In the Press

The Economist

Data security: Wired

June 29, 2006

THE sheer volume of data passing through the SWIFT network daily is mind-boggling: up to 12.7m messages about money transfers, bouncing between more than 7,800 banks and financial firms in over 200 countries. It is the broadest system of its kind for sending financial messages around the world quickly and securely. As one might expect, the data include the names and account numbers of those sending and receiving funds. Hence this week's outcry at the revelation that American government agencies have been tracking messages sent via SWIFT for several years in the hope of hunting down terrorists. SWIFT says it was complying with subpoenas from the American government, had limited the data handed over and had told its senior committee (made up of central-bank officials) what was going on. Still, questions remain about who knew what when, as well as the legality of it all. In private, bankers have expressed consternation at the snooping. The government of Belgium, where the SWIFT consortium is based, says it is investigating. The European People's Party, the centre-right group in the European Parliament, has called for a broader inquiry. The American Civil Liberties Union detects "abuse of power" by the Bush administration. Privacy International, a human-rights group in London, has lodged complaints in more than 30 countries in a bid to "paralyse" the Americans' effort. Simon Davies, its director, says it plans to file more. George Bush and his senior advisers have already hit back. The president blasted the media for publishing details of the surveillance programme: a "disgraceful" move, he said, that did "great harm" to America. Therein lies the rub. Since the terror attacks of September 2001, the Bush administration has tried hard to cut off funding for terrorists. Through bodies like the Financial Action Task Force, America has pressed foreign governments to monitor financial transactions more closely. International banks are already required to file reports on suspicious activity, and are loth to criticise anti-terrorism efforts publicly, no matter how onerous. Watching SWIFT means tracking a huge amount of data. Michael Turner of the Political and Economic Research Council, an American think-tank, says the closest parallels are the FBI's collection of data on suspected Communists during the 1950s and registration of Japanese-Americans during the second world war. But those cases "pale in comparison from a pure quantitative perspective," he adds. An industry representative suggests the Americans may have been forced to go to SWIFT after banks turned down their requests for information. "This is a delicate issue," he says. "There's a degree of cloak and dagger and hush-hush involved." So much for the hush.