Counterterrorism Blog

The revelations in today's New York Times and Washington Post that the Department of Defense and the CIA have been issuing "non-mandatory" national security letters in unknown numbers to gain access to financial records from American companies raise some disturbing issues.

Notably, Congress has previously refused to provide these agencies with the authority to subpoena such documents, on the basis that the FBI already had this authority and that it was a bad idea to get the CIA and Defense Department to engage in domestic spying.

Given that the FBI already had this authority and has been using it at the rate of some 9000 times per year, it is not clear why the CIA and Defense Department have needed it. The initial efforts to justify it raise more questions than they answer. According to the NY Times, "military intelligence officials with knowledge of them said the military had issued the letters to collect financial records regarding a government contractor with unexplained wealth." That sounds like a rationale for a domestic FBI procurement fraud investigation, not a rationale for a terrorist finance investigation by the military and the CIA.

Among those we already pay to undertake procurement fraud investigations are the GAO, the Defense Department Inspector General, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, and the audit agencies of the Air Force, Army and Navy. The Justice Department has an entire National Procurement Fraud Initiative, again within the criminal justice system, that has civil and criminal components and which can undertake asset forfeitures. Given this, it is not self-evident that the time and resources of U.S. military intelligence personnel are well spent in secretly collecting the personal banking data of defense contractors to rule out the possibility that they may be covertly using their ill-gotten gains to help terrorists.

In the second case discussed in the articles, the technique was reportedly used by the military to obtain the U.S. financial records of the Muslim chaplain at Guantanamo Bay, a U.S. citizen, falsely suspected of supporting the terrorists. Again, when the person under investigation is an American the justification for doing this without the normal procedural protections of a law enforcement investigation is hard to understand.

Notably, the military officials cited in the article stated that they intend to keep all of the records they have obtained through the process more or less forever, even after a case has been closed. Again, there are regulations governing the uses of such records in a law enforcement setting, but there appear to be none applicable to these.

It is easy to distinguish this situation from the one involving U.S. accessing SWIFT and CHIPS wire transfers moving across national borders. There, the initiative was undertaken by the U.S. Treasury, the lead agency on terrorist finance. Access was limited to the movement of particular transactions to and from foreign sources of interest, thus enabling sophisticated link analysis to track the financial activities of specific targets found to be of high terrorist risk. Here, according to today's press accounts, the CIA and Defense Department asked for the complete bank account records of any American they were interested in, covering the person's purely domestic transactions as well as international ones, without any form of oversight, check or balance, without apparent disclosure to the Congress, and in the face of significant Congressional opposition.

There are strong reasons to support military and CIA missions to obtain and analyze financial intelligence on terrorists overseas. The military and CIA have a comparative advantage over our domestic law enforcement agencies when they are operating overseas, especially in a hostile environment. There are treasure troves of data that can and should be mined by our intelligence and military agencies whenever they gain access to, for example, the computer disks of the Ba'ath party in Baghdad or Al Qaeda in Pakistan and Afghanistan, and as NATO did in the past in Bosnia. In such cases, the work of the military and the CIA on terrorist finance document acquisition and analysis can be fundamental.

In short, there is much for the CIA and the military to do on terrorist finance involving information that is outside of the U.S. and not likely to raise domestic civil rights concerns. As greater scrutiny is given to the existing terrorist finance efforts of the military and the CIA, one hopes the baby will not be thrown out with the bathwater.