POLITICAL WEBLOG

Jayna Davis, a University of Texas graduate in Broadcast Jounalism as worked as an investigative journalist, reporter and producer and received critical acclaim for her achievements and medical reporting. Ms. Davis had no idea that she would become part of American history tantamount to the December 7, 1941 attack upon the United States by the Japanese Empire. In 1991, Jayna reached the pinnacle of her career when she joined the news team at KCRA-TV in Sacramento, California, the third largest NBC affiliate in the country. In 1993, Jayna found her niche in Oklahoma City when KFOR-TV hired her to spearhead the station's investigative news unit. During her four years at Channel 4, Jayna earned several awards, including "Best Investigative Report" from the Oklahoma Associated Press in 1994 and the Oklahoma Association of Broadcasters in 1995. Her life changed forever. At 9:02 AM on April 19, 1995, Jayna found herself staring at the smoldering shattered shell of the skeletal, structural remains of the Alfred P. Murrah Building with a colleague by her side memorializing this cowardly attack. The horrifying images were broadcast via satellite to the world, documenting America's deadliest terrorist attack of the 20th century. Ms. Davis uncovered a great deal more that did not correspond with government findings and certainly shed light on an even greater evil. Ms. Davis has refused to be silenced and takes her efforts publicly in all media outlets.

Ernie Fitzgerald blew the whistle on billions of dollars in cost overruns at the Department of Defense and was illegally fired by President Nixon. Mr. Fitzgerald's landmark federal whistleblower case resulted in his reinstatement and effectually led to the passage of amendments to the False Claims Act in 1986.

Ohio Environmental Protection Agency employee Paul Jayko lost his position for exposing that public schools were being built on contaminated land causing a high occurrence of cancer. After a hotly contested trial, Mr. Jayko won his job back.

Making cash deposits or withdrawals? Using a safety deposit box? Planning to put down a cash deposit towards your car purchase? Used an ATM on your way to the family’s out-of-state Christmas gathering? Bought some travelers checks to bring along for your summer vacation? Applied for new mortgage, loan modification or foreclosure rescue? Under current banking regulations, most of your everyday transactions have a great chance of being written up as a Suspicious Activity Report (SAR).

SARs have been around since April of 1996. The Bank Secrecy Act (BSA) requires financial institutions to file suspicious activity reports (SAR) to inform the federal government of transactions related to possible violations of law. SARs were originally intended to be used as supporting documents for existing cases in combating money laundering, terrorist financing and other financial crimes. Now they are being used to initiate new investigations, based on a multitude of routine transactions by individuals and businesses.

For example, if you deposit more than $10,000.00 dollars, your transaction is being reported to the IRS. If you deposit less than $10,000.00 dollars, your transaction may result in a SAR report of structuring/ money laundering, based on your implied intent to evade the reporting requirement to the IRS. If you’re using your safety deposit box often, that may be reported in a SAR. If you rarely use your safety deposit box, that will also be reported as a suspicious activity. Making a cash payment towards the purchase of your vehicle? There goes another SAR. Purchasing anything that costs $3,000 or more and paying by certified checks, money orders or traveler's checks? A report is going to be made. Your financial privacy is just another casualty in the government’s “war on terror”, which is being used to spy on law-abiding Americans.

Not surprisingly, the numbers of SARs are soaring. Approximately 2.9 million of these reports have been filed between April of 1996 and December 2005, according to a report by FinCEN (a unit of the U.S. Treasury Department, and the single largest repository of personal financial information in the United States). A February 2009 report from the U.S. Government Accountability Office (GAO) found that between 2000 and 2007, suspicious activity report (SAR) filings nearly quadrupled, from 163,000 to 649,000 per year.

Privacy advocates say the SAR crosses the line by making the definition of "suspicious activity" deliberately vague. That forces banks to use their own subjective discretion in filing SARs, paving the way for racial profiling, political motivation and ulterior motives for targeting certain customers. The banks are not worried about violating consumers' privacy, because it's illegal for them to inform customers when SARs are filed on them.

"Under this stealth law, banks and banking regulators are starting with the premise that every American is a terrorist, and anything that they do is capable of being a terrorist act," said James Rockett, co-head of the financial institutions corporate and regulatory group at the San Francisco-based law firm of Bingham McCutchen. "The definition of unusual is so broad under the current construct ... anything that happens in any single account in the U.S., even if it's negligibly different, is going to be reported to the government," he said.

For example, an independent film company was filming in Arizona, generating large revenues to the local economy and employing state residents. Numerous cash withdrawals and deposits were routinely made in the course of this multi-million dollar film production. Wells Fargo bank officers and officials visited the film set, met the all-star cast and production crew. Although it was self-evident that the funds were being used for legitimate purposes, bank employees have made over sixty (60) SAR reports about the film company and its producers.

In describing cash withdrawals that were used to pay local extras, purchase film props and pay the art department, Wells Fargo bank’s SAR filings reported the company for possible money laundering, stating that the amounts withdrawn were too large for a “photography studio”. Needless to say, that was a blatant, willful misrepresentation and Wells Fargo was well aware of the legitimate need for the financial transactions in question. But the banks are not worried about either violating your privacy – or lying to justify their disclosures. Under 12 U.S.C. §3403(c), financial institutions and their employees have complete immunity from civil liability for the reporting of known or suspected criminal offenses or suspicious activity by filing a Suspicious Activity Report (SAR) with the FinCen.

The FinCEN is a Unit of the U.S. Treasury Department that compiles customer financial data based on SARs reports and other sources. This reporting system evolved in 1992 when Congress amended the Bank Secrecy Act, authorizing the Treasury Department to adopt the SAR requirements, through the Annunzio-Wylie Anti-Money Laundering Act.

This amendment gave the Treasury Department the power to require reporting of any "suspicious transaction relevant to a possible violation of law or regulation.” 31 U.S.C. § 5318(g)(1). The Right to Financial Privacy Act (RFPA) was enacted to ensure that customers be notified before disclosure of their records to the government, to give customers standing to challenge release of their records to the government; and to require government agencies to produce an audit trail documenting the disclosure of customer info to the government, as well as any interagency transfer of info.

But RFPA contains a large loophole that accommodates financial institution reporting under the Bank Secrecy Act. 12 U.S.C. § 3413(d). Though RFPA contemplates that notice will be given to customers when financial records are transferred from one federal agency to another, notice is not given to customers when SARs are furnished by FinCEN to law enforcement officials. The SARs contain all of your personal data, name, age, Social Security number, address, occupation, account number and other details about your bank transactions. In certain instances, the account could even be frozen until you can prove you are not a criminal.

The definition of a “financial institution” obligated to file SARs now includes many entities most individuals would not consider as such, including the casinos and the U.S. Postal Service. However, these entities are required to report any suspicious activity involving at least $5,000. Thus, gamblers visiting a casino may encounter some difficulties.

Every person engaged in a trade or business, who in the course of that trade or business, receives more than $10,000 cash in one transaction or in two or more related transactions must file a Form 8300 with FinCEN. 31. U.S.C. §5332. This is a very broad requirement, so that many different entities are subject to this regulation. For example, if you purchase jewelry in cash for over $10, 000, a report will be filed on you, even if such activity in itself is not unlawful or suspicious.

One of the best privacy safeguards is to limit the collection of personal information. In a direct contravention to this simple principle, unnecessary data is being stockpiled through SARs. This not only diverts government resources from more productive uses, but also contributes to unprecedented privacy violations. Individuals and businesses are being intentionally kept in the dark as to the disclosures of their private information, under the theory of “What you don't know can't hurt you”. However, in this scenario, it SAR can…