2 August 2001

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Aug 2

August 2, 2001: Federal Reserve Governors Encourage Banks to Review Suspicious Activity Reports, Possibly Due to Heightened Terrorist Threat

The Federal Reserve Board of Governors issues a non-routine supervisory letter to Federal Reserve banks, emphasizing the need to continue monitoring suspicious activity reports (SARs). The letter gives no explanation why it has been sent out at this particular time, but states, “Reserve banks must continue to conduct a thorough and timely review of all material SARs filed by supervised financial institutions in their districts.” It adds, “A periodic, comprehensive review of SARs will assist Reserve banks in identifying suspicious or suspected criminal activity occurring at or through supervised financial institutions; provide the information necessary to assess the procedures and controls used by the reporting institutions to identify, monitor, and report violations and suspicious illicit activities; and assist in the assessment of the adequacy of anti-money laundering programs.”

While the letter does not say if there are specific reasons why the banks should currently be watching for suspicious activities, William Bergman, an economist who works at the Federal Reserve Bank of Chicago from 1990 to 2004, will later point out, “Intelligence warnings on terrorism were rising significantly in mid-2001.” He will therefore question whether, “with terrorism and its financing already recognized as an important element of the national money laundering strategy,” this letter is “related to these warnings.” He will also point out, “negotiations between the Taliban and representatives of the United States over energy production issues in Afghanistan ended on August 2, 2001” , and that, “Four days later, President Bush received a ‘PDB’—a presidential daily brief—with a headline warning that bin Laden was ‘determined to strike in US,’ and the body text of the PDB referred to ‘patterns of suspicious activity’” .

When, in December 2003, Bergman asks the Board of Governors staff why it issued the August 2 letter, and if the letter was related to intelligence about heightened terrorist threats, he will receive no reply and subsequently be told he has “committed an egregious breach of protocol in calling the Board staff and asking the question.” Also around this time, between June and August 2001, there is an unexplained surge in the amount of US currency in circulation .

August 2, 2001: Alleged Hijacker Pilot Fails Driving Test

After being fined for speeding the day before (see August 1, 2001), Hani Hanjour fails a test to obtain a Virginia driver’s license. Hanjour already has an Arizona driving license and an international driving license. [9/11 COMMISSION, 8/21/2004, PP. 32, 44 ] According to the Virginia police, Hanjour also has a Florida driver’s license, although the 9/11 Commission will dispute this (see August 1, 2001). Entity Tags: Hani Hanjour Timeline Tags: 9/11 Timeline Category Tags: Hani Hanjour

August 2, 2001: US Official Secretly Meets Taliban Ambassador in Last Attempt to Secure Pipeline Deal

Christina Rocca. [Source: Sherwin Crasto / Reuters / Corbis] Christina Rocca, Director of Asian Affairs at the State Department, secretly meets the Taliban ambassador in Islamabad, apparently in a last ditch attempt to secure a pipeline deal. Rocca was previously in charge of contacts with Islamic guerrilla groups at the CIA, and oversaw the delivery of Stinger missiles to Afghan mujaheddin in the 1980s. [IRISH TIMES, 11/19/2001; BRISARD AND DASQUIE, 2002, PP. 45; SALON, 2/8/2002] Around the same time, US embassy officials in Islamabad hold secret talks with Taliban security chief Hameed Rasoli. [WASHINGTON POST, 10/29/2001]

August 2, 2001: Fire at Pentagon Helps Prepare Workers for Crisis Response on 9/11

Almost half of the Pentagon has to be evacuated because of a small but smoky fire there. [CNN, 8/2/2001] The three-alarm fire apparently starts early in the afternoon, in electrical wires near the loading dock behind a food service area, between two main corridors. [UNITED PRESS INTERNATIONAL, 8/2/2001] It starts on the building’s first floor but extends up to the second floor. [CNN, 8/2/2001] It spreads into the return air duct system, causing smoke to disperse through a fifth of the building. Seventeen vehicles respond to it, and it is put out with extinguishers and a minimal amount of water. About 8,000 Pentagon workers are forced to evacuate from the building, but no one suffers any injury. [UNITED PRESS INTERNATIONAL, 8/2/2001] Reportedly, the fire provides “the Pentagon’s most relevant experience in dealing with the Flight 77 attack” on 9/11. It is one of the first real tests for the Pentagon’s new Building Operations Command Center (BOCC), which opened two months earlier, on June 4. [MICROSOFT EXECUTIVE CIRCLE, 2006] Steve Carter, the assistant building manager, will later recall that due to this fire, when the Pentagon is hit on 9/11 the emergency drill is “fresh in everybody’s mind.” Consequently his building maintenance and operations workers are able to “immediately [start] those same steps again.” [WASHINGTON POST, 9/11/2006] And in response to this fire, Paul Haselbush, the director of real estate and facilities at the Pentagon, will direct his staff to update their emergency plans. As a result, his continuity of operations plan will be fresh in his mind when the attack occurs on 9/11. [GOLDBERG ET AL., 2007, PP. 143]