Blacklisting Terrorism

The author of 'IBM and the Holocaust' suggests how we might move against the assets of our enemies in a new global war.

World War III began on September 11, 2001, not with inter-continental ballistic missiles between superpowers, but with a turn-of-this-century global movement known as international terrorism, wielding weapons of every-day life against civilized society. War was openly declared on the U.S. long ago. Unfortunately, America was the last to notice.

But now we have noticed. And we have acknowledged that our enemy is an amorphous 21st-century nemesis without borders or standing armies requiring new rules of engagement. International terrorism advances not in tanks or trenches but in rented sedans, passenger jets and hotel suites. So the global war against terrorism will be waged unconventionally, not only across battlefields and front lines with armored corps and infantry, but also in cafés, hotel rooms and parking lots deploying SWAT teams and surreptitious special-op squads. In other words, Israel's stealth war on terrorism will become a worldwide model.

It is universally agreed that the protracted war under way will also require combat against the finances, technology assets and freedom of movement afforded the terrorists. These must not be empty words. It can be done. To do so means blacklisting the economic and technologic capability of international terrorism. Legal blacklisting was exactly the technique the Allies used during the Hitler era to frustrate, and often deny, Nazis the commerce they required. With varying degrees of success, the Allies were successful. Here's how blacklisting worked, and how it could work again.

Blacklisting goes beyond "Trading with the Enemy" measures because it extends to all those who may directly or indirectly cooperate, sympathize or provide "aid and comfort" to the enemy, regardless of their location in the world. Legal blacklisting began in Britain after the 1939 outbreak of World War II. The so-called "British Black List" or "Statutory List" was a public roster. Britain also developed the non-public "War Trades List," which included names, ships and companies that were merely suspected.

The United States only entered the war in December 1941 after Pearl Harbor. But several months before that, on July 17, 1941, President Franklin D. Roosevelt, expecting war in Europe, ordered the Treasury and Secretary of State to jointly create a blacklist of those aiding or abetting Nazi Germany. America's "Black List" was known as the "Proclaimed List" and included any nation, company or person deemed "detrimental to the interests of national defense." Immediately after Pearl Harbor, the Proclaimed List of blacklisted companies and individuals catapulted. It grew from 1,800 in the summer of 1941 to 5,000 European and Latin American companies by mid-January 1942, whether located in Nazi Europe, or in neutral countries such as Portugal, Spain or Switzerland. Some firms were included merely because they were considered "Axis sympathizers." Of course, all direct trading with Germany and Italy was prohibited.

Extreme enforcement measures were often taken. For example, on January 14, 1942, five controlling senior executives of General Aniline and Film Corporation, America's third largest dyestuff manufacturer, were actually banned from the company by the Treasury Department. All were American citizens, but of German birth, and had for years been suspected of close ties to the German conglomerate I.G. Farbenindustrie.

On March 26, 1942, a Congressional Committee castigated Standard Oil of New Jersey for turning over synthetic rubber processes to the German Navy while withholding the same technical information from the United States and British militaries.

Even still, IBM danced on the head of a pin to legally circumvent the Proclaimed List by conducting extensive dealings with the Nazis through subsidiaries in Switzerland, Spain and other neutrals, and ensuring that all contacts with New York were routed through its Swiss or Vichy offices.

A broader WWII Treasury regulation required a "license" just to communicate with certain territories considered directly or indirectly under Nazi domination. Thus, to conduct business with certain parts of Europe, American firms were required to first obtain a "license" to communicate, outlining the purpose of the contact, and then additionally consult the Proclaimed List for blacklisted entities.

Long after the Proclaimed List was repealed in 1946, America continues to maintain what it calls export controls and other restrictions, severely regulating the type of equipment which can sold to certain countries. These controls even extend to many forms of ordinary software that American high school students take for granted.

America and its allies can now realistically cripple the economic and technologic capability of named terrorist individuals and organizations, as well as those countries such as Afghanistan, Lebanon and Iran which shelter and cater to them. No one can obtain a satellite cellphone account without a credit check and accounts are often terminated if users are one day late with payments. Stock brokerages manage huge portfolios for market-savvy terrorists who have spent millions just on the 20 or 30 moles who spent two expensive years training to destroy the World Trade Center and more. Evidence now indicates the terrorists may have shorted insurance stocks. The point is, prompt payment, good profits and business as usual can no longer be the governing force in this war on terrorism.

America and its anti-terrorist allies can revive the precedent of WWII: license communications to countries that harbor terrorists, and certify a list of blacklisted names. But this time, we need to plug the loopholes of globalization that WWII financial warriors were not sophisticated enough to detect. All foreign subsidiaries must be reigned in.

When the smoke clears, the petro-assets of terrorists and their sheltering governments should be seized as "war reparations," and the profit streams of corporations which knowingly collude should be disgorged.

Civilized commerce must be denied to the uncivilized among us.