Questions Answered in SWIFT Spying Case

We learned more about the spying that the US Treasury Department is engaged in yesterday and today.  The questions I raised in my blog yesterday are being answered. First of all the question “why wouldn’t Treasury mine SWIFT transactions?” The records of millions of transactions of international money transfers would be fruitful hunting grounds for Treasury to discover tax evaders, money launderers and supporters of terrorism.

The answer comes from an NPR interview with Stuart Levey, Under Secretary for Terrorism and Financial Intelligence at the Treasury. From his bio at treasury.gov

In the role of Under Secretary, Mr. Levey directs the Treasury’s efforts to cut the lines of financial support to international terrorists, a critical component of the overall effort to keep America safe from terrorist plots. In addition to helping fight the financial war on terror, Mr. Levey also focuses on protecting the integrity of the financial system, fighting financial crime, enforcing economic sanctions against rogue nations and combating the financial underpinnings of the proliferation of weapons of mass destruction. He also oversees the Treasury Department’s newly-created Office of Intelligence and Analysis, ensuring that actionable intelligence is available to key decision makers and that the Department is fully integrated within the broader intelligence community.

According to Levey this is how SWIFT spying works:  Investigators at Treasury “type in” their database queries along with an explanation justifying the request. Onsite auditors from SWIFT monitor those requests realtime and block them if they appear abusive or unjustified.  And then, after the fact, there are two sets of auditors who review all the investigations; one set at SWIFT and another group at Booze Allen the independent consulting firm.  So that answers the question “why is the spying so limited?” that I asked yesterday: because there are controls in place and oversight.

The other question is “where did those controls come from?”. Obviously there is nothing like this in place at ATT and the government side stepped the only controls that were in place to oversee wire tap authorizations.  That answer comes from a Wall Street Journal report printed today in the Saturday edition.

Leonard "Lenny" Schrank, heads SWIFT in Brussels, Belgium. According to the Wall Street Jouornal he is:

A gregarious technology whiz who graduated from the Massachusetts Institute of Technology, the Brooklyn-born Mr. Schrank ended up working closely with U.S. intelligence officials on the project when Swift received subpoenas from the Treasury Department following the Sept. 11, 2001, attacks, people familiar with the program said.

In other words, the reason there is such a good program of oversight in this case is that the head of SWIFT negotiated and won controls. By doing so he protected SWIFT’s international reputation. I would not be surprised if he convinced the Treasury that there would be undesirable repercussions to international finance if the controls were not in place.

So now the question still remains: Why did not ATT impose similar restrictions on the NSA’s access to their data and voice traffic?  Is leadership there clueless? Or, were they offered favorable treatment when competing for lucrative government contracts?

I see that Lenny Schrank is due to retire from SWIFT next year. Let me be the first to nominate him for CEO of SBC/ATT.