The man behind the Treasury's use of financial warfare will take his playbook to the U.S. spy agency.
- By Keith JohnsonKeith Johnson is Foreign Policy’s acting managing editor for news. He has been at FP since 2013, after spending 15 years covering terrorism, energy, airlines, politics, foreign affairs, and the economy for the Wall Street Journal. He has reported from Europe, the Middle East, Africa, and Asia and, contrary to rumors, has absolutely no plans to resume his bullfighting career., Jamila TrindleJamila Trindle is a senior reporter who covers finance, economics and business where they intersect with national security and foreign policy. Her beat spans everything from the economic underpinnings of conflict to sanctions, corruption and terror finance. Before coming to Foreign Policy magazine, Jamila reported for the Wall Street Journal’s Washington bureau, covering financial regulation and economics. She has also worked as a foreign correspondent in China, Indonesia and Turkey as a freelancer for NPR, Marketplace, The Guardian and others. She moved back to the U.S. to cover the post-crisis economy for PBS in 2009.
David Cohen, the driving force behind the U.S. Treasury Department’s increasingly sophisticated use of financial warfare, has been tapped as deputy director of the Central Intelligence Agency.
The White House said Friday that it was nominating Cohen, 52, to replace the current No. 2 at the CIA, Avril Haines, who is moving to the White House to become deputy national security advisor to President Barack Obama.*
“He is an outstanding public servant with whom I have worked closely over the past several years. David brings a wealth of experience on many of the issues that we focus on as an agency,” said CIA director John Brennan in a statement.
The move represents something of a break with the agency’s tradition of filling its deputy spot with CIA insiders well-versed in the agency’s traditional intelligence-gathering and covert operations activities. Cohen’s nomination highlights the growing importance of financial warfare, such as sanctions, to U.S. national security missions.
While at Treasury, Cohen has spearheaded efforts to bring Iran to the negotiating table by squeezing its financial and energy sectors, pushed back against Russian aggression in Ukraine with targeted sanctions, and led the fight to choke off the financial flows that fund the homicidal operations of the Islamic State.
“This may be the final ensconcing of Treasury’s tools in the national security complex,” Juan Zarate, a former Treasury assistant secretary and deputy national security advisor in the George W. Bush administration now at the Center for Strategic and International Studies, told Foreign Policy. “The move just underscores the fact that Treasury now sits at the heart of the national security establishment.”
Even so, Treasury’s ability to harness financial tools for national security purposes is still in many ways a work in progress. Cohen has acknowledged that sanctions, which have become a go-to weapon against everyone from Boko Haram to North Korea, are not particularly effective against the latest threat to the United States: the Islamic State, also known as ISIS and ISIL.
“As for disrupting the revenue that ISIL generates from extortion and other local criminal activities, we recognize that Treasury’s tools are not particularly well-suited to the task,” Cohen said in a speech in October.
Cohen’s biggest achievements at the Treasury Department — two unprecedented sanctions programs against Iran and Russia — are still being tested. Crashing oil prices have apparently caused more economic pain for Russia in the past year than U.S. and Western sanctions. And while the Obama administration has credited the restrictions on Iran’s finance and energy sectors with bringing Tehran to the table to negotiate dismantling the country’s nuclear program, a deal has not yet been reached, raising questions about the sanctions’ ultimate effect.
The nomination was first reported by the Washington Post, which noted that the lingering fallout from past instances of CIA torture may have helped tip the scales for an outsider to take the No. 2 spot.
But Cohen’s expertise itself could help the CIA adjust to new threats in the future, especially when it comes to dealing with looming challenges in cyber warfare and asymmetric threats, such as those posed by transnational actors and terrorist groups.
“By naming Cohen as his new deputy director, John Brennan [is] acknowledging the centrality of disrupting terrorist financing and the challenges we face in isolating regimes that violate international norms,” Rep. Adam Schiff, the top Democrat on the House Intelligence Committee, said in a statement.
Zachary Goldman, who worked with Cohen at Treasury as a policy advisor on the Iran sanctions, agrees. “Thinking about ways to leverage economic power has become a crucial part of how to think about any national security problem of any importance,” said Goldman, who is now the head of the Center on Law and Security at NYU School of Law.
John Hudson contributed to this report.
*Correction, Jan. 9, 2015: David Cohen’s nomination to be deputy director of the CIA does not require Senate confirmation. An earlier version of this article mistakenly said it required Senate confirmation. (Return to reading.)
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