WASHINGTON (CNNMoney.com) -- You probably know the Treasury Department as the agency that brought you the bank bailout, the AIG rescue and, of course, the IRS.
But Treasury is also one of the key players in the war on terrorism and smack in the middle of nearly every major international conflict in which the United States is involved. The office is also playing an increasingly critical role at the center of U.S. foreign policy strategy in Korea, Iran, Afghanistan and throughout the Middle East.
In particular, Treasury has been waging a quiet economic war against Iran.
The department this month expanded sanctions on Iran to include several companies and others affiliated with Iran's Islamic Revolutionary Guard Corps for alleged involvement in nuclear and missile programs.
Inside Treasury, the work is done by a low-profile but high-impact unit known as the Office of Terrorism and Financial Intelligence.
"Years ago, if anybody had said that Treasury would be at the center of all these national security issues, we wouldn't have believed you," said Matthew Levitt, who used to help run the department and now directs the Washington Institute's Stein Program on Counterterrorism and Intelligence.
Treasury is the world's only government finance agency with its own in-house intelligence unit. It has offices as far flung as Riyadh, Islamabad, Kabul and Abu Dhabi.
They're the ones seizing or freezing assets of suspected bad guys -- from terrorists to drug runners. They're a part of the U.S. intelligence apparatus, sharing information with the CIA and the FBI, among others.
"Treasury is the only finance ministry in the world to have an intel shop that is very much focused on financial intelligence, getting access to information about the networks that support terrorists, weapons proliferation or narcotics traffickers," said David Cohen, assistant secretary for terrorist financing.
For the past few years, the intelligence office has been pressuring big banks worldwide to stop doing business with Iran. The aim is to cut funding for Iran's nuclear efforts and groups like Hezbollah and Hamas.
"They're really responsible for crippling the Iranian economy," said Glenn Simpson, a senior fellow in corruption and transnational crime at the International Assessment and Strategy Center.
The department is headed by Treasury Undersecretary Stuart Levey, who has become world renown. He was among the few high-ranking Bush administration appointees that President Obama asked to stick around.
In 2008, Levey was decried by an ousted Iranian finance minister who in a farewell speech publicly complained about Levey and an "exhausting chess battle with the U.S.Treasury," according to a translation provided by an American Enterprise Institute policy analyst.
Michael Jacobson, a former senior adviser in the intelligence office, said that the president's decision to keep Levey on sent a powerful signal abroad.
"It was definitely a message, particularly to Iran: We're talking about engagement but we're keeping on the guy who is responsible for the tougher moves as well," said Jacobson, a counterterrorism and intelligence senior fellow at the Washington Institute's Stein Program on Counterterrorism and Intelligence.
Sanctions have always been a big stick available in the U.S. foreign policy arsenal, but the Treasury's intelligence office goes further, Cohen says.
It pressures international banks to cut ties that the United States believe are tainted by terrorism.
"Frankly, you don't have to tell them the next point: That it would be really bad for their reputation if it turned out they were involved in illicit transactions," Cohen said. "Financial institutions recognize that their reputation is probably their most critical asset."
Treasury's pressure often has a ripple effect. After the office blacklisted two state-owned Iranian banks, Britain, Australia and other countries followed suit.
The Office of Terrorism and Financial Intelligence was put together six years ago following the big federal agency shuffle that created the Department of Homeland Security.
The office has more than 700 attorneys, investigators, analysts and financial experts. And the financial intelligence unit is housed with other Treasury teams, such as the financial crimes unit, that need intel on alleged dirty money transactions.
Among their jobs is leading the Illicit Finance Task Force, which works with Afghanistan and Pakistani officials to disrupt improper financial transactions and help the governments build up their own financial crime-fighting teams.
One of their biggest accomplishments came in December when the Credit Suisse Group agreed to pay a $500 million penalty for violating U.S. sanctions against Iran.
The Credit Suisse settlement was the largest the office had ever reached. It came about in no small part because Treasury, working with the Justice Department, had turned up evidence that the company had developed a how-to pamphlet for Iranian clients explaining how to fill out payment messages in a way that avoided triggering U.S. filters.
Sometimes the office's work has drawn controversy.
For example, since the Sept. 11 terrorist attacks, Treasury has had access to a database of intra-European financial transactions, despite protests about privacy violations. The United States has been working with the European Union council to come up with a final agreement that would allow Treasury continued access while assuaging privacy concerns.
Cohen assures that Treasury only uses the database when it has a reason to believe a person is involved in terrorism and takes safeguards to assure privacy protections.
Ferreting out information about potentially illegal financial transactions has become highly valued by the U.S. intelligence community. One reason: It can prove to be powerful evidence because there's less room for misinterpretation, as opposed to wire taps of conversations that might be held in code.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.83%||3.86%|
|15 yr fixed||2.95%||2.94%|
|30 yr refi||3.95%||3.98%|
|15 yr refi||3.05%||3.05%|
Today's featured rates:
Walmart, facing higher labor costs due to raise in starting wage, is cutting workers' hours at some stores. More
A conservative think tank is sponsoring a Times Square billboard as a tribune to its opposition to a new minimum wage rule for fast food workers in New York state. More
Looking for something good on Netflix? These entertaining films will help you learn more about finance and investing. More