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New Federal Patriot Act Turns Retailers into Spies against Customers
The Boston Globe ^ | 11/28/2001 | By Scott Bernard Nelson, The Boston Globe

Posted on 11/23/2001 2:58:00 PM PST by Smogger

Nov. 18--Ordinary businesses, from bicycle shops to bookstores to bowling alleys, are being pressed into service on the home front in the war on terrorism.

Under the USA Patriot Act, signed into law by President Bush late last month, they soon will be required to monitor their customers and report "suspicious transactions" to the Treasury Department -- though most businesses may not be aware of this.

Buried in the more than 300 pages of the new law is a provision that "any person engaged in a trade or business" has to file a government report if a customer spends $10,000 or more in cash. The threshold is cumulative and applies to multiple purchases if they're somehow related -- three $4,000 pieces of furniture, for example, might trigger a filing.

Until now, only banks, thrifts, and credit unions have been required to report cash transactions to the Treasury Department's Financial Crimes Enforcement Network, under the Bank Secrecy Act of 1970. A handful of other businesses, including car dealers and pawnbrokers, have to file similar reports with the Internal Revenue Service.

"This is a big deal, and a big change, for the vast majority of American businesses," said Joe Rubin, chief lobbyist for the US Chamber of Commerce. "But I don't think anybody realizes it's happened."

The impact is less clear for consumers, although privacy advocates are uncomfortable with the thought of a massive database that could bring government scrutiny on innocent people. Immigrants and the working poor are the most likely to find themselves in the database, since they tend to use the traditional banking system the least.

"The scope of this thing is huge," said Bert Ely, a financial services consultant in Alexandria, Va. "It's going to affect literally millions of people."

The filing of so-called suspicious activity reports, though, is only the latest in a series of law enforcement moves the government has made in response to the Sept. 11 terrorist attacks on New York and Washington. And so far, the filing requirement has been overshadowed by debate over the other changes.

The Patriot Act signed into law Oct. 26, for example, gives the government a vast arsenal of surveillance tools, easier access to personal information, and increased authority to detain and deport noncitizens. House and Senate negotiators came to terms Thursday on a bill that would add 28,000 employees to the federal payroll in an effort to bolster airport security, and Attorney General John Ashcroft has said he is reorganizing the Justice Department and the FBI to focus on counterterrorism efforts.

As for the business-filing requirement, specifics about what companies have to do and when they have to do it still need to be worked out. The Treasury Department has until March 25 -- the date the Patriot Act becomes law -- to issue regulations about how to put the new rules into practice.

"The law itself doesn't go into any detail, because you'd presume that's what the Treasury regulations are for," said Victoria Fimea, senior counsel at the American Council of Life Insurers. "And the devil, of course, is in the details."

When he signed the legislation, President Bush said the new rules were designed to "put an end to financial counterfeiting, smuggling, and money laundering." The problem, he and others have said, was keeping tabs on the billions of dollars that flow outside the traditional banking system and across national borders each year.

Money launderers often disguise the source of their money by using cash to buy pricey things. Later, they can resell the products and move the money into a bank account -- at which point it has been laundered, or made to look legitimate, by the aboveboard sale.

Making a series of transactions just below the $10,000 filing threshold is also illegal under the new law if it's done to keep a business from contacting the government.

Financial services companies such as banks, insurers, and stock brokerages face a higher standard under the new law than other businesses. In addition to the filing requirements, they have to take steps such as naming a compliance officer and implementing a comprehensive program to train employees about how to spot money laundering.

Unlike other businesses, though, most financial services companies already have a process in place to deal with government regulation.

"Certainly for the bigger [insurance] companies, they most likely are already tooled up for this," said Fimea. "For other companies, this creates a whole new landscape."

James Rockett, a San Francisco lawyer who represents banks and insurance companies in disputes with regulators, said he's skeptical the authorities will get any useful information from reports filed by nonfinancial companies.

"You're trying to turn an untrained populace into the monitors of money laundering activity," Rockett said. "If you want to stop this, it's got to be done with police work, not tracking consumers' buying habits."

Voices opposing any of the new law-enforcement measures appear to be in the minority, however. For now, at least, few people and few companies want to be perceived as being terrorist sympathizers.

"In a political sense, it would have been very hard for us to go to Congress in this case and loudly argue that the legislation shouldn't include nonfinancial-services guys," said Rubin, of the US Chamber of Commerce. "Everybody wants to help and to stop money laundering right now."

Scott Bernard Nelson can be reached by e-mail at nelson@globe.com.


TOPICS: Front Page News; News/Current Events
KEYWORDS: privacylist
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To: Romulus
yer poking a stick into the eyes of the blind
101 posted on 11/23/2001 7:54:47 PM PST by IRtorqued
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To: Romulus
"I see myself fighting a rearguard action, and am not interested in accelerating the speed of surrender."

An eloquent and well-reasoned reply.

Neither am I interested in hastening the hardening of chains on my wrists and ankles. Unlike our forebears in WWI and WWII, we have a well-earned cynicism toward the Fed. I'm sometimes told that I'm "ate up with it".

However.............we have a bit of a secret weapon on our side this time: the basic American aversion to inconvenience and the Almighty Dollar. Please allow me to explain...

We all put up with tanks and APC's in airports (I know I know..........fat load of good they'll do against some individual maniacs carrying suitcases..........), obscenely long lines in those same airports, etc., etc. while we're at war with an enemy who's obviously hell-bent on destroying our country and our culture.

BUT.................

........as soon as it looks like we've won this thing (when will that be? when the media say so...........sad, but true.....), then John and Janie Citizen will NOT put up with these long lines, the uniformed guys in cammo and toting M-16's, etc., in their airports. They'll stop travelling; the airlines will suffer even more / once again, and there will be hearings, talking heads on TV questioning the need for this continued "military presence", etc. The airlines will win. The military will be gone, security will (hopefully) be improved by a combination of better technology and better-trained security personnel, and the public will tire of this war-time footing and scream for "normalcy".

One thing you can count on with Americans: Interfere with their "convenience", and you'll have Hell to pay when you can no longer justify inconveniencing them.

102 posted on 11/23/2001 7:57:25 PM PST by RightOnline
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To: JD86
You may be correct, but it isn't now and with respect to current activities under investigation that most of us fear. When they pass new laws, these tools can be used to enforce them. I keep hearing:

German Accent: "Papers Please!
Confused Voice: "For What?"
German Accent: "If ze haz done nuzzing wrong, ze haz nuzzing to fear!"

The framers attempted to protect us from this for a reason.

103 posted on 11/23/2001 8:02:05 PM PST by bluefish
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To: bluefish
Fortunately the WWII vets, my father included, saved us from the Nazis.

You make a comment I do not understand. The framers attempted to protect us from this for a reason.

Several people have alluded to the proposition that they think this law is a violation of the 4th Amendment. I respectfully disagree....
and I have asked each of them why they think so. Do I read your comment correctly? You think this law is a violation of the 4th Amendment?
If so, can you tell me why?

104 posted on 11/23/2001 8:07:41 PM PST by JD86
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To: exodus
But when you buy a boat, a car or house you create a public record. How much less private can you get? You can bet the airlines are now scanning passenger transaction patterns looking for anything suspicious. Is this wrong? Is it wrong if the govt requires that airlines do this? Is it public safety or an invasion of privacy? The 4th Amendment (which is WHAT YOU QUOTED) does not promise anonymity.
105 posted on 11/23/2001 8:12:43 PM PST by Dialup Llama
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To: Smogger
They have always spied on customers. There are some things in this bill I don't like, but this is not one of them. It is only common sense that suspicious activity be reported.
106 posted on 11/23/2001 8:15:43 PM PST by rwfromkansas
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To: ThomasJefferson
Oh yeah, it is just insane to ask your businesses to report suspicious purchases to the govt. In case you haven't noticed, there are terrorists among us.
107 posted on 11/23/2001 8:17:09 PM PST by rwfromkansas
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To: RightOnline
"...Now our former comrades-in-arms consider us to be traitors,
because we refuse to accept what our leaders tell us.
When did it become a crime to question the actions of our politicians?
We can't even criticize the slanted news coverage
without being reminded that "we are at war."
Sorry, people.
There is no Declaration of War.
Bob Barr asked for one.
His fellow Congressmen didn't see any reason
to bother with that quaint requirement.
# 83 by exodus
*******************

To: exodus
"When did it become a crime
to question the actions of our politicians?"

It didn't.
In fact, if / when you stop,
you become just another drooling,
CNN-worshipping a**hole.

Just understand that there may be other ways
of looking at the actions of a President......
a decent, Christian man..... at war..."


# 86 by RightOnline
************

RightOnline, we are not at war.

Our leaders told us that we were at "war with terrorists."
But when Congressman Bob Barr asked for a Declaration of War,
as required by the Constitution,
the House as a whole refused to vote the question.

I don't care what kind of man Bush is.
He's asking me to give up my freedom for an un-declared war
against an enemy that CAN NOT be conquered.

108 posted on 11/23/2001 8:18:01 PM PST by exodus
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To: Rowdee
If the congressmen vote on a bill they don't read, that is there problem...and frankly, disgusting. They need to be run out of Washington, either by recall, or force.
109 posted on 11/23/2001 8:18:55 PM PST by rwfromkansas
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To: exodus
Thank you for responding. I agree with your analysis of the 4th Amendment insofar as it goes enumerates our right to be left alone.

However, please allow me to try to make a distinction about invasion procedures and things readily available in public.
For example, you cannot be required to provide a blood sample without probable cause or a search warrant. However, when you walk down the street with your face uncovered for all to see you do not have an expectation of privacy and anyone may take your picture, including law enforcement officials. Now let me make the comparison to this law. No one can come into your house and demand an accounting of your cash without probable cause or a search warrant. However, when you walk into a public retail store and hand over $10,000 in cash you are affirmatively giving up privacy of that transaction. You may not agree with that last sentence but in this case I believe the public good of tracking and catching criminals and terrorists outweighs the private desire to pay in cash when other means are so readily available. Thank you for considering my position.

110 posted on 11/23/2001 8:20:55 PM PST by JD86
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To: Mercuria
The people who are paying no attention to the unconstitutional laws being passed by Congress and signed into the law by the President and enforced by proven incompetents who are known to abuse the power they already had, will not pay attention untill it is them or their children who are at the end of the unconstitutional abuse and by then it will be to late.

They seem to forget those agencies 'accidently' kill people, withold and misplace evidence, put innocent people in jail for years and destroy lives.

111 posted on 11/23/2001 8:25:34 PM PST by Native American Female Vet
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To: Dialup Llama
*******************

To: exodus
But when you buy a boat, a car or house you create a public record.
How much less private can you get?
You can bet the airlines are now scanning passenger transaction patterns looking for anything suspicious.
Is this wrong? Is it wrong if the govt requires that airlines do this?
Is it public safety or an invasion of privacy?
The 4th Amendment (which is WHAT YOU QUOTED) does not promise anonymity.
# 105 by Dialup Llama

************

Your statement is correct,
but the assumption derived from the statement is wrong.

Yes, a purchase creates a public record.
It does not, however, create a public need
for you to justify your right to make the purchase.

Being seen in public with your girlfriend
does not create a need to air
all the details of your relationship.

It's none of your business.

112 posted on 11/23/2001 8:30:24 PM PST by exodus
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To: RightOnline
Excellent post. Excellent points and I am in total agreement.

I do have one question, however. If, under this extended law someone is found to be laundering money, but they are no threat to national security, will they still be indicted? Or is this law restricted to terrorist crimes only?

113 posted on 11/23/2001 8:31:23 PM PST by bjcintennessee
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To: JD86
My comment was more in reference to the standard refrain of the authoritarian: "If you have nothing to hide, what is your concern." I hate hearing it because it doesn't consider the big picture - the slippery slope.

I haven't thought about this one particular provision of the law with respect to the 4th Amendment b/c I don't care to delve into detailed arguments of law - I prefer leaving that to the lawyers and Constitutional scholars to endlessly debate.

I prefer to simply look at things from a practical impact standpoint. How it effects me or others. First, it is another heavy chain around the neck of the small business owner, many of whom are put out of business by overburdensome government regulations already. This law requres the business owner, once again, to work on behalf of the government without compensation.

Second, I am not overly familiar with this provision. Would it require someone making ten $1000 purchases with cash to now have to leave a name and address with the business? What about someone making 20 $500 purchases? Will we be free to use cash at all anymore, or is the anonymity of cash too inconvenient for the government to keep tabs on all of us? Maybe we should make it easier and just requre everybody to use government issue credit cards only. After all, if we are doing nothing illegal, we have nothing to fear, right?

This provision notwithstanding, it is the cumulative effect of the entire act that bothers me. More and bigger government. More and bigger regulations. Less and less freedom. These tools will not be limited to stopping terrorists. They are simply more devices by which the government will herd the flock.

114 posted on 11/23/2001 8:33:51 PM PST by bluefish
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To: Mercuria
"There's a war going on! And this stuff isn't going to be used against AMERICAN CITIZENS!!"

Well I wonder what Nacer Mustafa and his father Fathi Mustafa would have to say about that.

Charges against 2 U.S. citizens dropped after lab tests determine documents not doctored

By Associated Press, 11/21/2001 14:05

LABELLE, Fla. (AP) A man of Palestinian descent was released after being jailed for more than two months when federal authorities dropped charges that he altered his U.S. passport by laminating it.

Nacer Mustafa, 24, had been jailed as a national security risk by federal officials in Texas. The same charges against his father, Fathi Mustafa, 66, also were dropped Tuesday. The elder Mustafa was free on bond and ordered to wear a computerized monitoring device.

A laboratory analysis of the passports determined neither was altered.

''The laboratory analysis showed that the laminate had most likely split and was not an additional laminate,'' Assistant U.S. Attorney Jay Hileman wrote in his motion to dismiss the charges.

''You could say this was a miscarriage of justice,'' said Dan Gerson, a Houston attorney representing the family. ''There's a potential here ... to sue the government.''

The Mustafas were arrested Sept. 14 at Bush Intercontinental Airport in Houston as they entered the United States from Mexico. A federal agent said there was a second layer of lamination on their passports.

Both men are U.S. citizens and run a small department store in LaBelle, east of Fort Myers.

Fathi Mustafa said Tuesday he was glad his and his son's names have been cleared, and that he will soon be reunited with his son. Nacer Mustafa was expected to return home this week.

Fathi Mustafa has spent the last six weeks wearing a computerized ankle bracelet. The Mustafas said they must wait for paperwork from Texas to be sent to the federal courthouse in Fort Myers before the monitoring device can be removed.

''I have been living this hell,'' he said. Fathi Mustafa, a citizen for nearly 40 years, said doesn't understand the treatment by the United States. ''I've known from the first time that nothing was wrong with our passports,'' he said. ''But we don't want to argue right now, we are just thanking God he's out of jail.''

115 posted on 11/23/2001 8:38:35 PM PST by Native American Female Vet
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To: exodus
"RightOnline, we are not at war."

Look at the results of 9/11 and tell me this.

We ARE at war, exodus, whether you choose to accept it or not. Unlike some, I don't need an act of Congress to tell me that there are those who choose to attack us, destroy us, kill us. If that's what you're waiting for...........a "formal" declaration of war...........then you're waiting in the ticket line once the game has already started and the stadium's full.

"...against an enemy that CAN NOT be conquered."

Who said anything about "conquering" anybody?? This isn't about "conquering", exodus. It's about kicking their sorry asses. It's about justice; it's about revenge; it's about victory............it's about winning. There IS a difference.

....and don't pretend to tell me that we can't "win" this. That's patent nonsense.

You don't seem to understand nor in any way acknowledge the above. You'd better, because this is the reality in which we find ourselves........you included.

116 posted on 11/23/2001 8:39:55 PM PST by RightOnline
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Comment #117 Removed by Moderator

To: eddie willers
When this is over we will beat our swords back in to plowshares.

...and this will be over when.......what?

118 posted on 11/23/2001 8:46:33 PM PST by Dakotabound
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To: exodus
Well, of course, we are NOT at war!! Again, very few can use their heads.....we are in exactly the same types of actions as Iraq flyover bombings, attacking the sovereign nation of Kosovo, whatever the hell you want to call Somolia--I think that was technically called 'peace keeping', or some such rot. The Constitution says that Congress DECLARES war, not the President.....and as for having a president who runs to the UN.....I consider those traitors....the United States is a sovereign nation.
119 posted on 11/23/2001 8:47:17 PM PST by Rowdee
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To: bluefish
I can understand your concerns, however, this is not really a new law. It has been used to fight money laundering for years.
Also, there is a sunset provision in the law for the war on terrorism.
120 posted on 11/23/2001 8:47:29 PM PST by JD86
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