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Treasury Discloses Limits on Bank-Data Sharing With Spy Agencies

By Greg Farrell
June 09, 2014 12:00 AM EDT

The U.S. Treasury Department said it sets limits while allowing the nation’s intelligence agencies to access reports that banks file on suspicious or large money moves by customers, including information about Americans.

The Treasury, saying it was responding to a public records request, released the protocol at the end of last week, describing how it provides some information in bulk to the National Counterterrorism Center, the hub of the government’s anti-terrorism intelligence efforts. The document, partially redacted, also sets conditions for searching the database.

The 2010 memorandum of understanding between the Treasury’s Financial Crimes Enforcement Network and the NCTC requires intelligence agencies to make “best efforts” to tap information valuable only to specific cases and immediately destroy data obtained in error. Redistribution is limited.

The Obama administration has been seeking to assure the U.S. public and allies that they’re not subject to continual surveillance, while defending intelligence collection as vital to stopping terrorism. Unlike the vast data tombs unveiled by former National Security Agency contractor Edward Snowden, the U.S. has publicly required financial firms for decades to report suspicious activity to the Treasury for anti-money-laundering efforts. The information can be shared with law enforcement and has been used in past terrorism cases.

‘Vital Access’

“Financial data can be some of the most relevant as to how people are connected,” NCTC Director Matthew Olsen said in an interview. “That’s why it’s vital that we have access” to the FinCEN database, he said.

While his unit also looks at travel patterns, phone records and other pertinent data when investigating potential international terrorist activity, tracking the money is key, he said. FinCEN data, for example, can help map financial flows from individuals in the U.S. to terrorist networks in Yemen or Syria, he said.

“Financial connections are the most binding between people,” he said. “When we can find connections based on money, it’s not a smoking-gun piece, but it helps with analysis.”

U.S. banks file more than 15 million currency-transaction reports each year, spurred by movements of $10,000 or more into or out of an account, according to FinCEN. Financial institutions -- including banks, brokerages, money-transfer businesses and casinos -- also file more than 1.5 million suspicious-activity reports annually.

“The data we collect is publicly known,” FinCEN Director Jennifer Shasky Calvery said in an interview. “It’s not raw data. It’s suspicious, large-cash transactions that meet a threshold.”

The guidelines seek to balance privacy and the prevention of national-security threats, she said. “We think we’ve gotten that balance right, although it is something we must always be ready to re-examine.”

To contact the reporter on this story: Greg Farrell in New York at gregfarrell@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net David Scheer

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