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Financial terrors in dark databases

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The latest issue of

AccountingWeb

's `Weekly Business Bite' includes a link to an item headlined, `Terrorist Finance Tracking Programme Disclosed.' The reference is to the recent disclosure by the US Treasury Secretary John Snow about the existence of such a programme.

"Given our intimate knowledge of the global financial system and financial flows, along with our close working relationships with financial institutions around the world, Treasury is uniquely positioned to track these terrorist money flows both internationally and domestically. This is part of an overall governmental effort to map terrorist networks and apprehend terrorists around the world," said Snow, as one learns from the text of his statement dated June 22 on

www.treas.gov

.

The programme, he said, carefully targets financial transactions of suspected foreign terrorists, using intelligence leads. "Data-mining, statistical and financial analysis and link-analysis tools have been employed in this effort to `follow the flow of terrorist monies,'" notes the report on

AccountingWeb

. But Snow's statement reads, "It is not `data mining', or trolling through the private financial records... It is not a `fishing expedition', but rather a sharp harpoon aimed at the heart of terrorist activity."

Snow rued having to disclose all these details; "because the public dissemination of our sources and methods of fighting terrorists not only harms national security but also degrades the government's efforts to prevent terrorist activity in the future," he reasoned. Provocation for the sudden disclosure was the leak in the media about the programme.

Such as in a news report dated June 22 on

www.nytimes.com

titled `Bank Data Secretly Reviewed by US to Fight Terror,' by Eric Lichtblau and James Risen. "Treasury officials did not seek individual court-approved warrants or subpoenas to examine specific transactions, instead relying on broad administrative subpoenas for millions of records from the cooperative, known as Swift," noted the story.

Such an access to large amounts of sensitive data was highly unusual, it said. The story cited Stuart Levey, Under Secretary for the Office of Terrorism and Financial Intelligence, and spoke about `concerns inside the administration about legal and privacy issues.' Lichtblau and Risen write about some of the innovative approaches such as Treasury officials asking credit card companies `about devising an alert if someone tried to buy fertiliser and timing devices that could be used for a bomb'! But, it seems, `they were told the idea was not logistically possible.' Other newspapers such as

Wall Street Journal

,

Los Angeles Times

, and

Washington Post

too carried reports about the `secret' operation.

Levey had to do some explaining. Which he did on June 23, through an official statement that `following the money' is `one of the most valuable methods' to identify and find terrorists. "If a terrorist operative that you're watching sends or receives money from another person, you know that there's a link between the two. Money trails don't lie. And, to wire money through a bank, a person needs to provide a name, address, and account number exactly the kind of concrete leads that that can move an investigation forward and allow us to take action," he declared.

A worrisome aspect of Levey's statement was his disclosure that as part of sleuthing, his office had, using powers under the International Emergency Economic Powers Act of the US, subpoenaed records on terrorist-related transactions from Swift (Society for Worldwide Interbank Financial Telecommunication), the `cooperative' mentioned in the news report.

Check

www.swift.com

to know more about Swift: such as, that it is the financial industry-owned cooperative supplying secure, standardised messaging services and interface software to 7,800 financial institutions in more than 200 countries; and that "Swift's worldwide community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and trade." Levey clarified that the Swift subpoena was powerful but narrow, as it allowed the office to access only information related to terrorism investigations. "We are not permitted to browse through the data, nor can we search it for any non-terrorism investigation. In practice, this means that we have accessed only a minute fraction of Swift's data," he said defensively about what according to him was a `creative and vigorous approach'.

To assure people that nothing wrong has been done, the statement describes the checks and balances: "Multiple layers of strict controls have been put in place to make sure that the information is not misused. Before they can run a search against this data, analysts must first explain how the target of the search is connected to a terrorism investigation. If the link cannot be established, the data cannot be searched."

Under auditors' scrutiny

One learns that Swift's auditors are able to monitor the searches in real time and can stop any one of them if there are any concerns about the link to terrorism. "In addition, a record is kept of every search that is done. These records are all reviewed either by an outside independent auditor, the company's auditors, or both," said Levey.

"Until today, we have not discussed this programme in public for an obvious reason: the value of the programme came from the fact that terrorists didn't know it existed. They may have heard us talking about `following the money,' but they didn't know that we were obtaining terrorist-related data from Swift. Many may not have even known what Swift was. With today's revelations, this is unfortunately no longer true. This is a grave loss." A snatch from Levey's statement that may seem to be naïve for many.

Swift was swift in giving out a statement on June 23 addressed to its `community'. It underscored its `commitment to the highest standards of integrity, confidentiality and availability of the messaging data' transmitted on behalf of members and users. Swift assured that it had received `significant protections and assurances' from the US Treasury `as to the purpose, confidentiality, oversight and control of the limited sets of data produced under the subpoenas'. Also, that `independent audit controls provide additional assurance that these protections are fully complied with'.

`Disgraceful disclosure'

The topic continues to be hot and alive. `Senate intelligence chief blasts media over leaks,' says

Reuters

. `CIA has access to your bank records,' warns

Telegraph.co.uk

. "The National bank of Belgium (NBB) has known for years that the US government was supplied information over international financial transactions administered by the Brussels-based institute Swift," informs

www.expatica.com

in a filing dated June 27.

Meanwhile the media has come under vigorous attack. The US President George Bush has said, "The disclosure of this programme is disgraceful." And that the leak by the newspapers "makes it harder to win this war on terror."

As Suffolk exclaims in

King Henry VI

, the establishment may say, `A plague upon them!' And continue thus: "Their softest touch as smart as lizards' sting! Their music frightful as the serpent's hiss, and boding screech-owls make the concert full! All the foul terrors in dark-seated hell."

To those who depend on the seamless financial network, though, the question that may linger on is whether endowing the US with unlimited powers to pry into global money deals can be more terrifying than the other terror.

http://AccountSpeak.blogspot.com

D. Murali

(This article was published in the Business Line print edition dated June 29, 2006)
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