Feds seek financial records

In the broadest sweep of financial records ever, federal investigators are asking thousands of U.S. banks, credit card issuers, brokerages and others to comb their databases for any traces of suspects in the attack on the World Trade Center.

On Thursday, the Federal Deposit Insurance Corp. asked banks and savings and loans to search for accounts in the names of 46 people and organizations thought to have played a role in the attack--from suspected hijacker Mohamed Atta to supposed charities such as the Wafa Humanitarian Organization.

The goal is to uncover “everything that a bank has that can be traced to help put together the money trail” of the terrorists, said FDIC spokesman David Barr.

A day earlier, the Securities and Exchange Commission made a similar sweeping request, asking that every business dealing in any financial instruments examine their records for the suspects. In an extraordinary step, the SEC appealed for assistance from companies it does not regulate.

The latest request extends a plea the FBI and FDIC made in recent days for banks to check on any “relationships or transactions” involving the suspects--a search involving billions of records.

The massive search includes practically every aspect of the nation’s financial life. Companies are asked to look at mutual fund sales, purchases of traveler’s checks, money transfers, stock trades, credit card activity and loan payments, among other transactions.

“Every tool in the federal government is being utilized during this effort to identify the perpetrators of the Sept. 11 attack,” said Rob Nichols, deputy assistant secretary at the Treasury Department.

Nichols said the Treasury is coordinating the request through a committee encompassing the FBI, CIA, IRS, National Security Agency, Secret Service, and others in law enforcement and intelligence.

President Bush already has issued an order blocking the terrorists’ funds, and the government has said it will seize the assets of terrorists and their supporters. Most important, the government wants to use financial records to identify and pursue those behind the attack.

For some financial institutions, the search involves a fairly simple computer check. But for those relying on paper records, it could grow complex.

The massive request for information worries Bert Ely, a banking consultant who specializes in public policy. Regulators “have told the banks and securities firms to go on a giant fishing expedition,” Ely said. “They are going to net a lot of people who have absolutely no relationship with the terrorists.”

Firms plan to comply

Still, companies are complying with the government request. Vanguard Group, the nation’s second largest mutual fund, said it could search its accounts for the requested information in a matter of hours.

“If we have a name or a Social Security number, we can certainly find any particular account quickly,” said Vanguard spokesman Brian Mattes. Mailing addresses and other information can be used to search for accounts as well, he said.

Other transactions would be harder to trace. If a suspect bought traveler’s checks at a bank and cashed them during a purchase, that would provide valuable evidence of the individual’s location at specific times and even disclose what the person bought. But investigators would eventually want the actual check.

“It’s doable,” said Michael O’Neill, a spokesman for American Express, a leading traveler’s check issuer and one of the many companies reviewing its records. “I wouldn’t know the time frame.”

One Chicago banking executive said the nation’s banks are struggling to assign priority to several separate requests for suspect-related records.

“One of the challenges for banks is that the requests are coming from a number of different places asking for the same or almost the same information,” said the executive, who spoke on condition of anonymity.

The Treasury Department said it expects answers from the nation’s 9,750 banks and savings and loans in a week or so.

The SEC, which is investigating suspicious trading in financial markets before the attack, wants help from every company that deals with securities. “The commission asks that all securities-related entities (whether or not registered with the SEC) voluntarily check their records for any relationships or transactions with the individuals and organizations” suspected in the attack, the SEC said.

Hedge funds, for example, don’t register with the SEC, but the agency wants their help.

Name confusion called likely

One likely complication: Several of the suspects in the attack have names that are common among people of Arab ancestry. With approximately 477 million bank accounts and many other financial accounts in the U.S., the sweeping request for records is likely to pull in a lot of unrelated people.

In some cases, the suspects varied the spellings of their names at times, probably to make it more difficult for authorities to track them. That, too, could have the effect of expanding the scope of the search, said banking expert Ely.

“A lot of people are going to have their first dealings with the FBI, trying to explain why they have the same name” as a suspect, Ely predicted.

The review of records is not limited to the United States. A Treasury official, who asked not to be identified, said the Group of Seven nations--which besides the U.S. includes Japan, Germany, France, Britain, Italy and Canada--agreed this week to make similar searches among their financial institutions.