Late last week, the New York Times dropped the not-so-surprising revelation that the US government has its nose deep into the world’s largest international financial database, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) database, looking for leads on terrorist activity. If you haven’t been following this story, then you’ll want to jump down to the last part of this post, because I’m first going to dive right into why I support this particular antiterror program.
Regular Ars readers who’re familiar with my previous, critical coverage of other invasive, electronic snooping programs—criticism that goes all the way back through the Carnivore/ECHELON days and extends right up to the NSA’s domestic surveillance program (formerly TIA)—might be surprised that I could support a program that taps into international financial records and looks for terrorist connections. Isn’t such activity just as invasive and scary as the NSA listening in on our phone calls and reading our email? In a word, no.
Working with the market vs. working against the market
Anonymity is the enemy of commerce. This has been true four millennia, and it’s even more true in our modern world of cashless commerce than it was in antiquity. Our entire modern financial system is built on the ability to verify the identity of all the parties involved in market transactions, either directly or by using a proxy like verifying that a particular credit card transaction fits the cardholder’s typical purchasing behavior.
My point here is that, when the US government dips into a large financial database in an attempt to trace money as it flows between parties, they know exactly who they’re spying on. The SWIFT snooping program works because the feds can start working their way through the network of transactions at a known node—a terrorist or terrorist financier. They then can look to see who that person is dealing with, and who their contacts are dealing with, and so on. This is the polar opposite of the NSA program, in which the government starts with a data flow and then tries to figure out identities of all the parties involved in the communication.
It is crucial that critics of the NSA program, and of other technologies of mass surveillance (TMS) efforts, keep these two types of programs separate. The SWIFT program makes sense, because you begin with a discrete and inherently finite collection of identities and try to trace the myriad connections between them. In contrast, the NSA program attempts to work in the opposite direction, from an overwhelming volume of connections to a very small pool of identities. If the former program works, it’s because the financial industry has gotten very good at identifying all the parties to a transaction; if the latter program works, it’s because we got lucky and happened to be snooping the right call at the right time.
Let me put this in market terms: there are massive, overwhelming incentives for the financial community to be able to verify the identity of each node in a network of financial transactions; as I just said, business is built on this knowledge and the trust that it engenders. This is not true for telecom networks, where the incentives are structured to reward transport capabilities—bandwidth, quality of service, access, on-time delivery, etc.—between nodes that may or may not be anonymous.
Thus the SWIFT snooping program exploits the strengths that the market has endowed financial databases with, while the NSA snooping program is fighting an uphill battle against the ever growing volume of communications data that the market demands from telecom networks.
Oversight is key
Although I think that the SWIFT snooping program is a good idea, I almost certainly wouldn’t support a similar program for snooping domestic transactions. Why? Because I’m one of those “give me liberty or give me death” fanatics, which means that I have two main criteria for any kind of government program that involves spying on innocent citizens:
- Operational effectivenessOversight
There’s so much international money tied up in the integrity of the SWIFT database that I have a fairly high degree of trust that the SWIFT snooping program is subject to strict controls and international oversight. We’re not talking about a domestic company that’s going to roll over for the feds, and a Congress that’s going to look the other way while the Executive branch does whatever it likes. There’s real money at stake here, and much of it belongs to foreigners who are going to be concerned about things like corporate espionage and the US using the data to give domestic businesses an unfair edge.
A very short intro to the SWIFT database story
One of the US government’s first priorities in the aftermath of 9/11 was to strike terrorism right in the pocketbook. It was in the context of their attempts to freeze terrorist assets and to trace the sources of funding for international terror organizations that the Bush administration first learned of the SWIFT database. They immediately moved to gain access to it, and at one point they allegedly wanted a copy of the entire thing for antiterror purposes.
Here’s the NYT’s description of the SWIFT international banking database:
Swift’s database provides a rich hunting ground for government investigators. Swift is a crucial gatekeeper, providing electronic instructions on how to transfer money among 7,800 financial institutions worldwide. The cooperative is owned by more than 2,200 organizations, and virtually every major commercial bank, as well as brokerage houses, fund managers and stock exchanges, uses its services. Swift routes more than 11 million transactions each day, most of them across borders.
The cooperative’s message traffic allows investigators, for example, to track money from the Saudi bank account of a suspected terrorist to a mosque in New York. Starting with tips from intelligence reports about specific targets, agents search the database in what one official described as a “24-7” operation. Customers’ names, bank account numbers and other identifying information can be retrieved, the officials said.
Immediately following the NYT’s story, the Republican outrage machine cranked into high gear over the revelations, with a chorus of right-wing bloggers, pundits, and even the President himself condemning the story as damaging to national security. In fact, by turning the outrage knob up to eleven, the administration and its surrogates have been able to turn the conversation about the program almost completely into one about freedom of the press vs. national security. (This is a move that the left has been wholly complicit in, by the way.)
For what it’s worth, I think it’s a tragedy, and probably even a threat to national security, that the NYT is our now our first line of defense against Executive overreach. That used to be the job of Congress.
Further readingSWIFT statement on compliance policyBank Data “Motherlode” in Feds’ HandsNYT reveals secret program to combat terrorist financingSWIFT: The Latest Victim of the War on Terror