Implications of the bank data tracking

The arguing back and forth about the Bush Administration’s monitoring of international banking transactions continues with administration officials noting that the action is well within the executive powers and senators acknowledging that they were informed about the activity:

A secret program that allowed U.S. officials to examine hundreds of thousands of private banking records from around the world in search of terrorist ties has been “absolutely essential” to protecting the country from further attacks, Vice President Cheney said yesterday.

Outgoing Treasury Secretary John W. Snow said that the program, in effect since shortly after the Sept. 11, 2001, attacks, is the thing “I’m proudest of” in his tenure and insisted that strong safeguards protect the privacy of individual Americans. “It’s really government at its best,” Snow said at a news conference. “It’s responsible government. It’s effective government.”

Meanwhile the New York Times responded to criticism in an editorial this morning that it was all in good fun:

After the attacks on 9/11, when the terrorist threat seemed equally dangerous and amorphous, one of the few clear strategies for counterattack was to follow the money. Almost everyone, including this page, urged the Bush administration to be aggressive in shutting down the flow of cash to terrorist organizations, and to root out the people who were supplying it.

The administration went to work, and one very useful source of information turned out to be a banking cooperative known as Swift — Society for Worldwide Interbank Financial Telecommunication. It routes about $6 trillion a day among 7,800 financial institutions worldwide. An article by Eric Lichtblau and James Risen in yesterday’s Times — and similar stories in The Wall Street Journal and The Los Angeles Times — detailed how investigators have made use of Swift data to track potential terrorist financing. Government officials say the information has helped capture one important Al Qaeda operative abroad, and that it has assisted domestic investigations as well.

That sounds like good news. What’s worrisome is a familiar refrain. Despite a compliant Congress, which was eager to give the administration all the investigative tools it requested, the White House has chosen to operate outside any real scrutiny, and not to seek explicit authorization for what has clearly become a permanent program.

Toujours l’attaque!

Here’s the bit from the Washington Post piece cited that I found most interesting:

SWIFT’s extensive U.S. operations enabled Treasury to issue what the organization called “compulsory” subpoenas in this country, officials said yesterday. But Levey insisted that stringent safeguards were put in place to protect banking privacy and to ensure that U.S. intelligence had access only to the records of persons whose possible terrorist connections it could prove.

“We started with really narrowly crafted subpoenas all tied to terrorism,” Treasury Secretary Snow said. But because SWIFT “didn’t have the ability to extract the particular information from their broad database . . . they said, ‘We’ll give you all the data.’ ” Once a suspect was identified, U.S. officials had to present SWIFT with evidence of terrorist connections — in the form of a name on a watch list, or a classified cable — and were allowed to access information tied only to that name.

SWIFT auditors and Booz Allen Hamilton Inc., an independent firm contracted by the U.S. government, supervised all the searches, Levey said. “The audit reports have been issued periodically since the beginning of the program, and they have found consistently that the government is not abusing this data, that we are using it for counterterrorism purposes.

Leaving aside for a moment that the claim attributed to SWIFT i.e. that they weren’t able to extract the particular information, is in all likelihood hooey (I assume that they just couldn’t be bothered), Pundita, at my connivance pointed out something interesting:

The uses include catching US companies creating undocumented offshore shell corporations, international crime syndicates doing money laundering, and rouge regimes purchasing stuff for nukes.

Yes indeed, it’s not only the terrorists and the ACLU who are huffy about US surveillance of SWIFT.

The controversy is part of the wider picture about the limits of globalization and democracy.

So even with the safeguards in place I suspect we’ll see fallout from this particular surveillance program that goes well beyond tracking down terrorist financing. As a college roommate of mine once put it “If you don’t want people to uncover your secrets, it’s better not to have any”.

UPDATE

Victor Comras at Counterterrorism Blog notes that public knowledge of the monitoring of international financial transactions is no new thing:

But reports on US monitoring of SWIFT transactions have been out there for some time. The information was fairly well known by terrorism financing experts back in 2002. The UN Al Qaeda and Taliban Monitoring Group , on which I served as the terrorism financing expert, learned of the practice during the course of our monitoring inquiries. The information was incorporated in our report to the UN Security Council in December 2002. That report is still available on the UN Website.

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The fact is that there is really very little privacy today when it comes to the international transfer of funds. That is why criminal networks, money launderers and terrorist groups have increasingly turned to Hawalas and cash couriers for such transactions.