Retroactive Immunity for the Banksters, Too?

On October 18, 2007, the Senate Intelligence Committee passed the first version of a bill that would grant corporations retroactive immunity for helping Bush spy on Americans.

The Senate intelligence committee yesterday produced a new bipartisan bill governing foreign intelligence surveillance conducted inside the United States, but objections by several Democratic lawmakers to some of its provisions raised questions about how quickly it might gain passage.


It would further give some telecommunications companies immunity from about 40 pending lawsuits that charge them with violating Americans’ privacy and constitutional rights by aiding a Bush administration’s warrantless surveillance program instituted after September 2001. That provision is a key concession to the administration and companies, which lobbied heavily for the provision. 

On October 22, 2007, right in the middle of the larger debate about retroactive immunity, FBI Deputy Director John Pistole gave a pep talk at a money laundering conference, cheering the work bankers had done to help pursue terrorists. He described the pattern analysis FBI was doing on financial transactions.

We established a specialized section in our Counterterrorism Division called the Terrorism Financing Operations Section, or TFOS. 

The mission of our agents and analysts in TFOS is to trace transactions and track patterns.  This painstaking work helps us identify, disrupt, and prosecute terrorists, their associates, their leaders, and their assets. 


First and foremost, we’re looking for basic personal information—addresses, birthdates, phone numbers, and employment.  These help us understand day-to-day expenses and spending habits.  This information then helps us uncover travel patterns, other accounts, important transactions, and financial histories.  And these in turn may lead us to previously unknown business or personal associations, including other members of a network.

He lauded the al-Haramain indictment, without noting that the government–after apparently wiretapping al-Haramain illegally–dismissed the charges.

In 2000, the FBI discovered possible connections between Al Haramain and al Qaeda and began an investigation.  We started where we often start—by following the money.  And we uncovered criminal tax and money laundering violations. 

Al Haramain claimed that money was intended to purchase a house of prayer in Missouri—but in reality, the money was sent to Chechnya to support al Qaeda fighters. 

In 2004, the Treasury Department announced the designation of the U.S. branch of Al Haramain, as well as two of its leaders, and several other branch offices.  In 2005, a federal grand jury indicted Al Haramain and two of its officers on charges of conspiring to defraud the U.S. government.

We relied on BSA information and cooperation with financial institutions for both the predication and fulfillment of the investigation.  Because of reporting requirements carried out by banks, we were able to pursue leads and find rock-solid evidence. 

Yes, we used other investigative tools—like records checks, surveillance, and interviews of various subjects.  But it was the financial evidence that provided justification for the initial designation and then the criminal charges. 

And, most of all, Pistole exhorted the bankers to fill out detailed data on certain kinds of clients so the FBI doesn’t have to reconstruct "who, what, when, where, why, and how" information after it develops probable cause. 

So when your bank’s officers are conducting reportable transactions, there are some things they can do to help us glean even more information right off the bat.  Let me just run through a few:

  1. You can complete each applicable field.
  2. You can verify personal identifiers, where possible, and even complete the “description” narrative.  When you fill out the “who, what, when, where, why, and how” on the front end, this saves us all time on the back end, because we don’t have to come back to you with subpoenas, looking for specific information.
  3. You can check all the violation types that apply and avoid checking the “other” box.
  4. Finally, you can file the reports electronically, which will save all of us time.
  5. And if a customer strikes you as especially suspicious, call us in addition to filing a SAR.

Believe me, we know that this creates a lot of work for you.  We also know you don’t necessarily see an obvious return on your investment.

Mind you, this kind of analysis undoubtedly will help the FBI track down criminals of all sorts, and with the FISA Amendment Act, the yoking of financial data to telecom data has probably been made legal. Heck, once the FBI dedicates some resources to Ponzi schemes and money laundering, such "who, what, when, where, why, how" information might help prevent the next Madoff scam. Maybe Congress will even ask some questions about why all this data analysis didn’t alert the FBI to the massive fraud on Wall Street.

But I can’t help but imagine that this speech was designed to reassure the bankers that they–like the telecoms that were being actively discussed–would be protected from legal liability for their role in helping the government select targets for illegal wiretapping. 

And I can’t help but wonder whether the newly "accurate" information the government supplied to Vaughn Walker on Friday alerts him to the fact that banks–and not just telecom providers–would be in line for retroactive immunity, too. 

Already, Vaughn Walker is assessing whether the retroactive immunity language was specific enough to be Constitutional. I wonder how he will feel about Congress granting immunity to an entire group of people without once admitting it publicly?

27 replies
  1. klynn says:


    I have to head out but when I return I’ll find an article that addressed how much the bank lobby supported retroactive immunity. So I would give a big nod yes to your post.

    And based on my comments at the end of the last thread, the bankers knew what they were doing.

    Walker should not let that change his ruling.

  2. JimWhite says:

    In 2000, the FBI discovered possible connections between Al Haramain and al Qaeda and began an investigation.

    It sure would be nice to know a little more about the original “discovery”. Was this a tip, an SAR, or were some aspects of TIA in place during the Clinton years?

    • pdaly says:

      I’ve been flipping through Richard Clarke’s Against All Enemies to figure out what sort of system was in place during Clinton’s presidency to track terrorists–since Clinton’s administration, unlike W’s, was taking terrorism and al Qaeda seriously.

      Surprised to learn that few at CIA or FBI knew about hawala banking systems.

      And surprised that Clarke describes government resistance among the agencies to develop a financial tracking system.

      p. 98:

      In January 1995 we had persuaded the President to issue an Executive Order making it a felony (under the International Emergency Economic Powers Act) to raise funds for or transfer funds to designated terrorist groups or thier front organizations. Rick Newcomb, the head of an obscure but powerful office in the Treasury (the Office of Foreign Assets Control), was eager to use the new authority…

      Newcomb and I reviewed the case of the Holy Land Foundation of Richland, Texas. We were convinced that it was in violation of the Executive Order. [snip] Then FBI Director Louis Freeh and Treasury Secretary Bob Rubin objected. Freeh was concerned with alienating Arabs in America and claimed that use of the International Emergency Economic Powers Act might be challenged in court. Rubin claimed that he feared the law might not hold up under a challange.

      p. 196 Richard Clarke compliments the new Treasury Secretary Larry Summers for developing at the end of the Clinton administration a “multilateral approach to name and shame foreign money laundering havens [for al Qaeda, other terrorists and criminals]” Then Clarke mentions what happes after W took over:

      When the Bush administration came into office, I wanted to raise the profile of our efforts to combat terrorist financing, but found little interest. The new President’s economic advisor, Larry Lindsey, had long argued for weakening U. S. anti-money laundering laws in a way that would undercut international standards. The new Secretary of the Treasury, Paul O’Neill, was lukewarm at best toward the multilateral efforts to “name and shame” foreign money laundering havens, and allowed the process to shut down before the status of Saudi Arabian cooperation was ever asessed.

      p. 196

      So if al-Haramain was under suspicious in 2000, it seems to have been from something in place under Clinton–the subsequent Bush administration was not interested or was feigning disinterest while working behind the scenes on a new system?

      • emptywheel says:

        Brilliant catch, pdaly.

        One of the best books I’ve read on globalization is Moises Naim’s Illicit. He makes it clear how dependent businesses are on breaking down the nation-state’s sovereignty to create these gray areas to exploit. So the terrorists are operating in the same space as drug dealers and otherwise legitimate corporations.

        And of course they don’t want to get rid of that gray space for corporations and rich people. So they’re basically keeping the back doors open for terrorists.

        Incidentally, I expect some of the Global Relief Foundation and the al-Haramain attention came from PatFitz’ work on terrorism prosecution in SDNY.

        • pdaly says:

          Thanks. I’ll have to find Naim’s book you mentioned.

          The other part I haven’t figured out: why would al-Haramain group be indicted under W?, especially since W’s administration had been protecting Saudi interests?

          Does the post 9/11 bombing in Saudi Arabia which we are told helped convince the Saudis to begin cooperating with the US in hunting down Al Qaeda fit into this timeline some how?

  3. JThomason says:

    These help us understand day-to-day expenses and spending habits.

    This is from Pistole’s speech quoted above. This is not about tracking terrorists. This impulse is about gaining a financial advantage to those who have access to the information. Its a violation of the fundamental economic discretionary integrity that the 4th Amendment was designed to shield. It is about illegally obtaining personal information for the sake of gaining an economic advantage. Remember Bush was first and foremost representing business interests.

    The pretext of terrorism here serves only to strengthen this interest with access to otherwise protected information bolstering the competitive advantage of the corporate financial cabal that was in the end his principle constituent. Its a heady soup of monopoly, tyranny, oligarchy, and the compartmentalization and consolidation of financial information all converge at the executive’s office or at least the Vice President’s office to ultimately deprive all but the elite of economic liberty. Its all designed to insure speculative control over the monetization of “the people.”

    If nothing else we have been exposed to the pattern of Bush et al. to depend on pretext. The impending banking and insurance collapse threatened the consolidation of this power. No wonder Paulson was so histrionic.

  4. Arbusto says:

    Military Industrial Complex, added Prison Industrial Complex, now Intelligence Financial Complex. Our Government in action.

  5. behindthefall says:

    Nobody should know that much about how so many people spend their money. That is power, lots of power, and “Absolute power corrupts absolutely.”

  6. cinnamonape says:

    And with all this transaction reporting just HOW did the 50,000 wealthy ($100K buy-in) investors for USB get a walk? We don’t have THEIR names or the amounts that they laundered from the US, nor the figures of yeilds on those illegal investments. Are these people now part of “organizations” involved in the drug-trade, weapons transactions in Central Africa, those involved in the sex-slave marketing of women and children, deals with former dictators…or current ones (Burma)?

    USB, Credit Suisse and two other Swiss offshore investment banks saw their assets go from $2.1 trillion in 2001 to $5.7 trillion in 2007. Apparently those reporting standards did nothing to slow the surge of wealth into these secret tax-dodges.

    OT But report just in indicating that almost 100 interrogation tapes were destroyed by the CIA. It sounds as if the torture was much more widespread, and possibly entailed more suspects than previously indicated. The CIA wants to prevent not only those who were tortured, but the names of those who VIEWED the interrogations tapes, from being made available to the defense. This makes it entirely possible that very high individuals actually did view the tapes, or portions of them.

    • emptywheel says:

      I’m looking for a copy of that document–there’s nothing to indicate, yet, that those 92 aren’t just from the two admitted torturees. They have always said there were thousands of hours of torture on them.

  7. cinnamonape says:

    More on the sequence of events that led to the UBS revelations…and how BVush and his cronies tried to hide “certain” transactions from the taxman, while gaining information on the others.…..-boat/903/

  8. bmaz says:

    But I can’t help but imagine that this speech was designed to reassure the bankers that they–like the telecoms that were being actively discussed–would be protected from legal liability for their role in helping the government select targets for illegal wiretapping.

    Well, I guess somebody ought to tell the Bankie Bankersons that they also may not be covered by the provisions. Just like the telcos! Cause you just never know what those pesky AGs will decide!

  9. stryx says:

    You can verify personal identifiers, where possible, and even complete the “description” narrative. When you fill out the “who, what, when, where, why, and how” on the front end, this saves us all time on the back end, because we don’t have to come back to you with subpoenas, looking for specific information.

    Citizen, do your duty for the Glorious State!

    All Hail Dear Leader!

  10. stryx says:

    Really though. It’s been a while, but just exactly why was Spitzer brought under suspicion? Why him and how? Especially since the charges were dropped IIRC?

    As has been said, who chose this one and not the other?

  11. lennonist says:

    Imagine if you were a criminal defense attorney and had information that the prosecutor told its witness that “Believe me, we know that this creates a lot of work for you.[and that] you don’t necessarily see an obvious return on your investment.” (wink, wink) You could nail the witness on cross with this, possibly destroying the witness’ or even the prosecutor’s credibility.

    The point is prosecutors get very good at subtly indicating that good things will happen if you cooperate without specifically saying what they will be. Semi-plausible deniability is the goal, but bankers (and thankfully juries too) aren’t stupid.

    In retrospect, it’s obvious that their “investments” were not only appreciated by the government but “returned” too, to say the least. And while they all received “carrots” later on, Nacchio provided a great example of the “sticks” available to the government if you “got all mavericky.”

    Nacchio, along with Matt Diaz, is also a good example of how “state secrets” and their supposed “irrelevance” in criminal court (that was the ruling in both cases) prevents you from telling the jury the whole truth, ultimately landing you in the custody of the “secret keeping” government, in prison.

  12. Mary says:

    And one more point – as we know from the SWIFT saga, entities that operate in countries other than the US are not necessarily made safe by a wholly US determination that the warrantless cooperation is “legal”

    I don’t know they international aspects on the surveillance laws, but I have to wonder whether or not disclosure of a massive program being run outside of judicial review and legislative authorization would comply with the laws of the other countries where some of these businesses operate – I would bet they give a bye to anything done pursuant to court order or public legislation authorizations, but a President’s private off the books program with no court orders or legislation – umm, I dunno. I do know that in the SWIFT case, the European authorities sure didn’t buy the internal audits being provided (was it by McConnell’s old company? I can’t remember) as sufficient to get the intstitutions off the hook. And of course, the upshot was the decision to relocate the clearinghouse, not a good outcome for the US.

  13. emptywheel says:

    That’s a great question on several levels.

    They may have indicted on the earlier money laundering stuff (remember, I think that may have come out of PatFitz’ investigation, so if PatFitz was his normal boyscout self, it is all on the up and up) as a way to try to force al-Haraman’s cooperation elsewhere. Or maybe it was an attempt to point to legitimate informatoin that preceded the illegal stuff.

    But I also think they always stopped short of going after al Haramain Saudi Arabia. One of the arguments al-H has made is why was the US going after it, and not SA? And why was it using things like the Chechnya donation when both AHSA and some other Saudi groups were allowed to do?

  14. JLML says:

    We bought a house last year (our first at age 50 something.) One of the fees we paid at closing was a terrorist background check called, I jest you not, a “patriot search.” What kind of illegality do you think our $40.00 bought?

  15. klynn says:

    Sorry, I posted this in the previous thread before this post was up. It fits better here…More on banking, FISA and the Patriot Act…

    And this made it so clear for me what was going on between the government and the banks:

    Barr also noted the futility of the unnecessary bureaucratic paperwork: Banks are now under increasing pressure to file more and more Suspicious Activity Reports (SARs) with federal agencies at the current rate of 800,000 per year (which is nearly triple the rate of three years ago). Until quite recently SARs were limited to instances in which unusual banking activity triggered a legitimate suspicion the customer was engaging in money laundering or some other illegal financial activity. Now, because of the PATRIOT Act, which greatly expanded the category of suspicious activities that would trigger an SAR filing, and as a result of “defensive filings” by banks, the kinds of transactions coming under scrutiny are often routine and not indicative of any unlawful activity.

    The mindless reporting of this kind is nothing more than plain eavesdropping by bank officials who are eager to gain favor with federal regulators, and it also reflects the federal government’s increasing desire to gather data on all of its citizens for no reason.

    It has gotten so bad that one banker informed Barr that his bank has set quotas for increased numbers of SARs to be filed each reporting period.

    You may be in sympathy with the banks, since the federal government is prosecuting banks for not filing enough SARs, failing to file a report with federal agencies on a customer simply because he may be using an ATM more frequently then the norm seems an overreaction, but it is happening.

    What happens to the information that the government is gathering from banks from filing SARs? Beyond gathering the data and storing it in its massive computers, hardly anything. Of the nearly 700,000 SARs filed in 2004, less than 900 were actually passed on to a law enforcement agency for follow-up.

  16. klynn says:

    This is OT but somewhat related:

    How did Paulson try to get retroactive immunity? Why, via the infamous Clause 8, of course: the clause Krugman caught Paulson lying about. For those of you who came out late, here’s the text of clause 8:

    Sec. 8. Review.
    Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

    And this, but you addressed this earlier EW:

    The distinction is significant. Telecommunication companies, such as AT&T and Verizon, are embroiled in lawsuits over their alleged cooperation with the government’s warrantless surveillance. If credit card companies and banks also provided information without a warrant, it’s conceivable they could face a courtroom challenge as well.

  17. masaccio says:

    In 2004, AmSouth Bank was fined $50mn for failure to comply with the Bank Secrecy Act and the Anti-Money Laundering Act. The trigger event was a Ponzi Scheme.

  18. JohnLopresti says:

    Someone posted a link in a prior thread to a BusinessWeek article describing delegation to Negroponte of right to declare a SEC filing waiver, written into the federal register May 6, 2006. Scanning several departments’ bulletins on that fed reg page yielded only more vectors for investigation, especially if there may be something with retroactivity. Most of the closest approximations to germane notices I located appeared to be brand x vanilla dereg.

  19. klynn says:

    This is another info source in some agreement on the role of banks. It quotes Tice’s testimony regarding the overlay of credit card and banking info with telecom intel.

    Is it just me thinking we need to take a closer look as to why Obama retained Bush Appointee, Stuart Levey, as director of Treasury’s Office of Terrorism and Financial Intelligence? Seems odd as I research. This is an important position but no one pays attention to who Stuart Levey is or if he is best for such an important position for national security…

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