Expansion of "National Security Letters" Gives Unaccountable Power to FBI
by Kim Zetter
First published January 6, 2004 by Wired.com
While the nation was distracted last month by images of Saddam Hussein’s spider hole and dental exam, President George W. Bush quietly signed into law a new bill that gives the FBI increased surveillance powers and dramatically expands the reach of the USA Patriot Act.
The Intelligence Authorization Act for Fiscal Year 2004 grants the FBI unprecedented power to obtain records from financial institutions without requiring permission from a judge.
Under the law, the FBI does not need to seek a court order to access such records, nor does it need to prove just cause.
Previously, under the Patriot Act, the FBI had to submit subpoena requests to a federal judge. Intelligence agencies and the Treasury Department, however, could obtain some financial data from banks, credit unions and other financial institutions without a court order or grand jury subpoena if they had the approval of a senior government official.
The new law (see Section 374 of the act), however, lets the FBI acquire these records through an administrative procedure whereby an FBI field agent simply drafts a so-called national security letter stating the information is relevant to a national security investigation.
And the law broadens the definition of "financial institution" to include such businesses as insurance companies, travel agencies, real estate agents, stockbrokers, the U.S. Postal Service and even jewelry stores, casinos and car dealerships.
The law also prohibits subpoenaed businesses from revealing to anyone, including customers who may be under investigation, that the government has requested records of their transactions.
Bush signed the bill on Dec. 13, a Saturday, which was the same day the U.S. military captured Saddam Hussein.
Some columnists and bloggers have accused the president of signing the legislation on a weekend, when news organizations traditionally operate with a reduced staff, to avoid public scrutiny and criticism. Any attention that might have been given the bill, they say, was supplanted by a White House announcement the next day about Hussein’s capture.
James Dempsey, executive director of the Center for Democracy & Technology, didn’t see any significance to the timing of Bush’s signing. The 2004 fiscal year began Oct. 1 and the Senate passed the bill in November. He said there was pressure to pass the legislation to free up intelligence spending.
However, Dempsey called the inclusion of the financial provision "an intentional end-run" by the administration to expand the administration’s power without proper review.
Critics like Dempsey say the government is trying to pass legislation that was shot down prior to the U.S. invasion of Iraq, when the Bush administration drafted a bill to expand the powers of the Patriot Act.
The so-called Patriot Act II was discovered by the Center for Public Integrity last year, which exposed the draft legislation and initiated a public outcry that forced the government to back down on its plans.
But critics say the government didn’t abandon its goals after the uproar; it simply extracted the most controversial provisions from Patriot Act II and slipped them surreptitiously into other bills, such as the Intelligence Authorization Act, to avoid raising alarm.
Dempsey said the Intelligence Authorization Act is a favorite vehicle of politicians for expanding government powers without careful scrutiny. The bill, because of its sensitive nature, is generally drafted in relative secrecy and approved without extensive debate because it is viewed as a "must-pass" piece of legislation. The act provides funding for intelligence agencies.
"It’s hard for the average member to vote against it," said Dempsey, "so it makes the perfect vehicle for getting what you want without too much fuss."
The provision granting increased power was little more than a single line of legislation. But Dempsey said it was written in such a cryptic manner that no one noticed its significance until it was too late.
"We were the first to notice it outside of Congress," he said, "but we only noticed it in September after it had already passed in the House."
Rep. Porter Goss (R-Florida), chairman of the House Intelligence Committee that reviewed the bill, introduced the legislation into the House last year on June 11, where it passed two weeks later by a vote of 264-163. The Senate passed the legislation with a voice vote in November, which means there is no record of how individual senators voted or the number who opposed or supported it.
Goss’s staff said he was out of the country and unavailable for comment. But Goss told the House last year that he believed the financial institution provision in the bill brought the intelligence community up to date with the reality of the financial industry.
"This bill will allow those tracking terrorists and spies to ‘follow the money’ more effectively and thereby protect the people of the United States more effectively," he said.
But Rep. Betty McCollum (D-Minnesota), who opposed the legislation, told the House, "It is clear the Republican leadership and the administration would rather expand on the USA Patriot Act through deception and secrecy than debate such provisions in an open forum."
A number of other representatives expressed concern that the financial provision was slipped into the Intelligence Act at the 11th hour with no time for public debate and against objections from members the Senate Judiciary Committee, which normally has jurisdiction over the FBI. Sen. Patrick Leahy (D-Vermont), the minority leader of the Senate Judiciary Committee, along with five other members of the Judiciary Committee, sent a letter to the Intelligence Committee requesting that their committee be given time to review the bill. But the provision had already passed by the time their letter went out.
"In our fight to protect America and our people, to make our world a safer place, we must never turn our backs on our freedoms," said Rep. C.L. "Butch" Otter (R-Idaho) in a November press release. "Expanding the use of administrative subpoenas and threatening our system of checks and balances is a step in the wrong direction."
Charlie Mitchell, legislative counsel for the American Civil Liberties Union, said many legislators failed to recognize the significance of the legislation until it was too late. But the fact that 15 Republicans and over 100 Democrats voted against the bill in the House signifies that, had there been more time, there probably would have been sufficient opposition to remove the provision.
"To have that many people vote against it, based on just that one provision without discussion beforehand, signifies there is strong opposition to new Patriot Act II powers," Mitchell said.
He said legislators are now on the lookout for other Patriot Act II provisions being tucked into new legislation.
"All things considered, this was a loss for civil liberties," he said. But on a brighter note, "this was the only provision of Patriot II that made it through this year. Members are hearing from their constituents. I really think we have the ability to stop much of this Patriot Act II legislation in the future."