[NYTr] Bush Regime Claims "State Secrets" to Evade Suit for Banking Records

[All the News That Doesn't Fit]

The ew York Times via Truthout - Aug 31/Sep 1, 2007
http://www.truthout.org/docs_2006/083107B.shtml

US Cites "Secrets" Privilege as It 
Tries to Stop Suit on Banking Records

By Eric Lichtblau

Washington - The Bush administration is signaling that it plans to
turn again to a legal tool, the "state secrets" privilege, to try to
stop a suit against a Belgian banking cooperative that secretly supplied
millions of private financial records to the United States government,
court documents show.

The suit against the consortium, known as Swift, threatens to
disrupt the operations of a vital national security program and to
disclose "highly classified information" if it continues, the Justice
Department has said in court filings.

A hearing on the suit is scheduled for Friday in federal court in
Alexandria, Va.

The "state secrets" privilege, allowing the government to shut down
litigation on national security grounds, was once rarely used. The Bush
administration has turned to it more than 30 times in terrorism-related
cases, seeking to end public discussion of cases like the claims of an
F.B.I. whistle-blower and the abduction of a German terrorism suspect.

Most notably, the administration has sought to use the privilege to
kill numerous suits against telecommunications carriers over the
National Security Agency's eavesdropping program.

But a judge in California rejected the argument because the program
had been discussed so widely. The government challenge is pending before
the United States Court of Appeals for the Ninth Circuit, where judges
at a hearing two weeks ago expressed skepticism on the secrecy argument.

Asserting the privilege requires the director of national
intelligence and the attorney general to certify legally the potential
harm to national security.

If the administration makes good on its intention to invoke the
privilege in the Swift suit, it would be one of the most significant
tests of the privilege.

Swift is considered the nerve center of the global banking industry,
routing trillions of dollars each day among banks, brokerage houses and
other financial institutions. Its partnership with Washington, reported
in The New York Times in June 2006, gave Central Intelligence Agency and
Treasury Department officials access to millions of records on
international banking transactions.

The access was part of an effort to trace money that investigators
believed might be linked to financing of terrorism.

Months after the Sept. 11, 2001, attacks, Swift began turning over
large chunks of its database in response to a series of unusually broad
subpoenas from the Treasury Department.

Administration officials have defended the program as an important
tool in the war on terror. European banking regulators and privacy
advocates were quick to denounce the program as improper and possibly
illegal.

The pressure resulted in an agreement this year by Swift and United
States officials to tighten restrictions for using the data.

Two American banking customers also sued Swift on
invasion-of-privacy grounds. Legal and financial analysts had expected
that the suit would have been thrown out because American banking
privacy laws are considered much laxer than those in much of Europe.

But the chief judge in Federal District Court in Chicago, James F.
Holderman, ruled in June that he would allow the suit to proceed, partly
on grounds of claims of a Fourth Amendment violation and his finding
that Swift's arguments on that point were "unpersuasive."

"The decision in Chicago was a pretty big win for our side," Steven
E. Schwarz, a lawyer in Chicago who represents the plaintiffs, said in
an interview.

The Swift program, Mr. Schwarz said, "is an Orwellian example of
government overreaching and unfettered access to private financial
information that is not consistent with the values upon which our
country was founded."

Judge Holderman did agree to move the suit to the federal court in
Alexandria at the request of Swift lawyers. Its main American arm
operates from Manassas, Va.

The hearing on Friday is on a motion by Swift for Judge T. S. Ellis
to reconsider Judge Holderman's ruling.

In a motion filed on July 25, the Justice Department urged the court
to throw out the suit to "preserve" the program against financing
terrorism, "protect Swift from the burden of further litigation here and
minimize the likelihood that highly classified information will be
threatened."

The department said this week that it would send a lawyer to the
hearing, but it was unclear whether the "state secrets" privilege would
be raised.

Lawyers for the Justice Department and Swift would not discuss the
case in substance beyond the court filings.

The administration has turned to the privilege much more frequently
than past administrations. According to a report due out this weekend by
an advocacy group, OpenTheGovernment.org, the administration has used it
39 times in the last six years, compared with 59 times in the 24 years
before that.

Historically, courts have been reluctant to challenge the secrecy
privilege. But the administration has suffered setbacks in seeking to
use the secrecy claim in the eavesdropping case and several other recent
cases.

"We've seen a real erosion of the 'state secrets' privilege in the
last year," said Mr. Schwarz, the lawyer suing Swift. "I think it is
from overuse. We've seen it used in record numbers, in situations where
it was inappropriate, and the courts are starting to recognize that."

Tom Blanton, director of the National Security Archive at George
Washington University, said: "What seems clear is that until a year or
two ago, the judges rarely even questioned it when the government raised
the 'state secrets' claim. It was a neutron bomb - no plaintiffs left
standing.

"But we're now seeing that judges are starting to actually look
behind the government's secrecy claims and see what's really there."