U.S. may invoke 'state secrets' to squelch suit against Swift
The Belgian banking cooperative secretly let the CIA comb through millions of financial records as it tried to track terrorists' financing.
By Eric Lichtblau
Published: August 31, 2007
WASHINGTON: The Bush administration is signaling that it plans to turn once again to a favorite legal tool known as the "state secrets" privilege to try to shut down a lawsuit brought against a Belgium banking cooperative that secretly supplied millions of private financial records to the U.S. government, court documents show.
The lawsuit against the banking consortium, which is known as Swift, threatens to disrupt the operations of a vital national security program and to reveal "highly classified information" if it is allowed to continue, the Justice Department said in several recent court filings asserting its strong interest in seeing the lawsuit dismissed. A hearing on the future of the lawsuit was scheduled for Friday in federal court in Alexandria, Virginia.
The "state secrets" privilege, allowing the government to shut down public litigation on national security grounds, was once a rarely used tool. But the Bush administration has turned to it dozens of times in terrorism-related cases in seeking to end public discussion of everything from an FBI whistle-blower's claims to the abduction of a German terrorism suspect.
Most notably, the Bush administration has sought to use the state secrets assertion to kill numerous lawsuits against telecommunications carriers over the National Security Agency's domestic eavesdropping program, but a judge in California rejected that claim. The issue is now pending before an appeals court, where judges in a hearing two weeks ago expressed skepticism about the administration's claims.
Asserting the state secrets privilege requires the certification of both the director of national intelligence and the attorney general about the potential harm to national security. If the administration makes good on its intention to invoke the secrets claim in the lawsuit against Swift, it would be one of the most significant cases to test the claim.
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Swift is considered the nerve center of the global banking industry, routing trillions of dollars each day between banks, brokerages and other financial institutions. The group's partnership with the U.S. government, first revealed in media reports in June 2006, gave officials at the CIA access to millions of records on international banking transactions in an effort to trace money that investigators believed might be linked to terrorist financing. Swift agreed to turn over large chunks of its database in response to a series of unusually broad subpoenas issued by the Treasury Department beginning months after the attacks of Sept. 11, 2001.
Bush administration officials have defended the banking data program as an important tool in its war on terror, but European regulators and privacy advocates were quick to denounce the program as improper and possibly illegal, and the pressure forced Swift and U.S. officials earlier this year to agree to tighter restrictions on how the data could be used.
Two U.S. banking customers sued Swift on invasion-of-privacy grounds. Many legal and financial analysts expected that the lawsuit would be thrown out because U.S. banking privacy laws are considered much more lax than those in much of Europe. But to the surprise of many, a judge refused to throw out the lawsuit in a ruling in June.