Feds using banks to surveil Americans' financial data without warrants, House Judiciary says
FIRST ON FOX: Federal law enforcement has been manipulating the Suspicious Activity Report (SAR) system to gain access to Americans’ financial information without warrants or probable cause, the House Judiciary Committee said Friday.
The panel and its Subcommittee on the Weaponization of the Federal Government released its interim report, first obtained by Fox News Digital, which details its findings.
The committee said in the report that the FBI "has manipulated" the SAR's filing process to treat financial institutions "as de facto arms of law enforcement, issuing ‘requests’ without legal process, that amount to demands for information related to certain persons or activities it considers ‘suspicious.'"
"With narrow exception, federal law does not permit law enforcement to inquire into financial institutions’ customer information without some form of legal process," the report states. "The FBI circumvents this process by tipping off financial institutions to ‘suspicious’ individuals and encouraging these institutions to file a SAR — which does not require any legal process — and thereby provide federal law enforcement with access to confidential and highly sensitive information."
The committee said that, in doing so, the FBI "gets around the requirements of the Bank Secrecy Act," which specifies that it is a bank’s responsibility to file a SAR whenever it identifies a "suspicious transaction relevant to a possible violation of law or regulation."
The committee acknowledged that "at least one financial institution requested legal process from the FBI for information it was seeking," but noted that "all too often the FBI appeared to receive no pushback."
"In sum, by providing financial institutions with lists of people that it views as generally ‘suspicious’ on the front end, the FBI has turned this framework on its head and contravened the Fourth Amendment’s requirements of particularity and probable cause," the report states.
The committee added that their oversight of "financial surveillance" had shed "new light on the decaying state of Americans’ financial privacy and the federal government’s widespread, warrantless surveillance programs."
The FBI responded to the report in a statement to Fox News Digital, saying, "While we have no comment on the report, as a general matter the FBI frequently receives information from the private sector about possible criminal activity. Financial institutions are required under the Bank Secrecy Act to file Suspicious Activity Reports (SARS) on activity they deem reportable, and the Financial Crimes Enforcement Network (FinCEN) shares the information with law enforcement.
"The FBI cannot open an investigation without evidence of a federal criminal violation or a threat to national security. We follow the law and the facts, and we never open an investigation based solely on First Amendment activity."
The committee began their investigation into government-led financial surveillance earlier this year, after a whistleblower disclosed that following the events of Jan. 6, 2021, Bank of America "voluntarily and without legal process" provided the FBI with a list of names of all individuals who used a Bank of America credit or debit card in the Washington, D.C., region around that time.
Fox News Digital first reported in March that federal investigators had asked banks to search and filter customer transactions by using terms like "MAGA" and "Trump" as part of an investigation into the Jan. 6, 2021, Capitol riot, warning that purchases of "religious texts" could indicate "extremism."
The committee also obtained documents that indicate officials suggested that banks query transactions with keywords like Dick's Sporting Goods, Cabela's, Bass Pro Shops and more.
A source familiar with the documents told Fox News Digital at the time that while Jan. 6 was the "impetus" for the queries and searches, none of the documents the committee had obtained revealed any specific time frames or limitations for banks searching for customer transactions with the terms. The source said the federal government used the information for investigations beyond Jan. 6.
"In the days and weeks after January 6, 2021, the FBI coordinated with the Treasury Department’s Financial Crimes Enforcement Network to encourage financial institutions across the country to scour their data and file SARs on hundreds of Americans, if not more, without any clear criminal nexus," the report says.
Bank of America, at the time, told Fox News it "follows all applicable laws and regulatory requirements to receive, evaluate, process, safeguard, and narrowly respond to law enforcement requests."
Documents obtained by the committee revealed that at least one financial institution reached out to the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) with the idea that it would "support the Bureau’s efforts to address the acute threat of domestic terrorism."
"The financial institution encouraged FinCEN to use SARs as the basis for issuing Patriot Act 314 (a) requests, which allows FinCEN to ‘canvas the nation’s financial institutions for potential lead information’ from ‘more than 37,000 points of contact at more than 16,000 financial institutions to locate accounts and transactions of persons that may be involved in terrorism or money laundering."
After those findings, the panel continued investigating the matter and obtained more than 48,000 pages of documents, noting that the information they received through their probe "is concerning."
"Documents show that federal law enforcement increasingly works hand-in-glove with financial institutions, obtaining virtually unchecked access to private financial data and testing out new methods and new technology to continue the financial surveillance of American citizens," the report states.
However, the committee is warning that "all Americans should be disturbed by how their financial data is collected, made accessible to, and searched by federal and state officials, including law enforcement and regulatory agencies."
"With the rise in e-commerce and the widespread adoption of cash alternatives like credit cards or peer-to-peer payment services, the future leaves very little financial activity beyond the purview of modern financial institutions or the government’s prying eyes," the report states. "This is because, as a condition of participating in the modern economy, Americans are forced to disclose details of their private lives to a financial industry that has been too eager to pass this information along to federal law enforcement."
The report says the committee's investigation "makes clear that federal law enforcement has taken advantage of this dynamic by deploying financial institutions as arms of federal law enforcement, directing financial institutions to profile Americans using the typologies it distributes or urging financial institutions to identify any ‘suspicious activity’ an individual may have engaged in."
The committee is warning that "absent renewed safeguards, the federal government and financial institutions will continue to siphon off Americans’ sensitive financial data, place it into the hands of bureaucrats, and erode any remaining semblance of financial privacy in the United States."
