Government Wants More Access to Banking Records
Once again, it appears Congress didn't do its homework. Buried in the recently passed Intelligence Reform Bill, is a provision that paves the way for the Government to ask for millions of international bank records.
The initiative, as conceived by a working group within the Treasury Department, would vastly expand the government's database of financial transactions by gaining access to logs of international wire transfers into and out of American banks.
Government officials said in interviews that the effort, which grew out of a brief, little-noticed provision in the intelligence reform bill passed by Congress in December, would give them the tools to track leads on specific suspects and, more broadly, to analyze patterns in terrorist financing and other financial crimes.
What is this provision?
The provision authorized the Treasury Department to pursue regulations requiring financial institutions to turn over "certain cross-border electronic transmittals of funds" that may be needed in combating money laundering and terrorist financing.
One of the few who got it right was Sen. Robert Byrd:
Senator Robert Byrd, Democrat of West Virginia, said consideration of the 615-page bill was rushed and lawmakers shouldn't have voted on something ``stampeded'' to the floor.
`We cower like whipped dogs in the face of political pressure,'' he said before the vote. Byrd and Republican James Inhofe of Oklahoma voted against the bill.
Most upset with the new regulations will be those in the banking industry, who still aren't in sync with the Patriot Act requirements.
But in a letter in January to Treasury Department officials, 52 banking associations around the country said that a "lack of clarity" by the government in explaining what is expected of them in complying with regulations to deter terrorist financing and money laundering has "complicated, and in some cases undermined" those efforts.
The result, banking officials say, is that many banks, now in a defensive mode, are sending the government far more reports than ever before on "suspicious activities" by their customers - and potentially clogging the system with irrelevant data - for fear of being penalized if they fail to file the reports as required.
It also hasn't helped that the Government has brought criminal enforcement actions against banks which haven't complied to its satisfaction:
By sharply increasing prosecutions against banks over compliance failures, "law enforcement is shooting the messenger," said Herbert A. Bierne, a senior enforcement official with the Federal Reserve System's board of governors. "You shoot the messenger, you stop getting the messages."
Message to Congress: Act in haste, repent at leisure. Stop passing bills you haven't read.
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