Every morning David S Cohen descends into a fortified, cavelike complex in the bowels of the Treasury Department to pore through hundreds of pages of leads - from raw intelligence reports to polished threat assessments - to try to penetrate the vast and opaque finances of the Islamic State, the terrorist group capable of producing 50,000 barrels of oil a day.
As the clocks on the wall keep Zulu time, or Greenwich Mean Time, Cohen, Treasury's intelligence strategist and global enforcer, tries to track the Islamic State's shipments from its Syrian and Iraqi oil wells along well-worn smuggling routes across the border into Turkey. There the oil can be sold on the black market for as much as $60 a barrel - a deep discount from the standard rate of about $80, but still a windfall for the terrorist group.
"That oil is finding its way to someone who is refining it and selling it, and presumably has some relationship with the formal financial sector, and that person is quite vulnerable to our sanctions as well as to our economic diplomacy," Cohen said in a recent interview. He declined to go into any detail about which countries or how much money he believes are involved.
Cohen, a fastidious Yale Law School graduate who is known inside the White House as the administration's "financial Batman," is a first line of attack against the Islamic State. His title is under secretary for terrorism and financial intelligence and he may be more important in the fight against the Islamic State than the Tomahawks fired off American warships or the bombs dropped from F-16s. He has become a fixture in Obama's Situation Room.
"David plays the lead role in the effort to both monitor and stop the flow of illicit funds into illicit and terrorist activities, and ISIL is an example of where that is now currently a central concern," Treasury Secretary Jack Lew said in an interview, using an acronym for the Islamic State.
But the effort to cut off Islamic State financing is so far proving as difficult as the American military campaign. The Sunni militants, considered the world's richest and most financially sophisticated terrorist group, control about a dozen oil fields in Iraq and Syria. The vast majority of the $100 million to $200 million in surplus income that experts estimate they will bring in this year is raised outside the traditional banking system. The group can bring in at least $1 million a day from its black-market oil sales, plus tens of millions more each year from extortion and ransom.
"That creates big problems for David and for the US government," said Juan C Zarate, who had the No. 2 terrorism and financial crimes post under former President George W Bush and is the author of Treasury's War: The Unleashing of a New Era of Financial Warfare.
Cohen is to outline the administration's strategy for shutting off the Islamic State's financial spigot in a speech on Thursday at the Carnegie Endowment for International Peace in Washington, his first extended public remarks on the topic.
Before the Islamic State rose to prominence, Cohen was best known in the administration as the point man in shaping and carrying out a set of sanctions meant to cripple Iran's economy and force its leaders into talks to halt its progress toward developing a nuclear weapon. "It's safe to say that without David's relentless efforts, we would not be where we are in terms of getting the Iranians to the negotiating table with the chance of reaching a diplomatic solution," said Antony J Blinken, the deputy national security advisor.
Yet Iran, which uses legitimate banks and seeks a full price for its oil, was - at least in comparison - straightforward. To follow the money within the Islamic State, Cohen must track the group's oil sales from black marketeer to black marketeer until the cash finally ends up traceable in a bank or financial institution.
"I will expect that we will have impact on ISIL's financial situation long before 36 months," Cohen said, referring to Obama's estimate for how long it could take to destroy the group. "But this is not going to be a case of, we flip a light switch and all of a sudden all of their financial resources have disappeared."
When he's not at the White House or at Treasury, Cohen travels the world working to enlist foreign governments in efforts by the United States to blackball bad actors from the international financial system and choke off their money supply.
Last week he made a three-day trip to Doha, Qatar, and Jidda, Saudi Arabia, where he met with counterparts to discuss how to combat the Islamic State's financial networks. They were the 13th and 14th countries he has visited so far this year.
He is leaning hard on Turkey to crack down on the black market sales, which benefit the country and its elite through the lower price of oil. Some reports suggest that Turkey may be beginning to do more to rein in the illegal trade, and the Obama administration last month bombed several Islamic State mobile refineries in Syria. Cohen will not say to what extent the airstrikes have hurt the Islamic State's oil revenues.
What he will say is that 13 years ago Treasury's intelligence operations consisted of a single person sitting in a cramped room churning out reports for senior officials. Today Cohen presides over a 700-person, $200 million-a-year counterterrorism office within Treasury that was created after the September 11, 2001, attacks. He likes to point out that it includes the only in-house intelligence unit in any finance ministry in the world.
"I never dreamed of this job in particular because it didn't exist," Cohen, 51, said during the interview, conducted in his cavernous office at Treasury, next door to the White House. "But it is my dream job. I'm able to touch pretty much every single national security issue we're facing."
Raised a doctor's son in Boston, educated at Cornell, married to a fellow Yale Law School graduate and a father of two, Mr. Cohen describes himself as "super-compulsive" about allowing no email to go unread and maintaining a clean inbox. He is similarly meticulous about his food intake, up to a point. On a recent afternoon he had a Cobb salad at his desk for lunch and gave in to temptation.
"I tried not to eat the egg, but I couldn't resist," he said.
Colleagues say Mr. Cohen, who worked in the Treasury Department in the Clinton administration and in private practice before becoming No. 1 in the terrorist financing office in 2011, exudes a relaxed style but comes alive under pressure. "We're being looked to, often, to be the first set of substantive actions that the administration will take in response to a new threat," said Adam Szubin, the director of Treasury's Office of Foreign Assets Control, which is responsible for enforcing the economic sanctions program. "You really have to be ready to make decisions, including pretty sensitive and sometimes controversial ones. He thrives on that kind of stress."
In addition to fighting the Islamic State, Mr. Cohen has been at the centre of the administration's escalating sanctions on Russia to try to pressure President Vladimir V. Putin of Russia to stop intervening in Ukraine and is at the same time pushing European countries to adopt the administration's policy of not paying ransom for kidnapped hostages. In an October 2012 speech, long before the world saw the videos of the American journalists James Foley and Steven J. Sotloff being beheaded by Islamic State militants, Mr. Cohen said demanding ransom was "frighteningly successful" for terrorist groups and refusing to pay was "the surest way to break the cycle."
But in the interview, Mr. Cohen called it "as excruciating a policy issue as we deal with here."
"You look at the families of people who are being held hostage, and you can't help but feel it's horrible," Mr. Cohen added. "In each individual instance, it's a very difficult policy to adhere to, but we do because it is protective of U.S. citizens as a whole."
It is also critical to his overarching goal: cutting off the Islamic State's money in any way he can.
He was in London for a speech in June, he said, when he first saw reports of the Sunni militants' sweep into Mosul. "We had been worrying about these guys, thinking about them before this," he said in the interview.
Watching their advance across Iraq, he said he remembered thinking, "We're going to have to do even more work."
©2014 The New York Times News Service
