Saturday, June 24, 2006

Treasury defends secret surveillance program

Treasury defends secret surveillance program

WASHINGTON (Reuters) - U.S. Treasury Secretary John Snow on Friday defended a secret program for monitoring financial transactions, calling it "government at its best" and a valuable aid for fighting terrorism.

For nearly five years since the September 11 2001 terror attacks, Treasury has been tapping into records of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) for evidence of potential activity by terror groups.

Despite Treasury's efforts to keep it quiet, the New York Times laid the program out in detail on Friday, forcing Treasury to confirm it while complaining about the revelation.

"As part of our efforts to track the funds of terrorists, we are confirming that we have subpoenaed records on terrorist-related transactions from SWIFT," Treasury Under Secretary Stuart Levey told a hastily called news conference.

"The legal basis for this subpoena is routine and absolutely clear," he added. Levey said it was "a grave loss" that the surveillance program had been revealed but indicated that it will continue.

"I think that this program still...has the potential to still be powerful," Levey said.

Democrats on Capitol Hill blasted the program as a threat to Americans' privacy and an example of the Bush administration's efforts to expand the power of the executive branch. But White House spokesman Tony Snow said it wanted to "shut off the spigot" to block terror groups moving money.

Snow said the surveillance program was producing results. "By following the money, we've been able to locate operatives, we've been able to locate their financiers, we've been able to chart the terrorist networks and we've been able to bring the terrorists to justice," he said.

SWIFT is a co-operative owned by the approximately 7,800 financial institutions in more than 200 countries that use it. Levey indicated that some tens of thousands of transactions that have passed through SWIFT have been examined.

The program to examine banking transactions is run out of the Central Intelligence Agency (CIA) and overseen by the U.S. Treasury Department. The records examined mostly involve wire transfers and other methods of moving money overseas or into and out of the United States.

Levey said Treasury had briefed U.S. lawmakers as well as central bankers from the Group of 10 nations on the program and won support for it.

"The reaction from experts -- across the political spectrum -- has been that this is exactly the kind of creative and vigorous approach that is needed to combat the elusive terrorist threat that we face," he said.

An American Civil Liberties Union spokesman expressed concern that "too much of this is still in the shadows" to be able assess the program's impact on rights to privacy.

"I fear that again the administration is going to hide behind the need for secrecy. It's extraordinary that they went to the entity that moves money around the world and got the private sector to do its work," said Barry Steinhardt, director of the ACLU's technology and liberty project.

With autumn congressional elections on the horizon, reaction from lawmakers was mixed along highly partisan lines.

Senate Majority Leader Bill Frist said he had "full confidence" in the program's legality and usefulness while Ed Markey, a Democratic member of the U.S. House of Representatives from Massachusetts, said it appeared to "rely on justifications concocted without regard to current laws" and threatened liberties.

Treasury officials said SWIFT was exempt from U.S. laws restricting government access to private financial records because the cooperative was considered a messaging service, not a bank or financial institution.

Levey described it as "the premier messaging service used by banks around the world to issue international transfers " but, in response to questions, conceded that not every bank or banking center was a member of SWIFT.

He declined to estimate how many transactions by Americans might have been included under the monitoring program and specified that only "targeted searches on individual targets" had been initiated.

"In practice, this means that we have access only to a minute fraction of the data that we obtain from SWIFT," Levey said, adding that controls against misuse included auditing by Booz Allen Hamilton to ensure no-one used information improperly.

Only one instance was found in which information was used inappropriately and that person "is no longer allowed to work on this program," Levey said.

Snow said the program was "entirely consistent" with efforts to strengthen government activities and to protect America from potential attacks by terror groups.