Dear A-Letter Reader:
During the 1984 televised presidential campaign debates, Republican candidate Ronald Reagan deflected President Jimmy Carter's criticisms with remarks like: "There you go again." The same can be said today about President George W. Bush, but Bush's repeated actions are far more serious.
According to the New York Times (6/23): "Under a secret Bush administration program initiated weeks after the Sept. 11 attacks, counter terrorism officials have gained access to financial records from a vast international database and examined banking transactions involving thousands of Americans and others in the United States, according to government and industry officials. The program is limited, government officials say, to tracing transactions of people suspected of having ties to Al Qaeda by reviewing records from the nerve center of the global banking industry, a Belgian cooperative that routes about $6 trillion daily between banks, brokerages, stock exchanges and other institutions. The records mostly involve wire transfers and other methods of moving money overseas and into and out of the United States."
What this potentially means is that any and every international wire transfer of funds among SWIFT banks has been, and is now, open to secret U.S. government inspection without any judicial authorization or restraint.
The system to which The Times refers is SWIFT, formally known as the Society for Worldwide Interbank Financial Telecommunication. I first wrote about SWIFT in The A-Letter on June 25, 2004 and again as recently as April 4, 2006. Here's what I said then, writing about the use of digital cash in international banking: "Until 1913, when the U.S. Congress created the Federal Reserve (and the Internal Revenue Service), American banks issued their own paper currency. Today the Fedwire and CHIPS, the New York-based "Clearing House for Interbank Payments System," are parts of a worldwide, inter-connected electronic computer banking network started in 1977 called SWIFT, (Society for World Interbank Financial Transactions). SWIFT regional centers in Brussels, Belgium and Culpeper, Virginia (USA) daily clear hundreds of millions of transactions valued at billions of dollars."
Little did I know then that the U.S. government, since late 2001, using an executive order of the President as the only justification, had conned SWIFT officials into allowing them to paw through the financial transfer records of anyone they labeled as a potential terrorist. Just as in the case of Bush's order allowing the NSA to secretly monitor millions of Americans' phone calls, and just as he authorized the NSA to ignore the law requiring a warrant for wiretapping, he has allowed the financial transfers of almost everyone to be subject to government police scrutiny.
This latest Bush "spy on Americans" program is run by the Central Intelligence Agency and supposedly overseen by the U.S. Treasury Dept. They insist it is confined to suspected terrorism. But these are the reliable folks who told us the PATRIOT Act would only be used to track terrorists. But on May 30, 2003, the New York Times reported: "The Justice Department has begun using its expanded counter terrorism powers to seize millions of dollars from foreign banks that do business in the United States...Officials at the State Department, however, have raised concerns over the practice, in part because most of the seizures have involved fraud and money laundering investigations that are unrelated to terrorism."
The Times explained: "A little noticed provision in the sweeping anti-terrorism legislation passed in October 2001, gave federal authorities in such cases the power to seize money that passes through banks in the United States without notifying the foreign government. Most overseas banks maintain what are called 'correspondent accounts' in American banks, allowing them to exchange American currency and handle other financial transactions in this country. Section 319 of the PATRIOT Act allows federal authorities to seize money from the foreign bank's correspondent account if they can convince a judge that the money deposited overseas at the bank was obtained illicitly."
What can you do to protect yourself from this wholesale spying on your financial activity?
Well, for one thing, you can transfer a portion of your cash or other liquid assets offshore to banks in places where the local law forbids any government access to your accounts without a prior judicial hearing; where the law makes it a crime to reveal any financial information. That's why the Sovereign Society recommends bank accounts in places such as Liechtenstein, Austria, Panama or Switzerland. And when you do this, as a side benefit, you gain direct access to much better and more profitable investments denied to Americans who are hogtied by SEC rules that block offshore investing.
This latest revelation of the abuse of SWIFT by the U.S. government is just further proof that America has become a financial police state. What's next? Exchange controls? Prior permission to transfers funds abroad? My advice is, act now -- before it's too late.
That's the way that it looks from here.
BOB BAUMAN, Editor
Further Resources
- To protect your assets from the prying eyes of the government, consider one of these offshore havens: