New Federal Patriot Act Turns Retailers into Spies against Customers

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."

It's a tool, lawyer.

A conversational tool.
It has a definate bearing on the discussion,
because we are having a discussion.

You feel that I'm not understanding you,
so you use a hypothetical argument to
illustrate your point. I do the same.

It's not against the rules.
It's a tool of rational people,
used to promote understanding.

You're not in court.
Stop trying to bully the opposing witnesses,
and let us make our point.

Debate what we say, not how we say it.

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

"...I thought you were interested in my opinion.
My mistake.
# 400 by JD86
************

I am interested in your opinion, JD86.

I too am confused.
I see a clear violation of our freedom.
You seem to see my concern as nothing but paranoia

What really bothers me about the Patriot Bill and the requirement of the shopkeepers/retailers to report cash transactions of $10,000 or more is that it smacks of guvmint entrapment.

When Castro took power in Cuba in 1960, he randomly put people in charge of their neighborhoods to report goings-on, etc. The people, who were anti-communist, thought this will be a snap as I just won't report anything. Castro then "created" incidents within the various neighborhoods to see who would report and who wouldn't. Guess what happened to those who didn't report? Suddenly, EVERYONE was reporting every little detail about what was happening in his/her respective neighborhoods.

We all know that the guvmint sends people out to catch landlords who won't rent to certain ethnicities, etc. Who is to say that the guvmint won't send agents to go to various retailers (big and small) with $10,000 to see whether guy complies with the reporting regulations? How about sending out IRS Agents to check as to whether they comply or not? The Patriot Bill has all the ear-marks of Big Brother and Fidel Castro.

miss print

PS Does anyone know whether the Patriot bill includes the following four little words in it: "and for other purposes?" If so, then the guvmint can write anything into the bill they want - after it has been passed - because it decides what the other purposes are AT A LATER DATE.

"...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."

Considering the attack on 9-11 and considering the possibility of more attacks, the possible use of smallpox - the possible use of suitcase nukes, and the Communist Chinese supplying Cuba with arms and munitions and the Communist Chinese now controlling the Panama Canal and the port at the Bahamas, I'd say it's time for all of us to keep our eyes - not "Wide Shut" but...Wide Open!

most people who are fully aware of the forfeiture law have had personal knowledge of it...

Nah, we just leaf through Reader's Digest at the barbershop and learn all about it.

I am certain our troops appreciate your support.

Of course I support them. But until Congress declares War and institutes specific and temporary Wartime-Only measures (remember fuel, meat, sugar rations?), then there is no way in hell I'll support stuff like what's in this fishwrap Patriot Bill.

IMHO, anyone who intentionally mis-spells words in a post as an affection of an attitude....is making a statement, not asking for a response.
I didn't think Miss Print was interested in my viewpoint....so I didn't provide it.

Good point, but, errr, um, did you mean "affection" or affectation"? I used to smoke cigarettes but only Dunhills. I gave up smoking easily as it was strictly an affectation rather than an addiction. Hey, we could go on all night with word fun but it wouldn't get us any closer to getting rid of the Patriot bill that turns retailers into snoops, would it?

With admiration and affection, miss print

PS Did you get your Juris Doctorate in '86? Just curious about your handle...

Okay, serious questions. Why do you think it is entrapment to check to see if someone is following the law? Another example you didn't use is checking bars to see if they are serving minors. Is there any pro-active law enforcement activity that you find acceptable? Where do you draw the line?

The U.S. Constitution was set up that the individual was innocent until the government proved them guilty. With the way the government has been conducting itself in the last few years, we are all guilty until we prove ourselves innocent. For that reason, I oppose "check-points" to find drunken drivers. The use of check-points means that all drivers are guilty until they prove that they aren't drinking and driving. The check-points can be used to check one's car for all sorts of other things, e.g., contraband, etc. The use of them inures Americans to the fact that our constitutional rights are being violated. People become afraid to oppose them, too, as we are told these check-points are taking the bad drivers off the road and, after all, don't we all want to be safer? ("What's the matter, fella, you got a problem with being safer?") Etc., etc.

The U.S. Constitution was set up that the individual was innocent until the government proved them guilty.

On this point we agree. I would point out however that at the time the Constitution was written, there were thousands of people in the country versus millions of people in the country. The absolute freedom available in Kentucky when the nearest house was 100 miles away is not available in Kentucky in a subdivision where the next house is 10 ft. away. Does that I mean all constitutional rights should be subjugated to the needs of the government? NO. Does it mean I think there is never a time when a limit on a constitutional right is permissible? NO. I think each situation must be adjudged on its own merits. Balancing the constitutional right in question against the provisions of the Constitution which provide for the enactment of laws for the General Welfare of the People.
People sometimes forget that there is more to the Constitution than the Bill of Rights.

Balancing the constitutional right in question against the provisions of the Constitution which provide for the enactment of laws for the General Welfare of the People.

The General Welfare of the People means that the government does for the individual what the individual cannot do for himself (gender-neutral usage), i.e., keeping a Navy, building an ABM shield, etc. Setting up check-points (whether on the highway or the airports) and asking retailers to rat on their customers smells of Nazi (national socialism) Germany and communist Cuba.

One of the things most people forget is that the Founding Fathers set up our republic as LIMITED government. The people were freer when they governed themselves - according to the Holy Scriptures. (Thomas Jefferson, when Supervisor of Education for the District of Columbia, said that there were 2 books every schoolchild should have - a bible and a hymnal.)

You are right this isn't Kentucky where one's nearest neighbor is now only 10 yds away instead of 100 miles (200 years ago), ditto for Calif. If we, as Americans, were as religious as we were 200 years ago, there wouldn't be any need for intrusive laws that are being foisted upon us in the name of "security" and "safety." 200 years ago, the literacy rate in the U.S. was about 90%. Today, the literacy rate is just about the lowest in the industrialized world. Those who can read, seem to limit their reading to just the headlines of the morning paper or the captions that run along the bottom of the TV screen. They (not including you) don't usually show up at FR.

The General Welfare of the People means that the government does for the individual what the individual cannot do for himself

You have presented some excellent points.
However, I would submit that protecting the country from terrorists is one of the things the individual cannot do for himself.
Again, I think we agree on the objective....I think where people disagree is on the "reasonableness" of the provisions of the Patriot Act for intrusion in people's private lives. I think the question in most people's minds is "Is there sufficient ie reasonable justification for this level of intrusion?" I think most people would agree there are some instances where it is reasonable to limit the absolute right of privacy. Where reasonable people disagree is on what those instances are. That is why we are having this discussion on whether or not the Patriot Act will pass a constitutional challenge.

I think most people would agree there are some instances where it is reasonable to limit the absolute right of privacy. Where reasonable people disagree is on what those instances are. That is why we are having this discussion on whether or not the Patriot Act will pass a constitutional challenge.

Reasonable is a subjective word. The U.S. Constitution does not have any provisions for subjective terms. The only place where one can find where the Founding Fathers thought "reasonable" might fit is in the 10th Amendment which granted the sovereign STATES the right to determine what those instances might be. "Reasonable" is not granted to the federal government.

The Patriot Act cannot pass a strict constitutional test. It was passed AFTER the name was changed (formerly the Anti-Terrorism Act) when patriots were outraged. So it was given a gimmicky acronyn ("PATRIOT") for a name and passed. After all, since 9-11, who wouldn't be for a bill with the name PATRIOT in it?

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