While Agha Hassan Abedi carried on a crusade to develop a Pakistani nuclear capability through the tentacles of his global bank--the Bank of Credit and Commerce International (BCCI)--BCCI itself played a key role in U.S. intelligence gathering. It did so by providing financial services to arms dealers and associated terrorists. Financial information about who was paying whom, presented a fairly clear picture about what was taking place in the purchase and movement of armaments and strategic technology.
If, for example, a check was drawn on the Sitico account at BCCI Luxembourg and deposited in, say, Raytheon's account at Bank XYZ in Dallas, then this information could be combined with the knowledge that Sitico was an Iraqi front company, and an analyst might conclude that Iraq was purchasing spare parts for the HAWK. Of course, few (if any) financial transactions would be this straight forward, so considerable effort would be needed to trace the flow of money. (This was especially true considering that some of BCCI's accounts were kept in longhand and written in Urdu.)
But, looking forward, the loss of BCCI did considerable damage to the process of intelligence collection for:
"The greatest concern of U.S. decisionmakers in upcoming years is likely to be restricting the spread of advanced military technologies--particularly nuclear, chemical, biological, and ballistic missile technologies--and preventing the use of such technologies as have been acquired. These tasks will require monitoring the pursuit and application of those technologies by a number of countries--including Israel, India, Pakistan, Iran, Iraq, and North Korea. In addition to monitoring within-country activities, attention will have to be directed toward the licit and illicit international supply of various components of those technologies" (Jeffrey T. Richelson, The U.S. Intelligence Community, 3rd edition, Westview Press, 1995).
Moreover, the vast amounts of banking and financial data being sucked in and stored for analysis by the NSA mandated a separate facility to analyze and process the data. The volume of financial data was already taxing NSA resources. (NSA's data processing capacity has been recently expanded through installation of the world's third fastest supercomputering center [according to rating criteria that may, or may not, be valid]. The center is located at E-Systems of Dallas, Texas, a company that was purchased in April 1995 by Raytheon for $2.3 billion.)
These concerns, and others, led to the creation of FinCEN, located in Vienna, Virginia. Because FinCEN was established as a unit of the U.S. Treasury, NSA's COMINT and ELINT could be combined with domestic sources of information, including information from the Federal Reserve and the Treasury's own data bases, which included various types of financial, tax, and customs information. It also meant the merger of foreign and domestic intelligence. As one cypherpunk has noted, national borders are just speed bumps on the information superhighway.
A November 1993 GAO report on FinCEN lists 84 positions (out of 207 staff members) referred to as "intelligence analysts", most of whom come from the NSA. "FinCEN, planned as a hunter of tax-evaders, has become a hunter of economic and financial secrets at home and abroad" (J. Michael Springmann, "FinCEN--American Financial Intelligence Service," Unclassified, No. 33, Summer 1995.)
"And, it is clear from the March 29, 1995 draft of Clinton's executive order on access to classified information, that FinCEN's brief has been expanded. It will, in the future, conduct security clearance investigations for all government employees and contractors with access to classified information, in the process examining their bank statements, credit histories, and foreign travel records" (Springmann).
FinCEN now issues all regulations under the Banking Secrecy Act, the basis of all U.S. money laundering legislation.
Section 5313 of the Banking Secrecy Act (BSA) requires a Currency Transaction Report (CTR) of cash deposits or transactions of $10,000 and above, which is IRS Form 4789, and a Currency Transaction Report by Casinos (CTRC), which is IRS Form 8362. Section 5316 of BSA also requires a Currency or Monetary Instrument Report (CMIR) for transport of $10,000 or more of currency in or out of the U.S. This is Customs Form 4790. Section 5314(a) of BSA requires reporting of foreign bank or financial accounts whose value exceeds $10,000 at any time during the preceding year. This is called a Foreign Bank Account Report (FBAR) and is Treasury form TDR 90-22-1. Section 60501 of the IRS Code requires the reporting of business transactions involving more than $10,000 cash. These are reported on IRS Form 8300.
These and other forms are entered into the Treasury Financial Date Base (TFDB) and become available on-line in the Treasury Enforcement Communications System, TECS II. The TFDB data are processed through the FinCEN Artificial Intelligence (AI) System, which is trained to identify suspicious transaction patterns.
FinCEN's AI system has now been joined by thousands of bio-intelligence (BI) systems also programmed to detect suspicious activity. In 1992 Treasury (now operating through FinCEN) was given authority to issue regulations on "suspicious transactions" reporting (Title 31, USC Sec. 5318(g)). Under this regulation, your banker (a BI system) is required to report any suspicious behavior on your part. (So don't even think of looking cross-eyed at him or her.)
Private companies are also jumping onto the AI bandwagon to build products to analyze banking transactions:
". . . UK software company InterAcess Risk Management has unveiled Syfact, a software package designed to analyse the relationships between apparently unrelated accounts and spot potential irregularities between them.
"The package can run through an entire bank's account holders, allowing compliance officers to build a diagram of laundering patterns of fraudulent activity, which, InterAccess says, would normally take months to construct.
"The system logs suspicious transactions for investigation against other events, either within the bank's own systems or in collaboration with other organisations. It also is designed to be used by criminal intelligence agencies for the same purpose" ("Technology to aid and curb crime," Money Laundering Bulletin, July 1995).
FinCEN's director, Stanley Morris, has targeted Internet banking and "cyberlaundering" as one of his top priorities.
"The term 'cyberspace' may send chills down the spines of many, but money launderers are probably not among them. It is likely they delight in the murky potential it provides for plying their trade beyond the scrutiny of the government agents who pursue them. . . .
"Stanley Morris, director of the Treasury Department's Financial Crimes Enforcement Network, has targeted cyberspace banking as one of FinCEN's highest priorities. . . .
"All [cyberspace banks] operate in an environment where identities are often concealed, national borders do not exist and transactions are instantaneous and potentially untraceable. . . .
"Cyberspace banking will attract money launderers because of its potential to aid them in the three classical areas of money laundering [placement, layering, and integration]....
"If cyberbanking permits person-to-person cash-like transfers, with no involvement of cash, existing U.S. currency reporting regulations technically will not apply." (" 'Cyberlaundering' poses threat to controls," Money Laundering Alert, April 1995.)
So now money launderers join child pornographers, terrorists, conspiracy theorists, and hacker-crackers in the government litany of alleged Internet evils. To some extent, the apparent concern may be duplicitous. For the NSA is heavily involved in several of the enterprises that are rushing to become "cyberspace" banks. The NSA was late getting into the financial services game, but it is now attempting to seize the initiative in the area of its comparative advantage: information technology.
And in another respect, FinCEN's brief to catch money launderers is certainly duplicitous. For who is better posed to run an undetected money laundering operation than the FinCEN money laundering cops?
The integration of human, communications, and electronic intelligence (HUMINT, COMINT, and ELINT) in FinCEN-type environments required the construction of a common data base standard so that information could easily be transferred between different agencies and different applications. The standard that was decided on was originally implemented at the Justice Department in a software system for federal prosecutors to keep track of the vast amounts of data involved in a legal case. This was the PROMIS system partly developed and enhanced through a contract between the Justice Department and a Washington-D.C.-based firm called Inslaw.
This data standard, embodied in the PROMIS software, was implemented at the Justice Department, the NSA, the CIA, and the NSC. PROMIS was also sold to the Federal Emergency Management Agency to keep track of individuals (in a data base called MAINCORE) who were to be rounded up and incarcerated in the event of certain types of "national emergencies". It is also at the heart of FinCEN's data collation efforts.
The PROMIS software--whether equipped with a Trojan horse and sold to foreign intelligence organization, or similarly modified to spy on banking transactions--provides the key to a scandal that links the covert collection of data on individuals, money laundering in Arkansas and elsewhere, defense payola around the nation, and nuclear espionage at the White House, to the deaths of Danny Casolaro and Vince Foster.
1. John Steuri, Chairman and CEO of Alltel Information Services (formerly Systematics), says in a memo to Jim Norman, "We have no present or prior relationship whatsoever with any company called E-Systems." Is he willing to swear to this under oath?
2. If Caspar Weinberger's name is allegedly on account number KPFBMMBODE at the Union Bank of Switzerland , then what six names are allegedly on account number KPFBMMBODB at the same bank? Is the name of a U.S. senator in any way linked to this second account number?
3. Who was the president of Panama whose brother wrote a paper "Panama as an International Banking Center" at the Wharton School of the University of Pennsylvania under my supervision?
4. What major U.S. bank is in danger of losing the entirety of its equity base because of money laundering and RICO violations?
5. What top Federal Reserve official is also involved in money laundering?
6. What secret government communication division is located in Manassas, Virginia? Why was one of their employees named Standorf found beaten to death in his car at National Airport? Was it because he had delivered to Danny Casolaro computer printouts that showed the details of wire transfers from BCCI London and the World Bank to accounts in the Cayman Islands and Switzerland? Did some of these transfers represent payments to U.S. government officials for sales of the PROMIS software to foreign governments?
7. Does Harry C. Wechsler of Boston Systematics have MAINCORE clearance?
8. What document concerning Systematics was given to Vince Foster by Webster Hubbell the night before Foster died?
[To be continued]