Business Balks at Patriot Act & The FBI’s Secret Scrutiny

November 12th, 2005 - by admin

Richard S. Dunham / Business Week & Barton Gellman / Washington Post – 2005-11-12 08:27:45

The Patriot Act: Business Balks
Richard S. Dunham / Business Week Online

(November 10, 2005) — Las Vegas Mayor Oscar B. Goodman loves to remind visitors of Sin City’s oh-so-discreet tagline: “What happens in Vegas stays in Vegas.” But since the New Year’s celebrations ringing in 2004, he has had to modify the motto.

Fearing a terrorist attack, the FBI descended on casinos, car rental agencies, storage warehouses, and other Las Vegas businesses with sheaves of “national security letters” demanding financial records covering about 1 million revelers. Startled business owners who questioned the action were told they had one choice: cough up their documents or wind up in court.

Now, a somber Mayor Goodman acknowledges, what happens in Vegas may end up staying in an FBI computer. “It’s Kafkaesque,” he says. “The central component to our economy is privacy protection. People are here to have a good time and don’t want to worry about the government knowing their business.”

Strange Coalition
The FBI carried out its document hunt under the Patriot Act, the anti-terrorism law passed hurriedly in the aftermath of September 11. The act allows investigators to demand that businesses turn over sensitive financial records, without specifying the investigation’s target or why the files are needed. The outfit receiving a letter is permanently gagged, prohibited by law from ever disclosing that the feds came calling.

Indeed, the statute is silent on whether company officials who receive an order can call a lawyer or appeal to a judge — although the Justice Dept. says it always allows businesses to seek legal recourse, behind closed doors and without the person appealing present. “Businesses want to cooperate in the war on terrorism, but this type of unchecked government power goes a little over the line,” says Bob Shepler, director of corporate finance at the National Association of Manufacturers (NAM).

With most provisions of the Patriot Act due to expire at yearend, the Administration has been urging Congress to make its temporary police powers permanent. But an odd coalition is trying to scale back the government’s reach — and it may be making headway. On Nov. 9, word came from Capitol Hill that the rising chorus of civil liberties complaints could produce a deal to temper some of the law’s more intrusive features.

Thousands of Letters
If that happens, corporate interests can notch up part of the victory to savvy lobbying. Concerned about the circumvention of due process guarantees — and about hefty compliance costs — a half-dozen prominent business groups have joined with the American Civil Liberties Union to push Congress to narrow the law’s scope. What’s surprising in today’s with-me-or-against-me Washington is that the coalition includes such Bush allies as NAM, the U.S. Chamber of Commerce, and the National Association of Realtors.

“These are not groups that normally take on this Administration,” says Susan Hackett, general counsel of the Association of Corporate Counsel, a coalition member that represents companies’ in-house lawyers. “People in the business community clearly are worried.”

Administration officials insist they haven’t overreached. “The Patriot Act allows us to get a very limited set of records,” contends one Justice official. “We are not inclined to ask courts to endorse fishing expeditions, and courts are loath to do so.” Department officials say that judges have granted them access to business records under Section 215 of the Patriot Act just 35 times in the first 3 1/2 years of the law, adding that those orders involved only data on driver’s licenses, public accommodations, apartment leases, credit cards, and telephone use.

Data Leaks?
But Justice also enjoys broader clout under the Act’s Section 505 — an expansion of national security letters, issued without a court order. Since 2001 the feds have served as many as 30,000 letters a year, according to Administration sources and civil libertarians. Despite the volume of requests, one Justice official says: “There has not been a single verified abuse of any Patriot Act authority.”

Still, corporate lobbyists and business groups are increasingly concerned about the law’s cost and potential for abuse. The business alliance spelled out its reform agenda in an Oct. 4 letter to Senate Judiciary Committee Chairman Arlen Specter (R-Pa.). The groups argue that the Patriot Act’s Sections 215 and 505 “allow the federal government to require voluminous and often sensitive records…without [public] judicial oversight or other meaningful checks on the government’s power.”

They say that compliance with the demands puts confidential financial data, trade secrets, and other proprietary information at risk. Another concern: the fear that multinationals could land in legal trouble abroad — particularly in Europe — for violating stringent privacy laws there if they comply with U.S. government demands for financial records.

“Extremely Broad”
The businesses with the most at risk are real estate agents, car dealers, casinos, jewelers, boat dealers, travel agencies, insurance brokers, Internet service providers, and pawnbrokers — all deemed to be financial institutions under a broad definition approved by Congress in 2003. “Our customers must be comfortable that sensitive financial information will remain confidential,” says Tom Heinemann, a policy analyst at the Realtors’ association. “Our industry wants to make sure that there are appropriate checks and balances in place to protect access to those kinds of records.”

What’s more, the business groups contend that the Patriot Act, as written, gives the feds carte blanche to rifle through corporate records. One worry: Like police searching a car trunk after a traffic stop, the feds could discover evidence of unrelated crimes or securities law breaches when they rummage through business records. “The sweep of government power is extremely broad,” says Lisa Graves, senior counsel at the ACLU. “When you’ve got a hammer, everything starts to look like a nail.”

Business groups say they already are getting pounded. They argue in their Oct. 4 letter that the law “does not impose any limit on the breadth of records” demanded by federal agents, and they are seeking “a meaningful right to challenge the order when the order is unreasonable, oppressive, or seeks privileged [business] information.” The coalition has urged Congress to give companies the right to seek court permission to lift the act’s lifetime gag orders, an idea that may be taking hold.

Deaf Ears
Few of these complaints are registering with the usually business-friendly Bush Administration. The Justice Dept. says that business has all the protections it needs. “There are sufficient safeguards that many choose to ignore,” Attorney General Alberto R. Gonzales told the Senate Judiciary Committee at an April hearing. Among those: a right to appeal to a secret court and a limited right to counsel to comply with or challenge an order. Gonzales now favors including those guarantees in the rewritten Patriot Act, which will be finalized by House and Senate negotiators scheduled to meet for the first time on Nov. 10.

But Gonzales is likely to be disappointed by many of the other provisions negotiators are now hammering out. Both the Senate and House versions of the measure would allow a judge to modify an FBI order that was deemed unreasonably burdensome on a business.

And on Nov. 9, the House directed its team to accept Senate-passed provisions setting a four-year sunset clause on many of the Patriot Act’s key provisions, despite Administration opposition.

In final negotiations, the Senate is pushing its House counterparts to incorporate most of the safeguards sought by commercial interests.

One big victory for the corporate coalition came on Nov. 9 when House negotiators agreed to permit businesses or individuals to seek judicial review of national security letters. Senate leaders believe they have an agreement on another top business concern: limiting the power of law enforcement to keep company records on file forever. A tentative deal would require investigators to return or destroy lists they’ve obtained, such as those covering airline passengers or casino customers, if the terror tip turns out to be a dud.

Frayed Ties
Less certain is the fate of a Senate-passed requirement that the FBI link the specific records that it’s seeking to a specific suspect. The Administration is fighting to maintain its current power.

The changes sought by business “are overly complex and will lead to litigation difficulties [in pursuing terrorist suspects] because it will require the courts to engage in a more complicated legal review,” one senior Administration official argues. As BusinessWeek went to press on Nov. 9, congressional leadership sources said that no final deal had been cut on the sensitive issue.

In one area, business appears to be losing: Neither version addresses corporate concerns about exposing trade secrets or breaching customer privacy.

Corporate reps in Washington acknowledge that they had qualms about the Patriot Act from the start but say they didn’t want to speak out against the key legislative underpinning of the war on terrorism immediately after September 11. But with George W. Bush’s approval rating now hovering below 40%, Hill Republicans may have decided that it’s wiser to stand up for their corporate donors than to stick with their embattled President.

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The FBI’s Secret Scrutiny: In Hunt for Terrorists,
Bureau Examines Records of Ordinary Americans

Barton Gellman / Washington Post

(November 6, 2005) — The FBI came calling in Windsor, Conn., this summer with a document marked for delivery by hand. On Matianuk Avenue, across from the tennis courts, two special agents found their man. They gave George Christian the letter, which warned him to tell no one, ever, what it said.

Under the shield and stars of the FBI crest, the letter directed Christian to surrender “all subscriber information, billing information and access logs of any person” who used a specific computer at a library branch some distance away.

Christian, who manages digital records for three dozen Connecticut libraries, said in an affidavit that he configures his system for privacy. But the vendors of the software he operates said their databases can reveal the Web sites that visitors browse, the e-mail accounts they open and the books they borrow.

Christian refused to hand over those records, and his employer, Library Connection Inc., filed suit for the right to protest the FBI demand in public. The Washington Post established their identities — still under seal in the US Court of Appeals for the 2nd Circuit — by comparing unsealed portions of the file with public records and information gleaned from people who had no knowledge of the FBI demand.

The Connecticut case affords a rare glimpse of an exponentially growing practice of domestic surveillance under the USA Patriot Act, which marked its fourth anniversary on Oct. 26. “National security letters,” created in the 1970s for espionage and terrorism investigations, originated as narrow exceptions in consumer privacy law, enabling the FBI to review in secret the customer records of suspected foreign agents. The Patriot Act, and Bush administration guidelines for its use, transformed those letters by permitting clandestine scrutiny of US residents and visitors who are not alleged to be terrorists or spies.

The FBI now issues more than 30,000 national security letters a year, according to government sources, a hundredfold increase over historic norms. The letters — one of which can be used to sweep up the records of many people — are extending the bureau’s reach as never before into the telephone calls, correspondence and financial lives of ordinary Americans.

Issued by FBI field supervisors, national security letters do not need the imprimatur of a prosecutor, grand jury or judge. They receive no review after the fact by the Justice Department or Congress. The executive branch maintains only statistics, which are incomplete and confined to classified reports. The Bush administration defeated legislation and a lawsuit to require a public accounting, and has offered no example in which the use of a national security letter helped disrupt a terrorist plot.

The burgeoning use of national security letters coincides with an unannounced decision to deposit all the information they yield into government data banks — and to share those private records widely, in the federal government and beyond. In late 2003, the Bush administration reversed a long-standing policy requiring agents to destroy their files on innocent American citizens, companies and residents when investigations closed. Late last month, President Bush signed Executive Order 13388, expanding access to those files for “state, local and tribal” governments and for “appropriate private sector entities,” which are not defined.

“National Security Letters”
National security letters offer a case study of the impact of the Patriot Act outside the spotlight of political debate. Drafted in haste after the Sept. 11, 2001, attacks, the law’s 132 pages wrought scores of changes in the landscape of intelligence and law enforcement. Many received far more attention than the amendments to a seemingly pedestrian power to review “transactional records.” But few if any other provisions touch as many ordinary Americans without their knowledge.

Senior FBI officials acknowledged in interviews that the proliferation of national security letters results primarily from the bureau’s new authority to collect intimate facts about people who are not suspected of any wrongdoing.

Criticized for failure to detect the Sept. 11 plot, the bureau now casts a much wider net, using national security letters to generate leads as well as to pursue them. Casual or unwitting contact with a suspect—a single telephone call, for example — may attract the attention of investigators and subject a person to scrutiny about which he never learns.

A national security letter cannot be used to authorize eavesdropping or to read the contents of e-mail. But it does permit investigators to trace revealing paths through the private affairs of a modern digital citizen. The records it yields describe where a person makes and spends money, with whom he lives and lived before, how much he gambles, what he buys online, what he pawns and borrows, where he travels, how he invests, what he searches for and reads on the Web, and who telephones or e-mails him at home and at work.

As it wrote the Patriot Act four years ago, Congress bought time and leverage for oversight by placing an expiration date on 16 provisions. The changes involving national security letters were not among them. In fact, as the Dec. 31 deadline approaches and Congress prepares to renew or make permanent the expiring provisions, House and Senate conferees are poised again to amplify the FBI’s power to compel the secret surrender of private records.

The House and Senate have voted to make noncompliance with a national security letter a criminal offense. The House would also impose a prison term for breach of secrecy.

Like many Patriot Act provisions, the ones involving national security letters have been debated in largely abstract terms. The Justice Department has offered Congress no concrete information, even in classified form, save for a partial count of the number of letters delivered. The statistics do not cover all forms of national security letters or all US agencies making use of them.

“The beef with the NSLs is that they don’t have even a pretense of judicial or impartial scrutiny,” said former representative Robert L. Barr Jr. (Ga.), who finds himself allied with the American Civil Liberties Union after a career as prosecutor, CIA analyst and conservative GOP stalwart. “There’s no checks and balances whatever on them. It is simply some bureaucrat’s decision that they want information, and they can basically just go and get it.”

‘A Routine Tool’
Career investigators and Bush administration officials emphasized, in congressional testimony and interviews for this story, that national security letters are for hunting terrorists, not fishing through the private lives of the innocent. The distinction is not as clear in practice.

Under the old legal test, the FBI had to have “specific and articulable” reasons to believe the records it gathered in secret belonged to a terrorist or a spy. Now the bureau needs only to certify that the records are “sought for” or “relevant to” an investigation “to protect against international terrorism or clandestine intelligence activities.”

That standard enables investigators to look for conspirators by sifting the records of nearly anyone who crosses a suspect’s path.

“If you have a list of, say, 20 telephone numbers that have come up . . . on a bad guy’s telephone,” said Valerie E. Caproni, the FBI’s general counsel, “you want to find out who he’s in contact with.” Investigators will say, “ ‘Okay, phone company, give us subscriber information and toll records on these 20 telephone numbers,’ and that can easily be 100.”

Bush administration officials compare national security letters to grand jury subpoenas, which are also based on “relevance” to an inquiry. There are differences. Grand juries tend to have a narrower focus because they investigate past conduct, not the speculative threat of unknown future attacks. Recipients of grand jury subpoenas are generally free to discuss the subpoenas publicly. And there are strict limits on sharing grand jury information with government agencies.

Since the Patriot Act, the FBI has dispersed the authority to sign national security letters to more than five dozen supervisors—the special agents in charge of field offices, the deputies in New York, Los Angeles and Washington, and a few senior headquarters officials. FBI rules established after the Patriot Act allow the letters to be issued long before a case is judged substantial enough for a “full field investigation.” Agents commonly use the letters now in “preliminary investigations” and in the “threat assessments” that precede a decision whether to launch an investigation.

“Congress has given us this tool to obtain basic telephone data, basic banking data, basic credit reports,” said Caproni, who is among the officials with signature authority. “The fact that a national security letter is a routine tool used, that doesn’t bother me.”

If agents had to wait for grounds to suspect a person of ill intent, said Joseph Billy Jr., the FBI’s deputy assistant director for counterterrorism, they would already know what they want to find out with a national security letter. “It’s all chicken and egg,” he said. “We’re trying to determine if someone warrants scrutiny or doesn’t.”

Billy said he understands that “merely being in a government or FBI database . . . gives everybody, you know, neck hair standing up.” Innocent Americans, he said, “should take comfort at least knowing that it is done under a great deal of investigative care, oversight, within the parameters of the law.”

He added: “That’s not going to satisfy a majority of people, but . . . I’ve had people say, you know, ‘Hey, I don’t care, I’ve done nothing to be concerned about. You can have me in your files and that’s that.’ Some people take that approach.”

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