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International banking records - some facts

Submitted by Pat on Fri, 06/23/2006 - 1:28pm

The blogosphere is buzzing over today's New York Times report about the "secret" program to access bank transaction data on thousands of Americans and "others in the United States". Others? Hmmm... like terrorists maybe?

Here at Stubborn Facts, our job is mostly to wade through the media spin and the rantings of the BSphere to give you the actual facts about what the program is. I will, mostly, leave it to others to explain just how despicable the New York Times' decision to publish this story was.

First, there is SWIFT, which stands for "Society for World-wide Interbank Financial Telecommunications". [source]. Swift is, basically, how money is transferred between banks in different countries. Swift isn't a bank, but a cooperative venture of many banks to provide "secure, standardised messaging services and interface software to 7,800 financial institutions in more than 200 countries". Swift was founded in 1973 and is a Belgian corporation, subject primarily to Belgian law.

According the NYT article itself, only a small fraction of the financial transactions handled through the Swift network are between banks in the U.S. Almost all Swift transactions are between banks in different countries. The NYT article does not allege that entirely intra-American financial transactions were obtained. This is potentially relevant because the 4th Amendment (which is probably not implicated here anyway as the U.S. Supreme Court has said there is no constitutional right to privacy in bank records) imposes different requirements on international searches than on domestic ones.

Even according to the NYT article, the records sought are not pattern-matching "fishing expeditions", although one anonymous leaker claims that the U.S. obtained the entire Swift database in the immediate atermath of 9/11. Rather, the U.S. discovers the name of a terrorist, then uses the Swift records to see who was transferring the money to the terrorist. Once they find that person, they look at his records to see who else he was transferring money to, in order to find other terrorists he may have financed.

So here's what's involved with the searches at issue: a customer of the bank of Sudan (for example) transfers money to a customer of the bank of Indonesia. That customer uses the money to buy the materials for a suicide bomb used in an attack. The Treasury Department and the CIA use the Swift records to identify the guy in the Sudan who funded the Indonesian attack. Then they look at that guy's other financial transactions to see who he is funding in, say, the United States, so they can investigate those people before they can actually finish building their own suicide bombs. The program does not, cannot, track records of routine financial transactions. Information about whether you withdrew $500 at the ATM in the local stripjoint is not in the database. It is only transactions between banks, and almost exclusively transactions between banks in different countries.

According to the Treasury Department and Swift itself, the subpoenas were lawfully issued, and the scope of the subpoenas was limited pursuant to negotiations with Swift officials. As time passed, according to the NYT article, additional safeguards were imposed. Recently, Swift officials reviewed individual search requests along with U.S. officials. An outside auditor was engaged to look for inappropriate activity. One employee was fired for an improper search. The program is used only for terroism investigations and the data is not allowed to be used for tax fraud, drug trafficking, or other criminal activity. The program was disclosed to the appropriate members of Congress.

Not a single person in the NYT article says flatly that the program is illegal. One anonymous leaker said the program "arguably complies with the letter of the law, if not the spirit." Even the outside legal expert on banking privacy sought by the Times for comment could only muster: "There has to be some due process. ... At an absolute minimum, it strikes me as inappropriate."

So there you have it. International transactions. No claim that the program is actually illegal. Proven effective at catching terrorists. But the editor of the New York Times decided that you have a "right to know", regardless of the law and decisions made by elected officials. I guess terrorists don't really ever use the international banking system to transfer funds to finance killing innocent civilians; it's all just an excuse to bring about Big Brother.

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