Surveillance of financial transactions goes too far

The Bush administration admitted that it was conducting warrantless surveillance of the financial transactions of Americans and others only after newspapers exposed the program. According to some Republicans, the solution is to imprison journalists who blow the whistle on government wrongdoing.

Shortly after 9/11, President Bush invoked the International Economic Emergency Act to authorize the U.S. Treasury and the Central Intelligence Agency to snare vast amounts of international banking data passing through a hub in Brussels, Belgium. The administration issued general subpoenas that vacuumed up the personal financial data of vast numbers of people. The agents were looking for leads on terrorist financing.


Treasury Secretary John W. Snow hailed the warrantless surveillance as "government at its best." But the Los Angeles Times reported that government officials said, "The effort has been only marginally successful against al-Qaida, which long ago began transferring money through other means, including the highly informal banking system common in Islamic countries."

The searches almost certainly violate a 1978 federal law, the Right to Financial Privacy Act. Using a vague administrative subpoena to impound hundreds of thousands of people's financial records is probably also a violation of the Fourth Amendment to the Constitution, which states that search warrants require "probable cause" of criminal conduct and must specify what is to be seized.


Treasury Undersecretary Stuart Levey said, "We've done a large number of searches. ... I don't know the exact number but it's ... at least tens of thousands, maybe hundreds of thousands of searches." If the person running the program isn't sure whether it's tens of thousands or hundreds of thousands of searches, this is a clue that the federal government is grabbing far too much.

Senate Judiciary Committee Chairman Arlen Specter, a Pennsylvania Republican, wrote to top Bush administration officials expressing doubts about the legality of the searches. He is also perturbed that the administration withheld information about the program from almost everyone in Congress until after it learned that The New York Times was going to publish an exposM-i. Mr. Specter asked, "Why does it take a newspaper investigation to get them to comply with the law?"

Another massive roundup of financial records will not keep Americans safe. Federal money cops have long been overwhelmed by too many reports from banks. The 9/11 hijackings were preceded by the biggest failure ever by U.S. financial authorities.

A U.N. report on terrorist financing released in May 2002 noted that a "suspicious transaction report" had been filed with the U.S. government over a $69,985 wire transfer that Mohamed Atta, leader of the hijackers, received from the United Arab Emirates. The report noted that "this particular transaction was not noticed quickly enough because the report was just one of a very large number and was not distinguishable from those related to other financial crimes."

One of the key federal agencies vacuuming the financial information long has snubbed the terrorist threat. As of 2004, the Treasury Department's Office of Foreign Assets Control had 10 times as many agents assigned to track violators of the U.S. embargo on Cuba as it had tracking Osama bin Laden's money. From 1994 to 2004, this Treasury bureau collected nearly 1,000 times as much in fines for trading with Cuba as for terrorism financing.

The feds' roundup of financial data may be far greater than what the Bush administration has thus far acknowledged. reported Friday that a Treasury spokeswoman "would neither confirm nor deny" that U.S.-based banking systems were also part of the so-called Terrorist Finances Tracking Program.

There is no reason to assume that the Treasury Department has been more restrained in grabbing banking records than the National Security Agency has been in seizing Americans' telephone records.

House Homeland Security Committee Chairman Peter T. King, a New York Republican, denounced the Times' exposM-i as "treasonous" and urged the Bush administration to prosecute the newspaper. But the role of the media in a free society is not to cover up government abuses.


The issue is not whether the federal government should detect and block terrorist financing; almost everyone favors such efforts. Instead, the issue is whether the government can invoke the terrorist threat to exempt itself from all statutory restraints. Keeping Americans in the dark is not the same as keeping them safe.

James Bovard is the author of "Attention Deficit Democracy." His e-mail is

Columnist Steve Chapman is on vacation.