More bank data may not aid fight against terrorism

By Caroline Drees, Security Correspondent

Mon Apr 18, 2005 10:30 AM ET

WASHINGTON, April 18 (Reuters) - A plan to force banks into disclosing hundreds of millions of wire
transfers to help fight terrorist financing would overwhelm bankers and regulators and add
questionable value to the war on terrorism, experts and officials say.

The proposal is being studied by the U.S. Treasury and would grant the government unprecedented
access to banking records. Banks wire more than $6 trillion across the globe each day, the bulk of
it in and out of the United States.

While counterterrorism officials are eager to tap into this mother lode of financial information,
some officials, bankers and experts question whether authorities can actually glean pertinent
information from the flood of data, while protecting the privacy of banking clients.

"The big provisos are whether that data can be obtained in a cost-effective way that doesn't
overburden the private sector, doesn't choke the government, and in a way that it can be ... used
without running roughshod over privacy and civil liberties concerns," said Joseph Myers, a former
National Security Council official under U.S. President George W. Bush.

One current counterterrorism official said: "With a billion additional reported transactions a day,
you're just increasing the amount of hay in the haystack. You're not getting any closer to finding
the needle."

Many officials and experts, including Myers, say wire transfers might contain useful information to
track down terrorists and believe the idea of reporting some of those flows merits study, as long as
the challenges are clear.

BURDEN VS. BENEFIT

A sweeping intelligence bill passed by the U.S. Congress in December to overhaul the U.S. spy
community called on the Treasury to study whether the proposal was useful and feasible.

A Treasury spokeswoman said, "Information collected from certain cross-border wire transfers could
be incredibly valuable to our efforts to starve terrorists of funding."

Douglas Greenburg, who coauthored the Sept. 11 commission's landmark report on terrorism financing,
pointed to Abdul Aziz Ali, a facilitator of the Sept. 11, 2001, plot who wired an estimated $120,000
from Dubai to the hijackers in the United States.

"If the government had a database they could search through by name to find what wire transfers he's
made, where and to whom, that could be extraordinarily useful," Greenburg said.

Dennis Lormel, who ran the FBI's anti-terrorism financing operations after the 2001 attacks, also
said access to wire transfer data was a hugely valuable resource, but the government needed to
develop better technology to analyze the vast amounts of information.

"You have to balance the burden versus the benefit. Because right now, you're hard-pressed to
demonstrate what the benefit would be," he said.

In the industry, bankers are wary of more reporting requirements in the wake of Sept. 11. Financial
institutions must already report to the government a host of other transactions, such as "suspicious
activities" and some currency moves.

"Someone needs to take a temperature check," said John Byrne, a senior official at the American
Bankers Association. "Is all of this information worthwhile? Should resources be allocated to yet
another information-gathering requirement without any sort of evidence that this is going to be
remotely useful?"

Jimmy Gurule, the Treasury's former undersecretary for enforcement, agreed.

"In the end, the banks could be reporting this overwhelming volume of data, most of which will
probably not have any legitimate investigative value."

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