[Infowarrior] - U.S. may invoke 'state secrets' to squelch suit against Swift

[Richard Forno]

 U.S. may invoke 'state secrets' to squelch suit against Swift
By Eric Lichtblau
Friday, August 31, 2007
http://iht.com/articles/2007/08/31/america/swift.php

WASHINGTON: The Bush administration is signaling that it plans to turn once
again to a favorite legal tool known as the "state secrets" privilege to try
to shut down a lawsuit brought against a Belgium banking cooperative that
secretly supplied millions of private financial records to the U.S.
government, court documents show.

The lawsuit against the banking consortium, which is known as Swift,
threatens to disrupt the operations of a vital national security program and
to reveal "highly classified information" if it is allowed to continue, the
Justice Department said in several recent court filings asserting its strong
interest in seeing the lawsuit dismissed. A hearing on the future of the
lawsuit was scheduled for Friday in federal court in Alexandria, Virginia.

The "state secrets" privilege, allowing the government to shut down public
litigation on national security grounds, was once a rarely used tool. But
the Bush administration has turned to it dozens of times in
terrorism-related cases in seeking to end public discussion of everything
from an FBI whistle-blower's claims to the abduction of a German terrorism
suspect.

Most notably, the Bush administration has sought to use the state secrets
assertion to kill numerous lawsuits against telecommunications carriers over
the National Security Agency's domestic eavesdropping program, but a judge
in California rejected that claim. The issue is now pending before an
appeals court, where judges in a hearing two weeks ago expressed skepticism
about the administration's claims.

Asserting the state secrets privilege requires the certification of both the
director of national intelligence and the attorney general about the
potential harm to national security. If the administration makes good on its
intention to invoke the secrets claim in the lawsuit against Swift, it would
be one of the most significant cases to test the claim.

Swift is considered the nerve center of the global banking industry, routing
trillions of dollars each day between banks, brokerages and other financial
institutions. The group's partnership with the U.S. government, first
revealed in media reports in June 2006, gave officials at the CIA access to
millions of records on international banking transactions in an effort to
trace money that investigators believed might be linked to terrorist
financing. Swift agreed to turn over large chunks of its database in
response to a series of unusually broad subpoenas issued by the Treasury
Department beginning months after the attacks of Sept. 11, 2001.

Bush administration officials have defended the banking data program as an
important tool in its war on terror, but European regulators and privacy
advocates were quick to denounce the program as improper and possibly
illegal, and the pressure forced Swift and U.S. officials earlier this year
to agree to tighter restrictions on how the data could be used.

Two U.S. banking customers sued Swift on invasion-of-privacy grounds. Many
legal and financial analysts expected that the lawsuit would be thrown out
because U.S. banking privacy laws are considered much more lax than those in
much of Europe. But to the surprise of many, a judge refused to throw out
the lawsuit in a ruling in June.