Officials Defend Bank Data Tracking

Times Staff Writers

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.


Officials said that every search of the system was recorded and that those logs were audited by SWIFT as well as independent reviewers with the government contracting firm Booz Allen Hamilton Inc.

Snow referred to the SWIFT employees who monitor use of the data as “scrutineers.” They have access to the facility where the information is handled and can appeal to Treasury officials when they object to a search.

SWIFT is owned and controlled by the world’s largest financial institutions, including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. in the United States, as well as major European companies including Deutsche Bank in Germany.

The SWIFT network does not contain records on credit card purchases, bank deposits or other routine transactions made by most customers. Rather, SWIFT is used primarily for wiring money from one country to another.


As a result, access to the SWIFT data has enabled U.S. agencies to track financial transactions involving individuals, Middle Eastern charities and other organizations suspected of having ties to Al Qaeda or other terrorist groups.

But officials acknowledged Friday that the program also allowed authorities to review transactions of U.S. citizens when there was a suspected terrorism connection.

“We can’t just browse through this and say, ‘I wonder what U.S. persons are sending money abroad’ or anything like that,” Levey said.

The database is maintained at a CIA facility in Virginia. The agency asked that the precise location not be disclosed.


The Senate Intelligence Committee has sent staff to the site to observe the operation and evaluate the safeguards in place, according to a senior committee aide who spoke on condition of anonymity.

The aide said that lawmakers’ familiarity with the SWIFT program, and the checks that are employed, helped explain why the operation had not raised the same concerns as recent disclosures that the National Security Agency had eavesdropped on U.S. residents without court warrants.

“Unlike the NSA program, Congress had been onboard with this all along,” the aide said. “Everyone thought they had appropriate controls.”

Details on the program have also been given to members of the Senate Banking Committee.


Sen. Richard C. Shelby (R-Ala.), chairman of the panel, said in an interview Friday that he was familiar with the operation and did not find cause for concern.

“Any data system or financial system that helps in the fight against terrorist financing ... is worthwhile, and the SWIFT program is no exception,” Shelby said. “We know a lot about the program. We don’t need hearings on this.”

Though the database resides at a CIA-run site, the data can be accessed from other locations by analysts from the CIA, the FBI and other agencies, according to a U.S. official familiar with the program.

“But even if you access this data from another location, those searches are tracked and audited, and those audits are done regularly,” the official said.


Critics have expressed concern that even if the government is confining its use of the SWIFT data to terrorism searches, it has control of an extensive set of records that it could exploit for other purposes.

Snow said Friday that, over time, Treasury and SWIFT had worked to limit the types of records that were turned over. Because SWIFT sorts its records by country, “we’ve narrowed the geographic scope” of the data provided, Snow said.


Times staff writer Jeffrey Fleishman in Berlin contributed to this report.