The threat of terrorism is evolving — are we evolving with it? 

In the aftermath of the Sept. 11 attacks, there emerged a truism that was often repeated in law enforcement circles: “we cannot afford to become complacent.” It is a statement that is worth revisiting today as we mark the 12 months that have passed since the attack on the U.S. Capitol last January. The mob violence inflicted on Capitol police officers and the shocking desecration of one of the most storied buildings in American history felt like a gut punch to most Americans. On its one-year anniversary, we should collectively consider whether we’re letting our guard down again. 

The world has been on a war footing against terrorism for decades, and thankfully no attack on the scale of 9/11 has been successful on U.S. soil since 2001. That has no doubt led some to conclude that the terrorist threat has diminished in recent years. Such a fallacy comes from a fundamental misreading of the truth, however. Terrorism isn’t fading away, it’s evolving. Today, the danger comes as much from lone-wolf actors and domestic violent extremists as it does from foreign terrorist groups. As FBI Director Christopher Wray told lawmakers in March of last year, the threat of domestic terrorism is now “metastasizing.”

To protect ourselves from these risks, we will need to revive and revise some of the tactics deployed after 9/11, and that includes following the money. Twenty years ago, the FBI did not have to reach out to the financial sector for assistance. Within hours of the World Trade Center’s collapse, many of the country’s largest banks contacted the bureau to inquire how they could help. That simple proactive step proved critical to subsequent collaboration between financial institutions and federal investigators, including agents in the FBI’s then-newly formed counterterrorism financing arm, The Terrorist Financing Operations Section (TFOS). Under such public-private partnerships, banks received invaluable guidance on how to best mitigate their regulatory exposure to terrorism-related transactions while investigators benefited from having direct channels to the sector’s financial intelligence streams. 

But as other financial-crime priorities have arisen in recent years, such working groups have lost momentum. Within the FBI, TFOS has been folded into the bureau’s larger Counterterrorism Section, stripping the team of solid-line reporting and executive ownership. These developments are troubling, particularly in light of the Taliban’s recent takeover of Afghanistan and the increased potential that Al Qaeda or a similar organization may once again use the country as a base of operations. The safeguards are not needed for external threats alone. The rise of domestic extremist groups, both within the United States and abroad, demands that we consider what more can be done to track terrorism fundraising within our own borders. 

The most comprehensive look at how that might be accomplished can be found in a report published in July by the Paris-based Financial Action Task Force, or FATF. The intergovernmental watchdog group noted in the report that ethnically or racially motivated extremist groups raise money in a variety of ways, including through crowdfunding campaigns, real-estate rentals, membership fees, and events, in addition to such illicit activity as drug trafficking, fraud, and the exploitation of nonprofit organizations. Once raised, the funds are typically moved into banks, money services businesses, and cryptocurrencies, or else retained as cash, FATF concluded. The groups then spend the money on weapons, equipment, propaganda efforts, recruitment campaigns, and training. 

Each of these stages—fundraising, money movements, and expenditures—are touchpoints where public-private partnerships (PPPs) can be effective in targeting extremist groups. Each of the stages is associated with transactional red flags that can be identified by financial institutions and reported to law enforcement agencies. But there are challenges unique to domestic terrorism that must be considered. For one, domestic violent extremists (DVEs) are largely self-funded through legitimate sources, including donations and personal salaries and wages. What’s more, not every individual associated with a DVE group falls under the rubric of “terrorist”. In most instances, there is a radicalization process through which a person first becomes a sympathizer to a cause, then an activist, and then an extremist. But it is not until the fourth and final stage of radicalization, when an extremist becomes a violent extremist, that they are criminals under the law. To overcome such hurdles, financial institutions will need continuous guidance from, and clear communication with, law enforcement officials. 

Past collaboration between the public and private sectors has been a critical factor in preventing another 9/11-style attack. In light of the Jan. 6 attack and the rising risks of terrorist activity in Afghanistan, it’s time to consider the formation of new PPP working groups that can function as financial SWAT teams targeting terrorism. One potential model for how this might work can be seen in the working groups recently hosted by ACAMS, a global association of more than 89,000 anti-compliance professionals from around the world. Convened in November in Washington, D.C., the gatherings brought together high-level representatives from federal law enforcement, nongovernmental organizations, and some of the world’s largest financial institutions. The upshot of these early meetings: participants identified multiple ways that intelligence can be shared faster and more effectively on such topics as drug trafficking, modern slavery, and the illegal wildlife trade. We can do the same for terrorist financing. 

Shortly after the 20th anniversary of 9/11, Director Wray informed Congress that the FBI had seen its number of ongoing domestic terrorism cases skyrocket from roughly 1,000 at the beginning of 2020 to approximately 2,700 in the fall of 2021—a trend, he noted, that has coincided with increased risks of attacks by groups operating abroad. 

The warning signs are clear. But are we doing enough? 

Dennis Lormel is president of the Society of Former FBI Agents and Scott Liles is president & managing director of ACAMS.