This op-ed was originally published at the Washington Examiner on September 8, 2017.
Last summer, there was a legislative effort in the House of Representatives to expand the USA Patriot Act, the controversial post-Sept. 11 anti-terrorism law. Thankfully, the effort failed. But there are rumors from staffers on Capitol Hill that Rep. Robert Pittenger, R-N.C., the lead sponsor of the bill that failed last year, is currently shopping a new version in anticipation of reintroduction.
The “Anti-Terrorism Information Sharing Is Strength Act” (H.R. 5606), introduced by Reps. Pittenger and Maxine Waters, D-Calif., would have expanded Section 314 of the Patriot Act. This particular part of the 2001 law already provides for information sharing between financial institutions and the federal government to deter terrorism and significant money laundering schemes, but would have been expanded that existing system to include a host of non-terrorism domestic crimes listed in 18 U.S. Code 1956(c)(7).
Importantly, the Treasury Department has already issued regulatory guidance that was never subject to public comment or any kind of external review that oversteps Section 314 authority by asking financial institutions to share this broader swath of information with one another — and ultimately, with the government. But many businesses have correctly decided to ignore this “regulatory guidance” because it goes far beyond what the current law allows. In short, this bill was an attempt to legalize the Treasury Department’s regulatory overreach.
As the House Liberty Caucus, which is chaired by Rep. Justin Amash, R-Mich., explained in its July 2016 vote alert, the “Anti-Terrorism Information Sharing Is Strength Act” would have “violate[d] our Fourth Amendment-secured right against unreasonable searches and seizures.”
“Under the Fourth Amendment to the Constitution, the government may not conduct unreasonable searches and seizures. With limited exception, a search or seizure is unreasonable if it occurs without probable cause and a warrant. Section 314 of the Patriot Act attempts to sidestep this constitutional protection by treating a domestic criminal investigation like a foreign terrorism investigation, and H.R. 5606 [would have] extend[ed] the applicability to a much wider range of criminal investigations,” the Liberty Caucus added.
The “Anti-Terrorism Information Sharing Is Strength Act” was part of a power grab by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). According to FinCEN’s own data, only 17 percent of current requests from law enforcement under Section 314 are actually related to terrorism or terrorist financing with the wide majority of requests made under the much broader “money laundering” category.
FinCEN’s current practice already demonstrates that this extraordinary power is being used, for the most part, as an end-run around constitutional protections for non-terrorism related investigations. This bill would only have made things significantly worse, allowing government access to private information on the mere suspicion of a multitude of “unlawful activities.”
Unfortunately, FinCEN’s power grab didn’t end with the failure of the “Anti-Terrorism Information Sharing Is Strength Act.” The House Subcommittee on Terrorism and Illicit Finance just held a hearing in April during which Pittenger telegraphed that the issue may soon come back up, specifically mentioning the use of Section 314 and the so-called need for additional information sharing. In fact, he has been shopping a draft of a bill to multiple offices in the House.
When asked by Rep. Warren Davidson, R-Ohio, about safeguards to protect civil liberties, acting FinCEN Director Jamal El-Hindi didn’t have a coherent response. In a follow-up question, El-Hindi confirmed that requests from law enforcement for banking records don’t come in the form of subpoenas or warrants. Indeed, all law enforcement has to do is sign a certification that they have met FinCEN’s criteria, which is significantly less than what is required for a traditional search warrant.
FinCEN receives the requests from law enforcement, El-Hindi noted, and asks financial institutions if there are any transactions that appear suspect. “This is a little bit like ‘Go Fish,'” Davidson said. “Got any transactions that look like this?”
No one disagrees that law enforcement should have tools available to fight the money laundering of illicit funds that would promote terrorism. But the desire of FinCEN to expand Section 314 to a large number of non-terrorism domestic crimes made the “Anti-Terrorism Information Sharing Is Strength Act,” or any such bill that could follow it, incredibly suspect.
What’s more, there are already examples of government overreach as it relates to suspected money laundering. Take, for example, the Internal Revenue Service’s abuse of civil asset forfeiture and structuring laws, through which some innocent Americans — including Andrew Clyde, Carole Hinders, and Jeff Hirsch — saw their lawfully obtained money seized by federal bureaucrats.
Congress can’t so easily disregard civil liberties — especially by further expanding the reach of the Patriot Act to crimes that have literally nothing to do with terrorism — by hiding behind the deceptive titles of proposed legislation. Instead, Congress should stop delegating authority to executive branch agencies, and even take steps to force agencies to conduct their business within the confines of the law, rather than using their power to codify and expand blatant agency overreach.
Jason Pye (@pye) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the director of public policy and legislative affairs for FreedomWorks.