[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
THE TERROR FINANCE TRACKING PROGRAM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
JULY 11, 2006
__________
Printed for the use of the Committee on Financial Services
Serial No. 109-105
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MICHAEL G. OXLEY, Ohio, Chairman
JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio MAXINE WATERS, California
SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair DARLENE HOOLEY, Oregon
RON PAUL, Texas JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio BRAD SHERMAN, California
JIM RYUN, Kansas GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio BARBARA LEE, California
DONALD A. MANZULLO, Illinois DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North MICHAEL E. CAPUANO, Massachusetts
Carolina HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut JOSEPH CROWLEY, New York
VITO FOSSELLA, New York WM. LACY CLAY, Missouri
GARY G. MILLER, California STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota JOE BACA, California
TOM FEENEY, Florida JIM MATHESON, Utah
JEB HENSARLING, Texas STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida AL GREEN, Texas
RICK RENZI, Arizona EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin,
TOM PRICE, Georgia
MICHAEL G. FITZPATRICK, BERNARD SANDERS, Vermont
Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California
Robert U. Foster, III, Staff Director
Subcommittee on Oversight and Investigations
SUE W. KELLY, New York, Chair
RON PAUL, Texas, Vice Chairman LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California DENNIS MOORE, Kansas
STEVEN C. LaTOURETTE, Ohio CAROLYN B. MALONEY, New York
MARK R. KENNEDY, Minnesota STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey ARTUR DAVIS, Alabama
J. GRESHAM BARRETT, South Carolina EMANUEL CLEAVER, Missouri
TOM PRICE, Georgia DAVID SCOTT, Georgia
MICHAEL G. FITZPATRICK, DEBBIE WASSERMAN SCHULTZ, Florida
Pennsylvania GWEN MOORE, Wisconsin
GEOFF DAVIS, Kentucky BARNEY FRANK, Massachusetts
PATRICK T. McHENRY, North Carolina
MICHAEL G. OXLEY, Ohio
C O N T E N T S
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Page
Hearing held on:
July 11, 2006................................................ 1
Appendix:
July 11, 2006................................................ 37
WITNESSES
Tuesday, July 11, 2006
Levey, Stuart, Under Secretary, Terrorism and Financial
Intelligence, U.S. Department of the Treasury.................. 13
APPENDIX
Prepared statements:
Oxley, Hon. Michael G........................................ 38
Kelly, Hon. Sue W............................................ 40
Levey, Stuart................................................ 44
Additional Material Submitted for the Record
Kelly, Hon. Sue W.:
CRS Report for Congress: Treasury's Terrorist Finance
Program's Access to Information Held by the Society for
Worldwide Interbank Financial Telecommunication (SWIFT).... 63
Maloney, Hon. Carolyn:
Compilation of publicly available statements regarding the
monitoring of wire transfers by the U.S. Government........ 49
THE TERROR FINANCE TRACKING PROGRAM
----------
Tuesday, July 11, 2006
U.S. House of Representatives,
Subcommittee on Oversight
and Investigations,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:10 a.m., in
room 2128, Cannon House Office Building, Hon. Sue W. Kelly
[chairwoman of the subcommittee] presiding.
Present: Representatives Kelly, Paul, Royce, Kennedy,
Garrett, Davis of Kentucky, McHenry, Oxley [ex officio], Moore
of Kansas, Maloney, Davis of Alabama, Cleaver, Scott, Moore of
Wisconsin, and Frank [ex officio].
Also present: Representative Bachus.
Chairwoman Kelly. This hearing of the Subcommittee on
Oversight and Investigations will come to order. Without
objection, all members' opening statements will be made part of
the record.
I wanted to point out that during World War II, Congressman
Andrew May returned from an oversight visit to the Pacific
theater and told a group of reporters that those with loved
ones serving in submarines didn't need to worry because the
Japanese were setting their depth charges to detonate at a
level that was too shallow to reach our submarines. Several
newspapers reported this.
The Japanese then subsequently reset the fuses on their
depth charges. A vice admiral estimated that the public
disclosure of this information cost us 10 submarines and the
lives of 800 American men.
During the mid-1970's, committees chaired by Senator Frank
Church and Congressman Otis Pike brought to the attention of
the American public a litany of activities which showed an
intelligence community that had, at times, overstepped its
bounds, leading to the enactment of the Foreign Intelligence
Surveillance Act.
I cite these instances not to draw comparisons with the
subject of the hearing today, but rather to demonstrate the
cross-pressures that we all confront when dealing with matters
of secrecy and national security.
No member wants to undermine our national security.
We all recognize that there are times in wars, Churchill
said, when certain truths must be, ``attended by a bodyguard of
lies.''
As a New Yorker, and representative of so many people who
are deeply affected by terrorism, I could not feel more
strongly about protecting our vital national security tools.
Just the same, no Member wants to forgo the institutional
obligation envisioned by the Founding Fathers. We work always
to strike a structural balance that James Madison articulated
very well in Federalist Paper No. 51. The hearing today is to
examine a terror finance tracking program and to examine the
merits of the program and to see if it has been properly
created and implemented by the Administration.
Along with Chairman Oxley, and my colleague Mr. Gutierrez,
and my colleague Mr. Frank, I have spent as much time on terror
finance as any Member of this body. We have held many hearings.
We have established a bipartisan Task Force on Terror Finance,
and in 2004, I even authored an amendment which authorized the
government to monitor cross-border wire transfers.
My record properly suggests that I would support a
sophisticated and aggressive program similar to what has been
described by the media. While many terrorist operatives are
increasingly resorting to cash couriers to move funds,
charities and wealthy donors who support terrorists are likely
to have used the SWIFT system that this program specifically
targets. It would be foolish to ignore that.
Furthermore, this program has the support of several
important people outside of the Administration who are familiar
with the workings of the program: people like Chairman Oxley;
the co-chairs of the 9/11 Commission; and former officials such
as Dennis Lormel, former head of the FBI's terror financial
units, who said that many people in Congress who should have
been briefed by this Administration were not.
And while I appreciated the visit last week from Under
Secretary Levey after the program's existence was reported in
the media, our oversight obligations are far from fulfilled.
I believe that the skepticism the Administration afforded
this Congress, perhaps properly, regarding the terror finance
tracking program must be reciprocated. We must ensure that an
environment of accountability is provided for everyone in
government who deals with sensitive financial information.
In our letter our colleague, Intelligence Chairman
Hoekstra, recently sent to President Bush about withholding
information from Congress, he mentions how he expects it to
reinforce an important question in the minds of all Members:
What else is it that we don't know? What else don't we know?
So, in addition to this hearing, I am going to ask Under
Secretary Levey to come back here to brief this subcommittee,
and to answer any questions he cannot answer in public forum
today. I will also conduct a follow-up hearing on this subject
in September to allow the private sector witnesses to discuss
pros and cons of this program.
Additionally I am asking the GAO to conduct an
investigation into this program to ensure that it was indeed
conducted in accordance with all proper laws; that it does
possess all necessary safeguards; and that Congress was
appropriately informed. This GAO investigation is mere due
diligence, and it is going to help ensure that our trust is not
poorly placed in the Treasury Department.
I want to thank Under Secretary Levey for coming here
today. I have a deep respect for Under Secretary Levey, and I
believe he is doing an excellent job at Treasury. We understand
that he did not make many of the decisions about disclosure to
Congress and that there are many things he cannot discuss in an
open setting. However, I do look forward to an informative
discussion on this matter today.
And with that, I turn to our ranking member, Mr. Frank.
Mr. Frank. Thank you, Madam Chairwoman. I am here today in
the absence of the ranking member of the subcommittee, Mr.
Gutierrez, who missed his plane; he flies out of Chicago and
these things will happen.
I begin by expressing my appreciation for your statement,
Madam Chairwoman. I think you have laid out what exactly the
issues are here; namely, the extent to which our fight against
terrorism is going to be a genuinely collaborative effort
between the Executive Branch and Congress. And I think you were
right to point to the broad support for the program. I don't
know of any Member of Congress who thinks we should not be
tracking the finances of terrorists. The resolution which I
offered, which was widely supported by people on my side of the
aisle and a few on the other side, explicitly affirmed that.
My problem is that this Administration, by its pattern of
rejecting the notion of Congressional collaboration, has made
this controversial. That is where the controversies come in.
There was not a great deal of controversy about the substance.
There is wide agreement that we should be tracking the
financing of terrorists in many ways. As the gentlewoman from
New York has said, we on this committee have been pushing the
Administration to do even more in that area than it wanted to
do.
The problem is--and it is not an isolated instance. We have
seen it in area after area. I have come to genuinely believe
that the fact that the Congress would have been willing to be
cooperative is not only irrelevant but seen by the
Administration as problematic; that is, I believe this
Administration would rather do things unilaterally, without
inviting Congressional collaboration, because the dominant
factors in the Administration genuinely believe that increased
executive authority, unhindered and unhampered by interference
by the Congress, is essential. And we have seen this in a
number of areas.
To be honest, I have come to believe that the people in
this Administration have a different view of democracy than the
one that I have.
But I want to be very clear, this is not a case of my
accusing them of not being democratic. Those on the left who
make those accusations, I think, are wrong. The question is:
How do you define democracy? I think this Administration
prefers the model of having the single decisionmaker elected
every 4 years and basically entrusting most of the important
decisions to that decisionmaker. And the willingness of the
Congress to cooperate, that the gentleman from New York
correctly pointed out, is robust because they think, okay, if
we let them agree with us on this issue, then they will have
established the right to disagree with us on another.
There would not have been any problem with this program,
and the proof of that is the briefing pattern. Now, we are
supposed to be briefed on these things. I have a list here of
the Members who were briefed on this program.
Let me start with a story. On May 11th, I was invited to a
briefing. I went to the secret elevator, up to the secret room,
and I took out my cell phone because, you know, who knew who
might be listening in on my cell phone. And two people from, I
guess, Treasury, that I never even knew, said we are going to
tell you about something that is about to be made public.
The conversation I had, the only time I have heard a
comparable conversation was between Groucho and Chico. They
said to me, ``We are going to tell you something that is about
to be made public.'' I said, ``Well, is it going to be made
public because you want it to be?'' ``No. It is going to be in
the newspaper.'' ``Okay, you are telling me this only because
it is going to be in the newspaper?'' ``Correct.'' ``Well, I
have a question. Since you are only telling me this because it
is going to be in the newspaper, when it is in the newspaper
can I then talk about it?'' ``No.''
So here is the briefing I was offered. I was offered a
briefing about something only because it was about to be made
public anyway. And the purpose of telling me this, I believe,
was that so once I heard about it first from them, I couldn't
talk about it in the newspaper.
There have been 28 Members of the House briefed on this
program. Two were briefed in March of 2002, a few months after
it started; one in 2003; two in 2005; and 23 on the 11th of May
2006.
In other words, the briefings were overwhelmingly after the
Administration knew that it was being made public. These were
briefings after the fact.
This is the exact opposite. Let me put it this way. When
you brief us--and by the way as I read this, no member of this
committee was briefed until the 11th of May when the chairman
of the committee and I were invited to the briefing room. And I
was never briefed, let me say--by the way, I don't want to get
myself in any more trouble than I might otherwise be; I
declined the briefing. When I was told that I was being briefed
only because it was going to be made public anyway, and the
consequence of my being briefed would be that I couldn't
discuss the program, I excused myself.
And I did tell Treasury, and I will repeat myself for Mr.
Levey, if you ever want to tell me about something that I am
not going to read in the newspaper, I will be available. But
otherwise you can trust me to read the papers on my own. I will
be okay with that. If I miss an issue, I will see if I can call
and see if I can have you mail me one. But I don't need you to
give me the oral version.
To some extent, Treasury saw itself in that position. The
role model was La Guardia reading the comics to the people of
New York during the newspaper strike.
As long as the newspapers are available, I will get them
myself. See, that is the problem; the briefing apparently shows
it. You briefed very few Members of Congress; only two Members
were briefed between 2003 and the program being made public.
Now, here is the problem with that, and I will wind this
up, Madam Chairwoman. I appreciate your indulgence.
Yes, of course, we think this program should go forward.
And why do we want to be briefed and have oversight? And let me
summarize it this way. I strongly believe that you and the
other law enforcement people are the good guys and you are
fighting the bad guys. But you are not the perfect guys. And my
problem is that your model seems to assume that you are the
perfect guys, that you won't make mistakes, that you don't need
to be checked, and that you can do this all on your own. And
what I want to do is give you all the powers you can to fight
the terrorists, to fight the bad guys; but I don't think
anybody ought to be given enormous power. And that is what you
are going to be given, because you are going to be given an
enormous staff and not have checks. And no matter how many
internal checks you have, I don't think they will ever be
enough.
I think Congressional oversight makes sense. I think the
gentlewoman from New York is correct. She and others have a
very good record in being very supportive of this effort
against terrorism, and you have rebuffed us. And I think that
is a mistake. And, consequently, that is why a program that
should not have been terribly controversial has become
controversial.
So I hope with the program the gentlewoman has outlined, we
will now begin a period of real cooperation, and that in the
future there will be a voluntary effort on your part to do
this. Thank you, Madam Chairwoman.
Chairwoman Kelly. Thank you, Mr. Frank.
The Chairman of our Committee, Mr. Oxley.
The Chairman. Thank you, Madam Chairwoman. And Secretary
Levey, thank you for appearing today. We are pleased to have
you here as the obvious reason for this hearing was to discuss
the positive aspects of this program and how effective it has
been.
I think that there has been very little argument in the
Congress of how effective that has been. The issue raised this
morning, of course, was who was briefed and when and so forth.
And frankly, I am confident that the Administration did the
right thing in very selectively informing the Intelligence
Committee. We are not the Intelligence Committee, in case you
haven't noticed, and the Intelligence Committee did their work
very effectively.
How many people were briefed and when it occurred seems to
be relatively irrelevant since the program was up and running,
and I think there was general consensus that it was very
effective. And, obviously, the fewer people who know about that
program, that secret program, the better. The revelations that
appeared in the popular media clearly had a negative effect on
the effectiveness of that program. I am sure you are going to
testify to that later.
I keep coming back back to the warnings or the concerns
that were expressed, particularly by the co-chairs of the 9/11
Commission, two well respected gentlemen, Governor Kean, and,
of course, our former colleague, Lee Hamilton.
Why would those two individuals, well respected, plead with
the news media--in this case, the New York Times--not to reveal
that information? It seems to me that goes to the heart of this
entire issue. And it was, frankly, never answered during the
debate on the resolution that we had a week or so ago.
So we keep coming back to that very poignant issue. And by
the way, they weren't the only two who were trying to keep that
program secret, because obviously the terrorists, once they get
that information, change their habits, the New York Times
Editorial Board to the contrary notwithstanding. It is amazing
how much the editorial board at the New York Times understands
about terrorists' actions and finances.
But that is for another day.
It seems to me that, again, the purpose of this hearing is
to describe how effective the program has been and the
potential and real damage the leaks have caused. When this
committee debated and voted on the terrorist financing part of
the PATRIOT Act, it was this kind of program that we clearly
had in mind.
If you look at the editorial in the New York Times shortly
after 9/11, they called upon the Administration to do exactly
what the Administration did. And sometimes I am concerned that
maybe the effectiveness of the program is what really upsets
some folks in the media. But we have in this committee, I
think, set the framework in the terrorist financing provisions
and the anti-money-laundering provisions in the PATRIOT Act
that really allow the Administration to do this effective
program that has, I think, been severely weakened by the
revelations that occurred in the popular press. I find that to
be very upsetting.
By the way, this is not the first time that we have had
this kind of situation where you have had unauthorized leaks
from--which I think is frankly treason--and it has been
reported in the popular press, for whatever reason. This is at
least the third time that we have had that situation occur. And
as one of my colleagues said on the Floor, nobody is happier
about these revelations than those who would harm us. I find
that incredibly upsetting, and of real concern, as chairman of
this committee, that we would find ourselves in that position
today. I yield back.
Chairwoman Kelly. Thank you.
Mr. Moore, do you have an opening statement?
Mr. Moore of Kansas. Thank you, Madam Chairwoman, and thank
you, Secretary Levey, for being here today. And I really
appreciate the opportunity to have a brief conversation with
you and hear your testimony.
I really, really appreciate the statement, the strong
opening statement made by our Chair, and I really do mean that
sincerely.
I believe what she said, I believe what the Ranking Member
said, that every Member of Congress wants to protect our
country. Nobody wants any more harm to come to our country.
That is not the issue and that is not the question. When I
disagree with somebody I try to at least understand why they do
what they do so I can work with it.
And I really, truly, believe that had the President and the
Administration come to this Congress after September 11th and
said, look, the whole world has changed. We need to look at the
FISA law which has been in effect since 1978--and I understand
there are 17,000 applications and only 6 or 10 or 8 rejections
after 17,000. I was a district attorney for 12 years. I never
had that kind of a record, the batting average, when I went to
get search warrants. And I just think that is an exceptional
number.
And my point by saying that is this: If the President had
come to Congress to say, ``Look, the whole world has changed,
we need to change the FISA law, we need to enact some new laws
regarding wire transfers and bank transactions in other
countries,'' I think Congress would have lined up, Republicans
and Democrats--this is not about partisan politics, as the
Chairman said--Mr. President, we will do anything reasonable
you ask.
And I mean that very sincerely, and that is what I invite
and encourage the Administration to do in the future if there
is something like--in the war on terror, we need to work
together. We are all Americans and we all want to protect our
country. And I say this with the greatest respect and
sincerity. I hope the Administration will come to Congress and
say we need to change the laws in the area. And if they do
that, I really believe--I honest to God believe that we will
work together with the President to do whatever, anything
reasonable to protect our country.
So I look forward to hearing your testimony today, Mr.
Secretary Levey, and look forward to asking you some questions,
and thank you for being here. Thank you, Madam Chairwoman.
Chairwoman Kelly. I am going to turn to Mr. Paul in 1
minute, but because there are a number of people here, and I
know that the Under Secretary is going to need to leave, I am
going to ask all members to shorten their opening statements to
a 2-minute, rather than a 5 minute, with unanimous consent.
Mr. Paul.
Dr. Paul. Thank you, Madam Chairwoman. I know today it is
not very appropriate to bring up the subject of the
Constitution and the Fourth Amendment, so I am not going to
pursue that. But I am always concerned about the legal
authority for what our government does.
The whole issue of whether or not records can be examined
without a subpoena issued under probable cause is really
questionable. And I too, like everybody else, wants to do
whatever we can to find out what the terrorists are planning to
do.
But I want just take a minute to make the point about the
practicality of what we do.
Quite frankly, I don't think the terrorists were tipped off
to anything. You know, we have been monitoring financial
transactions for 30 years. And, they know what is going on. As
a matter of fact, they have been suspicious to the degree that
they essentially don't use the system any more. They have gone
to this hawallah type of system, which is off the books. And
therefore, all the effort that we put forth may be wasted
effort and may be confusing things.
This assumption that more is better--spend more money, have
more reports, have more subpoenas--can actually backfire on us.
And I want to just quote a U.N. report that came out after 9/
11. As a matter of fact, it came out in May of 2002. And this
dealt with a $69,000 wire transfer that Mohammed Atta, leader
of the hijackers, received from the United Arab Emirates. The
report noted that this particular transaction was not noted as
quickly enough because the report was just one of a very large
number and was not distinguishable from those related to other
financial crimes.
So therefore, this idea that we just need more financial
surveillance is flawed since the Bank Secrecy Act, FinCEN, has
been around, we have had executive orders, we have the SWIFT
program. And to think for a minute that the hijackers aren't
going to be very knowledgeable about this--I just think we are
kidding ourselves. And this whole idea of more is better, I
think, needs to be questioned.
I yield back.
Chairwoman Kelly. Thank you, Mr. Paul.
Ms. Maloney.
Mrs. Maloney. Thank you, Chairwoman Kelly and Ranking
Member Frank for holding this important hearing. Our oversight
is legally required under the International Emergency Economic
Powers Act, the law the Administration is using to support this
initiative. But the Administration has kept Congress in the
dark. Although Treasury started subpoenaing data from SWIFT in
October of 2001, only three present Members of this body were
informed about the program before May 11, 2006.
Even though this committee has jurisdiction, most of us
learned about the depth of this program only from the New York
Times when it published its article on June 23rd of this year.
Apparently, Congressional notification occurs when the New York
Times is delivered to our office.
The Administration's intentional failure to consult with
Congress for 5 years--even though it is clearly required by the
law they argue supports this program--is part of a very
disturbing pattern. As the Chairman of the Intelligence
Committee, Chairman Hoekstra, noted over the weekend, the
Administration needs to be reminded that keeping Congress
informed of intelligence programs is not optional. It is a
legal requirement.
Congressman Hoekstra's comments echo those of the Supreme
Court in reviewing the Guantanamo Bay tribunals. The
Administration needs to remember that this is a country where
there are three branches of Government.
I would just like to say that when the Times brought this
program to our attention, it was condemned by the
Administration. But these are the same types of charges leveled
against the same paper that we heard about with the Pentagon
Papers. But despite the statement of the President and
Secretary Snow, no one was exactly surprised that the U.S.
Government is monitoring international wire transfers.
And I have here a list of public statements in papers
across this country, in Canada, and in Australia, about the
SWIFT program and our government's monitoring of it. And I
request permission to place this in the record, and would note
that the interns in my office compiled it in just 2 days and it
is quite extensive. So no one was surprised.
I request permission to put my entire statement in the
record.
Chairwoman Kelly. So moved.
Mrs. Maloney. And the press clippings.
Chairwoman Kelly. Thank you.
Mr. Davis.
Mr. Davis of Kentucky. Thank you, Madam Chairwoman. I think
we face two issues here. I appreciate your coming here, Mr.
Secretary. One is the ability to act; and second is the issue
of how we manage an effective oversight program from a
constitutional perspective.
I think it was extremely regrettable and frankly
reprehensible that the New York Times published this
information. I am thoroughly familiar with the hawallah
networks myself from my experience and study with the Middle
East; however, I think the bigger aspect is their selectivity
in information that they have shared, particularly since they
called for this type of program in an editorial on September
24, 2001.
However when we look at this ability to act, I think one of
the deeper issues is that we need collaboration as opposed to
briefing. I have been to plenty of briefings during my time in
the House that were classified, and all of the information was
available online or in public media sources. I would question
the status of the classification.
But I think what we need at a deeper level, rather than
information, is participation and using the expertise in the
House to collaborate because we are dealing with adaptive
networks. Just as terrorists are changing as they find out
methods that we have, one of the things that I think would be
helpful to maintain the constitutional oversight, that it is
necessary for the Administration to work closely with the
subcommittees in Congress, and specifically those Members with
expertise on these issues and understanding perhaps the
political dimension in a way that many of the agencies may not,
to ensure that we can have a robust, flexible, and responsive
system and one that can adapt to the continuing changes in
technology and the way our enemies operate.
I appreciate your being here today, and I look forward to
the discussion. I yield back, Madam Chairwoman.
Chairwoman Kelly. Thank you. Mr. Cleaver.
Mr. Cleaver. Because I respect the seniority system, then I
will wait until next if it is okay.
Chairwoman Kelly. Okay, thank you. Mr. Scott.
Mr. Scott. Thank you very much, Chairwoman Kelly. Again I
want to congratulate this committee under the leadership of
Chairwoman Kelly for providing the leadership on a very intense
and important issue of terrorist financing. And I am very
pleased to have served with her on this committee. I have been
to every meeting. I think it is very important, Secretary
Levey, that we understand what we are really saying here. What
we are saying is that this Administration needs to understand
that they are not the only ones who are concerned about the war
on terror. The American people elected a Congress, men and
women who care about this country, who are just as concerned
about this fight on terror as the President is. He has no
monopoly on that.
What is of paramount concern to me is that the framers of
the Constitution put this government together, and they put it
together--and the phrase that John Adams used was, ``We put
this government together in a manner that is a balance of a
delicate nature,'' meaning that there is a separation of power.
It is not just the Executive Branch. They put the Executive
Branch there to execute and administrate. But they put the
Congress of the United States here so that we might be able to
handle the purse strings, but, most importantly, to provide the
oversight.
And what it appears to me that this committee--and the
President seems to think this committee is not a committee of
oversight but a committee of hindsight. We are here to tell
this Administration that we are not a committee of hindsight.
We are going to do our job that the American people put us here
to do.
Now, it is not the New York Times or the Washington Post or
the L.A. Times or even the Wall Street Journal or any of our
distinguished newspapers that need to be called to task. It is
this Administration. The leaks didn't come from the New York
Times. They came from people in your Administration.
The fundamental question has to be: When is this
Administration going to look in the mirror? That is where you
need to look.
Let that message go back to this Administration. We care
about it. Why don't you have people over there with loyalty?
Where is your test? Where is your examination for people who
work in this Administration? What are you doing to seal the
leaks?
The other issue that is of paramount importance, Mr. Levey,
is the first amendment and the fourth amendment. They are
precious. Our men and women of many years throughout the
history of this country died on the battlefield so that we
could have that first amendment, which is the freedom of the
press, so we can have that fourth amendment, which protects our
privacy.
It is along those lines that I would like to question you
this afternoon. Thank you, Madam Chairwoman.
Chairwoman Kelly. Thank you, Mr. Scott.
Mr. Garrett.
Mr. Garrett. Thank you, Madam Chairwoman, and I will be
very brief. First of all, I think I go along with the
statements by the ranking member that members on both sides
have the same bottom-line interest to make sure that the job
gets done, but within a constitutional framework. I will just
be listening to your testimony on three quick points. One is
the aspect of why it is that--we can go back to my constituents
and tell them why it is that the information from programs such
as SWIFT is vital to the overall program, but does not go to
the point that Mr. Paul raised, is just providing us with too
much information. Secondly, how can I assure them that the
average, the majority of Americans, their financial information
is not going to be within--or is it--not going to be within the
information that you look at. And thirdly, to the overall issue
of information going out to the public, to the question of was
the information that was reported in all the papers and what
have you truly unique and new information to the public, or was
it actually information as we have heard both here and on the
Floor of the House, information that was really out there in
the general domain prior to this? And if it was information
that was out in the general domain prior to this, is this
something your program looks at and should have done something
to dissuade them from putting it on their Web site, that how
they work with their government and the general public has this
access to information in the past? But I appreciate your being
here. And thank you, Madam Chairwoman.
Chairwoman Kelly. Thank you Mr. Garrett.
Now, Mr. Cleaver.
Mr. Cleaver. Thank you, Madam Chairwoman, and Ranking
Member Frank. Under Secretary Levey, thank you for
participating in this hearing, and I am looking forward to
hearing about the Administration's efforts to combat terrorism
and how you plan to implement communication between this
Administration and the Congress as we address this critical
issue of fighting terrorism.
Among the critical institutional issues that this topic has
helped to shed light on is the importance of Congressional
oversight with respect to fighting terrorism and implementing
other Federal programs and activities.
I am sure that my colleagues and the Administration will
agree that Congressional oversight is an integral part of our
system of checks and balances, as fundamental to our Nation as
the right to vote. And as a Member of Congress, I believe it is
incumbent upon this body not only to protect the people from
terrorists but to also ensure that our government respects our
Constitution and follows the rule of law.
Again, I look forward to hearing your testimony.
And I will have some very, very clear questions that I
would like for you to address.
Thank you, Madam Chairwoman.
Chairwoman Kelly. Thank you.
Mr. McHenry.
Mr. McHenry. Thank you, Madam Chairwoman. I certainly
appreciate your holding this important hearing today, and I
certainly appreciate the Secretary taking the time to be here.
I think of major importance to this committee and to
Congress and to the public at large is the question of is the
government doing enough to protect us from future attacks. And
I think that is at the heart of what this is all about.
You have some who just want to put their head in the sand
and say that we will just duck and cover and avoid the next
attack. But I think that is a horrible policy. It is a cut-and-
run policy. It is an ignoring-the-world-as-it-is policy. And I
am grateful that this Executive Branch, and you, Mr. Secretary,
have taken on this task.
I mean, after all, you are the Under Secretary for
Terrorism and Intelligence. What are you supposed to be doing,
other than figuring out the financial transactions of the
terrorists and harvesting that intelligence?
Now, I certainly appreciate the fact that this was
disclosed to the Intelligence Committee, as it should be. I
understand their special place and their special protections in
Congress of that information so that we can provide necessary
insurance that it is not let out to the public.
I do think it is horrible what the New York Times has done
to this program. But I do commend you, Mr. Secretary, for
working hard every day. I look forward to your testimony and
opportunity for you to answer some questions today.
Thank you, Madam Chairwoman.
Chairwoman Kelly. Thank you.
Ms. Moore.
Ms. Moore of Wisconsin. Well, thank you, Madam Chairwoman
and Ranking Member Frank. I want to welcome the Under Secretary
to this very important hearing. It must be a relief to see me
speak, because I am the last. I have the least seniority on
this committee. And so certainly this part of the inquiry will
be over soon.
I can tell you that as a new Member of Congress, I was not
here on 9/11. I was not here for the debate on the PATRIOT Act
and other things.
But I do--as a citizen, at the time, I do recall the many,
many discussions and the debates that were held and statements
that were made by people on both sides of the aisle about how
our enemies were jealous of our freedoms, that a victory to the
terrorists would be that they would be able to undermine our
freedoms, undermine our system of democracy which they held in
great contempt and disdain.
Part of the system on our way of life of government that we
revere so much is, in fact, this shared power, this
Congressional oversight, oversight of the people. And I am
wondering as we begin this hearing--I do want you to keep this
in mind--are we indeed capitulating on that very fear by an
Administration that is determined that our need to
surreptitiously examine financial records is more important to
capitulate to that fear than it is to include the Congress of
the United States in their oversight role and to make sure that
we are not conducting warrantless searches without the consent
of the people? Are we indeed capitulating to that fear? I yield
back.
Chairwoman Kelly. Thank you very much, Ms. Moore.
Mr. Bachus.
Mr. Bachus. I thank the chairwoman.
Secretary Levey, I almost feel like apologizing to you.
There are obviously not only many newspapers in this country,
but there are many Members of Congress who simply will not
acknowledge what is a fact, and that is, number one, this is a
legal program.
The legal foundation of this program is well established.
In fact, it has not been questioned by any of the newspapers.
The New York Times has actually admitted that this program
does, in fact, have a sound legal basis.
Number two, the program is necessary. The New York Times, 2
weeks after 9/11, in an editorial, urged the Administration to
start such programs as this.
And the third thing that no one has disputed is that this
is a very successful program.
The program is legal, it is necessary, and it is
successful.
The one point of debate has been whether or not this
classified secret covert operation, whether or not Members of
Congress or newspapers had the right to print publicly the
sources of our information, the methods we were using, and the
details of the program.
And I would hope that Members of this Congress, and
newspapers and the media, would realize that decision which the
Administration has said comprised this program, that decision
was not given under our Constitution to either newspapers or
Members of Congress. And for Members of this Congress, if I had
gone out and held a press conference and revealed this
information, I could have been criminally prosecuted.
And when newspapers reveal classified secret information
which not only compromises the program but compromises our
allies overseas, it is--to me, it is inexcusable and
reprehensible. And I am sorry that your job of protecting this
country is being made more difficult by not only Members of
this Congress but by the media.
Chairwoman Kelly. Thank you very much, Mr. Bachus.
We have before us Under Secretary Levey. He is Under
Secretary for Terrorism and Financial Intelligence of the U.S.
Department of the Treasury. And, Secretary Levey, I understand
that the problem here is not the program itself. The problem
that this committee has is that we have a charge to provide
oversight over the legislative arena to make sure that there is
not anything going on that might in some way inherently damage
the public of the United States. That is what our committee is
charged to do.
Given that, as you know, some people have lamented that
public disclosure of this program has essentially rendered it
defunct, we now would like to hear your opening statement, and
then we will follow that with questions.
STATEMENT OF STUART LEVEY, UNDER SECRETARY, TERRORISM AND
FINANCIAL INTELLIGENCE, U.S. DEPARTMENT OF THE TREASURY
Mr. Levey. Thank you, Chairwoman Kelly, Congressman Frank,
and distinguished members of the committee. This is my fifth
time appearing before your committee in the past 2 years in
what has been an ongoing and fruitful discussion of our
government's efforts to track and combat terrorist financing.
It is clear from everyone's opening statements that we share
the same mission, which is to succeed in disrupting those
terrorists.
The program we are discussing today, the terrorist
financing tracking program, has supplied a powerful source of
intelligence that has greatly advanced that mission to track
and disrupt terrorists.
Counterterrorism officials place a heavy premium on
financial intelligence because it is rich and accurate. When
terrorist supporters send or receive money, they may provide
the kind of concrete leads that can advance a terrorism
investigation.
As 9/11 Commission Chairman Lee Hamilton testified before
this committee in 2004, ``Following the money to identify
terrorist operatives and sympathizers provides a particularly
powerful tool in the fight against terrorist groups. Use of
this tool almost always remains invisible to the general
public, but it is a critical part of the overall campaign
against al Qaeda.''
The terrorist finance tracking program was until recently
just such a powerful and invisible tool. It has been a key part
of our efforts to combat al Qaeda and other terrorist groups
and its exposure represents a grave loss.
SWIFT is the premier messaging service used by banks around
the world to issue international transfers, which makes its
data exceptionally valuable. In response to a subpoena, SWIFT
makes available to us a subset of its records that it maintains
in the ordinary course of business in the United States. SWIFT
data consists of records of completed financial transactions,
largely overseas transfers. It does not contain, for the most
part, information on ordinary transactions made by individuals
in the United States such as deposits, withdrawals, ATM
transactions, and the like. It does not provide access to
individual bank account information.
The program is consistent with privacy laws as well as
Treasury's longstanding commitment to protect sensitive
financial data. The SWIFT subpoena that we issue is powerful
but narrow. We cannot simply browse through the records that
SWIFT turns over. We are only able to see that information that
is responsive to targeted searches in the context of a specific
terrorism investigation.
The data cannot be searched unless the analyst first
articulates and enters into a computer the justification that
links that target of the search to a terrorism investigation.
I want to emphasize that we cannot search this data for
evidence of nonterrorist-related crime such as tax evasion,
economic espionage, money laundering, or other criminal
activity. As a result, we have access to only a minute fraction
of the data that SWIFT has provided.
Because we agree with Mr. Frank that people aren't perfect
and people in government are not perfect either, the program we
have instituted has multiple overlapping layers of governmental
and independent controls to ensure that the data is only
searched for terrorism purposes and that the data is properly
handled. SWIFT representatives are able to monitor our searches
in real time and stop any one of them if they have any concerns
about the links to terrorists.
In addition, a record is kept of every search that is done
and those records are reviewed by SWIFT's representatives and
by an outside independent auditor. Moreover, Congress was
informed of this program in the traditional way of such matters
through the Intelligence Committee.
The program has also delivered results. It provides
counterterrorism analysts with a unique and powerful tool to
track terrorist networks. To cite one prominent example, the
program played an important role in the investigation that
culminated in the capture of Ham-bali who, as you know, is JI's
operation chief and masterminded the deadly bombings in Bali in
2002.
But beyond these headlines cases, the program has proved
its worth in many quieter but equally significant ways. Anyone
who has tried to piece together a complex terrorism
investigation with months of sweat and dead ends knows how
important it can be to uncover a new connection or a new
personal identifier.
This program generated just such leads on a regular basis.
Some observers, including some members of this committee, have
argued that the disclosure of this program did little damage
because terrorist facilitators are smart and they already knew
to avoid the banking system. They note that we were quite open,
that we were following the money and trying to track financial
transactions.
But let me respond to this issue firsthand. When I was
asked to oversee this program nearly 2 years ago, I requested
that the written output from this program be part of my
intelligence briefing every single morning. Every day I go into
our SCIF and I get my intelligence book and behind tab 11 of my
book is the output from this program. And I can't remember a
single day when my intelligence book hasn't included concrete
leads from this program and most often many more than one.
Now, one can debate the reasons why, but the fact is that
financiers and associates of terrorist networks have continued
to use the banking system. And this program continued to show
us who they are and how they do so.
In short, the terrorist finance tracking program has been
extremely valuable. It is grounded in law and bounded by
safeguards. It represents exactly what I believe our citizens
hope we are doing to prosecute the war on terror.
Finally, much has been said about the newspaper's decision
to publish information about this program. As a government
official, and as mentioned here today, I must point out that
the newspapers almost certainly would not have known about this
program if someone had not violated his or her duty to protect
this secret.
At the same time, I do very much regret the newspaper's
decision to publish what they knew. Tracking terrorist money
trails is difficult enough, without having our sources and
methods revealed. I can assure you, however, that our efforts
will not wane. We will continue to do everything in our power
to follow terrorist money trails and disrupt their activities.
We are absolutely committed to this mission, and I know that
this committee is, as well.
I look forward to answering your questions about this
program. Thank you.
Chairwoman Kelly. Thank you, Secretary Levey. Without
objection, your full opening statement will be made a part of
the record.
[The prepared statement of Secretary Levey can be found on
page 44 of the appendix.]
Chairwoman Kelly. I am going back to something I said
before, which is that there are people who have lamented that
public disclosure of this program has essentially rendered it
defunct. 9/11 Commission co-chair Tom Kean said, ``I think it
is over.''
I am interested in exploring this suggestion that the
program is no longer useful. You have testified before Congress
that there was a lag between what Saudi Arabia said and what
Saudi Arabia did regarding their efforts to fight terror
financing. And you and others in government have raised
concerns about wealthy individuals and charities based in Saudi
Arabia.
Given the nature of the data that passes through the SWIFT
system, it seems reasonable to conclude that the tracking
program may continue to be particularly useful in monitoring
the activities of charities and wealthy individuals who support
terrorism under the veil of legitimacy.
Generally speaking, how, if at all, has this SWIFT program
helped you assess whether the Saudis and other emerging banking
centers such as the UAE and Bahrain have lived up to their
stated commitments to combat terror financing?
And in talking about this, if you would specifically
respond to the suggestion that the program has been killed by
public disclosure, I would appreciate it. And I would
appreciate you updating your views on how Saudi Arabia and
others are cooperating with us in our fight against terror
financing. Is Treasury investigating the link that resulted in
the public disclosure, also? So I am asking you essentially
three questions.
And I will repeat them. Would you like me to?
Mr. Levey. Sure.
Chairwoman Kelly. Okay. One is I would like to know how the
SWIFT program has helped you assess the Saudis and other
emerging banking centers such as UAE and Bahrain, how that has
helped you assess whether they have lived up to their
commitments in combating terror finance. And in discussing
that, I would like you to specifically talk about whether or
not the program disclosure, the SWIFT program disclosure, has
been killed because its usefulness is no longer available to
us. And the third question I would like to ask is if Treasury
is investigating the leak that resulted in the public
disclosures.
Mr. Levey. I think I have those questions.
Let me start by the damage from the disclosure. I think, as
I indicated in my opening statement, there is no doubt there
has been damage from this disclosure. As everyone on this
committee knows, this is a very formidable enemy. They are
intelligent. They do what they can to cover their tracks. The
fact that we have now made explicit the information that we are
looking at to track their money trails is definitely damaging,
just as a matter of logic.
The question that you pose, though, is whether the program
is dead or absolutely without value. And to be very honest, I
think that remains to be seen.
One of the things that one has to take into account is when
you talk about terrorist networks, there are lots of aspects to
it. And I think you have alluded to some of the key points,
which is that you have some people trying to live in polite
society and keep one foot in both worlds, one foot in the
legitimate world and one foot in the world where they are
supporting violent jihad. You have charities and so forth. It
may well be that this program will still yield a great deal of
value in those sorts of--those sorts of investigations.
I can tell you, without going into specifics about any
individual case, for obvious reasons, that one of the ways that
this program has been quite valuable is in the investigation of
charities and particularly their attempts to reconstitute
themselves after they have been first exposed. So without going
into specific detail about how it has helped with respect to
the countries you named in your question, I can tell you that
the program has been quite valuable in that respect.
If I can just touch briefly on the question you asked about
the leak and investigation of the leak.
Obviously, I think everyone here knows that the Department
that handles investigations is the Justice Department and they
would be responsible for any investigation. All I can say at
this point is that we have shared information with the Justice
Department and are in consultation with them about the
appropriate way to go forward.
Chairwoman Kelly. So you are working with Justice to
investigate the leak that resulted in the public disclosure; is
that correct?
Mr. Levey. We are in consultation with them. The
responsibility for doing an investigation in this sort of
matter would be the Justice Department.
Chairwoman Kelly. I would like for you to describe the
thought process behind the plan notifying Congress. When you--
this was brought out by Mr. Frank. Correct me if I'm wrong, but
it looks to me like the Administration sought to brief chairs
and ranking members of the Intelligence Committees on this
program prior to their decision to preempt--only prior to
preempt the New York Times, Wall Street Journal, and L.A.
Times. My colleague testified he was told that he was only
briefed because it was going to appear in the newspapers.
I would like to know if at any point there were changes
made to the program in response to feedback from the people in
Congress that you did notify? And I would further like to know,
what kind of--I would like to hear an explanation for the
limited scope of briefing Congress. The authorities that the
Administration, you, cite in your testimony for the program are
the International Economic Powers Act, the United Nations
Participation Act, and Executive Order 13224. The International
Economic Powers Act is the primary jurisdiction of this
committee along with the International Relations Committee.
The International Relations Committee has jurisdiction also
over the U.N. Participation Act. The executive order cited
focuses on Treasury Department powers but also references both
Justice and State Departments.
So why did the Administration choose to brief none of the
committees that have been put in charge of overseeing the
government functions that you talk about giving you authority?
Why did they brief others and not the committees of
jurisdiction?
Mr. Levey. Well, thank you for that question. I look
forward to responding to it. I know it is a concern of yours
and many others.
I should say at the outset that I very much value the
partnership we have with this committee. This has been an
excellent relationship. We have done many good things together
and I hope we will continue to do so. As I said in my opening
statement, Congress was informed of this program in exactly the
way that Mr. Frank indicated in his opening statement, through
the chairman and ranking member of the Intelligence Committees.
The members were briefed as consistent with my
understanding of the National Security Act and the customs and
practices that have been agreed upon over time by both the
Executive and Legislative Branches in working on intelligence
matters.
As you indicate in your opening statement, these were
decisions that were made in 2002, and so I can't tell you the
thinking that went behind them because I was not there at the
time.
I can tell you that when I did arrive at the Treasury
Department in 2004, and I was given responsibility for this
program, I took a look at that and it seemed at that time even
more appropriate because the office that I had been just
confirmed to be the head of is a hybrid office. It is one where
we have a policy function as well as an Assistant Secretary for
Intelligence and an Intelligence Office.
My Assistant Secretary for Intelligence is naturally a part
of the Intelligence Community. She reports not just to me but
to the DNI. Her confirmation--I know that is a Senate issue--
but her confirmation went through the Intelligence Committee
and not through Senate Banking or Senate Finance. And we have a
hybrid office and she is the person with day-to-day
responsibility for this program. It seemed appropriate to me
that the Intelligence Committee would be the committee that
would have the primary responsibility for oversight of what is
essentially an intelligence-gathering tool.
And that is why the decision was made, I believe, as it
was, and continued until May of 2006.
Chairwoman Kelly. Mr. Secretary, I would call to your
attention the International Economic Powers Act, section 1703,
which requires full Congressional notification and on a
continuing basis. That is full Congressional notification. I
would also note that your testimony comments about the fact
that you have hired an outside independent auditor for
oversight. That is the province of this committee.
We turn now to Mr. Frank.
Mr. Frank. Thank you. First--and I think there is a genuine
interest in trying to find out how we control leaks. I would
say I know my friend from Alabama referred to Congressional, as
well as newspaper, divulging of information. I am not aware of
any Member of Congress who divulged anything, including those
who were briefed.
Obviously the question about how much damage was done is a
very important one; we don't want to see damage done. But here
is my problem. You quoted Mr. Hamilton in your statement. Mr.
Hamilton said a long time before this leak: ``Following the
money to identify terrorist operatives and sympathizers
provides a particularly powerful tool in the fight against
terrorist groups. Use of this tool almost always remains
invisible to the general public but it is a critical part of
the overall campaign.''
Didn't that make it visible? I mean, when Lee Hamilton said
that, he said here is a tool that is invisible, was Lee
Hamilton irresponsibly leaking when he said that this is an
invisible tool and it made it visible?
Mr. Levey. Actually, I think what Chairman Hamilton was
doing was something very different, and I don't think that he
caused damage to this program or any other. I think what
Chairman Hamilton was doing was saying that following the money
is an important--
Mr. Frank. Okay, but here is the key question. No, Mr.
Levey, here is the problem. We announced to the al Qaeda and
others--it says it is a critical part of the campaign against
al Qaeda, following the money.
Did they not infer from that that we would be looking at
their bank accounts? I mean, did they think we were sneaking
into the caves at night and going through their pockets? I
mean, I really have trouble understanding.
By the way, I also have seen this referenced in December of
2002, a U.N. Communication, public, that said, talking about
SWIFT, the United States has begun to apply new monitoring
techniques to spot and verify suspicious transactions. Was this
not known to them, that we were carefully tracking financial
records?
Mr. Levey. I think we can't speculate about what the
terrorists knew. What I can tell you, as I said in my opening
statement, is that I look at this every day and it still is
providing concrete leads.
Mr. Frank. Today? It still is?
Mr. Levey. Yes.
Mr. Frank. So it is still working, even after the leak? You
just said that, Mr. Levey.
Mr. Levey. Yes, it is.
Mr. Frank. Okay. Good.
Mr. Levey. But the leak hasn't had any effect on the
program yet, because the data we are looking at predates the
leak.
I would like to answer your question, if I could, about
this U.N. report and other disclosures that were made. What was
done very commonly was we would discuss that we are following
the money. But that leaves people in some doubt as to what
exactly we are able to look at. Once the SWIFT program is
disclosed, it is my fear that they will now know exactly what
it is.
Mr. Frank. Excuse me, but the U.N. reference here refers
specifically to the SWIFT program. It says settlement is
handled through correspondent banking relationships, such as
the SWIFT, Fedwire, and TIPS. The United States has begun to
apply new monitoring techniques to spot and verify
transactions. It mentions SWIFT in that reference.
Mr. Levey. I have read the U.N. report. I have to admit, I
read it after this week, because I probably, like everybody
else, didn't see that U.N. report until after it was brought to
our attention. But I can tell you that U.N. report does not
describe this program.
Mr. Frank. It does say we are tracking things, and it
mentions SWIFT.
Mr. Levey. But there is a significant difference, Mr.
Frank. The difference is that U.N. report talks about then
monitoring and looking for suspicious transactions. I think it
is important for people to understand that is not what we are
doing in this program. We are not looking for suspicious
transactions. We are doing targeted searches on individuals.
Mr. Frank. I would say this. Look, I want this program to
work. My sense is that people do these things even though they
are generally aware they are being tracked. People get
wiretapped, and everybody knows about wiretapping. That doesn't
keep people from saying things we can wiretap.
Mr. Levey. I hope we are right.
Mr. Frank. I am going to ask for a classified briefing in a
few months as to whether or not there is damage. This is a
serious question. I have to correct myself. I said I was
offered a briefing on the 11th of May. It was the 25th of May.
If it wasn't important to brief me before it was going to
become public, why did you decide after it became public to
brief me? What was the point of that?
Mr. Levey. Well, the point of that was that, when we
realized that there would be a very likely disclosure, there
was discussion within the Administration about briefing certain
chairmen and ranking members of committees so--as a courtesy to
them so they wouldn't read about it.
Mr. Frank. As a courtesy to me. The courtesy is that this
program has been going on for four-and-a-half years; I have
been the ranking member for a couple of years; Mr. Oxley is the
chairman; and we don't know about it. Did I miss something in
Miss Manners? What is courteous? To say that I am going to tell
you a secret because everybody is going to know it in an hour,
and the question is I couldn't talk about it as much. If I was
due the courtesy after you knew it was coming out, why not
before? It is not a matter of courtesy.
I want to go back to what the chairwoman said. We wanted to
help you make this thing work. I think we can. We can look at
this and say this is a good idea, but how about this or that
element of privacy?
We work with the financial services community. This
committee has, on several occasions, recommended changes. We
haven't always agreed. We passed in our regulatory relief bill
a loosening of some of the requirements because we thought we
could make the system less inefficient and less burdensome
without any damage. Not everybody agreed, but we did it. The
Senate rejected that.
That is the kind of give and take that, I think, improves
the program. You talk about briefing. Let me just say again,
yes, the chair and ranking member of the Intelligence Committee
were briefed on the 7th of March of 2002, just after the
program started. There was virtually no briefing until--only
three other members were briefed: the chairman of the
Intelligence Committee, and you apparently tried to brief the
ranking member--she wasn't available it says--and the chairman
of the Appropriations Subcommittee. So between 2002 and 2006,
when you knew it was going to be made public, there were three
briefings. That is not nearly an adequate effort for us to work
together on this.
This program is not in controversy. The unilateralism with
which you proceed is, and that is what makes something
controversial.
Chairwoman Kelly. Thank you.
Mr. Oxley.
The Chairman. Thank you, Madam Chairwoman.
Mr. Levey, are you satisfied that the proper requirements
were met in terms of briefing the Intelligence Committee?
Mr. Levey. As I understand this process, I think the proper
requirements were met, that you brief the chairman and ranking
member of the Intelligence Committees, which is what we did.
The Chairman. And the program at the time was up and
running and you didn't feel it necessary to brief the
Intelligence Committee every couple of weeks or that the
program was operating, they were briefed on it, they knew how
the program was operating?
Mr. Levey. That is correct.
The Chairman. And my briefing with the committee, with the
ranking member and the chairman, was informative. I didn't feel
upset that I had not been briefed beforehand. After all, I am
not on the Intelligence Committee. This is the Financial
Services Committee. The obligations the Administration had to
brief the members of the Intelligence Committee, the chairman
and the ranking member were met under the law, and at least
this chairman is perfectly satisfied with the way that was
handled.
All right. As you know, Congress had mandated a FinCEN
exploration of a system to review all cross-border financial
transactions. I believe it was in the PATRIOT Act. Could you
tell us the status of that?
Mr. Levey. Yes, Mr. Chairman, I would be happy to.
Let me first do that by distinguishing what that program of
cross-border wire project--how it differs from the SWIFT
program. I think it is important.
The cross-border wire study that we are doing a feasibility
study on now, that project is both narrower in a sense, because
it only deals with U.S.-to-abroad and abroad-to-U.S.
transactions, whereas the SWIFT program is worldwide, but it is
also much broader as well, because it deals with all cross-
border transactions, whether handled by SWIFT or not. We can
use that information for terrorism, money laundering, all sorts
of law enforcement purposes; and we can do all kinds of things
that people traditionally think about when they think about
data mining in terms of looking at trend analysis, suspicious
activity, and the like.
We are currently doing a feasibility study on that broader
project that you have asked us to take a look at. We have
gotten some comments from the private sector as well as from
the regulators which we are currently considering.
I can tell the committee that one thing we are considering
is whether we should try to do this as a pilot project to see
if we can set up the system right and get value for it before
we proceed with the larger project.
The Chairman. And once that is completed, then will that be
reported back to this committee and to the Congress?
Mr. Levey. Yes. I think we have to do a feasibility study;
and, of course, we have to brief this to our new Secretary who
will be the decisionmaker about how he recommends that we go
forward.
The Chairman. Let me ask you about the Terrorist Finance
Tracking Program and use of SWIFT data. What key protections
were part of that program that could guarantee fourth amendment
protections?
Mr. Levey. Well, as you know, Mr. Chairman, the fourth
amendment, the Supreme Court case of the United States v.
Miller, that there is no fourth amendment right to privacy in
the types of records we are talking about here. But we take
very seriously the sensitivity of financial data, so we did put
in place very serious protocols and controls. They include
making sure that the data is in a very secure place, the most
secure place, the most secure environment, that the people who
have access to it are only those with the appropriate
clearances, and that they can only use this data to do
terrorism searches.
As I indicated at the outset, actually, I sat down with one
of our analysts yesterday and watched how this worked. If--you
type in the target of the search, and then the next required
field is the justification, the connection to terrorism, and if
you don't fill that in, you can't search the data.
It is that justification field that is monitored both by
the SWIFT people onsite and an outside auditor after the fact
to ensure that any improper searches are identified.
The Chairman. As I understand it, one of the arguments that
the New York Times used after the story broke to rationalize
this was, well, everybody knew about this program. It was out
there in the general media, and people knew that that SWIFT
program was up there and operating.
If that were true, why was it a kind of a ``man bites dog''
story above the fold in the New York Times?
Mr. Levey. I think that is an excellent question, Mr.
Chairman. I can't speak for the New York Times. They clearly
thought it was front-page, above-the-fold news.
I think, as I tried to explain to Mr. Frank, the answer
here is it is one thing to say that you are following the
money, and people think, okay, maybe they are getting
suspicious activity reports and whatnot. It is quite another
thing to tell people exactly what you are looking at and how.
I think--I won't speak for the members of this committee,
but the people that I have talked to, very, very few of them
knew what SWIFT was at all before June 23rd, let alone exactly
how it worked. Unfortunately, that informational advantage that
we had over our adversary is gone.
The Chairman. Precisely, the operational details of how
this program worked. Mr. Frank made the analogy to wiretaps. I
used to do this for a living. Not for a moment did I think that
the people I was wiretapping, organized crime, knew that I was
wiretapping them. It would be pretty evident from the
discussions on there that they would have never said that had
they known I was listening in on the proceedings.
So it seems to me that this program, which has proven to be
very, very effective, and the revelations, that really kneecaps
our operational actions here, and the success of that program
is deeply disturbing.
To the extent you can tell us, who implored the New York
Times to not run this story?
Mr. Levey. I had a series of meetings with the reporters
and with the editors of the New York Times and implored them,
as persuasive as I could be--apparently not persuasive enough--
that they shouldn't run the story. In addition, Secretary Snow
had a separate meeting with Mr. Keller to make the same points.
We tried--the position I took with them--and everyone knows
what the outcome was--was that this program was legal, that it
was properly controlled and it was valuable and, therefore, the
real newsworthiness of this story would just be the tipping off
of our adversaries as to what we were doing. I didn't think it
was something that they should do. They obviously differed with
me on that and published it.
The Chairman. What role did Governor Kean and former
Congressman Hamilton play as well?
Mr. Levey. As I understand it, Chairman Hamilton both met
with the New York Times and urged them not to publish the story
and Governor Kean made the same request, as I understand it,
over the telephone; and they made their argument that this
story--that they knew about the program, that they thought the
program was well run, and that publishing it would not--would
be harmful to our overall effort in combating terrorism. But,
apparently, their suggestions were not heeded as well.
The Chairman. To your knowledge, did any sitting Members of
Congress implore the New York Times to withhold the story?
Mr. Levey. It is my understanding--though I am not 100
percent sure about this--that Congressman Murtha did, but I
don't know. All I know is that he told us that he was going to,
but I don't know whether he did.
The Chairman. I am sorry, what was the last part?
Mr. Levey. He told us he was going to, but I don't know
whether he did.
The Chairman. You had some conversations with Congressman
Murtha?
Mr. Levey. Yes, we did.
The Chairman. The stories I read at least indicated that he
followed up on that?
Mr. Levey. Yes, but I can't say for sure.
The Chairman. So here you had a current Congressman, well-
respected on these issues, a former chairman, well-respected on
these issues, and a former chairman, of course, of the 9/11
Commission, both Democrats, along with Governor Kean, former
Governor of New Jersey, Republican Governor, along with the
Secretary of the Treasury, and I am assuming some other folks,
perhaps higher up in the Administration, imploring the New York
Times that this would do serious damage to our ability to track
terrorist financing and to better protect the American people,
and the New York Times basically said, as their famous headline
said about Gerry Ford, drop dead.
I yield back.
Chairwoman Kelly. Thank you, Mr. Chairman.
Mr. Moore.
Mr. Moore of Kansas. Thank you, Madam Chairwoman.
Chairman Oxley said, ``I used to do this for a living,''
talking about gathering information subject to wiretaps and
others. I did as well as a district attorney. But I have
tremendous respect for our system and the fact that we have an
Executive Branch, a Legislative Branch and a Judicial Branch,
all of which have co-equal power, meaning that they all have
the same power.
In our system there is oversight by the Executive Branch,
and that is the FBI, the district attorney or the local police
department, but the Judicial Branch, especially when gathering
sensitive, private information. Is our system here sufficient,
do you believe, to protect the privacy of individuals, number
one?
Number two, what Members of Congress--you mentioned the
Intelligence Committee chairman and ranking member are advised
or briefed. Anybody else?
Mr. Levey. I think that the system we have in place does
provide appropriate oversight.
Mr. Moore of Kansas. By whom?
Mr. Levey. Both by Congress, through the Intelligence
Committee, the controls we have in place that I have described
in my testimony, but also you mentioned the type of process
that we use to gather the information.
We issued an administrative subpoena in this case. The key
fact that I think is important to point out here is that the
recipient of this subpoena, SWIFT, had every right to challenge
that subpoena in court. They could go to district court and
challenge the subpoena on any ground they wished. They had, and
continue to have, the most excellent outside counsel that one
could obtain, and they knew all of their rights. They could
have gone to court.
This is not a situation that I know has been debated in
other contexts where the recipient of the compulsion order from
the government is not able to--or doesn't feel able to
challenge the compulsion in court. This is a situation where
they not only were able to as a matter of law, but were fully
aware that they were able to.
Mr. Moore of Kansas. Were other Members of Congress, aside
from the chairman and ranking member of the Intelligence
Committee, briefed?
Mr. Levey. I believe Mr. Frank has the list of briefings
and has better information than me. We can get back to you.
Mr. Moore of Kansas. My question is, initially, were other
than those two people briefed, other Members?
Mr. Levey. Of Congress?
Mr. Moore of Kansas. Yes.
Mr. Levey. There would be, both in the House and the
Senate, the chairman and ranking member.
Mr. Moore of Kansas. So four Members of Congress, the House
and the Senate, were briefed.
Mr. Levey. It is my understanding, yes.
Mr. Moore of Kansas. How often did that briefing take
place, besides the initial briefing?
Mr. Levey. We gave them the briefing. I wasn't there at the
time, and I don't know if there were follow-up discussions or
not.
Mr. Moore of Kansas. I would like you to find that out, if
you would, please, and provide that information to the
committee, if there were follow-up briefings after the initial
briefings of the House and Senate committee. Would you do that,
sir?
Mr. Levey. I will look into that.
Mr. Moore of Kansas. Not responsive, your honor. Will you
do that, sir?
Mr. Levey. I will look into that. I don't know if I have
that information.
Mr. Moore of Kansas. If you do, will you please provide
that or tell us why you can't provide it?
Mr. Levey. Yes, absolutely.
Mr. Moore of Kansas. Thank you.
With disclosure--well, with disclosure of the eavesdropping
program that has happened in the past few months here, with
disclosure of this program, a lot of Americans are wondering if
there are other programs that this government is operating
right now that even we, Members of Congress, don't know about.
And I guess again I would ask you--as I said in my opening
statement, I would really appreciate and invite the
Administration to bring Congress in and tell us in classified
briefings, if necessary, if you think it is necessary, and I
would certainly respect that as a former prosecutors, but tell
us, make us part of this whole thing, so we can protect our
country as well and not feel like we are being kept out of the
process. That is what it feels like, I think, to a lot of
Members of Congress; and that is why you are getting this kind
of questioning right now from some people.
I would absolutely respect any request for a confidential
briefing, a classified briefing. I think it is important that
there really be oversight here so the three branches of
government and our system of checks and balances can operate to
protect the people in our country.
Thank you, sir.
Chairwoman Kelly. Mr. Moore, two things arose in your
questioning. One, you asked about oversight, and the Secretary
said they have oversight. The oversight, however, is an outside
auditor that has nothing to do with government.
Mr. Moore of Kansas. Very good point.
Chairwoman Kelly. I have asked for a classified briefing.
We have formally asked for a classified briefing to follow
this. So we will be having that.
Mr. Moore of Kansas. I thank the Chair.
Chairwoman Kelly. Thank you very much.
Mr. Bachus apparently has to leave, so we will go next to
Mr. Bachus.
Mr. Bachus. Thank you. I have to go to the Floor on the
Internet gambling bill.
Mr. Secretary, I think most members of this committee and
the Congress are aware the Espionage Act of 1917 basically
makes it a criminal act to, ``communicate, deliver or transmit
information to any person not entitled to receive it.'' They
are talking about, there, information related to national
defense.
Now that Act allows the Executive Branch to classify
information. This information was classified information. So it
fit into that category, and it makes it a criminal act to
communicate that information, to deliver it or to transmit it.
Having said that, the case law--the Supreme Court has made
an exception, and it has said, if specific information has been
published or released by the government that it is not a
criminal act.
It is my understanding that the New York Times and some
members of this committee have said that this information was
already published. Would you one more time go over whether or
not--it is not the existence of something. We know we have
spies, for example, in Russia. But if we reveal the names of
those spies, that would be a different thing.
Would you go over with this committee one more time whether
or not the methods of this program, the details, had been
revealed?
Mr. Levey. I would be happy to. I think you make a good
point.
I think Mrs. Maloney pointed out that there are lots of
statements made in the public about following the money. Even
the word SWIFT, I gather if you do a Google search, you can
find SWIFT someplace, and people have found that.
But what wasn't revealed before these articles was how we
are doing this, we are subpoenaing the information from SWIFT.
There were other aspects of the New York Times story that
talked about the interagency collaboration in exploiting the
data that was classified and remains classified. It is that
sort of operational detail that both was classified and remains
classified, but also which I find so disappointing, because, as
I said, my interest here is not in anything other than getting
after the terrorists. I was very disappointed to see the story
because it makes my job, that I think we are doing all together
here, much, much more difficult.
Mr. Bachus. I read the case last night, United States v.
Morrison, which says that the determination of whether
something should be published or not or given to the public is
up to the Executive Branch of the Government, and at no time
did you all make a determination to publish this information,
as I understand it. In fact, you made the determination not to.
Mr. Levey. As I said, Congressman, we did everything we
could to try to persuade the New York Times not to publish this
story. I had several meetings with them. I answered a lot of
their questions. I was authorized to give them information in
order to persuade them of the controls that we had in place and
so forth. I spent some time correcting some misimpressions they
had made in the course of their reporting. I did everything I
possibly could to try to talk them out of it.
In fact, when they notified us they were going to publish
the story, I was in Italy on my way to go to Poland to give a
speech with Under Secretary Joseph on the Proliferation
Security Initiative. I had to cancel that appearance in Poland
in order to come back and have one more meeting with the folks
from the New York Times. I very much regret not being able to
follow through on my commitment to Under Secretary Joseph on
proliferation of finance, which I know is another concern of
this committee, but I felt like it was important to do
everything I possibly could in this regard.
Mr. Bachus. Did they give you any reason for why they were
going to publish it?
Mr. Levey. I think the way I can answer that is Mr. Keller
seems to be quite able to speak for himself and has a forum to
do so. I will let them speak for themselves.
Mr. Bachus. I have no further questions.
Chairwoman Kelly. Thank you.
Mrs. Maloney.
Mrs. Maloney. Thank you.
Mr. Levey, the Administration strongly objected to the
publication, as you said over and over, of the Times story, but
the fact that the United States was monitoring wire transfers
both in this country and abroad was very well known, it was the
topic of multiple newspaper articles and testimony, both here
in Congress and other places. It was widely reported that
Canada had a SWIFT tracking system, as did Australia. Even TV
fiction picked up on it, as one of my interns found the issue
was a central part of a West Wing episode on May 15, 2002,
literally 4 years ago, cross-border wire transfers. I could go
into the whole plot of how they found it, but they were
tracking it through the central data system. It was very
similar to what is happening. This was West Wing, popular TV.
There was a book that came out by a Wall Street reporter
several days before this Times report, the One Percent
Doctrine, where he goes into the whole deal and how it
happened. He goes on to say that the terrorists had wised up.
They were no longer using wire transfers.
So, really, my basic question is, is it your position--and
I have to say you said there was never a detailed description.
But in the Security Industry News of May 2005, there was a
detailed description of the SWIFT program. He says, ``We are
not simply running a watchlist against the data. The SWIFT
messages can be parsed, they do contain fields, they can be
formatted in a way that helps us to analyze''--and it goes on
for pages about how the SWIFT program operates.
So where was the hue and cry against the Security Industry
News when they published a detailed description well over a
year before, in addition to the many descriptions that I put
into the record?
So is it your position that a significant number of
terrorists would not have been aware of this monitoring after
all this coverage but suddenly woke up and were threatened by
it after they read the New York Times, after it had been in the
Australian news, the Canadian news, the Security News, even
West Wing stories, well over 4 years ago?
Mr. Levey. Absolutely, and I know that for a fact because I
go into the SCIF every morning and I read my intelligence book
and I see exactly what transactions are still occurring that
were captured by this program which came up in response to our
targeted searches. That is exactly what value the program had,
and I think that value has been compromised by this revelation
and the discussion that followed it.
I don't think that any of the things that you referred to
revealed this program, as I explained to the prior questioner,
did not explain exactly how we were doing this, what we were
subpoenaing from SWIFT, that we, the United States Government,
had access to that information. None of the things that you
referred to revealed that. Even if they had, the front-page
discussion of it and the ensuing media description of it made
it much more apparent to the terrorists.
I know for a fact--
Mrs. Maloney. Maybe the terrorists don't watch West Wing.
I have another question. You testified, Mr. Levey, that you
obtained large blocks of data from SWIFT and put these in a
U.S. Government database. You testified that you only searched
this data under specific rules. But those rules are written by
you, known only by you, and enforced by you and not by any
other branch of government. There is absolutely no review.
Apart from the condition that SWIFT apparently--conditions
that they negotiated with you, there is no check on your
discretion at all. In fact, we learned that at least one
instance of abuse occurred, but we do not know when it happened
or what it was.
So my question is, one, are you willing to provide this
committee with the subpoenas you served on SWIFT; two, are you
willing to provide us with the protocols or rules you used to
search the data; and, three, are you willing to give us details
about any inappropriate searches to date? We know of one,
because that was reported in the paper again, but this
information would be very helpful to oversight.
Mr. Levey. Well, as Chairwoman Kelly said at the outset,
she has requested a classified briefing. Those are requests
that we will take back and try to provide as much information
as we can in the classified setting, because I think the proper
forum for discussing issues like that would be in that setting.
We will try to arrange that.
Mrs. Maloney. Thank you very much. My time is up.
I look forward to the classified briefing. If I may, Madam
Chairwoman, put in writing specific questions we would like
followed in that meeting.
Chairwoman Kelly. Under Secretary Levey has to leave at
noon, so, without objection, all members' written questions
will be able to be submitted. I will be holding the hearing
open for 30 days for questions and responses.
With that, we now turn to Mr. Paul.
Mr. Paul. Thank you, Madam Chairwoman.
Could you tell me, Mr. Secretary, how many subpoenas have
been issued under the SWIFT program?
Mr. Levey. Mr. Paul, if I could, I would take that
question--first of all, I don't know the exact number off the
top of my head. Even if I did, I would rather provide it in the
other setting, if I could.
Mr. Paul. How many criminal prosecutions have there been?
Mr. Levey. Getting into the operation details, again, and
detailed output of the program would not be appropriate for
this setting.
Mr. Paul. In many ways, this whole idea of oversight
doesn't amount to a whole lot, because that would be the
essence of oversight.
My contention in my opening remarks, in a practical sense,
they have an alternative. They go to this transfer of money
through hawallahs. Isn't this a possibility that they could do
that and isn't it quite possible that they did know about our
surveillance since it has been around for a long time? If you
could answer that.
And also answer the question I raised about the information
being very adequate before 9/11 with that currency suspicious
transaction report that told us that Mohammed Atta had actually
transferred money. So it isn't the lack of information that is
the problem. Just additional subpoenas and information, how is
that going to solve our problem?
Mr. Levey. Those are good questions, Mr. Paul. Let me take
the first one first, which is, is it possible that they knew
about this? I think this is the exchange I had with Mrs.
Maloney.
I have testified that there is a trend that the terrorists
have moved towards cash couriers and hawallahs. I think that is
part of what Mrs. Maloney was referring to. I have been very
open to that. But a trend doesn't mean 100 percent.
Yes, some terrorists have moved to cash couriers and
hawallahs. But what I was very adamant with her, and what I
will say to you as well, is I know for a fact that some
terrorist facilitators and some parts of these terrorist
networks were still using this traditional banking system and
we were capturing that information by targeted searches through
this SWIFT data and it was yielding value up until the time of
this disclosure. That is just a fact.
I don't know for sure why. We can speculate why. But that
is the fact. I do know that. That is what I think is lost.
This question that you asked, and I think it is an
important point you are making, are we just getting more data
and just collecting as much as we can? I think our record on
this program is really quite good, because what we have done
over the course of time is look at the data that we are getting
from SWIFT in response to our subpoena. What we do is we search
the data and we see where the value is in that data; and what
we have done is stopped collecting from them, stopped getting
from them, the parts of the data that are not yielding value.
In addition to that--this really goes to the points you are
getting at--we have deleted the data going back historically
that wasn't valuable to a terrorism investigation. That is a
very strong indication of our good faith, that we are only
using this for terrorism purposes. That is our only intention
in getting the data, and that is the only use we are trying to
put it to.
Mr. Paul. I yield back.
Chairwoman Kelly. Thank you, Mr. Paul.
We have been called for a vote, but I think we have time to
fit Mr. Davis in.
Mr. Davis of Alabama. Thank you, Madam Chairwoman.
Have you read the One Percent Doctrine by Ron Suskind?
Mr. Levey. No, sir, I have not.
Mr. Davis of Alabama. Among other things, there is a
reference in the One Percent Doctrine to human intel that the
United States obtains from al Qaeda. There is a description of
a particular operative. There are references to specific
conversations that the informant had with al Qaeda leadership.
There is a reference in the book to locations of those
conversations. There is a reference to the exact nature of
those conversations. That is information that it would seem to
a reasonable listener would provide some information about who
the operative was.
There is also a description in the One Percent Doctrine of
a particular device called I think a muftaker which could
possibly be used to release or discharge chemical weapons.
There is a detailed description of how big it is, how wide, its
dimensions, what it looks like, a comparison of things it looks
like. Obviously, a reasonable al Qaeda operative reading that
book could decide to make a change in tactics and come up with
a new device of which we have no knowledge.
Tell me why the Administration is not as outraged by the
One Percent Doctrine as it is with the New York Times?
Mr. Levey. Um--as I said, I haven't read that book.
Mr. Davis of Alabama. ``Um'' is not a good answer.
Mr. Levey. Oh, I am sorry. My answer wasn't satisfactory?
Give me another chance, okay?
I think that we are concerned about that book and the types
of revelations that are made in that book.
Mr. Davis of Alabama. Has there been any Congressional
resolution introduced, to your knowledge, regarding that book,
Mr. Levey?
Mr. Levey. I have no idea. You would be in a better
position.
Mr. Davis of Alabama. Madam Chairwoman, can I inquire of
the Chair if the Chair knows of any resolution relating to the
One Percent Doctrine?
Chairwoman Kelly. Not that I know of.
Mr. Davis of Alabama. Go ahead, Mr. Levey.
Mr. Levey. I think I have answered your question, that I
don't know whether there has been a resolution.
Mr. Davis of Alabama. Do you agree, Mr. Levey, that the
information contained in the One Percent Doctrine could cost us
an operational advantage against al Qaeda?
Mr. Levey. I can't comment on the specific parts of the
book that you have referenced, although I have read the
muftaker part but not the others. From your description--and I
would assume your description is accurate--I would agree that
those are not the kinds of things we would want to see
published.
Mr. Davis of Alabama. So, therefore--and I am not going to
use up my time so that other members can question--but my
point, Mr. Levey, I think is fairly straightforward. This is
the concern that some of us have. You are not terribly animated
about the One Percent Doctrine because, frankly, it is obvious
the Administration was a very significant, extensive source for
the author of that book. Frankly, for those who read it, it is
also clear that the Administration is portrayed in a pretty
favorable light.
The New York Times I don't think anyone in this room
believes necessarily portrays the Administration in a favorable
light. So it leaves the inexplicable conclusion, Mr. Levey--and
I think it is a pattern if you look at the Plame disclosures--
your Administration is deeply concerned when some sources
reveal classified intel; it is not terribly animated when other
sources reveal classified intel.
That is exactly the reason why so many people on both sides
of these daises have a problem or a question with the kind of
unilateral authority the Administration seeks to gather upon
itself.
It is crystal clear that anyone reading the One Percent
Doctrine knows a great deal about American intelligence
gathering operations. It is far more detailed and specific than
the New York Times story, and it has not produced a peep of
outrage from the people you work for.
I will yield back.
Chairwoman Kelly. Thank you, Mr. Davis.
Mr. McHenry.
Mr. McHenry. Thank you, Madam Chairwoman.
Mr. Under Secretary, you are Under Secretary of what?
Mr. Levey. Terrorism and Financial Intelligence.
Mr. McHenry. Terrorism and Financial Intelligence.
Mr. Levey. Yes, sir.
Mr. McHenry. So what do you deal with, mainly?
Mr. Levey. Well, the broad mandate, it is terrorism was
sort of the founding principle upon which the office was
created, but, over time, we have done a lot of work on
counterproliferation and sanctions and so forth using the
financial system and financial intelligence to advance national
security goals, including proliferation finance as well. But
terrorism still remains the number one priority.
Mr. McHenry. Okay. I recognize that may seem a silly
question to you, but we are dealing with Congress here. Based
on the rhetoric I have heard this morning from my colleagues,
it seems a new fact to them that indeed you are trying to deal
with the financing of terrorism. You have tools in place to
monitor the financing systems of these terrorists, including
one that was disclosed, a classified program, which I would
hope, Mr. Under Secretary, that you do have classified programs
to root out and find these terrorists and their funding
mechanisms. Do you not have tools to do this?
I would say you don't have to answer, but I am saying,
rhetorically, it seems ridiculous, the rhetoric that has been
used here.
Now, additionally, the ranking member of this committee had
a level of outrage that you had not come before this committee
and disclosed to all that can listen, that can watch it on C-
SPAN, whoever wants to fall asleep can watch it on C-SPAN,
about this program.
Were you asked indirectly about anything related to this
SWIFT program by anyone from this committee?
Mr. Levey. I am not sure I understand the question, but I
don't believe I was ever asked about this program by anyone on
this committee.
Mr. McHenry. Okay. Or anything related to it?
Mr. Levey. I don't believe so, no.
Mr. McHenry. But you did disclose this program to the
Intelligence Committee, which also has oversight over your
activities?
Mr. Levey. The Intelligence Committee definitely has
oversight of our activities, including our intelligence office,
for obvious reasons.
Mr. McHenry. I have two quick questions, because we have
been called to vote on the Floor.
You said in your testimony that you received written output
from the program as part of your daily intelligence briefings
and that you, ``cannot remember a day when that briefing did
not include at least one terrorism lead from the program.'' Do
you believe that this disclosure will, in the end, reduce the
number of leads that you will have in this program? Or have you
seen a result yet?
Mr. Levey. As I indicated to Mr. Frank, we haven't seen the
result yet because the data that we are accessing right now was
data that was created before the news stories. It is a matter
of logic that I would think the public discussion of this would
be harmful to the program. But, as I also said to Chairwoman
Kelly, I am hopeful that we will still have some value from the
program, and we intend to continue with it.
Mr. McHenry. Briefly, you also touched on the difference
between the wiretapping program, the national security
wiretapping program, versus what you are doing with financial
tracking.
Mr. Levey. If you are referring to the NSA program?
Mr. McHenry. Yes.
Mr. Levey. I am happy to say I was not read into the NSA
program, so I am happy to say I don't know the details of the
differences between that program and this one. But there are a
couple of things that I think are fairly obvious.
One is that we are obtaining records by subpoena that are
kept in the ordinary course of business. We are collecting
business records that SWIFT keeps in the United States in the
ordinary course of business. From what I have read, I think it
is a different legal authority being used in the other
programs. But, again, I state very clearly, I don't know for
sure. I wasn't read in.
Mr. McHenry. Thank you, Mr. Under Secretary. I certainly
appreciate your being here today.
Just in conclusion, I think it is a big difference that we
are discussing here. It is the difference between a classified
program and a headline. Certainly, classified programs are not
meant to be headlines so we can protect our operational
advantage over our enemies.
I thank you for your service and thank you for your
testimony and thank you for answering these questions today,
however outrageous some of them have been.
Mr. Levey. Thank you.
Chairwoman Kelly. Thank you very much.
We have been called for a vote. I know that the Secretary
needs to leave. Mr. Scott has a question he would like to ask.
If you could briefly answer that, we would be appreciative.
Mr. Scott. Let me just call your attention to what the Act
says, because I believe if this Administration had followed the
law, had done what the Act expressly says, we wouldn't even be
in this shape we are in today.
It clearly states that the President shall--shall, not
may--``shall consult with Congress before exercising any of the
authorities granted by this Act and shall consult regularly
with the Congress so long as such authorities are exercised.
Whenever the President exercises any of the authorities
granted, he shall immediately transmit to Congress a report
specifying, among other things, the authorities to be
exercised, the actions to be taken in exercise of those
authorities to deal with those circumstances.''
We are not here to talk about the SWIFT program or what it
has done or all of this. That is fine. There is no problem with
that. But it is important for this Administration to understand
that they have violated the law. They have not allowed Congress
to do its job.
You have people who run not every 6 years, not every 4
years, but every other year. The mandate from the people is to
do our charge. The charge of this committee is the oversight
and investigation of terrorist financing. Here we are 5 years
after and no report.
So when you look at what the New York Times has put
forward--and let me just state this very clearly. This is no
ordinary leak. I don't think it has been made known that this
is no ordinary leak. That story in the New York Times was put
together--and the Washington Post--by a compilation of 20 Bush
officials who saw something enough wrong that something needed
to be done about this.
This is no ordinary leak. This is no story of whether you
are strong on terror or not. It is whether or not you are going
to stand up for the principles that this country stands for.
And had we done what the emergency act says for us to do,
clearly we would not be in this position.
When 20--not some clerk, not some disgruntled employee, we
are talking about 20 Bush officials, administrators in your
Administration, who saw something wrong with the direction in
which we were going to say let us pause here for a moment so
that--this is a dangerous road we are going on that undermines
the very system.
At some point, this Administration, as I said before, needs
to clearly look in the mirror and see where the wrong is coming
from.
I am going to vote, Mr. Chairman.
Chairwoman Kelly. Thank you, Mr. Scott.
Mr. Levey. Again, that was not a question, so I will not
have a response.
Chairwoman Kelly. I would like to go and vote, also, but I
think it is far more important that we get some of these
questions answered, so I am going to stay here and ask a few
more questions. One is a question that you did not have an
opportunity to answer, evidently, Mr. Under Secretary.
I asked you about the tracking program that you mentioned
might be useful, continue to be useful, with regard to tracking
activities of charities and wealthy individuals that support
terrorism. The Saudis, for instance, have not yet set up a
functioning commission over their charities. I wants to know
why there is this lag, and I want to know if this program would
be helpful in that regard.
Mr. Levey. If I could, Chairwoman Kelly, I would like to
respond to those separately, rather than together, because I
don't want to talk about the use of this program with respect
to any particular country.
As I said to you earlier in response to another question,
it is my hope--because, as you point out, there is a
multilayered factor to a terrorist network and there may well
be parts of terrorist networks where this program, even after
its disclosure, will remain valuable because people will still
be using the banking system. It is my hope--I hope Mr. Frank is
right when he said it will still be valuable. I hope that is
right. I don't really care about winning some political
argument. What I want to do is get at the terrorist financing.
I would be happy if there was no damage at all. Unfortunately,
I don't think that will be the case.
With respect to the Saudi charity commission, this is an
issue that I know we have discussed both in this room and in
your office on several occasions. There is no country that we
have spent more time with in terms of trying to work with them
on terrorist-financing issues.
The Saudis, as we have said--this will sound repetitive to
you because I have said to this to you before, but I think it
is important to say the whole piece, which is when it comes to
counterterrorism generally and fighting al Qaeda cells in Saudi
Arabia, they have been extremely aggressive and effective, and
their security services have had causalities, and they are
really in the fight in a way that I think is valuable not just
in Saudi Arabia. But al Qaeda is a worldwide threat, so when
they are fighting cells in Saudi Arabia, that is of benefit to
us all.
On terrorist financing, there are a number of issues where,
as you put it--and I guess you were quoting me, so I know I
agree with it--there has been a real lag between what they say
they were going to do and what they do. The charities
commission is a perfect example. We haven't seen the charities
commission. It is a matter of years now, and there is no
charities commission. I am not satisfied--you work personally
on getting their FIU up and running. I think that is a project
that still requires a lot of work.
The specific thing I was referring to when I made this
suggestion about lag and gap in a prior statement was holding
individual financiers personally responsible in Saudi Arabia.
This is something where the Foreign Minister, Prince Saud, has
said they intend to hold people personally accountable; and
that has not yet happened. As I say, there is a lag between
what they are saying and the facts on the ground. We will see
if there is a gap between what they say and what they do.
I think I have been to Saudi Arabia three or four times,
and I spent a lot of time and effort on this, and I know you
do, too. I am going to keep at this and do everything I can
both to encourage them and to help them fight terrorism more
effectively.
Chairwoman Kelly. We have both been advocates for the work
of the Egmont Group, the financial intelligence units of a
number of different countries. I want to know how the TFTP
program complements our technical assistance programs with
those groups.
Mr. Levey. I have to think about that a little bit,
Chairwoman Kelly. I think they may be separate enterprises.
They fit together in one sense, which is that effective
counterterrorism and, frankly, effective anti-money laundering
policy requires the exchange of information and exploiting that
information. Egmont is a great forum for doing that on an
international basis, and we continue to work on it. A new
director of FinCEN, Bob Horner, has taken up the torch on this
and is doing a great job and takes this all very seriously.
But, frankly, this program that we are discussing today was
one that is separate. It is limited only to terrorism and not
to all law enforcement and money laundering efforts like the
Egmont group is. So it is narrower in that sense, and the
sharing mechanisms are different.
Chairwoman Kelly. How do you evaluate what is working and
what is not?
Mr. Levey. This has been a very difficult problem ever
since I started this job. I think this is something we
discussed when I first testified.
A lot of the indices of how effective we are are things
that we see only in intelligence reporting, and, therefore, you
have to wonder whether you are getting the full story. Because
the way intelligence reporting works is you get some
information, but you don't know whether there is reporting bias
or collection bias or whatever.
There are two things I can point to that I take some heart
in. One would be is that, as I indicated in my written
statement, we have seen a terrorist organization that was under
so much pressure that the intelligence suggested they could not
conduct a sophisticated attack because they lacked the funding
to do so.
You saw another indication like that in the letter Zawahiri
wrote to the now deceased Zarqawi asking for money and saying
that the al Qaeda leadership, and Zawahiri, lacked money and
their lines have been cut off. That is, of course, a great
symbol of success.
I also point the committee to the assessment the 9/11
Commission public discourse project gave us, which was a fairly
tough assessment across the board, but when it comes to this
issue in particular, they graded the interagency effort as an
A-minus, their highest mark. And I should say I have seen some
news reporting in recent weeks that that was a grade for the
Treasury Department. I want to make clear that wasn't a grade
for the Treasury market. That was a grade for the entire
government's efforts, including, I would say, this committee.
Chairwoman Kelly. Thank you.
You said that the G-10 central banks were kept informed of
the program. But in some countries, like the United Kingdom and
others, the Egmont group, the Egmont member FIU, isn't part of
the Central Bank. So did they know about SWIFT or were they
left in the dark?
Mr. Levey. As I said, the ones that were informed were the
Central Bank governors, not necessarily FIU's.
Chairwoman Kelly. So other country FIU's may not have known
about the SWIFT?
Mr. Levey. That is correct.
Chairwoman Kelly. And therefore were not able to use it?
Mr. Levey. That is a separate question which I would like
to discuss with you in another setting.
Chairwoman Kelly. I thank you.
I have just been reminded that there was a question that I
didn't really get an answer to, another section of a question,
and that is the question about the UAE and Bahrain and whether
they are living up to their stated commitments to combat
terrorist finance.
Mr. Levey. I think that the general answer is that we have
very good relationships there, and our cooperation is strong. I
think I can give you a more satisfying answer if I respond to
that in writing, if that would be okay with you.
Chairwoman Kelly. That is fine. You can give it to us in a
more detailed answer, if you would like to, in a confidential
briefing.
I need to do a bit of business here. There are a number of
things that we have been requested to insert in the record. One
is the list that Mr. Frank had on what Members of Congress were
briefed and what the dates were.
The other is the CRS report for Congress entitled
Treasury's Terrorist Finance Programs: Access to Information
Held by the Society for Worldwide Interbank Financial
Telecommunication.
The next one is Reports of U.S. Monitoring of Swift
Transactions Are Not New: The Practice Has Been Known by
Terrorism Financing Experts for Some Time, by Victor Comras.
Another, A Secret the Terrorists Already Knew, by Richard
A. Clarke and Roger W. Cressey.
And the final one, Continued Debate Over the Swift
Disclosure, by the New York Times by Dennis M. Lormel.
So moved that they be put in the record.
Chairwoman Kelly. With that, the Chair notes that members
will have additional questions for this panel that they will
submit in writing. So, without, objection the hearing record
will remain open for 30 days for members to submit written
questions to this witness and to place their responses in the
record.
With that, we thank you very much, Mr. Secretary. You have
been very patient with us all.
This hearing is adjourned.
[Whereupon, at 12:08 p.m., the subcommittee was adjourned.]
A P P E N D I X
July 11, 2006
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