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+[House Hearing, 117 Congress] +[From the U.S. Government Publishing Office] + + + + + + + + DOLLARS AGAINST DEMOCRACY: DOMESTIC + + TERRORIST FINANCING IN THE + + AFTERMATH OF INSURRECTION + +======================================================================= + + VIRTUAL HEARING + + BEFORE THE + + SUBCOMMITTEE ON NATIONAL SECURITY, + + INTERNATIONAL DEVELOPMENT + + AND MONETARY POLICY + + OF THE + + COMMITTEE ON FINANCIAL SERVICES + + U.S. HOUSE OF REPRESENTATIVES + + ONE HUNDRED SEVENTEENTH CONGRESS + + FIRST SESSION + + __________ + + FEBRUARY 25, 2021 + + __________ + + Printed for the use of the Committee on Financial Services + + Serial No. 117-6 + + + + [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] + + + + ______ + + + U.S. GOVERNMENT PUBLISHING OFFICE +43-993 PDF WASHINGTON : 2021 + + + + + HOUSE COMMITTEE ON FINANCIAL SERVICES + + MAXINE WATERS, California, Chairwoman + +CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina, +NYDIA M. VELAZQUEZ, New York Ranking Member +BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma +GREGORY W. MEEKS, New York BILL POSEY, Florida +DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri +AL GREEN, Texas BILL HUIZENGA, Michigan +EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio +ED PERLMUTTER, Colorado ANN WAGNER, Missouri +JIM A. HIMES, Connecticut ANDY BARR, Kentucky +BILL FOSTER, Illinois ROGER WILLIAMS, Texas +JOYCE BEATTY, Ohio FRENCH HILL, Arkansas +JUAN VARGAS, California TOM EMMER, Minnesota +JOSH GOTTHEIMER, New Jersey LEE M. ZELDIN, New York +VICENTE GONZALEZ, Texas BARRY LOUDERMILK, Georgia +AL LAWSON, Florida ALEXANDER X. MOONEY, West Virginia +MICHAEL SAN NICOLAS, Guam WARREN DAVIDSON, Ohio +CINDY AXNE, Iowa TED BUDD, North Carolina +SEAN CASTEN, Illinois DAVID KUSTOFF, Tennessee +AYANNA PRESSLEY, Massachusetts TREY HOLLINGSWORTH, Indiana +RITCHIE TORRES, New York ANTHONY GONZALEZ, Ohio +STEPHEN F. LYNCH, Massachusetts JOHN ROSE, Tennessee +ALMA ADAMS, North Carolina BRYAN STEIL, Wisconsin +RASHIDA TLAIB, Michigan LANCE GOODEN, Texas +MADELEINE DEAN, Pennsylvania WILLIAM TIMMONS, South Carolina +ALEXANDRIA OCASIO-CORTEZ, New York VAN TAYLOR, Texas +JESUS ``CHUY'' GARCIA, Illinois +SYLVIA GARCIA, Texas +NIKEMA WILLIAMS, Georgia +JAKE AUCHINCLOSS, Massachusetts + + Charla Ouertatani, Staff Director + Subcommittee on National Security, International + Development and Monetary Policy + + JIM A. HIMES, Connecticut, Chairman + +JOSH GOTTHEIMER, New Jersey FRENCH HILL, Arkansas, Ranking +MICHAEL SAN NICOLAS, Guam Member +RITCHIE TORRES, New York LEE M. ZELDIN, New York +STEPHEN F. LYNCH, Massachusetts ROGER WILLIAMS, Texas +MADELEINE DEAN, Pennsylvania TOM EMMER, Minnesota +ALEXANDRIA OCASIO-CORTEZ, New York WARREN DAVIDSON, Ohio +JESUS ``CHUY'' GARCIA, Illinois ANTHONY GONZALEZ, Ohio +JAKE AUCHINCLOSS, Massachusetts VAN TAYLOR, Texas, Vice Ranking + Member + + C O N T E N T S + + ---------- + Page +Hearing held on: + February 25, 2021............................................ 1 +Appendix: + February 25, 2021............................................ 35 + + WITNESSES + Thursday, February 25, 2021 + +Boukadoum, Iman, Senior Program Manager, Fighting Hate and Bias, + The Leadership Conference on Civil and Human Rights............ 4 +Brooks, Lecia, Chief of Staff, Southern Poverty Law Center....... 6 +Gartenstein-Ross, Daveed, CEO, Valens Global..................... 12 +Glaser, Daniel L., Global Head, Jurisdictional Services, and Head + of Washington, DC Office, K2 Integrity; Senior Advisor at the + Foundation for Defense of Democracies; and former Assistant + Secretary for Terrorist Financing and Financial Crimes, U.S. + Department of the Treasury..................................... 8 +Rogers, Daniel, Co-Founder and Chief Technology Officer, Global + Disinformation Index........................................... 10 + + APPENDIX + +Prepared statements: + Boukadoum, Iman,............................................. 36 + Brooks, Lecia,............................................... 42 + Gartenstein-Ross, Daveed..................................... 58 + Glaser, Daniel L............................................. 97 + Rogers, Daniel............................................... 102 + + + DOLLARS AGAINST DEMOCRACY: DOMESTIC + + TERRORIST FINANCING IN THE + + AFTERMATH OF INSURRECTION + + ---------- + + + Thursday, February 25, 2021 + + U.S. House of Representatives, + Subcommittee on National Security, + International Development + and Monetary Policy, + Committee on Financial Services, + Washington, D.C. + The subcommittee met, pursuant to notice, at 10:02 a.m., +via Webex, Hon. Jim A. Himes [chairman of the subcommittee] +presiding. + Members present: Representatives Himes, Gottheimer, San +Nicolas, Torres, Lynch, Dean, Ocasio-Cortez, Garcia of +Illinois, Auchincloss; Hill, Zeldin, Williams of Texas, Emmer, +Davidson, Gonzalez of Ohio, and Taylor. + Ex officio present: Representative Waters. + Chairman Himes. The Subcommittee on National Security, +International Development and Monetary Policy will come to +order. Without objection, the Chair is authorized to declare a +recess of the subcommittee at any time. Also, without +objection, members of the full Financial Services Committee who +are not members of this subcommittee are authorized to +participate in today's hearing. + As a reminder, I ask all Members to keep themselves muted +when they are not being recognized by the Chair. This will +minimize disturbances while Members are asking questions of our +witnesses. The staff has been instructed not to mute Members, +except when a Member is not being recognized by the Chair and +there is inadvertent background noise. + Members are also reminded that they may only participate in +one remote proceeding at a time. If you are participating +today, please keep your camera on. And if you choose to attend +a different remote proceeding, please turn your camera off. + If Members wish to be recognized during the hearing, please +identify yourself by name to facilitate recognition by the +Chair. + Today's hearing is entitled, ``Dollars Against Democracy: +Domestic Terrorist Financing in the Aftermath of +Insurrection.'' + I now recognize myself for 4 minutes to give an opening +statement. + As we heard from Merrick Garland during his confirmation +hearing earlier this week, the country faces a, ``more +dangerous period in the wake of January 6th than we did after +the Oklahoma City bombing, the single deadliest act of domestic +terrorism in American history.'' This threat is real and it is, +therefore, incumbent on all of us on this subcommittee to look +at the ways that these extremist groups fund not only their +violent activities, but their recruitment and radicalization +efforts as well. + In the wake of the attacks of September 11th, we recast the +entire Federal Government, and worked feverishly to defund +terrorist extremes. To effectively disrupt domestic extremist +groups, we need to better understand their financing. + In today's hearing, I want us to focus on three important +areas. + First, to better understand how these groups are raising +money. Unlike ISIS, for example, these organizations are not +pyramid-shaped, where funding comes from a handful of easily +disruptible areas. An online fundraising drive for a legitimate +charity, and one that helps support an extremist group, can +look very similar. Some extremist groups are eschewing the +traditional banking sector in favor of cryptocurrency, thereby +avoiding our traditional methods of disrupting extremist +financing. + Second, to give serious thought to where our efforts on +disruption are best spent. Terrorist attacks rely on their +asymmetrical nature to be effective. Many of the domestic +terrorist attacks in recent memory have been self-funded. The +bomb constructed by Timothy McVeigh cost less than $5,000. +However, recruitment and radicalization efforts are often more +resourced and time-intensive. Targeting these efforts may +provide an avenue for preventing future attacks. + Third, we need to be conscientiously mindful of the civil +liberties concerns at play here. Unlike international extremist +groups, law enforcement is constrained by the Constitution when +dealing with domestic extremists. Balancing the desire to give +law enforcement the tools necessary to disrupt these groups, +with the need to respect the rights of all Americans in the +Constitution to which we have all pledged an oath, is +essential. + I will quickly note, in the spirit of my opening statement +and the subcommittee's first hearing, that this hearing is not +about, ``what-aboutism'' or ``both-sidesism.'' The topic is +domestic terrorism, and it must be divorced from any specific +ideology. + While we all lived through a brutal event on January 6th +undertaken by right-wing extremists, no location on the +political spectrum has a monopoly on extremism or violence. +Focusing on one group to score political points doesn't do +anything to help us solve the very real problem at hand, a +problem that could get worse over time, as January 6th +demonstrated to so many groups that they could, in fact, make +the news and be effective in their dark ways. + Finally, I would like to thank our panel of witnesses whose +expertise and experience in their respective fields is +unparalleled. I sincerely appreciate your assistance in +tackling this difficult issue. + The Chair now recognizes the ranking member of the +subcommittee, Mr. Hill, for 5 minutes for an opening statement. + Mr. Hill. I thank the chairman, and I appreciate you +holding this hearing, and for your opening statement, and I +appreciate the witnesses lending their expertise today. + I know this is a topic that touches all members on this +subcommittee and across the Capitol, for the events that +transpired on January 6th affected all of us deeply. While we +have discussed domestic terrorism financing in the past, this +hearing will hit closer to home than the previous ones. + I look forward to the constructive dialogue on this topic +as a way to bring both sides of the aisle closer together. The +Majority has made the decision to convene this hearing in the +aftermath of the horrific destruction and mayhem of January +6th. All of us are saddened and outraged by the actions of +those involved in that evil and devastating act. All of us +condemn the rioters' destruction and malice towards the +peaceful conduct of the business of democracy here in the +people's House. + But I would be remiss if I didn't note that extremist +events like this have been caused by both the far left and the +far right all across our country. Even this week, in Senate +testimony, we are learning important details about the +premeditation of the attack and the weakness in the Capitol +security planning and preparation. + To honor the rank and file men and women of law +enforcement, I have sponsored a resolution with my good friend, +Representative Ed Perlmutter, to celebrate the bravery of the +Capitol Police, the D.C. Metropolitan Police, and other law +enforcement officers. These men and women protected us with +courage, and they should not be overlooked. I am pleased to +report that this resolution has strong bipartisan support, with +over 133 co-sponsors. + It is important to note, though, that this is not the first +time that our Nation's Capitol and elected officials have been +targeted. I will spare the committee a long history lesson, but +I will mention that prior to the events of January 6th, there +have been 6 other attacks on the Capitol involving extremists, +ranging from White supremacists to anarchists. Most in this +room will remember the members of this committee and our +colleagues who were attacked during the Congressional baseball +game practice in 2017, committed by a terrorist fueled by rage +against Republicans. + Unfortunately, as the chairman said, extremism, on both the +radical left and radical right in our country, is not new, and +it affects all Americans. It is important that we investigate +the funding for such attacks and mitigate extremists' ability +to access it. Cutting off funding will inhibit their ability to +grow and expand their abilities and scope. + We need to craft bipartisan solutions to ensure that the +violence and hatred that fuel the attacks does not happen +again. We must use our existing extensive laws and law +enforcement operation and cooperation to identify and prosecute +those on the left and right who attempt to use terror and +violence. + I appreciate the chairman, and in a final comment, I would +hope--I see our distinguished Full Committee Chair on the +call--I would urge our Chair, when we are in Washington to--I +would invite her consideration of an in-person hearing. + And with that, Mr. Chairman, I yield back the balance of my +time. + Chairman Himes. The Chair thanks the ranking member for his +statement, and now recognizes the Chair of the Full Committee, +the gentlewoman from California, Chairwoman Maxine Waters, for +1 minute. + Chairwoman Waters. Thank you very much, Mr. Chairman. I +think this is extraordinarily important. I thank you for +holding this hearing. + We are here against the backdrop of the January 6th +insurrection, a deplorable, yet predictable, display of White +supremacists such as the Proud Boys, the Oath Keepers, QAnon, +and others, and nationalist violence incited by President Trump +against the members of this body and against democracy itself. + Unfortunately, the violence that we saw on the 6th is not +new, but arises from our nation's legacy of violence towards +people of color, religious minorities, LGBTQ persons, women, +and immigrants; from the KKK and lynching, to the terror in +Charlottesville, Pittsburgh, El Paso, and Escondido, White +supremacists and nationalism are not new threats. + But there is hope. The radicalization, recruitment, +training, and operations that made January 6th possible also +had a money trail, which can and must be targeted to turn the +tide against future attacks. + Thank you. And I yield back the balance of my time. + Chairman Himes. Thank you, Madam Chairwoman. + We now welcome the testimony of our distinguished +witnesses, and we have five witnesses today. First, Ms. Iman +Boukadoum, who is a Senior Program Manager at The Leadership +Conference on Civil and Human Rights; second, Ms. Lecia Brooks, +who is Chief of Staff at the Southern Poverty Law Center; +third, Mr. Daniel Glaser, who is Global Head of Jurisdictional +Services and head of the Washington, D.C., office of K2 +Integrity, a Senior Advisor at the Foundation for Defense of +Democracies, and a former Assistant Secretary for Terrorist +Financing and Financial Crimes at the U.S. Department of the +Treasury; fourth, Dr. Daniel Rogers, who is co-founder and +chief technology officer of the Global Disinformation Index; +and fifth, Dr. Daveed Gartenstein-Ross, who is chief executive +officer at Valens Global. + Witnesses are reminded that your oral testimony will be +limited to 5 minutes. You should be able to see a timer on your +screen that will indicate how much time you have left, and a +chime will go off at the end of your time. I would ask that you +be mindful of the timer, and quickly wrap up your testimony if +you hear the chime, so that we can be respectful of both the +witnesses' and the committee members' time. + And without objection, your written statements will be made +a part of the record. + Ms. Boukadoum, you are now recognized for 5 minutes to give +an oral presentation of your testimony. + +STATEMENT OF IMAN BOUKADOUM, SENIOR MANAGER, FIGHTING HATE AND + BIAS, THE LEADERSHIP CONFERENCE ON CIVIL AND HUMAN RIGHTS + + Ms. Boukadoum. Chairman Himes, Ranking Member Hill, and +distinguished members of the subcommittee, thank you for +holding this timely hearing today. + Last month's violent insurrection, heavily fueled by White +supremacy and White nationalism, shocked the world, but it +didn't shock me. It didn't shock my community or other +marginalized communities, because we are not new to White +nationalist violence. Personally, as a Muslim and an Algerian +American, I appreciate the opportunity to be heard today as we +wrestle with the aftermath of this horrific day. + We echo the sense of urgency shared by many of you today in +Congress regarding the very real threat of White nationalist +violence, and I would just note that our coalition has been +ringing the alarm relating to White nationalist violence for +generations. + We know, however, that even well-intentioned national +security laws are invariably weaponized against Black, Brown, +and Muslim communities, and that White nationalist violence is +not prioritized, making that policy failure the fundamental +reason for what transpired on January 6th, not a lack of legal +authority. + For this reason, we oppose any legislation that would +create new charges for domestic terrorism or any enhanced or +additional criminal penalties. The Federal Government, +including the Treasury Department, has many tools at its +disposal to investigate. And also, the FBI and DOJ have 50 +terrorism-related statutes and over a dozen criminal statutes +that they can use. They just need to use them to target White +nationalist violence. + And, of course, we know that White nationalist violence and +violence inspired by Muslims or ISIS and al-Qaida-inspired +violence is very differently treated in this country. Global +policing of charitable giving by Muslims, for example, in my +community, which is a core part of my faith, has led to the +effective forfeiting of our First Amendment rights. + The failure to prioritize White nationalist crimes and the +over-policing of innocuous financial transactions by mosques or +those originating from the Middle East or people with Middle +Eastern names, has taken attention away from the clear and +present threat of White nationalist violence percolating all +around us, and countless innocent people, particularly in the +Muslim community, as I said, have effectively lost their right +to perform religious duties for decades. + What is clear is that the Treasury Department and other +Federal law enforcement agencies already have vast +administrative and statutory authorities at their disposal +which they routinely use to disrupt financing relating to +clandestine activity by freezing bank accounts and stopping +those transactions. + And what history demonstrates is that providing additional +national security authority to fight domestic terrorism would +devastate already over-policed and over-surveilled communities +of color and Muslims. + I would like to sum up with a few recommendations. + First, the Jabara-Heyer NO HATE Act is an important piece +of legislation that must be passed. It centers communities, and +it would help with information-sharing relating to hate crimes, +and would allow the Treasury Department to trace financial ties +to White nationalist violence. + Second, the the Domestic Terrorism Prevention Act (DTPA) is +a piece of legislation that we have endorsed and we believe +will also help with information-sharing, including with the +Treasury Department, to enhance clamping down on White +nationalist violence. + And, third, we believe that hate crimes data must be +reported and mandated for public consumption and that +government leaders must be able to see what is happening across +our country within the hate crime space. + I will just conclude by saying that history has taught us +that national security laws invariably harm the very +communities they are supposed to protect. From COINTELPRO, the +FBI's unlawful domestic surveillance operation that the church +committee demonstrated in Congress, was shamefully used against +Dr. Martin Luther King, Jr., and other civil rights leaders in +the 1960s; and it, too, was justified as a national security +program. + And now, after 9/11, we have seen similar frameworks used +to unjustly target and harm Arabs, Muslims, and others, +treating us and our religion as suspicious, and compromising +our First Amendment rights, freedoms, and due process rights. + Adding national security authorities will only exacerbate +these challenges. + Thank you. And I am happy to answer any questions. + [The prepared statement of Ms. Boukadoum can be found on +page 36 of the appendix.] + Chairman Himes. Thank you, Ms. Boukadoum. + Ms. Brooks, you are now recognized for 5 minutes. + +STATEMENT OF LECIA BROOKS, CHIEF OF STAFF, SOUTHERN POVERTY LAW + CENTER + + Ms. Brooks. Good morning, Chairman Himes, Chairwoman +Waters, Ranking Member Hill, and members of the subcommittee. +My name is Lecia Brooks, and I serve as the chief of staff for +the Southern Poverty Law Center (SPLC). + For 50 years, SPLC has been a catalyst for racial justice +in the South and beyond. We work in partnership with +communities to dismantle White supremacy, strengthen +intersectional movements, and advance the human rights of all +people. The SPLC began tracking White supremacist activity in +the 1980s. Each year, since 1990, we have conducted a census of +hate groups operating across the U.S. as part of our annual +Year in Hate Extremism report. Our 2020 report, released this +month, documented a decline in the number of hate groups, but +not a decline in the strength and momentum of their movement. + As the January 6th Capitol Hill siege affirmed, their +threat to our democracy has not diminished. Far-right +extremists are exploiting internet technology to create a +broader, more decentralized, and more dangerous movement. The +proliferation of numerous internet platforms has allowed +individuals to engage with potentially violent movements, like +QAnon and Boogaloo, without being card-carrying members of a +particular group. + Our testimony outlines how this movement finances itself in +the decentralized way in which they now operate. The funding +and financing of hate groups in this decentralized landscape is +also changing in important ways. In the past, hate groups +raised money by charging dues, selling products, or requiring +the purchase of uniforms. Today, some White nationalist groups +and personalities are raising funds through the distribution of +propaganda itself. + In November, SPLC researchers reported that dozens of +extremist groups were earning thousands of dollars per month on +a popular live-streaming platform called DLive. As the post- +election period became dominated by former President Trump's +false assertions that the election was fraudulent, these DLive +streamers shifted to video streaming at in-person events +branded with the slogan, ``Stop the Steal.'' Some of these same +individuals were featured by House impeachment managers as key +perpetrators of the violence on January 6th. You see, they had +used DLive to live-stream the events inside the Capitol and on +the grounds. + Crowdfunding is also being exploited by hate groups to earn +money in this new decentralized landscape. Crowdfunding sites +played a critical role in the Capitol insurrection, providing +monetary support that allowed people to travel to Washington, +D.C. They have also played a crucial role in raising hundreds +of thousands of dollars in legal fees for extremists. + The violent insurrection at the U.S. Capitol on January 6th +should serve as a wake-up call for Congress, the Biden +Administration, internet companies, law enforcement, and public +officials at every level. But we had wake-up calls before, many +of them, in fact: Charleston, in 2015; Charlottesville, in +2017; and Christchurch, New Zealand, and El Paso, in 2019. + As we all saw last month, we can no longer afford inaction. +Some technology companies have taken steps in the right +direction to combat the rise of hate and extremism on these +platforms, but both government and internet companies must do +far more. + Let me close by highlighting five policy recommendations we +included in our testimony: + One, tech companies must create and enforce terms of +service to ensure that they do not become platforms for hate. +They should prevent their sites from being used by extremist +organizations to raise money for their illegal actions. + Two, these companies should commit to much more +transparency and regular outside audits to measure financial +harms caused by their platforms. + Three, Congress should prioritize the funding of programs +for research into technologies that can be used to detect and +prevent online financial harms while preserving human rights. + Four, Congress should reject legislation to create a new +Federal criminal domestic terrorism statute. If passed as +prologue, such a statute could be used to expand racial +profiling, or even be wielded to surveil and investigate +communities of color and political opponents in the name of +national security. + Finally, we should make concerted efforts across the +government to improve Federal hate crime data collection, +training, and prevention. Data drives policy. We cannot address +hate violence unless we measure it properly. + Thank you for holding this important hearing. The SPLC +looks forward to working with you as you continue to focus your +urgent attention on this important issue. + [The prepared statement of Ms. Brooks can be found on page +42 of the appendix.] + Chairman Himes. Thank you, Ms. Brooks. + Mr. Glaser, you are now recognized for 5 minutes. + + STATEMENT OF DANIEL L. GLASER, GLOBAL HEAD, JURISDICTIONAL + SERVICES, AND HEAD OF WASHINGTON, DC OFFICE, K2 INTEGRITY; + SENIOR ADVISOR AT THE FOUNDATION FOR DEFENSE OF DEMOCRACIES; + AND FORMER ASSISTANT SECRETARY FOR TERRORIST FINANCING AND + FINANCIAL CRIMES, U.S. DEPARTMENT OF THE TREASURY + + Mr. Glaser. Thank you, Chairman Himes, Ranking Member Hill, +and distinguished members of the subcommittee. Thank you for +the opportunity to appear before you today to talk about how +the U.S. Government can employ similar tools and strategies +against White nationalist and other domestic terrorist groups +as it has employed against global jihadist groups over the past +2 decades. + This is a personal issue for me. During my time at the +Treasury Department, I fought to cut off funding to terrorist +groups such as al-Qaida, the Islamic State, and Hezbollah. As a +Deputy Assistant Secretary in the Bush Administration, and +eventually as the Assistant Secretary for Terrorist Financing +in the Obama Administration, my primary responsibility was to +lead the design and implementation of strategies, to attack the +financial networks of these groups, and other threats to our +country's national security. And while we should never let down +our guard with respect to those still-potent terrorist +organizations, it has become tragically clear that there are +domestic extremist groups that, in some ways, present an even +greater threat to our ideals and our democracy. We have the +responsibility to target those groups with the same +determination, creativity, and sense of purpose that we +displayed in the years following 9/11. + To be sure, counter-illicit finance strategies are not +silver bullets, and there are practical and constitutional +limitations to domestic action that do not arise in the global +context. But any comprehensive response to a national security +threat must include a strategic financial component. It is my +hope and expectation that the new leadership at the Treasury +Department will turn its attention to precisely that challenge. + From the outset, let's be clear, that the purpose of a +counter-illicit finance strategy is not to replace the +traditional law enforcement tools which will remain the +foundation of any domestic effort. + Supplementing those efforts, a counter-illicit finance +strategy should seek to hinder the ability of extremist groups +to use the financial system to mask their identities and to +raise and move funds. The first step must be to understand the +typologies and methods by which such groups raise and move +funds and to map out their financial networks. + This first step should be followed by two general +categories of actions: first, offense, undermining the +financial networks that support these groups; and second, +defense, taking systemic action within the financial system to +make it less vulnerable to abuse by these groups. + It is sometimes stated that extremist groups are less +vulnerable to financial measures because of their informal and +decentralized structure. I believe that this is a hypothesis +that is yet to be tested. Any group that engages in organized +activity needs to raise and move funds, and when those +activities extend nationwide or globally, it only increases +such groups' reliance on the financial system. + The U.S. Government should undertake a comprehensive effort +to understand how these extremist groups are accessing the +financial system and, to the extent possible, to map their +financial networks. Once the financial networks and activities +of the extremist groups are better understood, the U.S. +Government should consider the application of targeted +financial measures. The U.S. currently has all the authority it +needs to apply targeted financial sanctions against foreign +extremist groups, and it began to do so last spring with the +designation of the Russian Imperial Movement. + Unfortunately, the U.S. has yet to target additional +foreign groups. And in contrast to previous campaigns against +jihadist groups, Treasury has not followed up the initial +Russian Imperial Movement designation with a financial pressure +campaign involving waves of sanctions seeking to dismantle +facilitation networks. I encourage the U.S. Government to +pursue such campaign as a priority matter. + Practical and constitutional constraints give the U.S. +Government far less ability to apply targeted financial +measures against domestic groups. Congress should consider +legislation allowing for sanctions like authorities to protect +the U.S. financial system from abuse by domestic extremist +groups. Such authorities will need to be tailored to ensure +that the government complies with constitutional requirements, +including First Amendment restrictions on how groups are +targeted and due process restrictions on how such measures are +applied. One consideration could be to forego the asset freeze +that is usually associated with sanctions in favor of some more +limited measures. + There are also measures that the U.S. Government can take +today to make the U.S. financial system less vulnerable to +abuse by extremist groups. The United States has a robust anti- +money-laundering and countering the financing of terrorism +regime, but it can always be fine-tuned and adjusted to address +new vulnerabilities, including those presented by domestic +extremist groups. + The potential measures in Treasury's toolbox include: the +issuance of guidance to financial institutions on financial +typologies, methodologies, and red flags; the establishment of +private-public partnerships; the use of information-sharing +authorities; and the use of geographic targeting orders. + Taken together, these measures will strengthen the ability +of financial institutions to identify, report, and impede the +financial activity of domestic extremist groups, and will +ensure that the U.S. financial system is a hostile environment +for these groups. + Thank you, again, for the opportunity to testify, and I +look forward to answering your questions. + [The prepared statement of Mr. Glaser can be found on page +97 of the appendix.] + Chairman Himes. Thank you, Mr. Glaser. + Dr. Rogers, you are now recognized for 5 minutes. + + STATEMENT OF DANIEL ROGERS, CO-FOUNDER AND CHIEF TECHNOLOGY + OFFICER, GLOBAL DISINFORMATION INDEX + + Mr. Rogers. Chairman Himes, Ranking Member Hill, Chairwoman +Waters, and members of the subcommittee, good morning, and +thank for the opportunity to speak before you and discuss the +funding mechanisms of these domestic violent extremist groups. + I am the co-founder and chief technology officer of the +Global Disinformation Index (GDI), a nonprofit focused on +catalyzing change in the technology industry to disrupt online +disinformation. + Last fall, my colleague, Ben Decker, and our team at the +GDI collaborated with the Institute for Strategic Dialogue to +conduct a study entitled, ``Bankrolling Bigotry'', to examine +the funding mechanisms of American hate groups. + Many of the groups implicated in the events of January 6th +are the same ones that we examined last year in our study. This +is why I sit before you today to discuss a little bit about +what we learned about how technology and payments companies +enable groups like those that participated in the insurrection +to operate. + These groups leverage the internet as a primary means of +disseminating their toxic ideologies and soliciting of funds. +One only needs to search Amazon or Etsy for the term, +``QAnon'', to uncover shirts, hats, mugs, books, and other +paraphernalia that both monetize and further popularize the +domestic violent extremist threat. Images from that fateful day +last month are rife with sweatshirts that say, ``Camp +Auschwitz'', that, until recently, were for sale on websites +like Teespring and CafePress. + As we speak, at least 24 individuals indicted for their +role in the January 6th insurrection, including 8 members of +the Proud Boys, have used crowdfunding site GiveSendGo to raise +nearly a quarter of a million dollars in donations. And it is +not just about the money. This merchandise acts as sort of like +a team jersey that helps these groups recruit new members and +foment further hatred towards their targets. + We analyzed the digital footprints of 73 groups across 60 +websites, and 225 social media accounts and their use of 54 +different online fundraising mechanisms, including 47 payment +platforms in 5 different cryptocurrencies, ultimately finding +191 incidences of hate groups using online fundraising services +to support their activities. + The funding mechanism included both primary platforms like +Amazon, intermediary platforms such as Stripe or Shopify, +crowdfunding sites like GoFundMe, payment facilitators like +PayPal, monetized content streaming services such as YouTube +Super Chats, and cryptocurrencies such as Bitcoin. + All of these payment mechanisms were linked to websites or +social media accounts on Facebook, Instagram, YouTube, +Telegram, LinkedIn, Pinterest, Gab, BitChute, and others. The +sheer number of companies I just mentioned is the first clue to +the scale and the scope of the problem. This is not an issue of +any one individual company, but, rather, a systemic problem of +hate and bigotry exploiting an entire industry, and even +government policy, to raise funds, peddle extremist ideologies, +and commit acts of violence. + A number of conclusions stood out to us in performing this +work. For starters, over half of the platforms we identified +already have explicit policies against hate and extremism that +are simply not enforced. We also found that a large fraction of +the groups we studied have approved tax-exempt status with the +IRS. A full 100 percent of anti-Muslim groups, 75 percent of +anti-immigrant groups, and 70 percent of anti-LGBTQ groups have +501(c)(3) or 501(c)(4) status. + Over 1/3 of the militia groups that we identified, +including the Oath Keepers, whose leadership was recently +indicted on charges related to January 6th, have tax-exempt +status. + This status gives them access to a whole spectrum of +charity fundraising tools from Facebook donations to Amazon +Smile to the point where the most common fundraising platform +we identified across all of our data was Charity Navigator. +These platforms are reticent, to say the least, to make +unilateral decisions that go against IRS determination. + The problem of hate groups exploiting the Tax Code goes +back decades, and stems from a combination of a lack of +resources at the IRS to properly enforce compliance, as well as +long-standing efforts by some to exploit the charity rules for +political, and, now, extremist purposes. + But the issue has become more urgent in the wake of January +6th. In the days leading up to the insurrection, the Oath +Keepers' founder, Stewart Rhodes, appeared on a podcast and +solicited charitable donations to the Oath Keepers Educational +Foundation. It can only be presumed that these funds, which +listeners were notably able to deduct from their Federal taxes, +went to transporting and lodging members of the group slated to +participate in the ensuing riots. + Private industry must also step up and do more. Since the +publication of our report last October, we have documented at +least 17 actions taken by platforms against the groups we have +enumerated. For example, four of the six payment mechanisms +routing funds to the Oath Keepers have been blocked. Amazon has +even removed them from Amazon Smile. But 17 actions out of 200 +instances we observed speaks to the rampant way that it has +been allowed to persist. In fact, while most platforms have +removed the Oath Keepers, payment facilitator RallyPay still, +to this day, services the group's fundraising needs, and has +shown no signs of responding to public pressure to stop. + More must be done. Industry-wide standards must be set, and +enforcement across both the private and public sector must be +stepped up. + Chairman Himes, Ranking Member Hill, Chairwoman Waters, and +members of the subcommittee, thank you for your time, and I +welcome your questions. + [The prepared statement of Dr. Rogers can be found on page +102 of the appendix.] + Chairman Himes. Thank you, Dr. Rogers. + Dr. Gartenstein-Ross, you are now recognized for 5 minutes. + + STATEMENT OF DAVEED GARTENSTEIN-ROSS, CEO, + VALENS GLOBAL + + Mr. Gartenstein-Ross. Domestic violent extremism is today +uniquely posed for growth. Opportunities are given by our +information environment by seemingly intractable global +problems that governments appear incapable of addressing, by a +nation riven by its differences, and by an age where ethics and +identity are in constant flux. + Chairman Himes, Ranking Member Hill, Chairwoman Waters, and +distinguished members of the subcommittee, on behalf of Valens +Global, it is an honor to appear before you today. I think it +is obvious how the backdrop I describe represents an attractive +recruiting environment for any extremist group. + This panel's consensus is that White supremacist extremism, +or WSE, is the most pressing present threat. This is not just +the panelists' opinions. Multiple U.S. Government assessments +validate this view, as do relevant statistics, but White +supremacist extremism is not the only concern in the domestic- +violent extremist, or DVE space. + In addition to documenting relevant WSE threat actors, my +written testimony details street violence, assaults, arson, and +intimidation employed by another militant stream. There has +been a general rise in extremism. + The opening remarks of the chairman and the ranking member +rightly emphasized that we are living through a dynamic +multifaceted ecosystem of extremism. Our divisions could plunge +the U.S. into serious conflict, or even fragmentation. + Scholars have discussed reciprocal radicalization, where +opposite extremes strengthen both sides and give average people +a reason to drift toward extremes. Reciprocal radicalization +shows that the power and success of groups aligned with one +extremist ideology fuels ostensibly opposing groups. Though +different forms of extremism can thrive off one another, +society suffers. + Our policies must be appropriate to this environment. Any +policies to combat DVE should be narrowly targeted and rights- +protected. Unfairly targeting only one ideology, or seeking to +criminalize constitutionally protected behaviors, may push the +country into deepening conflict. So, what can be done? + First, the U.S. Government should consider designating +additional WSE groups as terrorist organizations. I single out +WSE groups here because of the level of transnationalism in the +movement, which is a prerequisite for designation under current +law. The State Department's designation last year of the +Russian Imperial Movement was significant, and it is worth +considering further designations of violent groups that satisfy +the criteria. + Second, any current discussion of DVE financing will touch +about a domestic designation statute allowing designation of +purely domestic groups. This is the most direct way of +addressing DVE groups' financing, potentially criminalizing the +act of funding them and letting authorities clamp down on their +assets. Yet, such a statute would be fraught with civil +liberties concerns. Any such statute must be viewpoint-neutral +with designations corresponding to the threat groups posed, not +to the ideas that they espouse. The statute must be clear about +predicate acts that could result in designation, and that +threshold for designation should be relatively high. + Third, [inaudible] more rigorously mapped relevant DVE +groups and their finances. The current consensus among DVE +experts is that these groups are relatively fluid and devoid of +organizational hierarchy. This may be so, but there is a +tendency for experts to see groups as disorganized or non- +hierarchal, when they have a hidden structure, something to +which Mr. Glaser's testimony alluded. Our current understanding +of DVE group structure and funds may be incomplete, and in the +digital age, fluid structures can quickly morph into more +concrete ones. Further research may present further policy +options. + Finally, the U.S. Government should devote resources to +better understanding reciprocal radicalization and related +phenomenon, fringe fluidity, the transition of an individual or +group from one extremist ideological stream to another. Better +understanding of these dynamics would afford us a better +understanding of how violent extremists interact with each +other. + In conclusion, this hearing refers to the events of January +6th as an insurrection. Anybody who has been in an insurgency +or a civil war situation knows that it is essential to reduce +the potential pool from which militant factions can draw. +Everyone who is a part of this hearing--Members of Congress, +experts, media, spectators--should understand that we are all a +part of this story. Our work is not to score partisan points, +but to make this democracy more resilient to the challenges it +confronts. + With the divisions we have, with today's unprecedented +ability to mobilize for good or ill, we need to reduce the +number of people who might try to impose their will on the rest +of us by force. + Thank you. + [The prepared statement of Dr. Gartenstein-Ross can be +found on page 58 of the appendix.] + Chairman Himes. Thank you, Dr. Gartenstein-Ross. + We now come to the member question portion of the hearing. +I thank all of the witnesses for that comprehensive testimony, +and now recognize myself for 5 minutes for questions. + One thing that struck me is that we heard from five +excellent witnesses, and I don't believe I heard the word, +``cybercurrency'' once. It comes up a lot with my constituents. +It comes up a lot in different contexts. So just to keep some +organization, let me ask two of the witnesses to just offer a +brief perspective on how the committee should think about +cybercurrency as an anonymous and potentially untraceable +source of financing. + Let me start with Ms. Brooks. Any thoughts? + Ms. Brooks. I invite my colleague, Dr. Rogers, to take the +first shot at that. + Mr. Rogers. Okay. Thank you. Thanks, Congressman. That is a +very interesting question, and one that was included in our +study. We looked at five different cryptocurrencies and their +involvement in transferring funds to these groups. They are +definitely there. They are definitely part of the fundraising +strategies. What we noticed was that there was a strong +correlation with the kind of explicit extremism of the group +and their use of cryptocurrencies. So, maybe less extreme +groups, or more cryptically extreme groups, for lack of a +better word, had a more dominant use of traditional fundraising +platforms that touched the kind of mainstream financial system. +And what would happen is as they were deplatformed off of those +tools, those sites, they would migrate into the use of +increasingly anonymized cryptocurrencies. + I should also point out that cryptocurrencies, I like to +call them pseudonymous, not necessarily anonymous, and there +are efforts and ways to track transactions, the challenge being +attributing, say, a particular cryptocurrency wallet to a +particular actor, but we definitely saw the use of +cryptocurrencies generally behind the most extreme groups that +we studied. + Chairman Himes. Thank you, Dr. Rogers. + I do have one other question, if any of the other witnesses +have a different or additional perspective on cryptocurrencies, +let me just invite anyone who wants to chime in. + Mr. Glaser. If I could chime in, Mr. Chairman? + Chairman Himes. Yes, please. + Mr. Glaser. This is Danny Glaser talking. + With respect to cryptocurrencies, I think it is important +to remember that if you want to be able to use a cryptocurrency +in the real economy to any scale, at some point, it does need +to be converted into actual currency, into dollars. That is the +place where the Treasury Department does regulate +cryptocurrencies, and cryptocurrency exchanges are regarded as +money services businesses. They have full customer due +diligence requirements. They have full money-laundering program +requirements. They have reporting requirements. + The U.S. Treasury Department, just last month, issued a +proposed rule relating to unhosted wallets of cryptocurrencies, +and that is out for notice and comment right now. It addresses +the particular issue of wallets that are not hosted on a +particular exchange. I think it is an important rule that is +out there, and I do encourage people to take a look at it. The +comment period closes in May, and then, hopefully, Treasury +will be able to take regulatory action to close that particular +vulnerability. + Chairman Himes. Thank you, Mr. Glaser. + I actually have an additional question for you, and I don't +have a lot of time. One of the things that struck me about the +testimony is that there weren't really calls for additional +laws. In fact, two of our witnesses urged us to avoid that. + Mr. Glaser, you, though, suggested something new that I +would like to give you, maybe, the 42 seconds I have left to +elaborate on. You said you were hopeful for sanctions like +authorities against domestic actors. You did nod to +constitutional and civil liberties concerns, but give us +another 30 seconds on exactly what you mean and, perhaps, most +importantly, what sort of Fourth Amendment overlay should +accompany such authority? + Mr. Glaser. Thank you for the question. + The fact is that the Treasury Department really does not +have a lot of authority to go after purely domestic groups in +the way that it goes after global terrorist organizations. It +simply doesn't have that authority. + You could imagine an authority that does allow for the +designation of domestic organizations. It would have to take +into account, certainly, constitutional restrictions. When you +read a lot of the court decisions, there are concerns relating +to notice. Those concerns could be addressed in a statute. +There are concerns that a lot of the scrutiny is heightened +because sanctions are usually accompanied with asset freezes. +But you could imagine sanctions that don't involve asset +freezes that involve--transaction bans that involve regulatory +type of requirements that you see in Section 311 of the PATRIOT +Act. + So, there is a variety of ways that the due process +standards could be raised from what we see in the global +context and the-- + Chairman Himes. Thank you, Mr. Glaser. I hate to cut you +off, but I have to be a little disciplined on time. I am very +interested in that, so let me encourage you, if you want to +submit additional testimony, to do so. + And before I recognize the ranking member, it was +startling--not startling, it was interesting to me that there +were apparently no strong dissenting views on the concept of +additional legislation. So if the witnesses have additional +thoughts on that, the chairman would certainly welcome that in +written form. + And with that, the Chair now recognizes the distinguished +ranking member for 5 minutes for questions. + Mr. Hill. Thanks, Chairman Himes. This has been an +excellent panel, with really superb presentations, and it has +been very informative. + In looking at the draft legislation that the Majority +noticed with this hearing, one bill stuck out to me, and I +think it is a good follow-up from your most recent exchange. It +seeks to amend Title 31 to require the Secretary of the +Treasury to establish a program to allow designated employees +of financial institutions to access classified information +related to terrorism, sedition, and insurrection. + Now, over the past three Congresses, we have talked about +the concept of a fusion center, not unlike we do in monitoring +cyber risk and cyber crimes, for this terror finance arena. We +have never been able to come ashore on it legislatively, so I +found that interesting; however, I am concerned when you +deputize bank employees without any oversight as to how the +information would be protected, or if there is really even a +need for that, so I would like some comments. + Dr. Gartenstein-Ross, could you describe how banks share +information with law enforcement today, and then provide +feedback on how we might change these protocols, or if that +protocol change is necessary? + Mr. Gartenstein-Ross. Thank you, Ranking Member Hill. + There are four primary ways that banks share information +now. The first is suspicious activity reports (SARs). Financial +institutions have to file these documents with the Financial +Crimes Enforcement Network (FinCEN) when there is a suspected +case of money laundering or fraud. The SAR is designed to +monitor activity in finance-related industries that are out of +the ordinary, or a precursor to illegal activity, or could +threaten public safety. + Second, there is law enforcement's Section 314(a) power +under the PATRIOT Act, in which it obtains potential lead +information from financial institutions via FinCEN. + Third, law enforcement can use its subpoena power if a +court issues a subpoena pursuant to an investigation, or to an +administrative proceeding. + And, fourth, where there are blocked assets, pursuant to +the Office of Foreign Assets Control (OFAC) authorities, +sanctions, or otherwise, banks are required to report blocked +assets back to OFAC. + The information-sharing, in my view, is currently quite +effective. Treasury, in particular, has a very strong +relationship with the U.S. financial institutions. + Mr. Hill. Thank you. And we made one tweak that was passed +into law, signed into law last year, a bill of mine, called the +Cooperate with Law Enforcement Agencies and Watch (CLAW) Act, +which encouraged cooperation on accounts kept open so that they +could be pursued by law enforcement investigations. And I +appreciated the bipartisan support for that. + On Section 314 in the PATRIOT Act, is that a place where we +could, in a protected, appropriate way, make a change that +relates to this domestic issue, or is that, in your view, too +challenging? + Mr. Gartenstein-Ross. No. I think it is a place where you +could definitely make a change. The 314(a) process allows an +investigator to canvas financial institutions for potential +lead information that might otherwise never be uncovered. It is +designed to allow disparate pieces of information to be +identified, centralized, and evaluated. + When law enforcement submits a request to FinCEN to get +information from financial institutions, it has to submit a +written certification that each individual or entity about +which the information is sought is engaged in or reasonably +suspected of engaging in terrorist activity or money +laundering. + I think that in some cases, 314(a) may already be usable, +but I think it is worth looking at the 314(a) process to see +if, in this particular context, when you are looking at +domestic violent extremism, as opposed to foreign terrorist +organizations, there are some tweaks that would provide the +ability to get leads in this matter. + Mr. Hill. Yes, I share all of the chairman's concerns about +this, but I would invite you to write to the committee with +more details about how one might make a regulatory or +procedural change there at Treasury on that topic. + Let me switch subjects. You made a very interesting point +in your comment about mapping these extremist groups' +organizational capability. Can you expand on the mapping part? +We have about 30 seconds, and I will turn it to-- + Mr. Gartenstein-Ross. Yes, sir. Basically, right now--and +you heard several witnesses say this, and I am not disputing +this--the view of these groups is that they tend to be rather +hierarchy-less. They are not very vertical in structure. And +what I have noticed in the realm of extremist groups is +sometimes there are hidden structures that we experts are slow +to recognize. I know that one of the proposed bills on the GAO +would look in more detail into the assets that DVE groups have. +I think that is a good idea. I think that we could do more to +map the assets and understand the flow of funds to these +organizations, sir. + Mr. Hill. Thanks for your time. + Mr. Chairman, thank you for your leadership, and I yield +back. + Chairman Himes. Thank you, Mr. Ranking Member. + The Chair now recognizes the Chair of the Full Committee, +Chairwoman Waters, for 5 minutes of questions. + Chairwoman Waters. Thank you so very much for allocating +this time. + I would like to direct a question to Mr. Glaser and, +perhaps, Ms. Brooks also. + As you know, Henry Enrique Tarrio is known as the national +chairman of the Proud Boys, and he was in town prior to January +6th, and he was ushered out of town by the local metropolitan +police. But what is interesting about him is he had a +relationship with the FBI, and he became an informant for the +FBI, and he informed on people for drugs and gambling and human +smuggling, and some other things; but it appears that they +turned a blind eye to the fact that he was a domestic +terrorist, and, basically, was participating in terrorist +activities, et cetera, and getting away with it, and said that, +before going into rallies, they would inform law enforcement +that the Proud Boys were going to be involved. + Now, even though this hearing is based on financing, I +guess my question, Mr. Glaser and Ms. Brooks, is this: Should +we look at public policy that would not allow the FBI to have +these kinds of relationships where they would turn a blind eye +to domestic terrorism in exchange for information and informing +on drugs and gambling and that kind of thing? + Mr. Glaser? + Mr. Glaser. Thank you for the question, Chairwoman Waters. + I certainly don't think the FBI should be turning a blind +eye to White supremacy and to domestic terrorism of any kind. +Of course, the FBI has a difficult job to manage in terms of +figuring out the best way to collect information that it could +act upon. I don't know that I know enough about the internal +deliberations within the FBI that led it to make the decisions +that it made, but I certainly do agree that we should be--and I +don't think we have been, and when I was in government, we +certainly--I will take that as a criticism of myself as well. +We certainly did not prioritize efforts against White supremacy +as much as we should have. I think that is changing now, and I +think it needs to continue to change, and I think it should +change throughout the government. + Chairwoman Waters. Okay. Thank you very much. It is, I +think, very important to understand whether or not the FBI will +use criminals and domestic terrorists and turn a blind eye in +exchange for information about drugs, gambling, and other +things. I knew that happened in dealing with drug dealers, +where they let some drug dealers stay free if they turned in +other drug dealers but this makes it appear they don't care +about domestic terrorism. + Do you know anything about this? Ms. Brooks, have you heard +about the Proud Boys and their relationship to the FBI? + Ms. Brooks. Yes, ma'am. Thank you. Thank you, Chairwoman +Waters. + I completely agree with my colleague, Mr. Glaser, that they +should not turn a blind eye. The Southern Poverty Law Center +would say that it is because we failed to take the threat of +White supremacy and White nationalists, we failed to recognize +the importance of it. And, so, that the FBI would engage in +some information-sharing at the risk of our democracy is +untenable, and I believe that solely because, as we saw on +January 6th, we failed to recognize the threat. I believe we +have learned some things, and hopefully, the information- +sharing will be taken seriously, and we will recognize that the +greatest threat to our homeland is from White nationalists with +a White supremacist ideology. + Chairwoman Waters. Do you think that I, or Chair Himes, or +anyone should pursue public policy in this area of turning a +blind eye from our law enforcement in exchange for information +that they could give them on other kinds of crimes? + Ms. Brooks. Yes, ma'am. I do think that it is something you +should look into. The Southern Poverty Law Center is happy to +assist in that, and we can bring some research together and add +it to the record if you would like. + Chairwoman Waters. Thank you very much. + Mr. Chairman, I yield back the balance of my time. + Chairman Himes. Thank you, Madam Chairwoman. + The gentleman from Texas, Mr. Williams, is now recognized +for 5 minutes. + Mr. Williams of Texas. Thank you, Mr. Chairman, and thank +you, Mr. Hill. + Unfortunately, January 6th was the second politically- +motivated attack that I have been involved in, in the past 4 +years. As we talked about already this morning, on June 14, +2017, a crazy Bernie Sanders supporter opened fire on a +Republican congressional baseball practice and injured me, +along with five other individuals. Because of the heroic +actions of Capitol Police Special Agents Crystal Griner and +David Bailey, and with God being in charge, the only fatality +that day was the crazed shooter. + Now, this was a politically-motivated attack driven by +anger and extremism, where signs were posted on social media +beforehand, and some of the posts read, ``Republicans are the +Taliban of the U.S.A.'', and, ``It is time to destroy Trump and +company.'' Unfortunately, if you went on Twitter or Facebook +right now, you would find similar messages from hundreds of +people spewing this type of hate. + So, Ms. Boukadoum, how could we possibly monitor everything +posted on the internet without greatly expanding the police +state, and significantly infringing on our First Amendment +rights and all Americans' constitutional rights? + Ms. Boukadoum. Thank you for the question, Congressman. + I believe that there was a fundamental breakdown in law +enforcement response on January 6th, and also, when the attack +happened by that Bernie Sanders supporter, because the law +enforcement agencies in our country have disproportionately +prioritized the wrong thing. This is a question of +prioritizing. We have not prioritized White nationalist +violence. We have not prioritized violence that is motivated by +actions. We have prioritized ideology, and that is deeply +troubling, and, in fact, as you said, Congressman, it's a +violation of the Constitution. + And so, our position is that we must follow the acts of +people. So if there is a threat made by people, whether it is +the Proud Boys, or whether its Bernie Sanders supporters, then +law enforcement must follow that. What we have seen is a +fixation on a certain type of terrorism that is inspired by so- +called Muslim ideology, and that has blind-sighted us. And, +unfortunately, we missed a huge attack on January 6th, and many +people died, and many people are shocked still. + So, that is my answer to you. + Mr. Williams of Texas. Okay. In 2019, the City of San +Francisco voted to label the NRA as a domestic terrorist +organization. In August of 2020, Speaker Pelosi called +Republican lawmakers, ``enemies of the State.'' Now, with +people being so quick to judge their political opponents as +domestic terrorists, it makes me very uncomfortable to expand +the powers to go after our own citizens. + So, Dr. Gartenstein-Ross, what safeguards are in place to +make sure that any additional powers granted to the State are +not abused for political gain? + Mr. Gartenstein-Ross. Thank you, Representative Williams. +That is a great question, and I share your concern about people +throwing the word, ``terrorist'' around, or overlabeling in +this regard. This is why when I emphasized, and to be very +clear, I am not advocating a domestic designation statute. I +was simply making the case both for and against it. But for any +additional powers that are given to the State, I think what is +important is: first, setting a clear threshold for what +designation, or who the predicate of the crime would be; and +second, making sure that it is keyed to actual terrorism. + One thing we have seen over the course of the past year is +that we have an unprecedented ability to mobilize for a variety +of causes. Some mobilizations result in violence being +inflicted by a variety of actors, and I think we are going to +see more mobilizations around a variety of causes that end up +with violence being a part with the mobilization. I think we +need to understand any powers given to the State against that +context and against the context that you emphasized that there +are a variety of groups, a variety of individuals who +increasingly see their opponents as evil, and harming them as +something which naturally flows from their very binary world +view. + Mr. Williams of Texas. Okay. Throughout the COVID-19 +pandemic, I have been very concerned about having our kids out +of school and learning remotely, but the social skills that our +children learn through interacting with other people their age +cannot be replicated over a computer, and never will be. We +have already seen reports of increased mental health issues, +depression, and suicides as a result of the COVID-19 lockdown. + So, Dr. Rogers, can you talk about the role that isolation +and mental health play in radicalizing individuals to carry out +these horrible attacks? + Chairman Himes. The gentleman's time has expired, so the +witness will have to provide that statement as an amendment to +the witness' testimony. + Just for clarity, since we are getting started on these +hearings, the Chair will allow the witnesses the courtesy of +finishing an answer that they have begun before the timer goes +off, just as a matter of courtesy and good transmission of +information, but that courtesy will begin to be revoked 15 or +so seconds after the timer. + So with that, the gentleman from New Jersey, Mr. +Gottheimer, is recognized for 5 minutes. + Mr. Gottheimer. Thank you, Chairman Himes, Chairwoman +Waters, and Ranking Member Hill. Thank you very much for +putting together this important hearing, and thanks to all of +our witnesses for being here today. + I proposed bipartisan legislation called the Freezing +Assets of Suspected Terrorists and Enemy Recruits (FASTER) Act, +featured in today's hearing. This bill will help law +enforcement to freeze the assets of domestic terrorists facing +Federal charges for insurrection and seditious conspiracy, like +those who stormed the Capitol, but also like ISIS-inspired lone +wolf terrorists, and others of that ilk. + Mr. Glaser, given your experience in the private sector and +as the former Assistant Secretary for Terrorist Financing and +Financial Crimes, you know that for foreign terrorist +organizations, the threshold for asset seizure is low. Given +what transpired at the Capitol, do you believe that law +enforcement could make use of greater authorities in certain +cases for domestic extremism, such as insurrection or seditious +conspiracy? + Mr. Glaser. Thank you for the question, Congressman. And to +be clear, I think we need to make a distinction between seizure +and forfeiture on the one hand, and freezing assets on the +other hand. The standard for seizing and forfeiting assets +under any circumstance is the same under criminal or civil +forfeiture. It is relatively lower with respect to freezing +assets for foreign organizations. And as I was saying, when I +talk about a domestic terrorist financing authority, I am +talking about the application of sanctions like authority in +that case, but it doesn't necessarily have to involve a freeze. + But to answer your question with respect to your +legislation, I do think it addresses a lot of concerns with +respect to immobilizing assets quickly. It is linked to the +criminal justice system. It is not linked to more traditional +terrorist financing types of activity in which the Treasury +Department would be involved. + I guess my question is whether or not an asset forfeiture +count within an indictment would serve a similar purpose, but I +do certainly applaud your effort to ensure that assets relating +to insurrection are quickly immobilized, and it seems to me +that is what the statute is trying to do. + Mr. Gottheimer. Thank you, sir. And just to follow up, do +you believe that the current financial intelligence system we +have in place is effective in providing the proper data to law +enforcement to combat the financing of these attacks? + Mr. Glaser. I think that our anti-money-laundering +counterterrorist financing system does generate an enormous +amount of information for the government to analyze and then +use. I think there are ways that it can be improved. Public- +private partnerships are very important. Daveed talked about +the use of 314, both A and B to transfer information, and I +think there are maybe tweaks we can make to the suspicious +activity reporting that would provide, not necessarily more +information, but better information. + Certainly, there is technology that also could be employed +by the government and by financial institutions to allow them +to go through the massive amounts of data that banks need to go +through to file quality suspicious activity reports. + I think there are plenty of ways the system can be +improved, but the fact is that Treasury has access to massive +amounts of financial information, and I think the focus should +be on improving the quality, not necessarily the quantity. + Mr. Gottheimer. Thank you, sir. + Ms. Brooks, in the work that the Southern Poverty Law +Center has done to track domestic extremist groups like the +ones that attacked the Capitol on January 6th, have you +observed increased use of 21st Century technologies to enable +these groups? For example, using websites that are outside of +the mainstream to organize and spread hate, and fundraising +tools like cryptocurrencies that are more difficult for law +enforcement to track? + Ms. Brooks. Yes, sir. Thank you for the question, and this +really speaks to the earlier question as well. As I mentioned +in my oral testimony, we note a massive decentralization of +these groups and a disbursement of groups, so it makes it +harder to track them and harder to follow the money. And we +have noticed that the groups are continuing to self-disburse. + Mr. Gottheimer. Are they using cryptocurrencies? Do you +notice them using cryptocurrencies? + Ms. Brooks. Oh, yes, sir. Hold on one second. I have +something on that. Yes. Monetized propaganda has continued to +increase and we see a lot of personalities distributing--I'm +sorry. I apologize. I am looking for my notes on that. Hold on +a second. + On December 8th, someone from the far right personalities +distributed--oh, sorry. I will stop. + Mr. Gottheimer. Mr. Chairman, will you allow the witness to +answer the question? Is that okay? + Chairman Himes. Oh, yes. If the witness would like to +quickly conclude her answer, that is fine. + Mr. Gottheimer. Thank you, Mr. Chairman. + Ms. Brooks. Thank you. In a single bitcoin transaction, we +noted about $523,000 exchanged on blockchain. The recipients +included Nick Fuentes whom, as you know, is a far-right +internet personality who is banned from YouTube and other +platforms because of his hateful content. And so, we continue +to see this money transferring across lines. + Mr. Gottheimer. Thank you, Ms. Brooks. And thank you, Mr. +Chairman. + Chairman Himes. You are welcome. + The gentleman from Ohio, Mr. Davidson, is now recognized +for 5 minutes. + Mr. Davidson. I thank the chairman, and I thank the +witnesses for the expertise you have provided for this hearing +and the preparation that goes into it. With each passing +Congress, I want to share a concern, that really, with each +passing Congress, we further erode the Fourth Amendment under +the guise of promoting national security. This has evolved from +a trend to a real tradition. + As an example, the Corporate Transparency Act took a large +chip out of the Fourth Amendment last year. I fear that January +6th will be used as another reason to further destroy the +Fourth Amendment and the protections it provides. + Mr. Glaser's testimony states that the U.S. anti-money- +laundering (AML) CFT regime can always be fine-tuned and +adjusted to address a variety of vulnerabilities, including +those presented by racially- and ethnically-motivated violent +extremist groups. + Mr. Glaser then lists different tools the Treasury can use +to fine-tune and adjust. Let's take a moment to translate what +it means to fine-tune and adjust this AML toolbox. It really +means that we are further intruding on individual privacy by +handing the government more and more of a person's financial +record. At what point do we draw the line? + January 6th cannot and should not be used to destroy our +right to privacy even further. And, frankly, I was encouraged +by Ms. Brooks' notion that we should resist the temptation to +further empower the Federal Government because it has been +abused and, frankly, it has been abused heavily towards +minority groups in the past, and now under the guise of +protecting them, it would be a shame to see further powers that +erode privacy protections. + So, I urge my colleagues to speak up on this topic and the +narrative that really attacks the Fourth Amendment right to +privacy. Mr. Glaser, in your testimony you said that the +government should consider legislation to protect the U.S. +financial system from being abused by domestic terrorists. You +acknowledge that the legislation would have to be tailored to +comply with the Constitution, specifically the First Amendment, +but you really don't make mention of the Fourth Amendment +anywhere. + My question is, what constitutes an unreasonable search of +an American citizen? Should Americans have any expectation of +privacy with respect to their personal finances? Where is that +limit, because it sounds like there might not be one. In fact, +the word, ``privacy'' isn't even mentioned in your testimony. + Mr. Glaser. Thank you for the question, Congressman. In my +testimony, I did make reference to constitutional due-process +requirements. I didn't specifically mention the Fourth +Amendment, but, of course, the Fourth Amendment is where many +of those constitutional due process requirements are contained, +so it certainly wasn't my intention to imply that the Fourth +Amendment shouldn't be--we shouldn't ensure that the Fourth +Amendment protections adhere. + I would also note that with respect to the Anti-Money +Laundering/Combating the Financing of Terrorism (AML/CFT) +measures that I recommend be taken, none of them involve +providing the government with more financial records. + Mr. Davidson. I appreciate that. I do get that. And, look, +you served in a very important post, one of the most important +in our government, for that matter, in my view, in terms of +overseeing this part of Treasury, which is really vital for our +national security, and I think it is relevant for Chairman +Himes to be holding this hearing on the topic. + So, the tension is just so incredibly important. I guess, +the core question is, do you believe that Americans should have +an expectation of privacy with respect to their personal +finances? + Mr. Glaser. Yes, of course, I think Americans should have +an expectation of privacy with respect to their personal +finances. As with every other privacy consideration, it is a +question of balancing where the liberal limitations of that +privacy begin and end, and I think it is certainly possible and +I think we do so every day to respect people's privacy on the +one hand, but also give the government the tools it needs to +protect its citizens from other threats. Because threats to +civil liberties come in all direction-- + Mr. Davidson. I appreciate that. I apologize. I have to get +at least one more question in. I have about a dozen, so. But +Mr. Gartenstein-Ross, according to the LexisNexis report last +fall, the scope of AML is huge. So my question is, should we +double down on a static AML system in an ever-evolving industry +that is growing compliance costs or should we try to overhaul +it? + There was a really good BuzzFeed article last year that +talked about the problems where the biggest banks, frankly, are +the biggest money launderers, how do we address that-- + Chairman Himes. The gentleman's time has expired. + The gentleman from New York, Mr. Torres, is recognized for +5 minutes. + Mr. Torres. Thank you, Mr. Chairman. Both the Code of +Federal Regulations and the PATRIOT Act provide the Federal +definition of, ``domestic terrorism'', but as has been noted, +there was no Federal designation of domestic terrorism nor was +there Federal prosecution of domestic terrorism as a crime unto +itself, all of which has me wondering, what is the point of +defining domestic terrorism in Federal law if it doesn't result +in designation for prosecution, what practical impact does the +Federal definition have on domestic counterterrorism and, in +particular, counterterrorism finance? + Mr. Glaser? + You are on mute, Mr. Glaser. + Chairman Himes. The Chair will instruct that 25 seconds be +added back to the gentleman from New York's time. + Mr. Torres. I appreciate that, Mr. Chairman. + Chairman Himes. Mr. Glaser, are you with us? + Mr. Torres. Mr. Glaser, you are on mute. + Is there anyone else on the panel who can address this +question? + Ms. Boukadoum. I am happy to jump in. The domestic +terrorism definition that is in the PATRIOT Act is really +defined for FBI investigatory purposes. And you are absolutely +right, Congressman Torres--and it is good to see you, again-- +that there is no parallel charge that goes with the domestic +terrorism definition. So, it is really designed for +investigatory purposes. + What we submit is that the material support for terrorism +statute--as we know, there are two of them. There is one with +an international nexus that is required and there is one that +allows for investigating material support for terrorism, +domestic terrorism, in particular, as defined in the PATRIOT +Act with underlying statutes that allow for any crimes that +take place within the United States that have no international +nexus. + And we believe that second piece of the material support +for terrorism statute has been neglected, and can be nicely +used with the domestic terrorism definition as laid out in the +PATRIOT Act, and we hope that statutory framework will be used +to actually go after violent White nationalists and others. + Mr. Torres. Much has been said about the First Amendment +and domestic counterterrorism. I have a hypothetical. Suppose +there were a White supremacist organization with a publicly- +stated mission of murdering minorities, overthrowing the +government, and establishing a White ethnostate, could the +Federal Government legally open an investigation into the +membership and financing of such an organization without +running afoul of the First Amendment? + Ms. Boukadoum. That is an excellent question and it is not +a hypothetical, Congressman. It is actually a fact. We have +seen, as my friends and colleagues at the Southern Poverty Law +Center who are part of our coalition have highlighted time and +time again, that there are myriad organizations that have +absolutely espoused violence out in public on Facebook, on big +tech platforms, that have not been taken seriously. And so, +yes, absolutely, the financial institutions and financial +enforcement apparatus can trace those groups and should be +tracing those groups, frankly. + But as I said, there has been a deprioritization of White +nationalist violence at the expense of our collective security. +So I would submit that there is nothing wrong, or that there is +nothing that runs afoul of the First Amendment to go into +investigating those types of groups. + Mr. Torres. I want to make one observation, and let me know +if you agree or not, but it seems to me there is a cognitive +dissidence or double standard on the part of law enforcement. +If you are a member of a violent enterprise like the mafia or a +gang, you can be prosecuted under the RICO law, but if you are +a member of a violent White supremacist enterprise, then +somehow you are protected by the First Amendment. Can anyone on +the panel explain the disconnect there? + Ms. Boukadoum. I think that is an excellent point. And in +my written testimony that we submitted for the record, we +highlight that RICO and conspiracy statutes are extremely broad +and should absolutely be used against particularly organized +White nationalist groups that, as you mentioned, espoused an +ethno-national state that wants to get rid of and kill millions +of people, but I would love to open it up for the other +panelists. + Ms. Brooks. Thank you. + Thank you for the question, Representative Torres. And I +completely agree there. The Southern Poverty Law Center +documents White nationalist groups today to be clear their +mandate is to create a White ethnostate, and they have proved +time and time, again, that they will carry out violent means to +reach that end. + I would also offer that the Southern Poverty Law Center has +used RICO statutes in the course of our civil suits against +hate and extremist groups over the past couple of decades and I +think that--those are the laws that we mean when we say that +there exist current statutes that law enforcement could use to +address the real threat of domestic terrorism. + And for me, and I agree with my colleagues in the +Leadership Conference, it is important that we educate +ourselves and recognize the very real threat of domestic +terrorism. That is why the Southern Poverty Law Center supports +the Prevention Act. + Law, as you know, is a very, very blunt tool and we +advocate for further education and communication between and +coordination between the Department of Homeland Security, the +Department of Justice, and the FBI. And they could really work +together to lower the threat level and strengthen a partnership +that would blunt these hate and extremist groups. + So, thank you for the question. + Chairman Himes. The gentleman's time has expired. The +gentleman from Ohio, Mr. Gonzalez, is recognized for 5 minutes. + Mr. Gonzalez of Ohio. Thank you, Mr. Chairman, and thank +you to our panel for today's testimony. It is an important +hearing and, Mr. Chairman, I do appreciate your comments at the +beginning about how this shouldn't have a political lens on it, +and I think we need to be honest with ourselves about that. + I want to start by referencing the testimony of Dr. +Gartenstein-Ross. You talked about, in chilling fashion, how +extremism is poised for growth. Unfortunately, I agree with you +100 percent, for a variety of reasons, and you also highlighted +reciprocal radicalization, and I think that is right. + I would argue that there is an escalating component to it +as well, one side does one thing, the other side escalates and +radicalizes, and there is a countermovement that does the same. +And we are in this Ping-Pong of extremism, unfortunately. + So with that as my first question for Dr. Gartenstein-Ross, +in your research, did you find that any of the political +violence from the summer--and I am not creating an equivalency, +so let's just get that clear. What happened at the Capitol is +far worse. I am not creating an equivalency, but I am trying to +understand the mechanisms. + In your eyes, did the political violence from the summer +inspire or activate some of the far-right nationalist movements +that we saw at the Capitol? + Mr. Gartenstein-Ross. Thank you, sir, for that question. I +would say it is unsettled, but I believe that the answer is +yes, in a rather subtle way. There is a really good book +called, ``How Terror Evolves'' by Yannick Veilleux-Lepage, +which looks at airplane hijackings. And it argues that tactics +evolve from one group to another regardless of ideology, and it +even looks at criminal groups that have used airplane +hijackings. + I think what we saw over the course of the past year is a +number of different mobilizations, starting with the anti- +lockdown mobilization, then there is a racial justice +mobilization, then an anti-fascist/anarchist mobilization, and +finally a pro-Trump steal an election mobilization, and those +aren't all extremist mobilizations by any means, but all of +them were mobilizations that were very powerful. + And I think that each mobilization learned from the other +ones, and the lesson that was learned by the time of the +Capitol attack is that attacking a symbol of government is +extraordinarily dramatic, and there are multiple examples of +that from attacks on mayor's offices to autonomous zones and +attacks on police precincts that provided some tactical guide +for what occurred. + So I do think that different groups, both extremist and +nonextremist, are learning to mobilize faster than before. And +all of them are learning from one another's tactics, and +tactics that we may applaud today may be used tomorrow by a +group that we utterly despise and that despises us. + Mr. Gonzalez of Ohio. Thank you for that answer. + And a follow-up, what role do public figures, politicians +or otherwise, play in contributing to the violent behavior that +we have seen across society over the last year? And how can we +be better leaders? + This is where I want you to lecture us and tell us how we +have failed the American people. + Mr. Gartenstein-Ross. I love the question. And we are in an +extraordinarily polarized environment where even the slightest +differences of point of view can lead to recrimination, fear, +calls for people to be fired, different labels being thrust +upon other people. I think now is the time for political +leaders to show wisdom, and let me applaud this subcommittee +for the bipartisan way that it put this hearing together. + I applaud it for getting witnesses who can speak to both +sides of the aisle, but I agree with the premise of the +question that ultimately, we need to figure out how to step +back from the precipice. We need to figure out how we live +together within a system that we all support. + We need to figure out how the fact that the person next to +us disagrees on some issues doesn't cause us to think of that +person in a binary way as being evil or beneath us or someone +who is our enemy. We are struggling with that, and part of it +is politicians, and part of it is the systems of communications +that we have. + It is a complex, multifaceted problem, but the question you +asked, sir, is the exact right question, and politicians have +often been a part of the problem. + Mr. Gonzalez of Ohio. Thank you. And with my final 30 +seconds, I am going to share a brief story. I voted for +impeachment, as most of you know, and I am a Republican. So, I +have been the subject of threats in two different instances in +the last year, one from the left and one from the right. And I +will tell you my personal opinion is if this body and some of +us on this committee don't start acting more responsibly, what +happened in January is only the beginning, and that is up to +us. That requires real leadership. + And so, I thank you for your answers, and I hope we will +heed those lessons. + Chairman Himes. The gentleman's time has expired. + The gentleman from Massachusetts, Mr. Lynch, is recognized +for 5 minutes. + Mr. Lynch. Chairman Himes, first, I want to congratulate +you on your chairmanship. I am proud and happy to be a member +of this subcommittee, and thanks for putting this hearing +together. Congratulations to the ranking member as well. + I want to talk about cryptocurrencies a little bit. The use +of cryptocurrencies by terrorist networks, drug traffickers, +and other illicit activities is well-documented. I know Mr. +Glaser, we worked together when I used to Chair the Task Force +on Terrorist Financing back in the day, but we had experts from +FinCEN to the RAND Corporation. They have all expressed +concerns about the use of cryptocurrencies by criminals, and we +do have some examples that haven't been mentioned here. + One example is the far-right group, the White supremacist +platform, The Daily Stormer. They actually solicit donations +from users by cryptocurrency. They use Monero, but there have +been high-profile, high-value bitcoin transfers to a number of +these U.S.-based groups. These are domestic far-right extremist +wallets. + As a matter fact, earlier this month, Treasury Secretary +Yellen said, ``I see the promise of these new technologies, but +I also see the reality. Cryptocurrencies have been used to +launder the profits of online drug traffickers and they have +also been used as a tool to finance terrorism.'' + So Mr. Glaser, and also Dr. Rogers, I think you could speak +to this as well, how does the use of cryptocurrencies--and I +Chair the Task Force on FinTech, and we are worried about this. +We are trying to adopt some of these technologies, but this is +one of those double-edged swords, I guess. How does the use of +cryptocurrencies affect the ability of law enforcement agencies +and research organizations and financial institutions to +identify and trace the funding of domestic extremists? + Mr. Glaser. Thank you for the question, Congressman Lynch, +and it is good to see you, again, and thank you for your +leadership on these types of issues over the years. + After 9/11, all of the focus was on Hawala, and there was +this notion that it was some sort of magical, mysterious system +that nobody could comprehend and it was impossible to trace +through. And in the end, we found out that really wasn't the +case; it operated based on the same principles as a lot of +other financial transfers, and it was just a matter of bringing +it into the system in an appropriate way. And I think that +there is an analogy between that and cryptocurrencies. + Cryptocurrencies aren't inherently bad and, in fact, as +Secretary Yellen said, they have a lot of useful purposes and +could really help on issues such as financial inclusion. + That said, they are also subject to abuse, so the challenge +is to bring them into the system and regulate them in the +appropriate way. I do think that the Treasury Department +approaches it the right way through the regulation of +exchanges, applying customer due diligence, programmatic +requirements in suspicious activity reporting requirements to +the exchanges which is where the cryptocurrencies are +ultimately transferred into Fiat currency and where Fiat +currency is transferred back into the cryptocurrency. + Again, I highlight that FinCEN has a rule out right now, a +proposed rule, related to unhosted wallets, which is a loophole +in the system right now and that is a place where I think +people should be focusing. + But the fact is that there are some cryptocurrencies out +there which try to design themselves along the fault lines of +the AML/CFT restrictions. We need to look at those. We need to +make sure that those types of cryptocurrencies are banned, but +we also need to provide opportunities for the sector to grow in +a supervised, regulated way as I think it is, for the most +part, right now. + Mr. Lynch. Wouldn't it require getting rid of the +pseudonymist nature, where we don't have digital identities? +Isn't that the core of the problem? And that is what the users +or the advocates of crypto, a lot of them, cling to that; that +they want to decentralize anonymous or pseudonymist systems. Is +that part of the problem? + Mr. Glaser. Yes. Anti-money-laundering, countertrust +financing rules and regulations at the end are about +transparency. It is about transparency in the international +financial system and the domestic financial system. And in +certain ironic ways, cryptocurrencies provide enhanced +opportunities in certain ways for law enforcement agencies to +be able to trace transactions that aren't there and sort of +bulk transactions in the private sector. + But, again, I come back to, [inaudible] And I think the +point of entry is at the exchanges, which is where we are +trying to regulate it now. + Mr. Lynch. Thank you, Mr. Chairman. + I yield back. + Chairman Himes. The gentleman's time has expired. The +gentleman from Texas, Mr. Taylor, is recognized for 5 minutes. + Mr. Taylor. Thank you, Mr. Chairman. I appreciate this +hearing, and I appreciate the witnesses and the expertise that +they bring to this important topic. Domestic terrorism +obviously is something that I think, with a little historical +perspective--I think we remember Puerto Rican separatists +shooting Members of Congress on the Floor of the U.S. House +back in the 1950s, so this is a long path that we have been +going down in trying to fight this. + And, obviously, I was intrigued, Mr. Chairman, by your +comments about the domestic terrorism being more difficult +because they have First and Fourth Amendment rights. + But I remember my own time as a Marine on the U.S./Mexican +border contending with the Foreign Intelligence Surveillance +Act (FISA), and the Posse Comitatus Act, dealing with the +international component and really the PATRIOT Act, dealing +with that and trying to figure out, well, okay, where does the +international stop and the domestic begin, and how do we share +data between the CIA and the FBI, and how is that legal, when +is that legal, which, unfortunately, 9/11 really revealed to us +we had some problems there. + So just going down the path of making sure that we are +sharing information across platforms at the same time, +protecting peoples' rights, and I think that is something that +we are all conscious of, that push/pull. + Dr. Gartenstein-Ross, just in terms of the way you think +about this, is there enough sharing between the FBI, the +Department of Homeland Security, and local law enforcement? Are +there regulatory or statutory changes that we can make at the +congressional level to encourage information-sharing so that we +can actually stop/prevent terrorist actions? + Mr. Gartenstein-Ross. That is an excellent question. As you +know, sir, DHS, one of its mandates is to share information +with local law enforcement, which is a relatively effective +system; although, you have had a number of times where some of +the information shared ends up getting leaked to the press, +which, in turn, causes controversy and then impedes sharing. + One of the reasons why we were so slow to look at WSE +extremism as the government relates to a 2009 controversy about +a report on what was dubbed right-wing extremism at the time. +So, it is not clear to me that there are specific fixes that +can immediately leap to mind, but I will say that this is +something that we should look into to see if there are things +that impede the flow of information. Anything that will allow +information to be shared more widely will be a positive. + Mr. Taylor. Mr. Glaser, just given your experience in +government, what would you say to that in terms of information- +sharing between--again, I saw the restriction when it went from +international to domestic. There were definitely some walls +that were created there in the 1970s that were knocked down a +little bit after 9/11, but do we have those in terms of dealing +with this problem? + Mr. Glaser. Thank you for the question. And I agree with +your premise that there needs to be a vibrant partnership +between the public sector and the private sector to attack +these sorts of issues. In fact, when I was in-- + Mr. Taylor. We will get to that in a second, but the +question is, within the Federal Government and local law +enforcement, are there walls that we need to break down +statutorily or by regulation? + Mr. Glaser. With respect to financial intelligence, I think +that there is very good information-sharing between the Federal +Government and the State Governments. State Governments have +access to suspicious activity reports, so I think that there +are probably mechanisms that we could implement to improve +them, but they wouldn't be legislative in nature. + Mr. Taylor. Okay. And then Ms. Boukadoum, this is something +you are concerned about, is the role of private companies +taking it upon themselves to report to the authorities what +they perceive to be problematic when they are not required to +do it, right? + And so I am thinking recently there was an allegation that +Bank of America went in, pulled all the data from their +customers, and reported that to law enforcement without having +a warrant, and that--in assisting the Fourth Amendment +question, should the government even be willing to accept data +that they don't have the right to get, that the Fourth +Amendment precludes them from? Your opening statement leads me +to believe that you are concerned about this as well. + Ms. Boukadoum. Absolutely, Congressman. I think that civil +liberties have to be protected, and I think that the private +sector, Bank of America, big tech have to really make sure that +there is a notice requirement that is provided to customers and +also that there is, yes, a warrant from the FISA court, even +though, it is a secret court, but there are mechanisms for +making sure that due process and transparency to the extent +possible are complied with. + Mr. Taylor. Thank you. + Mr. Chairman, I yield back. + Chairman Himes. The gentleman yields back. The gentlewoman +from Pennsylvania, Ms. Dean, is recognized for 5 minutes. + Ms. Dean. Thank you, Mr. Chairman. I thank you for hosting +this important hearing. I will get right to some questions. I +thank all of those who are testifying today to help us +understand this better. + Mr. Rogers, if I could start with you, what evidence is +there of alternative financing platforms contributing to +expanded recruitment or radicalization of domestic terror +groups? Do we have any evidence of alternative financing +platforms? + Mr. Rogers. Thank you, Congresswoman, for the question. And +if I may clarify, by alternative financing platforms, can you +provide more detail about exactly the sorts of platforms you +are referring to? + Ms. Dean. Fundraising. + Mr. Rogers. Okay. That is sort of the core of our entire +research, how extensively those sorts of platforms are being +used, and it speaks to a lot of the discussion today that most +of the financial activities not through the kind of, +traditional banking, there is a lot of other sort of companies +and chokepoints being involved whether you are talking about +crowdfunding platforms--I mentioned GiveSendGo as an example, +Rakuten Pay, all of these companies, they sit on top of the +larger kind of payments in banking. + At the end of the day, the money lands somewhere that is a +more traditional bank or payment provider, but even before you +get to those companies, there is a whole host of smaller and +alternative, what you may call, tech companies, that are +facilitating these payments and we outline close to 100 of them +in our report. + Ms. Dean. And would you say that those digital fundraising +platforms are contributing to the diffusion of harmful +ideologies? + Mr. Rogers. Absolutely. As I mentioned in my testimony, not +only are they just helping or facilitating raising funding for +these groups, but merchandising platforms. Go to Etsy.com and +type in, ``QAnon'', and the sale of merchandise helps further +the ideology, kind of creates that, as I call it, that team +jersey to help the group recruit and further whatever ideology +they are peddling. + Ms. Dean. Thank you. I appreciate that. + Mr. Glaser, if I could turn to you. FinCEN, at the +Department of the Treasury, is at the forefront of detecting +illicit financial transactions involving potential crimes in +terrorism, and I am thinking of, for example, advisories +regarding possible human trafficking or drug trafficking. But +does FinCEN provide this type of guidance related to armed +domestic extremists or mass shooters in terms of potential +purchase of weapons, amassing of arsenals of guns, or other +weapons for attacks? + Is there such an advisory alert? We are examining +communications and gaps in communications--is there such an +advisory around the amassing of weapons? + Mr. Glaser. FinCEN does not currently have an advisory +relating to domestic terrorism. I would not be surprised if +they were working on one right now, and I think it is a great +question. In my testimony, I specifically reference that as one +of the things that FinCEN could be doing. + And as I said, I wouldn't be surprised if they were working +on one right now, but there is not currently one out there. + Ms. Dean. There was legislation that was introduced last +session by my friend, Representative Wexton--perhaps you are +familiar with it--the Gun Violence Prevention Through Financial +Intelligence Act. It was a bill in simplicity that would +develop an advisory notification to assist financial +institutions in detecting and then reporting suspicious or +illegal financial activities around firearms. + Do you think that legislation is worthy, and would be a +step in the right direction? + Mr. Glaser. Thank you, Congresswoman. I must admit that I +am not familiar with that specific legislation. I will say that +banks already have the obligation to report suspicious activity +to FinCEN, but there are holes in it relating to illegal +activity relating to firearms, I am sure that is something that +should be addressed. + Ms. Dean. Thanks so much. + And maybe Ms. Brooks, I will go for a quick question to +you. How can the Federal Government provide better tools or +facilitate coordination, again, about communication with State +law enforcement agencies, prosecutors, the Federal Government-- +what should we be doing to share information more efficiently? + Ms. Brooks. Thank you for the question. The Southern +Poverty Law Center, of course, supports the Domestic Terrorism +Prevention Act because it really is about improving +communication and coordinating communication in response across +agencies. + Of course, it doesn't provide for additional Federal +criminal enforcement power, but we believe that improved +communication and coordination was the big part of the issue on +January 6th, so we support that, just the sharing of +information and acting upon that information. + Thank you for the question, Representative Dean. + Ms. Dean. Thank you. + I yield back. Thank you, Mr. Chairman. + Chairman Himes. The gentlewoman's time has expired. The +gentleman from Illinois, Mr. Garcia, is recognized for 5 +minutes. + Mr. Garcia of Illinois. Thank you, Chairman Himes and +Ranking Member Hill, for convening this hearing, and thank you +to the witnesses for joining us today and sharing your research +and knowledge. + We know that racism and right-wing extremism have long +histories in this country. As an immigrant, I have seen it for +most of my life. Donald Trump tapped into that from the very +start of his campaign, and what happened here on January 6th is +a symptom of something very serious. + Like many of you, I was locked down in my office that +afternoon. I didn't know whether or not armed militia had +entered my office building. I didn't know if they were looking +for me as a proud immigrant, Mexican-American Congressman, but +I knew they wanted to stop a Democrat from being elected +President. + It is easy to say that the people who stormed the Capitol +last month represent a small fringe in our politics, but they +have allies and friends in high places. + I have a couple of questions. Ms. Brooks, in your +testimony, you gave us a good timeline of how racist extremism +has connected to party politics. Could you talk a little more +about how the radical right entered the mainstream and what we +should be worried about moving forward? + Ms. Brooks. Thank you so much for the question. As the +Southern Poverty Law Center has documented over the last couple +of decades, there has been an increase in the number of active +hate groups in the United States. We found about 10 years ago, +maybe 15 years ago, that that increase is directly connected to +the shifting demographics within the United States. + And so, the decrease in the White population serving as a +numeric majority has served to create fear and anxiety in the +White population. As we saw with the ascension of President +Obama, that was kind of a peak moment, and an example, if you +will, for Whites who were beginning to think that they were +being displaced, and feeding into a White nationalist trope +around the great replacement or White genocide. + So, we have seen an increase in that rhetoric. What we saw +over the last 6 years was an increase in that rhetoric that was +echoed from the highest office in the country, from the +President, and that served to kind of fuel and carry the +disinformation, fear, and anxiety to this fever-pitch position +in which we find ourselves in today. + Mr. Garcia of Illinois. Thank you. + Dr. Rogers, you studied radicalization and terrorism in a +number of countries and your report on bankrolling bigotry +mentioned that far-right groups use the 501(c)(3) nonprofit +status to look legitimate. What role does money in our +political system play in fanning the flames of right-wing +extremism? Do all of these nonprofits and shell companies make +it harder to track their role? + Mr. Rogers. Thank you, Congressman, for the question. For +starters, I am not an expert on tax exempt organizations, and I +am certainly happy to point you to ones that I have worked with +in the past. + But it is my understanding that the abuse by some of the +charity and the nonprofit tax-exempt rules has grown over time +as political campaigns and what-not have become more expensive +as a way to shield identities involved in political donations +and things like that. + And so, that abuse has grown over the past decades, while +at the same time, the resources for enforcing the 501(c)(3) and +501(c)(4) rules to say that if a group applies as a supposedly +educational charity, to enforce that they actually are engaging +in educational charitable activities and not say, secretly a +violent militia, the resources that the IRS has to fulfill that +regulatory compliance role have decreased over time for a whole +host of reasons. + So one of our recommendations that we have taken from one +of our experts is to actually break out that function from the +IRS. The IRS is ultimately a revenue-generating organization, +and this part of the IRS is not, by definition, revenue- +generating, so it tends to be kind of ignored. + If you took that regulatory function out, much as the +charity commission in the U.K. as an independent organization +to fulfill that role, that might help with the compliance and +the enforcement problem. So, just one idea related to that. + Mr. Garcia of Illinois. Thank you very much. + Mr. Chairman, I yield back. + Chairman Himes. The gentleman yields back. And the +gentleman from Massachusetts, Mr. Auchincloss, is recognized +for 5 minutes. + Mr. Auchincloss. Thank you, Mr. Chairman, and thanks to +those who are testifying today. As part of our ongoing +investigation into the insurrectionist attack on the Capitol on +January 6th, the attack laid bare our vulnerability to domestic +terrorism, and we need to examine solutions to stop future +attacks before they happen. + I believe it would be a grave mistake, however, to maintain +permanent fencing around our Capitol. Constituents, advocates, +have the right to visit the home of our democracy and speak +with their Representatives to share their thoughts, agreements, +and concerns. We need innovative tools to root out domestic +terrorism, and protect Members, staff, and visitors without +turning this building into a fortress surrounded by fences +topped with barbed wire. + And, indeed, we also need to find ways to protect places of +worship, including in my own district, without them having to +resort to a military posture as well, in particular, Jewish +places of worship. + I represent one of the most densely-populated Jewish +districts in the country, and I know that my Jewish +constituents who go to places of worship are increasingly on +edge and increasingly concerned about the threats of domestic +terrorism targeted and fueled by anti-Semitism. + I wonder if, first, Ms. Brooks, and then, Mr. Rogers, might +speak for 30 seconds to a minute each about the intersection +between anti-Semitism and domestic terrorism in this country +and whether they have seen a rise in both intent and actions +targeted against Jewish people. + Ms. Brooks. Thank you so much for the question. And we +don't talk about this enough, but there is a direct link and a +connection between White nationalism, White supremacy, and +anti-Semitism. It should not be separated at all. There has +been an increase in anti-Semitism in this country and globally +for the last couple of decades, and people have failed to pay +attention. + We have these major violent events like the Tree of Life +Synagogue, like what happened in Escondido, and then we move +on, but we are not connecting the dots. We are in this +together, and a White supremacist agenda would separate +everyone from who they are. So to be clear, we should stand +together against White nationalism and anti-Semitism in support +of the Jewish population. Thank you for the question. + Mr. Auchincloss. I just want to state, for the record, how +much I agree with standing together. I think the Jewish people, +as well as my African-American constituents know that where +there is conspiracy theorizing, where there is extremism, it is +just a matter of time before they come for Black Americans and +for Jewish Americans, such has been our history. So, thank you +for saying that. + Mr. Rogers, I welcome your thoughts as well. + Mr. Rogers. Thank you, Congressman. And I could not agree +more with both your thoughts and Ms. Brooks, your statement on +the subject, another subject that I am passionate about as +well. As you say, if history is any guide, hate is hate, and it +always comes for people of color and the Jewish community as +well. + One other point I would add is that in many ways, the QAnon +conspiracy theory phenomenon is itself a kind of remix, if you +will, or a mash-up of historically all of the various sorts of +anti-Semitic Jewish blood libels. The idea of the cabal at the +top, et cetera, et cetera, that if not explicit, is a very +thinly veiled version of the same blood libel that has been +circulating for a hundred, if not, hundreds of years. + And so, yes, I think they go very much hand in hand whether +explicit or not, and I think they are linked and solidarity is +obviously of utmost importance. + Mr. Auchincloss. Mr. Rogers, are there particular actions +that you would recommend Congress pursue relative to anti- +Semitism and the intersection of anti-Semitism and domestic +terrorism, in particular, and the spread of disinformation +about that? + Mr. Rogers. I think there are a number of regulatory fronts +that all go to the general problem of disinformation as a +whole, and I don't know that we have the time to get into all +of them here, but I think they certainly fall into three big +categories, with the one most relevant to today's discussion +being this idea of government platform liability, that our data +is showing what a key role these sorts of platforms play in +facilitating the activities of these groups. + And the fact that the liability is so nebulous or +nonexistent through things like Section 230 and what-not, what +we found is that there are already policies in place against +all of these hate and extremist groups, but they are just +simply not enforced. + So updating that kind of platform liability to help drive +enforcement, I think is one of the key areas that we can focus +on. + Mr. Auchincloss. Slightly-- + Chairman Himes. The gentleman's time has expired. + Mr. Auchincloss. Okay. Thanks. + Chairman Himes. I believe that every present member of the +subcommittee has had an opportunity to ask questions. If that +is incorrect, speak up now or forever hold your peace. + Hearing no one, I would like to thank our witnesses for +their testimony today and for an excellent, excellent +discussion. + The Chair notes that some Members may have additional +questions for this panel, which they may wish to submit in +writing. Without objection, the hearing record will remain open +for 5 legislative days for Members to submit written questions +to these witnesses and to place their responses in the record. +Also, without objection, Members will have 5 legislative days +to submit extraneous materials to the Chair for inclusion in +the record. + I ask our witnesses to please respond as promptly as you +are able, and I noted a couple of questions that sadly were cut +off by the timer, and I will ask the staff to facilitate that. + With that, I will thank our excellent witnesses one more +time, and the hearing is adjourned. + [Whereupon, at 11:51 a.m., the hearing was adjourned.] + + A P P E N D I X + + + + February 25, 2021 + + +[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] + +