What the Government Knows
While an overseas program to track bank records has unleashed a political storm, the domestic Patriot Act has already made a wealth of financial data available to U.S. law enforcement agencies.
WEB EXCLUSIVE
By Michael Isikoff
Newsweek
Updated: 2:46 p.m. PT June 26, 2006
June 26, 2006 - Over the last four years, U.S. law enforcement agencies have gained access to over 28,000 financial records inside the United States under a little known provision of the USA Patriot Act that parallels the secret international bank data program disclosed by news organizations last week, Treasury Department records show.
The disclosure of the overseas program—under which Treasury Department officials have tapped into the records of a vast Belgian-based international financial database called Swift (Society for Worldwide Interbank Financial Telecommunications)—has kicked up a storm of controversy. Some critics have decried the program as another example of the administration's invasion of privacy in the name of the war on terror. At the same time, President Bush today condemned as "disgraceful" the disclosure of the operation, which intended to help the government track overseas money movements of suspected terrorists. "For people to leak that program, and for a newspaper to publish it, does great harm to the United States of America,” Bush told reporters in Washington.
But the international program is only one part of a much broader, if little publicized, Treasury Department effort to probe suspect financial records—including thousands of bank accounts, wire transfers and other transactions involving individuals, companies and nonprofit organizations inside the United States.
Under a section of the USA Patriot Act passed by Congress in the aftermath of the September 11 terror attacks, Treasury officials were given new powers to direct U.S. banks and other financial institutions to search their records for accounts or transactions involving any individuals or groups who come under scrutiny during investigations of terrorism and money laundering cases.
Although it has received little attention, the Patriot Act program has produced a wealth of previously unavailable financial data that has been shared with U.S. law enforcement agencies—without any notice to the account holders who are being investigated. Since the fall of 2002, when the program began, U.S. Financial Crimes Enforcement Network (FINCEN)—an arm of the Treasury Department—has directed searches of 4,397 "subjects of interest" and received reports back on 28,463 accounts and financial transactions, according to recent Treasury records.
Once there is a positive "match" showing a suspect individual or company has conducted a financial transaction with a U.S. bank, FINCEN then notifies the law enforcement agencies, which can use the existence of a reported "match" as the basis for a grand jury or administrative subpoena. The Treasury records show that U.S. agencies have used the program to obtain 1,206 grand jury subpoenas and 328 administrative subpoenas. It has also led, according to the Treasury records, to 90 indictments, 79 arrests and 10 convictions.
Treasury Department officials last week cited those figures as evidence that the Patriot Act program has become an important tool that is being increasingly used by U.S. law enforcement agencies to obtain domestic financial records.
**so the Treasury Dept leaked as well?**
Robert Werner, the director of FINCEN, also told NEWSWEEK in an interview that data gleaned from the secret Swift program involving overseas bank records can then used by Treasury to request record searches of banks and broker dealers inside the United States under the Patriot Act program—one way in which the two efforts can complement each other. "You might have information from the Swift data that allows you to track a transaction inside the United States" under the Patriot Act program, Werner said.
The complementary nature of the two programs—one secret and the other entirely public (even if barely known to the general public)— puts a different context on the furor over the Swift program. After the Swift program was disclosed last week—in news stories by the Times, Wall Street Journal and Los Angeles Times—the ACLU decried the "financial spying" effort as "another example of the Bush administration's abuse of power."
But the Swift program is not significantly different—at least in concept—from the Patriot Act program. And the Patriot Act program involves purely domestic financial records, presumably an issue that would be of greater concern to American citizens who were concerned about the privacy of their financial records.
As outlined by Treasury Department officials last week, the overseas program is triggered by intelligence information about possible financial activity by suspected terrorists. Once Treasury receives the leads, it then obtains records on the suspected activity from Swift. Swift, a Brussels-based financial industry consortium, electronically processes billions of international wire transfers and money movements conducted among banks, brokerages and investment funds around the world.
Treasury Department officials insisted last week that the Swift program was closely monitored by an outside auditing firm to insure that the record searches requested by Treasury only involves legitimate terror suspects. But even though it was originally conceived as a tool for terror fighting, the Patriot Act program is actually broader than that and now frequently involves record searches in law enforcement cases that have nothing to do with terrorism.
This is because, as Congress wrote it, FINCEN searches under the Patriot Act may be for terrorism and money laundering cases—and money laundering is frequently present in a wide range of criminal activity unrelated to terrorism. Indeed, according to the recent Treasury Department figures, federal law enforcement agencies have requested FINCEN searches for financial records in a total of 536 cases—63 percent of which, or 342, involved suspected money laundering activity as opposed to terrorism. A Treasury Department "fact sheet" on the Patriot Act program highlights the fact that the program has been used in cases as diverse as cigarette smuggling, identity theft, investment fraud, and drug trafficking. In December 2003, Newsweek reported that the program had been used by the FBI office in Las Vegas to obtain the financial records of Clark County commissioners suspected of taking bribes from a local strip club operators.
After the disclosure, Treasury officials said last week, FINCEN has tightened up on its criteria for processing searches requested by law enforcement agencies and that many requests, 100 out of about 650 this year, are now rejected. "It has to be true money laundering," Werner said.
URL: http://www.msnbc.msn.com/id/13561813/site/newsweek/
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