The limits of U.S. financial warfare.

• Author: Scheuer, Michael
• Position: Treasury's War: The Unleashing of a New Era of Financial Warfare - Book review

Juan C. Zarate, Treasury's War: The Unleashing of a New Era of Financial Warfare (New York: Public Affairs, 2013), 512 pp., $29.99.

America's Founding Fathers believed little else would matter if the government they were forming did not reliably protect the new republic from foreign and domestic threats while also ensuring the liberty and growing prosperity of those it was to govern and defend. If that were not the Republic's main and institutionalized organizing principle, the Founders believed, their effort to give it life would fail. The keys to success in ensuring national survival, liberty and prosperity were: stay out of debt; steer clear of foreign entanglements, alliances and wars that did not concern the United States; and avoid situations whether products of ill-considered policies, fatuous and feckless idealism, or leaders' inattention--that would lead to unnecessary wars and foreign military adventures, debt and eroded liberty. James Madison warned in the 1790s:

Of all the enemies to public liberty, war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debt and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended. Elsewhere, he added, "War is in fact the true nurse of executive aggrandizement."

Juan C. Zarate's new book, Treasury's War: The Unleashing of a New Era of Financial Warfare, shows how great a regression the Republic has undergone since the only-necessary-wars principle of the Founders' era. Zarate, who served in the George W. Bush administration as assistant secretary of the treasury for terrorist financing and financial crimes and is now a senior adviser at the Center for Strategic and International Studies, offers a detailed study about what might be called "all war, all the time." The author is described on the dust jacket of his book as "a chief architect of modern financial warfare," and he unveils a catalogue of America's financial-warfare adversaries, including Al Qaeda and other Islamist fighters; organized criminal groups, narcotics cartels and people smugglers; North Korea and Iran, with a short stopover in Libya; computer hackers; and obstructive, turf-conscious bureaucrats. What emerges is a stark reality: the Treasury Department is at war--and those involved in this financial warfare revel in it. Traveling the world to recover hoards of embezzled money, stop terrorist plots and confound North Korea's money managers, these financial warriors thwart the bad guys through an array of tools ranging from old-fashioned publicity--to "name and shame" evildoers--to electronic whizbangs. And they do so in an amiable way, which is fitting for a group of men and women portrayed as if they are all "above average," in the mold of the children of Lake Wobegon. Based on Zarate's characterization, they are all brilliant, hard-driving, friendly, striking, optimistic, garrulous, savvy, confident, eloquent, masterful and so on.

It must be said that Zarate and others in Treasury's war have accomplished some remarkable things for U.S. security-temporarily denying North Korea ready access to international financial markets; attacking the essential components of Iran's economy such as banks and oil; dismantling parts of the financial networks of Al Qaeda and other Islamist insurgent groups; and recovering many billions of dollars stashed away by Saddam Hussein and Muammar el-Qaddafi for the debauched retirements they never reached. Perhaps most interesting, Zarate explains how successful he and others at Treasury were in forging ties to powerful private-sector U.S. and European interests--banks, financial managers and organizations providing security for international financial transactions--that allowed effective joint attacks on targets designated by the U.S. president. The reader will come away from Treasury's War genuinely impressed by the tactical victories scored by those Zarate ably led and justly honors.

Zarate has written a useful and alarming book. Useful, because he instructs his readers about the wide range of lethal enemies the U.S. government has acquired in recent decades and, at times, motivated. And alarming because, as Zarate implies, the U.S. government has no national-security strategy worth the name. Resting complacently on the illusion that the tactical victories Zarate details will adequately defend the United States, Washington, under either party, continues to pursue a relentlessly interventionist foreign policy that cultivates more enemies and complements the strategies that our myriad foes have designed to seek our defeat. Sadly, at book's end Zarate turns out to be an advocate of intervention.

The rub in the book arises when it becomes...