BOB EDWARDS, host:  

The Bush administration promises to wage a financial war against terrorism. Washington is especially eager to get at funds controlled by exiled millionaire Osama bin Laden, suspected of masterminding last week's attacks. NPR's Kathleen Schalch reports. 

KATHLEEN SCHALCH reporting:   US officials say they're looking at the big picture. The Treasury Department has created a foreign terrorist asset tracking center, and Jimmy Gurule, the Treasury's undersecretary for enforcement, says its mission is to shut down the terrorists' financial bases and funding operations.

Mr. JIMMY GURULE (Undersecretary for Enforcement, Treasury Department): We're going to be following the money trail wherever it leads.   

SCHALCH: The FBI has asked banks to search for any transactions involving people wanted in the attacks.  Financial investigator Michael Kessler of Kessler International says these records may provide clues about what the terrorists could be planning next. But hunting for them won't be easy.   

Mr. MICHAEL KESSLER (Kessler International): What's going to happen is that we're going to get to a point in the trail where everything is going to start becoming mucky. 

SCHALCH: Federal officials have actually been trying to track and freeze terrorists' assets for years. After the 1998 embassy bombings in Africa, they've trained their sights on Osama bin Laden in particular. William Weschler advised the Clinton administration on money laundering and chaired the National Security Council's Interagency Group on Osama bin Laden's Financial Network.

Mr. WILLIAM WESCHLER (Former Chair, Interagency Group on Osama bin Laden's Financial Network): It's not just his own funds. It's monies that he raises from people who don't even know that their money is being diverted sometimes, sometimes through the guise of Muslim charities. But money that's intended for orphans ends up going for bombs instead.

SCHALCH: Weschler says some charities are secretly tapped by terrorist cells. Some are front organizations. Some fund both good works and terrorism. Donors range from large corporations in the Middle East to immigrants living in Europe and the US. Money is funneled through places in the Middle East and elsewhere, where paper trials may vanish and the line between terrorist and ordinary business transactions may be blurred, in part because people rely on cash.

Mr. WESCHLER: It's not uncommon for totally legitimate people to walk around with briefcases full of money, for someone to buy something on the order of a car with cash.

SCHALCH: And investigators suspect that much of the money used to fund terrorism travels through a completely underground banking system known as Hawala. Many ordinary people use it to transfer funds without paying expensive fees and bribes. They give money to a broker in one country, who will contact a broker in another country, who in turn gives that amount of money to someone else. Rayburn Hess(ph), a former chief of financial intelligence at the US State Department says these brokers are almost always relatives.

Mr. RAYBURN HESS (Former Chief of Financial Intelligence, US State Department): Unless you're part of that particular circle, it's very difficult to penetrate it.

SCHALCH: Things are murky, even inside terrorist organizations. Operatives may not know where the money they use is coming from because the people who move, invest and distribute it often belong to separate financial cells. Again, Rayburn Hess.

Mr. HESS: The financial cells, the way that they're structured, answer to the ultimate leader. Most other people that might be in a terrorist organization would have no idea who the financiers were.

SCHALCH: Hess believes it is possible to cut off the terrorists' funds, but it may mean setting aside current notions of bank secrecy and financial privacy and leaning hard on other countries where regulations are lax. But experts like William Weschler are cautious.

Mr. WESCHLER: As difficult as a military victory is going to be, it'll be even more difficult to get a final victory over the financial network.

SCHALCH: And, he says, it will take time. Kathleen Schalch, NPR News, Washington.

EDWARDS: Coverage of the aftermath of last week's terrorist attacks continues in a moment with NPR's Neal Conan. This is MORNING EDITION from NPR News. I'm Bob Edwards.