John Lee Dumas, host of the award-winning podcast Entrepreneurs on Fire, joins Tom Fox on the last installment of Looking Back at 9/11 to commemorate the 20th anniversary of the 9/11 attack. He tells Tom how his life changed in that pivotal moment, and the big lessons he learned. 

A Time of War

John tells Tom that he was in his final year at Providence College, and in the ROTC cadets, on 9/11. When he saw the towers fall, he knew at once that it would change the trajectory of his career. He and his roommate looked at each other and they knew “that our next four years of active duty army experience went from being in the peacetime army to looking like we were going to war.” Within hours they were called to active duty: “We just became officers in the US army during a time of war,” John recalls.

Leadership Lessons from the Army

Tom asks John what leadership lessons he learned from his time in the army. John outlines three major takeaways that his time in combat taught him:

What Americans Should Remember

John wants Americans to appreciate their freedom, because it was hard won. He tells listeners, “So few people have ever experienced what true lawlessness is. And until you’ve experienced that, it's hard to really appreciate what we do have here. But you know, this is a great country and it is the home of the free because of the brave. And I hope that's just something that we will always remember.”

Resources

John Lee Dumas: Entrepreneurs on Fire | Twitter

Scott Moritz is Tom Fox’s guest on this episode of Looking Back at 9/11. Scott is the Senior Managing Director at FTI Consulting Risk and Investigations, assisting clients and their outside counsel in managing their response to white collar crime, misconduct and bribery incidents. He is also the host of the podcast series, Fraud Eats Strategy. Scott joins Tom to talk about how the events of 9/11 impacted the FBI.

How 9/11 Changed The FBI: Structural and Cultural Ambidexterity

9/11 fundamentally changed the FBI overnight. Scott remarks that for a long time after 9/11, the FBI was primarily focused on the attack on the Trade Center. That was the Bureau’s main investigation, and it was being worked on by all the FBI field offices, and virtually every foreign attache office in the world. Many scholars, through various organizational studies and surveys, assumed that the FBI would have created simultaneous frontline structures and processes to balance their two competing missions: national security and law enforcement. The scholars also posited that perhaps the FBI would engage in cultural ambidexterity, which would be to refuse to take on the mission of national security altogether. The FBI did something altogether unexpected and tackled both. 

The Benefit of One Agency

“There was this rapid emergence of two clear, but distinct, identities, and eventually, you know, one new unified identity FBI, but some changes where, terrorism cases were centralized at headquarters...This was a big departure from the way that the FBI normally operated,” Scott tells Tom. By staying as a single agency, the FBI had better access to local law enforcement agencies and could take better advantage of defendants with information that could advance the national security mission.

A Shift In The Private Sector

Tom asks Scott to talk about any changes in the private sector he was personally involved in. The major change in the private sector post-9/11, especially with respect to financial institutions, was the induction of the Patriot Act which also paved the way for other significant changes. Financial Institutions and broker dealers had to harden the security of buildings and supply chains across the country’s infrastructure. There was also the explosion of no fly lists, watch lists and terrorist watch lists. Banks, building owners and brokerage companies had to navigate these systems often, and quickly. Scott was very involved in helping these institutions in their anti money laundering obligations, as well as their security obligations. 

Looking To The Future

Tom asks Scott to share some reflections on 9/11, and for the future. Scott remarks that post-9/11, the country was more united and people were more compassionate to one another. The best of humanity in forms of kindness and outpouring of love was seen not just from Americans to each other, but from the rest of the world to America. He hopes that someday he can see that kind of love and unity again. 

Resources

Scott Moritz | LinkedIn | Twitter

Fraud Eats Strategy

Eric Feldman is Tom Fox’s guest on this episode of Looking Back at 9/11. Eric is the Senior Vice President and Managing Director at Affiliated Monitors, a company that deals with monitoring large and small companies in the government contracting, construction, engineering, manufacturing, and financial services. He also conducts assessments of corporate ethics and compliance programs across many countries. Eric joins Tom to talk about the impact the events of 9/11 had on the role of Inspector General.

The Impact of 9/11 on The IG's Role

Eric explains to Tom that 9/11 was the most informative time of his career, and the careers of many other Inspector Generals. It was a refocusing moment for everyone. Eric got to work within the oversight function, but as part of the mission he was overseeing. "That focus on mission was it for me," he tells Tom. Eric expresses that understanding the mission helped make him a better Inspector General. IGs all over the world became more concerned with looking at the broader picture of how funds were being used at their agencies to fight the war on terror, instead of the minutiae of looking at time and attendance reporting.

The Importance of The IG Now

Tom asks Eric to elaborate on how the IG's role rose in prominence post-9/11. Eric explains that government IGs became "part of the team" in different ways. There is more collaboration now across the agencies that IGs oversee. There is also independence: Eric expresses that there must be a balance between collaboration and independence. IGs are especially important as they ensure that the dollars being spent on the war and mission are being spent properly.

A Wake Up Call of Unity

Eric reflects that 9/11 was a wake-up call for the United States. The country came together, and there was a level of unity and patriotism, as well as a sense of duty that overtook politics. Eric hopes that the people can return to that unity without another catastrophe. 

Resources

Eric Feldman | LinkedIn | Twitter

Affiliated Monitors

Alex Dill is Tom Fox’s guest on this episode of the Looking Back at 9/11 Series. Alex is a scholar and professor specializing in financial regulation, risk management and compliance. He also has corporate experience in ​​the ethics of business practices in finance, bankruptcy, bond covenants, and debt markets. He joins Tom to talk about The Patriot Act’s impact on responding to terrorist threats.

How 9/11 Changed AML

Before 9/11, AML regulations were very lax and backward looking. The focus was on prosecuting crimes that were already committed, and prosecuting money laundering, more so than the financing of terrorism. Banks weren’t engaging in meaningful customer due diligence as they felt the process invasive. After 9/11, this all changed. Law enforcement agencies and financial institutions revamped their policies and procedures to take a more preventive approach to AML and financing of terrorism. This led to The Patriot Act.

The Financial Response

Tom asks Alex if he saw a similar regulatory response with non-financial institutions with respect to Patriot Act AML procedures post-9/11. “There was a huge amount of rulemaking that had to be done,” Alex responds. He adds that public companies adopted customer due diligence, and that it was applied more broadly to different sectors, but with a risk-based approach. Companies now had to file suspicious activity reports, not just banks. Customer identification was also introduced. “The Patriot Act sought to encourage cooperation among law enforcement agencies, and among the financial institutions themselves to share information and obtain information from foreign law enforcement authorities,” Alex tells Tom.

The Challenge With The Patriot Act 

Alex explains to Tom that there are challenges with the Patriot Act. A major challenge is detecting the financing that goes into these attacks. Funds that finance these actions are sourced from both legal and illegal means, and that is a major issue. The transaction amount can be small, and this might pose a risk to some compliance officers. 

Technology in Anti-Terrorism

Alex remarks that technology is very important moving forward in the fight against terrorism, as it has changed the way we function in our world. The downside of technology is that it has also helped create some of the compliance issues we have today. Social media platforms have helped to create polarization in the society, and programs like cryptocurrency have been used by criminals for money laundering, and financing terrorism. However, Alex ends with a positive note stating that the AML act of 2020 has been doing the work to help curb these issues.

Resources

Alex Dill | LinkedIn | Twitter

Juan Zarate is the Global co-Managing Partner and Chief Strategy Officer at K2 integrity. On 9/11 he was a prosecutor at the Treasury Department working on international enforcement issues, anti money laundering, anti-corruption and anti-terrorist financing. He joins Tom Fox to commemorate the 20th anniversary of 9/11. They discuss how his role changed, the Treasury Department response and what the tragic event means for him.

A Change of Mission

9/11 changed the mission of the Treasury Department. Juan tells Tom, “We went after terrorist financing to try to disrupt and dismantle Al-Qaeda's terrorist networks and infrastructure, and disrupt how illicit financing was flowing through the international system.” He recalls where he was on the fateful day and how seeing the smoke from the Towers and the Pentagon affected him emotionally. Something very different was happening, he recalls; the country was under attack.

He outlines the strategic, departmental and tactical changes implemented after 9/11 to fight terrorism. The President declared that we were now at war. “The attitude and the strategic direction of the government was [that] we now have to prevent terrorist attacks,” Juan recalls. “We have to disrupt and dismantle terrorist networks. And that led to an entire preventative paradigm for the counter-terrorism approach to the government.” The new mission of the Treasury Department was the following areas, Juan remarks: “How do you use financial information more aggressively? How do we think about the use of tools and authorities that the Treasury has, like sanctions, anti money laundering rules? How do we think about the relationships internationally with central banks, finance ministries? How do we get the world on board to disrupt terrorist financing, to rip these organizations out of the legitimate financial commercial world?” The Patriot Act was one tactical change, among others, that was implemented to achieve the new mission of fighting terrorism.

What 9/11 Means

Tom asks Juan, “What are your reflections now as we come up on the 20th anniversary of the day of 9/11, and really what it meant for America and for you 20 years later?” Juan responds that he has mixed emotions. He thinks about the victims and their families first of all. That day changed history, he says. “It changed the way that the U S government viewed the world. It changed the way that we operated our strategy. And it changed the sense of our vulnerability.” The recent events in Afghanistan make the 20th anniversary even more difficult for Juan. “I have very mixed emotions coming on the 20th anniversary of 9/11,” he concludes, “but I'm very proud of the work that we did. I'm proud of the people I served with and my sympathies go out to the victims and their families.”

Resources

Juan Zarate at K2 Integrity 

On the 20th anniversary of the 9/11 terrorist attack, Tom Fox and guests look back on the tragic event and what it meant for them personally, as well as how it impacted the world of compliance. Tom’s first guest this week is Gabe Hidalgo, anti money laundering compliance expert, who shares how the events of that fateful day changed the course of his career.

Looking Back

Gabe - who worked as outside counsel for insurance companies at the time - remembers turning on YahooTV as soon as he got to his office on 9/11 and seeing the second plane hit the World Trade Towers. He knew immediately that it was a deliberate attack. “I knew that this was kind of a hallmark moment,” he tells Tom, “that this was not an accident.” He details leaving the office in haste to get to his pregnant wife, and the obstacles and roadblocks he faced on the way. When they finally reunited at home, they were overcome with emotion. He remembers feeling gutted thinking about the unborn children who would grow up never knowing their fathers.

Needing to Do Something

Gabe needed to do something more than just shed tears about 9/11, he tells Tom. He started to think about how he could use his skills as an attorney. “I went down the path of looking in private industry, what I can do, and came across anti money laundering compliance, which I thought was fascinating. And I said to myself, I need a way for me to be able to get into that so that I can start making a difference.” He shares his journey into the field, and that it was exactly the right time and the right fit for him. 9/11 was a wake up call for America, he remarks. It made us realize that we need to do whatever we can to prevent anything similar from happening again.

Evolution of AML Since 9/11

Tom asks Gabe how AML compliance has advanced since 9/11. It’s much more difficult for terrorist financiers to move funds now, he responds. “A lot of institutions have strengthened and hardened their compliance programs to the point where they can monitor individual transactions as they're moving across the transactional workflow in the United States. They examine each and every transaction that's coming across from a correspondent banking perspective, which is probably one of the most high-risk channels for money movement.” Gabe and his colleagues have done great work over the past 20 years, which has helped law enforcement stop and apprehend would-be terrorists. However, we can’t be complacent, Gabe says.

Tom asks what 9/11 means for America. The 20th anniversary is a somber one, Gabe replies. 9/11 taught us not to be naive, that we’re not as protected as we think we are. He is proud of the advancements made to keep everyone safe, but the work continues. “It's a moment of reflection,” he points out. “We need to think about not only the people who have lost their lives, but everyone that was impacted - whether they were directly impacted through a family loss, or they were emotionally impacted by what actually occurred.”

Resources

Gabe Hidalgo on LinkedIn