(Photo Credit: Jupiterimages, Colin Anderson)
By Emily Flitter and Stella Dawson and Mark Hosenball

NEW YORK/WASHINGTON -- The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.

The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.

Financial institutions that operate in the United States are required by law to file reports of "suspicious customer activity," such as large money transfers or unusually structured bank accounts, to Treasury's Financial Crimes Enforcement Network (FinCEN).

The Federal Bureau of Investigation already has full access to the database. However, intelligence agencies, such as the Central Intelligence Agency and the National Security Agency, currently have to make case-by-case requests for information to FinCEN.

The Treasury plan would give spy agencies the ability to analyze more raw financial data than they have ever had before, helping them look for patterns that could reveal attack plots or criminal schemes.

The planning document, dated March 4, shows that the proposal is still in its early stages of development, and it is not known when implementation might begin.

Financial institutions file more than 15 million "suspicious activity reports" every year, according to Treasury. Banks, for instance, are required to report all personal cash transactions exceeding $10,000, as well as suspected incidents of money laundering, loan fraud, computer hacking or counterfeiting.

"For these reports to be of value in detecting money laundering, they must be accessible to law enforcement, counter-terrorism agencies, financial regulators, and the intelligence community," said the Treasury planning document.

A Treasury spokesperson said U.S. law permits FinCEN to share information with intelligence agencies to help detect and thwart threats to national security, provided they adhere to safeguards outlined in the Bank Secrecy Act. "Law enforcement and intelligence community members with access to this information are bound by these safeguards," the spokesperson said in a statement.

Some privacy watchdogs expressed concern about the plan when Reuters outlined it to them.

A move like the FinCEN proposal "raises concerns as to whether people could find their information in a file as a potential terrorist suspect without having the appropriate predicate for that and find themselves potentially falsely accused," said Sharon Bradford Franklin, senior counsel for the Rule of Law Program at the Constitution Project, a non-profit watchdog group.

Despite these concerns, legal experts emphasize that this sharing of data is permissible under U.S. law. Specifically, banks' suspicious activity reporting requirements are dictated by a combination of the Bank Secrecy Act and the USA PATRIOT Act, which offer some privacy safeguards.

National security experts also maintain that a robust system for sharing criminal, financial and intelligence data among agencies will improve their ability to identify those who plan attacks on the United States.

"It's a war on money, war on corruption, on politically exposed persons, anti-money laundering, organized crime," said Amit Kumar, who advised the United Nations on Taliban sanctions and is a fellow at the Democratic think tank Center for National Policy.

Suspicious Activity

The Treasury document outlines a proposal to link the FinCEN database with a computer network used by U.S. defense and law enforcement agencies to share classified information called the Joint Worldwide Intelligence Communications System.

The plan calls for the Office of the Director of National Intelligence - set up after 9/11 to foster greater collaboration among intelligence agencies - to work with Treasury. The Director of National Intelligence declined to comment.

More than 25,000 financial firms - including banks, securities dealers, casinos, and money and wire transfer agencies - routinely file "suspicious activity reports" to FinCEN. The requirements for filing are so strict that banks often over-report, so they cannot be accused of failing to disclose activity that later proves questionable. This over-reporting raises the possibility that the financial details of ordinary citizens could wind up in the hands of spy agencies.

Stephen Vladeck, a professor at American University's Washington College of Law, said privacy advocates have already been pushing back against the increased data-sharing activities between government agencies that followed the Sept. 11 attacks.

"One of the real pushes from the civil liberties community has been to move away from collection restrictions on the front end and put more limits on what the government can do once it has the information," he said.

(Reporting by Emily Flitter in New York, Stella Dawson and Mark Hosenball in Washington; Editing by Tiffany Wu and Leslie Gevirtz)

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11 Comments

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llozano

So we have all this power and ability to look into individual finances and yet not one banker has gone to jail? It gets curioser and curioser.

March 14 2013 at 9:33 PM Report abuse +1 rate up rate down Reply
1 reply to llozano's comment
cpo1514

Looks like a shake-down for the Bamster????Great shades of J edgar Hoover..... and yet no one complains,,

March 15 2013 at 10:22 AM Report abuse rate up rate down Reply
teedee911

Like they haven't been looking already........

March 14 2013 at 5:44 PM Report abuse rate up rate down Reply
kjhprival

Don't worry, the Dear Leader is in power, all is well. The right to be left alone, the right of privacy, is antiquated. We all belong to the Government now. Rejoice in the Hive. Oh how for years it was the epitome of sophisticated wisdom to repeat the call to beware the industrial/military complex, and now, with the government/media complex, there is only silence. Hardly any news stories on privacy loss, government growth, poverty increase, welfare rolls swelling, corruption everywhere. No, the media loves the Dear Leader, and so should we. It's for our own good. We don't deserve freedom anyway.

March 14 2013 at 4:04 PM Report abuse rate up rate down Reply
drbuckles

I guess the real people worried here is if you aren't paying any taxes or you are money laundering your drug money, like HSBC was just caught doing. or a terrorist group moving your money around. You always have to follow the money, and it usually leads to the wealthy and crooks.

March 14 2013 at 3:09 PM Report abuse rate up rate down Reply
Audrey De Jesus

Daily news--**** you all.

March 14 2013 at 2:57 PM Report abuse rate up rate down Reply
Audrey De Jesus

Democrats are acting like dictators, scary. Funny, i used to be scare of the GOP, but now, Democrats are scaring me a lot more...Drones in your bedrooms---spy's---Homeland security buying up all the ammo in America.. Scary.

March 14 2013 at 2:56 PM Report abuse +1 rate up rate down Reply
morpheas1

this report says that the FBI HAS ACCESS ALREADY and they have had it before "this administration". Now they just wanna ‘share’. (btw, they’ve been scary for years, you’re just noticing NOW?) I read another report on guns being taken from citizens in CA - an activity that HAS BEEN GOING ON FOR YEARS BEFORE "this administration" - my point - never take these "reports" for their face value, don't take my comment or ANYONE ELSE'S on face value - do some research about the subject before you freak out

March 14 2013 at 2:35 PM Report abuse rate up rate down Reply
bgatlake

more loss of civil rights being usurped by our ruling regime

March 14 2013 at 1:17 PM Report abuse +1 rate up rate down Reply
dnllgrady

The ACLU has been glaringly absent when it comes to civil liberties and this President. Are they nothing more than a political SS that acts only in opposition to its ideological enemies? The evidence is adding up.

March 14 2013 at 10:15 AM Report abuse +3 rate up rate down Reply
franzr00

How freedom dies. Soon, with sophisticated computer programs, a person's buying habits will be assessed for being proper by the Federal government. People with badges love these type of programs, since they never know when something useful might show up. And of course, the government never makes mistakes!

Right now, it is large sums of money, but as computer power increases, and capacity increases, it comes down to lower and lower levels.

The FBI is under constraints that anything they do has to hold up in Court. The CIA and NSA don't have those constraints. But they can destroy a person just as easily.

Just as there is a secret no-fly list that one cannot really challenge, perhaps soon there will be a no financial transactions list, that will be equally difficult to challenge.

As Ben Franklin stated, those who would give up liberty for a little temporary safety deserve neither liberty nor safety.

But I am sure there will be those who will say if you do nothing wrong, you have nothing to fear. Of course, since the government never makes mistakes.

March 14 2013 at 9:04 AM Report abuse +2 rate up rate down Reply