US Intelligence Unit Accused Of Illegally Spying On Americans’ Financial Records
US Intelligence Unit Accused Of Illegally Spying On
Americans’ Financial Records
The Treasury Department’s Office of Intelligence and
Analysis has been illegally rifling through and filing away the private
financial records of US citizens, Treasury employees alleged. “This is such an
invasion of privacy,” said one official.
Posted on October 6, 2017, at 7:00 a.m.
By Jason Leopold and Jessica Garrison Posted on October
6, 2017, at 7:00 a.m.
The intelligence division at the Treasury Department has
repeatedly and systematically violated domestic surveillance laws by snooping
on the private financial records of US citizens and companies, according to
government sources.
Over the past year, at least a dozen employees in another
branch of the Treasury Department, the Financial Crimes Enforcement Network,
have warned officials and Congress that US citizens’ and residents’ banking and
financial data has been illegally searched and stored. And the breach, some
sources said, extended to other intelligence agencies, such as the National
Security Agency, whose officers used the Treasury’s intelligence division as an
illegal back door to gain access to American citizens’ financial records. The
NSA said that any allegations that it “is operating outside of its authorities
and knowingly violating U.S. persons’ privacy and civil liberties is
categorically false.”
In response to detailed questions, the Treasury
Department at first issued a one-sentence reply stating that its various
branches “operate in a manner consistent with applicable legal authorities.”
Several hours after this story published, the department issued a more forceful
denial: “The BuzzFeed story is flat out wrong. An unsourced suggestion that an
office within Treasury is engaged in illegal spying on Americans is unfounded
and completely off-base.” It added that “OIA and FinCEN share important
information and operate within the bounds of statute.”
Still, the Treasury Department’s Office of the Inspector
General said it has launched a review of the issue. Rich Delmar, a lawyer in
that office, offered no further comment.
But a senior Treasury official, who is not authorized to
speak on the matter so requested anonymity, did not mince words: “This is
domestic spying.”
Sources said the spying had been going on under President
Barack Obama, but the Donald Trump appointees who now control how the
department conducts intelligence operations are Treasury Secretary Steven
Mnuchin and Under Secretary for Terrorism and Financial Intelligence Sigal
Mandelker.
At issue is the collection and dissemination of
information from a vast database of mostly US citizens’ banking and financial
records that banks turn over to the government each day. Banks and other
financial institutions are required, under the Bank Secrecy Act of 1970, to
report suspicious transactions and cash transactions over $10,000. The database
is maintained by the Financial Crimes Enforcement Network, or FinCEN, a bank
regulator charged with combatting money laundering, terrorist financing, and
other financial crimes. Under the law, it has unfettered powers to peruse and
retain the data.
In contrast to FinCEN, Treasury’s intelligence division,
known as the Office of Intelligence and Analysis, or OIA, is charged with
monitoring suspicious financial activity that occurs outside the US. Under a
seminal Reagan-era executive order, a line runs through the Treasury Department
and all other federal agencies separating law enforcement, which targets
domestic crimes, from intelligence agencies, which focus on foreign threats and
can surveil US citizens only in limited ways and by following stringent
guidelines.
FinCEN officials have accused their counterparts at OIA,
an intelligence unit, of violating this separation by illegally collecting and
retaining domestic financial information from the banking database. Some sources
have also charged that OIA analysts have, in a further legal breach, been
calling up financial institutions to make inquiries about individual bank
accounts and transactions involving US citizens. Sources said the banks have
complied with the requests because they are under the impression they are
giving the information to FinCEN, which they are required to do.
One source recalled an instance from 2016 in which OIA
personnel, inserting themselves into a domestic money-laundering case, sought
information from a Delaware financial institution. In other cases, according to
a second source, FinCEN gave OIA reports with the names of US citizens and
companies blacked out. OIA obtained those names by calling the banks, then used
those names to search the banking database for more information on those
American citizens and firms.
"This is such
an invasion of privacy." —Treasury Department official
Sources also claimed that OIA has opened a back door to
officers from other intelligence agencies throughout the government, including
the CIA and the Defense Intelligence Agency. Officials from those agencies have
been coming to work at OIA for short periods of time, sometimes for as little
as a week, and thereby getting unrestricted access to information on US citizens
that they otherwise could not collect without strict oversight.
“This is such an invasion of privacy,” said another
Treasury Department official, who, lacking authorization to speak on the
matter, asked not to be named. This person predicted that banks “would lose
their minds” if they knew that their customers’ records were being used by
government intelligence officers who did not have the legal authority to do so.
The Defense Intelligence Agency did not respond to a
request for comment. CIA spokesman Dean Boyd said, "Suggestions that the
Agency may be improperly collecting and retaining US persons data through the
mechanisms you described are completely inaccurate."
Sources claimed the unauthorized inspection and
possession of Americans’ financial data have been going on for years but only
became controversial in 2016, when officials at FinCEN learned about it and
began objecting. Early last year, Treasury’s Office of Terrorism and Financial
Intelligence, which oversees OIA, proposed transferring much of FinCEN’s work
to OIA.
In a bureaucratic turf war, FinCEN officials objected to
the proposal, which would have shifted numerous employees and a portion of
FinCEN’s budget to OIA. They said the move was illegal without prior approval
from Congress.
Instead of being given the guidelines, sources said, they
were removed from an email chain about the issue.
And they claimed that OIA, because it is part of the US
intelligence community, could not legally collect information on US citizens
and residents unless it complied with a landmark executive order known as
12333. Signed by President Ronald Reagan and later revised and reissued by
President George W. Bush, this order sets the rules for how intelligence
agencies can operate. Before any agency can collect, retain, and disseminate intelligence
on American citizens, that agency must establish privacy guidelines, and those
guidelines, in turn, must be approved by the attorney general after consulting
with the director of national intelligence. OIA, which was established in 2004,
has never completed this process. Even so, it must follow rules designed to
protect the civil rights and privacy of American citizens.
The Office of the Director of National Intelligence and
the attorney general declined to comment.
Also, sources said, under an agreement between the two
branches of Treasury, OIA is allowed to access FinCEN’s banking database for
specific foreign intelligence purposes. But, these sources said, OIA has been
going far beyond those limits, flouting both this agreement and the executive
order.
Last summer, FinCEN officials asked to review OIA’s
guidelines required under the executive order. Instead of being given the
guidelines, sources said, they were removed from an email chain about the
issue.
In September, a high-ranking attorney for the Treasury
Department, Paul Ahern, got into a heated exchange at a meeting with at least a
half-dozen FinCEN employees. He told them that OIA had the authority to access
and use the data because it had preliminary, draft guidelines, according to
people with knowledge of the meeting. In fact, more than a month would pass
before the guidelines were written, according to a first draft reviewed by BuzzFeed
News. To this day, the guidelines have not been finalized.
Ahern, sources said, also informed FinCEN officials that
OIA had already been collecting information on US citizens. Many FinCEN
officials were aghast because they believed that was illegal.
A Treasury Department spokesperson declined to make Ahern
available for comment, and referred back to the department’s statement that all
its offices act “in a manner consistent with applicable legal authorities.” The
former head of OIA, S. Leslie Ireland, who resigned last year, did not respond
to a request for comment. This month, she was named to the board of directors
of banking giant Citigroup. The company declined comment.
Some FinCEN officials said they were instructed not to
speak to Congress about their domestic spying concerns and other issues. They
did anyway.
In October of 2016, Rep. Sean Duffy, the chairman of the
House Subcommittee on Oversight and Investigations, sent a letter to
then-Treasury Secretary Jacob Lew asking for OIA’s legal authority to collect
and retain domestic information.
Nearly one year later, the Congressman has yet to receive
an answer, according to a committee staffer.
Officials at FinCEN said that after they began raising
alarms, OIA began shutting them off from classified networks. That lack of
access, which BuzzFeed News reported last week, meant FinCEN officials were
unable to fully respond to law enforcement agencies during several live
terrorist attacks over the last year. It also prevented FinCEN from fully
complying with the Senate investigation into possible collusion between Donald
Trump’s campaign and Russia. ●
UPDATE
October 6, 2017, at 4:06 p.m.
This story has been updated to reflect statements that
were issued after the story was published from the Treasury Department and the
National Security Agency.
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