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Right On The Money

The Bush administration's tracking of international financial transactions was legal, congressionally endorsed, and largely transparent.

12:00 AM, Jun 28, 2006 • By ADAM J. WHITE
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SHORTLY AFTER SEPTEMBER 11, 2001, the Treasury Department began to monitor international financial transactions of persons suspected of having terrorist connections. According to Treasury, the program successfully identified terrorists. Like other disclosed counterterrorism programs, the program's legality was immediately challenged. But critics have their work cut out for them: The program appears to be both constitutionally sound and congressionally authorized. Furthermore, the Bush administration has repeatedly indicated that such surveillance was underway.

The overview of the Terrorist Finance Tracking Program (TFTP), as reported last Friday and largely confirmed by Treasury officials, is fairly straightforward. The United States secured information on international financial transactions from the Society for Worldwide Interbank Financial Telecommunication (Swift), a Belgian consortium founded in 1973 by the world's banks. Pursuant to administrative subpoenas, Swift provided to Treasury electronic financial data that would be searched for terrorist-related information.

The details and circumstances surrounding TFTP have only begun to come to light and to say that the program appears to be on firm legal ground generally is not to say that it has been applied legally in every respect on every occasion. But on the evidence currently available, the objections raised to the program seem unfounded:

The program did not violate the Constitution. The ACLU categorically denounced the TFTP as a violation of the Constitution, saying that "The invasion of our personal financial information, without notification or judicial review, is contrary to the fundamental American value of privacy and must be stopped now."

But the program's constitutionality is incontrovertible. In U.S. v. Miller (1976), the Supreme Court held in no uncertain terms that the Fourth Amendment's protection against unreasonable searches and seizures did not protect bank customers' financial records. Customers have "no legitimate 'expectation of privacy' in their [records]," because all such financial information is "voluntarily conveyed to the banks and exposed to their employees in the ordinary course of business." In short, "[t]he depositor takes the risk, in revealing his affairs to another, that the information will be conveyed by that person to the Government." No reasonable expectation of privacy means no Fourth Amendment violation.

The ACLU also cannot support its statement that an administrative subpoena is somehow unconstitutional because it is issued from the executive, rather than the judicial, branch. Judicial oversight is not absent, because a court would review the subpoena if the Treasury Department sought to enforce it in court. And the Supreme Court made clear in See v. City of Seattle (1967), among other cases, that administrative subpoenas for the production of records or documents satisfy the Fourth Amendment so long as they are "sufficiently limited in scope, relevant in purpose, and specific in directive." As of yet there have been no suggestions that Treasury's subpoenas failed to meet that standard.

Congress authorized the program. Whereas the defense of other recently disclosed surveillance programs may depend in part on the president's authority to act in the face of congressional silence or disapproval, defense of the TFTP is simplified by Congress's express statutory authorization of the president to conduct this program. The International Emergency Economic Powers Act of 1977 (IEEPA) expressly affords the president power to investigate international financial transactions, including those of non-foreign persons, pursuant to a declared state of emergency. Section 1702(a)(2) empowers the president to compel production of such financial transactions, via administrative subpoenas.