U.S. used broad subpoenas to obtain banking data


Federal investigators gained access to reams of personal banking information without court approval by issuing broad administrative subpoenas, a legal tool historically associated with far less sensitive regulatory probes and one that privacy advocates say has been abused in the U.S. counterterrorism campaign.

The Bush administration insisted yesterday that the secret program, which has tracked millions of financial transactions since shortly after the Sept. 11 attacks, has proved invaluable in blocking funding to terrorist networks. Treasury Secretary John W. Snow called the program "government at its best," while Vice President Dick Cheney criticized the news reports that disclosed its existence.

But new details about the program, which followed recent disclosures about warrantless wiretaps and the possible collection of phone records on millions of Americans, touched off fresh criticism of the administration's efforts to expand counterterrorism powers.

Yesterday some privacy advocates and civil libertarians questioned, among other things, last year's aggressive push by Justice Department officials and the president to allow FBI agents to use administrative subpoenas to more quickly gather banking and other personal records - even as the secret CIA-Treasury Department program was tracking much of the same information.

"There was a lot of debate about the FBI getting access to bank records, but it turns out that instead of using the FBI and the authority under the Patriot Act, the government is using the Treasury Department and completely separate authority to do it in secret," said Kate Martin, director of the Center for National Security Studies.

"Regardless of the strength of their legal argument, the administration has an obligation to be up front with the Congress and the public," she added. "And it appears that they deliberately withheld this in that debate."

On different fronts, administration officials defended the financial tracking program yesterday as an important tool in the fight against terrorism and lamented its disclosure through reports yesterday in the Los Angeles Times, The New York Times and The Wall Street Journal. According to the newspapers, the secret program had allowed counterterrorism analysts access to track virtually all international financial transfers through the database of a Belgium banking firm, known by the acronym SWIFT.

"What I find most disturbing about these stories is that some of the news media take it upon themselves to disclose vital national security programs, thereby making it more difficult for us to prevent future attacks against the American people," Vice President Dick Cheney said at a political lunch in Chicago. "That offends me."

In Washington, the Treasury Department's top counterterrorism expert told reporters that the money tracking system had been a "very, very powerful program" and had allowed investigators to conduct "at least tens of thousands, maybe hundreds of thousands of searches."

Stuart Levey said he could not publicly discuss specific instances where the program had helped block a terrorist group. "I can say this," he said. "We've had a number of terrorism investigations that have ended successfully and a number of attacks that we've been fortunate enough to avert. And in very many of those successful counterterrorism operations, this program has played a vital role."

Levey said the Treasury Department obtained information from the financial database through a series of administrative subpoenas, issued under the authority of a 1977 U.S. law focused primarily on economic sanctions against rogue countries. The law, known as the International Emergency Economic Powers Act, allows the president to launch broad financial investigations, and Levey said, "We issue such subpoenas regularly, and our authority to do so has never been seriously questioned."

Traditionally, though, administrative subpoenas have served a much narrower role, according to legal analysts and a detailed report last year by the Congressional Research Service. U.S. law provides more than 300 instances where federal agencies are permitted to issue such subpoenas, which do not require prior approval from a judge but can be subject to a court challenge.

There are no uniform regulations for issuing the subpoenas, which require only the approval of an agency official. Partly because of those loose guidelines, administrative subpoenas have typically been used as a tool of regulators - to help Department of Agriculture officials inspect meat packing plants, for instance, or to investigate a few specific crimes, such as medical fraud.

"The target of an administrative subpoena, typically, is the business that's engaged in wrongdoing," said Lisa Graves, senior counsel for legislative strategy at the American Civil Liberties Union and a Justice Department official during the Clinton administration. When the subpoenas are used to obtain third-party information, she said, there is less incentive for an entity such as SWIFT to challenge the disclosure.

"It's not their data, it's not about them per se, so all of the equities and the inherent checks of an administrative subpoena are basically missing in this other national security context," Graves said.

As the Bush administration pushed last year for Congress to renew the counterterrorism provisions in the Patriot Act, it also pushed for FBI officials to have the power to issue administrative subpoenas in criminal investigations. Congress did not go that far, amid concerns that the broader powers would lead to privacy intrusions.

Instead, lawmakers expanded the ability of FBI agents to issue "national security letters," which are similar to administrative subpoenas but do not carry the same force in court. The bureau has made broad use of that power: Statistics disclosed in late April showed that the FBI has issued in the past year 9,254 national security letters to demand bank, credit card, Internet or other business records for 3,501 citizens and others living in the United States.

The trend has troubled privacy advocates, who questioned yesterday how the financial information in the Treasury Department program was collected and whether it is stored or destroyed at the end of a specific investigation.

"Of course the government needs to get the information necessary to protect the American people and to fight terrorism," said Nancy Libin, staff counsel for the Washington-based Center for Democracy and Technology. "But at the same time, there is a way to do this - or there ought to be a means developed to the extent they don't feel like they can - to do this while protecting the privacy of the American people."

At a news conference yesterday, U.S. Attorney General Alberto R. Gonzales said the Justice Department had reviewed the program and said, "We believe it is lawful." Treasury Secretary Snow called it a program "entirely consistent with our democratic values, entirely consistent with our best legal traditions."

Washington lawyer Kenneth C. Bass III, who led intelligence investigations at the Justice Department in the late 1970s and early 1980s, said yesterday that the program - and the reaction to it on all sides - fit a distinct pattern since the attacks nearly five years ago.

"There's no question that there's a substantial step up in acquisition of personal information after 9/11, and this is just another example of it," Bass said. "I am a skeptic on how useful any of it is. ... Does it get overkill? Sometimes it does, yeah. But I think [the financial tracking] probably has a lower rate of misfire than something like the telephone toll record sweep because you get much more specific information when you do this. You get the amounts of the deposits and a source for the deposits, and that's pretty focused intel."


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