Finance Committee on May 5th, 2015

[Prof. Martin Rudner]

Yes.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

U.S. intelligence officials claim that it's known that al Qaeda members are recruited, facilitated, and trained out of that mosque, and in 2011, the current leader of the Liberal Party, Justin Trudeau, visited that mosque. There was also a conference, the Reviving the Islamic Spirit conference, that took place in 2011 where the then Liberal leader had spoken, and that was funded by a group, IRFAN, which as we all know raised $14.5 million to send to Hamas and had their charitable status withdrawn.

At the time, Mr. Garneau, who was running for the leadership against Mr. Trudeau, refused to appear at that conference because of the radical ideas that were being promoted.

Could you please comment—either of you if you want to both comment on this—when Canadian politicians appear in places like this, does that give a confidence, a boost of confidence to, or legitimize in any way the activities of these kinds of organizations?

[The Chair, Conservative, James Rajotte]

This is for—

[Mark Adler, Conservative, York Centre, ON]

—either Mr. Stephenson or Mr. Rudner.

[Prof. Martin Rudner]

Let me make a non-political statement on this because one doesn't want to transform countering terrorism finance into a political party issue.

I think the point is twofold. One is that at the time Saudi Arabia had not yet judged those mosques and that “current” of theology in Islam as being a threat to Islam. It changed afterwards. From our point of view, it was a threat to Canada then.

The problem, in my personal view, is that we have to begin treating terrorism and counterterrorism like we treat all “conflict threats” to Canada: as non-partisan. To my mind, there should be consultation and counsel between the Government of Canada and the leaders and members of Parliament of opposition parties, to achieve a non-partisan consensus on what constitutes the threats to Canada and how to constrain and impede those threats from materializing into political violence within Canada. That should be done in an absolutely non-partisan sense, as we did during wartime.

I think we have to return to that. I'm hopeful that Parliament—and through this committee examining terrorism finance—can achieve this metapolitical consensus on terrorism financing threats to Canadian interests.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Adler.

We'll go to Mr. Anderson, please.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

Mr. Chairman, I have a couple of comments.

I'm new to the committee, so I'm glad to be here today. I can assure you that I didn't come here to attack one witness specifically. I've seen this before, in the natural resource committee, where Ms. Krause was attacked personally for the information she brought forward.

It was interesting to hear clear testimony that funding on environmental activism goes far beyond her investigation. It's far more international than most of us had thought it was in the past.

Mr. Stephenson, I want to come back to a couple of things that you mentioned. You talked about the importance—a few times, actually—of real-time information exchange and how to be more effective. I think we'd probably all agree that's necessary, that things need to be monitored much more quickly.

Do you have any idea of how we could prevent the reach of government into the private lives of citizens who aren't involved while we're doing this? We want to be more effective. We also want to stay away from and leave normal citizens to live their lives. Do you have any suggestions on how that might be accomplished?

[Kevin Stephenson]

I mentioned it earlier. I think every healthy democracy struggles with the question of security for its citizens and their right to privacy. With my knowledge of the Canadian system, I think you have quite an excellent balance in doing that, especially when it comes to the terrorism financing,

In looking at some of the things that I was involved in after 9/11, and then also working within Egmont, it seems that more often than not, it's actually very rare that one entity within a government doesn't have information about particular terrorists, terrorist financing, or something that would be of interest to others. The issue seems to be that sometimes that particular agency doesn't share it across the board to other agencies. That's the point I've been trying to make today, to make sure that all the competent authorities are sharing that financial intelligence, and the importance of financial intelligence.

You're much more familiar with the Canadian system than I am. We're not an assessor body within the Egmont Group; the FATF does that. As I mentioned before, you have your mutual evaluation coming up to look at the system.

It's always a struggle to find that balance, and I think open debate is the best way to move forward.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Fanusie, you mentioned that local people may be the ones who are most interested in fighting terrorism because of the pressure that's put on them through extortion and a number of other avenues.

We spend a fair amount of money supporting democratic rights in different countries—human rights, and those kinds of things.

Are you aware of any programs internationally that are set up to try to work on the ground with local communities, specifically to deal with these issues of financing around terrorism and those kinds of things? Are governments taking any initiative in that area?

[Yaya Fanusie]

I'm trying to think of specific examples, and it's difficult. In the situations that I mentioned, we're talking about environments where the terrorist groups have control, where there isn't much of a government presence.

However, if we look at what has happened in war zones—the wars in Afghanistan and the war in Iraq—clearly there were examples. Even with the military working on the ground in communities where the military presence was not solely a kinetic presence, there was a development presence. Of course, in Afghanistan, there were the provisional reconstruction teams. In the war environment, we have examples of how governments can multi-task and not solely focus on kinetic action. We have seen that in the war zone.

It's difficult because there has to be a presence on the ground.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

This question may be a bit tied to that and could go to a number of you here, but are there any effective ways you're aware of to pre-empt these organizations before they gain strength?

Think about ISIL. There are a few hundred fighters not really going anywhere. They are able to consolidate and move ahead. The international community is slow to react to that, and then we end up in the situation that we're in right now.

Are there any tools that we can use internationally that might pre-empt these organizations in terms of intercepting their financing ahead of time? Or is that too much of a crystal ball to be able to do that...?

That's for Mr. Johnston, perhaps, and Mr. Stephenson.

[The Chair, Conservative, James Rajotte]

Mr. Johnston, do you want to address that?

[Patrick Johnston]

In the case of ISIS, I think that certainly there was a warning from the U.S. intelligence community about the group and its rise, particularly in regard to the Shiite crackdown in the government on Sunni politicians, subsequent protests, and the movement of the group that's now known as ISIS into Syria when it was still known as the Islamic State of Iraq.

I think the misperception and some of the reluctance to act initially wasn't necessarily because of not knowing about it, but because of not knowing the size and scale that it could grow into. It really is I think a unique terrorist organization in what it has become, in being really like a terrorist state rather than a dispersed network of cells. Although there are cells, that's not its primary mode of organization.

I think the rise of ISIL, though, was so historically contingent on those factors, which go all the way back to how the Iraqi democracy was set up and who became the president, that it is difficult to undo some of that history, even if you can see the makings of a group like ISIS or another terrorist group emerging from such a context.

[The Chair, Conservative, James Rajotte]

There's a very brief time left.

Mr. Stephenson, do you want to comment very briefly?

[Kevin Stephenson]

Just quickly, I agree with what Mr. Johnston was saying.

I also think that within the Egmont Group something we're struggling with is trying to get the real-time exchange of TF information. I don't want to sound like a broken record, but I also think that sometimes there's a disconnect in some jurisdictions in terms of the intel agencies and the FIUs. Sometimes an FIU might have a bit of information about the movement of funds, but they don't know that the particular or entities might be of interest in terms of terrorists.

We need to bridge that gap. I think that's one thing. It's difficult. It's a challenge, because you have to remember that these people don't want to be detected. That's one of the things that I think we need to figure out: how to better communicate amongst the jurisdictions and also domestically.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Anderson.

Colleagues, we have time for probably four five-minute rounds.

We will begin with Mr. Brahmi.

Please proceed.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you, Mr. Chair.

I want to start by thanking those who have come testify before us and tell them that I am sorry they have had to hear some statements that are a bit exaggerated. Someone said that the Islamic State had declared war on Canada. I hope that, when a state declares war on Canada, the response will be more than 6 airplanes and 70 members of special forces for training. So you have heard some things that are not very serious, and we apologize for that.

I would like to continue along the lines of Mr. Fanusie's somewhat broader perspective. You talked about funding and oil sales that generate $1 million to $2 million a day for the Islamic State. Let's try to put the amount of money generated and the means used in perspective. Two attacks have been carried out in Canada, one in Saint-Jean-sur-Richelieu—which is the riding I represent—and one in Ottawa.

A Winchester rifle was used in Ottawa. It was probably a collection rifle. I don't know what its price is, as I am not an expert on collection rifles, but I imagine it would be around $100.

As for the attack in Saint-Jean-sur-Richelieu, a kitchen knife was used that costs about $10 at Walmart or Canadian Tire. The perpetrator used a 2000 Nissan Altima automobile—so a 14-year-old car—which was beige in colour, to be very specific.

When we put in perspective the millions of dollars the Islamic State generates through the sale of oil and the investment put in by the two individuals who carried out attacks in Canada, can we really say that those were terrorist attacks? How do you view that imbalance?

Isn't confusion between real international terrorism and the mental health issues of people who have no connection to those international organizations likely to discredit and diminish the work you are doing to warn authorities about the funding of international terrorist organizations? Couldn't the fuelling of that confusion to fearmonger and support a political program diminish your work?

I will begin with Mr. Fanusie.

[Yaya Fanusie]

Yes, thank you.

To respond, the key issue is distinguishing what we're talking about when we discuss financing. At the beginning of my statement I mentioned that an act of violence itself does not really cost much money. I think what's important to understand—and you make reference to the $1 million to $2 million dollars a day from oil.... I'm not familiar with all of the intricacies behind the cases that you mentioned, but what I will mention is an individual like John Maguire. If you look at John Maguire, who was here at the University of Ottawa and later went to join ISIS—

[Tarik Brahmi, NDP, Saint-Jean, QC]

The government is not using the John Maguire example to promote its program. I was rather using the example of the two individuals who used the equipment I mentioned. Given the equipment used in those two attacks, could that not discredit your approach?

[Yaya Fanusie]

The approach I'm laying out is to really highlight how organizations receive their funding.

[Tarik Brahmi, NDP, Saint-Jean, QC]

Thank you.

I will now yield the floor to Professor Rudner.

[Prof. Martin Rudner]

I think the key element we have to focus on is the intentions of the Islamic State. Let me just mention that Islamic laws require the giving of warnings to intended targets of jihad, of the Islamic religious warfare agenda. By the way, they always do that. They don't necessarily send it in English or French to particular email recipients, but they always issue a warning. One of the tasks of the intelligence community and scholars of terrorism is to monitor the discourse of the Islamic State and other terrorist groups.

In answer to your question, there's no question, absolutely none, that the Islamic State has threatened Canadian interests explicitly and directly. Whether or not the two individuals you mentioned were controlled agents of ISIS we will know only when our intelligence and security community publish the intelligence that they were able to collect and disseminate.

They won't do this now for reasons of sources and methods. We Canadians do not want Islamic State to know if we've penetrated them and how we've penetrated them, because we still want to get the intelligence.

There's no simple answer except that there is a direct and explicit threat to Canada.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you, Mr. Brahmi.

I'm going to take the next round.

Mr. Fanusie, I wanted to follow up with you on your presentation. I thought it was very interesting.

You made the point that a number of witnesses have made before the committee, which is that an actual operation costs very little. It's the maintenance of the organization in and of itself that is the issue.

You talked about ISIS as an organization raising about $1 million to $2 million per day from oil, but you also said that kidnapping for ransom is the leading method of terrorist financing after state sponsorship, which I think would surprise many people. People are aware of the kidnapping, but I don't know if they're aware of how much money is actually being raised.

I wanted to follow up with you on the illegal trade of ancient artifacts. It's something we've heard very little about at this committee, so I wanted you to expand on it.

It's interesting: I recently read a book by someone on the FBI Art Crime Team. I think it was called Priceless. The amount of money involved in theft and the amount of organized crime involved in art, as well as the artifacts, which you mentioned here, are things that I don't think this committee has really covered that much.

Can you perhaps expand on those in detail?

[Yaya Fanusie]

Sure. Specifically with reference to the Islamic State, it's probably important to point out how this happens. It's not necessarily a case of guys from ISIS going out and digging and looting artifacts and sculptures that they find themselves. What you have is a phenomenon such that they have control of an area, they control the territory, and they pretty much allow the locals to dig, and they tax the proceeds. Getting back to the idea of just taxing whatever is sold, it's sort of an open environment. They don't necessarily pillage themselves, but they're in these areas where you have millennia's worth of artifacts that can be found and they just allow people to find them or bring them and sell them. When they're sold, they get a share of the proceeds.

That's the layout. That's how it happens.

You mentioned the underground economy, which I think we don't really understand. We don't have the same sort of attention to this economy.

Actually a few weeks ago, I read an article, not about ISIS but about a historic Italian book, I think maybe from the Renaissance period, that was found. It was sold by an art dealer. The U.S. Homeland Security had a team that went in and did all the digging and recovered the book, and the book was at a library at Johns Hopkins University.

I talked to the people at Johns Hopkins and they said that for artifacts there's really no process like the Kimberley process for blood diamonds, under which items have to go through a very strict certification to verify that they are not from illicit trade.

There are safeguards, but they're not that rigorous. There's a lack there.

[The Chair, Conservative, James Rajotte]

So in most cases they're not actually selling the artifact themselves. Someone else is selling it.