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Officials Defend Bank Data Tracking

Amid privacy concerns, the Bush administration portrays the Treasury Department's secret program as crucial to the war on terrorism.

June 24, 2006|Greg Miller and Josh Meyer | Times Staff Writers

WASHINGTON — In response to the Sept. 11 attacks, the Treasury Department sought to enlist a reluctant ally. The world's banking industry long had been loath to give up data on its customers, so U.S. investigators issued a subpoena for just a narrow slice of information from a worldwide financial consortium.

The reply stunned Treasury officials.

The consortium couldn't extract the shards of data that U.S. terrorism analysts were looking for, so it offered something far more generous.

"They said, 'We'll give you all the data,' " Treasury Secretary John W. Snow said Friday during a news conference in which he defended the espionage program.

And just like that, intelligence teams that once had to scrape for scraps of data from individual banks were given keys to the international banking kingdom -- access to a vast database containing detailed records on billions of bank-to-bank money transfers around the world.

Disclosure of the arrangement by The Times and other media outlets prompted complaints from privacy advocates overseas and in the United States.

Silvana Koch-Mehrin, a member of the European Parliament, said the idea of U.S. intelligence agencies reviewing records on banking customers around the world "makes me uncomfortable.... The Bush administration is turning into a nasty Big Brother."

Pam Dixon of the World Privacy Forum, a San Diego research group, said the program was "just one piece of an emerging pattern" in which the U.S. government was pressuring corporations to give up data they were not willing to surrender before the Sept. 11 attacks.

"And once you have that," Dixon said during a radio interview, "that data can be kept forever and used for other purposes without oversight."

Administration officials spent much of Friday defending the operation as crucial to the war on terrorism.

In a speech in Chicago, Vice President Dick Cheney said that disclosure of the surveillance program would make it more difficult "to prevent future attacks against the American people." He said the program was "conducted in a way to guarantee and safeguard the civil liberties of the American people."

Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, who oversees the effort, said: "It has enabled us and our colleagues to identify terror suspects that we didn't know, as well as find addresses and other identifiers for those terrorists that we did know about."

Treasury officials provided details on the scope of the program Friday. Levey said the agency had used the data in conducting "at least tens of thousands, maybe hundreds of thousands of searches."

The cooperation from an industry known for guarding customer confidentiality with jealous intensity reflected just how profoundly Sept. 11 changed corporate mind-sets about collaborating with law enforcement and intelligence services.

The visceral effects of the attacks on the World Trade Center and Pentagon -- as well as subsequent strikes in Madrid, London and other cities -- created a willingness to work with law enforcement.

Amid this altered mood, the Bush administration moved swiftly in the weeks after Sept. 11 to collect swaths of data not only from the banking industry but -- in a separate program that generated headlines in recent months -- telecommunications firms as well.

But the enthusiasm for cooperating with authorities had limits.

Two years into the operation that Snow referred to as the Terrorist Finance Tracking Program, the banks were getting increasingly antsy.

"In 2003, [they] began to ask the question of how long this would go on," said a former senior government official familiar with the operation who spoke on condition of anonymity.

The Treasury Department had repeatedly sought to assure the Belgium-based banking consortium providing the data -- the Society for Worldwide Interbank Financial Telecommunication, or SWIFT -- that the records were being searched only for terrorist-related clues. But SWIFT executives "made the point that oral assurances were no longer enough," the former official said.

The concerns forced Treasury to make concessions, giving banks the ability to monitor how the information was being used.

But nearly five years after Sept. 11, the program continues. And each month, the Treasury Department issues a new subpoena to SWIFT under the International Emergency Economic Powers Act. That has produced the most expansive database on international financial transactions the United States has possessed.

Dixon, of the World Privacy Forum, said the administration's continued use of emergency powers was "very disconcerting." "We need firm lines drawn on how we use emergency powers in crisis situations," she said.

Snow reiterated Friday that the Treasury Department issued administrative subpoenas to compel SWIFT to turn over the data, and that under terms negotiated with SWIFT, intelligence analysts were allowed to access the records only for terrorism-related searches.

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