Compliance Professionals Look Back on 9/11 — Podcast Series

Thomas Fox
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Thomas Fox - Compliance Evangelist

This year is the 20th anniversary of the attacks upon America on September 11, 2001. Like most Americans, this was the seminal event in the history of our country. I have thought a lot about that date and the anniversary; even more so with the fall of Afghanistan and the evacuation from Kabul.

I wanted to do something to commemorate this anniversary, so I decided to do a podcast series featuring the personal stories of persons in the compliance field with their thoughts about what the date of 9/11 means to them, how it changed our profession and their thoughts looking back some 20 years later. The lineup was (click each name to listen to the program in full):

Part 1-Gabe Hidalgo on Needing to Make a Difference

Gabe Hidalgo is an anti-money laundering (AML) compliance expert, who shared how the events of that fateful day changed the course of his career. Hidalgo was working as counsel for insurance companies at the time. He recalled 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,” and “that this was not an accident.”

Having understood that America had been attacked, Hidalgo was determined to join the fight against terrorism. As he related, he needed to “do something more than just shed tears”. He immediately ruled out local law enforcement or the FBI as his wife was adamant that she did not want him carrying a gun or going into harms way. So, Hidalgo 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.”

I concluded by asking Hidalgo for his reflections looking back at 9/11; some 20 years later. Hidalgo began by noting that “the 20th anniversary is a dark moment”. 9/11 taught us not to be naive, that we’re not as protected as we think we are. He said, “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.” He is proud of the advancements in AML compliance made to keep everyone safe but concluded, “the work continues.”

[Listen to the full podcast conversation with Hidalgo here]

Part 2-Juan Zarate-the Treasury Department Responds

On 9/11 Juan Zarate was at the Treasury Department working on international enforcement issues, anti-money laundering (AML), anti-corruption and anti-terrorist financing. Zarate discussed how his role changed, the Treasury Department response and what the tragic event means for him.

On 9/11, Zarate was in his office, which faced south giving him a view right to the Pentagon. Zarate had a TV in his office, obviously watching with horror as to what was happening in New York. He had been a terrorism prosecutor for a number of years at the Department of Justice (DOJ) so was aware of Al Qaeda. “When I looked south across the windows from the office you could see smoke billowing from the Pentagon. From the fourth floor of the Treasury Department, looking out across the river, you could see smoke rising from the Pentagon.” This affected him emotionally; something very different was happening, he recalled; the country was under attack.

I asked 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?” He responded that he has mixed emotions. He thinks about the victims and their families first of all. That day changed history. “It changed the way that the US 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 concluded, “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.”

[Listen to the full podcast conversation with Zarate here]

Part 3-Professor Alexander Dill - Patriot Act: The AML Response to Terrorist Threats

Professor Alexander Dill is a scholar 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. On 9/11, he worked in lower Manhattan.

He recalled Tuesday, September 11, 2001, was a beautiful Tuesday morning. When he got out at his subway stop for work there was a big crowd of people and they were talking about a single engine Cessna, which had accidentally hit the North Tower. That turned out not to be true. He never did make it in his building. He solemnly said, “I think I was lucky because there were people in the corner office watching people as they jumped out of the top floors. I looked down in the ground at a street corner and I saw an engine from one of the American airlines planes which I later saw in the 9/11 Museum.” He saw the South Tower collapse and he related, “I was frozen in my tracks, I just couldn’t move. Then an EMS worker was running up the street and yelled at me, get moving. There was a big cloud of dust chasing her. So, I did finally did start running.”

I concluded by asking Dill to reflect back on what the last 20 years had brought to the world of AML and compliance. His view is that the advent of technology has been the key in AML and the terrorism financing fight, in AML and terrorism financing regulation and in AML and terrorism financing compliance. But technology advances are much broader than simply in combating terrorist financial. Dill pointed to social media which he said has a “creative and productive side, but also kind of a dark side or a negative side.” Cryptocurrency has expanded investment opportunities if you want to get into that value title asset class, “but it is also increasingly used by criminals for money laundering and financing of terrorism.” Finally, there is “AI and machine learning, where this tech can offer very efficient compliance solutions, but the models are often black boxes. They can’t be properly validated, and this increases model risk.” Dill ended with the Anti-Money Laundering Act of 2020, which he said, “really does a good job of enhancing, attempting to enhance innovative technologies to help achieve the law enforcement objective.”

[Listen to the full podcast conversation with Dill here]

Part 4-Eric Feldman – How 9/11 Changed the Role of the IG

On the morning of September 11, 2001, at 7:30 AM, Eric Feldman was in the morning staff meeting at the CIA. Then Director George Tenet was en route to the Headquarters. An assistant of Director Tenet came into the conference room and announced that a plane had just hit the World Trade Center. Feldman related that although it “was unclear what was going on at that point before the second plane hit, everyone in that room was quite certain what was going on because of reporting that had gone on before that.” From that point it was “battle stations and you had never seen people snap to attention and leave as quickly as that.”

Feldman went back downstairs back to his office where he watched the second plane hit the World Trade Center. At that point, Feldman was scheduled to be heading to the White House for a meeting of agency IGs to meet on the President's Council on Integrity and Efficiency. As he could not get in touch with anyone at the White House, he got into a car and drove down. As he was driving down George Washington Parkway, he could see the smoke coming out of the Pentagon. Feldman said, “it was clear we needed to go back, and we made a U-turn on the cross, the median on the GW Parkway, which is a quite a feat, and headed back toward CIA headquarters. As we’re coming into the compound, people are rushing out of the compound on foot, which was somewhat disconcerting. At that point, of course, there were all kinds of rumors, about the next plane, which ultimately crashed in Pennsylvania, but they thought would, could potentially be hitting the agency. It was chaos.”

We concluded by Feldman reflecting back on 20 years after the initial attacks on 9/11. He reflected 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. It was so good to see. He said, “I think we’ve lost that. And I wish that we could get refocused without another catastrophe on what’s important in this country and the tribalism, as we all know, is just way out of hand. And I yearn for that feeling, that we were one country, solidly behind a single mission to defend ourselves.” He hopes that the people can return to that unity without another catastrophe.

[Listen to the full podcast conversation with Feldman here]

Part 5-Scott Moritz - How the FBI Changed Overnight

Scott had some very poignant and moving recollections from that day, from realizing that many of the senior team were in the air that morning, to seeing streams of panicked New Yorkers running down the streets of Manhattan, to his journey home that night. He related how he and some colleagues were walking to Penn Station to catch a train home and as they crossed 5th Avenue, which had a view into lower Manhattan where the World Trade Center, Twin Towers had stood. As they looked down the street, they could no longer see those symbols of America’s financial center.

Scott reflected that by staying as a single agency with a dual mission, one of the benefits to the FBI and to the law enforcement mission in general was the FBI had better access to local law enforcement agencies and could take better advantage of cooperating defendants who may have information that could advance the national security mission. He said, “I think that’s proven to be a really effective model. The FBI has significantly improved threat analysis following the creation of the national director of intelligence, the field intelligence group, and probably most notably the addition of embedded security analysts in each of the 56 FBI field offices.” Moreover, the most important part of the FBI’s transformation is how those intelligence analyses were effectively integrated into FBI operations. Finally, he concluded, “the FBI no longer describes itself as a law enforcement agency, although that is clearly part of the mission. Now there is a dual mission with the FBI describing itself.”

I asked Scott to share some reflections on 9/11, and for the future. He remarked that post-9/11, the country was more united, and people were more compassionate to one another. He spoke about “the tender mercies of strangers who were consoling one another, in the days that followed. My wife was in the grocery store and another customer was just overcome with grief, going through like this mundane task of getting groceries and a complete stranger just came up to her, hugged her and consoled her, and that was playing out all over the place. It was phenomenal, the best of human nature that really was tapped into. I also remember the outpouring of love and compassion to the American people from every part of the world. Finally, as a New Yorker, I experienced some of that outpouring firsthand.”

Moritz concluded, “I hope that we can summon some of that compassion and human kindness that followed 9/11 to heal what’s going on in our today”

[Listen to the full podcast conversation with Moritz here]

Part 6-John Lee Dumas - I Knew I Was Going to War

Dumas was also an Officer Candidate in ROTC on 9/11. He said, “I remember I woke up in the morning and one of my roommates said, “Hey, turn the TV on”. We turned on the TV and we just saw the tower smoking. Very shortly after that the collapsing live on the television screen. One of my roommates who was also in ROTC, we looked at each other and we both knew without saying anything 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 of some kind. We knew when that tower collapsed that we were going to be playing a very active roles as officers in the US Army. Within a couple hours, we actually had a real world briefing at our ROTC headquarters on campus where the commander of our ROTC battalion, gave us a real-world breakdown. It confirmed what we were thinking when we saw that the tower collapse. We just became officers in the US Army during a time of war.”

We turned to leadership lessons Dumas learned from his time in the Army. He commanded a tank platoon, which was four M1 Abrams tanks and 16 men. Yet, as the tank commander, Dumas was one of the least knowledgeable persons within his own platoon about how a tank worked, the best operations, how to drive a tank, how to load the Sable rounds, how to actually fire the weapon and even how to navigate. He related, “I was the platoon leader at 22 years old and one of the least experienced and least knowledgeable people in my platoon. That’s how the military works. And I learned right at the beginning, I needed to stand upon the shoulders of giants. I needed to go to my Platoon Sergeant, at the time, who seemed like an old man at 37 years old. But it was me, like a little baby.”

I concluded by asking Dumas about his reflections of 9/11 and of going to war in Iraq some 20 years later. He said, “My reflections on 9/11 was just travesty terror, confusion, panic, nobody really knowing what was coming next. The major message that I do want to pass across for people today is something that was really obvious to me living in Iraq for 13 months and living in a world where there really was no police. There really was no law. There really was no cohesion. There was no repercussions. 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.”

[Listen to the full podcast conversation with Dumas here]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

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