Treasury Flexes Muscles in Bank Monitoring

Robert Siegel talks with Stuart Levey, Under Secretary for Terrorism and Financial Intelligence at the Treasury. Undersecretary Levey is responsible for the operations of OFAC, the Office of Foreign Asset Controls, which issues subpoenas to organizations like SWIFT.

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ROBERT SIEGEL, host:

Stuart Levey is Under Secretary of the Treasury for Terrorism and Financial Intelligence and joins us by phone. Welcome to the program.

Mr. STUART LEVEY (Under Secretary of the Treasury for Terrorism and Financial Intelligence): Thank you for having me, Robert.

SIEGEL: You and others have said this is not a fishing expedition but it appears that you have gained access to a tremendous amount of financial data rather than narrow amounts of data that might describe particular transactions. Why? Why do you need so much?

Mr. LEVEY: Well, actually I think there's a little bit of a misconception there. What we have is a set of data that's provided to us by SWIFT, but in fact we cannot access it just to do whatever we want, to browse through it for example, or to do broad searches. Instead we can only access it if our analyst first explains exactly who or what he wants to do a search on and then articulate how that person or entity is connected to an ongoing terrorism investigation.

SIEGEL: To whom is that person explaining and articulating those conditions?

Mr. LEVEY: Well, the way it works is the analyst has to type that into the database and cannot access the database until that has been accomplished, and then there are two sets of auditors that are monitoring what is going on.

One, in a very I think creative and unusual arrangement that we set up with the company, with SWIFT, SWIFT itself is on site and has real-time access to all the searches that are being done and at any time, their representatives can stop the search and say wait a minute, I have a question about that. I'm not sure why that's connected to terrorism or the connection hasn't been articulated sufficiently. And then after the fact, it can be audited both by SWIFT and by outside auditors that we've engaged to do just that.

SIEGEL: But when you say outside auditors, are you describing what we would recognize as oversight? That is, there would be someone from another branch of government who would be looking at it or lawyers are looking at it to see if it's in conformity with the law.

Mr. LEVEY: Well, certainly our lawyers do look at that and lawyers from the Treasury Department and the Justice Department have looked at this arrangement and have confirmed that it's consistent with the law. In fact our legal authorities are really quite clear on this.

But these auditors are independent outside auditors, Booz Allen, as a matter of fact. So there's really three levels of oversight if you will. The SWIFT auditors, Booz Allen and then, of course, we ourselves. And these audit reports have been issued regularly since the beginning of the program and have, as I mentioned, confirmed that we have been using the information only for counter-terrorism purposes.

SIEGEL: Okay let's take a hypothetical case. I'm a Somali immigrant taxi cab driver in Washington, D.C. I send money back home to my cousin who has moved to Peshawar, Pakistan. On the face of it, might your people look at the terms of that transaction, just knowing that much?

Mr. LEVEY: No. I think in order for us to get access to that transaction, you need two more things. First of all, that it was sent through a bank that uses SWIFT as its messaging service. But the second thing, Robert, is that the only way that we get access to that transaction is of that taxi cab driver who is sending the money, that that transaction came up either because we're doing a search on the person receiving the money or on him because of a terrorism connection.

SIEGEL: So if I'm a Somali immigrant who drives a cab in Washington, D.C., but I've already had difficulty at the airport. I discover that I'm on some list somewhere. My transactions if they go through a bank that works with SWIFT, I should pretty well assume that they're being, my transactions are being surveiled in that sense.

Mr. LEVEY: Truthfully, no. I think that even that is going too far. We don't just do searches on everybody on any watch list or whatever. What happens is we're doing counter terrorism, we're pursuing a counter terrorism investigation, and we get a lead that this person is a terrorist facilitator. This person is the donor to a terrorist organization, or this person is an operative.

And then what we want to do is see who else that person is connected to and we can do a search on that person and we can find out who that person has sent money to and who has sent money to him.

SIEGEL: How high yield a program is this? That is, for the number of transactions you examine, how many of them turn out to lead to any good useful intelligence for an investigation?

Mr. LEVEY: Actually, that's an excellent question. It's a very high percentage of sort of positive hits, by which I mean that it leads to some actionable lead where we could follow up. Because this kind of data has exactly the kind of information that counter terrorism investigators need, because if you do have a connection between a terrorist operative and another person and you get a hit in this data, the kinds of things you'll get are real addresses, real phone numbers, account numbers.

And that's the kind of thing we could act on and so where this program is particularly powerful and why, frankly, we're very disappointed that it's become part of the public domain, is because it provides a very high percentage of actionable leads because financial intelligence is so powerful and rich.

SIEGEL: But when you're in the finding needles in haystacks industry here, what's a high percentage? I mean is one percent a high percentage? Is 10 percent a high percentage? How often do you get something useful?

Mr. LEVEY: Well, I want to answer that in two ways. Because if you don't get something useful, there's no information extracted from the database at all. If, for example, Stuart Levey was identified as a terrorist operative and someone did a search on me and it only yields that I send money to a relative in London who no one suspects of terrorism, nothing happens. There's no data extracted from that, and no one sees it other than a single analyst.

But in some of our investigations and, you know, when we're following up on a recent terrorist attack or something like that, we'll get a very high percent. I would say a high percentage of actionable leads would be something, you know, closer to the 10 percent number that you've come up with. Although to be honest with you, I don't have a precise figure on that.

SIEGEL: There was a report in the New York Times that one person was dismissed from the program for misusing the database. That would be putting in information that has no conceivable connection to terror? What happened, what was the story?

Mr. LEVEY: Well I think of this as proof that the controls work because, you know, we've done tens of thousands or hundreds of thousands searches and we have, and you know this is a human endeavor. So we had, we did have one situation where one analyst did a search that was later determined to be inappropriate and that person was removed from the program. And I think that's good evidence that these controls are not just window dressing, but are actually being used.

SIEGEL: Secretary Levey, thank you very much for talking with us today.

Mr. LEVEY: Thanks for having me.

SIEGEL: That's Stuart Levey, who is Undersecretary of the Treasury for Terrorism and Financial Intelligence.

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