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Tuesday, July 11, 2006

U.S. assessing impact of terror money trail leak

WASHINGTON, July 11 (Reuters) - The disclosure of a secret U.S. program to monitor bank transfers will logically hurt efforts to track terrorism finance, although it is too soon to know the actual impact, a senior U.S. official said on Tuesday.

U.S. President George W. Bush and other top officials have condemned reports on the secret program by The New York Times and other papers last month, saying they undermined efforts to fight terrorism. Bush called the disclosure "disgraceful." Some lawmakers have called it treason.

Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, said the program's exposure was "a grave loss" to efforts to fight al Qaeda and other militants, but acknowledged the effect was not yet apparent because of a time lag in obtaining the classified information.

"We haven't seen the result (of the disclosure) yet because the data that we're accessing right now was data that was created before the news stories," Levey told a House of Representatives financial services subcommittee hearing.

He said it was a "matter of logic" that the publication would harm the efforts to follow the money trail of militants, which he said continued to provide concrete leads every day.

"I am hopeful that we will still have some value from the program and we intend to continue with it," he said, adding it remained to be seen if the leak had made the system defunct.

For nearly five years since the Sept. 11 attacks, the Treasury has been tapping into records of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) for evidence of potential activity by militant groups.

U.S. officials have defended the program, saying it was legal, effective and adequately supervised to avoid abuse.


Levey said that among the safeguards in place were the need for a subpoena to get the records; limits on data searches which require a specific link to a terrorism investigation; the ability of SWIFT representatives to monitor the searches in real time and stop one if they have concerns; and the collection of records on each search that is conducted.

He said top members of the congressional intelligence committees as well as the central banks of the Group of 10 major industrialized countries were briefed.

But several Republican and Democratic lawmakers at the hearing said Congress had not been kept in the loop.

Rep. Barney Frank, a Massachusetts Democrat, said that of the 28 House members who were briefed on the program, 23 were briefed only after after the administration knew the program was about to be made public by the papers.

"Many in Congress who should have been briefed by this administration were not," said Rep. Sue Kelly, a New York Republican who chairs the subcommittee on oversight and investigations which conducted the hearing.

She said she asked the Government Accountability Office, the investigative arm of Congress, on Tuesday to look into the program to "ensure that it was indeed conducted in accordance with all proper laws, that it does possess all necessary safeguards and that Congress was appropriately informed."
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