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The U.S. Financial Police State

Recently, an article in the New York Times reported that, "Under a secret Bush administration program initiated weeks after the Sept. 11 attacks, counter terrorism officials have gained access to financial records from a vast international database and examined banking transactions involving thousands of Americans and others in the United States, according to government and industry officials. The program is limited, government officials say, to tracing transactions of people suspected of having ties to Al Qaeda by reviewing records from the nerve center of the global banking industry, a Belgian cooperative that routes about $6 trillion daily between banks, brokerages, stock exchanges and other institutions. The records mostly involve wire transfers and other methods of moving money overseas and into and out of the United States."

What this would mean is that any and every international wire transfer of funds among banks has been open to secret U.S. government inspection without any judicial authorization or restraint.

The system to which The New York Times refers is SWIFT, formally known as the Society for Worldwide Interbank Financial Telecommunication.

Since later 2001, the U.S. government, through the use of a Presidential executive as its justification, had tricked SWIFT officials into allowing them to sift through the financial transfer records of anyone labeled as a potential terrorist. Just as in the case of the President's order to allow the NSA to secretly monitor millions of U.S. citizen's phone calls, and just as he authorized the NSA to ignore a law that requires a warrant for wiretapping, he has allowed the financial transfers of almost everybody to be subject to government police scrutiny.

This latest "spy on Americans" program is run by the CIA and it is supposedly overseen by the U.S. Treasury Department. Officials insist it is confined to suspected terrorism only. However, these are the same people who said that the USA PATRIOT Act would only be used to track terrorists. However, in an article of May 30, 2003, the New York Times reported: "The Justice Department has begun using its expanded counter terrorism powers to seize millions of dollars from foreign banks that do business in the United States...Officials at the State Department, however, have raised concerns over the practice, in part because most of the seizures have involved fraud and money laundering investigations that are unrelated to terrorism."

The paper explained: "A little noticed provision in the sweeping anti-terrorism legislation passed in October 2001, gave federal authorities in such cases the power to seize money that passes through banks in the United States without notifying the foreign government. Most overseas banks maintain what are called 'correspondent accounts' in American banks, allowing them to exchange American currency and handle other financial transactions in this country. Section 319 of the PATRIOT Act allows federal authorities to seize money from the foreign bank's correspondent account if they can convince a judge that the money deposited overseas at the bank was obtained illicitly."

So, the question is: what can a person do to protect himself from this wholesale spying on his financial activity?

He can begin by transferring a portion of his cash or other liquid assets offshore to banks in locations where local law forbids any government access to his accounts without a prior judicial hearing and where it is a felony to reveal any financial information. Among the best places are the countries of Liechtenstein, Austria, Panama or Switzerland. And when he does this, he can gain direct access to much better and more profitable investments that are denied to U.S. citizens who are constrained by SEC rules blocking offshore investing.

This revelation of the abuse of SWIFT by the U.S. government is just further proof that the U.S. has become a financial police state.