I •

..
~
j

SECRE'F

•• Memorandum

Event: Interview of Gary A. Grappo

Type of Event: Witness Interview
Date: 10/30/03
for the Record

Date memo prepared: 10/31/03

Special Access Issues: None
Prepared by: Serena Wille
Team Number: 4
Location: 9-1 I Commission
Classification: Setl et
Participants - State: Gary Grappo, 10 Brooks, Esq.
Participants-Commission: J. Roth, S. Wille

On October 30,2003, we interviewed Gary Grappo, Director, Office of Regional

and Economic Affairs (REA), Bureau of Near Eastern Affairs (NEA), State Department,
for approximately 2 Y2 hours. This memorandum provides a summary of what we .
consider the most important points covered in the interview, but is not a verbatim
account. The memorandum is organized by subject and does not necessarily follow the
order of the interview. All information in this memorandum was provided by Grappo

•
during the interview unless explicitly stated or indicated otherwise .

Grappo held the position of Director, REA, from July 2001 through October 31,
2003. His new assignment, beginning November 1,2003, is as DCM, Riyadh, Saudi
Arabia. Grappo began his State Department career in 1985 and was initially posted to
Nicaragua ('85-'87), Portugal ('87-'90), and the Soviet desk in DC ('90-'92) .. After a
special 7ili floor assignment from '92-'93 and Arabic language training from '93-'95,
Grappo spent three years in Jordan as the economic counselor ('95-'98) and three years in
Muscat, Oman as the DCM ('98-01).

Organizational Issues

Grappo described REA as the office in NEA where all the "random" issues, i.e.,
issues not specific to anyone country, end up. NEA covers the region of Northern Africa
from Morocco to Egypt (excluding Sudan), the Arabian peninsula, the Levant, Iraq, and
Iran. The bureau does not cover Turkey. REA covers such issues as the multinational
force in Sinai, regional economic and commercial affairs, human rights, environmental,
narcotics, human trafficking, counterterrorism, and the like. (U)

Prior to 9111, Grappo does not believe the office did much on terrorist financing
although it was involved in money laundering, which was treated like any other economic
issues. Grappo does not recall doing anything on terrorist financing for the two or so
months after his arrival and before 9/11. From 9/11 - MaylJune 2002 Grappo spent
about 80% of his time on counterterrorism, the vast majority of which was on
counterterrorist financing (CfF). His deputy, Lee Litzenberger, also spent most of his

SI5CRET
 ,.SECRET

• time on CTF. In the summer of2002 NEA's approach to counterterrorist financing

transitioned from a regional one to a country-specific one and the work was shifted from
REA to the country desk officers. Middle Eastern countries were being dealt with on an
individual basis and programs and policies were tailored to a single country. Grappo's
involvement with counterterrorist financing dropped to about 10% and consisted of
addressing broader issues (e.g., how does the EU deal with the Middle East on terrorist
financing) or answering his colleagues' questions. At this point Lee Litzenberger and
Patrick Hafeman (sp?), an economic officer at NEA, were the main point people in NEA
oil counterterrorist financing. ~

After initial interagency meetings immediately post-9/11 at the NSC, the

interagency responsibility shifted to Treasury with David Aufhauser (GC, Treasury) as
the head of the NSC's PCC on terrorist financing (PCC). Within the State Department,
the issue was recognized as broader than the Middle East and therefore the Office of
Economic and Business Affairs (EB) took the lead on CTF and Tony Wayne (AJS, EB)
served as the main State representative. It was clear that EB would work with and lean
on both Office of the Coordinator for Counterterrorism (S/CT) and NEA. Grapponoted
that there was a great deal of coordination and cooperation among EB, S/CT, and NEA
on the issue of terrorist financing. Wayne took Grappo to those PCC meetings when the
Middle East was discussed, which was most of the time. Rarely, DAS Jim Larocco or
AlS Bill Bums (both ofNEA) would attend in lieu of Grappo. Grappo noted that his

•
office never did anything on terrorist financing without first consulting Frank Taylor, the
Coordinator for Counterterrorism and his folks at S/CT. ~

Interagency Policy and Issues

9/11 Classified Information

• SECRET 2
 8ECRE"F

• 9/11 Classified Information

• SB€RET 3
 sSECRET

• 9/11 Classified Information

Grappo acknowledged that he USG does not presently have enough resources
devoted to this issue. The intensity of the issues is such that a single individual cannot
both train other countries and investigate the issues. (U)

•
9/11 Classified Information

• 4
 ,-, ,

-8ECRE"f-

9/11 Classified Information

•
Grappo led the first interagency group to Saudi Arabia in December 2001. I His
trip followed upon a trip by AlS Bill Bums in November 2001, at which time Bums
delivered a list of general and specific questions to the Saudi government regarding
terrorist financing. Bums reported to Orappo that the Crown Prince had encouraged the
USO to send over a working group. I

9/11 Classified Information

9/11 Classified Information

• I Grappo's deputy, Lee Litzenberger, went on all the other trips.

SECRET 5
 SECRET

• 9/11 Classified Information

• SECRET 6
 .........

SECRET

•
9/11 Classified Information

•• SECRE~ 7
 . ,•... ",

8ECRE1=-

• 9/11 Classified Information

• SECRET 8