Although in recent years the American public has learned about controversial federal programs that involve unauthorized surveillance, torture, and even official “kill lists,” most Americans still don’t know that their government has a secret financial blacklist that permits federal, state, and even foreign law enforcement agencies to obtain all financial information on – and even financially destroy – selected private individuals and organizations.
The original PATRIOT Act and later amendments established procedures for financial institutions to share customer information with law enforcement agencies, in order “to deter money laundering and terrorist activity.” Requests under Section 314(a) of the PATRIOT Act allow law enforcement to identify a target’s assets and prevent financial institutions from conducting further transactions with that individual – even when the transactions are legal and the individual has not been convicted of any crime. This is all done in secret; financial companies are barred from informing targets that they are on a financial blacklist, or “314(a) List.”
By influencing financial companies not to do business with a target – for example, pressuring companies not to open an account, issue a loan or credit card, offer employment, or conduct other transactions – law enforcement agencies can effectively force a person into poverty (or an organization into bankruptcy), even when that person has done nothing wrong. Under the authority of the PATRIOT Act, agencies do this secretly, without apparent oversight, and (according to some) in violation of the U.S Constitution.
Because of the secrecy, 314(a) targets generally don’t know they’re on a list, have no access to evidence, and therefore cannot dispute their blacklisted status (the Freedom of Information Act, or FOIA, does not require disclosure of this kind of classified information). What’s more, they can’t sue financial institutions for denial of services due to a blacklist, because Section 314(b) protects institutions from legal liability as long as they obey the government.
Here’s how it works: FinCEN, an office in the U.S. Treasury Department, acts as a middleman between law enforcement agencies and roughly 30,000 financial institutions. Every two weeks FinCEN gives institutions a list of names of law enforcement targets; institutions must then review the past year’s worth of their records for transactions involving anyone on the list. Such transactions include account files, wire transfers, credit card records, safe deposit box and trust department records, loan and mortgage documents, cashier’s checks, and other records. If an institution finds a match, it must mark an “X” next to the named target and return the data to FinCEN. If law enforcement authorities want more information about the target, they will issue either a subpoena or a National Security Letter to the institution.
Some bankers have reported being “overwhelmed” by the “endless” 314(a) requests from law enforcement agencies. This may indicate abuse, or at least overuse, of the system.