Background Briefing by Senior Administration Officials

By Telephone to Filing Center

Edgartown Elementary School

Martha's Vineyard, Massachusetts

9:45 A.M. EDT

SENIOR ADMINISTRATION OFFICIAL: I'm going to provide some background for you on the amendment that we have just issued in the form of an executive order that will help us disrupt Osama bin Ladin's network. Once I make a few points I'll hand this over to my colleague from Treasury, who is actually in charge of implementing this thing.

The purpose in doing this was to add another tool in our effort to dismantle or disrupt Osama bin Ladin's network and, therefore, his ability to attack the United States. We, obviously, are using a number of tools for this purpose -- military, which we all saw on Thursday, was an attempt to disrupt physically his operational capability by attacking his headquarters and attacking a facility that he was using to produce a precursor for chemical weapons.

We are going at him diplomatically as well by working and pressing where necessary other countries where he is active or his people find haven to take action against his people. We are working against him in an intelligence setting as well, which, obviously, I can't go into, but that's another tool that we're using.

Finally, we want to take financial action against him. As has already been made clear in a lot of press reporting, bin Ladin is a wealthy individual and he has a far-flung business empire. This empire is useful to him. It's useful to him in an operational way because you can see how this kind of empire is useful for moving people, money, materials, providing cover. It has tremendous utility to him.

But, moreover, many of these businesses are profitable, thereby provide him with funds with which to press his attack against the United States. So we view this as an important tool and overall multifront campaign, if you will, to disrupt bin Ladin's network and its ability to operate against us.

Anyway, having said that, my colleague from Treasury will walk you through the details of what this actually is designed to do.

SENIOR ADMINISTRATION OFFICIAL: Good morning. On August 20th, President Clinton signed an amendment to an Executive Order 12947 which added the names of Osama bin Ladin's Islamic Army and two principal lieutenants of Osama bin Ladin to the annex of the 1995 executive order of the number I've mentioned which was promulgated pursuant to the International Emergency Economic Powers Act, prohibiting transactions with certain Middle East terrorist groups. The order blocks all property subject to U.S. jurisdiction in which there's interest of organization named on that annex.

In addition, it blocks property and interest in property of persons later designated to expound to be -- to have committed or pose a significant threat to the Middle East peace process or to assist in, sponsor, or provide financial material or technological support or services in support of acts of violence.

The order further blocks property which there's an interested person determined to be under, controlled, or acting for or on behalf of. This would also include any transactions or dealing by a United States person within, or person within the United States and property, or interest in property of so-called specially designated terrorists. That would include taking or receiving any contribution of funds, goods or services to the benefit of the named person.

So to recap all this, what we've done -- what the President has done is to block assets, prohibit transactions by U.S. persons anywhere in the world with these entities, prohibit fund-raising, making or receiving any contribution of funds, goods or services for the benefit of these or yet to be named persons or companies, organizations; provides authority to name connected parties of the Islamic Osama bin Ladin organization. That is entities owned or controlled by or acting for on behalf of.

And that is identifying the network that works for him, under him, in support of him -- applying all those listed sanctions to all named parties. The effect of this action is to expose the network, the organization, by a very public way, identifying these names, taking whatever steps are available under this order against those individuals or entities, and then working with allies to take similar steps when a financial trail is identified.

One final point here is that the objective is to take down the infrastructure. This is one tool in the broad front that my colleague has outlined for you that will work together to take down the network.

Q: How extensive are the known dealings between Americans and the bin Ladin organization now?

SENIOR ADMINISTRATION OFFICIAL: Well, we don't anticipate a large number of assets subject to U.S. jurisdiction or a large number of dealings between U.S. persons and the bin Ladin organization. Whatever does exist, however, is prohibited. Whatever assets are in the United States or come within possession of United States financial institutions or their branches operating abroad -- or foreign branches of any other companies, for that matter -- will be prohibited. But the involvement has not been identified as extensive.

Q: Why wasn't Osama bin Ladin and his two lieutenants, why weren't they on this list before now? And, number two, if you don't anticipate large numbers of money or people to be impacted as it relates to American institutions, what's the point?

SENIOR ADMINISTRATION OFFICIAL: Well, in response to the first question, as I indicated we don't anticipate a large number of assets subject to U.S. jurisdiction. But the point now is in identifying the network, asserting jurisdiction, denying material support, technological, financial, provision of services and fundraising, and then working with allies to take similar steps, we will seek to identify a financial trail.

Now, also, this is the first step in building all of the linkages that exist with regard to this bin Ladin organization. As this evolves, other contacts will emerge, persons working for the entities and organizations will also be identified.

Can you add to that?

SENIOR ADMINISTRATION OFFICIAL: I would underscore one thing that my colleague has said -- mainly, that it's a first step. No one anticipates that this is going to have an enormously disruptive effect immediately. But its benefits to us in hindering his operation and the degree in which this hems him in over time -- especially if we get the cooperation of allies -- could well be significant. But the effect will be over time.

As to the question of why they weren't on this list before, I'd make two observations. One is that a key organization with which Osama bin Ladin is affiliated has been on the list, Islamic Jihad. And so, in effect, some elements of his network were already covered.

The second observation is that what we knew about Osama bin Ladin's capabilities, as well as his own operations, evolved over time. And the situation now is simply different with respect to him than it was a number of years ago. So I think this is the appropriate time to do it and we're doing it.

Q: Has any other country joined in this embargo or asset freeze up to this point?

SENIOR ADMINISTRATION OFFICIAL: No, not at this time. But it's fairly early in the process. And if I could just add to my colleague's response. Until we take this official, formal, public step, it's difficult for us to have a lot of leverage with our allies. And this is one important way in which this is a first step. Now that we've taken this step we can urge our allies to take analogous steps within their own system.

Q: To whom specifically have you spoken or are you speaking about this sort of action?

SENIOR ADMINISTRATION OFFICIAL: Well, I don't want to get into our diplomatic contacts.

Q: I've got another question. Has this sort of asset freeze or seizure ever crippled a terror organization and do you have evidence of it?

SENIOR ADMINISTRATION OFFICIAL: Well, there are probably several answers to this; let me take a shot. We would not expect this single step to cripple this network, any more than I think we would expect a military attack against his headquarters in Khost, in Afghanistan, to cripple the network. This is precisely why we need to wage this multiprong campaign, because what we aim to get is -- excuse me for using a hackneyed phrase -- but a synergistic effect of a number of different actions, which together we intend -- with which we intend to hamper his ability to operate.

But your point is well taken. But we would not expect this one single step to just do the trick.

Q: Have you received overnight any better damage assessment to the physical infrastructure, and how difficult do you believe it will be to rebuild or reestablish that camp?

SENIOR ADMINISTRATION OFFICIAL: Look, I would really like to restrict this press call to the EO.

Q: Just to follow up on John's earlier question, could you tell us which countries might be most important in terms of following the U.S. lead in this asset freeze?

SENIOR ADMINISTRATION OFFICIAL: Well, to some extent it's an intelligence issue which I'd be very reluctant to get into. In terms of how the international financial system operates and in the kind of general or systemic sense who we need to reach out is something that I can't address.

Q: In other words, you don't want to say, you don't want to identify the countries?

SENIOR ADMINISTRATION OFFICIAL: Don't be so brutal about it. No, I don't want to right now.

Q: And if I could just -- one other question to clarify. We're talking about -- we keep using the term financial freeze, but in the President's statement, he talks about blocking financial transactions. But just so I understand, in other words, if there were a U.S. bank or corporation that found it had assets of this organization, are those assets then seized or put in escrow? Can you explain exactly what happens?

SENIOR ADMINISTRATION OFFICIAL: The financial institution will take steps to immobilize those monies or whatever property is identified. So if there is a U.S. institution that has a deposit of Osama bin Ladin, his top lieutenants, or any subsequently named organization that he owns, controls, has significant business interest or investments in, the financial institutions have been notified that this has been signed and implemented, and so they are required to block -- block and freeze are synonymous terms, and what that means is to immobilize, not to be able to withdraw or invest or move or have any transactions whatsoever with those monies.

But it is not a seizure, it is not a taking title to. It's a term of art synonymous with immobilizing.

Q: I realize you don't want to get into intelligence data, but where's his money? Where are we looking?

SENIOR ADMINISTRATION OFFICIAL: We will certainly follow whatever financial trails we identify and continue to work to identify involvement. But in terms of naming specifics, I don't think we can get into any particular specifics lest they disappear.

Q: Well, can you tell us where the money is invested? Is it in banks, is it in oil, shipping?

SENIOR ADMINISTRATION OFFICIAL: Well, as my colleague said, I can't be specific, but he's got a wide array of very diverse companies in which he's invested to some degree or controls outright. And they run the gamut from agricultural companies to banking and investment firms, to construction companies, and the hide many sins export-import kinds of companies. He's into a lot of things.

Q: And the last question I have -- you've given us generalities. However, you've said in your statement repeatedly, you want to make public his network. Can you name examples of companies that we're talking about?

SENIOR ADMINISTRATION OFFICIAL: No, in all respect, I can't at this point until we officially identify them. We will be taking steps under the authority in the executive order to work with the Secretary of State and the Attorney General, Secretary of Treasury to name those entities. And when they are published, then they have the force and effect of law, certain legal things kick in. And they're either on the list or not on the list, and it would not be appropriate for me to prejudge that process that has yet to occur.

Q: How quickly do you anticipate that happening? Because you did just say a couple minutes ago that the whole point of this is to publicly expose these, so how quickly does that happen?

SENIOR ADMINISTRATION OFFICIAL: In naming these, as I say, it has a legal effect and the legal effect is as I've described. And having the information in proper order, correctly identified that we can rely on is a critical step in naming the names publicly, ut in terms of timing, with all due speed.

Q: Just a quick question about the initial order. It covers the Islamic Army, which you've got listed a whole bunch of different names for, and then two individuals. Who are these individuals, and is that all it covers, is these three?

SENIOR ADMINISTRATION OFFICIAL: That's all it covers for now. But as I said, then the authority exists in the original order, the 1995 order, to go back and named organizations and companies that he owns or controls or organizations acting for or on his behalf. Now, as to these two people, all I can really say is these are two of his principal lieutenants.

Q: Can you be any more specific on how much you expect this to affect -- you sort of said you didn't expect very much -- can you give us an idea more in dollar terms?

SENIOR ADMINISTRATION OFFICIAL: Anything I'd be saying right now would be speculation. We have not historically found large amounts of money blocked pursuant to especially the terrorism program. The names often take on assumed names; we seek to identify assumed names, and if we do, then those will be blocked. But this is not like a situation involving a state-owned oil company or something like that. They're usually into smaller amounts of money or movements of money.

Q: I was wondering if you might have some information on a slightly different topic, and that is a report that a convoy of journalists that was seeking to assess some bomb damage in Afghanistan is now missing.

SENIOR ADMINISTRATION OFFICIAL: I have no information on that.

SENIOR ADMINISTRATION OFFICIAL: Nor do I.

THE PRESS: Thank you.

END 10:10 A.M. EDT