Treasury Department's financial record surveillance program

Having received word that the New York Times had uncovered a previously-secret financial surveillance program, The Treasury Department called a news conference to defend its surveillance of the financial records of Americans and other users of a global financial database:

The Treasury Department today mounted a staunch defense of a previously secret program to search a global financial database for terrorism-related transactions, saying the effort has been an effective weapon and that its disclosure can only help the world's terrorists. [WaPo]

The Treasury's financial database monitoring program works in tandem with the NSA's warrantless phone monitoring program:

The program, launched by the Bush administration shortly after the Sept. 11, 2001, terrorist attacks, uses the Treasury Department's administrative subpoena powers to obtain records from a Brussels-based international banking consortium known as the Society for Worldwide Interbank Financial Telecommunication, or SWIFT. The consortium links about 7,800 banks and brokerages in 200 countries and handles billions of transactions a year, accounting for more than 80 percent of the international messaging traffic on funds transfers.

After the 2001 attacks, President Bush invoked his powers under the International Emergency Economic Powers Act to "investigate, regulate or prohibit" any foreign financial transaction linked to "an unusual and extraordinary threat." His order for Treasury to gain access to SWIFT's database overrode objections from other government and banking industry authorities who worried that sharing the information would erode public confidence in the banking system.

According to current and former counterterrorism officials, the "terrorist finance tracking program," as Snow called it, works in tandem with another previously secret surveillance program in which the National Security Agency monitors international telephone calls, faxes and e-mails, The Washington Post reported today. Under the NSA program, the agency has eavesdropped on more than 5,000 Americans suspected of terrorist links without obtaining warrants. In a related effort, the NSA has also built a massive database of foreign and domestic telephone calls with the aim of tracking calling patterns to detect terrorist activity. [WaPo]

The WaPo article goes on to explain that the Treasury used to have access to the SWIFT database only through narrowly-tailored subpoenas.

As Snow and Levey described the program, it began with narrow subpoenas that SWIFT was not able to comply with because it lacked the ability to extract the specific information from its broad database. So SWIFT gave Treasury access to all of its data, and the two sides worked together to extract the limited records on the individuals or entities under investigation. [WaPo]

Let me get this straight. SWIFT wasn't organized enough to extract the specific information requested in a subpoena, so they just handed the whole database to the Treasury Department? Did SWIFT just say "Hell, take it all, you figure it out. But don't go peeking where you shouldn't."?

According to the WaPo article, Treasury Secretary Snow assures us that even though the Treasury has access to the whole database (which includes some U.S. domestic transactions), they have safeguards which they enforce to prevent them from doing anything they shouldn't do. He also noted that, according to internal audits, there had been at least one inappropriate use of data and that the person responsible is no longer allowed to work on the program.

How comforting.

Comments

[felicity]

There are some interesting quotes and some critical commentary in the LA Times' version of this story today.

[Ralph]

This is great. Our masters promise not to peek at anything they aren't supposed to see. We should trust them because we are all on the good guys' side.

This is beyond mind-boggling. They are operating at the level of the robotic crew on the 900-year-late spaceship found by Ford and Zaphod: "Return to your seats!"

Only the fully anaesthetized would obey.

[gordo]

Ralph--

As far as I know, the Bush administration is not claiming exemption from the law on this one, so it's hard for me to get worked up about it.

The government should be looking for suspicious transactions. As long as they follow the law when they do it, our privacy is left intact. It's hard to see how the government could enforce rules against money laundering, tax evasion, etc, without looking at financial records.

[Jeffrey O]

With all this massive mining of data... who have the caught and actually convicted?

Remember the Sami Alarian (sp?) case? That was another slam dunk that they didn't "win" a conviction.

I don't think they know what they are doing. And I think all they can do is occassionally frame up someone as try to get a conviction. These Miami terrorists will have the same result.

I think we have no enemies but the ones "we" create. Who would want this messed up economy anyway?

I have always said that no foreign country could possible "attack" the US and occupy us as a conquering nation. It is impossible. We couldn't do it Vietname, in Iraq and we spend trillions on "our war machine".

So what IS the threat? and who IS the enemy of america?

[Ralph]

As long as they follow the law when they do it, our privacy is left intact.

Gordo,

The Bush administration has repeatedly broken the law in pursuit of bungled policies and domestic political vendettas. For example, they released classified information in order to "out" an important CIA operation which was monitoring weapons of mass destruction, including those in Iran which are now claimed to be a threat to the world. Further, Bush has now claimed the right to ignore any legislation that limits the "inherent power" of the Presidency.

This is exactly why the U.S. Constitution institutionalizes a separation of powers: in order to limit the overreaching power of any one branch.

Trust this administration to obey the law? Laughable. Trust any future administration to do the same? Naive, and contrary to the central concept of the Constitution.

[Brautigan]

He also noted that, according to internal audits, there had been at least one inappropriate use of data and that the person responsible is no longer allowed to work on the program.

'Cause he's been transferred to Director of Oppo Research at the RNC, no doubt.

[Jim Lippard]

Note that SWIFT's data is for transactions which are mostly outside of the United States (very little where both sides of the transaction are within the U.S.). I once worked on a project to build a next-generation private network for SWIFT. That project failed due to my employer's bankruptcy, and SWIFT went to a multi-provider solution with AT&T, Colt Telecom, Equant, and Infonet (now part of British Telecom).

The U.S. government already has huge amounts of information about financial transactions within the U.S., via the FinCEN database, which gets filled with data thanks to past laws like banking "Know Your Customer" laws and the USA PATRIOT Act.

[mudkitty]

Gordo - you need to familiarize yourself with the United States Constitution. Particulary the 4th amendment, you know, the one where you have the right to be secure in your person and papers...fishing expiditions are not allowed.

If you really believe 9/11 "changed everything" then the terrorists have won.

[Matt]

I'm a "former" Liberal; now I'm a Conservative. Since I've been on both sides of the aisle, I believe I'm uniquely qualified to clear up a few things for you people.

Regarding Gordo's assertion that we don't need an army because no one can attack the US:

First of all, no one can attack the U.S. BECAUSE of the armed forces. If we didn't have the army then there would be nothing stopping anyone from attacking us.

Secondly, it is incredibly simplistic to think that an economy the size of ours could exist without open trade routes. By sitting back and allowing mideast politics to dictate world energy prices (by allowing Saddam Hussein or the Iranians, or the Libyans to blockade oil shipments for example) - these things would cripple the WORLD economy. Not just the American economy.

What we are doing by confronting these "rogue" states benefits every country in the world - whether they choose to admit it or not.

Surely even you liberals can understand that our domestic security, the security of middle eastern countries, and the world economy are all symbiotic. If you don't get that, then you just aren't trying to understand the problem.

Regarding whether this SWIFT program has been effective:

Just because no one has paraded a terrorist in front of the NY Times doesn't mean the program is not effective. YOU don't know who's been caught because you aren't privvy to what's going on. And that's the point - it's SECRET!!!!

Denying the enemy the use of International banking systems is sortof like the 21st century version of denying freedom of movement to an enemy on the battlefield. It cuts down on their options, and that puts the strategic advantage in the hands of us (remember, WE really ARE the good guys).

If they don't know what we're looking at, they can't use any of it. Now that they know about SWIFT, they can understand our tactics better. And yes, the other posters were correct, SWIFT is about international trade, not domestic U.S. trade.

Now, regarding this nonesense about Bush being a traitor/criminal/etc.:

I'm not the biggest Bush fan, but the fact is that he is the guy making decisions. He is NOT breaking the law, he is not a criminal, but he is in a lose-lose situation.

No matter what he does, you people will oppose him. If he does nothing about terrorism and there's an attack, you blame him for the attack. If he comes out strongly on defence, you claim he's over-stepping his authority.

If any of you were in the Oval office making decisions, I assure you that you would not find things are so "clear" anymore. You all benefit from hindsight. Try being the guy who's being told every day all the horrible things that people are planning to do to our country and you'd probably wish you were living in "blissful ignorance" again.

I know this is the case because I have a family member who used to work very high up in the CIA. He told me that I really don't want to know all the things that the CIA finds out about - he said its enough to make you want to go live in a bunker.

Finally,

It is very easy for you all to criticize the people who are trying desperately to protect our country; the Armed Forces, the NSA, the CIA, and even the Bush Administration. About that I'll quote Theodore Roosevelt:

"It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena; whose face is marred by the dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions and spends himself in a worthy cause; who at the best, knows in the end the triumph of high achievement, and who, at worst, if he fails, at least fails while daring greatly" -- Theodore Roosevelt (Paris, 1910)

[Alon Levy]

Since I've been on both sides of the aisle, I believe I'm uniquely qualified to clear up a few things for you people.

On the contrary, having been on both sides would expose you to the general zeal-of-a-convert mechanism. I know that conservative-turned-liberals tend to be extremely shrill about Bush, often more than people who have always been liberal. I suspect it's because a) they supported previous Presidents' conservative excesses but not Bush's, so they look back to these Presidents and decide that they were better than Bush, and b) being more familiar with the conservative echo chamber, they tend to be less disgusted with the liberal echo chamber.

Regarding Gordo's assertion that we don't need an army because no one can attack the US:

Did Gordo assert that? What I see in this thread is that he says that this program may be justifiable.

Just because no one has paraded a terrorist in front of the NY Times doesn't mean the program is not effective. YOU don't know who's been caught because you aren't privvy to what's going on. And that's the point - it's SECRET!!!!

In other words, I'm supposed to take the administration's word that its program is effective. I should trust politicians, the least honest group of people around, without any evidence that they can be trusted, and with plenty that they can't.

It is very easy for you all to criticize the people who are trying desperately to protect our country; the Armed Forces, the NSA, the CIA, and even the Bush Administration.

Kind of like it was very easy for people to criticize the Soviet Empire's KGB, isn't it? After all, Solzhenitsyn never had to actually work on protecting the USSR from American espionage...

I'm not the biggest Bush fan, but the fact is that he is the guy making decisions. He is NOT breaking the law, he is not a criminal, but he is in a lose-lose situation.

He's not breaking the law... because he is the law? Because you say so? I don't understand.

About that I'll quote Theodore Roosevelt: (...)

Indeed, public opinion of Bush crashed because he failed. Sometimes the man who goes into the arena just fails - after all, it's insane to expect every leader to succeed. Carter lost the election because he failed to resolve the hostage crisis; Bush I lost the election because he failed to do something about the economy even though he raised taxes. Bush II would've lost if the election had been in 2005 rather than 2004.

Although leaders tend to aggrandize themselves, it's the critic that keeps the leader honest. Without a constant barrage of shelling from a hostile media, and constant criticism from the critic, the leader has no incentive to remain honest, or to really try doing anything (if you know what's good for you, don't invoke the liberal media myth in response).

[Matt]

Alon,

Yes, unfortunately Gordo does take the whacko position that we don't need a big military because he says, "I have always said that no foreign country could possible "attack" the US and occupy us as a conquering nation. It is impossible. We couldn't do it Vietname [sic], in Iraq and we spend trillions on "our war machine".

Regarding proof about the effectiveness of the SWIFT program. You asked if we should just trust the politicians...

No, you don't have to trust the politicians. However, it isn't up to you or the New York Times to determine what is and is not secret. We vote to decide who makes these decisions, and although you don't like it, the Republicans are making these decisions right now. The New York Times does not have the power to declassify information.

Now, the SWIFT program (in contrast to the wire tapping program) was operating under congressional oversight, and it was subject to judicial review. IOW, the feds had to get a warrant before they would be able to access financial information on an individual out of the database. There's no story here - the New York Times was just obstructing justice.

Is the system perfect? No, probably not. But this particular program has all the protections one could reasonably expect to have with a covert program.

Also, just because the program is covert, that doesn't make it bad; you do realize that don't you?

Now, about my assertion that Bush never broke the law. No, it isn't because I said he didn't break the law. It's because he actually has not broken any laws.

I realize that you folks like to come on these forums and banter back and forth unchallenged about how Bush lied, and the war is illegal; but the fact is that he hasn't been convicted of any crimes. Not only that, I haven't seen anyone who can explain to me exactly what law he supposedly broke.

All I've seen is a bunch of unsubstantiated conspiracy theories about all these evil things that Bush has "probably" cooked up with Karl Rove et al.

If that's the way you feel, I strongly suggest you take a look at this website as a way of protecting yourselves: http://zapatopi.net/afdb/

Finally, Bush, in fact, has not failed. Thank God we have not had another major attack on our country since 2001. Despite all his failings he has managed to persevere and hold the line. I suspect that the programs that were put in place after 9/11 had a lot to do with this success.

Furthermore, our economy, despite the fact that Gordo can't recognize it, is booming! Unemployment is low, personal equity is up, people in America are richer than they have ever been. The great economy has been because taxes have been kept low, and the Fed made the right moves with interest rates, and the government has generally stayed out of the way of international trade.

Now, honestly, only a small amount of this success can be attributed to Bush, but then again I don't really think that Bill Clinton (whom I voted for twice) can realistically take much credit for the boom of the 90's. The truth is, the economy pretty much rolls along regardless of what any President does. The best thing any government agency can do is stay out of the way.

Finally, I really don't think that I fall into the "zeal-of-a-convert" mold. I can tell you dozens of things that I think the Republicans are doing wrong. The truth is that over time, I've simply "grown up". I have more responsibilities now, and I recognize that much of the idealism I enjoyed as a younger man simply isn't realistic.

[Alon Levy]

No, you don't have to trust the politicians. However, it isn't up to you or the New York Times to determine what is and is not secret. We vote to decide who makes these decisions, and although you don't like it, the Republicans are making these decisions right now.

But how can anyone vote on things that are kept secret? Incidentally, I don't have any problem with Republicans' making decisions. There are very few issues on which the two major parties in the US are more similar to each other on than they are on civil liberties. The approach is "Shred civil liberties, and then use the fact that there're no civil liberties protections to hide the shredding."

Finally, Bush, in fact, has not failed. Thank God we have not had another major attack on our country since 2001. Despite all his failings he has managed to persevere and hold the line. I suspect that the programs that were put in place after 9/11 had a lot to do with this success.

Al-Qaida's MO makes it clear that it can only afford to strike once in a long while, and that the initial strikes in Afghanistan crippled Bin Laden's organization so much that Islamist terrorism can only take the form of independent cells. Since the US has no native Islamist population (its Muslim population is too low and too well-integrated into mainstream society), the attacks occur in Europe, not the US. It has nothing to do with Bush.

No, it isn't because I said he didn't break the law. It's because he actually has not broken any laws.

I have concrete, easily available evidence that he did versus your word. For example, the signing statements are perversions of democracy; with them Bush negates laws Congress passes without being subject to any Congressional override (you do know he's never vetoed any law, right?).

I realize that you folks like to come on these forums and banter back and forth unchallenged about how Bush lied, and the war is illegal; but the fact is that he hasn't been convicted of any crimes.

Neither was OJ.

Furthermore, our economy, despite the fact that Gordo can't recognize it, is booming!

Yeah, because of a housing bubble and deficit spending. When Keynes said "in the long run, we're all dead," what he meant was that it was acceptable to engage in deficit spending in times of recession if the government ensured a surplus in times of growth. Now is an ideal time for the US government to start paying off the debt, but instead Bush borrows more and more money, pushing the debt up to WW2 levels.

[Matt]

Alon,

Honestly most of what you've written is either unintelligible, vague, or too general to respond to.

I mean, how does deficit spending lead to a good economy??? That's ridiculous. I think perhaps you are a moron.

>M

[Alon Levy]

I mean, how does deficit spending lead to a good economy??? That's ridiculous. I think perhaps you are a moron.

Can you please learn something about Keynesian economics before going on about how such things are ridiculous? The idea that deficit spending stimulates the economy is about as ridiculous as the idea that trade can be a win-win situation via comparative advantage (please tell me you know at least that part).

[Matt]

Ok Alon, my bad. Perhaps you are not a moron. But you sound young, and somewhat inexperienced. Since you are still talking about Keynes, then I suppose you have some understanding of economics. That's good. We'll make a nice conservative (or at least Libertarian) out of you yet.

I agree with you that our government is spending too much money right now. However, Keynes also allowed for the fact that governments would run deficits during times of war. Of course, we are at war so a deficit right now is understandable.

Furthermore, I would point out to you that George Bush does not determine the budget of the United States. Although the President proposes budgets, their final character is determined by Congress. So, it is actually the Republican controlled Congress that is at fault for the deficit spending (minus the war costs, of course). Personally, I believe that this "over spending" is what will cost us seats in November.

And yes, I must agree that Mr. Bush has unfortunately not vetoed any spending bill (or any bill at all for that matter). This falls into the category of the "dozens" of things that I disagree with that he has done.

Now, to get back to your original points:

Since you love Keynes so much, it isn't that deficit spending, itself, is what pulls an economy out of recession. It is the combined effect of lower taxes, lower interest rates, and increased buying power that ultimately affects demand to the positive side. His point has always been that demand is what really stimulates the economy.

However, when you lower taxes you almost necessarily cause the government to run at a deficit. Ergo, deficit spending during a recession is "justifiable".

Since you are liberal, you probably think that the government paychecks (the deficit spending) are what stimulate demand. Not so. It is the stimulus to the rest of us who don't actually get the government paychecks, the businesses and consumers that pull the economy out of recession because we have a greater ability to buy products and services.

So, my point that your notion that deficit spending is good for the economy is ridiculous is that it isn't the "deficit spending" that is good. It is the absense of tax and interest rate cost that is good.

Now, you made other little digs. Comparing Bush to OJ, and this paragraph which I have to admit I can't figure out what you are saying:

"I have concrete, easily available evidence that he did versus your word. For example, the signing statements are perversions of democracy; with them Bush negates laws Congress passes without being subject to any Congressional override (you do know he's never vetoed any law, right?)."

If you wish to discuss these things further, please send it to me via email (linked from this blog). I don't want to continue having this conversation here because we have now fallen off-topic of this blog post.

[Alon Levy]

Ok Alon, my bad. Perhaps you are not a moron. But you sound young, and somewhat inexperienced. Since you are still talking about Keynes, then I suppose you have some understanding of economics. That's good. We'll make a nice conservative (or at least Libertarian) out of you yet.

Sorry, I care about facts too much to be what "libertarian" means nowadays. I mean, sure, I care about free markets and balanced budgets, but libertarianism is ultimately robber baron capitalism trying to pass itself as a free market.

I agree with you that our government is spending too much money right now. However, Keynes also allowed for the fact that governments would run deficits during times of war. Of course, we are at war so a deficit right now is understandable.

No, it's not, because of the current nature of the war. The US is engaged in a limited war, like Vietnam or Korea, when nonetheless spending only increased at a moderate level. The current debt/GDP ratio is the highest since World War Two, although Iraq is more limited than Vietnam. Bush made the stupid mistake of cutting taxes in times of war; when Kennedy did it he at least had the excuse of not knowing that he was opening a can of worms.

And yes, I must agree that Mr. Bush has unfortunately not vetoed any spending bill (or any bill at all for that matter). This falls into the category of the "dozens" of things that I disagree with that he has done.

Then the problem is with your verdict. Bush's aversion to vetoing, and his shrill insistence on cutting taxes when he could easily say, "We're at war and we need to make sacrifices, and that means paying more taxes to pay for the war" are not small problems. Although deficit spending can be good, when taken to excesses it causes huge problems. In normal circumstances it only causes prolonged recessions (think the 1970s); in this case, because the dollar is falling and the USA's debt is in dollars, the repercussions of borrow-and-spend conservatism will be global.

Since you are liberal, you probably think that the government paychecks (the deficit spending) are what stimulate demand. Not so. It is the stimulus to the rest of us who don't actually get the government paychecks, the businesses and consumers that pull the economy out of recession because we have a greater ability to buy products and services.

The idea that liberalism is all about taxing and spending is just a myth. My position seems to be consensus among modern liberals: the government should keep interest rates low to avoid unemployment; when recessions become too severe for monetary policy to work properly, the government should cut taxes and/or increase spending temporarily. There's plenty of bickering on what "spending" and "temporarily" mean - for Keynes "temporarily" was a lot more fluid than it is for modern liberals, and "spending" can be not only welfare or public works but also military expenditure. It's important to note that what got many countries out of the Great Depression was World War Two, which ushered in massive tax increases but even greater spending increases.

[Matt]

Again,

If you want to continue discussing this, send it to my email.