WASHINGTON (AP) — Despite the Bush administration’s
pledge to battle terrorist financing, the government’s
average penalty against companies doing business with countries
listed as terrorist-sponsoring states fell sharply after the Sept.
11 attacks, an Associated Press analysis of federal records
The average penalty for a company doing business with Iran,
Iraq, North Korea, Sudan or Libya dropped nearly threefold, from
more than $50,000 in the five years before the 2001 attacks to
about $18,700 afterward, according to a computer-assisted analysis
of federal records.
After the attacks, Bush grouped North Korea, Iran and Saddam
Hussein’s Iraq together as an “axis of evil”
countries with both weapons of mass destruction and links to
A Treasury Department spokeswoman said that despite the smaller
average fines, the administration was doing a good job of enforcing
economic penalties against nations considered sponsors of
terrorism. Molly Millerwise said the department’s Office of
Foreign Assets Control, or OFAC, “is committed to ensuring
that U.S. entities abide by U.S. sanction laws. We are not in the
business of making money.”
The smaller average fines could indicate that companies are
making fewer large deals with terrorist countries, said Adam Pener,
who advises businesses on how to avoid dealing with terrorist
“I would argue this is a good sign OFAC is doing its
job,” said Pener, who is the chief operating officer of the
Conflict Securities Advisory Group. “OFAC in a lot of ways is
a deterrent. Especially in the post-9/11 era, companies are
policing themselves a lot more.”
Vice President Dick Cheney was a vocal critic of trade embargoes
while he headed Halliburton, a Houston-based oil services
conglomerate, from 1995 to 2000. Under Cheney, Halliburton expanded
its trade with Iran through an offshore subsidiary. That
arrangement is now being investigated by a federal grand jury.
Nineteen executives or directors of companies fined by OFAC were
top campaign fund-raisers for Bush.
One example is Joseph Grano Jr., chairman of the federal
Homeland Security Advisory Council, which the president created by
executive order and whose members he selected. Grano formerly
headed the U.S. subsidiary of the Swiss bank UBS AG. It paid more
than $100 million in fines for trading U.S. currency to Iran and
other nations and for transferring funds to Iraq during
Bush renewed the ban on trade with Iran in March 2001. Since
Sept. 11, 2001, the Treasury Department has added hundreds of names
to the list of people and businesses whose U.S. assets are frozen
because of suspected links to terrorism.
The department also has traced terrorist financing and seized
more than $200 million in terrorist assets.
OFAC is the agency that enforces U.S. restrictions on trade with
drug traffickers, terrorists and countries on the State
Department’s list of state sponsors of terrorism. U.S. laws
such as the Trading With the Enemy Act prohibit most trade with
those designated countries: Iran, North Korea, Sudan and Cuba.
Libya was on the list until this year, after its government agreed
to disclose and dismantle its clandestine nuclear and chemical
The Bush administration also removed Iraq from the banned list
this year after the U.S.-led invasion that ousted Saddam.
The AP used publicly available OFAC records to compile a
database of penalties.