do Everything Possible to not only stop the next attack but the terror future funding of terrorist groups and that was the paradigm for the first part of the book, foundation for a new approach to the use of treasury. Operating under something of the he 20 rule. And how it shaped what you were doing. The mandate at the time was to be aggressive as possible under law as we could in terms of use of these powers so the secretary of the treasury instituted what is in essence a management rule for purposes of using treasury powers, we are not going to have paralysis by analysis or do anything beyond the law and abide by the law but it will be aggressive in what we can do and that meant freezing assets aggressively which created some controversy because use of assets freezing are powerful and in essence you throw a net around a network regardless of whether or not people are criminally liable. And going in the wrong hands. To the 80 sure. Under the law the secretary of the treasury under this power only has to have reasonable basis to believe someone is a terrorist or fallen to the category of the executive order and the executive order, general counsel this time, seminole in crafting it, and not only to go after terrorists but only associated with financially supported. It opens up the potential for the use of power in the directive, use it aggressively. And screaming right now, went through a battery of lawyers and checks and areas of the process, it was rigorous but the mandate was use it aggressively, touched some nerves, do what we can and layout sensitivities in terms of looking at the sources of funding and how some of the charities built up over time not only do good work but support the afghan. A hedin was a problem and that led to the shutdown of the largest charity in existence at the time. People were swept up in this who were thought to be culpable or susceptible respective being culpable, financial misdeeds, and not involved, and business at that time . The price of the nature of this authority and the fact that we were being prevented with the tool, we were a resting assets, not people. We were trying to stop bad money from going to nefarious groups, that meant you had to stop the money and if it was in possession of people who were not necessarily culpable though we had proof of intent, that was ok because that was not the standard, that creates all sorts of friction and debate internationally, particularly with european hours about what those standards are. It is important to know we use it judiciously, how important our was, important to preserve it. The Dirksen SenateOffice Building 0 rule grew to be the 100 rule, diplomats and costs of doing this wrong, legal consequences if we didnt get it right. We are going to be prevented it and try to disrupt and dismantle financing. Another pivotal event through the creation of the department of a land security which stripped treasury of some pretty key authorities. And it is and to see you describe the effect on that department. Can you talk a little bit about this, and your sense of what the role was supposed to be in the post 9 11 world. One reason i wanted to tell the story was the history of that transition, the transition to public Homeland Security is not well understood from treasury perspective. At least not out underside the whole of the Treasury Department is one of the dramatic things that happened was stripping of what the treasury enforcement office, keep in mind treasuries at the time had 40 lawenforcement under its offices, the secret Service Bureau of alcohol and tobacco and firearms was responsible for all federal Law Enforcement training. Have to say some who might not rolled this worlds, those authorities rendered treasurys together. A lot grew up over excise tax, secret service was born out of a directive from Abraham Lincoln to go after the counterfeit rings doubling the country after the civil war and so these were authorities that were naturally treasury but looked like guns and badges creating friction with the fbi, department of justice and other agencies but what happened when these bodies were stripped, these functions were stripped in the treasury was a fundamental question to what is the Treasury Department, if 90 of its budget in this round was gone, most significant agencies like the secret service are stripped out, what is the treasury and does it have a seat at the table. I recounted the book times when i had to go represent the treasury and my colleagues in interagency meetings where literally the questions come up, people raising their hand saying why is treasury year, and the remarkable thing, that question is not asked any more, why arent they hear, and that is the Great Success of the bureaucratic transaction, frankly the magic of that period was weaver so demoralized kicked in the gut but we reconsidered what treasury should be. And a key National Security issues for each and every one of them. Without blinking an eye. When that person looked at you at the table, did you have an answer . We strategizing, this was a small, all. The original title for the book was guerrillas in gray suits and part of the reason i love that title, the publisher didnt. Part of the reason i love that title was we were not only engaged in financial insurgency against the enemies, and engage in insurgency bureaucratically in the government. Danny glazer, jeff flock, a core group of people. On his left with six people to help oversee the elements of the treasurys that were left behind, and others, financial crimes enforcement network, criminal investigators and the irs still left behind. We strategizing. We had come to jesus moment. What are we . Should exist and why . And treasury has unique powers, authorities and relationships that impact our enemies in ways that no other agency in government can. The fbi cant do what we can and the cia and department of Homeland Security cant. We are the only ones that can touch the markets and Financial System in the way that forces the financial activity, treasury and do that with power and authority and we set out to do that. Lets get into that. I will quote from the book. The twentyfirst century financial and commercial environment had its own ecosystem that could be leveraged uniquely to american advantage in a system where banks of the prime movers. This was a strategic revelation which was revolutionary. Where was the revolution and how did that happen . The revolution was in two ways. The first was recognizing this was ecosystem. The ability to isolate rogue actors from the financial perspective was really about pending to the financial environment and harnessing the fact that financial actors, their financial reputation at risk and that motivation was the corps element of this ecosystem. If we could impact it, we could impact how banks, nonbank Financial Institutions decided to do business with suspect actors, iranian companies, north korean actors so understand there was an ecosystem. The second revolution was the fact that recognized what mattered most was what those financial and commercial institutions decided in their board rooms and compliance offices. It became more important to us how the ceos of banks reacted than how foreign ministries react. At an end of the day the financial lectors at the gate were determining whether or not they were going to open accounts paula wire money, usually means, of financial activity to go forward and if they werent people were blocked from the Financial System and it didnt matter what the un said, with the finances said, one of the things we came up against especially in later years driving much of this was great consternation that European Countries had or the fact the we are meeting with Financial Institutions and Financial Institutions were taking steps further sdi and what governments were mandating and wanted. Those banks were more concerned about their bottom line and Financial Risks and reputation < anything else. It was a simple proposition. What we did was there is a strategy to impact this and impact it centrally and that is what we did. That is why you have seen financial pressure campaigns work in ways people hadnt imagined a few years ago. Walk through this a little bit. We are not talking sanctions, you are talking something different, isolating and convincing ceos in the board room that is not only immoral but about business to do business with these rogue countries. Sanctions are a core part of it. I dont want to dismiss sanctions because the way the u. S. Treasury innovated and use target sanctions the way europeans do, part of what i call financial persuasion. How do you impact the ecosystem in a way that organically rejects financial activity . How can you prompt that system to reject it in a way where you line National Security interests with the financial interests. So it is not just sanctions, it is the use of sanctions, enforcement mechanisms, regulation, international standards, u. N. Resolutions, find everything in your cool kids to actually set the ecosystem and prompt it and that was the trek. And treasury today, just masterful at it. They do this very well, one of the great tools the u. S. Government brings to bear, and a tool we have got to preserve. Not all perfect as you read about in the book. There are several case studies most notably north korea which is a page turner, a good beach read but you write about shortcomings, how treasuries bowls, this isolation, didnt always measure up with paula line up with the bowls of other departments in the government. Can you talk about those shortcomings and how you navigate them . There is an inherent tension with these kinds of campaigns. Keep in mind this is about not just telling banks what to do but focusing on illicit conduct, conduct Bank Sanctions or activities that we are focused on and the point is it often is difficult to move the agenda from looking at those illicit activities and diplomatic goals and the north korean example is a great example of why this is different. Sanctions free 9 11 were typically trade based sanctions and commercial base sanctions driven by diplomacy, what was happening to the u. N. The way we applied against north korea, was to focus on north coreys illicit financial activity, the soprano state which deals in drugtrafficking, moneylaundering, counterfeiting 100 bills engage in illicit activities, bad for business so we focused very much on that element of the north korea portfolio. The problem, between the interests of the diplomats to make a deal and to have chips on the table to trade, this kind of pressure which is basically about cleansing and protecting the international Financial System and what you had in the north korean example was the ability to isolate North Koreans in a way they hadnt felt before. They told senior white house negotiator in private you finally found a way of hurting because we isolated them in the Banking System with one domestic regulatory act. It worked too well and got in the way of Six Party Talks and unwind its hands that grew difficult because what we tried to do was inoculate the system from doing business, in unwinding had to tell the Financial System, became a very tense interagency process, also became a very difficult episode in our diplomacy because we tried to give away leverage too early in north korea. Does that undercut the effectiveness of these tools . In section 311 does that make it most effective to politics, geopolitical interests, National Security concerns, and other interests of other u. S. Companies . I think so. The danger is the overuse of these powers and the potential to be divergence of interests in the treasury and state department or even between the treasury and other parts of the government for example the cia or the Intelligence Community in terms of wanting to take action to isolate accuracy, the Intelligence Committee wanting to sit back and watch and wait. Absolutely, that is something that is yet to be resolved in the iranian context, because we have talk about negotiations and the question he will raise and has begun to raise is how can the economy be improved, how the sanctions and pressure be lifted . The pressure on our end is how do you unwind it . The baseline of the fresher, the baseline of suspect and the illicit activities they are engaged in not because they are necessarily engage in the Nuclear Program but because their activities are potentially detrimental, how you and wind that becomes a tricky venture, and political tools to be tossed around chips and it stars to lose its resonance and its effectiveness globally. I want to get to questions but before we do i want to ask about syria and you read about a syrian taste steady with financial warfare to a bank. I wonder as you look at this situation now where we are in this moment, do you look and see an obvious opportunity for some kind of financial pressures that would make a difference in a moment like this . Is difficult and one of the points i make in the book is these hours and campaigns have been very successful in dennis sense they have been sort of thought of as the alternative to diplomacy and military power and often seen as silver bullet, it tools and strategies and build leverage. And an Aggressive Campaign would stop with what Bashar Alassad is doing. And it hasnt risen to the area of tension in north korea and al qaeda, has garnered attention. You see the Treasury Department isolating another syrian bank just about a year ago along with the countries which were significant sort of move in terms of coordination with gulf related countries trying to isolate actors and financial actors that are engaged in corruption and tied to iranian support and that is powerful because the Financial Community does not deal with iranians or syrians. There is a moment for application and this is it. We just have the political will to say we are willing to take risks in terms of our diplomacy and otherwise to go after syria more aggressively. I will give you two examples. And the hunt for Bashar Alassads regime. That is to say traditionally the way we of the nasa tons and Saddam Hussein asset hunt or even the gaddafi freezing of assets, those are sort of after the fact. Why dont we do that now . We declared the regime and a legitimate, declared them corrupt, they are engaged in all sorts of atrocities that include chemical weapons use so lets go after their assets now, leverage the International Actors in this space that hunt and look for those kinds of assets and go find them and make a concerted