Treasury Seeks To Cast A Wider Net For Terrorists The department will soon publish new rules that would pave the way for tracking all of the money transfers coming in and out of the U.S. As envisioned, Treasury would take all that information and ferret out patterns associated with terrorism financing.
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Treasury Seeks To Cast A Wider Net For Terrorists

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Treasury Seeks To Cast A Wider Net For Terrorists

Treasury Seeks To Cast A Wider Net For Terrorists

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And here in the U.S., the government began collecting personal information on millions of people soon after the 9-11 attacks. The idea was to bring together phone, email and other information to find patterns of suspicious behavior and to uncover terrorists. The technique is called data mining. It's controversial because data mining inevitably sweeps up information about innocent people along with the suspected terrorists.

Well, now, the Treasury Department wants to create a system to gather more financial data and to track all the money transfers coming in and out of the United States. NPR's Dina Temple-Raston reports.

DINA TEMPLE-RASTON: The proposed Treasury Department regulations would require banks and money servicing companies, like Western Union, to report all of their electronic transactions to the Treasury Department - automatically. Right now, they only have to report suspicious activity and large transfers over $10,000. Criminals and terrorists get around that regulation.

Eric Lewis is a partner of a Washington law firm that specializes in terrorism financing and money laundering. He says the current rules are so lax the loopholes actually have nicknames.

Mr. ERIC LEWIS (Attorney, Senior Partner, Baach Robinson and Lewis): What you often see happening is a practice known as Smurfing. That is where you have people sending money just below the reporting threshold.

TEMPLE-RASTON: Smurfing, like the little blue characters on the cartoon?

LEWIS: Like the little blue character only not nearly so cute.

TEMPLE-RASTON: Lewis says criminals will send funds to the U.S. in increments just a dollar below the $10,000 threshold to avoid detection. The new proposals would help prevent that from happening because every transfer would be recorded.

The new rules would also allow the government to cast a wider net over an informal remittance system called hawala. It's been a source of funding for a number of terrorism plots in this country. It basically uses brokers here in the U.S. and overseas who can move money with just a phone call. Someone contacts a hawala and asks to have a thousand dollars sent to, for example, Pakistan. For a fee, the broker calls a colleague there who makes the money available for pick up.

It's all perfectly legal, but the dollar amounts are generally small and hard to track. Earlier this year, the Times Square bomber financed his plot using small hawala money transfers. So did the 911 hijackers.

The Treasury is hoping that gathering all that financial information and looking for patterns, essentially data-mining, will help them identify plots before they happen.

Mr. JUAN ZARATE (Former Deputy Assistant to the President and Deputy National Security Advisor for Combating Terrorism): The jury is still out on that.

TEMPLE-RASTON: Juan Zarate was the Bush administration's top official working on terrorism financing. He isn't convinced the deluge of information is what the Treasury needs to combat terror. Right now, there are about 14 million transactions over $10,000, every year.

Mr. ZARATE: Now you throw on top of it millions and millions of transfers that have no connection to any criminal activity at the start. And there's a real good question as to whether of not data can be held properly, will be protected, and whether or not it's ultimately going to be useful; whether or not you're adding more hay to the haystack, as officials try to find the needles in that haystack.

Professor MARC ROTENBERG (Director, Electronic Privacy Information Center): When you gather data in this fashion it generally suggests that the government doesn't know quite what it is looking for.

TEMPLE-RASTON: Marc Rotenberg is the director of the Electronic Privacy Information Center in Washington. Rotenberg says European bankers and financial institutions are already complaining. They've resisted U.S. data requests in the past, saying they violate privacy laws in Europe. This proposal, he says, makes it worse.

Prof. ROTENBERG: It's quite a mess actually to pursue this. And I'm wondering if perhaps they might reconsider and withdraw it.

TEMPLE-RASTON: The government will have a year to decide. A public comment period has just started.

Dina Temple-Raston, NPR News, New York.

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