Proceedings of the Standing Senate Committee on
National Security and Defence
Issue 17 - Evidence - Meeting of May 11, 2015
OTTAWA, Monday, May 11, 2015
The Standing Senate Committee on National Security and Defence met this day at 1:04 p.m. to study and report on security threats facing Canada.
Senator Daniel Lang (Chair) in the chair.
[English]
The Chair: Welcome to the Standing Senate Committee on National Security and Defence on Monday, May 11, 2015. Before we begin, I would like to go around the table and introduce everyone. My name is Daniel Lang, a senator from the Yukon, and on my immediate left is the clerk of the committee, Adam Thompson. I would like to invite each senator to introduce themselves and the region they represent.
Senator Mitchell: Grant Mitchell from Alberta.
[Translation]
Senator Dagenais: I am Senator Jean-Guy Dagenais from Quebec.
[English]
Senator Stewart Olsen: Carolyn Stewart Olsen from New Brunswick.
Senator Ngo: Thanh Hai Ngo from Ontario.
Senator Beyak: Lynn Beyak from Ontario.
The Chair: Colleagues, on June 19, 2014, the Senate agreed that the Standing Senate Committee on National Security and Defence be authorized to study and report on security threats facing Canada, including but not limited to cyberespionage, threats to critical infrastructure, terrorist recruitment and financing, and terrorist operations and prosecutions, and that the committee report to the Senate no later than December 31, 2015.
During the course of our hearings, we have been learning more and more about radicalization and threats to Canada. We learned about foreign funding coming into Canada to promote a radical religious ideology. We've heard about religious leaders who interpret the religious doctrine in extreme ways, and of course we have heard about the significant number of Canadians who have provided material support to ISIS, some 80 Canadians who were abroad and have returned, over 145 Canadians presently abroad, and over 90 who are seeking to join the Islamist group. Most of these individuals have not been charged, prosecuted or convicted. In fact, when it comes to prosecutions, some claim that Canada is lagging behind.
Today we'll be exploring radicalization and terrorist financing in greater depth. We have heard that in the last five years FINTRAC has identified over 683 terrorist financing cases, yet we have not had any charges, prosecutions or convictions, after spending $250 million during that period for the federal agency collecting this information.
Joining us today to discuss terrorist financing and prosecution is Christine Duhaime. Ms. Duhaime practises law in Toronto and Vancouver. She has a specialized counterterrorist financing and anti-money laundering law practice and is a certified financial crime and anti-money laundering specialist, which is a U.S. certification.
She is one of the only lawyers in the world with a combined practice in gambling law and anti-money laundering law and advises casinos, gaming companies operating on mobile and online platforms, and social media entities on compliance with gaming, sports betting, wagering, anti-money laundering and privacy laws.
Ms. Duhaime, in her spare time, is writing a global legal textbook for Thomson Reuters in 2015 on financial crime, counterterrorist financing, anti-money laundering law and financial institutional compliance.
Ms. Duhaime, we are pleased to have you join us today. I understand you have an opening statement along with some recommendations. I would invite you to begin
Christine Duhaime, Barrister and Solicitor, Duhaime Law, as an individual: Good afternoon, Mr. Chairman and members of the committee. I thank you for the invitation to appear before you today to testify on this very important topic. I have some brief remarks.
If I were in your seat today, the most pressing questions I would have would be: Are counterterrorist financing efforts effective in Canada? If not, why not? If not, what can we do to have a more effective counterterrorist financing regime in place? I propose to answer those questions for you.
With respect to the first question about whether counterterrorist financing efforts are effective, the answer is a resounding no. If counterterrorist financing efforts were effective, I would not be here today. You wouldn't be asking me questions and there would be no need for this hearing. Moreover, there would not be an Islamic State in place if our counterterrorist financing efforts worked, because they were designed to prevent this scenario from happening.
At the moment in Syria and Iraq and areas controlled by ISIS, there are many banks, in the neighbourhood of 50 in Syria and 121 in Iraq, that continue to operate and be connected to our financial system in which our ATMs work and in which they will exchange Canadian dollars and which defectors from Canada can use when they defect to places like Syria. Despite the fact that ISIS has been around for a number of years and we were aware of the situation, nothing has been done, it appears, to significantly stop the banking system from being connected to the finances of ISIS.
In the modern world terrorists need three things to take root and grow. One is financing, the second is access to our financial system, and the third is access to social media. Without much resistance, we unfortunately give them all three.
The goal of counterterrorist financing is essentially to identify and prevent terrorist financing. The regime we set up in Canada and around the world is premised on a few things. The first is that if we create an organization, as we have with the FATF, the Financial Action Task Force, and empower it to create recommendations for the private sector guardians of our financial system that allow for the identification and prevention of terrorist financing, and if all countries adopted those same procedures, then there would be no safe haven for terrorist financing anywhere around the world. It's a great concept, but it hasn't worked because there are safe havens for terrorist financing around the world.
It has not worked because the FATF procedures have a number of issues. The first is that they conduct mutual evaluations of countries on a rotating basis. Those mutual evaluations appear to be glowing no matter what country you're from, Macao being an example. It has serious financial crime issues, yet it has a glowing mutual evaluation report.
The FATF recommendations are not balanced. They weigh in favour of anti-money laundering law, which is important but nowhere as important as terrorist financing. That needs to be revised.
Separate and apart from the FATF, there are countries with beautiful anti-money laundering laws on the books and banks with beautiful compliance plans, but they're meaningless if there's no enforcement. Although we have great recommendations from the FATF that need a bit of tweaking and we have amazing laws all over the place, including in Syria, surprisingly, it's meaningless if we don't do anything in terms of enforcing those laws, which is one of our big issues.
That brings me to Canada. We have adequate, not perfect, laws on the books, but we have very little enforcement when it comes to counterterrorist financing. We are a jurisdiction that has focused all of our enforcement and compliance efforts on anti-money laundering law, almost nothing on sanctions and very little on counterterrorist financing.
In Canada, we have quite a number of problems when it comes to financial crime. To be brief, the first one is that our regulators have devoted insufficient resources to ensuring that the private sector is compliant with the terrorist financing component of what we call "financial crime compliance" and with sanctions.
Our regulators and prosecutors have failed to make the private sector accountable for counterterrorist financing lapses and sanctions lapses. What I mean by that is we almost never hear of officers or directors or the financial institutions or any reporting entities being prosecuted for those types of offences. They may have regulatory infractions from FINTRAC, but that's as far as it goes, and it's not overwhelming even in that respect.
There are no prosecutions or very few of terrorist organizations and terrorists in Canada, either. There are next to no prosecutions for sanctions law offences, other than, I think, one.
Finally, we let banks task accounting personnel to advise them on matters of terrorist financing and sanctions law, and that would be akin to me as a lawyer deciding I'm going to sign off on a public company audit. It's completely inappropriate. Accountants have a role to play, and lawyers have a role to play when it comes to the law, and we should not be asking accountants and accounting firms to be providing anti-money-laundering or counterterrorist financing advice on matters of law.
That brings me to digital financial terrorism. With ISIS, we have new and serious emerging threats taking place on social media 24/7, targeting Canadians and Americans non-stop. I provided you with a white paper — I don't know if you've seen it — that deals with concept that I call the "Twitter Terrorist." It deals with the propaganda and some examples of how they have targeted Canadians for their propaganda to get defectors to defect Syria. The problem with the Twitter Terrorist is it's not just them trying to obtain Canadians to defect; it's that they're using that social media for terrorist financing. While we are behind in Canada in terms of terrorist financing generally in our reporting regime and structure, we have this new and emerging threat of digital terrorist financing, and we're not even on the same page in terms of trying to address those threats and how to come to grips with them.
In the white paper that I believe will be made available to you, there are two examples I've provided out of hundreds in which Canadians are on social media seeking to raise funds for ISIS. One is a rather unfortunate incident that you may be aware of already in which a Canadian Kuwaiti — page 9 of the report — is soliciting to purchase a Yazidi slave girl on Twitter and have her shipped to Kuwait. I have no idea if that transaction took place, but that's an example of an unfortunate and abhorrent form of terrorist financing.
The next one on the same page is an example of somebody from Alberta who did, in fact, defect to Syria and is now there with ISIS. He is on Tumblr, trying to raise funds for ISIS, explaining how you can go to his kik.fm account and find out how to send money to them anonymously. He goes so far as to say that when you communicate with him, your terrorist financing activities will be safe and secure; i.e., FINTRAC or whoever you're trying to avoid will not detect you. Some of this is premised on the fact that they go to Tor and the deep web to undertake these transactions and find out how to fund.
I leave that aside for you to review, but those are two examples of how Canadians are on social media trying to engage in terrorist financing with ISIS.
Counterterrorist financing in the digital world and emerging digital threats are varied, international and cross-sectoral in nature. Coordinated responses are needed to ensure these threats are mitigated and dealt with. The key point here is this is not something, in my view, that the government can deal with itself. When it comes to social media, we need to have a coordinated effort with the public and private sector together to take down the Twitter accounts and stop the terrorist propaganda.
I'll give you another quick example: Garland, Texas, page 5 in the report I submitted to you. On May 1, hundreds if not thousands of tweets went out that there should be an attack in Garland, Texas. Obviously it's a bit of a crystal ball in which ISIS is telling us what they're going to do and advocating for lone wolves to undertake these attacks. Lo and behold, four days later, there was an attack in Garland, and apparently law enforcement in the United States was not aware of these tweets, from what I understand, if that's to be believed. If that is a true story, that's really frightening because we have a group like ISIS that is supremely transparent, very predictable, telling us on Twitter and other social media what they're about to do, calling for lone wolves to act against us, and we see it on Twitter — I certainly did on May 1 — and yet nothing seems to have been done to prevent it. That's an area I think we need to get a grip on.
In order to ensure that Canada has a robust and resilient counterterrorist financing response, my eight recommendations are as follows: First, go back to FATF with qualified people from Canada with expertise in terrorist financing and with the cooperation of Canada, obviously, come up with effective and long-lasting recommendations that will deal with terrorist financing in the same way and with the same emphasis that we deal with anti-money laundering law around the world.
The second recommendation is to insist that regulators conduct adequate and thorough look-back compliance reviews. A look-back is when we go back in time and look at whether a bank and other reporting entities have complied with anti-money laundering laws. If there are no adequate solutions when we do those look-backs, I think the obvious answer would be to think about prosecutions and fines.
The third one is to provide the political support for our regulators to fine or prosecute non-compliant reporting entities and their officers and directors, and that we make a statement and begin that prosecution.
Fourth, implement a solid criminal justice response to terrorism, covering investigation and prosecution of those who plan terrorist acts or are suspected of recruitment, training and financing of terrorism, as well as incitement to commit terrorist acts in Canada. I would suggest we have a specialized and trained group of prosecutors that understand terrorism and are committed to undertaking those types of prosecutions.
Fifth, create a specialized group of terrorist trained judges or a special court for terrorism cases and that they have exclusive jurisdiction when it comes to terrorism. I'm sure you're aware of the case out of British Columbia where a terrorist financier a number of years ago got a six-month sentence, and the judge made the remark that it was appropriate in the circumstances because, lo and behold, we wouldn't want to interfere with him travelling in the future — a completely inappropriate response for terrorist financing.
Six, create a digital counterterrorism offensive with a mandate to address counterterrorism, not only the Twitter Terrorist but the terrorist financing that comes along with it so we can identify those threats and shut them down when they occur. Not only that, but when we do see examples of that, we should be able to obtain that material, preserve that evidence and use it for future prosecutions.
Seven, invest in the research and innovation necessary to stay up to date with emerging threats from anonymous and new payment methods. I'll give you an example. There's a website that allows you to send anonymous types of emails and communications on Tor. Recently, they've come up with a method where you can email an anonymous payment to the email address of anyone in the world. They will do the transaction for you using PayPal, and all you need to do is enter your email address, give them your financial information, and they will fund whomever you want funded as long as you have their email address. That is a really frightening prospect in terms of terrorist financing. It is completely anonymous, and I think we need to get a grip on it.
Finally, I am a strong advocate that we should support the creation of a financial crime centre in Toronto that would be a bridge to the gap between the private and the public sector, and that we work together to deal with terrorist financing and hopefully become leaders in Canada in this area rather than what I think is followers at the moment.
I thank you for your time and will be happy to take your questions.
The Chair: Thank you very much, Ms. Duhaime. Your observations on the question of terrorist financing and how they go about it were very enlightening. I think it's very much of a learning curve for all of us. We appreciate your expertise.
I'm going to start with Senator Mitchell and then go to Senator Stewart Olsen.
Senator Mitchell: Thanks very much, Ms. Duhaime. It's been very interesting.
One of the questions that your presentation and others like it begs is how much of this terrorist financing is going on related to Canada? Do we have any evidence? I'm not being critical of it, but this presentation is premised upon this idea that there's tons of it happening, yet we have no evidence of it happening because we don't have the resources to find out. On the one hand you say it's happening, and on the other hand you're saying we don't have the resources to find it. How do we know it's happening and to what extent?
Ms. Duhaime: I think it's a circular question to answer because we don't review the reporting entities as we should to find out whether or not they're complying and what examples they have. We're missing that knowledge gap, for example, to know if they're dealing with terrorist financing. Because it's criminal activity, we really don't know. It's like money laundering. We don't know it all. These guys are smart. They're on Tor, using PayPal and Western Union, but we would be naive to think it's not happening from Canada and doesn't involve our financial institutions. I mean, why would it not?
Senator Mitchell: What's FINTRAC doing? Would you say that they're incompetent, focused in the wrong way or underfinanced?
Ms. Duhaime: I don't know any of those, except that having seen quite a number of reviews, I think they are not as tough as they should be on their compliance reviews. For example, for quite a number of years when they have undertaken compliance reviews, they have completely omitted the terrorist financing aspect that is part of anti-money laundering law and financial crime compliance.
When a bank or, let's say, a money services business submits a compliance plan to FINTRAC during part of its review, one of the questions that should be asked of a reporting entity — what they're supposed to do is a risk assessment of their particular location. How do they know whether or not there are terrorist financing risks happening at a bank at Yonge and Bloor, for example? I've never seen FINTRAC ask, "Where's your review to ensure you've done a risk assessment for your branch at Yonge and Bloor? Where are the risks? Where's your research?"
We're not asking the banks to prove that their risk assessments are actually tailored to their branches and to their bank. We're not looking at that and making sure it makes sense, and our compliance reviews are based on anti-money laundering law.
Senator Mitchell: When you say there are banks in Syria linked into the Canadian banking system where somebody can stick their card in and get Canadian money or U.S. money or whatever money comes out of that machine, are you saying that if you wrote to the minister of national security about that very fact, nothing would happen? This tough-on-crime government somehow doesn't know that's happening and you do? How can that be?
Ms. Duhaime: I don't know why they don't know, but it is true that ATM cards do work in Syria. Canadian ATM cards work. Defectors have used their ATM cards. ISIS tweets about how interesting it is that we haven't shut them down. We have not shut them down.
Part of the reason the U.S. government says we have not shut them out of the banking system is because they don't want to totally eliminate all of Syria from having banking resources because they don't want to harm the innocent people any more than they're already being harmed. So part of the strategy is that we don't want to shut the whole country down economically. There are legitimate businesses running, including in ISIS-controlled areas.
Senator Mitchell: That's reasonable.
Ms. Duhaime: Is it? I don't know.
Senator Mitchell: Thank you.
Senator Stewart Olsen: Thanks again for coming. This is very interesting. We're trying to get a better understanding of the nature and scope of the financing, and you've already been very clear on a lot of it, but I have a few questions.
Do you think we have money coming in for financing terrorist activities within Canada, or is it more likely that it's going out to finance other parts of the world? Do you have any information on who might be behind the financing? You mentioned Syria or ISIS. To try to have people grasp what's going on is difficult, but I think it's important that we know more about this, as much as we can.
Ms. Duhaime: I don't think the threat is money coming into Canada. That's not where the need is. They are asking for money to leave places like Canada and go to Syria.
In terms of the lone wolves, it takes very little to launch an attack in Canada, so they're not searching for money from ISIS to do that. The threat is going to be money coming from here to there.
In terms of who the actors are and how it's happening, I don't know, but a lot of it has moved digital. That's part of the problem, with the examples I gave you where they're raising money off of Tumblr. Unless we're following the Tumblr accounts and tracking that down, we don't know.
I suspect without any actual evidence that Canada is not in the digital game as much as we should be. We're not catching these types of requests for terrorist financing. The examples I gave you are examples of just two of many, and there are surely many that I have not come across.
Senator Stewart Olsen: Do you have any idea how much money might be involved, a guesstimate?
Ms. Duhaime: No.
Senator Stewart Olsen: So we're at the tip of the iceberg here, is what you're really saying.
Ms. Duhaime: I think with a group like ISIS, what we see on social media is the tip of the iceberg in the sense of what they're doing that we don't see. Obviously they won't be that transparent to us, so I think that's the concern. What we see is worse enough. What we don't see would be frightening, I would think.
[Translation]
Senator Dagenais: Ms. Duhaime, you alluded to funding and payment methods — I believe you spoke about credit cards — but I would like to hear your opinion on online payments, more specifically. Various companies, including PayPal Canada, provide online payment services. I think these entities are required to report electronic funds transfers to FINTRAC. The money can move through these payment methods. If no one closes these gaps, what kind of risks might we be exposed to at this point?
[English]
Ms. Duhaime: I think that the online payment methods are a risk for us because they tend to be anonymous. Obviously they're rapid, and they don't flow through our normal banking system. That's the issue as well.
I'll use bitcoin as an example, although there's no evidence that it has ever been used for terrorist financing, except one dollar transaction in the United States. Those payment methods are anonymous, so it's difficult to know what amount of money is going through there. We're not looking at regulating — I don't know why — these types of payments. I think one of the strategies would be determining the emerging payment methods of concern to us. Mobile banking is not really banking but a different way of moving tokens back and forth. I think that's a big concern for us, and we're not looking at that issue as much as we could.
[Translation]
Senator Dagenais: What would you recommend as a declaration threshold? FINTRAC requires any amount over $10,000 to be declared. Should that threshold be changed in order to trace the funding? The issue is not simple, but I am listening.
[English]
Ms. Duhaime: It's a difficult issue for this reason: Because we have anti-money laundering and terrorist financing laws around the world, we have removed significant amounts of people from the banking system that can't get bank accounts. We call them financially excluded. They happen to be poorer people. The more we unload financial regulation on banks and other remittance agencies, for example, the more we prevent people from getting access to banking. So we're creating a problem on the financial inclusion side that we're not addressing.
If we lower the threshold to $5,000, more banks will want ID and more of these anonymous, prepaid debit cards will be subject to anti-money laundering reporting. We will have more of a financial inclusion problem. It's not an easy answer, and I think the FATF struggles with that as well. Do we want to kick people out of the banking system or not?
Separate and apart from the financial inclusion problem, one of the issues when we remove people from the banking system is they go underground and do shadow banking. If they're underground doing prepaid cards such as in France, for example, that's how they funded those attacks. So if we move more people to the anonymous methods of payment, we're not capturing the data we need to stop terrorist financing and we're not identifying the terrorists. It's a weighing act. If you go below, you're going to throw people out of the banking system and you won't be able to monitor and control for terrorist financing.
The U.S. response is let's bring as many people in as we can that are reporting entities and as many transactions as we can so that we have as many people as possible, and let's deal with financial inclusion in another way.
There's no easy answer. Lowering the threshold would certainly help in terms of capturing terrorist financing because the amounts are lower, but I don't know if there's an easy answer without a bit more study.
Senator Beyak: Thank you, Ms. Duhaime. That was very knowledgeable and thorough. I concur with your remarks about the B.C. judge in the case you outlined. It was completely inappropriate for a judge to say that.
We heard from former Supreme Court Justice John Major that our committee might need to look at a special terrorism prosecution branch. Do you have thoughts on that?
Ms. Duhaime: I do support that and I think it's a great idea. I'm not sure what happens on the legal side when it comes to prosecutions and why that breaks down. But it seems like there's testimony over and over again that lawyers in the federal public service seem to find money laundering cases and terrorist financing cases complicated. The reality is it's their job, and we're lawyers. Nothing should be complicated.
So I don't know what the strategy is other than to find lawyers that don't find this intellectually challenging and task them with that in a separate body of prosecutors for terrorism. That would be my suggestion.
Senator Beyak: Do you think the French system would be workable here in Canada, where they have a special bench, a terrorism bench?
Ms. Duhaime: Yes. I think we should never be in the position again where we have judges that don't understand terrorism, terrorism financing and the threat and are more sympathetic to the terrorist financier than the damage that causes. Yes, I would totally support having a specialized court of knowledge to deal with terrorist financing.
Senator Beyak: Thank you. I think you're on the side of most Canadians, too.
Senator Ngo: To your knowledge, why are other jurisdictions effective in pursuing investigations and convictions of terrorism financing offences? Why in Canada do we have the weaknesses in money laundering or countering terrorist financing in Canada?
Ms. Duhaime: From what I've heard in testimony for a number of years now and certain witnesses that appeared before the Senate, for example, it seems to come down to lawyers in charge of the files who appear to think this is a complicated area of the law and appear to be afraid of it. It's not a big, scary monster. It is just the law, like all lawyers deal with, and I think that there is some sort of a mental block.
That's why I think if we had lawyers who undertook these cases, were confident that they could win or lose — it's irrelevant at this point. I think we're looking for deterrence. If we start to prosecute, we'll be sending a message that we're not a safe haven for terrorism or for money laundering, and I think things will begin to shift and we will become more compliant.
I think it has to start from the prosecution perspective. They need to be willing to take on all of these 683 cases. That's a large number of cases. Let's take them all on. Who cares if we lose 50 per cent. Let's make a statement that Canada is not a safe haven for criminals. I think that's really important.
Senator Ngo: I agree with you 100 per cent, but FINTRAC is not allowed to prosecute.
Ms. Duhaime: They're not a prosecution agency.
Senator Ngo: Exactly. They just provide information to other agencies, like the RCMP. That's the organization that can prosecute, not FINTRAC. So basically you say FINTRAC is not effective.
Ms. Duhaime: No. We have 683 cases that FINTRAC identified. I think that's amazing. So FINTRAC is passing this information on to the RCMP. I don't know if the RCMP is sufficiently funded to undertake its investigations, but one thing I do hear from the RCMP is that they're lacking financial crime expertise across the board to investigate these cases and find out where the money went, and they're also lacking resources. If we cure that problem and they present a case to the prosecution, I think our prosecutors should be willing to take on these cases, bite the bullet, have the guts to do it and make a statement. Because right now our statement to the outside world is that Canada is a safe haven for criminal activities, which I think is an unfortunate message.
Senator Ngo: So you think that Canada should take the risk in prosecuting those 683 files?
Ms. Duhaime: It's not a risk at all. My goodness, we have $1 million fines for each offence. If we were to prosecute and impose the maximum fine on directors and officers who are not compliant, on banks, money services businesses, we would make more money than this would cost. It is a profitable enterprise to prosecute for anti-money laundering and counterterrorism financing. Why we don't do it escapes me.
Senator Ngo: Thank you for your recommendations.
Senator Day: Thank you for your comments. I'm taking away from our session here today that you think the laws are sufficient; it's just that the system hasn't really caught up with the laws that are in existence. Can you agree with me that from the private law firm point of view, firms have a way of adjusting and developing specialization in different areas, but the prosecution side of our legal system hasn't had the same incentive to do so? There are lots of other things to do, I suppose. To develop a specialty takes time and effort, and that's just not being done. So we need some incentive to see that that happens.
Ms. Duhaime: Yes, absolutely. I would think that 20 lawyers assigned to do terrorist financing cases would be a pretty appealing portfolio in the world of public service lawyers. Sorry, I'm not in that world and am using all the wrong words. It seems to me that that would be an amazing portfolio. You would probably get a lot of people signed up. They would acquire the expertise quickly and would not be afraid to go to court and wouldn't be testifying that this is too complicated to handle.
Senator Day: I'm not in the same world either, so you could use the wrong word and I wouldn't know it.
Could you help me with the acronym FATF? Tell me what stands for.
Ms. Duhaime: Financial Action Task Force. It's the policy-making body based in Paris that I'm pretty sure Canada contributes a significant amount of money to. We sit on it, and it comes out with recommendations and issues reports periodically on the state of affairs for money laundering and counterterrorism financing.
Senator Day: Thank you. I think it's helpful just to have that on the record.
We have talked about prosecutors and judges and private sector lawyers. You're not, I hope — maybe you are — advocating for a new section of the judiciary. Are you suggesting that the same thing could happen as what happened with prosecutors and as happens now in private law firms of certain individuals in that realm becoming experts through doing this kind of thing and taking extra study and extra understanding, but they're still justices like everybody else? Or are you suggesting an entirely different court system?
Ms. Duhaime: What I think would work is to have a little section of the Federal Court where there are judges who are trained, understand terrorist financing, understand the risks and understand Canada's reputation in the whole scheme of things. I think we would see more balanced results if we had judges that are trained.
In fact, the last FATF mutual evaluation of Canada did in fact recommend that we educate judges on anti-money laundering and counterterrorism financing, and I don't think that's been done yet. So I think there is a knowledge gap. They need to understand what's at stake and how important this is, and right now they don't.
I'll give you an example. Once I was in court in British Columbia and I literally lost a case because a judge said the word "must" actually means "may." We have an interpretation act where the word "must" is actually defined so you don't get judges misinterpreting it.
If you're going to have a terrorism prosecution, you do not want a judge deciding that the word "must" means "may." Those are the types of things where I think you take it out of the hands of the regular judicial body and you train, educate and assist a group of people to make these decisions.
Senator Day: They would be the Federal Court. We're not talking about creating —
Ms. Duhaime: I think the Federal Court is fine, yes.
Senator Day: — some specialists within the federal —
Ms. Duhaime: That would never happen. That's the issue with that recommendation.
Senator Day: Exactly. I think that's the clarification I was trying to make on Senator Beyak's question. I think agree with you that the specialization could happen. Creating another court system is less likely to happen.
In some of your writings you made reference to a private civil lawsuit. Is there only one of those? If somebody is injured by virtue of a terrorist activity, that individual sues the bank for having forwarded money to that terrorist group.
Ms. Duhaime: Yes, an unidentified terrorist group. That's the Arab Bank case. Yes, there is huge liability out there for all banks, including Canadian ones. We have similar legislation. I think what plaintiffs are waiting for is the first American to be hurt by ISIS. As soon as that happens, the lawsuits will start to come for whatever banks, wittingly or not, funded ISIS.
The difficulty with that case is banks rely on the fact that there is a listed terrorism regime and a listed sanctions regime. As long as they're checking the names, they think they're fine and no liability will flow, but the Arab Bank case was different. There were terrorists that were not identified, that were not on a list. So you can be an unidentified terrorist but still be one, or you could be funding ISIS.
For example, with this Canadian who is trying to raise money off Tumblr, let's say he uses PayPal. He's not a listed person on any list. A bank could be exposed on the basis of the Arab Bank case — any bank around the world, in Canada or in the United States. So when I talk about the banks not being compliant, not taking this seriously and having non-lawyers do their anti-money laundering and terrorist financing work, it's a huge danger for them. They may be prosecuted and the standard of care is going to be who looked at your compliance plan, what did you do and how are you compliant? I really think there's dangerous exposure there that may bankrupt our banks.
Senator Day: Without the necessity of any changes in the laws.
Ms. Duhaime: Yes. They just need to up their compliance standards.
Senator Day: Exactly. Thank you very much.
The Chair: I'd like to pursue the question of prosecution. In in your writings, you've been fairly critical of the fact that there have been so few prosecutions. You restated that over the course of this panel today.
My understanding is that in a murder case or in cases such as that, which are serious, the RCMP do their investigation and due diligence, lay charges and then the Crown prosecutor will decided how the case proceeds from there; is that correct?
Ms. Duhaime: Yes.
The Chair: When it comes to terrorism, my understanding is that the Crown prosecutor and the RCMP are together and then they will determine, with the approval of the Attorney General, whether or not charges will be laid; is that not correct?
Ms. Duhaime: I believe so.
The Chair: If we follow that through, have you given any thought to the fact that this process is in place strictly for the area of terrorism but for other serious crimes it's not? Would you comment? Maybe this process has to be altered and go the other route in respect to the RCMP doing their due diligence and proceeding with charges and then working with the Crown prosecutor as opposed to the way it is today.
Ms. Duhaime: I think there should be no distinction. A financial crime offence is a financial crime offence, whether it's money laundering, terrorist financing, sanction avoidance, or whatever it may be. To make a distinction in how those cases proceed is just adding layers of policy and a lot of bureaucracy that don't actually need to be there. I think there should be a streamlined approach. One is the same as the other. Why we have a distinction doesn't make any sense to me.
The Chair: That's what I'm trying to figure out. One of the areas that has come up over the course of our hearings is the question of the process. As much as I don't want to discuss process, the reality is that that's how you have to proceed when it's established. The question, then, to people such as yourself, with the knowledge you have, is should the government look at the process to see whether or not it's stymying or stopping the prosecutions because of the way it's been put into place?
Ms. Duhaime: Absolutely. I think adding that process will result in fewer prosecutions, more thinking about it and more reflection and more "Let's not do this because it's a difficult case and we may not win"; whatever the case may be. Why do we have something as important as terrorist financing, for example, subject to extra processes and extra decision makers that might impede prosecutions? It should all be the same; it's not any different. It's a financial crime like any other.
Senator Mitchell: One of the issues that the RCMP and others have raised with respect to prosecution on terrorist financing is actually getting the evidence. If the money is sent abroad, it goes somewhere. The allegation is that maybe to an organization that looks reasonable, but then we can't track where it goes from there. How do you deal with that?
Ms. Duhaime: You can track it. It is interesting that you ask that question. A senior law enforcement person told me the other day that they do not get evidence from overseas because when they're asked by prosecutors or by law enforcement over there whether Canadians will protect the source, protect where it comes from, make sure they're safe, law enforcement has to say, "No, sorry, not in Canada." So they may get the information, but they won't share it with the prosecution division here because they're afraid it will be shared in the process of discovery. That seems to be a huge impediment where we have some information and we could prosecute, but we are not willing to take it because we can't assure them that the information or the person who provided it will be safe.
Senator Mitchell: Yet in Bill C-51, we are apparently setting up all kinds of impediments to the sharing of information. Are you saying that that regime now simply isn't adequate?
Ms. Duhaime: I think that may change. I'm just telling you what I heard last week from law enforcement as a big issue for them taking cases forward.
Senator Beyak: Canadians watch this committee at home. They're very concerned and your answers are direct, forthright and clarifying. Thank you for that and for your exceptional work.
Could you elaborate on the comments you've made in the past relating to money laundering and terrorism financing in Canada, Hong Kong and China? It's a different subject but very fascinating.
Ms. Duhaime: According to law enforcement and according to the U.S. government, Canada is a major money laundering country, particularly out of British Columbia because we have a serious drug situation there.
We are the largest manufacturer of a number of drugs. We are the largest exporter of a number of different other drugs. Some people say that the only business activity in Vancouver is drug crime. I could be; I don't know. There are law firms there. There isn't big business like we have in Toronto, that's for sure. What sustains Vancouver's economy is interesting. It could be Chinese money.
To answer your question more specifically, in addition to a money laundering problem particularly out of Vancouver, Vancouver is becoming a serious hub for transnational criminal organizations. That, again, is from law enforcement that deals with it.
One of the issues in Canada is we haven't escalated that as a situation because the federal government looks at crime on a national rather than a transnational basis. If they were to shift the focus in terms of ranking transnational criminal organizations, Vancouver is up there in the top 10 internationally as an unfortunate place where transnational criminal organizations thrive in terms of financing. It is not like it's not unknown to law enforcement, but they feel they're not getting the support to tackle it as they should.
With respect to China and Hong Kong, that is an interesting case where we have immigration programs that have solicited 100,000 or so wealthy Chinese immigrants to come to Canada under the wealthy immigration programs. All of them are what we call "politically exposed people" in anti-money laundering law. You are all politically exposed people, meaning that you have more power to commit financial crimes. I'm sorry to have to say that, but that's what the studies show. When we have politically exposed people that are foreign coming into Canada, we are supposed to, as banks, treat them differently. If they have over $100,000, we're supposed to ascertain the source of their funds and make sure there are no proceeds of corruption, especially out of China.
What has happened is that the billion or so dollars that have moved into Canada — all through Vancouver — has been done without the banks treating these people as politically exposed people and without our immigration officials treating them as politically exposed people, which means that none of that money has been vetted as to whether or not it is related to the proceeds of corruption. Since they're all ex-government officials with significant amounts of money, on salaries that usually do not match the amount of money they're coming in with, the problem is China is now chasing that in asset recovery maneuvers and it's going to want that money back. We're faced with the prospect that 25 per cent of the most wanted list out of China happen to be living in Vancouver. It's an unfortunate, embarrassing situation.
Senator Beyak: Thank you.
Senator Mitchell: I'd like to follow up on your point about resources, namely, that a lot of this could be related to the fact that the RCMP doesn't have people who are particularly expert in financial crime. They don't have adequate resources to develop that expertise, nor do they have adequate resources to simply investigate terrorist non-financial crime. In fact, they've moved 600 people from other crimes, amongst them financial crimes, to terrorism-related investigations. That was a point you made, that they just don't have enough money.
Ms. Duhaime: Yes. I actually called people I know high up in the RCMP and asked that question before I came here: Is there still a problem with resources? The answer is yes. And with respect to expertise, the answer is yes.
Senator Mitchell: So the answer is yes, they don't have enough money.
Ms. Duhaime: Yes.
Senator Mitchell: Chair, the answer is yes, they don't have enough money.
Thank you.
The Chair: There's never enough money, no matter where you are.
Ms. Duhaime: True.
Senator Day: Speaking about enough money, we hear rumours that ISIS is very well funded and has lots of money. Are you able to confirm that and do you have any feeling as to where they're getting their money?
Ms. Duhaime: I provided you with another report that deals with that quite significantly in all the ways they are funded. The biggest source of revenue for them is not oil, like people like to say it is. It is that they have, for a number of years now, before they were ISIS when they were in Iraq, they're really good at this extortion business.
They're like a gang, in essence. Anyone who is in their territory that crosses the territory and that they deal with has to pay taxes to them, and they will come around at gunpoint and collect taxes.
They have insidious ways with special groups that they dislike such as Christians. There's a Christian tax you've probably heard about. If you're Christian, in order to be kept alive, you pay a tax to them. It expires after a certain number of months and you pay again or you're shot.
They sell people; sick ways of terrorist financing and some regular gangster style ways of extortion. For example, before they moved into Aleppo, I think it was, they went to all the land title offices — this is how sophisticated they are — before they assumed power, got rid of a number of people by killing them if they didn't get the records they wanted. They identified who was Christian and who was not, went to take over their properties at gunpoint and then resold them or had their defectors live in them.
In every town it's the same thing: They take over the banks, take all the money, take over all the properties, resell them or re-lease them or give them for free to people they like. It's a racket — the old-fashioned way of a racket. It's very lucrative and that's what sustains them.
Senator Day: Thank you.
The Chair: I'd like to pursue some of your comments in respect to social media. You talked about Twitter and Tumblr, and there is, of course, PayPal. There are all these various Internet platforms that one can have access to if one has the knowledge.
The Western world has really woken up in the last number of years in respect to the threat that is out there, whether it is to Britain, Australia or Canada. One of the steps taken is to allow the various governments to at least halt if not in some cases totally mitigate the Internet utilization by some of these groups.
It seems to me that Canada by itself couldn't decide that there isn't going to be anymore Twitter in respect to this particular part of the world or this part of the platform. It has to be a united front, I would think.
Do you have any thoughts on that?
Ms. Duhaime: I have strong views on that. I think each country should appoint a digital terrorist person, and they all talk and they all deal with this issue.
We're losing the word on digital terrorism. There is no question we're losing it. They are able to get lone wolves to attack in Garland and will attack in Canada if we're not careful and we're not looking at what they're putting out on Twitter. We need to be watching their Twitter accounts so that we know the next attack is coming to Vancouver or Ottawa. They're quite transparent, so we need to be watching this and protecting ourselves against it.
With respect to shutting down Twitter accounts, most countries take the position that because these companies are American, it's a problem for the United States; but it's not. There is a Twitter Canada. They publish stuff that targets Canadians on Canadian websites with Canadian ISP addresses. To the extent that it is terrorism in Canada, that it's a hate crime, that it is calling for the overthrow of our government, that it might be seditious or whatever it happens to be, we should be shutting them down.
We have Anonymous — a group of people who are anonymous who really are vigilantes shutting down Twitter accounts and reporting accounts to Twitter. That should not be the response we rely on. It should be the federal government that is in charge of digital terrorism and has a digital terrorist financing initiative, not a group like Anonymous. They're doing good work in this area, but that's not what we should be relying upon.
I think each country should be taking charge and shutting down Twitter accounts and have a counterterrorist response. When they spew out their offensive material, we should have a response to that so that when our teenagers are watching it, they have something else to counterbalance it. We don't have that in Canada.
We have no way to report. There is no way for me to anonymously report the Garland tweet I saw on May 1 in Canada, and there should be. There should be a place where someone goes online right away and shuts that account down if they're asking for a terrorist attack in Garland.
If there is one in Ottawa what would we do? How would someone like me report it? Where would I report it anonymously? I wouldn't necessarily want to be involved in the investigation. Why don't we get that stuff taken off the Internet right away? We should and we don't.
The Chair: I want to pursue this further because there are other countries involved here. Is any other country doing what you're advocating Canada should do?
Ms. Duhaime: The EU is setting up a reporting agency where the member countries will have an online reporting place. If you see Twitter Terrorists saying "attack Paris," for example, a couple of days before you will report that.
They're also setting up, not a digital terrorist office like I'm advocating, but an office like that where there will be people who are part private sector and part public sector, and they will look at social media and take it down, prosecute and gather the evidence. They are really moving forward on this in a really positive way that I think we should emulate.
The Chair: Do you know if the United States is emulating that kind of platform?
Ms. Duhaime: They have a counterterrorism Twitter response.
The Chair: But it's not going very well.
Ms. Duhaime: It's because the tweets are, if I may be so bold, condescending. They will find an ISIS tweet that is offensive and they will re-tweet it. It's called "think again, look away," or something. Those tweets are not persuasive for young people. They're a "we're holier than thou" tweet.
What I think we need are regular people. The messages from ISIS are horrific enough. We don't need to be condescending in re-tweeting it or commenting on it. There was one about kids wearing jeans get whipped. I tweeted about that as well. It's a shocking thing that if you wear jeans in Syria you're going to get whipped — I don't know to death or not.
There was a tweet that was a bit condescending about that, but what's more effective is I don't know what it means to be whipped. Does that mean you're incapacitated, hospitalized and can't walk, or you can get up and walk? In context, a teenager wearing jeans is whipped and, look, "he's in the hospital for four months" is an effective message that will halt a teenager getting on a plane to Syria.
Those are the types of offensive counterterrorism messages we should get out there. You will no longer be able to go to McDonald's, drive a car, go on dates, and you can't listen to iTunes. Those are simple but effective things that matter to all of us. We all want to watch TV, watch movies, have our democracy, and we need to have a counterterrorism message that's based on democracy. We're selling democracy and they're selling the opposite, and ours is better because you can do all these great things.
The Chair: Thank you. I think we should put you in charge of that.
Ms. Duhaime: Happy to oblige.
The Chair: Colleagues, we have come to the end of our hour. I would like to thank Ms. Duhaime for coming before us. I know you have a busy schedule. We appreciate the information you brought to us.
Joining us now is Dr. Lorenzo Vidino. A native of Milan, Italy, Dr. Vidino holds a law degree from the University of Milan Law School and a Doctorate in International Relations from the Fletcher School of Law and Diplomacy.
Dr. Vidino is an academic and security expert who specializes in Islamism and political violence in Europe and North America. Since April 2015, he is the Director of the Program on Extremism at the Center for Cyber and Homeland Security, George Washington University. He has held positions at the Centre for Security Studies, the Rand Corporation, the Kennedy School of Government, Harvard University and the U.S. Institute of Peace.
He is also the author of several books, including a recent work on the Muslim Brotherhood in North America and writes frequently for several prominent newspapers, including the International Herald Tribune, The Wall Street Journal, the Washington Post and The Boston Globe. Mr. Vidino has testified before the U.S. Congress and consults with governments, law firms, think tanks and media in several countries.
Dr. Vidino, welcome to the committee. I understand you have an opening statement. Please proceed.
Lorenzo Vidino, Director, Program on Extremism, Center for Cyber and Homeland Security, George Washington University, as an individual: Thank you very much. It's a real pleasure to be here today speaking before you. I really appreciate it. It's a big honour.
I was asked today to speak about two subjects, which are, of course, somewhat overlapping. One is counter-radicalization, particularly the European experience when it comes to counter-radicalization, or CVE, countering violent extremism. The second part is about the Muslim Brotherhood in the West and what it means, what the Muslim Brotherhood in the West is and what the implications are from a counter-radicalization perspective. Briefly, I'll divide my few initial minutes on these two topics.
As for CVE, counter-radicalization, Canada has been moving over the last couple of years in the direction of understanding that soft measures, for lack of a better term, are an important part or an important complement to hard measures in a comprehensive counterterrorism strategy. I think CSIS, the RCMP, Public Safety Canada — I was a recipient of the Kanishka grant. I know that Kanishka has been very much looking into this stuff years for years and moving and developing these kinds of initiatives in Canada. Obviously, some European countries have been working on these issues for 10 years now, so the experience is longer there.
What we see in the European countries like the U.K., which is basically the pioneer of these kinds of initiatives, is that we have three kinds of initiatives under the umbrella of CVE. The big general preventive initiatives aim at integrating people, promoting integration, doing interfaith dialogue and so on. We have engagement, trust building measures, all of those initiatives that aim at building bridges and trust between authority and communities. Then we have targeted, individualized intervention, so one-on-one mentoring schemes for the most part.
What we have seen in Europe is there's significantly less faith or at least significantly fewer resources devoted to the large, general preventative measures for a variety of reasons that have to do with budget cuts but also with the difficulty of proving the effectiveness of these measures. You have to prove that these sorts of initiatives, as good as they might be, have an impact on diminishing or preventing radicalization, and that's obviously very difficult. Integrating people is obviously a great thing, but are we sure that that's part of a counter-radicalization strategy?
What has been, on the other hand, embraced with more enthusiasm are the one-on-one targeted interventions, which are more cost-effective, and it is generally easier to prove their effectiveness. This is the way a lot of European countries have been moving, particularly with the foreign fighters issue, with the difficulty — and this is also a Canadian problem — of prosecuting, charging individuals before they go and even after they have that experience of fighting in Syria and Iraq and come back. The lack of evidence is a big difficulty that all authorities and prosecutions face. Obviously there's monitoring, but one cannot monitor hundreds if not thousands of individuals 24/7. So CVE initiatives are seen as a necessary tool, even when people are not enthusiastic supporters of these initiatives, to try to at least diminish the number of individuals that embrace a certain ideology and can be potentially dangerous.
The challenges in doing CVE initiatives are many. We have seen the diversity of profiles of individuals that embrace a certain extremist ideology. They range from 13 to 50 years old, men and women, all sorts of socio-economic backgrounds. Obviously the motivations of these individuals change from case to case, and one needs certain flexibility in order to have approaches to sway individuals with such diverse backgrounds.
Another significant challenge we have seen throughout Europe is measuring effectiveness. It really boils down to the money being spent in a good way, that what you're doing is effective or at least not counterproductive, because some bad CVE initiatives could be counterproductive. Obviously it's difficult in some cases. You have to prove a negative. You have to prove that people did not radicalize because of what you did. One-on-one intervention is relatively easier, which is one of the reasons why authorities tend to embrace it.
One other problem that authorities in Europe have been facing — and I understand it is somewhat of a Canadian problem — leading to the second part of what I would like to discuss, is the choice of partners. Any counter-radicalization initiative can be successful only if it can count on partnership with Muslim communities. The question has always been, given the fragmentation of Muslim communities in all Western countries along ethnic, sectarian and political lines, who speaks for the Muslim community? With which organizations are you supposed to engage? Particularly when it comes to counter-radicalization and to all security-related matters, the question has always been, with groups, with organizations that trace at least their ideological and historical roots to non-violent Islamist organizations like the Brotherhood, are they part of the problem or the solution? Should governments work with them to counter violent extremism? That's a very tricky dynamic, and in a lot of European countries, particularly the U.K., the debate has been going on for at least 10 years and is not completely solved.
Let me clarify what I'm talking about by mentioning the Brotherhood in the West. We do have individuals that have come to the West over the last 40, 50 years, and some of them more recently, from a variety of Muslim majority countries and have established a life for themselves and organizations in North America and in Europe. These individuals that come from the Muslim Brotherhood background have created many organizations in the West, which is on some level, from a formal point of view, improper to call them Muslim Brotherhood. They do not answer to orders coming from Cairo or any other Arab capital. They are independent in the way they operate in Canada, the United States or any European country, but nonetheless are part of an informal network where you have strong links based on personal and financial connections and at the end of the day what matters the most — ideology. They all embrace a certain world view.
Basically it's a pattern that you see with minor differences in every Western country. We're talking about a very small number of people, but they are very sophisticated, politically savvy, well funded, and they have created organizations that represent a very small part of any Muslim community in any Western country but nonetheless exert a disproportionate influence. They're extremely vocal and visible. They basically aim to be the gatekeepers to Muslim communities, so that whenever politicians, governments or the media try to get the Muslim voice, if there were such a thing, they would go through them. They are sort of the self-appointed leaders of Muslim communities.
Are these organizations problematic or not, particularly from a security perspective? I would argue that there's no direct link of terrorism. I think it would be an analytical mistake to lump them, as some do, with al Qaeda or ISIS. These are not organizations that plan attacks in the West, and actually in many cases they do condemn them.
The problem is more indirect. First of all, these organizations have not, from an ideological point of view, completely condemned violence. I'm talking about heterogeneous transnational movements, so I'm simplifying things. Generally speaking, the movement has not abandoned violence as a tool to advance its agenda. It's abandoned its tactics, but it's not heartfelt.
Secondly, in some cases, they do directly support violence. I think we have many cases of Brotherhood organizations, including here in Canada, funding terrorist-designated organizations: Hamas and what we see in Libya now, for example, with the Brotherhood being actively involved in violence, together with jihadist groups. That's a very interesting dynamic.
Third, the other reason the Brotherhood in the West is concerning is it embraces a certain narrative that is very conducive to violent radicalization. In certain parts of Muslim communities, it mainstreams a narrative of support of violence and "victimism" that are extremely dangerous when combined.
The Brotherhood narrative basically says that the West is at war against Islam, that Western governments and Western societies hate Islam. They have this narrative where they lump together foreign policy issues with issues like cartoons as part of a big narrative that proves this point that the West hates Muslims and Islam.
Add to that the condemnation of terrorism — but it is often with a lot of "ifs" and "buts" — and the justification of acts of violence in places like Palestine, Kashmir, Iraq, Afghanistan and many other places.
Now, the Brotherhood in the West does not reach the conclusion that Muslims in the West should engage in violence in the West. It's not a black-and-white issue; there are a lot of grey areas.
This has to be said: They do actively engage in activities that prevent violent radicalization. It's somewhat of a paradox, but it happens in many cases, and we can get into examples later.
Nonetheless, that kind of narrative in the mind a 16- or 18-year-old is extremely dangerous, because violence is justified when Muslims are under attack: "If it's okay in Gaza and Afghanistan, why is it not okay in the West, where you're also telling me that Islam is under attack?" So the mainstreaming of this narrative is very much the staircase to violent radicalization, and the Brotherhood does mainstream that. It provides somewhat of a fertile environment.
The Brits, who have been looking into this dynamic, argue that what the Brotherhood does is provide the mood music to a suicide bomber's dance. It's a fanciful expression, but it's very telling. There's been a shift in the way the British government has looked at the issue of the Brotherhood and radicalization.
Ten years ago, the main line was that the Brotherhood was the solution, in a way: We have to work with soft Islamists against the hard ones; it takes a radical to defeat a radical; we work with them. Yes, they have positions on certain issues like gay rights, women's rights, freedom of religion, which are controversial to say the least, but nonetheless they get the job done when it comes to preventing violence. That was the main line 10 years ago.
If you pitch that line in London today, most people will look at you as though you're completely out of touch with reality. Things have changed a lot, and the British government has completely changed. It's not a matter of Tories or Labour. It's very much an issue that brings most of the political classes together in the U.K. Brotherhood organizations no longer get funded, and they are seen as part of the problem.
The latest incarnation of Prevent argued that:
Terrorist groups can take up and exploit ideas which have been developed and sometimes popularised by extremist organizations which operate legally in this country.
Again, what they do is not illegal, but it's part of the problem.
It's a common assessment that most countries have, I would argue. There has been at least talk in the U.K. of banning the Brotherhood. I think there's been a review, as I'm sure you're aware, of the activities of the Brotherhood in the U.K. The results have not been made public for a variety of reasons. I think it is clear that the British government is now going to move to ban the Brotherhood for a variety of reasons, mostly having to do with legal reasons. The idea is to adopt a no-platform approach where the Brotherhood is seen as part of problem, where the government takes a strategic approach seeking to undermine what the Brotherhood does. It does not give them legitimacy. It does not give them support. Legal tolerance doesn't mean civil tolerance. It tries to basically undermine what it does. It's considered problematic.
We talked about the violent radicalization side of things, but the other problem that comes with the Brotherhood is the impact on social cohesion and integration. I'm the first one to concede the point that the majority of people who in one way or the other get exposed to the Brotherhood world view will not necessarily graduate to becoming terrorists. The majority do not. I think what you have is a fringe, a small part that does make that additional leap into terrorism, but most will not. Nonetheless, there is the impact on social cohesion of a narrative, a very politicized, literal interpretation of Islam that sees the West as an antagonistic society into which Muslims should not be integrated, or integrated only in relation to what serves to advance the Islamic agenda.
Just to touch some of the core issues, for example, women's rights, gay rights and freedom of religion, the views the Brotherhood adopts are extremely problematic there. As I said, the numbers are very small. We're talking about a few hundred Brotherhood activists in each Western country, but they do rely on substantial resources. They have disproportionate control over mosques, schools and a lot of spaces where Muslims come together. For example, in all the European countries, there are annual gatherings for Muslims. The biggest ones, where 40,000 or 50,000 people go, are organized by Brotherhood organizations. Are all the 40,000 or 50,000 people who go there Brotherhood members or sympathizers? Absolutely not. But it's only the Brotherhood that has the financial resources, the activism, the mindset and the capabilities of organizing these sorts of events. Their goal is to spread their interpretation, which I would argue is still very much on the fringe in certain communities. Some ideas of the Brotherhood have percolated to parts of communities, but generally speaking, the vast majority of Muslims do not adopt the Brotherhood line of thinking.
Obviously, if that access to resources is combined with support from governments, which I think in some cases has happened, it becomes extremely problematic. That was the case in the U.K. 10 years ago where the government was actively partnering with Brotherhood organizations, giving them support. It gives proportionate influence to a very small and disproportionate organized minority.
I'll leave it there.
The Chair: Thank you, Mr. Vidino.
We will start with Senator Mitchell and then go to Senator Stewart Olsen.
Senator Mitchell: Thanks, Mr. Vidino. That was a very knowledgeable presentation. I read some of your publications, and they are very interesting. Clearly, you've thought this through.
I detect perhaps a change from your article written in 2011 about dealing with the Muslim Brotherhood, where you say that authorities should talk to Western Brotherhood organizations, but only with three conditions. One of those conditions was make sure that you engage other organizations. You're aware, of course, of these conditions. The second is you have to be fully aware of where they're coming from, and the third is that you don't transcend into an undue and counterproductive support of the brothers. A fear is that if authorities acknowledge them, they gain.
It's also a broader issue, and that's something that throughout my political career has been referred to as "ghetto politics," where we often are inclined, as politicians, to deal with leaders of groups, and we need to get past that. Why should we give any group that authority over a community or people? They're Canadians, just like the rest of us.
Have you changed your orientation regarding how one should deal with groups like the Muslim Brotherhood? If you're not dealing with them, who are you dealing with and how do you get to the community?
Mr. Vidino: It's flattering to know as an academic that your papers are being read. I appreciate that.
I haven't changed my stance. You summed it up very well. The conclusion I draw is that the approach should be engage but don't empower. Engage with knowledge. Know that it's not a uniquely Brotherhood tactic, but they are not always truthful and sincere when they engage. So know exactly who you're dealing with. I think that's rule number one in any setting.
Know that they have an agenda. Occasionally there are moments where that agenda is even compatible with the agenda of any government.
But the second part is to be proactive, to make that effort of not being lazy and just dealing with the most visible and most vocal voices, the ones that will be proactive and try to reach out to you. I use the plural "communities" throughout my presentation. They're as diverse as Muslim communities in any Western country. If you think you get the full picture just by talking to four or five individuals, self-appointed representatives, I think that's very mistaken. You have to do a lot of hard work in terms of finding voices that are probably less organized but not necessarily less representative.
I've seen that in Boston for example. I got my PhD in Boston. I looked at how the government was engaging. It was 2006-07 and the U.S. government was starting to reach out to Muslim communities there. It basically went to Brotherhood-leaning organizations mostly because those are the ones who themselves do outreach to government. For example, I saw shock on the faces of some U.S. government officials on knowing that the largest Muslim community in Boston is the Bosnian one that they had never met with, and it had very different customs from most of the communities they were engaging with. For some of them, the celebration for the end of Ramadan was getting shots of rakia — liquor — not exactly the conservative image they had by talking to certain people. Who is to define what Islam is? It's different communities of different perspectives.
It takes effort, knowledge and an understanding that you're getting a partial view with a spin that is problematic because, as I said, I think these groups are problematic.
I position myself somewhere in between. There are a lot of critics of the Brotherhood that argue you shouldn't talk to them. Shut them down; don't talk to them. I have problems with that approach because I think it's not realistic or feasible and potentially very counterproductive. At the same time, you have to be smart when you talk to them.
Senator Mitchell: If alienation is at the root of some of the radicalization problem, if it is not a sufficient condition, it's certainly a necessary condition. You talked about the soft side and the importance of alienation becoming a critical central feature of how you deal with groups. It's true that we need to prevent that occurring as well.
Mr. Vidino: Yes, and they are occasionally inevitable partners in this. They're undeniably a part of the community. They're undeniably representative of a cross-section of a community. If you alienate them completely, if you go to war with them, they could make your life difficult when you're trying to reach certain parts of the community. At the same time, if you consider them partners, embrace them, give them legitimacy and you think they will solve your problems when it comes to radicalization, I think that's a delusional approach. That "in between" is extremely delicate and complex, but it requires a tailored, nuanced solution.
I think the mistake the British government made at the beginning was to give them legitimacy because they saw them as partners in all of this. I think what's happening now is that they engage with them more behind closed doors. They see there are situations in which working with them is somewhat inevitable, but tactical partnerships are different from the press releases with hugs and kisses that took place 10 years ago.
Senator Mitchell: Thank you.
Senator Stewart Olsen: If you would, please explain to the people watching this and those interested, what exactly does the Muslim Brotherhood believe in? What is their ideology?
Mr. Vidino: First of all, we should make a distinction between the Brotherhood in Muslim-majority countries and in the West. There is a core, of course, with different goals, obviously.
I think the general idea is they do see Islam as a comprehensive system of life that shapes all aspects of private and public life so that every aspect of both should be shaped by Islam, the way they interpret it, which is quite conservative and literal, less literal than Salafists or more extreme groups. But that is the general view.
Hassan al-Banna was the founder of the Brotherhood in Egypt in the 1920s. There were different degrees. Gradualism is a big part of the Brotherhood's belief. The first thing is to create the perfect Muslim individual, then Muslim family, then Muslim society, then Muslim state and so on. It's the idea that Islamic law, sharia, governs all aspects of life. So in Muslim-majority countries, that entails creating an Islamic society and an Islamic form of government, which wouldn't necessarily be what we're seeing with ISIS. The way they interpret the sharia is not as extreme as ISIS, but nonetheless, the sharia shapes all way of life.
In the West it's different. It's a group that is extremely pragmatic and flexible, so they're fully aware that they're not going to create Islamic societies in the West. It may be a dream centuries down the road. If you have a certain mindset, you may think that eventually the whole world will embrace your views, but they're very pragmatic at heart.
Their goals in the West are different, and I would sum them up in basically three ways. One is to spread their interpretation of Islam. As I said, it's more about politics than religion. I find Islamism is a political ideology based on the interpretation of religion, their world view rather than their interpretation of Islam, spreading their world view to Muslim communities.
The second goal is to become gatekeepers to Muslim communities for all Western interlocutors, and that second goal reinforces the first. If you are the gatekeeper, the self-appointed representative, you might at some point actually become the representative. If the government sees you as a reliable partner, and, for example, it's a big thing in a lot of European countries to teach Islam in schools, then the government will appoint you to teach Islam in public schools. Then you have the ability to shape the education system. So becoming a gatekeeper is a very important thing for them.
The third goal is to do like any other lobbying group, which is to influence policy on anything that has to do with Islam and Islamism, both domestically and internationally, lobby for Brotherhood branches in the Middle East and North Africa on all issues that are of interest, and to be the Muslim voice when politicians reach out and want to know what Muslims think. They want to be the ones telling you that's what Muslims think. I would say those are the three goals.
Senator Stewart Olsen: Some countries have actually designated the Muslim Brotherhood as a terrorist organization. Do you agree with that? Do you think that's the way Canada should go?
Mr. Vidino: Yes, a few countries have. Saudi Arabia, Egypt and the United Arab Emirates have such designations. Syria has for a long time as well.
It's complicated. I think it has to do a lot with legal systems. I'm no expert on the requirements for designation under Canadian law. I think it's fair to say that for some branches of the Brotherhood — again, it's not a monolithic entity. The way it works is you have different branches in each country. Obviously, the Egyptian one is the most important, but if you cross the border and go to Libya, the Libyan branch of the Brotherhood is 99 per cent independent from the Egyptian one. So who do you designate? Do you designate the Brotherhood in Egypt or in every Arab country? We are talking about an organization that has branches in, give or take, 60 or 70 countries. It is an international organization, although it's questionable how effective and how much control that international organization has over the different branches. A lot of people argue that it's simply an incarnation of the Egyptian Brotherhood trying to control the other branches. Then you have in the Western Brotherhood 2.0, those kinds of organizations. The U.A.E. has designated some of the Western spin-offs of the Brotherhood as well.
It's difficult to say whether I would recommend that or not. First of all, who do you designate? I think for some of the branches internationally you have a case. I go back to Libya. That's a clear example of the Brotherhood being involved in terrorist activities.
You could argue that Abdul Majeed al-Zindani, the leader of Islah, the Yemeni branch of the Brotherhood, particularly in the past, has been designated as an al Qaeda supporter for more than 10 years in the U.S. So for some branches the case is pretty clear. For the spinoffs in the West, I think it's on a case-by-case basis.
The British approach is interesting. They came to the conclusion that it cannot be done legally and could actually be quite problematic. From a PR point of view, it would probably be very problematic. It would definitely trigger a battle in court. They weighed the pros and cons, and I think they said the cons outweighed the pros. Nonetheless, they opted — and I can't predict the future, but with the Tories in power now, they're going to be even more aggressive — to make their lives very difficult and have a clear understanding throughout government that they are part of the problem, not part of the solution. So no support, but also using what I would argue is the Al Capone law enforcement approach: "You're not an illegal organization, so we cannot designate you or prosecute you for terrorism-related matters, but I bet you that you have problems when you pay your taxes." A lot of their financial activities are not exactly aboveboard, and you do see a number of investigations taking place with a lot of charities in the U.K.
Senator Stewart Olsen: Thank you, that's very informative.
[Translation]
Senator Dagenais: Thank you, Mr. Vidino. You are recognized as an expert in the fight against radicalization. You gave a brilliant presentation on your main experiences with the European lessons in the fight against radicalization. I would like to hear what you think about the effectiveness of the European initiatives in the fight against radicalization so far.
Correct me if I am wrong, but the debate now seems to be moving toward prevention. I would like to hear your opinion on that.
[English]
Mr. Vidino: First of all, it's difficult to assess the European level, because at the end of the day all counter-radicalization initiatives are done at the country level, so each country should be analyzed individually. The European Union only does some coordination work, but at the end of the day all activities are at the individual country level.
The effectiveness is, as I said, a very difficult thing to assess, to measure. The general idea is that the big programs which were funded at the beginning in 2005, 2006, almost look like social engineering programs, with big integration and interfaith initiatives. There's less enthusiasm, as I said in my presentation. They're very expensive. They are built on the idea that lack of integration produces radicalization, and I think that idea is challenged by a lot of people.
Obviously there is no consensus on the issues of radicalization, but the idea is that we do not know for sure if lack of integration causes radicalization. A lot of people disagree.
Second, even if it's true, should pro-integration initiatives, as good as they are — of course they should be there — be part of a counter-radicalization strategy? Should law enforcement and intelligence agencies be running integration and interfaith dialogues? It doesn't necessarily make a lot of sense.
As I said, the focus has shifted on programs that are cheaper, smaller, which are the one-on-one interventions. There is enthusiasm about that because the results are relatively good. There are a lot of problems in getting hard data because of privacy laws, so you have to rely on what governments tell you. It's difficult to get a second opinion.
But we are investing a lot of resources in them, particularly over the last two years because of the foreign fighters issue and, as I said, the issues in prosecuting individuals. CVE programs are the only alternative to doing nothing about it because of a lack of legal recourse.
The head of the British police in charge of Channel, a British counter-radicalization intervention program, talked about a 95 to 100 per cent success rate, which is obviously very high. Some would question that. Probably what is arguable is that their programs would intervene with people at the very beginning of the radicalization trajectory. Nonetheless, that's still a good thing. They are numbers that are weeded out from what is already a very large number of radicalized individuals.
The engagement part, which is the third family of counter-radicalization initiatives, is also a very intangible aspect. At lot of it involves meetings with Muslim communities. Sometimes people make fun of them; there are all these tea-drinking sessions. What comes out of it? Of course it's difficult to measure in hard data, but there are ways that show that those kinds of initiatives are useful.
Ten years ago we had another foreign fighters' mobilization for Iraq with much smaller numbers, but we have a few hundred Europeans who went to fight in Iraq for al Qaeda. I'm hard pressed to think of even one case of a relative or a friend who went to the police or intelligence agencies to report the case of a relative, a brother or a friend who was going to Iraq to fight. Now that's a common dynamic. I know it's the same in Canada where you have many cases in which families, relatives, go to the police.
It's difficult to say and to prove, but arguably it is the by-product of this engagement, of these trust-building measures, breaking into communities which traditionally and historically, for understandable reasons, have always seen law enforcement as the enemy rather than a friend. Years and years of engagement, I think, have helped.
I empathize with some of our colleagues who sit in front of panels like this and try to justify the effectiveness of CVE measures with hard data. Sometimes it's very difficult, but sometimes the result is varied. It's maybe not immediately visible, but you might see it 10 years later.
[Translation]
Senator Dagenais: You said that it is difficult to obtain data, which are held by governments. But do you think prevention is working? Has there been an improvement in the prevention system?
[English]
Mr. Vidino: Absolutely, I think it does. And it's not just my opinion; it's the opinion of, I would argue, every single government in the Western world that it's part of a comprehensive counterterrorism strategy.
The people that agreed the most with this are really the people who deal with the hard stuff. Some of the firmest believers in the softer part of prevention are the people on the ground in law enforcement and intelligence who understand that some of these initiatives are crucially important.
They're not going to be successful all the time, but in the case of the 16-year-old — that's how the British started the Channel program. It was after they discovered the case of Hasib Hussain, who was one of the four 7/7 London bombers. He was the guy who blew himself up on the bus. He was the only one not known to authorities. The other three were already known to MI5 and he was not known. When they started investigating after the attacks, the only thing that they knew was that he had been scribbling "I love al Qaeda" and so forth on his books at school. The teacher picked up on that and went to the principal, talked about it and nothing was done because there was no system in place to do anything about it. The Brits, after that, and because of other cases of course, created Channel.
Other European countries have systems where that teacher, that principal, has a place to report that case and then to a certain entity. It changes from European country to country. In some cases it's the police, in some cases the municipality and in some other cases civil society organizations.
Generally I'm a fan of a light police footprint in this, obviously for trust reasons within the community. That structure then sets up some kind of intervention.
Will it work all the time? Obviously not. Will it work 50 per cent of the time? If it does, that's great. The idea in European countries is that it does work in many cases, and that's good because it relieves the police and the intelligence of a lot of work. They are already overwhelmed with cases. If it's 50 per cent fewer cases, that's great. Also, it's in the best interests of the young person radicalizing. The language that the British use is the language of safeguarding. This kind of intervention is done in the best interests of the young person radicalizing.
The way teachers were approached was to say, "If you see that your student is involved in gangs, is targeted by pedophiles, would you report the case?" Radicalization is the same thing. It's another social ill. That's the language being used in Europe. It's a social ill that targets young people, so teachers, community leaders and social workers should see it as such and report it.
It does absolutely work in some cases.
Senator Beyak: Thank you, Professor Vidino. I share Senator Mitchell's admiration for your work.
I credit the U.K. Conservative landslide to Home Secretary Theresa May who has been working on this problem for years. They believed in integration in the beginning and in outreach but have now decided to take the tougher approach.
My question is in a different vein. I wondered, given your experience in the U.K., if you might advise Canada on better managing alleged radical spiritual leaders who are coming here. There are self-proclaimed spiritual leaders, people like Tariq Ramadan, who have some good work but also have mixed documented messages that they say in other countries. Do you see a problem for that here in Canada, and how would you advise us to address it?
Mr. Vidino: I think that is a problem common to all countries, with the influx of more or less radical individuals who come here and promote certain views without knowing the legal framework in Canada in terms of who is and is not allowed. In a lot of countries, I think the approach has been that certain individuals that clearly espouse radical views should not be allowed in the country. That's a pretty standard MO in the vast majority of Western countries.
The Chair: Do they have a no-visit list?
Mr. Vidino: Yes, or it's done on a case-by-case basis. When they know a certain individual is coming from outside of the Schengen area, for example, and requires a visa, the government takes a decision not to let them in. It's quite a few people. Actually, certain groups know which countries are tougher. You enter the Schengen area and you ask for a visa in a certain European country so that you can tour the other countries on that visa. Few people ask for a visa for France because everyone knows the French are tough on this. However, other countries are a bit softer and you can enter Europe that way. A lot of that is done.
If you have issues of freedom of speech and expression, one must tread carefully when limiting that even from known citizens — people who come from outside, obviously. I think certain communities would feel targeted if certain individuals are being denied access to the country just because they're controversial. Obviously, it's on a case-by-case basis. It's difficult to advocate the determining factor that says yes or no. Advocating for violence should probably be one of those factors, but it's a delicate choice to be made on a case-by-case basis.
Even among those individuals who would be allowed, I think we go back to no platform, no tolerance. Legal tolerance does not equal civil tolerance. If a certain individual comes into the country and goes to a university to speak, maybe there is something to putting pressure on that university and telling them that as much as we understand that universities should be bastions of free speech, they should also be places where a certain kind of hatred should not be tolerated. Sometimes naming and shaming works, making it clear that providing a platform to certain individuals with certain views should not be tolerated. If they decide to go ahead anyway, so be it.
Framing it in the right way is important. In many cases, it's not about what some of those individuals say when it comes to criticizing Canada or any other Western foreign policy. Going back to issues that should be dear to everybody — women's rights, gay rights, freedom of religion — these are core issues. When you see you hardcore views on foreign policy, those views are going to be matched by their radical views on those issues. I think there should be little tolerance for that.
Senator Ngo: Have you conducted any research on the foreign funding community in North America who support the spread of the radical ideology in Canada? That's my first question.
Secondly, can you elaborate more on your comments about the victimization narrative? Who are the Muslim Brotherhood organizations in Canada, if you know?
Mr. Vidino: When it comes to foreign funding, as I said, it's what sets the Brotherhood apart from other organizations. It's their access to funds and their ability to receive compensation from small numbers with very deep wallets.
These sources of funding are not always clear. Some of them are good businessmen. The background of a lot of these individuals is that they're successful businessmen. They're raised in their own community. They have their own businesses.
Arguably, though, the majority of funds in the past came from supporters in the Arab Gulf region. It's one of the things that everyone knows but is sometimes a bit difficult to prove, a smoking gun. A lot of it is a cash-only business, and therefore it becomes difficult.
Obviously, some of those sources of funding have dried up over the last few years. A lot of Gulf countries have changed their policies on the Brotherhood — some dramatically. When looking at banning the Brotherhood or positions that the government should take, that's something to be taken into consideration. Few countries in the Arab world — in fact, I can only think of one — would be opposed to that. A lot of countries would take that in a positive light. I'm not saying that should be done to appease countries in the Arab Gulf, but that's a position that most countries would have.
The Government of Qatar has traditionally been, over the last four or five years, the largest sponsor of Brotherhood organizations in North America and Europe. I think you have private individuals in other Gulf countries that support them. They're not supported at the government level but by wealthy individuals in those countries. In Saudi and U.A.E. it is now illegal to do so. It is complicated to understand the dynamics of foreign funding.
The dynamic of victimization is the narrative. It's common to any kind of extremist ideology. The first part of any ideology is to tell its followers that they are under attack or being victimized by a conspiracy against them. Ideology gives you a vision of a better tomorrow and tells you how you can be part of that solution. Think of any extremist ideology or right-wing ideology, or a giant Zionist conspiracy, or any ideology.
In the Brotherhood narrative, it's a big conspiracy of the West and secular governments in the Arab world, not against Islamists but against Islam and Muslims. That's how they put it. They put together all kinds of issues, whether they are big geopolitical issues or local dynamics. Issues of Islamophobia do exist, undeniably. As with any narrative, it has to have at least some grounding in reality. Obviously, the ability of the Brotherhood is to exploit and magnify issues that exist and weave them into a conspiratorial and negative narrative.
What are the organizations in Canada that trace their roots to the Brotherhood? As I said, in the West you will not have an organization called Muslim Brotherhood in Holland, Muslim Brotherhood in Canada, and so on. In some cases they vehemently deny any link to the Brotherhood. If we keep the analysis on a formal level, they have a point. They don't have a membership card in their passport, although some of them are part of the Brotherhood in their country of origin. It's somewhat more informal. You have organizations created by individuals who have personal ties to different branches of the Brotherhood back in the Middle East and who have personal, financial, organizational and ideological ties to the movement.
The Muslim Association of Canada would be the first name that comes to mind. There are clear links there where you have prominent individuals that for 20 or 30 years have been involved in Brotherhood groups both in Canada and in the United States. What used to be called CARE Canada, it's the same thing. There are charities like Islamic Relief. Irfan is gone but it was part of that.
If you look at these eight to ten organizations, you basically see that it's always kind of the same people that are involved in them. That's kind of the milieu.
The title of my book is The New Muslim Brotherhood in the West. In a way, it is the Brotherhood 2.0. They are not part of a pyramid with Cairo on top, but they have the same world view and the same MO as the Brotherhood.
Senator Ngo: You answered part of my question.
The next question I would like to ask is this: Besides the U.K. action taken against the Muslim Brotherhood, so-called, are other countries in Europe taking similar actions? What are they doing?
Mr. Vidino: I'm turning on my computer because I want to read a couple of things I prepared.
Let me put it like this: Traditionally — and I think things have changed a little bit over the past couple of years — there's been a divide in the Western world between continental Europe and the Anglo-Saxon world, where continental Europe has taken a much more negative and pessimistic view of the Brotherhood and the Anglo-Saxon world was somewhat more favourable to the Brotherhood. I think things have changed. I talked about the shift in the U.K., but the approach in continental Europe has been that of seeing the Brotherhood in a very negative way.
Assessing one group in a certain way doesn't necessarily mean the way you deal with them and engage with them follows that assessment. A lot of factors come into play, such as politics.
Generally speaking, European intelligence agencies have a very negative view of the Brotherhood. Let me read to you a couple of quotes. This is from the Dutch. I have German and Belgian quotes, too, and they all pretty much say the same. This is from the AIVD, which is the Dutch equivalent of CSIS; the Dutch intelligence agency.
. . . not all Muslim brothers or their sympathizers are recognizable as such. They do not always reveal their religious loyalties and ultra-orthodox agenda to outsiders. Apparently cooperative and moderate in their attitude to Western society, they certainly have no violent intent. But they are trying to pave the way for ultra-orthodox Islam to play a greater role in the Western world by exercising religious influence over Muslim immigrant communities and by forging good relations with relevant opinion leaders: politicians, civil servants, mainstream social organizations . . . and so on. This policy of engagement has been more noticeable in recent years, and might possibly herald a certain liberalization of the movement's ideas. It presents itself as a widely supported advocate and legitimate representative of the Islamic community. But the ultimate aim — although never stated openly — is to create, then implant and expand, an ultra-orthodox Muslim bloc inside Western Europe . . . .
It's a very negative assessment. It sounds like something you could read in a right-wing blog. It's from the Dutch intelligence agency; one of the most liberal and tolerant countries in Europe. I could read you quotes from the Belgians, the Germans, the French, the Danish and the Italians; it would be basically the same analysis. That's the assessment from intelligence agencies.
One of the reasons there's a difference between the Anglo-Saxon and continental European countries is that intelligence agencies in continental European have a broader mandate than MI6, the FBI and CSIS. They look not only at violent extremism but at all threats to the democratic order. They look at subversion. They look at the Brotherhood more than Anglo-Saxon countries do. That's the opinion they get at the end of that process.
The Chair: I will follow up with one further question. This leads me to one question and perhaps you have some knowledge of this.
My understanding is that in some cases the Muslim Brotherhood, depending where it is, actually is in charge of schools or education. Should that be a cause for concern? If it is, what should countries such as Canada or England or France be doing about that in respect to ensuring that these young people are getting the education they should be getting?
Mr. Vidino: The dynamics change from country to country. In Germany, the big problem is in public schools. The German constitution states that each state in the federal system has to teach any religion in partnership with religious communities. What you get is the usual dynamic where you have 20 organizations applying to be partners with the government in teaching Islam in schools. From a purely formal point of view, the best application comes from Brotherhood organizations. All the other organizations do not have the sophistication to put together a good application. They cannot be part of it from a strictly bureaucratic point of view.
The vast majority of German states nonetheless take an approach where they look beyond just the formal aspect of the application, and they do not work with Brotherhood organizations because the Brotherhood and its Turkish equivalent, Millî Görüs, which is basically the sister organization in the Turkish language, are on the list of extremist organizations in Germany.
The Germans have two lists. One is the terrorist organizations and one is the extremist organizations. Extremist organizations are monitored. There are some limitations that come with being on that list, such as visas. One of them is that the intelligence agencies work with the department of education in identifying organizations that are on the list and are problematic and that the government should not work with. That then triggers lawsuits and very complex litigation, but that's the dynamic.
In other countries you have private schools run by Brotherhood organizations. That's become more problematic, obviously, with regard to what the government can do there. I talked about the world view and the impact on social cohesion that the Brotherhood has. When it runs its own school system, one can speculate as to what the results of that are.
I think what we have seen in the U.K., with some of the controversies over the last few months, is something that is of concern to the British government. It's one of the reasons why they have created a specific unit inside the Home Office, which is called the Extremism Analysis Unit, to look specifically at issues of known violent extremism or what they call "entryism" — situations in which Brotherhood and Jamaat-e-Islami Islamic organizations, which is the South Asian equivalent of the Brotherhood, work within the system and basically infiltrate it and spread their agenda through legal means, but obviously in a way that is problematic.
The Chair: Colleagues, I want to thank Mr. Vidino. It's been very informative and we very much appreciate you coming.
Joining us on our third panel of the day is Mr. Don Head, Commissioner, Correctional Services Canada.
Mr. Head, welcome to the committee. It's a pleasure to have you with us today. I understand you have an opening statement, and I would invite you to begin.
Don Head, Commissioner, Correctional Service Canada: Thank you, Mr. Chair and members. Good afternoon.
I'm pleased to have been provided with the opportunity to speak on behalf of Correctional Service Canada on this committee's important study regarding the security threats facing Canada.
Mr. Chair, Correctional Service Canada administers the sentences of approximately 23,000 federal offenders on any given day in federal penitentiaries and under supervision in the community. Many of the offenders have a history of violence and may pose a risk to the safety of Canadians if not properly managed. Our organization is acutely aware of the threat that such offenders pose to public safety. However, the individuals who pose the security threats which have been the principal focus of this study are not typical in the federal correctional system.
What we refer to as "radicalized offenders," defined as "an ideologically motivated offender, who commits, aspires or conspires to commit, or promotes violent acts in order to achieve ideological objectives," represent only a small number of the offenders under federal jurisdiction as of today.
Despite this number, Correctional Service Canada takes the issue of radicalized offenders and violent extremism very seriously. It should be noted that the correctional system has had these types of offenders in our care at various times over the last 150 years. While our Public Safety colleagues work tirelessly to detect, prevent and prosecute those who commit acts of terrorism and violent extremism, Correctional Service Canada is chiefly mandated with a wholly different responsibility: the management, supervision and rehabilitation of those convicted of such crimes.
In federal institutions and parole offices across the country, my staff works hard every day to ensure public safety. Through careful assessment and targeted correctional interventions and programming, our case management and psychology professionals address the needs and risks of all federal offenders; they assist offenders in their rehabilitation so that the latter may return to Canadian communities as law-abiding citizens.
Like all federal offenders who enter our system, our organization manages radicalized offenders through individualized correctional plans. Following a thorough assessment and examination of case-specific factors, a correctional plan is created to outline the appropriate interventions for an offender's rehabilitation and establish clear objectives against which their progress will be evaluated. As directed by these plans, we deliver nationally recognized correctional programs, psychological services, chaplaincy services and interventions, and education and employment programs to address the unique needs of each offender in our custody.
Mr. Chair, I'm sure it will come as no surprise to this committee that radicalized offenders do represent a unique challenge in this regard. Our observations suggest that these offenders are often different than the vast majority of our population, with different motivations and different needs, and we intend to be proactive in exploring new approaches and best practices for better managing these offenders in the interest of public safety and effective rehabilitation.
Indeed, radicalization poses a challenge not only for my organization but for correctional systems around the world. Our ongoing dialogue with our international counterparts has led us to conclude that while the challenges posed by these offenders are unique within the offender population, they are not unique to Canada.
However, these common challenges have presented us with an opportunity to work together and to benefit from our collective knowledge. As an organization, we are working with our international partners to evaluate how we manage radicalized offenders within the correctional system and to determine the most effective approaches to this problem. As is the case in many areas of public policy, there is a great deal we can learn from our partners around the world, and I am very pleased with how productive our dialogue has been. I can think of no better example of this cooperation than when we hosted a three-day roundtable and mini symposium in December of last year on radicalization. This event brought together international experts with significant knowledge and experience in the management of extremist offenders in a correctional setting.
Although very productive, this meeting represents a singular component of a comprehensive three-year research initiative undertaken by Correctional Service Canada. This initiative, entitled "Mitigating the Threat Posed by Violent Extremist Offenders in Correctional Institutions and Communities" and funded by Defence Research and Development Canada's Centre for Security Science, is being managed by Correctional Service Canada's research branch.
Through this initiative, including international consultation and the extensive internal research completed by my staff, we are now coming to better understand the issues of radicalization in Canadian penitentiaries. Through empirical evidence, we are learning what the profile of this population looks like, about their unique needs and motivations, and about the correctional interventions and programs that could be most appropriate for them.
Although we continue to examine and build upon our research, some interest findings are beginning to emerge. Most notably, it was found that compared to other offenders, radicalized offenders tended to be younger, better educated and had stronger employment histories. Further, they tended to be less likely to have had previous contact with the criminal justice system, tended to have fewer problems with the abuse of drugs and alcohol, and displayed better adjustment in terms of mental health and institutional behaviour.
In a related finding with respect to interventions, it was found that several of the more common treatment targets for correctional programs, such as those aimed at substance abuse, education and employment, appeared to be less significant needs areas for radicalized offenders. However, needs such as beliefs or attitudes may necessitate greater attention for radicalized offenders.
In addition to effective correctional interventions, the management and safe accommodation of radicalized offenders is also an area of focus for our organization. Radicalized offenders may represent a risk to the safety and security of federal institutions, both in terms of their personal safety and the possibility that they may attempt to recruit other inmates to their cause. Our research has attempted to determine useful indicators to assist us in identifying offenders who may be most susceptible to becoming radicalized while incarcerated. However, I would point out that our organization has significant experience in managing the complexities of our inmate population.
The threat posed by security threat groups and incompatibilities is an ongoing concern and one which extends far beyond the issue of radicalized offenders. Through research projects and ongoing consultations with international partners, it is our goal to produce comprehensive findings and recommendations on this subject and, ultimately, to pursue whatever changes may be necessary to address any concerns which have been identified. Although radicalized offenders only represent a small fraction of the inmate population at this time, we want to be proactive and to ensure that the most effective policies, interventions and training are in place.
Mr. Chair, I have spent my entire career working in the field of corrections. Since first being hired as a correctional officer in 1978, I have seen our organization evolve and adapt to change; I have seen tremendous innovation in how we carry out our mandate. When I began, we did not have a single nationally recognized correctional program. Today our correctional programs are internationally renowned. This accomplishment would not have been possible without considerable research and ongoing refinement of our policies. Radicalization represents a new challenge, but it is a challenge that I have full confidence that the work we are doing today will allow us to meet that in the future.
Although we look forward to enhancing our approach, this committee can rest assured that my staff will continue to manage all offenders, including radicalized offenders, with the critical objective of contributing to the public safety of Canadians.
I would like to thank you once again for the opportunity to appear before you today, and I look forward to answering any of your questions.
The Chair: Thank you.
Senator Mitchell: Mr. Head, thank you very much. You've been at this for 37 years. That's a long time. The depth of your knowledge is clear from your presentation.
You probably heard of or actually heard the testimony last week from a prison psychologist who mentioned the case of the man who killed his daughters and his former or other wife, and that he has been allowed to present his situation in prison, and at whatever size he is, he's intimidating nonetheless. We just need to hear from you your side of that story, whether it's true, and how could it be that that would happen and what exactly is going on.
Mr. Head: Thank you very much, senator. I anticipated this being one of the first questions that you would ask. As you appreciate, I can't talk about any specific offender, but I can talk about our overall management strategy, which I think will address your question or any concerns that you may have.
We monitor very closely any offender that comes into our system. If we have any concerns about their safety or any risk they pose to the safety of others, we have a variety of options of how we can deal with those individuals. I can assure you that that has been the case with anyone who has been identified as potentially radicalized or involved in any kind of radicalization activities.
We're aware of only one case in one institution which involved a totally different offender, where somebody was involved in potentially holding unofficial prayer sessions. Once that was brought to our attention, our staff and the imam who comes into the institution immediately intervened and that was brought to an end.
I know the testimony you heard last week was quite concerning. It was quite concerning for me, and obviously I did a lot of checking with the warden and with the staff. I think probably the statement that I would reflect back to you and the committee that the witness made is that this was all anecdotal information and not verified. So based on my own review of the situation and going back and checking what it was at the time, I have no concerns in terms of what was happening.
Senator Mitchell: So certainly not policy by any means or any stretch of the imagination?
Mr. Head: No, senator. As a matter of fact, any of the things in that testimony that were suggested were happening, staff would have been aware of. I have full confidence in my staff that they will intervene, not only the front-line correctional officers but the parole officers who manage individual cases and our own intelligence officers. We have a strong preventive security intelligence network that would give us any information that would suggest any of those alleged activities were occurring, and we have strategies for intervening immediately if that were the case.
Senator Mitchell: You referred to the important role of an imam. The psychologist also referred to that, and yet there are precious few imams now in the chaplaincy program, as well as precious few chaplains.
Do you feel the cutbacks in that area have been a detriment to the rehabilitation of the general population but also those who might be seen to be radicalized?
Mr. Head: Again, a great question and an opportunity for me to set some facts straight.
We have not cut back in terms of our chaplaincy services at all. Actually, what changed was just the vehicle by which we acquire faith service providers. We went to a single contract across the country that then provides access to the various faith services that we need to meet the needs of offenders.
One of the largest growing faiths within the offender population right now happens to be Islam, so we actually have a relatively good network of imams that we're able to tap into.
Now, there's no question that in some of our more isolated institutions it's sometimes more difficult to find an imam to go to Grande Cache up in the mountaintops of Alberta, for example. What will happen is they'll look at other ways to arrange for somebody to come at different times, and in some cases we've actually used technology to have faith service providers interact with offenders.
I have an outside advisory group called the interfaith committee, which is made up of a large number of various faith service denomination provider groups. We meet a couple of times per year to go over how the services are being delivered, where there are gaps and where there are opportunities for improvement. We actually have individuals on the interfaith committee who have been named by their various churches, associations and organizations to — actually, I've invited them to go into the institutions to engage staff and offenders to make sure that the right level of faith services are being made available.
The Chair: Just to clarify for the record in respect to the testimony of last week, do I take it that someone like the individual in question wouldn't be allowed to lead a prayer service in any institution? Is that correct?
Mr. Head: Absolutely. It's absolutely against our policy for that to happen.
Senator Stewart Olsen: Thank you for this. From your testimony today, I'm very encouraged to hear the way forward. You said that a lot of this is new for us. How are you making sure that all employees, the correctional officers and the people working within the facilities, are trained to identify and deal with this issue?
Mr. Head: Thanks, senator. That is, again, a very good question.
We are in the process right now of revamping our training programs for our correctional officers. At the time of their induction training, before they take up the job, we're looking at building a module around the findings that are coming out of the research. We're also looking at including this into our parole officers' continuous development training, which occurs every year. So we're building in these modules of training for the various groups of staff.
We'll also be looking at how we make that training available to other staff — for example, nurses and shop instructors, teachers — so that everybody is aware of the behaviours and interactions they should be watching for so we can stay on top of this issue.
One of the things we found in our discussions with the various countries we brought together for the mini symposium and in my engagement with counterparts of heads of national correctional jurisdictions is that we have all identified the need for this training. I'll actually be speaking to the Council of Europe heads of corrections in a few weeks and talking about how we can collectively work together to build identical training modules so that all our staff around the world are made aware of the kinds of things they should be watching for.
Senator Stewart Olsen: Thank you.
Once you've identified, what's the process then? What you do? Where do you go with it?
Mr. Head: In terms of radicalized offenders?
Senator Stewart Olsen: Yes, if you identify a threat.
Mr. Head: There are a couple of options available to us. Again, without sharing specific names, if at the time of sentencing we identify that an individual poses a significant risk, one that at least in the short term we're not sure how we can manage, we have the ability to place them in what we call our Special Handling Unit. We have a very special unit located in the region of Quebec where we house those individuals that we consider most dangerous in the system. We'll use that as an opportunity to monitor them, assess them and develop plans forward in a much more controlled environment than one of our normal general population penitentiaries.
With every offender, including the ones that we would send to the Special Handling Unit, we develop what I mentioned earlier in the opening comments as a correctional plan, a plan that will identify the kinds of interventions, programming and engagements that we're expecting the offender to be involved in while they're in our care and custody, and we will monitor their progress against that.
But as I mentioned as well, one of the challenges with individuals who are deemed to be radicalized is that they do not fit the normal profile of a criminal offender, for lack of a better phrase. We know that we have to spend more time dealing with their cognitive issues, their beliefs and attitude systems, than trying to deal with mental health problems, substance abuse problems or family cohesion problems.
Actually, this is one of the interesting pieces coming out of our research. As we go forward in terms of dealing with these individuals, we need to make sure we have the right intellectual clarity. What I mean by that is we need to be able to distinguish between those who are more prone to or exercising more cognitive extremism versus violent extremism. Individuals can have extreme thinking and attitudes, but if they're not acting out on those in a violent way, then that's a different approach. But for those that have the ability and have shown they have the ability to act violently, we take a much tighter containment approach until we can control that.
Senator Stewart Olsen: I'm hoping that doesn't happen in a silo, that when you identify these people who have been radicalized, that information would be passed on to CSIS or RCMP or someone.
Mr. Head: Yes. Just to give you a sense of how we work with some of the individuals who are currently before the courts and those we have received over the last couple of years, we've been in constant dialogue with the RCMP, CSIS, local police forces and with provincial corrections who hold them during the remand time to get an appreciation for what their attitudes and behaviours have been during that period of lock-up, who they're engaging inside the institution and who they're engaging in terms of their visitors. So it's very much a partnership approach to managing these individuals.
[Translation]
Senator Dagenais: Thank you very much for your testimony, Mr. Head. I have two questions. I would like to come back to the case of Mohammad Shafia, who was holding religious meetings in secret and who was also intimidating other inmates. Do you think that when he was holding his religious meetings and intimidating other inmates, he might have been taking advantage of it to pass on messages unbeknownst to anyone? We know that religious meetings are fairly small. Do you think he might have been using these opportunities to pass on certain radical messages?
[English]
Mr. Head: Senator, as I mentioned earlier, I'm not at liberty to talk about any specific offenders or their cases. I can assure you, because I did follow up in relation to the testimony that was presented to this committee last week, that the situations being described were not the case in the institution.
[Translation]
Senator Dagenais: You talked about training measures taken by your organization to prevent radicalization. How long have these measures, and this training program, in particular, been in place? Have you had the opportunity to evaluate the success of these measures that have been put in place?
[English]
Mr. Head: Yes. As I mentioned, we are just in the stages of pulling that research together to put the training in place.
What we've done up until this point in time is engage our staff in local discussions, particularly where the radicalized offenders we have now are being held, and talk to them about the kinds of things that we're looking at. But the actual formalized training modules are in the final stages of being developed and will be implemented a little later this year.
[Translation]
Senator Dagenais: You mentioned that you had set up measures to manage the most radicalized because they pose a radicalization risk. Has it been difficult to manage these individuals or has it been done naturally? Does the situation pose problems that might be more significant for some of your institutions?
[English]
Mr. Head: No. For the most part, senator, the cases have not posed any significant problems. In a couple of cases where we used the Special Handling Unit as the first level of engagement to assess risk, there were some normal behavioural issues, but nothing that I would consider would be associated with radicalized thinking.
With the others who have been placed in general population penitentiaries, we haven't seen anything that causes us any concern.
Our goal at this point in terms of working with these offenders is to make sure we are making some headway in relation to their thinking around their attitudes and their belief systems so that at whatever point they are released back in the community they do not pose any risk to Canadians or a community.
We're watching this group of individuals very closely in terms of their engagements, their interactions, their program involvement, their visiting, just to make sure there are no threats that we're not aware of or not seeing.
Senator Day: Mr. Head, thank you for being here. One of the comments you made during your presentation was that there is an increase in the number of Muslims in the prison population. Are all Muslims considered by you to be radicalized, and are all radicals Muslims?
Mr. Head: No. That's a very good question.
I would make two points, senator. Some of those that we see in relation to the increase in Muslims among the offender population are what I would call converts. Some of those offenders convert for really practical reasons, such as a different diet, a different meal. Others convert because they believe in the religion. Some others convert because they truly are followers and can be manipulated, and some of those are the individuals that we're worried about, susceptible individuals, because they are the ones that others will get to do things that pose an issue or concern.
Clearly, from our perspective, we separate Islamism from violent extremist Islam. Those are two different things. Muslims, those followers of Islamism, are no different than any other offenders that we have in terms of their belief systems. The ones that we consider to be radicalized are those that meet the definition that I shared with you earlier. That's why at this point in time the numbers that we're using, which include some of those individuals, are just a dozen or so within our system.
Senator Day: You would have people with radical ideas such that they wish to achieve a different kind of state, but it wouldn't necessarily be an Islamic state, presumably.
Mr. Head: That's right, exactly.
Senator Day: You would be watching from a radicalized point of view that part of the community within the prison community.
Mr. Head: Exactly. One of the groups we would be worried about is cognitive extremists who are being encouraged to become violent extremists.
Senator Day: You talked about those individuals who come into the prison community not necessarily radicalized but potentially become radicalized. You recognize that as a problem. There's been a lot of writing about that, and in fact there have been movies made that have shown that potential. You say in your presentation:
Our research has attempted to determine useful indicators to assist us in identifying offenders who may be most susceptible to becoming radicalized while incarcerated.
These are the ones we're talking about. On the next page you say that you want to be proactive.
Neither of those sound to me like you're there yet. Do you have the resources to reach those goals and develop a program? Would that include a psychiatrist, a psychologist, a sociologist, as well as the typical person in Correctional Services?
Mr. Head: Yes. What we do know now, based on the research that's been done so far, on our own observations and in discussions with our counterparts around the world, is that there seem to be two types of offenders that present as being susceptible to becoming radicalized within the institution.
One group is the individuals who have cognitive problems. They have low levels of education. They are individuals that are looking to belong, similar to individuals that join gangs. These are the individuals that we know will more than likely be those who do the dirty work inside the institution, such as assaulting others, moving contraband inside the institutions and creating problems.
The other group, which is as troubling and is one that we're monitoring, are those individuals who come into the system and are well educated and do not have significant cognitive problems or substance abuse problems. These are individuals that we're concerned will be radicalized because they bring a specific skill set that a radicalized group would be looking for. Whether that's individuals that bring specific knowledge, are good at communicating or good at recruiting others, this is a group that we're looking to monitor.
In discussions with our international counterparts, we know that everybody is struggling with that process of identification. However, through our security intelligence processes and networks, we're starting to become more refined as to what we look at.
In terms of funding to advance the agenda overall, the funding we have right now for doing the research comes from DRDC, as I mentioned. I have no additional resources that have been provided to me, so we continue to look at how we manage that within our existing budget.
Senator Day: Thank you.
Senator Beyak: Thank you, Commissioner Head. That was an excellent presentation.
I agree with you that the educated group seems to be problematic because when they're radicalized. Their ideology is such that they don't care about life on this earth. They could easily be planted with that kind of education and with those skills to recruit others. I'm glad you're monitoring that. I appreciate it.
Do you have a way to quantify the individuals after they leave? If they come in and are not particularly religious when they arrive but they are when they leave, do you have a way to monitor that?
Mr. Head: We have had a history of dealing with violent extremist behaviour for a number of years. If we go back in our history, the first violent extremist activities in this country started with the Fenian Brotherhood, which resulted in the assassination of Thomas McGee. Moving through history, we've seen issues related to Sikh terrorism, Croatian terrorism, Armenian terrorism, the attack on the Turkish embassy in Ottawa in 1985, Cuban extremists and anti-Castro extremism and the bombings in the 1960s in the country.
A couple of things we know historically on those kinds of individuals and some of the individuals involved in some of the more recent incidents that I've talked about are still under sentence and in our care. We found a couple of things. As they get older, their radical beliefs seem to fade away. We found that they ultimately want to return to society. They want to get on with their lives and have basically put aside their radicalized thinking and beliefs.
We also know, particularly with those that end up taking up a religious or theological perspective inside, that by the time they get outside, a year or two later, they've lost interest and no longer follow that. This is one of the things that we look at when weighing how we deal with some individuals as well. We do have some historical information that we're factoring into the new approach.
It's kind of interesting. When we dealt with those historical cases, we never talked about them as radicalized individuals. The word "radicalization" is relatively new and one that was coined to try to distinguish people from those that joined gangs and those that go down the path we're talking about here.
Senator Beyak: Do you also have a way to look at the problem of radicalized individuals and those who are sympathetic to Islamic ideology in prison, or is that part of the new initiatives you're taking?
Mr. Head: Yes, it's part of the new initiatives that we're taking.
One of the things that we're trying to be careful of as we go forward is to make sure we don't get caught up in what many of the other countries have warned us about, namely focusing on a purely theological distinction or characterization of individuals. The suggestion is that if we do that, we'll lose sight of the other types or groups involved in violent extremism, and we could then potentially be creating problems without even knowing it.
Senator Ngo: Thank you, Mr. Head. I have a few questions for you.
How do you manage offenders who have already become radicalized? To what extent do you use isolation to prevent the radicalized prisoner from influencing other inmates?
Mr. Head: That's a very good question. Our research has shown there is no magic pill. There is no silver bullet. There is no one approach to deal with individuals. A lot of what we're doing truly comes back to the individualized correctional plan that we develop for offenders.
In our discussions with various countries, even in terms of our own approach, we know that, for example, taking a separation approach versus an integration approach within the institutions is not going to be the best way. We have to assess each individual, assess the risk they pose and assess their ability to change.
Some individuals we'll separate until we see some change. For example, when I talked about the initial placement of some individuals in the Special Handling Unit, this was part of the separation approach. With some other individuals, we've been successful in integrating them into general population.
What it means for us on those cases is we have to be even more diligent in terms of monitoring their engagement with other offenders and whether they're actively involved in recruiting or trying to radicalize.
Depending on each individual case, we will look at whether there's a need for direct involvement of a psychiatrist, a psychologist or social workers and, if individuals are involved in extremist Islam, whether we involve imams in the process. In some cases, we will look at whether it's appropriate to involve family in terms of disengagement strategies.
One of the things that we're focusing on right now is how we use, for lack of a better phrase, our cognitive behavioural programs to address those cognitive gaps that we see with these individuals in terms of their beliefs and their attitudes towards the system and towards people.
Senator Ngo: What do you do to evaluate religious sermons to ensure that radical ideas are not being promoted, and how do you ensure that these ideas are not spread in prisons?
Mr. Head: Again, that's a very good question. One of the things that we've done through going to a single-based contract for the provision of faith service providers is to ensure that the individuals who are being contracted to come in go through a vetting process and that they also are made aware of the issues and concerns we have around potential radicalized offenders. Through the contract provider, this is a discussion we have, but we also use the interfaith committee that I talked about, by them coming into the institution, visiting and monitoring. We see that as well.
One of the largest pieces of the approach we take is the use of our security intelligence network in the institution. It's kind of interesting. In our environment, in my world, there's always some inmate that wants to share information about some other inmate. If those kinds of things are happening, we usually end up hearing it first from other inmates who will give us a signal that there's something going on or discussions are going on that are inappropriate. Most inmates know that if something is going to get out of hand, we'll potentially lock down the institution, and they don't want to have their programs or visits disrupted. Other inmates actually become a source of information for us in terms of monitoring this.
Senator Ngo: If that's the case, do you keep a record of the individuals showing sympathy to the radical religious ideology?
Mr. Head: If there's a security issue or a security concern, yes. We have our security intelligence files. Yes, we do.
Senator Ngo: The staff report to you, and what do you do after that?
Mr. Head: What will happen is staff will write observation reports. They'll go to the supervisors. The supervisors will vet those reports and ask additional questions. Those reports will go in to the institutional security intelligence officers in each of the penitentiaries. They will assess it. They'll look at correlating that with any other information or intelligence they've gathered at that institution. That information in turn is shared with our security intelligence analysts at the regional and national level, and they'll look for trends.
The security intelligence network is a national system that allows us, for example, to identify when an offender is engaging what may seem like a nondescript visitor at one institution. That security intelligence network will be able to tell us if this visitor is visiting an inmate at some other institution, even in some other part of the country, or whether they're involved in phone calls and those kinds of things so that we can chart these things out and continue to determine whether any given offender is a risk or whether they're posing any concerns that we need to be aware of. We have a very strong security intelligence network in our institution.
Senator Ngo: Do you share this information with CSIS and the RCMP in order to make sure that these individuals can be monitored upon release?
Mr. Head: Very much so. This is part of the engagement that we have. We have a very strong and direct relationship with CSIS and RCMP and, as well, in certain cases, the provincial police forces and local, municipal police forces as well.
The Chair: I want to follow up on that to make it clear on the record. With your responsibilities for the purpose of vetting anybody, for example, the interfaith committee, and anyone that's going into the institution, you contact CSIS to let them know who they are and if they have any observations to make; is that correct?
Mr. Head: We'll go through the RCMP and do the security checks. If there's anything that presents from there, then we may be engaged with CSIS. But it's been very rare that we've had to do that.
The Chair: Wouldn't it be automatic to go to the RCMP and CSIS both? They don't necessarily have the same database.
Mr. Head: I'm not sure how they share information back and forth, but I know when we do have somebody flagged that our conversations will be with either of those agencies in a more direct way than just the normal, routine vetting of individuals coming in.
The Chair: Just for the record, I want to get this clarified. From what you've told us here, you certainly appear to have a handle on the situation looking ahead, in view of the fact that you called this conference together I believe a year ago. Moving forward and looking at the prison population, you have stated that the fastest-growing conversion by the prison population is to Islam. When you say "fastest-growing population," what numbers are we talking about? Is it 100, or 5 or 10 per cent of the population?
Mr. Head: I should have brought the exact number for you, but we're talking close to a thousand offenders that proclaim Islam as their faith of choice, faith of following.
The Chair: So we're talking roughly 5 per cent of the population, ballpark?
Mr. Head: Yes. Even then, when the individuals are proclaiming that, we'll use the imams and the faith service providers to confirm that. Again, we do have situations where offenders will proclaim a certain faith to get some kind of advantage. As I say, one of the biggest advantages people look for is the different kinds of diets or meals that are provided.
The Chair: I just want to get it clarified for the record here. We did have the witness here last week. Quite frankly, he appeared to be very sincere and knowledgeable about what he spoke of, 40 years of experience, and he made it very clear that in that particular case, at least at that window of time, Mr. Shafia was organizing these prayer meetings when the imam wasn't there. Are you saying that never happened?
Mr. Head: What I'm saying is that the witness, as indicated to this committee, had no first-hand observation and that his information was anecdotal.
The Chair: So it never happened?
Mr. Head: What I said earlier is that in terms of my own checking on the situation, there was nothing that causes me any concern.
The Chair: I just asked you, sir —
Mr. Head: I'm trying to be careful, senator, that I don't talk very specifically about that individual. I'm not trying to be funny or dance with the committee at all. I guess I'll put it out there. I have no information to suggest that that happened at all.
The Chair: We'll leave it at that for now.
Senator Mitchell: You've indicated, which is really encouraging, that you're developing an understanding of radicalization and you're researching. Are you aware of the Kanishka project, and have you been able to utilize it to help you in that process?
Mr. Head: Yes, very much so. Our staff and our researchers are very aware of that, and it forms a basis for a lot of our thinking forward.
Senator Mitchell: Are you concerned that they may discontinue funding that?
Mr. Head: I'm concerned any time that I see discontinuation of funding for significant activities, but decisions are what decisions are, and we'll continue to find other ways, if that happens, to inform us and look at other opportunities going forward.
Senator Mitchell: When you mentioned the percentage or the size of the Muslim population, you identified certain categories, one of which was people who do it for some convenient reason, such as food. Others are really looking for something and they find it in that. You're really talking about people in the corrections system who are converting. Is it true also that there are gang members who happen to have come from those communities but that seem to be prominent? I know that's an issue in my city, and the community is very engaged with that themselves. They're very concerned about their sons, in particular, and some of their daughters. That's been more prominent, and that may just reflect the demographics of immigration.
Mr. Head: I think that's exactly the case. The discussion about radicalization gets blurred at times when you talk about traditional gangs, but we have seen individuals who are followers of Islam who are what we would call traditional gang members. In some cases their levels of violence are just as troubling or concerning as what we're talking about here in terms of radicalized violent extremism.
The Chair: It's been a very worthwhile hour here, and we appreciate your taking time out of your schedule. Once again, thank you for coming.
Joining us for our final panel of the day via video conference is Mr. Matthew Levitt, Director of The Washington Institute's Stein Program on Counterterrorism and Intelligence.
From 2005 to early 2007, Dr. Levitt served as Deputy Assistant Secretary for Intelligence and Analysis at the U.S. Department of the Treasury. In that capacity, he served both as a senior official within the department's Terrorism and Financial Intelligence branch and Deputy Chief of the Office of Intelligence and Analysis, one of 16 U.S. intelligence agencies coordinated under the Office of the Director of National Intelligence. In 2008-09 he served as a State Department counterterrorism adviser to the Special Envoy for Middle East Regional Security, General James L. Jones.
Dr. Levitt holds a doctorate from Tufts University, Fletcher School of Law and Diplomacy and is a graduate research fellow at Harvard Law School's Program on Negotiation.
Dr. Levitt has written extensively on terrorism, countering violent extremism, illicit finance and sanctions, the Middle East and Arab-Israeli peace negotiations. He is a frequent guest on the national and international media and the author of several books and monographs including Hamas: Politics, Charity, and Terrorism in the Service of Jihad, Negotiating Under Fire: Preserving Peace Talks in the Face of Terror Attacks; and another book entitled Hezbollah: The Global Footprint of Lebanon's Party of God.
Dr. Levitt, welcome to the committee. I understand you have an opening statement.
Matthew Levitt, Director, Stein Program on Counterterrorism and Intelligence, The Washington Institute, as an individual: Thank you very much. It's an honour to be able to testify before the Standing Senate Committee on National Security and Defence, and I appreciate your flexibility in allowing me to do this via video teleconference. I've been travelling the world a lot and so my being home for Mother's Day was important for my wife. I appreciate that very much.
Today the wars in Syria and Iraq, which are an increasingly interconnected conflict, have given rise to new terrorist networks, including both al Qaeda's Al-Nusra Front and the Khorasan group and of course ISIS, ISIL or the Islamic State.
The conflict has become a humanitarian and strategic catastrophe which threatens to tear apart the region along sectarian lines. It has injected new oxygen into groups and movements driven by violent Islamist ideologists, including but by no means limited to groups formally associated with al Qaeda.
The more horrific the actions of the Assad regime against the primarily Sunni Syrian civilians from chemical weapons and barrel bombings to use of starvation as a tactic of war, the greater the regime's magnetic appeal, drawing fellow Sunnis from around the world to defend their co-religionists and engage in an increasingly sectarian battle against the Alawite regime and its Shiite allies Iran and Hezbollah.
As these events in Syria and Iraq convulse the region, the humanitarian disaster and the security nightmare that now defines the Middle East have contributed to a reshaping of the terror finance environment. As a general rule, this is something that never stays static. We take an action; they respond. But this has seen rather dramatic changes. Some things have remained the same, such as the destabilizing role played by Iran in providing state sponsorship — cash, arms, material support — to terrorist groups and radical militias and to totalitarian regimes like that of Bashar al-Assad.
In other areas, like terrorist abuse of the charitable sector, issues that had petered out since 9/11 have now become prominent once again, and so other new means of raising, moving and storing funds for illicit purposes have been developed to adapt to the needs of today's terrorist groups and operatives. Indeed, one of these is the financing trends of homegrown violent extremists who may not officially belong to any established group as such, and the financing trends of different groups like al Qaeda and the Islamic State, for example, can vary significantly.
For the purposes of being brief, I'll focus on just three of these trends and of course be happy to answer questions on these or anything else the committee would like to discuss.
I'd like to focus on self-financing by homegrown violent extremists. I'd like to focus on the rise once again in abuse of the charitable sector. And I'd like to focus, in particular in the case of the Islamic State, on some of our successes in denying it access to the international financial system and yet its ability through backdoor banking channels to continue to access our international financial system.
In terms of self-finance, terrorism is relatively inexpensive, but the terrorism we're seeing today, whether it's terrorism at home or the desire to travel to Syria and Iraq to join groups like ISIS or Jabhat Al-Nusra, is extremely expensive. Consider, for example, the Paris attacks. Amedy Coulibaly, one of the three extremists in the Paris attacks in January, funded his mission by taking out a 6,000-year loan. The two Kouachi brothers reportedly received $20,000 from al Qaeda in the Arabian Peninsula, although that is doubted by some. In any event, the rocket-propelled grenade launcher and the Kalashnikov automatic assault rifles used by the Kouachis cost less than $6,000 total.
Similarly, travel to and from Syria is relatively cheap and easy, unlike terrorist travel in the past to places like Chechnya or Afghanistan. According to reports in the Canadian press, just to make this local for you, some would-be foreign fighters sought to raise money through part-time seasonal work in Alberta's oilfields. Even better for those individuals, "If you're someone that wants to be left alone or works well in isolation, there certainly is the opportunity to do that" is a quote from the Edmonton Police Chief, adding that they can "make a whole bunch of money in a very short period of time . . . ."
The individual who murdered a Canadian soldier before attacking the Parliament Buildings in October 2014 worked at one Alberta oilfield and raised money for his attempted travel to Syria.
Meanwhile, petty crime has also the potential to bring in significant funds, or at least sufficient funds, for a homegrown attack or transportation to a combat zone as well. Consider the 15-year-old boy in Montreal who held up a convenience store with a knife, stealing some $2,200 to pay for his plane ticket out of Canada. The teen's father turned him into police after finding the money in his son's bag.
Meanwhile, four men who were recently arrested in Brooklyn, New York, for attempting to join the Islamic State received funds from one of their co-conspirators Abror Habibov who operated mall kiosks for kitchenware and cellphones. According to the U.S. indictment, a round-trip ticket to Istanbul cost them a mere $598. One of the defendants expected he would not need to bring more than $400 with him to travel to Syria because he would not have any concerns in the land of the Islamic State, as he put it, so a sum total of $998 was needed to get there and as starter funds for his visit to fight for the Islamic State. The biggest obstacle for a third defendant was the fact that his mother had confiscated his passport.
As shown in the cases of the two Canadians in October who turned to deadly attacks when their intended travel to Syria was thwarted, such individuals may readily redirect transportation funds towards homegrown violent extremism. A report of the Financial Action Task Force identified several potential revenue streams for would-be foreign terrorist fighters, including robbery and drug trafficking, various social service payments and unpaid loans. I travel the world a lot and recently travelled to Copenhagen and met with counterterrorism officials there, who in particular focused on these petty crimes and the abuse of social welfare programs for people who want to become foreign terrorist fighters or potentially do things at home.
Another area of concern right now is the return of "abuse of charity." We had gone a long way in the international community — Canada, the United States and others — in helping the charitable sector improve its due diligence, working with them and making the charitable sector less amenable to abuse and less attractive for terrorists in particular. But now a recent report by the Financial Action Task Force released in February warns that "the possibility of abusing charities by ISIL or its affiliates directly or indirectly for fundraising or funding activities needs to be recognized."
Indeed, in the past half year, Western European countries have taken action against several outfits. The U.K. stripped the Muslim Charities Forum of state funding in January following an investigation into links to a group alleged to fund Hamas and the Muslim Brotherhood. French authorities shut down Pearl of Hope, a charity that claimed to promote the health and education of sick Palestinian toddlers in November 2014. Two senior leaders were also arrested on charges of financing terrorism. According to investigators, while Pearl of Hope did deliver food and medical supplies, "the group was also using such deliveries as a front to funnel covert funds to jihadist groups and had links to the Nusra Front . . . ." About a dozen other charities were under surveillance at the same time.
Even more concerning, innovations in social media and other communication technologies had made it easier than ever for individuals to donate money to their cause of choice. As the recent FATF report noted, "ISIL has manipulated social media, physical and virtual social networks, encouraged donations and conducted a marketing campaign in a manner that is consistent with industry standards established by major crowdfunding companies."
A case study offered to the FATF from Saudi Arabia highlights a group of individuals associated with ISIL who solicited donations via Twitter and asked donors to contact them via Skype. Once contact was made, the donors were asked to purchase an international prepaid card and to send a number to the financiers via Skype — just the number, not the card. The card number would then be sold for cash at a lower price by ISIL members in close proximity to Syria so that the cash could be given to ISIL.
The extent of complicity in terror financing by any given non-profit organization varies. In some cases, the organization may simply not realize that the recipient of their aid is in fact linked to or involved in terrorism. For others, a few bad apples within the outfit may be redirecting funds, while in the most extreme examples, the group itself is set up as a front for extremist fundraising efforts from the outset.
Again, FATF says, "In some cases, public appeals for donations have not correlated with the organisation's stated purpose." They cite one charity set up in Italy, for example, which received donations from individuals in Europe. While most donations went to legitimate uses — mainly adoptions — investigations turned up a donor who was a member of an extremist group located in Italy. Financial analysis eventually showed that this individual, who subsequently died fighting in Syria, used the organization as an unwitting conduit for fund transfers possibly connected to terrorist activity.
Another case study described an individual who established a charitable foundation under the pretext of collecting donations for Syrian refugees, people in need of medical and financial aid and for the construction of mosques, schools and kindergartens. However, the entire scheme had been set up to raise funds that were sent as an aid to terrorists and their families and meant to be used as financial support for terrorist activities.
It is early going as yet for ISIS and illicit fundraising through charities. The Financial Action Task Force report assessed that "the overall quantitative value of external donations to ISIL is minimal relative to its other revenue sources . . . ." But as those other revenue sources are increasingly squeezed, ISIL begins looking to alternatives. Charities are a tried and tested method of terror finance, and governments will need to be alert to the possibility of a rise in the level of abuse, similar to our concern about a rise potentially in the level of major donor financing for ISIL, major donors in the Gulf in particular. That's not something that is a major source of revenue for ISIL today, but it's one that could become one in the event that their massive fundraising through criminal enterprises directly and domestically within Iraq and the massive amount of money they still make through oil revenue — despite the fact we've cut back that revenue by about two thirds. ISIL is no longer making somewhere between $3 million and $3.3 million a day through illicit oil; it is only making between $750,000 and $1.3 million a day, but that, of course, is still a hefty paycheque. Even if we were to make further progress in denying them access to those funds, they would likely reach out to other means of financing, including through formal charities and major donors.
The last point I'd like to highlight as something that has changed is ISIL's backdoor banking. While relatively little action can be taken against ISIS through the formal financial system due to the nature of its fundraising — for example, it's reliance on crime and "taxing" local population within Iraq, which means it doesn't have to access the international financial system for those funds — the Iraqi government and the international community have done what they can to try to keep ISIL from being able to access the international financial system.
Banks on the lookout for ISIS financing have filed suspicious activity reports, which have provided what officials describe as valuable insight into financial activities in areas where ISIS operates. For its part, the Central Bank of Iraq constructed financial institutions to prevent wire transfers to and from banks located in ISIS-held areas, and international banks with regional branches in this area have relocated their staff. The one Iraqi bank headquartered in Mosul has since relocated its headquarters to Baghdad so it would no longer be under the influence of the Islamic State.
Nevertheless, ISIS continues to find workarounds even in the financial system. The Assad regime in Syria has not placed any restrictions on the banks in ISIS-held areas. Indeed, on March 7 the European Union sanctioned a Syrian businessman with close ties to Damascus for serving as a middleman in regime deals to purchase oil from ISIS.
Additionally, according to the recent FATF report on ISIS financing, some of the bank branches in ISIS areas within Syria may maintain links to the international financial system. Although many international institutions likely cut their ties to these banks already because of pre-existing sanctions on Syria at large, the latter are still able to liaise with certain unnamed jurisdictions.
Even when access to local banking services is blocked, the wartime conditions and the underdeveloped state of Syria's banking sector are forcing funds into financial institutions in the immediate surrounding regions. A parallel situation in Iraq, where the central government has not ceased paying salaries to civil servants, including civil servants living in areas under ISIS control, means that it is only a short drive out of the ISIS-held city of Mosul to Kirkuk. Employees can go there and pick up their earnings and take them back to Mosul where ISIS takes a cut off the top. In that city alone, Baghdad may be paying up to $130 million every month to government workers, meaning ISIS could potentially be profiting hundreds of millions of dollars annually from taxing these salary payments.
Other individuals can also bring back money from outside ISIS territory. The FATF report, for example, made note of instances when excessive cash deposits were placed into U.S. bank accounts here in North America and then sent via bank wire transfers to recipients near areas where ISIS operates, but not in banks located just outside areas they control. Then unknown persons made foreign cash withdrawals via ATMs in such areas, obtaining money from U.S.-based bank accounts using cheque cards. In some cases these transactions were closely coordinated with large deposits to the accounts in the United States followed by immediate withdrawals from ATMs near ISIS territory.
The Netherlands reportedly found similar indications that foreign terrorist fighters were using debit cards linked to their national bank accounts and withdrawing money from ATMs alongside those areas where ISIS operates.
Beyond the formal banking system, ISIS can also send and receive funds through nearby foreign money remitters. Finnish authorities reported that a common method of getting money to foreign fighters is to send it via money remitters who have agents operating in border areas close to ISIS-held territory. This is to finance them once they are in Syria and Iraq.
Dutch authorities have noted similar activities and regard it highly likely that intermediaries transport cash to areas near territory occupied by ISIS.
ISIS operatives have come up with other schemes as well. For example, the Saudis have reported that individuals associated with the group have solicited donors via Twitter and told them to establish contact via Skype.
As the above examples illustrate, terrorists, both individual operatives and organized groups, continue to adapt to efforts to disrupt their financing plans, and with some success. It is always important to periodically review policies and procedures to make sure these are appropriately aligned against the ever-changing nature of the terrorist threat at any given time. It is especially important to do so now, given the tectonic changes that are convulsing the Middle East and their very real, very immediate effects and aftershocks in the Western world, including the United States and Canada.
It is therefore an honour to provide this testimony before the standing committee, and I look forward to any questions you may have. Thank you very much.
The Chair: Thank you very much, Mr. Levitt.
Senator Mitchell and then Senator Dagenais.
Senator Mitchell: Thank you, Dr. Levitt. It was very interesting, powerful and provocative in a good way about bad things.
We had earlier testimony today about the function of the Financial Action Task Force. That testimony indicated, suggested, that it wasn't up to the task. You've reinforced that, inadvertently perhaps, because of the way you've drawn the complexity of the financing in that region, to and from that region.
Could you give us an assessment of where the Financial Action Task Force fits into this and what its capability is and what its potential to stop this is? Or is that the way we have to go?
Mr. Levitt: Thank you, senator.
I think the most important thing is to understand what the financial task force is and, more importantly, what it's not. The Financial Action Task Force is not an operational body. It is a technocratic body to establish best practices. It's also a multilateral organization that works by consensus.
For example, while it took some time, the Financial Action Task Force, in the years after 9/11, established not only best practices, 40 recommendations to deal with anti-money laundering, but also 9 special recommendations to deal with terror financing, what we frequently refer to as the 40 plus 9.
There was an effort several years later. I visited FATF in Paris and spent time with officials in Canada and many other places to try and push FATF to set similar special recommendations, best practices for the private sector, for the banking sector, et cetera, on trying to protect ourselves from abuse from proliferation-related illicit finance. That never went anywhere, even though the professional staff thought it would be very important and thought there were specific types of methodologies that applied to proliferation finance different from terror finance. It didn't go anywhere because at the end of the day this is a multilateral body that works by consensus and not every country was willing to participate. In this instance terrorism was regarded as something that affects all states, but since proliferation is something done by states, some countries involved thought we were just targeting certain states — you're targeting North Korea or Iran; you're not really targeting a thematic issue.
What we need to anticipate here is that FATF is going to be effective, when it is effective, by issuing reports. This last report was one of the best I've seen it do in a long time. I'll be honest with you, the reason it was so good is that I know that some of my former colleagues at the U.S. Treasury Department spent a lot of time with FATF not only declassifying some of their reporting for use in the report but pushing allies to do the same. So one of the impressive things about this report is that you have case studies from the Saudis, the Dutch and the Finns. I'm sure there is Canadian information in there too, but Canada of course doesn't need to be pushed to do this.
This is where FATF will be effective, in trying to get some of this information out there and maybe, if we're lucky, set more standards. There are specific things to ISIS, as I've hinted at, that would be useful here, but FATF is not going to be the body that is going to solve any of our problems. We're going to be looking more at our regulators, at our oversight and at our law enforcement and intelligence. I have to say, I'm very impressed with FINTRAC. Cards on the table, I've spent a lot of time with FINTRAC, both during my time at Treasury. I've come out and consulted with them several times. Recently I did a full day of training for them. I met, I believe, with some of your staff members. It was while you were on break, but I met with some of your staff members as well, and they do some very impressive work.
Senator Mitchell: Thank you, they certainly do. In fact, it was my staff member, Kyle Johnston, who extolled one of your virtues in that you shifted the focus of the organization that was, I think, FINTRAC's counterpart, when you were head of it in the U.S., from counting the number of prosecutions, which was a metric that seemed to prevail, to trying to give some emphasis to the impact of your work. Not necessarily valued or evaluated by prosecutions, but evaluated by the size of the networks that might be broken down or how you contributed to police and intelligence activities that broke down those networks. Could you describe that and that juxtaposition of parameters?
Mr. Levitt: With pleasure — and note to self to thank Kyle.
I was brought in as the Deputy Assistant Secretary in the Office of Intelligence and Analysis. In the U.S. system, that made me both senior executive of service within the Treasury Department, but also the deputy chief of one of our smaller intelligence agencies focused on these issues. When I got there, we weren't primarily focused on the number of prosecutions because they were still so small at the time. We were primarily being judged by two different but equally flawed metrics. We were being judged by them not because they were particularly good but because they were the only ones available; that is to say, the number of entities designated by the Treasury Department under Executive Order 13224, the terrorism designation authority, or others, or how much money was seized. Those were both interesting metrics, but I thought they were completely useless for two reasons.
First, they inherently assumed that if you came across a terror financier, you would designate them and seize as much money as possible — and that's not the case. You might work with the FBI, or in your case RCMP, to put together a prosecution. You may work with the intelligence community to do something on the intelligence side. There are many different ways to try and use that information and, of course, not in every instance will you be able to have the kind of underlying information to declassify and to do that kind of action, even if under the strictly classified intelligence you meet the threshold five times over.
I also felt trying to figure out how much money we seized was being that hamster in the cage, running around and around and never getting anywhere. At the end of the day, the international economy, even during bad times, was big enough so that if a person wanted to raise money through licit or illicit means, they'd be able to do it.
We wanted to refocus on how much impact there was. We wanted to disrupt our adversaries' financing process, which is not only the raising of money but the storing of money, the accessing of money and the moving of money. We were looking for places that were key nodes, where multiple people, groups and front companies were involved. If I can either designate or prosecute some type of action to take this out of circulation, I will really have a big impact on what they do. On top of that, if I can work with the intelligence community in advance of that public action so they can allay their collection platforms to look around the corner and see how they respond, then we can really do some interesting damage.
Of course, it's not to say that if I can freeze terrorist money that's a great thing. If I can designate terrorists, it's a good thing. If I can contribute to a prosecution, that's a great thing. Those are not the only metrics out there. The problem, of course, both for you as parliamentarians and once upon a time for me as a guy who used to testify before parliamentarians, is that you have a need and right to know some way to measure the money you're giving and its impact. At the end of the day, that becomes difficult.
To be perfectly honest, since I'm no longer in government and can speak freely, what we would therefore end up doing is declassifying anecdotes. We'd say here is a case and here is a case, but maybe it was or wasn't, depending particularly on the soundness of the methodology. There's nothing more you can do because if it works well, most of your biggest successes you'll never know about. You will have done something and the money would never have flowed and will therefore not have set off any tripwires.
I remember a time — and this was a case that was declassified for use in congressional testimony by my boss, then Under Secretary Stewart Levy — in which we had taken an action against the Abu Sayyaf group. It turns out that they got on the phone to one another. They had money in point B but they couldn't access it in point A. They were — and we didn't know this until we heard it — about to do a series of bus bombings in Manila. Taking this action not only prevented them from getting the money but had shaken the tree. They got on the horn saying these things and the Filipinos were able to arrest them and good things were able to happen, but we wouldn't have known otherwise. So it's very hard to measure.
I've been out of government since 2007. I don't spend all my time on these issues but a decent amount of time. I have talked to people in all kinds of line of work such as the private sector and the academic and public sectors, trying to come up with other meaty metrics, something you can sink your teeth into, and I failed. Maybe someone smarter than me will succeed. Until then, we need to be able to look at our contribution to a variety of different types of outcomes. Then we have to recognize that since those are only some of the potential outcomes, we can't judge the entire concept or program simply by how many prosecutions, designations or chunks of money were designated or frozen.
[Translation]
Senator Dagenais: Thank you very much, Mr. Levitt, for your presentation. As you must know, our committee is trying to understand the nature and scope of terrorism financing. Terrorism can be financed in various ways in Canada, such as funds from abroad, amounts that are sent out of the country to fund terrorist activities abroad, or quite simply self-funding, which promotes terrorist activities within Canada.
I know that this may not be an easy question to answer, but do you have an idea of how much legal or illegal funding might be moving through the Canadian financial system?
[English]
Mr. Levitt: The simple answer to that question is no, unfortunately. I'm not sure people in a better position to know would have a hard number either. It's very difficult to track these things down, as I intimated in my statement, because often it's being done under the cover of some other kind of activity. In fact, sometimes it's cover under cover, which is to say it's not the case of an institution created as a front but sometimes it is actually a legitimate institution being abused.
Parsing this out can be difficult and is an uphill battle, especially since — let's be honest — we are dealing with a massive humanitarian catastrophe or multiple humanitarian catastrophes. For us, as Western cultures that promote charitable giving, this is part of the culture of who we are. We want to encourage people to give money to help people who are in dire circumstances. That is why this has become something that is attractive to terrorists or other illicit actors, because the charitable economy has blossomed to try to address catastrophes and therefore that provides opportunity. It's very difficult to know.
[Translation]
Senator Dagenais: I understand from your answer that it is difficult to evaluate. However, if we wanted to analyze the volume of legal or illegal funds that might be moving through the Canadian financial system, would you be able to suggest a method to do that?
[English]
Mr. Levitt: There are several things that can be done, and this is where the FinCEN, FINTRAC, AUSTRAC type of regulators, which are three of the best, play a particularly important role.
You can come at it from the anti-money laundering perspective and from the countering terror financing perspective, and of course we need to come at it from both.
First, we need to have a fairly good assessment about the size of our economy and what a natural or normal burden of transfers looks like to be able to assess if there are upticks at any point. If trends can be discerned, we can study those transfer trends over time. In Australia, for many years, they've had 100 per cent visibility to all transfers coming in and out of the country, and therefore they can do very impressive studies.
In the United States, we're trying to get that point. First, we had to overcome some technical issues simply because the number of transfers going in and out of the United States a day is very high — the number of transfers going in and out of New York in one month is much larger than the number going in and out of Australia in a year — and also because, of course, we have to overcome legal and very legitimate privacy concerns as well.
We can look at this from an anti-money laundering perspective. We can do trends analysis. We can see if certain types of peaks appear at different particular periods. If an event happens abroad, do we see particular peaks in different types of activities, maybe to a particular location? Then we can do a deeper dive and see maybe that's all perfectly legitimate. Maybe if a bad thing happens in Lebanon, it makes sense that there is a peak in people of Lebanese descent in America and Canada sending more money back home to their family members. But maybe also part of that peak is that some illicit group there suddenly needs more money. Of course the reality is almost certainly to be both.
From the counterterrorism finance side there is lots to be done in terms of what I call relative open source analysis, that is to say, not Google, not completely information that is available to everybody, but not necessarily classified information; so bank reporting and this type of thing that comes to government. Here in the United States, there is the Bank Secrecy Act, et cetera. But there is also intelligence.
At the end of the day, we are talking about people who recognize now, if they didn't before, that we take a very close look at not only the financing but the resourcing of terrorism. By the way, that is a distinction that was first made and first made well by FINTRAC. I used to teach a graduate course on combatting the financing of illicit finance, and there was required reading by a senior FINTRAC analyst on the resourcing, not just the financing, not just money. Consider, for example, trade-based money laundering, where what crosses the world is not money at all but goods ultimately of value.
Frequently, the only way to get behind that cloud or to peel away the layers of that onion is to have access to more classified sources and methods of information, and so what we need to be able to do in government is leverage both sides of that equation and find a way to merge them together.
Senator Stewart Olsen: Thank you, sir. Your presentation is very interesting.
We have some loopholes in our laws in Canada that exempt modern, Internet-based payment methods from our counterterrorism laws because they allow value and funds to be sent from Canada to organizations without detection, reporting or supervision. Do you have any suggestions as to how we can close that gap?
Mr. Levitt: Well, I suggest that we do close the gap. How we do it is blessedly outside of my domain now. Since 2007, I have not been that far into the weeds. But I have had conversations with officials in Canada about this. It is not just a Canadian problem, to be sure. We are all trying to catch up with a technological universe that has surpassed us. I won't speak for you, but I will say that I'm the father of four boys, including two teenagers who can navigate the Internet far better than I can.
There are things that are happening online that make borders completely irrelevant. I tried to give one flavour of that in one of the anecdotes I gave in my remarks where funds are solicited on Twitter, and then the conversation continues to Skype, and then what is provided is the number of a prepaid card, not even the actual prepaid card itself, criss-crossing the world, very quickly. You don't have to go to a bank. It's really amazing. We're talking about not small amounts of money that can be moved if we are talking about a dozen or two dozen prepaid cards at a time.
How you do this in such a way that still keeps the free flow of information and commerce on line, which is pretty important to our economies today, is something we need to give a lot of attention to, but I'll be one of the last people in the think tank world in Washington who will admit to you where his expertise has ended, and you're beyond mine now.
Senator Stewart Olsen: Thank you.
Currently we have a $10,000 threshold for reporting transactions. Do you think that should be lower?
Mr. Levitt: Absolutely.
Senator Stewart Olsen: What would you suggest?
Mr. Levitt: How low can you go? Look, without trying to be pithy or funny, obviously there are privacy concerns. You need the public to feel comfortable and to buy into these things, but at the end of the day a $10,000 reporting requirement is completely yesterday. We're dealing with the same thing here in the United States, by the way.
I haven't been to Australia in about a year or a year and a half, but every time I go and meet with AUSTRAC, they finger me a little bit over the fact that they have a 100 per cent reporting requirement. If you want to send money out of this country, it gets reported to AUSTRAC. Beyond the issue of actual illicit transactions, the kind of trend analysis they can do is far beyond what we can do.
The $10,000 is way too high nowadays, especially when we're talking about much smaller amounts of money. To the extent we can get to the $1,000 to $2,000 range, we would be able to do a lot more. Even the $5,000 range would be better, but it would still be a problem.
I fully recognize all the issues on the other side of this debate. I don't pretend they're not there or they're not simple, believe you me, but from a combatting illicit finance perspective, there is not a whole lot of utility in the $10,000 limit at this point.
Senator Stewart Olsen: Thank you very much.
Senator Beyak: I'd like to echo Senator Stewart Olsen. Thanks for your expertise, Dr. Levitt. The details of your presentation were fascinating, the facts and the figures.
Given your background regarding Hezbollah, I wonder if you can tell me how prevalent it still is here in Canada 12 years after our previous government named it as a terror organization?
Mr. Levitt: Thank you for your kind works. Thank you also for asking me to talk about the subject of my last book.
Yes, I convinced my editors to let me get away with two chapters on only two regions. All the others had to be combined. One was the Gulf, and the other was North America. Most of that is focused on the United States, but several sections are specifically about Canada.
Again, cards out on the table, I travelled the world and met with lots of people, not for attribution, and spent a lot of time with the people in Canada who know a lot about these cases. I was also an expert witness here in the United States in Charlotte, North Carolina, in the cigarette smuggling case that ended up having a separate half of it in Canada, mostly in Vancouver. There was a Hezbollah case in Montreal that ended up not going to trial. Had that gone to trial last year, I would have been the expert witness for the Government of Canada in that case, and there are some others that may come down the pike.
Hezbollah is not 20 feet tall. I don't like using terms like "sleeper cells." That's more like movies and television. But there are Hezbollah supporters, certainly sympathizers, in North America on both sides of the U.S.-Canada border. In fact, there have been several of the most serious cases where these people have criss-crossed and spent some time on the American side and some time on the Canadian side of the border. One of the most senior Hezbollah operatives to have been killed in the war in Syria to date is someone who got Canadian citizenship, at one point had an address in Michigan and was a very dangerous individual. We have a whole bunch of cases like that.
I can go on for a long time and offer a lot of detail on this. I'm happy to do it offline if you like, but I want to make sure not to dive too deep on this.
I will just say that Hezbollah has longstanding fundraising schemes beyond the significant state sponsorship that it gets from Iran. That has increased significantly over the past few years, since the Green Revolution, since sanctions first starting taking a bite in Iran, since the fall in the price of oil. Hezbollah does not want there ever to be a day after when, for whatever reason — political, economic, or both — Iran can or will no longer provide the support, financial and otherwise, that Hezbollah has become accustomed to.
We have seen not only criminal enterprise increase significantly but much more organized criminal enterprise. If I can give you an example that's not in Canada but that has us all really concerned, that is Hezbollah narcoterrorism, not Hezbollah producing drugs in South America but Hezbollah moving those narcotics and laundering the proceeds. You will remember the tremendous amount of information along those lines that came out with the case of the Lebanese Canadian Bank. I spent last week in Argentina and a few weeks ago in Colombia on this issue, and there's still a lot going on.
Senator Beyak: Would you be able to tell us how and where Hezbollah is still operating in Canada?
Mr. Levitt: As we've seen here in the United States, Hezbollah doesn't only operate in the big cities. There have been and are sure to be nodes in major places like Montreal, Toronto and Vancouver, and I know of a few cases in some suburban areas around there.
I want to be very clear that we're not talking about, in any way, shape or form, tarring and feathering or speaking ill of an entire community. This is not a commentary on Canadians of Lebanese descent or anything like that. In Canada, as within the United States and elsewhere, there are some individuals who have affinity for — a much smaller number even — and who are operatives of Hezbollah. That is something we need to continue to work on. It's something that requires, for lack of a better term, public diplomacy.
Let's call a spade a spade. Hezbollah is not a banned entity back home in Lebanon. If you are a Lebanese Canadian or Lebanese American, your family is back home in Lebanon. Even if you don't want to give money to Hezbollah because you don't love their terrorism and their fighting of Israel and you don't love what they're doing in Syria, Iraq or Yemen, you often want to give money because it creates a better place for your family. If they are people who give to Hezbollah, you see Hezbollah as the only ones who stand up for and protect the Shia community. We need to explain to people in the West why we are concerned about this: That this is not a stance against Shia; this is a stance against a group that while doing good works and engaging in politics back home, it is also doing a lot of bad works and violence back home and elsewhere. That has been something we've not been particularly successful at, I think mostly because we haven't done much of it, this public diplomacy in the communities. It's hard and uncomfortable, but we need to do it.
Senator Ngo: I will follow up on my colleague Senator Stewart Olsen. She's talking about the funds being sent from Canada to various organizations outside of Canada. Now, to your knowledge, what can be done to stop foreign funding coming into Canada to promote radical religious ideology?
Mr. Levitt: This is a critically important question and one that is much more complicated to answer than what we've been talking about so far. Everybody agrees terrorism is bad; it's a violation of the law. When you start getting into funding ideological and religious activity, obviously it becomes much more sensitive. The task that we have is demonstrating that the financing is funding things that are beyond acceptable ideological behaviour, whether it's because it's financing hate and potentially hate crimes, or things that are not compliant with democratic norms. But this gets into a whole host of other legal issues, to be perfectly blunt. It starts to get us into the realm of another area that I spend a lot of time working on, which is countering violent extremism or counter-radicalization.
I'll be honest; here in the United States the government has a tremendous discomfort with getting involved in counter-radicalization or countering violent extremism at all insofar as it is involved with countering ideology. Because again to call a spade a spade, much of the ideology that terrorists are hiding behind is an extremist variation of religion. I would say it's not the true religion, but that doesn't make a difference. They claim it to be, and that makes it much less comfortable for us.
So we do need to have an effort to focus on these types of activities. Who does it and under what laws? I can't speak for Canada as it's beyond my expertise, but here in the United States, this is an issue we grapple with.
After I left the Treasury Department, I got a call from the State Department, but not an office I had ever had dealings with before, asking if could I come in and speak with the special representative to combat anti-Semitism about my work at treasury. Sure, I was happy to come in, but I couldn't imagine what they wanted to talk about.
What the special representative for combatting anti-Semitism wanted to talk about was as they started to dig into organizations that were producing expressly anti-Semitic literature, really horrible stuff, they were finding that often it was the same groups or funded by the same groups who were also funding, more explicitly, terrorist activity. So I tried to put them in touch with the people who were looking at this also from a terrorist perspective to see if they were looking at some of the same people from different perspectives.
I don't know what the laws are in Canada. Of course, you do have very good laws in terms of protecting from abuse of the charitable exempt status. The most recent prominent case was the Hamas front Irfan, which may find itself at the end of a prosecution as well. This is something we need to look at and appreciate, but appreciate at the same time just how difficult a problem it is to tackle. You need to demonstrate what the criminal violation is. Otherwise, in societies that embrace free speech, it can be complicated.
The Chair: Doctor, I'd like to follow up on the Irfan issue that Canada faced. It was a long period of time from when it was identified until it was actually disbanded, the way I recall it. Perhaps you can give us a further description from your perspective, in view of the fact you're fairly knowledgeable on it.
Mr. Levitt: I wrote about Irfan in my book on Hamas, which came out in 2006. Irfan didn't like it. Their lawyer sent a threatening letter to Yale University Press, which published my book. I was asked by the press to substantiate in still greater detail the basis for what I had said, which I was more than happy to do, and that was the end of that because I was careful to write in "fact."
Irfan was established around the same time and by some of the same people who established the Holy Land Foundation for Relief and Development, or HLF, here in the United States. HLF was originally founded as the Occupied Land Fund, OLF, and later changed its name to HLF and moved from California to Texas.
HLF, of course, was ultimately designated as a terrorist entity and shut down by the Treasury Department and then was prosecuted. The first case was a hung jury, and in the second trial they were convicted on all counts. Cards on the table: I served as an expert witness in that case, explaining what Hamas is and how they finance and the role Hamas played in that.
Irfan came up in that case under the list of unindicted co-conspirators. If you look deeper into the evidence in the case, which is available online now, Irfan comes up among the conversations. Irfan representatives attended this key Hamas meeting at a hotel on the grounds of the Philadelphia airport shortly after the Oslo accords were signed, where Hamas leaders in North America were getting together to figure out how they should react to this tragedy of a potential peace deal between Israelis and Palestinians. Because if there's peace, it will be very difficult to get people animated to continue to fight Israel.
At one point, one of the organizers at this meeting, which Irfan attended under its previous name, The Jerusalem Fund, said that we shouldn't say the word "Hamas" anymore because President Clinton had put Hamas on his first banned list. So they decided to use a very highly developed and complicated code name, which was "Samah," that is to say, "Hamas" backwards. That was too complicated for them to remember. Several of them kept saying, "Hamas. No, Samah." In any event, Irfan comes up in that and other cases many times.
I'll leave it there because it's my understanding there are still legal proceedings potentially ongoing. I think the good news here is that authorities, both in terms of the people who look at things from the abuse of charitable tax exempt status and the people at the RCMP who look at further violations of the law, however much time it took — and it takes time for these things — are acting on it.
Senator Day: Dr. Levitt, I was hoping to get a chance to talk to you and get your reaction. You're very knowledgeable on a lot of different countries that have organizations like FINTRAC gathering information. Are you satisfied that the other institutions in those countries have the laws and the expertise in prosecution and the judiciary to deal with this and to make it worthwhile?
Mr. Levitt: That is an excellent question. The answer is that it varies tremendously. There is tremendous variation. There are lots of countries that had nothing and now have a lot. There are lots of countries that are still getting up to speed and there are countries that just lack the capacity. This is an area where there's a tremendous amount of capacity-building going on — U.S. Treasury, State, the United Nations, think tanks — a tremendous amount of work. That, too, varies in terms of its quality. Sometimes it has to do with the recipient.
I remember being in one country where I think the United States, but it could have been an international, was providing training, but the members of this country just didn't want to have to do the full training anymore. I think it was month-long. We had to curtail it back to half a day for two weeks. We wanted there to be something; better something than nothing, but obviously we weren't getting the full thing going on.
Throughout the world, the quality of the financial intelligence units, the FIUs, vary greatly. Of course, the vast majority of them don't actually deal with what we would call classified intelligence. Almost none of them are like the U.S. Treasury, FINTRAC or AUSTRAC model, which are unique, and some were always tremendously problematic.
I remember when the Egmont Group, the umbrella company for the international group of financial intelligence units, admitted the Syrian FIU several years ago, well after Syria had been designated as a state sponsor of terrorism and all kinds of unacceptable actions were happening there. The United States was very concerned about allowing the Syrian FIU to have access to everybody else's information for fear that they would do the exact opposite of what they were supposed to with it.
I was on a boondoggle at a conference in the Bahamas for another think tank on Iran, and I was so perturbed by this that I checked into my hotel, ran up to my room, took out my laptop and quickly cranked out a piece — which is still up on our website, actually — on just how ridiculous it was or would be, because the talks were going on that day and the next, to admit the Syrian FIU, which they did.
So there are all kinds of variation. There's variation in terms of the umbrella groups, yet it's critically important to help build these. The reaction should not be frustration and therefore forget it. To the extent we continue to build up this relationship of competent and maybe, dare we hope, even really capable organizations like these, we'll be able to do more and more. Particularly in Western Europe now, there are several more entities like this that, while maybe not like FINTRAC or FinCEN, are much better than they ever were, and that means we have partners who can understand and speak our language more.
I was doing research on this type of issue for a monograph I wrote. I was traipsing the world and my co-author and I were joking. As you go around the world, you can see who speaks FATF. Who knows what the 40 plus 9 special recommendations are and is versed enough to talk about the complications in special recommendation IX? There's a growing body of people around the world who speak FATF and FinCEN, et cetera, and that's great because we can have that conversation drill down into particulars, the details, because that's where it's at. We can actually share information, even if it's not these multi-lateral organizations, but bilaterally, and do more good.
We are constantly making progress in this domain. Some are frustrated that so many years after 9/11 we're still not quite where we want to be. I think you could also look at it from the other side of the coin and say it's pretty amazing collectively how far we've come since then. I think there's responsibility on the part of Canada, America, Australia and others who have invested in this and are doing impressive work to contribute to the training of others, if not for the sake of those others, then out of selfish interests in being able to build up the number of partners with whom we can really communicate with on these constantly evolving issues.
Senator Day: Thank you very much. We'll leave it on that positive note.
Mr. Levitt: Thank you, sir.
The Chair: Thank you very much, Dr. Levitt. Your testimony has been very informative. We certainly appreciate you taking time out of that busy schedule of yours and away from those four boys.
(The committee adjourned.)