Posts

What Are NSA’s Standards for Surveilling Transnational Crime Organizations?

/13 Comments/in , /by

Yesterday, the Italian magazine Panorama claimed that the NSA had wiretapped the Vatican.

I have some questions about the veracity of the report. NSA has denied it more vigorously than other allegations of tapping world leaders. Panorama is not known to have access to the Edward Snowden documents. One key claim — that the current Pope, Jorge Mario Bergoglio, has been surveilled since 2005 — was actually sourced to WikiLeaks in the story (In addition to cables on Argentine politics, Bergoglio shows up in a 2003 cable speculating on the possibility of a Latin American Pope).

All that said, I am intrigued by this claim.

Panorama said the recorded Vatican phone calls were catalogued by the NSA in four categories – leadership intentions, threats to the financial system, foreign policy objectives and human rights.

I did a quick review of WikiLeaks cables on the Vatican (remember, these are classified at no more than the Secret level, and therefore are not going to have any intercept information in them, and they of course stop at 2010). The human rights issues pertain to interfaith dialogue and the rights of Catholics in repressive countries, the Church’s role in anti-gay laws, and allegations of anti-Semitism (this cable, on the Church prioritizing unity and thereby endorsing Holocaust denial, is one of the few Secret ones). There are fewer that relate directly to the Church’s role in the financial system; though a good many cables with “financial” content relate to Syria or, especially, Lebanon, and include the Vatican because of its influence with Christian power brokers in the region (this cable, on Syrian money laundering, was forwarded to the Vatican mission for some reason).

But there two other reasons why the Vatican might be an NSA target based on those topics: its multi-decade cover-up of pedophilia (and the impact legal investigations and settlements might have around the world), and the Vatican’s role in money laundering. The recent disclosures of Vatican money laundering suggest Iraq, Iran, and Indonesia have used the bank, as well as the Italian mafia, but given its ties to Lebanon, I wouldn’t be surprised if it were also laundering money from that country, which is another close focus of the US’ own money laundering attention.

In other words, in addition to wiretapping the Vatican because it wields special influence in countries around the world (the leadership intentions and foreign policy objectives category), the US would have reason to surveil it because of what amount to Vatican actions that make it a Transnational Criminal Organization, completely apart from matters of faith.

That is, if NSA applied its apparent mandate to track TCOs indiscriminately.

But I bet you they don’t. While I am sure they track Latin American, African, and South Asian drug networks, I’m certain they track Russian mobsters who have ties to online crime, and I’m sure they are tracking and probably have an active role in the investigation of Yakuza’s ties to big Japanese banks (most of these are either named Treasury drug kingpin or TCO targets), I also believe if the NSA tracked transnational crime organizations generally, its efforts would be shut down tomorrow.

Imagine, for example, if in addition to using Title III wiretaps (though barely) and self-disclosure and evidence generated by other financial institutions in put-back suits, the NSA used its bulk collection to track JPMC’s international transfers to see whether any of it constituted “foreign intelligence,” and from that referred any evidence of a crime to the FBI? Imagine if the NSA were stealing all of JPMC’s transfer information, even outside its access to SWIFT, to see how JPMC laundered its world-destabilizing actions through multiple jurisdictions? And both JPMC and HSBC have a known history of material support for terrorism, which certainly ought to justify such spying (noting, of course, that I think JPMC did get spied on in conjunction with the Scary Iran Plot, which may have forced FinCEN to settle with it on other outstanding sanction violation issues).

They wouldn’t even need to track JPMC and other multinational banks in the name of transnational crime and terrorism; the Sovereign Wealth Funds of the world — both of volatile Middle Eastern countries, Asian targets, but even in Europe — have effectively become foreign policy entities. Do they track what Qatar and the Emirates do with their SWFs?

As I said, I doubt it. While I suspect as this scandal develops we’ll find more and more evidence that the NSA has spied on targets selected for their financial competition with the US and UK (we’ve already seen hints they collected intelligence on the Euro versus the dollar, Brazil’s competitive position vis as vis the US, for example), I also suspect if there were ever a hint that the NSA treated JPMC or HSBC like it did other TCO targets, it would get shut down in a matter of weeks.

Four Mobs: Yet More Bizarre Thinking Behind Administration’s Transnational Crime Program

/19 Comments/in /by

Robert Chesney took a look at the Executive Order associated with the Administration’s roll-out of its Transnational Crime Organization program yesterday, which basically blocks the property of a group considered to be a TCO (note, in some places the Admin uses the acronym TOC; I agree with Chesney that TCO makes more sense and so will use that instead now).

As I guessed yesterday, the EO basically institutes a “material support for TCO” concept, directly parallel to the terrorist one.

Section 1.  (a)  All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i)   the persons listed in the Annex to this order and

(ii)  any person determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:

(A)  to be a foreign person that constitutes a significant transnational criminal organization;

(B)  to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or

(C)  to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.

(b)  I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by subsection (a) of this section.

(c)  The prohibitions in subsection (a) of this section include, but are not limited to:

(i)   the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(ii)  the receipt of any contribution or provision of funds, goods, or services from any such person.

(d)  The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

The EO also clarifies something that was not clear from yesterday’s dog and pony show rolling this out: the Administration has listed four organizations that will, at this point, be considered TCOs:

1. THE BROTHERS’ CIRCLE (f.k.a. FAMILY OF ELEVEN; f.k.a. THE TWENTY)
2. CAMORRA
3. YAKUZA (a.k.a. BORYOKUDAN; a.k.a. GOKUDO)
4. LOS ZETAS

Now, like Chesney, I have a few questions about this list. Like Chesney, I want to know why only Los Zetas is listed. Are we really playing favorites among Mexico’s drug cartels? Chesney thinks it might be a reaction to Los Zetas’ murder of an ICE agent earlier this year. But the choice also has curious implications for the Operation Fast and Furious program, in which ATF agents dealt guns used by Los Zetas members. Is this just a way to give ATF a way to validate the concept behind that failed program?

But there may be another reason. I suggested yesterday that Wells Fargo, which last year entered into a Deferred Prosecution Agreement for the money laundering it did for Mexican cartels in 2005, ought to be on the list of TCOs, too. The one cartel I know of that is definitely tied to that money laundering, however, is Sinaloa. So by leaving Sinaloa off the list, you leave of the necessity of freezing the funds of TBTF banks.

I’m even more mystified by the inclusion of the Yakuza–Japan’s mob–on the list. Japan has long tolerated the Yakuza even while making claims they’d crack down. Did we consult with them before we put the Yakuza on the list?

More curiously, the Yakuza played a key role in the response to this spring’s Japanese earthquakes (this is akin to the role that some terrorist organizations had in Pakistan’s flood and earthquake response, as well as Hezbollah’s general role in Shiite Lebanese welfare). This post provides a good description of the Yakuza’s role and their reasons for providing such humanitarian aide. Some highlights:

In truth, the measure of a yakuza boss is not how honourable he is, it’s how much cash he brings in, a fact that might help explain the mobsters’ motives for providing aid. A senior member of one organised crime group in eastern Japan acknowledges this. He says: “It’s usually about money. Earthquakes and disasters are one of the few times that yakuza can do what they’re supposed to do: help other people. We can do it because we’re not bound by red tape. It’s as simple as putting up the money, ordering the soldiers to buy supplies, put them on trucks, and carry them to areas where they’re needed. Certainly some members are looking at this as a chance to gain goodwill and local support when the reconstruction begins. In my case, I just want to give back to the community where I was born. That’s the spirit of the yakuza. That’s the ideal. Other people have other motives.”

Whatever their mixed motives, right now the yakuza are apparently helping the weak and the suffering, bringing warm blankets to those who are cold, feeding the hungry and getting water to the thirsty. The Sumiyoshi-kai and the Inagawa-kai in total have sent over 200 tons of supplies to devastated areas according to police sources and raised several million dollars from their own members to facilitate the aid. The Matsuba-kai, the Kyokuto-kai (both in Tokyo), and even smaller groups like the Aizukotestu-kai (in Kyoto) are all chipping in.

[snip]

One member of the Sumiyoshi-kai group I spoke to, a full-time gangster in the Saitama prefecture specialising in extortion, explains the efforts simply:

“In times like this, the usual societal divisions are meaningless. There aren’t yakuza and civilians or foreigners and Japanese. We’re all Japanese now. We all live here. Down the road, there is money to be made, for sure.

“Right now, it’s about saving lives and helping each other out. Ninety-five per cent of all yakuza are human garbage. Maybe 5 per cent uphold the rules. Right now we’re all doing our best. It’s one of the few times we can be better than we normally are.”

Even a senior police officer from Ibaraki agrees, speaking under conditions of anonymity. “I have to hand it to the yakuza. They have been on the ground from day one providing aid where others don’t or cannot do it. Laws can be like a two-edged sword and sometimes they hamper relief efforts. Sometimes, outlaws are faster than the law. This is one of those times.”

Now, it doesn’t appear that the Yakuza used foreign aid to pay for this humanitarian support. That is, it doesn’t seem like western money effectively went to the Yakuza, meaning it could be contrived as material support for a TCO.

Nevertheless, there are sure to be a whole host of ways in which American businesses might end up funding the Yakuza.  We’ll quickly find those businesses to be in the position that Chiquita got in, though without the cover story that they paid terrorists to protect their employees.

And then, ultimately, there’s the process by which mobs get picked as TCOs. The current list almost seems like a test of concept–an attempt to throw several different kinds of mobs on the list, to see how the new legal toy works in practice.

But remember it’s the Secretary of Treasury deciding, with no transparency, who is and who is not on the list. You know–the same guy insisting that banks never be held to account for their crime, even while he enables them to become more powerful.

Again, don’t get me wrong. Transnational gangs are a big problem. But this is a gigantic slippery slope that none of us really get to see even as we’re already sliding down it.

And it still doesn’t protect us from the banksters looting our own economy.