In 2010, journalist David Axe
spent a month in the Congo reporting on the Lord's Resistance Army
. When he returned, he wrote a book titled "Army of God: Joseph Kony's War in Central Africa
", illustrated by Tim Hamilton and edited by Matt Bors. The book first appeared online, but the paperback rights were acquired by publisher Public Affairs, with plans to publish an expanded edition in 2013. The deal included an advance, which was wired to Hamilton's account. That's where the U.S. Treasury department comes in. Specifically, The Office of Foreign Assets Control (OFAC)
Founded in 1950, OFAC enforced U.S. economic sanctions against embargoed nations such as Cuba and Iran. And 12 days after the 9/11 terror attacks, then-President George W. Bush signed Executive Order 13224
, authorizing OFAC to enforce “economic sanctions on persons who commit, threaten to commit, or support certain acts of terrorism.”
Prohibited recipients, called “Specially Designated Nationals” or SDNs, number in the thousands.
“No U.S. person can engage in business with any individual or entity on the list,” Treasury warns. “If they do, they may face civil monetary or criminal penalties.”
In fact, automated software approved by the OFAC, does most of the work for the banks; flagging transactions and routing the funds into a "blocked account" that can only be accessed by the Treasury Department.
Once funds have been diverted into this "special account" trying to clear the block becomes a Sisyphean task, with no clear way to contact anyone at OFAC.
False positives have been particularly problematic for charities and humanitarian groups. A report issued by the Combating Terrorism Center (CTC) at the U.S. Military Academy in West Point
says that terror-related counter-finance efforts “face a number of daunting policy trade-offs — personal integrity versus data access, financial integrity versus investor friendliness, due process versus being able to freeze very liquid assets, among others,". For that reason the money-intercept practice “seems unlikely to yield any dramatic achievements in the future,” the CTC concluded. In the meantime, the feds and the bank can, and do, take people’s money on the flimsiest of justifications.