Friday, August 31, 2007

Bush Claims "State Secrets" on Bank Privacy Suits

The Bush administration invoked its traditional state secrets defense in response to lawsuits testing George's steps into uncharted spying territory. How can a legal determination be made if the case is thrown out for secrecy reasons? The latest case involves Bush's monitoring the SWIFT database for terrorist activity. SWIFT is a Belgium, bank owned cooperative that processes financial transactions worldwide. The NY Times reported:

The Bush administration is signaling that it plans to turn again to a legal tool, the “state secrets” privilege, to try to stop a suit against a Belgian banking cooperative that secretly supplied millions of private financial records to the United States government, court documents show.

The suit against the consortium, known as Swift, threatens to disrupt the operations of a vital national security program and to disclose “highly classified information” if it continues, the Justice Department has said in court filings.

The “state secrets” privilege, allowing the government to shut down litigation on national security grounds, was once rarely used. The Bush administration has turned to it more than 30 times in terrorism-related cases, seeking to end public discussion of cases like the claims of an F.B.I. whistle-blower and the abduction of a German terrorism suspect.

SWIFT defended its actions after they became public with the following statement:

Only governments can define the boundary between security and data privacy. Private companies, like SWIFT, can play their part by upholding the law, but they cannot make policy and cannot enforce compliance by others. Ultimately they are dependent on governments and elected officials to develop the legal framework in which they operate.

If the Bush administration gets its way, the legal framework remains unclear as it won't have survived a court challenge. If the case is tossed, who else benefits? Last year The Carlyle Group purchased FRS Global, a Belgium headquartered software company that specializes in bank government regulatory compliance. Might their software be mining the millions of transactions?

Michael Wand, Director, The Carlyle Group said, “FRS is the leading regulatory and compliance software vendor in the financial services industry. With an evermore complex risk and compliance market, driven by a continuous wave of regulation in the financial services sector, we believe this market is critical for the industry. FRS provides an outstanding technology-driven ‘knowledge’ service to enable financial institutions to manage their regulatory reporting and compliance activities, and we believe the business will continue to grow significantly in the coming years.”

Who is George Bush trying to protect with his state secrets defense? Time may tell, then again it may not.