“SWIFT” Boating the Russian Mafia

Remember that GCHQ/MI6 agent, Gareth Williams, who was found dead in a duffel bag last year?

At first, the narrative around his death centered on rumors he had been killed in a weird gay sex game. Amid such sensational reporting, other articles revealed Williams worked closely with the NSA on wiretapping Rashid Rauf, one of the men involved in the 2006 plot to bring down planes with small bottles of liquid. Williams’ work with NSA is all the more interesting when you consider American manipulation of that investigation and their subsequent squeamishness about sharing the intercepts.

But now there’s a new theory out now (from the Daily Mail, which was early to the now discredited sex crime theory): that Williams was killed by the Russian mafia because he was working on a way to track money laundering.

But now security sources say Williams, who was on secondment to MI6 from the Government’s eavesdropping centre GCHQ, was working on equipment that tracked the flow of money from Russia to Europe.

The technology enabled MI6 agents to follow the money trails from bank accounts in Russia to criminal European gangs via internet and wire transfers, said the source.

‘He was involved in a very sensitive project with the highest security clearance. He was not an agent doing surveillance, but was very much part of the team, working on the technology side, devising stuff like software,’ said the source.

He added: ‘A knock-on effect of this technology would be that a number of criminal groups in  Russia would be disrupted.

‘Some of these powerful criminal networks have links with, and employ, former KGB agents who can track down people like  Williams.’

The rest of the Daily Mail article on this hypes how scary and omnipresent the Russian mafia are.

But money laundering is money laundering. Terrorists do it. Organized crime does it. Spy services do it. Corporations do it (often legally). And banksters do it, among others.

And there doesn’t appear to be anything about this description to suggest the Russian mafia would be specifically targeted by the technology. Indeed, the description of their exposure as a “knock-on effect” suggests everything would be targeted (which sort of makes sense; you can’t track money laundering unless you track the “legitimate” part of finance that makes it clean).

Which is why I find this latest narrative–with its complete lack of attention on the technology, instead focusing exclusively on the Russian mob–so interesting. Because finding a way to track money laundering, of any sort, would just be a new way to do what US intelligence has already been doing with SWIFT.

You’ll recall that SWIFT is the messaging system that tracks international money transfers; our use of it to track terrorist finance was first exposed by James Risen and Eric Lichtblau in 2006. In 2009, the US and EU got in a big squabble over whether the US would continue to have access when the servers moved to Europe. They ultimately signed a deal on access. But in March it became clear we were cheating on that deal–among other things by making all specific search requests orally, thereby bypassing the audit provisions demanded by the Europeans.

I increasingly suspect the furor around the SWIFT disclosures has to do with a concern over maintaining the perceived sanctity of tax havens even as it becomes clear our government has routinely been accessing money transfer information using nothing more than administrative subpoenas.  And I increasingly suspect the ongoing squabble between Europe and the US over SWIFT access has to do with America’s asymmetrical access to what has been described as the Rosetta stone of money transfers.

I’ve become convinced, the response to NYT’s reporting on SWIFT was (and remains) so much more intense than even their exposure of the illegal wiretap program. The shell game of international finance only works so long as we sustain the myth that money moves in secret; but of course there has to be one place, like SWIFT, where those secrets are revealed. And so, in revealing that the US was using SWIFT to track terror financing, the NYT was also making it clear that there is such a window of transparency on a purportedly secret system.And the CIA has, alone among the world’s intelligence services, access to it.

There are hints in Lichtblau’s book that back my suspicion that revealing SWIFT was so problematic because it reveals monetary transfers aren’t as secret as the banksters would like you to think they are. One reason people grew uncomfortable with the program was because “some foreign officials feared that the United States could turn the giant database against them.” (234) Others worried that the US might be “delving into corporate trade secrets of overseas companies.” (248) And when Alan Greenspan helped persuade SWIFT to continue offering US access to the database, he admitted how dangerous it was.

If the world’s financiers were to find out how their sensitive internal data was being used, he acknowledged, it could hurt the stability of the global banking systems. (246)

Now, Lichtblau doesn’t describe explicitly what these risks entail, but this all seems to be about letting the CIA see, unfettered, the most valuable secrets in the world, financial secrets. The world’s globalized elite has to trust in the secrecy of their banking system, but in fact the CIA (of all entities!) has violated that trust.

It turns out (the LAT reported this contemporaneously with the NYT reporting; I’ve just now read this in the context of Risen’s affidavit to quash his Sterling subpoena) that the CIA once developed a clandestine way to access SWIFT but were persuaded not to use it because doing so would “compromis[e] the integrity of international banking.”

CIA operatives trying to track Osama bin Laden’s money in the late 1990s figured out clandestine ways to access the SWIFT network. But a former CIA official said Treasury officials blocked the effort because they did not want to anger the banking community.

Historically, “there was always a line of contention” inside the government, said Paul Pillar, former deputy director of the CIA’s counterterrorism center. “The Treasury position was placing a high priority on the integrity of the banking system. There was considerable concern from that side about anything that could be seen as compromising the integrity of international banking.”

Ah, for the halcyon days when people believed international banking had any integrity to compromise!

My point, though, is that the US has had the potential capability to track Russian mobsters since SWIFT let us access the databases after 9/11, particularly now that we’re making all our specific requests orally. So far as I know, no one has ended up dead in a duffel bag over that access.

Moreover, there would be a great deal of people who would like to prevent the UK from getting their own back door into the global finance system, if that’s really the reason Williams was killed. (Note, Williams was also reportedly about to join the UK’s cybersecurity team, which might offer other reasons to want him dead.) Sure, the Russian mafia are among that group, but so would be many others with the means to murder a spook.

Now, it may be that this entire new narrative is just as sketchy as the sex crime one was. Or it may be that this is a preemptive attempt to suggest only Russian mobsters have anything to hide.

But I do find this latest narrative mighty intriguing.

21 replies
  1. newz4all says:

    Wired.com catches up with reporting first done here on this blog:

    Fishy Chips: Spies Want to Hack-Proof Circuits

    In 2010, the US military had a problem. It had bought over 59,000 microchips destined for installation in everything from missile defense systems to gadgets that tell friend from foe. The chips turned out to be counterfeits from China, but it could have been even worse. Instead of crappy Chinese fakes being put into Navy weapons systems, the chips could have been hacked, able to shut off a missile in the event of war or lie around just waiting to malfunction.

    The Intelligence Advanced Research Projects Agency, the spy community’s way-out research arm, is looking to avoid a repeat. The Trusted Integrated Circuit program is Iarpa’s attempt to keep foreign adversaries from messing with our chips — and check the circuits for backdoors once they’ve been made.

    The US has been worried about its foreign-sourced chips in its supply chain for a while now.


  2. PeasantParty says:

    I increasingly suspect the furor around the SWIFT disclosures has to do with a concern over maintaining the perceived sanctity of tax havens even as it becomes clear our government has routinely been accessing money transfer information using nothing more than administrative subpoenas. And I increasingly suspect the ongoing squabble between Europe and the US over SWIFT access has to do with America’s asymmetrical access to what has been described as the Rosetta stone of money transfers

    And I agree with your suspicions. It seems that by having the CIA, “stand down” on this money and banking issue that Governments know already and wish to allow it. Probably because statesmen and their corporate backers are involved as well. Imagine that! The CIA is continuously being told to stand down when the evil is within sight. Hopefully, one day they will disregard and do what is right for America.

    • BayStateLibrul says:

      The Dodgers are in bankruptcy, and Roger may soon be…. (paying for

      his fancy lawyer from Texarssssssssss}

  3. MadDog says:

    In spite of Treasury’s objections, I have a hard time believing that certain National Security State denizens did not, and do not, “follow the money” regardless of legal or policy “impediments”.

    To my mind, the SWIFT deal was all about scrubbing our SWIFT access so it could be used in court, and not about whether those National Security State denizens were accessing SWIFT data.

  4. Frank33 says:

    CIA operatives trying to track Osama bin Laden’s money in the late 1990s figured out clandestine ways to access the SWIFT network. But a former CIA official said Treasury officials blocked the effort because they did not want to anger the banking community.

    Obviously catching Bin Laden would anger the “Banking Community”. You cannot have terror without a dependable terrorist who has bank accounts at BCCI and Riggs. This story is getting tiresome. Bin Laden protected by mysterious US Government Spies. FBI agents, Able Danger, “Iron Man”, investigations that were closing in on the Al Qaeda network, all were terminated with extreme prejudice.

    But I like the theory that the Treasury Department is actually running Bin Laden for the International Billionaires. Remember the Bushies said they had nothing, no information about Al Qaeda and Bin Laden, after 9-11. That is because someone in the government flew all the suspects back to Saudi Arabia on Sept. 12. Also the relatives of Bin Laden’s in the Carlyle Group must have been no help to investigators.

  5. mattcarmody says:

    CIA couldn’t survive without money laundering and many of its officers wouldn’t be able to retire in relative wealth and comfort without access to unreported money.

    One thing to consider is maybe whomever is responsible for Williams’ death is trying to send a message to people who could conceivably move money from foreign locations by using seabags, such as, oh, Paul Bremer when he left Iraq, David Petraeus as he leaves the opium paradise known as Afghanistan, and many other lower level civilian and military proles who have access to privileged customs screening and shrink-wrapped bundles of NY Federal Reserve Bank dollars.

  6. Knut says:

    You’ll recall that SWIFT is the messaging system that tracks international money transfers

    SWIFT is an entity created by a consortium of European (and American banks) that does the transfers. The headquarters are situated in Belgium on the old Solvay Estate just north of Waterloo. My brother-in-law managed its public relations in the 1990s. The person you need to consult on the laundering is Tom Naylor, professor of economics at McGill, who has spent a lifetime researching it. He knows as much about the deep workings as anyone. I believe he writes for Counterpunch.

  7. Synoia says:

    I worked for SWIFT in the ’80s.

    At the time I worked there it had no databases. It was a message transfer service. It did no accounting and no settlements.

    • emptywheel says:

      I think the key here, still, is messaging.

      Which is why the notion that a GCHQ guy was allegedly offed for either breaking their security, which is legendary, or thinking about an alternative.

  8. punaise says:

    hmmm… wonder if this guy should be looking over his shoulder:

    In 2003, Jamie King was trying to develop machines that could replace humans in dangerous nickel and iron-ore mines. … he used artificial intelligence to interpret the vast data streaming from the robots’ sensors, which measured the distance of objects in every direction a thousand times a second.

    Although mining companies passed on the idea, King later discovered an unlikely new use for his minebot software: catching money launderers.

    Banks collect huge data sets on the millions of transactions that move money in and out of their accounts. When university colleagues introduced King to a financial-software entrepreneur, he got a peek at such a pile of numbers and realized it looked “very much like a whole bunch of sensor readings.”

    King co-founded Verafin in 2003 to sift bank data for patterns that could indicate fraud, drug trafficking or terrorist financing. At the time, most banks used rules-based software that flags transactions if they match a pattern defined beforehand as suspicious, such as several transfers of money overseas in a short period.

  9. bobschacht says:

    Ah, for the halcyon days when people believed international banking had any integrity to compromise!

    I’m afraid this is the key to the whole thing, as well as why Timmy Geithner is still head of Treasury, despite an extraordinarily bad performance as Obama’s guru on the economy (e.g.: the unemployment rate), as well as why few banksters have been prosecuted for the massive fraud they committed to bring down the economy (A foreign [Indian] banker has been the only one charged, IIRC).

    Are the Libertarians really the only way out of this mess?

    Bob in AZ
    P.S. BTW, I go away to a family reunion for a few days, and I come back to a blizzard of emails. You must have been saving up during NN.

  10. pdaly says:

    I was re-reading the Guardian’s November 2010 description of Gareth Williams’ death (in the “found dead” link at the top of EW’s post) and was surprised to find Russian strains throughout even then. But the article tosses out details without trying to string them together:

    The body had been found [23 Aug 2010] padlocked inside a sports bag in the flat where Gareth was staying. It could have been there for up to a fortnight.


    The building in which the body was found was owned by a private company, registered offshore, called New Rodina. Rodina was Russian for “motherland”.


    Ceri last spoke to her brother [Gareth Williams] on 11 August [2010], after he returned from a short trip to the US. He now intended to “tidy things up”, before returning to GCHQ in Cheltenham on 3 September.

    Ceri had called her brother again about a week later. No answer. She tried repeatedly, becoming worried.

    Now she [Ceri] contacted the police; the security services were already concerned, as Gareth had failed to show for work.

    On 23 August, at 6.30pm, a uniformed officer was sent to Williams’s top-floor flat in a Georgian townhouse in Alderney Street, Pimlico. It was only a few hundred yards from the MI6 headquarters at Vauxhall, and was used by the Secret Intelligence Service as a safe house.

    What? He goes missing from work for a week, and no one at MI6 thought to look for him at their own safe house where he was renting an apartment? Did they not have a key?!

    A lettings agent who held a spare key showed the policeman in.

    Is a lettings agent part of MI6? or just a random civilian with a key to an MI6 safehouse?!

    MI5 agents swept through the Alderney Street flat, followed by detectives from the Homicide and Serious Crime Command, assisted by SO15, Scotland Yard’s Counter Terrorism Command. Alderney Street was cordoned off as Home Office scientists began processing the scene. Once the spooks had departed, it was down to the murder squad to study the evidence.

    Slender 5ft 7in Gareth had been stuffed inside the near-airtight red North Face sports bag and placed in the bath, containing any spillage and minimising odours, too. The heating was on, increasing the rate of decomposition, which significantly lessened the chances of retrieving evidence from the corpse.

    And there was further proof that someone else must have been in the flat with him: his front door had been locked from the outside.

    I don’t know how or when they could have figured this last bit out, given all the comings and goings in the apartment by the security/intelligence services, but it certainly needs explaining how the door could be locked from the outside (of an MI6 safehouse) and there is no video tape of the person exiting?

  11. greengiant says:

    Read the complete postings on deepcapture.com to get a feel for how corrupted the US government, CIA, FBI, SEC, the financial industry, and the stock clearing company DTC are by the Russian Mafia/KGB/Putin and Islamic terrorists.

    Seems all the dark pools, the electronic stock markets as invented by Madoff were created by dubious parties.

    Do not be so naive to assume that all wealth transfers are going through Swift.

    • emptywheel says:

      Oh, I’m not, and I’m not sure that what Williams is reported to have been working on is a SWIFT substitute. Just trying to point out that there are more people than Russian mobsters who like things the way they are.

  12. prostratedragon says:

    Maybe not so OT. I can’t wait for a translation:

    Y refundaron la patria…: De cómo mafiosos y políticos reconfiguraron el Estado colombiano [And They Refounded the Nation…: How Mafiosi and Politicians Reconfigured the Colombian State] edited by Claudia López Hernández. Bogotá: Random House Mondadori, available through Amazon.

    Among other things, Ms. López presents a smoking gun of collaboration between some of Colombia’s right wing paramilitary groups and certain regional politicians, the Ralito Pact:

    López’s book shows that the Ralito Pact’s reference to “refounding the nation” —from which the book takes its title— was not merely pompous rhetoric. Rather, it reflected a broader objective shared by the AUC commanders and local politicians and landholders: to legalize the enormous wealth and power they had amassed during years of paramilitary expansion.

    The paramilitaries had driven more than one million poor farmers off their lands, preparing the way for what the authors refer to as a “counter-agrarian reform.” Large landholders and investors —including paramilitaries and other traffickers— acquired the land, and corrupt officials helped them obtain title. As one former paramilitary put it: “We went in killing, others followed buying, and the third group legalized.”

    According to reviewer Daniel Wilkinson, the presidential transition from Uribe to Santos might represent a spanner in the works of the Pact, as some of the nation’s haves were getting nervous about the advance of these new forces. I suppose we shall see.

    A little Quantic for thy blood pressure’s sake.

  13. WilliamOckham says:

    If the story is true, there is a very scary implication. The Russian mob knew enough about the internal workings of an intelligence community project to kill the right person (someone on the software side).

  14. regulararmyfool says:

    I danced in and out of the American black market for over 20 years. I can assure you that it is big and extends even into Iowa and Minnesota. I can land in any city big enough to have an airport and buy guns and drugs within 6 hours.

    With all of the unconstitutional powers claimed by this fake “democracy,”
    there is not one single agency that can track money laundering?

    The economists ignore the black economy in their insane flights of fancy. It is big and it will grow like a weed as more Americans fall through the poverty trap.

    The black economy is the only truly capitalist economy that has ever existed. The price on your stolen car is settled in seconds. An offer, then acceptance or rejection. All transactions are cash. There is no paperwork. There are no lawyers, judges or cops. You welsh on a deal, you will not do it again.

    The American people will not starve. The black economy will meet their needs even if it requires hijacking trains. Once someone drops into the economy, it is hard to ever go back to paying taxes, paying outrageous prices for consumer goods.

    Someone thinks the Russian Mafia is a problem? Totally insane.

Comments are closed.