The Bush Administration said Thursday that the war on terrorism includes measures to prevent proceeds from pirated movies and music from becoming a vehicle for financing terrorist networks.

Deputy Assistant Attorney General John Malcolm testified on Capitol Hill that while there was no widespread evidence such a thing is happening, it is a natural conclusion to draw. He said the world's multibillion-dollar piracy trade has been linked to organized crime syndicates, which in turn sometimes support terrorist activity. "On this point, I want to be crystal clear: Stopping terrorism is the single highest priority of the Department of Justice (news - web sites). We are constantly examining possible links between traditional crimes and terrorism, and we will continue to do so," Malcolm told a House Judiciary Subcommittee.

The congressional hearing wasn't the only attention paid to media piracy on Thursday. After testifying alongside Malcolm, Motion Picture Assn. president and CEO Jack Valenti and Recording Industry Assn. of America chairwoman and CEO Hilary Rosen joined U.S. Trade Representative Robert Zoellick in the U.S. Capitol to announce the creation of the Entertainment Industry Coalition for Free Trade. The coalition, which includes all the music and movie conglomerates, will educate key policy players and lawmakers about how international trade negotiations help lay the groundwork for strong copyright laws in foreign countries.

Zoellick, while not a member of the coalition, agreed the entertainment industry is one of the country's crown jewels and that music and movies are "borderless" in their appeal. He agreed piracy must be aggressively combated. Piracy, whether domestic or international, has become an all-consuming issue for Rosen and Valenti. The music business was hit hard by the rise of peer-to-peer Internet sites like Napster (news - web sites), and Valenti says the movie industry could face the same fate. Show business is trying to raise public awareness about piracy, with Valenti traveling to universities and colleges. He and Rosen say many people may not even realize they are stealing when they download a pirated song or movie.

At the congressional hearing, Valenti said the Internet is hardly the only digital threat, pointing to the thriving DVD and CD piracy business in Russia and many Asian nations. Overseas piracy is so pervasive, Valenti argued, that the international market for legitimate product is threatened. Valenti said the illicit industry is dominated by "highly organized, violent international criminal groups." Showbiz will never be able to penetrate these groups alone or to trace "the dark paths to which those profits are put," Valenti testified.