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U.S. Secretly Tracks Global Bank Data

The Treasury Dept. program, begun after the Sept. 11 attacks, attempts to monitor terrorist financing but raises privacy concerns.

June 23, 2006|Josh Meyer and Greg Miller | Times Staff Writers

WASHINGTON — The U.S. government, without the knowledge of many banks and their customers, has engaged for years in a secret effort to track terrorist financing by accessing a vast database of confidential information on transfers of money between banks worldwide.

The program, run by the Treasury Department, is considered a potent weapon in the war on terrorism because of its ability to clandestinely monitor financial transactions and map terrorist webs.

It is part of an arsenal of aggressive measures the government has adopted since the Sept. 11 terrorist attacks that yield new intelligence, but also circumvent traditional safeguards against abuse and raise concerns about intrusions on privacy.

Under this effort, Treasury routinely acquires information about bank transfers from the world's largest financial communication network, which is run by a consortium of financial institutions called the Society for Worldwide Interbank Financial Telecommunication, or SWIFT.

The SWIFT network carries up to 12.7 million messages a day containing instructions on many of the international transfers of money between banks. The messages typically include the names and account numbers of bank customers -- from U.S. citizens to major corporations -- who are sending or receiving funds.

Through the program, Treasury has built an enormous -- and ever-growing -- repository of financial records drawn from what is essentially the central nervous system of international banking.

In a major departure from traditional methods of obtaining financial records, the Treasury Department uses a little-known power -- administrative subpoenas -- to collect data from the SWIFT network, which has operations in the U.S., including a main computer hub in Manassas, Va. The subpoenas are secret and not reviewed by judges or grand juries, as are most criminal subpoenas.

"It's hard to overstate the value of this information," Treasury Secretary John W. Snow said Thursday in a statement he issued after The Times and other media outlets reported the existence of the Terrorist Finance Tracking Program.

SWIFT acknowledged Thursday in response to questions from The Times that it has provided data under subpoena since shortly after Sept. 11, 2001, a striking leap in cooperation from international bankers, who long resisted such law enforcement intrusions into the confidentiality of their communications.

But SWIFT said in a statement that it has worked with U.S. officials to restrict the use of the data to terrorism investigations.

The program is part of the Bush administration's dramatic expansion of intelligence-gathering capabilities, which includes warrantless eavesdropping on the international phone calls of some U.S. residents. Critics complain that these efforts are not subject to independent governmental reviews designed to prevent abuse, and charge that they collide with privacy and consumer protection laws in the United States.

Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists, said the SWIFT program raises similar issues. "It boils down to a question of oversight, both internal and external. And in the current circumstances, it is hard to have confidence in the efficacy of their oversight," he said. "Their policy is, 'Trust us,' and that may not be good enough anymore."

A former senior Treasury official expressed concern that the SWIFT program allows access to vast quantities of sensitive data that could be abused without safeguards. The official, who said he did not have independent knowledge of the program, questioned what becomes of the data, some of it presumably related to innocent banking customers.

"How do you separate the wheat from the chaff?" the former official said. "And what do you do with the chaff?"

More than a dozen current and former U.S. officials discussed the program on condition of anonymity, citing its sensitive nature.

The effort runs counter to the expectations of privacy and security that are sacrosanct in the worldwide banking community. SWIFT promotes its services largely by touting the network's security, and most of its customers are unaware that the U.S. government has such extensive access to their private financial information.

U.S. officials, some of whom expressed surprise the program had not previously been revealed by critics, acknowledged it would be controversial in the financial community. "It is certainly not going to sit well in the world marketplace," said a former counterterrorism official. "It could very likely undermine the integrity of SWIFT."

Bush administration officials asked The Times not to publish information about the program, contending that disclosure could damage its effectiveness and that sufficient safeguards are in place to protect the public.

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