Finance Expert: The Bank Data Spying Program Has Been Public

In Culture of Corruption, Economic Justice, International politics, Laws & Regulation, Terrorism, US Politics on June 24, 2006 at 6:29 pm

From the Counterterrorism Blog:


Reports of US Monitoring of SWIFT Transactions Are Not New: The Practice Has Been Known By Terrorism Financing Experts For Some Time; By Victor Comras

Yesterday’s New York Times Story on US monitoring of SWIFT (Society for Worldwide Interbank Financial Telecommunication) transactions certainly hit the street with a splash. It awoke the general public to the practice. In that sense, it was truly new news. But reports on US monitoring of SWIFT transactions have been out there for some time. The information was fairly well known by terrorism financing experts back in 2002. The UN Al Qaeda and Taliban Monitoring Group , on which I served as the terrorism financing expert, learned of the practice during the course of our monitoring inquiries. The information was incorporated in our report to the UN Security Council in December 2002. That report is still available on the UN Website. Paragraph 31 of the report states:

“The settlement of international transactions is usually handled through correspondent banking relationships or large-value message and payment systems, such as the SWIFT, Fedwire or CHIPS systems in the United States of America. Such international clearance centres are critical to processing international banking transactions and are rich with payment information. The United States has begun to apply new monitoring techniques to spot and verify suspicious transactions. The Group recommends the adoption of similar mechanisms by other countries.”

Suggestions that SWIFT and other similar transactions should be monitored by investigative agencies dealing with terrorism, money laundering and other criminal activity have been out there for some time. An MIT paper discussed the pros and cons of such practices back in 1995. Canada’s Financial Intelligence Unit, FINTRAC,, for one, has acknowledged receiving information on Canadian origin SWIFT transactions since 2002. Of course, this info is provided by the banks themselves.

While monitoring SWIFT-handled transfers is a useful tool in identifying and tracking certain suspicious transactions, its importance should not be overstated. The information in SWIFT’s hands is no better than the information which it is provided by the banks handling the transactions at both ends. And there is already an obligation on banks in the US and Europe to report all “suspicious transactions” The problem is that FINCEN and the corresponding FIUS in other countries have simply been overwhelmed by the enormous amount of transactions that are reported to them (see my earlier blog) Another problem is that European Banks are just getting around to providing (and requiring) information, such as names, account numbers and addresses of originators and recipients of transactions channeled or handled by them through SWIFT or other international transfer facilitators (see my earlier blog). And most banks outside of Europe, the United States and other OECD countries, still do not require, or verify, such information.

The fact is that there is really very little privacy today when it comes to the international transfer of funds. That is why criminal networks, money launderers and terrorist groups have increasingly turned to Hawalas and cash couriers for such transactions.

On this last point, about there really being very little privacy today when it comes to the international transfer of funds, I refer to yesterday's White House press briefing from which I quoted yesterday. At the briefing Tony Snow tries to plow over a question that simply lays out a simple point, namely, why does it matter that this program's existence has been brought to broader public knowledge? If terrorists financing experts would've known about SWIFT anyway, they would've found other ways to funnel money, and surely these experts weren't relying on the NY Times to find out that the info was being intercepted.


Q Well, given all that you're saying, and given the fact that it has been well known publicly that the government has endeavored to cut off the financial spigot, to use your term, why did the administration go to such intense lengths to stop the publication of something that people think is somewhat self-evident?

MR. SNOW: Because the means and methods by which we do it are not.

Q But the existence of this organization is no secret, either.

MR. SNOW: Are you kidding? Are you talking about Swift? When did you know about Swift before?

Q I'm talking about those in the —

MR. SNOW: — know about Swift before? (Laughter.)

Q While I don't, I can assure you that people in the financial community know.

MR. SNOW: I guarantee, you go talk to your local banker — you talk about —

The answer isn't found at my local bank branch. It's completely unfounded to say, as some administration supporters have, that "A productive and important investigative mechanism has been disrupted and greatly diminished" because this program has been brought to brighter public light. The financial experts funneling money for terrorists would have certainly known about SWIFT already, and, as the post above from Counterterrism Blog explains, they've already resorted to underground money transmitters (Hawalas) and hand-to-hand cash couriers.


The answer to the question, "why does it matter that this program's existence has been brought to broader public knowledge?" lies not in the exposure of the way the US has been attempting to track terrorist funding, but the simple fact that it's been happening.


Simply put, it's a twisted ankle for an administration that has two recent black eyes from the NSA surveilance program. They're beaten and bruised already, and by this program becoming more public, the program is not weakened in the slightest, but the Administration most certainly is.


Maybe we'll soon hear about the administration's legal justification for why it has been monitoring the health records of US citizens, in the hopes of tracking people that are attempting to obtain dialysis equipment to ship overseas to Osama bin Laden.


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