Columnist Jeff German: Patriot Act zeroes in on money laundering

Wednesday, Nov. 19, 2003 | 11:10 a.m.

During a visit to Las Vegas in August, Attorney General John Ashcroft said the much-criticized Patriot Act has been used to provide the "security that ensures liberty" in this country.

But critics charge the act, passed by Congress after the Sept. 11 attacks, also gives law enforcement authorities the ability, with little judicial oversight, to intrude on our constitutional right to privacy.

Lately the Patriot Act has drawn national publicity because of its use in the Las Vegas FBI's political corruption investigation. It has been said that this is the first time the act has been applied in a case not related to terrorism.

But it's not. It has been used, I've learned, in dozens of nonterrorism cases across the country this year alone.

The act extended the authority of the Financial Crimes Enforcement Network (FinCEN), a U.S Treasury Department agency that provides assistance to the FBI and 10 other federal law enforcement agencies that investigate money laundering.

FinCEN was created in 1990 to improve the sharing of information between some 26,000 financial institutions and the 11 law enforcement agencies. The institutions, which include casinos, were required to file reports that list any suspicious currency transactions. FinCEN filed away the reports and gave authorities access to information in the reports only upon request.

Section 314 of the Patriot Act has turned FinCEN into more than just a national clearinghouse of financial data.

FinCEN now has the ability to obtain banking information for federal authorities on suspected terrorists and money launderers from its vast network of institutions.

This new power has in effect given rise to a national registry in which law enforcement agencies, with little effort, can gain access to the financial transactions of millions of Americans.

It is a creation that Patriot Act critics, such as local defense attorney Richard Wright and Gary Peck, executive director of the American Civil Liberties Union of Nevada, say comes at a big price -- the loss of our right to conduct our financial dealings with a certain degree of privacy.

The Patriot Act, Wright and Peck contend, allows federal agents to learn about our financial records without any showing of probable cause to a court.

"It makes it significantly easier for the government to collect and examine this kind of personal information for massive numbers of people nationwide," Peck said.

Added Wright:

"What they have created through FinCEN is essentially a national data bank of financial transactions they can draw upon at any time. Simply by asking they can learn every place that you've had financial transactions."

That, Wright explained, goes against the principles of freedom upon which this country was founded.

"We have a right to move about the country with relative anonymity without the government monitoring what we're doing," he said.

Lawmen, however, love Section 314 of the Patriot Act because it eliminates a lot of their legwork and helps them zero in more quickly on potential criminal conduct.

Jane Fisher, FinCEN's assistant director, and Judith Starr, its chief counsel, explained how things work.

A law enforcement agency simply has to give its word to FinCEN that it has credible evidence that the subjects of the request either have terrorist ties or are involved in money laundering.

FinCEN then sends out letters requesting information on the subjects to all 26,000 institutions, if necessary.

That is what I'm told happened a couple of weeks ago in the Las Vegas investigation. The names of those linked to the corruption probe were included on a list FinCEN circulated to financial institutions here and elsewhere in the country.

Fisher and Starr said financial institutions are required to report back within 14 days if they determine that the subjects of a request have an account or have conducted business at the institutions.

FinCEN then informs the law enforcement agency that it has received a positive response, and it's up to the law enforcement agency to decide whether it wants to pursue that information through the usual legal channels, for the most part either by a grand jury subpoena or a court-approved search warrant.

As it turns out, the use of the Patriot Act in nonterrorist investigations is more common than you might think.

Fisher and Starr said that between February and Oct. 20, the act was used more by federal law enforcement agencies to uncover money laundering than terrorists.

Of the 167 Patriot Act requests FinCEN received, the officials said, 107 were related to money laundering and only 60 involved terrorism.

So the practice is not unique to Las Vegas, and it continues across the country as the nationwide debate over the act grows more intense.

It's a debate I suspect will be with us for a long time.