Tester Confronts Wall Street CEOs on Preventing Financing of Terrorist Organizations and Foreign Adversaries

Senator says executives have legal responsibility to prevent hostile actors like Iran from financing illicit activity with money going through their banks

During a Senate Banking Committee hearing today, U.S. Senator Jon Tester directly confronted the CEOs of top Wall Street banks about the procedures they have in place to protect American national security by preventing money that goes through their institutions from supporting terrorist organizations and foreign adversaries. 

In his opening question, Tester stressed that major U.S. banks must do more to prevent the financing of terrorist organizations: “I serve as the chair of the Defense Appropriations Committee,” said Tester. “I spend a fair amount of my time thinking about national security, how to protect against folks who want to do this nation harm – terrorist organizations as well as foreign adversaries. You all have responsibilities, including legal responsibilities, to make sure that you’re preventing hostile governments like Iran that would like to see the US not exist from financing terrorist operations and other illegal activities with funds that have gone through your institutions… So the question is, how are you as chief executives making sure that procedures are in place and that they’re followed so that your institutions do not end up inadvertently financing illicit activity?”

Additionally, Tester specifically pressed the CEO of Wells Fargo on violating U.S. sanctions and preventing bad actors from abusing their services:“Earlier this year, Mr. Scharf, Wells Fargo paid nearly $100 million in penalties to the [Federal Reserve] and [Office of Foreign Assets Control] for violating sanctions against Iran, Syria, and Sudan. I think we can all agree that’s not a good thing. But what is your bank doing to make sure that these sanction violations never happen again?”

As a member of the Senate Banking Committee, Tester has led the charge to ensure bank executives are held accountable. Earlier this year, Tester urged federal financial regulators to use every tool at their disposal to claw back reported bonuses received by executives from failed banks.

In October, Tester joined a bipartisan group of Senators in calling on the Biden Administration to make it the official policy of the United States to freeze $6 billion in Iranian assets in the wake of Hamas’s deadly terrorist attacks on Israel.