Original URL: http://www.theregister.co.uk/2006/08/22/terrorist_finance_snoop/

US authorities had free rein over world's bank data

Article 29 working party tackle SWIFT

By Mark Ballard

Posted in Media, 22nd August 2006 12:20 GMT

The US Treasury programme of snooping on international banking transactions to track terrorist funding had unfettered access to the world's private financial details for anything upto five years.

A spokesman for Society for Worldwide Interbank Financial Telecommunication (Swift) said it had won restrictions on the Treasury's power to see its data, which consists of records of financial transactions between 7,800 of the world's financial institutions, going back 120 days.

But the Treasury's snooping on international financial records, begun by subpoena in the wake of the September 11 terrorist attacks, was being done without oversight while Swift negotiated to protect the privacy of the international data it held.

"Over time we've narrowed down the scope of those subpoenas...the whole process has been refined," said the spokesman.

But he could not say how long it had taken to put the checks in place, nor how many records the Treasury had seen before its dogs were put back on the leash.

Swift was keen to keep the Treasury's nose out of its records because its clients would not take kindly to having their transactions scrutinised by a foreign government.

It managed to persuade the US authorities to have their investigators restrained. They agreed they could only take limited batches of data, rather than scan the whole lot freely. These batches could then be searched only for specific transactions that could be demonstrated to have links to terrorism. These searches were to be audited by both Swift and an external auditor, Booz Allen.

However, campaign group Privacy International said these were not enough. It had filed a complaint to the British data protection body, the Information Commissioner. It is worried that the Treasury was fishing through international financial records in the hope of turning up terrorist finance records. It also feared the data could be used for other purposes, including espionage.

Swift's CEO, Leonard Schrank, flew to London to meet Privacy International on Friday. Simon Davies, a PI director, said he had told Schrank he wanted to see proof that the Treasury was only able to see records that it knew contained details of terrorist financial transactions.

"When was the last time you were satisfied with something that was claimed without seeing proof?" said Davies.

"We are not prepared to accept anybody's face value assertions that protections have been put in place," he said.

He is meeting with Swift in Brussels again on Wednesday, just before the Article 29 Working Party of EU data protection commissioners meets to discuss what to do about the situation. They want to co-ordinate their separate investigations of the Treasury subpoenas through the Belgian privacy commissioner.

The way in which international business operates its IT infrastructure has given the US government unprecedented power to view international financial records.

Swift has an unspecified number of data centres around the world, each one storing every one of the 11 million transactions it handles on a daily basis, being mirrors of one another as backup in the event of one of them failing. This means that a US subpoena of records kept in Swift's US data centre will gain access to financial transactions made in over 200 countries.

In testimony before the House Financial Services Subcommittee on Oversight and Investigations on 11 July, Stuart Levey, under secretary for terrorism and financial intelligence at the US Treasury said no-one would have known about this programme (called the Terrorist Finance Tracking Programme) if details had not been leaked to the US papers.

He said secrecy was one of the programme's strengths. But Republicans have complained that even Congress was not aware of what was going on.

The Washington Post likened the programme to the National Security Agency's mass surveillance of international telephone and Internet communications without a warrant, which was recently found by a US judge to be illegal. It said the US government was also building "unprecedented" government databases of private transactions of people unrelated to terrorism.

Levey also said Swift did not supply it with individual bank account information.

This is not strictly true. According to Swift, each of the "messages" on its database is a record of a financial transaction. When the Treasury investigators get inside the encrypted electronic envelopes they get to see the individual bank account details of the payer and the beneficiary, including the amount being transferred.®