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THE TERROR FINANCE TRACKING PROGRAM

HEARING

BEFORE THE

SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JULY 11, 2006

Printed for the use of the Committee on Financial Services

Serial No. 109–105

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York, Vice Chair 

RON PAUL, Texas 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

CAMPBELL, JOHN, California 

BARNEY FRANK, Massachusetts 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

DEBBIE WASSERMAN SCHULTZ, Florida 

GWEN MOORE, Wisconsin, 

BERNARD SANDERS, Vermont

Robert U. Foster, III, Staff Director 

(III)

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

SUE W. KELLY, New York, Chair

RON PAUL, Texas, Vice Chairman 

EDWARD R. ROYCE, California 

STEVEN C. LATOURETTE, Ohio 

MARK R. KENNEDY, Minnesota 

SCOTT GARRETT, New Jersey 

J. GRESHAM BARRETT, South Carolina 

TOM PRICE, Georgia 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

MICHAEL G. OXLEY, Ohio 

LUIS V. GUTIERREZ, Illinois 

DENNIS MOORE, Kansas 

CAROLYN B. MALONEY, New York 

STEPHEN F. LYNCH, Massachusetts 

ARTUR DAVIS, Alabama 

EMANUEL CLEAVER, Missouri 

DAVID SCOTT, Georgia 

DEBBIE WASSERMAN SCHULTZ, Florida 

GWEN MOORE, Wisconsin 

BARNEY FRANK, Massachusetts 

(V)

C O N T E N T S 

Page 

Hearing held on: 

July 11, 2006 ..................................................................................................... 1

Appendix: 

July 11, 2006 ..................................................................................................... 37

WITNESSES 

TUESDAY, JULY 11, 2006

Levey, Stuart, Under Secretary, Terrorism and Financial Intelligence, U.S. 

Department of the Treasury ................................................................................ 13

APPENDIX 

Prepared statements: 

Oxley, Hon. Michael G. .................................................................................... 38

Kelly, Hon. Sue W. ........................................................................................... 40

Levey, Stuart .................................................................................................... 44

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Kelly, Hon. Sue W.: 

CRS Report for Congress: Treasury’s Terrorist Finance Program’s Access 

to Information Held by the Society for Worldwide Interbank Financial 

Telecommunication (SWIFT) ....................................................................... 63

Maloney, Hon. Carolyn: 

Compilation of publicly available statements regarding the monitoring 

of wire transfers by the U.S. Government .................................................. 49

(1)

THE TERROR FINANCE TRACKING PROGRAM 

Tuesday, July 11, 2006

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT

AND INVESTIGATIONS, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 10:10 a.m., in room 

2128, Cannon House Office Building, Hon. Sue W. Kelly [chairwoman of the subcommittee] presiding. 

Present: Representatives Kelly, Paul, Royce, Kennedy, Garrett, 

Davis of Kentucky, McHenry, Oxley [ex officio], Moore of Kansas, 

Maloney, Davis of Alabama, Cleaver, Scott, Moore of Wisconsin, 

and Frank [ex officio]. 

Also present: Representative Bachus. 

Chairwoman KELLY. This hearing of the Subcommittee on Oversight and Investigations will come to order. Without objection, all 

members’ opening statements will be made part of the record. 

I wanted to point out that during World War II, Congressman 

Andrew May returned from an oversight visit to the Pacific theater 

and told a group of reporters that those with loved ones serving in 

submarines didn’t need to worry because the Japanese were setting 

their depth charges to detonate at a level that was too shallow to 

reach our submarines. Several newspapers reported this. 

The Japanese then subsequently reset the fuses on their depth 

charges. A vice admiral estimated that the public disclosure of this 

information cost us 10 submarines and the lives of 800 American 

men. 

During the mid-1970’s, committees chaired by Senator Frank 

Church and Congressman Otis Pike brought to the attention of the 

American public a litany of activities which showed an intelligence 

community that had, at times, overstepped its bounds, leading to 

the enactment of the Foreign Intelligence Surveillance Act. 

I cite these instances not to draw comparisons with the subject 

of the hearing today, but rather to demonstrate the cross-pressures 

that we all confront when dealing with matters of secrecy and national security. 

No member wants to undermine our national security. 

We all recognize that there are times in wars, Churchill said, 

when certain truths must be, ‘‘attended by a bodyguard of lies.’’ 

As a New Yorker, and representative of so many people who are 

deeply affected by terrorism, I could not feel more strongly about 

protecting our vital national security tools. 

2

Just the same, no Member wants to forgo the institutional obligation envisioned by the Founding Fathers. We work always to 

strike a structural balance that James Madison articulated very 

well in Federalist Paper No. 51. The hearing today is to examine 

a terror finance tracking program and to examine the merits of the 

program and to see if it has been properly created and implemented by the Administration. 

Along with Chairman Oxley, and my colleague Mr. Gutierrez, 

and my colleague Mr. Frank, I have spent as much time on terror 

finance as any Member of this body. We have held many hearings. 

We have established a bipartisan Task Force on Terror Finance, 

and in 2004, I even authored an amendment which authorized the 

government to monitor cross-border wire transfers. 

My record properly suggests that I would support a sophisticated 

and aggressive program similar to what has been described by the 

media. While many terrorist operatives are increasingly resorting 

to cash couriers to move funds, charities and wealthy donors who 

support terrorists are likely to have used the SWIFT system that 

this program specifically targets. It would be foolish to ignore that. 

Furthermore, this program has the support of several important 

people outside of the Administration who are familiar with the 

workings of the program: people like Chairman Oxley; the co-chairs 

of the 9/11 Commission; and former officials such as Dennis 

Lormel, former head of the FBI’s terror financial units, who said 

that many people in Congress who should have been briefed by this 

Administration were not. 

And while I appreciated the visit last week from Under Secretary 

Levey after the program’s existence was reported in the media, our 

oversight obligations are far from fulfilled. 

I believe that the skepticism the Administration afforded this 

Congress, perhaps properly, regarding the terror finance tracking 

program must be reciprocated. We must ensure that an environment of accountability is provided for everyone in government who 

deals with sensitive financial information. 

In our letter our colleague, Intelligence Chairman Hoekstra, recently sent to President Bush about withholding information from 

Congress, he mentions how he expects it to reinforce an important 

question in the minds of all Members: What else is it that we don’t 

know? What else don’t we know? 

So, in addition to this hearing, I am going to ask Under Secretary Levey to come back here to brief this subcommittee, and to 

answer any questions he cannot answer in public forum today. I 

will also conduct a follow-up hearing on this subject in September 

to allow the private sector witnesses to discuss pros and cons of 

this program. 

Additionally I am asking the GAO to conduct an investigation 

into this 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. This GAO 

investigation is mere due diligence, and it is going to help ensure 

that our trust is not poorly placed in the Treasury Department. 

I want to thank Under Secretary Levey for coming here today. 

I have a deep respect for Under Secretary Levey, and I believe he 

is doing an excellent job at Treasury. We understand that he did 

3

not make many of the decisions about disclosure to Congress and 

that there are many things he cannot discuss in an open setting. 

However, I do look forward to an informative discussion on this 

matter today. 

And with that, I turn to our ranking member, Mr. Frank. 

Mr. FRANK. Thank you, Madam Chairwoman. I am here today in 

the absence of the ranking member of the subcommittee, Mr. 

Gutierrez, who missed his plane; he flies out of Chicago and these 

things will happen. 

I begin by expressing my appreciation for your statement, 

Madam Chairwoman. I think you have laid out what exactly the 

issues are here; namely, the extent to which our fight against terrorism is going to be a genuinely collaborative effort between the 

Executive Branch and Congress. And I think you were right to 

point to the broad support for the program. I don’t know of any 

Member of Congress who thinks we should not be tracking the finances of terrorists. The resolution which I offered, which was 

widely supported by people on my side of the aisle and a few on 

the other side, explicitly affirmed that. 

My problem is that this Administration, by its pattern of rejecting the notion of Congressional collaboration, has made this controversial. That is where the controversies come in. There was not 

a great deal of controversy about the substance. There is wide 

agreement that we should be tracking the financing of terrorists in 

many ways. As the gentlewoman from New York has said, we on 

this committee have been pushing the Administration to do even 

more in that area than it wanted to do. 

The problem is—and it is not an isolated instance. We have seen 

it in area after area. I have come to genuinely believe that the fact 

that the Congress would have been willing to be cooperative is not 

only irrelevant but seen by the Administration as problematic; that 

is, I believe this Administration would rather do things unilaterally, without inviting Congressional collaboration, because the dominant factors in the Administration genuinely believe that increased executive authority, unhindered and unhampered by interference by the Congress, is essential. And we have seen this in a 

number of areas. 

To be honest, I have come to believe that the people in this Administration have a different view of democracy than the one that 

I have. 

But I want to be very clear, this is not a case of my accusing 

them of not being democratic. Those on the left who make those accusations, I think, are wrong. The question is: How do you define 

democracy? I think this Administration prefers the model of having 

the single decisionmaker elected every 4 years and basically entrusting most of the important decisions to that decisionmaker. 

And the willingness of the Congress to cooperate, that the gentleman from New York correctly pointed out, is robust because they 

think, okay, if we let them agree with us on this issue, then they 

will have established the right to disagree with us on another. 

There would not have been any problem with this program, and 

the proof of that is the briefing pattern. Now, we are supposed to 

be briefed on these things. I have a list here of the Members who 

were briefed on this program. 

4

Let me start with a story. On May 11th, I was invited to a briefing. I went to the secret elevator, up to the secret room, and I took 

out my cell phone because, you know, who knew who might be listening in on my cell phone. And two people from, I guess, Treasury, 

that I never even knew, said we are going to tell you about something that is about to be made public. 

The conversation I had, the only time I have heard a comparable 

conversation was between Groucho and Chico. They said to me, 

‘‘We are going to tell you something that is about to be made public.’’ I said, ‘‘Well, is it going to be made public because you want 

it to be?’’ ‘‘No. It is going to be in the newspaper.’’ ‘‘Okay, you are 

telling me this only because it is going to be in the newspaper?’’ 

‘‘Correct.’’ ‘‘Well, I have a question. Since you are only telling me 

this because it is going to be in the newspaper, when it is in the 

newspaper can I then talk about it?’’ ‘‘No.’’ 

So here is the briefing I was offered. I was offered a briefing 

about something only because it was about to be made public anyway. And the purpose of telling me this, I believe, was that so once 

I heard about it first from them, I couldn’t talk about it in the 

newspaper. 

There have been 28 Members of the House briefed on this program. Two were briefed in March of 2002, a few months after it 

started; one in 2003; two in 2005; and 23 on the 11th of May 2006. 

In other words, the briefings were overwhelmingly after the Administration knew that it was being made public. These were briefings after the fact. 

This is the exact opposite. Let me put it this way. When you brief 

us—and by the way as I read this, no member of this committee 

was briefed until the 11th of May when the chairman of the committee and I were invited to the briefing room. And I was never 

briefed, let me say—by the way, I don’t want to get myself in any 

more trouble than I might otherwise be; I declined the briefing. 

When I was told that I was being briefed only because it was going 

to be made public anyway, and the consequence of my being briefed 

would be that I couldn’t discuss the program, I excused myself. 

And I did tell Treasury, and I will repeat myself for Mr. Levey, 

if you ever want to tell me about something that I am not going 

to read in the newspaper, I will be available. But otherwise you can 

trust me to read the papers on my own. I will be okay with that. 

If I miss an issue, I will see if I can call and see if I can have you 

mail me one. But I don’t need you to give me the oral version. 

To some extent, Treasury saw itself in that position. The role 

model was La Guardia reading the comics to the people of New 

York during the newspaper strike. 

As long as the newspapers are available, I will get them myself. 

See, that is the problem; the briefing apparently shows it. You 

briefed very few Members of Congress; only two Members were 

briefed between 2003 and the program being made public. 

Now, here is the problem with that, and I will wind this up, 

Madam Chairwoman. I appreciate your indulgence. 

Yes, of course, we think this program should go forward. And 

why do we want to be briefed and have oversight? And let me summarize it this way. I strongly believe that you and the other law 

enforcement people are the good guys and you are fighting the bad 

5

guys. But you are not the perfect guys. And my problem is that 

your model seems to assume that you are the perfect guys, that 

you won’t make mistakes, that you don’t need to be checked, and 

that you can do this all on your own. And what I want to do is give 

you all the powers you can to fight the terrorists, to fight the bad 

guys; but I don’t think anybody ought to be given enormous power. 

And that is what you are going to be given, because you are going 

to be given an enormous staff and not have checks. And no matter 

how many internal checks you have, I don’t think they will ever be 

enough. 

I think Congressional oversight makes sense. I think the gentlewoman from New York is correct. She and others have a very good 

record in being very supportive of this effort against terrorism, and 

you have rebuffed us. And I think that is a mistake. And, consequently, that is why a program that should not have been terribly controversial has become controversial. 

So I hope with the program the gentlewoman has outlined, we 

will now begin a period of real cooperation, and that in the future 

there will be a voluntary effort on your part to do this. Thank you, 

Madam Chairwoman. 

Chairwoman KELLY. Thank you, Mr. Frank. 

The Chairman of our Committee, Mr. Oxley. 

The CHAIRMAN. Thank you, Madam Chairwoman. And Secretary 

Levey, thank you for appearing today. We are pleased to have you 

here as the obvious reason for this hearing was to discuss the positive aspects of this program and how effective it has been. 

I think that there has been very little argument in the Congress 

of how effective that has been. The issue raised this morning, of 

course, was who was briefed and when and so forth. And frankly, 

I am confident that the Administration did the right thing in very 

selectively informing the Intelligence Committee. We are not the 

Intelligence Committee, in case you haven’t noticed, and the Intelligence Committee did their work very effectively. 

How many people were briefed and when it occurred seems to be 

relatively irrelevant since the program was up and running, and I 

think there was general consensus that it was very effective. And, 

obviously, the fewer people who know about that program, that secret program, the better. The revelations that appeared in the popular media clearly had a negative effect on the effectiveness of that 

program. I am sure you are going to testify to that later. 

I keep coming back back to the warnings or the concerns that 

were expressed, particularly by the co-chairs of the 9/11 Commission, two well respected gentlemen, Governor Kean, and, of course, 

our former colleague, Lee Hamilton. 

Why would those two individuals, well respected, plead with the 

news media—in this case, the New York Times—not to reveal that 

information? It seems to me that goes to the heart of this entire 

issue. And it was, frankly, never answered during the debate on 

the resolution that we had a week or so ago. 

So we keep coming back to that very poignant issue. And by the 

way, they weren’t the only two who were trying to keep that program secret, because obviously the terrorists, once they get that information, change their habits, the New York Times Editorial 

Board to the contrary notwithstanding. It is amazing how much the 

6

editorial board at the New York Times understands about terrorists’ actions and finances. 

But that is for another day. 

It seems to me that, again, the purpose of this hearing is to describe how effective the program has been and the potential and 

real damage the leaks have caused. When this committee debated 

and voted on the terrorist financing part of the PATRIOT Act, it 

was this kind of program that we clearly had in mind. 

If you look at the editorial in the New York Times shortly after 

9/11, they called upon the Administration to do exactly what the 

Administration did. And sometimes I am concerned that maybe the 

effectiveness of the program is what really upsets some folks in the 

media. But we have in this committee, I think, set the framework 

in the terrorist financing provisions and the anti-money-laundering 

provisions in the PATRIOT Act that really allow the Administration to do this effective program that has, I think, been severely 

weakened by the revelations that occurred in the popular press. I 

find that to be very upsetting. 

By the way, this is not the first time that we have had this kind 

of situation where you have had unauthorized leaks from—which 

I think is frankly treason—and it has been reported in the popular 

press, for whatever reason. This is at least the third time that we 

have had that situation occur. And as one of my colleagues said on 

the Floor, nobody is happier about these revelations than those 

who would harm us. I find that incredibly upsetting, and of real 

concern, as chairman of this committee, that we would find ourselves in that position today. I yield back. 

Chairwoman KELLY. Thank you. 

Mr. Moore, do you have an opening statement? 

Mr. MOORE OF KANSAS. Thank you, Madam Chairwoman, and 

thank you, Secretary Levey, for being here today. And I really appreciate the opportunity to have a brief conversation with you and 

hear your testimony. 

I really, really appreciate the statement, the strong opening 

statement made by our Chair, and I really do mean that sincerely. 

I believe what she said, I believe what the Ranking Member said, 

that every Member of Congress wants to protect our country. Nobody wants any more harm to come to our country. That is not the 

issue and that is not the question. When I disagree with somebody 

I try to at least understand why they do what they do so I can 

work with it. 

And I really, truly, believe that had the President and the Administration come to this Congress after September 11th and said, 

look, the whole world has changed. We need to look at the FISA 

law which has been in effect since 1978—and I understand there 

are 17,000 applications and only 6 or 10 or 8 rejections after 

17,000. I was a district attorney for 12 years. I never had that kind 

of a record, the batting average, when I went to get search warrants. And I just think that is an exceptional number. 

And my point by saying that is this: If the President had come 

to Congress to say, ‘‘Look, the whole world has changed, we need 

to change the FISA law, we need to enact some new laws regarding 

wire transfers and bank transactions in other countries,’’ I think 

Congress would have lined up, Republicans and Democrats—this is 

7

not about partisan politics, as the Chairman said—Mr. President, 

we will do anything reasonable you ask. 

And I mean that very sincerely, and that is what I invite and encourage the Administration to do in the future if there is something 

like—in the war on terror, we need to work together. We are all 

Americans and we all want to protect our country. And I say this 

with the greatest respect and sincerity. I hope the Administration 

will come to Congress and say we need to change the laws in the 

area. And if they do that, I really believe—I honest to God believe 

that we will work together with the President to do whatever, anything reasonable to protect our country. 

So I look forward to hearing your testimony today, Mr. Secretary 

Levey, and look forward to asking you some questions, and thank 

you for being here. Thank you, Madam Chairwoman. 

Chairwoman KELLY. I am going to turn to Mr. Paul in 1 minute, 

but because there are a number of people here, and I know that 

the Under Secretary is going to need to leave, I am going to ask 

all members to shorten their opening statements to a 2-minute, 

rather than a 5 minute, with unanimous consent. 

Mr. Paul. 

Dr. PAUL. Thank you, Madam Chairwoman. I know today it is 

not very appropriate to bring up the subject of the Constitution and 

the Fourth Amendment, so I am not going to pursue that. But I 

am always concerned about the legal authority for what our government does. 

The whole issue of whether or not records can be examined without a subpoena issued under probable cause is really questionable. 

And I too, like everybody else, wants to do whatever we can to find 

out what the terrorists are planning to do. 

But I want just take a minute to make the point about the practicality of what we do. 

Quite frankly, I don’t think the terrorists were tipped off to anything. You know, we have been monitoring financial transactions 

for 30 years. And, they know what is going on. As a matter of fact, 

they have been suspicious to the degree that they essentially don’t 

use the system any more. They have gone to this hawallah type of 

system, which is off the books. And therefore, all the effort that we 

put forth may be wasted effort and may be confusing things. 

This assumption that more is better—spend more money, have 

more reports, have more subpoenas—can actually backfire on us. 

And I want to just quote a U.N. report that came out after 9/11. 

As a matter of fact, it came out in May of 2002. And this dealt with 

a $69,000 wire transfer that Mohammed Atta, leader of the hijackers, received from the United Arab Emirates. The report noted that 

this particular transaction was not noted as quickly enough because the report was just one of a very large number and was not 

distinguishable from those related to other financial crimes. 

So therefore, this idea that we just need more financial surveillance is flawed since the Bank Secrecy Act, FinCEN, has been 

around, we have had executive orders, we have the SWIFT program. And to think for a minute that the hijackers aren’t going to 

be very knowledgeable about this—I just think we are kidding ourselves. And this whole idea of more is better, I think, needs to be 

questioned. 

8

I yield back. 

Chairwoman KELLY. Thank you, Mr. Paul. 

Ms. Maloney. 

Mrs. MALONEY. Thank you, Chairwoman Kelly and Ranking 

Member Frank for holding this important hearing. Our oversight 

is legally required under the International Emergency Economic 

Powers Act, the law the Administration is using to support this initiative. But the Administration has kept Congress in the dark. Although Treasury started subpoenaing data from SWIFT in October 

of 2001, only three present Members of this body were informed 

about the program before May 11, 2006. 

Even though this committee has jurisdiction, most of us learned 

about the depth of this program only from the New York Times 

when it published its article on June 23rd of this year. Apparently, 

Congressional notification occurs when the New York Times is delivered to our office. 

The Administration’s intentional failure to consult with Congress 

for 5 years—even though it is clearly required by the law they 

argue supports this program—is part of a very disturbing pattern. 

As the Chairman of the Intelligence Committee, Chairman Hoekstra, noted over the weekend, the Administration needs to be reminded that keeping Congress informed of intelligence programs is 

not optional. It is a legal requirement. 

Congressman Hoekstra’s comments echo those of the Supreme 

Court in reviewing the Guantanamo Bay tribunals. The Administration needs to remember that this is a country where there are 

three branches of Government. 

I would just like to say that when the Times brought this program to our attention, it was condemned by the Administration. 

But these are the same types of charges leveled against the same 

paper that we heard about with the Pentagon Papers. But despite 

the statement of the President and Secretary Snow, no one was exactly surprised that the U.S. Government is monitoring international wire transfers. 

And I have here a list of public statements in papers across this 

country, in Canada, and in Australia, about the SWIFT program 

and our government’s monitoring of it. And I request permission to 

place this in the record, and would note that the interns in my office compiled it in just 2 days and it is quite extensive. So no one 

was surprised. 

I request permission to put my entire statement in the record. 

Chairwoman KELLY. So moved. 

Mrs. MALONEY. And the press clippings. 

Chairwoman KELLY. Thank you. 

Mr. Davis. 

Mr. DAVIS OF KENTUCKY. Thank you, Madam Chairwoman. I 

think we face two issues here. I appreciate your coming here, Mr. 

Secretary. One is the ability to act; and second is the issue of how 

we manage an effective oversight program from a constitutional 

perspective. 

I think it was extremely regrettable and frankly reprehensible 

that the New York Times published this information. I am thoroughly familiar with the hawallah networks myself from my experience and study with the Middle East; however, I think the bigger 

9

aspect is their selectivity in information that they have shared, 

particularly since they called for this type of program in an editorial on September 24, 2001. 

However when we look at this ability to act, I think one of the 

deeper issues is that we need collaboration as opposed to briefing. 

I have been to plenty of briefings during my time in the House that 

were classified, and all of the information was available online or 

in public media sources. I would question the status of the classification. 

But I think what we need at a deeper level, rather than information, is participation and using the expertise in the House to collaborate because we are dealing with adaptive networks. Just as 

terrorists are changing as they find out methods that we have, one 

of the things that I think would be helpful to maintain the constitutional oversight, that it is necessary for the Administration to 

work closely with the subcommittees in Congress, and specifically 

those Members with expertise on these issues and understanding 

perhaps the political dimension in a way that many of the agencies 

may not, to ensure that we can have a robust, flexible, and responsive system and one that can adapt to the continuing changes in 

technology and the way our enemies operate. 

I appreciate your being here today, and I look forward to the discussion. I yield back, Madam Chairwoman. 

Chairwoman KELLY. Thank you. Mr. Cleaver. 

Mr. CLEAVER. Because I respect the seniority system, then I will 

wait until next if it is okay. 

Chairwoman KELLY. Okay, thank you. Mr. Scott. 

Mr. SCOTT. Thank you very much, Chairwoman Kelly. Again I 

want to congratulate this committee under the leadership of Chairwoman Kelly for providing the leadership on a very intense and important issue of terrorist financing. And I am very pleased to have 

served with her on this committee. I have been to every meeting. 

I think it is very important, Secretary Levey, that we understand 

what we are really saying here. What we are saying is that this 

Administration needs to understand that they are not the only ones 

who are concerned about the war on terror. The American people 

elected a Congress, men and women who care about this country, 

who are just as concerned about this fight on terror as the President is. He has no monopoly on that. 

What is of paramount concern to me is that the framers of the 

Constitution put this government together, and they put it together—and the phrase that John Adams used was, ‘‘We put this 

government together in a manner that is a balance of a delicate nature,’’ meaning that there is a separation of power. It is not just 

the Executive Branch. They put the Executive Branch there to execute and administrate. But they put the Congress of the United 

States here so that we might be able to handle the purse strings, 

but, most importantly, to provide the oversight. 

And what it appears to me that this committee—and the President seems to think this committee is not a committee of oversight 

but a committee of hindsight. We are here to tell this Administration that we are not a committee of hindsight. We are going to do 

our job that the American people put us here to do. 

10

Now, it is not the New York Times or the Washington Post or 

the L.A. Times or even the Wall Street Journal or any of our distinguished newspapers that need to be called to task. It is this Administration. The leaks didn’t come from the New York Times. 

They came from people in your Administration. 

The fundamental question has to be: When is this Administration going to look in the mirror? That is where you need to look. 

Let that message go back to this Administration. We care about 

it. Why don’t you have people over there with loyalty? Where is 

your test? Where is your examination for people who work in this 

Administration? What are you doing to seal the leaks? 

The other issue that is of paramount importance, Mr. Levey, is 

the first amendment and the fourth amendment. They are precious. 

Our men and women of many years throughout the history of this 

country died on the battlefield so that we could have that first 

amendment, which is the freedom of the press, so we can have that 

fourth amendment, which protects our privacy. 

It is along those lines that I would like to question you this afternoon. Thank you, Madam Chairwoman. 

Chairwoman KELLY. Thank you, Mr. Scott. 

Mr. Garrett. 

Mr. GARRETT. Thank you, Madam Chairwoman, and I will be 

very brief. First of all, I think I go along with the statements by 

the ranking member that members on both sides have the same 

bottom-line interest to make sure that the job gets done, but within 

a constitutional framework. I will just be listening to your testimony on three quick points. One is the aspect of why it is that—

we can go back to my constituents and tell them why it is that the 

information from programs such as SWIFT is vital to the overall 

program, but does not go to the point that Mr. Paul raised, is just 

providing us with too much information. Secondly, how can I assure them that the average, the majority of Americans, their financial information is not going to be within—or is it—not going to be 

within the information that you look at. And thirdly, to the overall 

issue of information going out to the public, to the question of was 

the information that was reported in all the papers and what have 

you truly unique and new information to the public, or was it actually information as we have heard both here and on the Floor of 

the House, information that was really out there in the general domain prior to this? And if it was information that was out in the 

general domain prior to this, is this something your program looks 

at and should have done something to dissuade them from putting 

it on their Web site, that how they work with their government 

and the general public has this access to information in the past? 

But I appreciate your being here. And thank you, Madam Chairwoman. 

Chairwoman KELLY. Thank you Mr. Garrett. 

Now, Mr. Cleaver. 

Mr. CLEAVER. Thank you, Madam Chairwoman, and Ranking 

Member Frank. Under Secretary Levey, thank you for participating 

in this hearing, and I am looking forward to hearing about the Administration’s efforts to combat terrorism and how you plan to implement communication between this Administration and the Congress as we address this critical issue of fighting terrorism. 

11

Among the critical institutional issues that this topic has helped 

to shed light on is the importance of Congressional oversight with 

respect to fighting terrorism and implementing other Federal programs and activities. 

I am sure that my colleagues and the Administration will agree 

that Congressional oversight is an integral part of our system of 

checks and balances, as fundamental to our Nation as the right to 

vote. And as a Member of Congress, I believe it is incumbent upon 

this body not only to protect the people from terrorists but to also 

ensure that our government respects our Constitution and follows 

the rule of law. 

Again, I look forward to hearing your testimony. 

And I will have some very, very clear questions that I would like 

for you to address. 

Thank you, Madam Chairwoman. 

Chairwoman KELLY. Thank you. 

Mr. McHenry. 

Mr. MCHENRY. Thank you, Madam Chairwoman. I certainly appreciate your holding this important hearing today, and I certainly 

appreciate the Secretary taking the time to be here. 

I think of major importance to this committee and to Congress 

and to the public at large is the question of is the government 

doing enough to protect us from future attacks. And I think that 

is at the heart of what this is all about. 

You have some who just want to put their head in the sand and 

say that we will just duck and cover and avoid the next attack. But 

I think that is a horrible policy. It is a cut-and-run policy. It is an 

ignoring-the-world-as-it-is policy. And I am grateful that this Executive Branch, and you, Mr. Secretary, have taken on this task. 

I mean, after all, you are the Under Secretary for Terrorism and 

Intelligence. What are you supposed to be doing, other than figuring out the financial transactions of the terrorists and harvesting 

that intelligence? 

Now, I certainly appreciate the fact that this was disclosed to the 

Intelligence Committee, as it should be. I understand their special 

place and their special protections in Congress of that information 

so that we can provide necessary insurance that it is not let out 

to the public. 

I do think it is horrible what the New York Times has done to 

this program. But I do commend you, Mr. Secretary, for working 

hard every day. I look forward to your testimony and opportunity 

for you to answer some questions today. 

Thank you, Madam Chairwoman. 

Chairwoman KELLY. Thank you. 

Ms. Moore. 

Ms. MOORE OF WISCONSIN. Well, thank you, Madam Chairwoman and Ranking Member Frank. I want to welcome the Under 

Secretary to this very important hearing. It must be a relief to see 

me speak, because I am the last. I have the least seniority on this 

committee. And so certainly this part of the inquiry will be over 

soon. 

I can tell you that as a new Member of Congress, I was not here 

on 9/11. I was not here for the debate on the PATRIOT Act and 

other things. 

12

But I do—as a citizen, at the time, I do recall the many, many 

discussions and the debates that were held and statements that 

were made by people on both sides of the aisle about how our enemies were jealous of our freedoms, that a victory to the terrorists 

would be that they would be able to undermine our freedoms, undermine our system of democracy which they held in great contempt and disdain. 

Part of the system on our way of life of government that we revere so much is, in fact, this shared power, this Congressional oversight, oversight of the people. And I am wondering as we begin this 

hearing—I do want you to keep this in mind—are we indeed 

capitulating on that very fear by an Administration that is determined that our need to surreptitiously examine financial records is 

more important to capitulate to that fear than it is to include the 

Congress of the United States in their oversight role and to make 

sure that we are not conducting warrantless searches without the 

consent of the people? Are we indeed capitulating to that fear? I 

yield back. 

Chairwoman KELLY. Thank you very much, Ms. Moore. 

Mr. Bachus. 

Mr. BACHUS. I thank the chairwoman. 

Secretary Levey, I almost feel like apologizing to you. There are 

obviously not only many newspapers in this country, but there are 

many Members of Congress who simply will not acknowledge what 

is a fact, and that is, number one, this is a legal program. 

The legal foundation of this program is well established. In fact, 

it has not been questioned by any of the newspapers. The New 

York Times has actually admitted that this program does, in fact, 

have a sound legal basis. 

Number two, the program is necessary. The New York Times, 2 

weeks after 9/11, in an editorial, urged the Administration to start 

such programs as this. 

And the third thing that no one has disputed is that this is a 

very successful program. 

The program is legal, it is necessary, and it is successful. 

The one point of debate has been whether or not this classified 

secret covert operation, whether or not Members of Congress or 

newspapers had the right to print publicly the sources of our information, the methods we were using, and the details of the program. 

And I would hope that Members of this Congress, and newspapers and the media, would realize that decision which the Administration has said comprised this program, that decision was 

not given under our Constitution to either newspapers or Members 

of Congress. And for Members of this Congress, if I had gone out 

and held a press conference and revealed this information, I could 

have been criminally prosecuted. 

And when newspapers reveal classified secret information which 

not only compromises the program but compromises our allies overseas, it is—to me, it is inexcusable and reprehensible. And I am 

sorry that your job of protecting this country is being made more 

difficult by not only Members of this Congress but by the media. 

Chairwoman KELLY. Thank you very much, Mr. Bachus. 

13

We have before us Under Secretary Levey. He is Under Secretary 

for Terrorism and Financial Intelligence of the U.S. Department of 

the Treasury. And, Secretary Levey, I understand that the problem 

here is not the program itself. The problem that this committee has 

is that we have a charge to provide oversight over the legislative 

arena to make sure that there is not anything going on that might 

in some way inherently damage the public of the United States. 

That is what our committee is charged to do. 

Given that, as you know, some people have lamented that public 

disclosure of this program has essentially rendered it defunct, we 

now would like to hear your opening statement, and then we will 

follow that with questions. 

STATEMENT OF STUART LEVEY, UNDER SECRETARY, TERRORISM AND FINANCIAL INTELLIGENCE, U.S. DEPARTMENT 

OF THE TREASURY 

Mr. LEVEY. Thank you, Chairwoman Kelly, Congressman Frank, 

and distinguished members of the committee. This is my fifth time 

appearing before your committee in the past 2 years in what has 

been an ongoing and fruitful discussion of our government’s efforts 

to track and combat terrorist financing. It is clear from everyone’s 

opening statements that we share the same mission, which is to 

succeed in disrupting those terrorists. 

The program we are discussing today, the terrorist financing 

tracking program, has supplied a powerful source of intelligence 

that has greatly advanced that mission to track and disrupt terrorists. 

Counterterrorism officials place a heavy premium on financial intelligence because it is rich and accurate. When terrorist supporters send or receive money, they may provide the kind of concrete leads that can advance a terrorism investigation. 

As 9/11 Commission Chairman Lee Hamilton testified before this 

committee in 2004, ‘‘Following the money to identify terrorist 

operatives and sympathizers provides a particularly powerful tool 

in the fight against terrorist groups. Use of this tool almost always 

remains invisible to the general public, but it is a critical part of 

the overall campaign against al Qaeda.’’ 

The terrorist finance tracking program was until recently just 

such a powerful and invisible tool. It has been a key part of our 

efforts to combat al Qaeda and other terrorist groups and its exposure represents a grave loss. 

SWIFT is the premier messaging service used by banks around 

the world to issue international transfers, which makes its data exceptionally valuable. In response to a subpoena, SWIFT makes 

available to us a subset of its records that it maintains in the ordinary course of business in the United States. SWIFT data consists 

of records of completed financial transactions, largely overseas 

transfers. It does not contain, for the most part, information on ordinary transactions made by individuals in the United States such 

as deposits, withdrawals, ATM transactions, and the like. It does 

not provide access to individual bank account information. 

The program is consistent with privacy laws as well as Treasury’s longstanding commitment to protect sensitive financial data. 

The SWIFT subpoena that we issue is powerful but narrow. We 

14

cannot simply browse through the records that SWIFT turns over. 

We are only able to see that information that is responsive to targeted searches in the context of a specific terrorism investigation. 

The data cannot be searched unless the analyst first articulates 

and enters into a computer the justification that links that target 

of the search to a terrorism investigation. 

I want to emphasize that we cannot search this data for evidence 

of nonterrorist-related crime such as tax evasion, economic espionage, money laundering, or other criminal activity. As a result, we 

have access to only a minute fraction of the data that SWIFT has 

provided. 

Because we agree with Mr. Frank that people aren’t perfect and 

people in government are not perfect either, the program we have 

instituted has multiple overlapping layers of governmental and 

independent controls to ensure that the data is only searched for 

terrorism purposes and that the data is properly handled. SWIFT 

representatives are able to monitor our searches in real time and 

stop any one of them if they have any concerns about the links to 

terrorists. 

In addition, a record is kept of every search that is done and 

those records are reviewed by SWIFT’s representatives and by an 

outside independent auditor. Moreover, Congress was informed of 

this program in the traditional way of such matters through the Intelligence Committee. 

The program has also delivered results. It provides 

counterterrorism analysts with a unique and powerful tool to track 

terrorist networks. To cite one prominent example, the program 

played an important role in the investigation that culminated in 

the capture of Ham-bali who, as you know, is JI’s operation chief 

and masterminded the deadly bombings in Bali in 2002. 

But beyond these headlines cases, the program has proved its 

worth in many quieter but equally significant ways. Anyone who 

has tried to piece together a complex terrorism investigation with 

months of sweat and dead ends knows how important it can be to 

uncover a new connection or a new personal identifier. 

This program generated just such leads on a regular basis. Some 

observers, including some members of this committee, have argued 

that the disclosure of this program did little damage because terrorist facilitators are smart and they already knew to avoid the 

banking system. They note that we were quite open, that we were 

following the money and trying to track financial transactions. 

But let me respond to this issue firsthand. When I was asked to 

oversee this program nearly 2 years ago, I requested that the written output from this program be part of my intelligence briefing 

every single morning. Every day I go into our SCIF and I get my 

intelligence book and behind tab 11 of my book is the output from 

this program. And I can’t remember a single day when my intelligence book hasn’t included concrete leads from this program and 

most often many more than one. 

Now, one can debate the reasons why, but the fact is that financiers and associates of terrorist networks have continued to use 

the banking system. And this program continued to show us who 

they are and how they do so. 

15

In short, the terrorist finance tracking program has been extremely valuable. It is grounded in law and bounded by safeguards. 

It represents exactly what I believe our citizens hope we are doing 

to prosecute the war on terror. 

Finally, much has been said about the newspaper’s decision to 

publish information about this program. As a government official, 

and as mentioned here today, I must point out that the newspapers 

almost certainly would not have known about this program if someone had not violated his or her duty to protect this secret. 

At the same time, I do very much regret the newspaper’s decision 

to publish what they knew. Tracking terrorist money trails is difficult enough, without having our sources and methods revealed. I 

can assure you, however, that our efforts will not wane. We will 

continue to do everything in our power to follow terrorist money 

trails and disrupt their activities. We are absolutely committed to 

this mission, and I know that this committee is, as well. 

I look forward to answering your questions about this program. 

Thank you. 

Chairwoman KELLY. Thank you, Secretary Levey. Without objection, your full opening statement will be made a part of the record. 

[The prepared statement of Secretary Levey can be found on 

page 44 of the appendix.] 

Chairwoman KELLY. I am going back to something I said before, 

which is that there are people who have lamented that public disclosure of this program has essentially rendered it defunct. 9/11 

Commission co-chair Tom Kean said, ‘‘I think it is over.’’ 

I am interested in exploring this suggestion that the program is 

no longer useful. You have testified before Congress that there was 

a lag between what Saudi Arabia said and what Saudi Arabia did 

regarding their efforts to fight terror financing. And you and others 

in government have raised concerns about wealthy individuals and 

charities based in Saudi Arabia. 

Given the nature of the data that passes through the SWIFT system, it seems reasonable to conclude that the tracking program 

may continue to be particularly useful in monitoring the activities 

of charities and wealthy individuals who support terrorism under 

the veil of legitimacy. 

Generally speaking, how, if at all, has this SWIFT program 

helped you assess whether the Saudis and other emerging banking 

centers such as the UAE and Bahrain have lived up to their stated 

commitments to combat terror financing? 

And in talking about this, if you would specifically respond to the 

suggestion that the program has been killed by public disclosure, 

I would appreciate it. And I would appreciate you updating your 

views on how Saudi Arabia and others are cooperating with us in 

our fight against terror financing. Is Treasury investigating the 

link that resulted in the public disclosure, also? So I am asking you 

essentially three questions. 

And I will repeat them. Would you like me to? 

Mr. LEVEY. Sure. 

Chairwoman KELLY. Okay. One is I would like to know how the 

SWIFT program has helped you assess the Saudis and other 

emerging banking centers such as UAE and Bahrain, how that has 

helped you assess whether they have lived up to their commitVerDate 0ct 09 2002 15:26 Jan 30, 2007 Jkt 031534 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\DOCS\31534.TXT HFIN PsN: TERRIE
16

ments in combating terror finance. And in discussing that, I would 

like you to specifically talk about whether or not the program disclosure, the SWIFT program disclosure, has been killed because its 

usefulness is no longer available to us. And the third question I 

would like to ask is if Treasury is investigating the leak that resulted in the public disclosures. 

Mr. LEVEY. I think I have those questions. 

Let me start by the damage from the disclosure. I think, as I indicated in my opening statement, there is no doubt there has been 

damage from this disclosure. As everyone on this committee knows, 

this is a very formidable enemy. They are intelligent. They do what 

they can to cover their tracks. The fact that we have now made explicit the information that we are looking at to track their money 

trails is definitely damaging, just as a matter of logic. 

The question that you pose, though, is whether the program is 

dead or absolutely without value. And to be very honest, I think 

that remains to be seen. 

One of the things that one has to take into account is when you 

talk about terrorist networks, there are lots of aspects to it. And 

I think you have alluded to some of the key points, which is that 

you have some people trying to live in polite society and keep one 

foot in both worlds, one foot in the legitimate world and one foot 

in the world where they are supporting violent jihad. You have 

charities and so forth. It may well be that this program will still 

yield a great deal of value in those sorts of—those sorts of investigations. 

I can tell you, without going into specifics about any individual 

case, for obvious reasons, that one of the ways that this program 

has been quite valuable is in the investigation of charities and particularly their attempts to reconstitute themselves after they have 

been first exposed. So without going into specific detail about how 

it has helped with respect to the countries you named in your question, I can tell you that the program has been quite valuable in 

that respect. 

If I can just touch briefly on the question you asked about the 

leak and investigation of the leak. 

Obviously, I think everyone here knows that the Department 

that handles investigations is the Justice Department and they 

would be responsible for any investigation. All I can say at this 

point is that we have shared information with the Justice Department and are in consultation with them about the appropriate way 

to go forward. 

Chairwoman KELLY. So you are working with Justice to investigate the leak that resulted in the public disclosure; is that correct? 

Mr. LEVEY. We are in consultation with them. The responsibility 

for doing an investigation in this sort of matter would be the Justice Department. 

Chairwoman KELLY. I would like for you to describe the thought 

process behind the plan notifying Congress. When you—this was 

brought out by Mr. Frank. Correct me if I’m wrong, but it looks to 

me like the Administration sought to brief chairs and ranking 

members of the Intelligence Committees on this program prior to 

their decision to preempt—only prior to preempt the New York 

17

Times, Wall Street Journal, and L.A. Times. My colleague testified 

he was told that he was only briefed because it was going to appear 

in the newspapers. 

I would like to know if at any point there were changes made to 

the program in response to feedback from the people in Congress 

that you did notify? And I would further like to know, what kind 

of—I would like to hear an explanation for the limited scope of 

briefing Congress. The authorities that the Administration, you, 

cite in your testimony for the program are the International Economic Powers Act, the United Nations Participation Act, and Executive Order 13224. The International Economic Powers Act is the 

primary jurisdiction of this committee along with the International 

Relations Committee. 

The International Relations Committee has jurisdiction also over 

the U.N. Participation Act. The executive order cited focuses on 

Treasury Department powers but also references both Justice and 

State Departments. 

So why did the Administration choose to brief none of the committees that have been put in charge of overseeing the government 

functions that you talk about giving you authority? Why did they 

brief others and not the committees of jurisdiction? 

Mr. LEVEY. Well, thank you for that question. I look forward to 

responding to it. I know it is a concern of yours and many others. 

I should say at the outset that I very much value the partnership 

we have with this committee. This has been an excellent relationship. We have done many good things together and I hope we will 

continue to do so. As I said in my opening statement, Congress was 

informed of this program in exactly the way that Mr. Frank indicated in his opening statement, through the chairman and ranking 

member of the Intelligence Committees. 

The members were briefed as consistent with my understanding 

of the National Security Act and the customs and practices that 

have been agreed upon over time by both the Executive and Legislative Branches in working on intelligence matters. 

As you indicate in your opening statement, these were decisions 

that were made in 2002, and so I can’t tell you the thinking that 

went behind them because I was not there at the time. 

I can tell you that when I did arrive at the Treasury Department 

in 2004, and I was given responsibility for this program, I took a 

look at that and it seemed at that time even more appropriate because the office that I had been just confirmed to be the head of 

is a hybrid office. It is one where we have a policy function as well 

as an Assistant Secretary for Intelligence and an Intelligence Office. 

My Assistant Secretary for Intelligence is naturally a part of the 

Intelligence Community. She reports not just to me but to the DNI. 

Her confirmation—I know that is a Senate issue—but her confirmation went through the Intelligence Committee and not 

through Senate Banking or Senate Finance. And we have a hybrid 

office and she is the person with day-to-day responsibility for this 

program. It seemed appropriate to me that the Intelligence Committee would be the committee that would have the primary responsibility for oversight of what is essentially an intelligence-gathering tool. 

18

And that is why the decision was made, I believe, as it was, and 

continued until May of 2006. 

Chairwoman KELLY. Mr. Secretary, I would call to your attention 

the International Economic Powers Act, section 1703, which requires full Congressional notification and on a continuing basis. 

That is full Congressional notification. I would also note that your 

testimony comments about the fact that you have hired an outside 

independent auditor for oversight. That is the province of this committee. 

We turn now to Mr. Frank. 

Mr. FRANK. Thank you. First—and I think there is a genuine interest in trying to find out how we control leaks. I would say I 

know my friend from Alabama referred to Congressional, as well 

as newspaper, divulging of information. I am not aware of any 

Member of Congress who divulged anything, including those who 

were briefed. 

Obviously the question about how much damage was done is a 

very important one; we don’t want to see damage done. But here 

is my problem. You quoted Mr. Hamilton in your statement. Mr. 

Hamilton said a long time before this leak: ‘‘Following the money 

to identify terrorist operatives and sympathizers provides a particularly powerful tool in the fight against terrorist groups. Use of 

this tool almost always remains invisible to the general public but 

it is a critical part of the overall campaign.’’ 

Didn’t that make it visible? I mean, when Lee Hamilton said 

that, he said here is a tool that is invisible, was Lee Hamilton irresponsibly leaking when he said that this is an invisible tool and it 

made it visible? 

Mr. LEVEY. Actually, I think what Chairman Hamilton was doing 

was something very different, and I don’t think that he caused 

damage to this program or any other. I think what Chairman Hamilton was doing was saying that following the money is an important— 

Mr. FRANK. Okay, but here is the key question. No, Mr. Levey, 

here is the problem. We announced to the al Qaeda and others—

it says it is a critical part of the campaign against al Qaeda, following the money. 

Did they not infer from that that we would be looking at their 

bank accounts? I mean, did they think we were sneaking into the 

caves at night and going through their pockets? I mean, I really 

have trouble understanding. 

By the way, I also have seen this referenced in December of 

2002, a U.N. Communication, public, that said, talking about 

SWIFT, the United States has begun to apply new monitoring techniques to spot and verify suspicious transactions. Was this not 

known to them, that we were carefully tracking financial records? 

Mr. LEVEY. I think we can’t speculate about what the terrorists 

knew. What I can tell you, as I said in my opening statement, is 

that I look at this every day and it still is providing concrete leads. 

Mr. FRANK. Today? It still is? 

Mr. LEVEY. Yes. 

Mr. FRANK. So it is still working, even after the leak? You just 

said that, Mr. Levey. 

Mr. LEVEY. Yes, it is. 

19

Mr. FRANK. Okay. Good. 

Mr. LEVEY. But the leak hasn’t had any effect on the program 

yet, because the data we are looking at predates the leak. 

I would like to answer your question, if I could, about this U.N. 

report and other disclosures that were made. What was done very 

commonly was we would discuss that we are following the money. 

But that leaves people in some doubt as to what exactly we are 

able to look at. Once the SWIFT program is disclosed, it is my fear 

that they will now know exactly what it is. 

Mr. FRANK. Excuse me, but the U.N. reference here refers specifically to the SWIFT program. It says settlement is handled 

through correspondent banking relationships, such as the SWIFT, 

Fedwire, and TIPS. The United States has begun to apply new 

monitoring techniques to spot and verify transactions. It mentions 

SWIFT in that reference. 

Mr. LEVEY. I have read the U.N. report. I have to admit, I read 

it after this week, because I probably, like everybody else, didn’t 

see that U.N. report until after it was brought to our attention. But 

I can tell you that U.N. report does not describe this program. 

Mr. FRANK. It does say we are tracking things, and it mentions 

SWIFT. 

Mr. LEVEY. But there is a significant difference, Mr. Frank. The 

difference is that U.N. report talks about then monitoring and looking for suspicious transactions. I think it is important for people to 

understand that is not what we are doing in this program. We are 

not looking for suspicious transactions. We are doing targeted 

searches on individuals. 

Mr. FRANK. I would say this. Look, I want this program to work. 

My sense is that people do these things even though they are generally aware they are being tracked. People get wiretapped, and everybody knows about wiretapping. That doesn’t keep people from 

saying things we can wiretap. 

Mr. LEVEY. I hope we are right. 

Mr. FRANK. I am going to ask for a classified briefing in a few 

months as to whether or not there is damage. This is a serious 

question. I have to correct myself. I said I was offered a briefing 

on the 11th of May. It was the 25th of May. 

If it wasn’t important to brief me before it was going to become 

public, why did you decide after it became public to brief me? What 

was the point of that? 

Mr. LEVEY. Well, the point of that was that, when we realized 

that there would be a very likely disclosure, there was discussion 

within the Administration about briefing certain chairmen and 

ranking members of committees so—as a courtesy to them so they 

wouldn’t read about it. 

Mr. FRANK. As a courtesy to me. The courtesy is that this program has been going on for four-and-a-half years; I have been the 

ranking member for a couple of years; Mr. Oxley is the chairman; 

and we don’t know about it. Did I miss something in Miss Manners? What is courteous? To say that I am going to tell you a secret 

because everybody is going to know it in an hour, and the question 

is I couldn’t talk about it as much. If I was due the courtesy after 

you knew it was coming out, why not before? It is not a matter of 

courtesy. 

20

I want to go back to what the chairwoman said. We wanted to 

help you make this thing work. I think we can. We can look at this 

and say this is a good idea, but how about this or that element of 

privacy? 

We work with the financial services community. This committee 

has, on several occasions, recommended changes. We haven’t always agreed. We passed in our regulatory relief bill a loosening of 

some of the requirements because we thought we could make the 

system less inefficient and less burdensome without any damage. 

Not everybody agreed, but we did it. The Senate rejected that. 

That is the kind of give and take that, I think, improves the program. You talk about briefing. Let me just say again, yes, the chair 

and ranking member of the Intelligence Committee were briefed on 

the 7th of March of 2002, just after the program started. There was 

virtually no briefing until—only three other members were briefed: 

the chairman of the Intelligence Committee, and you apparently 

tried to brief the ranking member—she wasn’t available it says—

and the chairman of the Appropriations Subcommittee. So between 

2002 and 2006, when you knew it was going to be made public, 

there were three briefings. That is not nearly an adequate effort for 

us to work together on this. 

This program is not in controversy. The unilateralism with which 

you proceed is, and that is what makes something controversial. 

Chairwoman KELLY. Thank you. 

Mr. Oxley. 

The CHAIRMAN. Thank you, Madam Chairwoman. 

Mr. Levey, are you satisfied that the proper requirements were 

met in terms of briefing the Intelligence Committee? 

Mr. LEVEY. As I understand this process, I think the proper requirements were met, that you brief the chairman and ranking 

member of the Intelligence Committees, which is what we did. 

The CHAIRMAN. And the program at the time was up and running and you didn’t feel it necessary to brief the Intelligence Committee every couple of weeks or that the program was operating, 

they were briefed on it, they knew how the program was operating? 

Mr. LEVEY. That is correct. 

The CHAIRMAN. And my briefing with the committee, with the 

ranking member and the chairman, was informative. I didn’t feel 

upset that I had not been briefed beforehand. After all, I am not 

on the Intelligence Committee. This is the Financial Services Committee. The obligations the Administration had to brief the members of the Intelligence Committee, the chairman and the ranking 

member were met under the law, and at least this chairman is perfectly satisfied with the way that was handled. 

All right. As you know, Congress had mandated a FinCEN exploration of a system to review all cross-border financial transactions. 

I believe it was in the PATRIOT Act. Could you tell us the status 

of that? 

Mr. LEVEY. Yes, Mr. Chairman, I would be happy to. 

Let me first do that by distinguishing what that program of 

cross-border wire project—how it differs from the SWIFT program. 

I think it is important. 

The cross-border wire study that we are doing a feasibility study 

on now, that project is both narrower in a sense, because it only 

21

deals with U.S.-to-abroad and abroad-to-U.S. transactions, whereas 

the SWIFT program is worldwide, but it is also much broader as 

well, because it deals with all cross-border transactions, whether 

handled by SWIFT or not. We can use that information for terrorism, money laundering, all sorts of law enforcement purposes; 

and we can do all kinds of things that people traditionally think 

about when they think about data mining in terms of looking at 

trend analysis, suspicious activity, and the like. 

We are currently doing a feasibility study on that broader project 

that you have asked us to take a look at. We have gotten some 

comments from the private sector as well as from the regulators 

which we are currently considering. 

I can tell the committee that one thing we are considering is 

whether we should try to do this as a pilot project to see if we can 

set up the system right and get value for it before we proceed with 

the larger project. 

The CHAIRMAN. And once that is completed, then will that be reported back to this committee and to the Congress? 

Mr. LEVEY. Yes. I think we have to do a feasibility study; and, 

of course, we have to brief this to our new Secretary who will be 

the decisionmaker about how he recommends that we go forward. 

The CHAIRMAN. Let me ask you about the Terrorist Finance 

Tracking Program and use of SWIFT data. What key protections 

were part of that program that could guarantee fourth amendment 

protections? 

Mr. LEVEY. Well, as you know, Mr. Chairman, the fourth amendment, the Supreme Court case of the United States v. Miller, that 

there is no fourth amendment right to privacy in the types of 

records we are talking about here. But we take very seriously the 

sensitivity of financial data, so we did put in place very serious protocols and controls. They include making sure that the data is in 

a very secure place, the most secure place, the most secure environment, that the people who have access to it are only those with the 

appropriate clearances, and that they can only use this data to do 

terrorism searches. 

As I indicated at the outset, actually, I sat down with one of our 

analysts yesterday and watched how this worked. If—you type in 

the target of the search, and then the next required field is the justification, the connection to terrorism, and if you don’t fill that in, 

you can’t search the data. 

It is that justification field that is monitored both by the SWIFT 

people onsite and an outside auditor after the fact to ensure that 

any improper searches are identified. 

The CHAIRMAN. As I understand it, one of the arguments that 

the New York Times used after the story broke to rationalize this 

was, well, everybody knew about this program. It was out there in 

the general media, and people knew that that SWIFT program was 

up there and operating. 

If that were true, why was it a kind of a ‘‘man bites dog’’ story 

above the fold in the New York Times? 

Mr. LEVEY. I think that is an excellent question, Mr. Chairman. 

I can’t speak for the New York Times. They clearly thought it was 

front-page, above-the-fold news. 

22

I think, as I tried to explain to Mr. Frank, the answer here is 

it is one thing to say that you are following the money, and people 

think, okay, maybe they are getting suspicious activity reports and 

whatnot. It is quite another thing to tell people exactly what you 

are looking at and how. 

I think—I won’t speak for the members of this committee, but 

the people that I have talked to, very, very few of them knew what 

SWIFT was at all before June 23rd, let alone exactly how it 

worked. Unfortunately, that informational advantage that we had 

over our adversary is gone. 

The CHAIRMAN. Precisely, the operational details of how this program worked. Mr. Frank made the analogy to wiretaps. I used to 

do this for a living. Not for a moment did I think that the people 

I was wiretapping, organized crime, knew that I was wiretapping 

them. It would be pretty evident from the discussions on there that 

they would have never said that had they known I was listening 

in on the proceedings. 

So it seems to me that this program, which has proven to be 

very, very effective, and the revelations, that really kneecaps our 

operational actions here, and the success of that program is deeply 

disturbing. 

To the extent you can tell us, who implored the New York Times 

to not run this story? 

Mr. LEVEY. I had a series of meetings with the reporters and 

with the editors of the New York Times and implored them, as persuasive as I could be—apparently not persuasive enough—that 

they shouldn’t run the story. In addition, Secretary Snow had a 

separate meeting with Mr. Keller to make the same points. 

We tried—the position I took with them—and everyone knows 

what the outcome was—was that this program was legal, that it 

was properly controlled and it was valuable and, therefore, the real 

newsworthiness of this story would just be the tipping off of our adversaries as to what we were doing. I didn’t think it was something 

that they should do. They obviously differed with me on that and 

published it. 

The CHAIRMAN. What role did Governor Kean and former Congressman Hamilton play as well? 

Mr. LEVEY. As I understand it, Chairman Hamilton both met 

with the New York Times and urged them not to publish the story 

and Governor Kean made the same request, as I understand it, 

over the telephone; and they made their argument that this story—

that they knew about the program, that they thought the program 

was well run, and that publishing it would not—would be harmful 

to our overall effort in combating terrorism. But, apparently, their 

suggestions were not heeded as well. 

The CHAIRMAN. To your knowledge, did any sitting Members of 

Congress implore the New York Times to withhold the story? 

Mr. LEVEY. It is my understanding—though I am not 100 percent 

sure about this—that Congressman Murtha did, but I don’t know. 

All I know is that he told us that he was going to, but I don’t know 

whether he did. 

The CHAIRMAN. I am sorry, what was the last part? 

Mr. LEVEY. He told us he was going to, but I don’t know whether 

he did. 

23

The CHAIRMAN. You had some conversations with Congressman 

Murtha? 

Mr. LEVEY. Yes, we did. 

The CHAIRMAN. The stories I read at least indicated that he followed up on that? 

Mr. LEVEY. Yes, but I can’t say for sure. 

The CHAIRMAN. So here you had a current Congressman, well-respected on these issues, a former chairman, well-respected on these 

issues, and a former chairman, of course, of the 9/11 Commission, 

both Democrats, along with Governor Kean, former Governor of 

New Jersey, Republican Governor, along with the Secretary of the 

Treasury, and I am assuming some other folks, perhaps higher up 

in the Administration, imploring the New York Times that this 

would do serious damage to our ability to track terrorist financing 

and to better protect the American people, and the New York 

Times basically said, as their famous headline said about Gerry 

Ford, drop dead. 

I yield back. 

Chairwoman KELLY. Thank you, Mr. Chairman. 

Mr. Moore. 

Mr. MOORE OF KANSAS. Thank you, Madam Chairwoman. 

Chairman Oxley said, ‘‘I used to do this for a living,’’ talking 

about gathering information subject to wiretaps and others. I did 

as well as a district attorney. But I have tremendous respect for 

our system and the fact that we have an Executive Branch, a Legislative Branch and a Judicial Branch, all of which have co-equal 

power, meaning that they all have the same power. 

In our system there is oversight by the Executive Branch, and 

that is the FBI, the district attorney or the local police department, 

but the Judicial Branch, especially when gathering sensitive, private information. Is our system here sufficient, do you believe, to 

protect the privacy of individuals, number one? 

Number two, what Members of Congress—you mentioned the Intelligence Committee chairman and ranking member are advised or 

briefed. Anybody else? 

Mr. LEVEY. I think that the system we have in place does provide 

appropriate oversight. 

Mr. MOORE OF KANSAS. By whom? 

Mr. LEVEY. Both by Congress, through the Intelligence Committee, the controls we have in place that I have described in my 

testimony, but also you mentioned the type of process that we use 

to gather the information. 

We issued an administrative subpoena in this case. The key fact 

that I think is important to point out here is that the recipient of 

this subpoena, SWIFT, had every right to challenge that subpoena 

in court. They could go to district court and challenge the subpoena 

on any ground they wished. They had, and continue to have, the 

most excellent outside counsel that one could obtain, and they 

knew all of their rights. They could have gone to court. 

This is not a situation that I know has been debated in other 

contexts where the recipient of the compulsion order from the government is not able to—or doesn’t feel able to challenge the compulsion in court. This is a situation where they not only were able 

to as a matter of law, but were fully aware that they were able to. 

24

Mr. MOORE OF KANSAS. Were other Members of Congress, aside 

from the chairman and ranking member of the Intelligence Committee, briefed? 

Mr. LEVEY. I believe Mr. Frank has the list of briefings and has 

better information than me. We can get back to you. 

Mr. MOORE OF KANSAS. My question is, initially, were other than 

those two people briefed, other Members? 

Mr. LEVEY. Of Congress? 

Mr. MOORE OF KANSAS. Yes. 

Mr. LEVEY. There would be, both in the House and the Senate, 

the chairman and ranking member. 

Mr. MOORE OF KANSAS. So four Members of Congress, the House 

and the Senate, were briefed. 

Mr. LEVEY. It is my understanding, yes. 

Mr. MOORE OF KANSAS. How often did that briefing take place, 

besides the initial briefing? 

Mr. LEVEY. We gave them the briefing. I wasn’t there at the 

time, and I don’t know if there were follow-up discussions or not. 

Mr. MOORE OF KANSAS. I would like you to find that out, if you 

would, please, and provide that information to the committee, if 

there were follow-up briefings after the initial briefings of the 

House and Senate committee. Would you do that, sir? 

Mr. LEVEY. I will look into that. 

Mr. MOORE OF KANSAS. Not responsive, your honor. Will you do 

that, sir? 

Mr. LEVEY. I will look into that. I don’t know if I have that information. 

Mr. MOORE OF KANSAS. If you do, will you please provide that 

or tell us why you can’t provide it? 

Mr. LEVEY. Yes, absolutely. 

Mr. MOORE OF KANSAS. Thank you. 

With disclosure—well, with disclosure of the eavesdropping program that has happened in the past few months here, with disclosure of this program, a lot of Americans are wondering if there are 

other programs that this government is operating right now that 

even we, Members of Congress, don’t know about. And I guess 

again I would ask you—as I said in my opening statement, I would 

really appreciate and invite the Administration to bring Congress 

in and tell us in classified briefings, if necessary, if you think it is 

necessary, and I would certainly respect that as a former prosecutors, but tell us, make us part of this whole thing, so we can protect our country as well and not feel like we are being kept out of 

the process. That is what it feels like, I think, to a lot of Members 

of Congress; and that is why you are getting this kind of questioning right now from some people. 

I would absolutely respect any request for a confidential briefing, 

a classified briefing. I think it is important that there really be 

oversight here so the three branches of government and our system 

of checks and balances can operate to protect the people in our 

country. 

Thank you, sir. 

Chairwoman KELLY. Mr. Moore, two things arose in your questioning. One, you asked about oversight, and the Secretary said 

25

they have oversight. The oversight, however, is an outside auditor 

that has nothing to do with government. 

Mr. MOORE OF KANSAS. Very good point. 

Chairwoman KELLY. I have asked for a classified briefing. We 

have formally asked for a classified briefing to follow this. So we 

will be having that. 

Mr. MOORE OF KANSAS. I thank the Chair. 

Chairwoman KELLY. Thank you very much. 

Mr. Bachus apparently has to leave, so we will go next to Mr. 

Bachus. 

Mr. BACHUS. Thank you. I have to go to the Floor on the Internet 

gambling bill. 

Mr. Secretary, I think most members of this committee and the 

Congress are aware the Espionage Act of 1917 basically makes it 

a criminal act to, ‘‘communicate, deliver or transmit information to 

any person not entitled to receive it.’’ They are talking about, there, 

information related to national defense. 

Now that Act allows the Executive Branch to classify information. This information was classified information. So it fit into that 

category, and it makes it a criminal act to communicate that information, to deliver it or to transmit it. 

Having said that, the case law—the Supreme Court has made an 

exception, and it has said, if specific information has been published or released by the government that it is not a criminal act. 

It is my understanding that the New York Times and some members of this committee have said that this information was already 

published. Would you one more time go over whether or not—it is 

not the existence of something. We know we have spies, for example, in Russia. But if we reveal the names of those spies, that 

would be a different thing. 

Would you go over with this committee one more time whether 

or not the methods of this program, the details, had been revealed? 

Mr. LEVEY. I would be happy to. I think you make a good point. 

I think Mrs. Maloney pointed out that there are lots of statements made in the public about following the money. Even the 

word SWIFT, I gather if you do a Google search, you can find 

SWIFT someplace, and people have found that. 

But what wasn’t revealed before these articles was how we are 

doing this, we are subpoenaing the information from SWIFT. There 

were other aspects of the New York Times story that talked about 

the interagency collaboration in exploiting the data that was classified and remains classified. It is that sort of operational detail that 

both was classified and remains classified, but also which I find so 

disappointing, because, as I said, my interest here is not in anything other than getting after the terrorists. I was very disappointed to see the story because it makes my job, that I think 

we are doing all together here, much, much more difficult. 

Mr. BACHUS. I read the case last night, United States v. Morrison, which says that the determination of whether something 

should be published or not or given to the public is up to the Executive Branch of the Government, and at no time did you all make 

a determination to publish this information, as I understand it. In 

fact, you made the determination not to. 

26

Mr. LEVEY. As I said, Congressman, we did everything we could 

to try to persuade the New York Times not to publish this story. 

I had several meetings with them. I answered a lot of their questions. I was authorized to give them information in order to persuade them of the controls that we had in place and so forth. I 

spent some time correcting some misimpressions they had made in 

the course of their reporting. I did everything I possibly could to 

try to talk them out of it. 

In fact, when they notified us they were going to publish the 

story, I was in Italy on my way to go to Poland to give a speech 

with Under Secretary Joseph on the Proliferation Security Initiative. I had to cancel that appearance in Poland in order to come 

back and have one more meeting with the folks from the New York 

Times. I very much regret not being able to follow through on my 

commitment to Under Secretary Joseph on proliferation of finance, 

which I know is another concern of this committee, but I felt like 

it was important to do everything I possibly could in this regard. 

Mr. BACHUS. Did they give you any reason for why they were 

going to publish it? 

Mr. LEVEY. I think the way I can answer that is Mr. Keller 

seems to be quite able to speak for himself and has a forum to do 

so. I will let them speak for themselves. 

Mr. BACHUS. I have no further questions. 

Chairwoman KELLY. Thank you. 

Mrs. Maloney. 

Mrs. MALONEY. Thank you. 

Mr. Levey, the Administration strongly objected to the publication, as you said over and over, of the Times story, but the fact that 

the United States was monitoring wire transfers both in this country and abroad was very well known, it was the topic of multiple 

newspaper articles and testimony, both here in Congress and other 

places. It was widely reported that Canada had a SWIFT tracking 

system, as did Australia. Even TV fiction picked up on it, as one 

of my interns found the issue was a central part of a West Wing 

episode on May 15, 2002, literally 4 years ago, cross-border wire 

transfers. I could go into the whole plot of how they found it, but 

they were tracking it through the central data system. It was very 

similar to what is happening. This was West Wing, popular TV. 

There was a book that came out by a Wall Street reporter several 

days before this Times report, the One Percent Doctrine, where he 

goes into the whole deal and how it happened. He goes on to say 

that the terrorists had wised up. They were no longer using wire 

transfers. 

So, really, my basic question is, is it your position—and I have 

to say you said there was never a detailed description. But in the 

Security Industry News of May 2005, there was a detailed description of the SWIFT program. He says, ‘‘We are not simply running 

a watchlist against the data. The SWIFT messages can be parsed, 

they do contain fields, they can be formatted in a way that helps 

us to analyze’’—and it goes on for pages about how the SWIFT program operates. 

So where was the hue and cry against the Security Industry 

News when they published a detailed description well over a year 

27

before, in addition to the many descriptions that I put into the 

record? 

So is it your position that a significant number of terrorists 

would not have been aware of this monitoring after all this coverage but suddenly woke up and were threatened by it after they 

read the New York Times, after it had been in the Australian 

news, the Canadian news, the Security News, even West Wing stories, well over 4 years ago? 

Mr. LEVEY. Absolutely, and I know that for a fact because I go 

into the SCIF every morning and I read my intelligence book and 

I see exactly what transactions are still occurring that were captured by this program which came up in response to our targeted 

searches. That is exactly what value the program had, and I think 

that value has been compromised by this revelation and the discussion that followed it. 

I don’t think that any of the things that you referred to revealed 

this program, as I explained to the prior questioner, did not explain 

exactly how we were doing this, what we were subpoenaing from 

SWIFT, that we, the United States Government, had access to that 

information. None of the things that you referred to revealed that. 

Even if they had, the front-page discussion of it and the ensuing 

media description of it made it much more apparent to the terrorists. 

I know for a fact— 

Mrs. MALONEY. Maybe the terrorists don’t watch West Wing. 

I have another question. You testified, Mr. Levey, that you obtained large blocks of data from SWIFT and put these in a U.S. 

Government database. You testified that you only searched this 

data under specific rules. But those rules are written by you, 

known only by you, and enforced by you and not by any other 

branch of government. There is absolutely no review. 

Apart from the condition that SWIFT apparently—conditions 

that they negotiated with you, there is no check on your discretion 

at all. In fact, we learned that at least one instance of abuse occurred, but we do not know when it happened or what it was. 

So my question is, one, are you willing to provide this committee 

with the subpoenas you served on SWIFT; two, are you willing to 

provide us with the protocols or rules you used to search the data; 

and, three, are you willing to give us details about any inappropriate searches to date? We know of one, because that was reported 

in the paper again, but this information would be very helpful to 

oversight. 

Mr. LEVEY. Well, as Chairwoman Kelly said at the outset, she 

has requested a classified briefing. Those are requests that we will 

take back and try to provide as much information as we can in the 

classified setting, because I think the proper forum for discussing 

issues like that would be in that setting. We will try to arrange 

that. 

Mrs. MALONEY. Thank you very much. My time is up. 

I look forward to the classified briefing. If I may, Madam Chairwoman, put in writing specific questions we would like followed in 

that meeting. 

Chairwoman KELLY. Under Secretary Levey has to leave at noon, 

so, without objection, all members’ written questions will be able 

28

to be submitted. I will be holding the hearing open for 30 days for 

questions and responses. 

With that, we now turn to Mr. Paul. 

Mr. PAUL. Thank you, Madam Chairwoman. 

Could you tell me, Mr. Secretary, how many subpoenas have 

been issued under the SWIFT program? 

Mr. LEVEY. Mr. Paul, if I could, I would take that question—first 

of all, I don’t know the exact number off the top of my head. Even 

if I did, I would rather provide it in the other setting, if I could. 

Mr. PAUL. How many criminal prosecutions have there been? 

Mr. LEVEY. Getting into the operation details, again, and detailed output of the program would not be appropriate for this setting. 

Mr. PAUL. In many ways, this whole idea of oversight doesn’t 

amount to a whole lot, because that would be the essence of oversight. 

My contention in my opening remarks, in a practical sense, they 

have an alternative. They go to this transfer of money through 

hawallahs. Isn’t this a possibility that they could do that and isn’t 

it quite possible that they did know about our surveillance since it 

has been around for a long time? If you could answer that. 

And also answer the question I raised about the information 

being very adequate before 9/11 with that currency suspicious 

transaction report that told us that Mohammed Atta had actually 

transferred money. So it isn’t the lack of information that is the 

problem. Just additional subpoenas and information, how is that 

going to solve our problem? 

Mr. LEVEY. Those are good questions, Mr. Paul. Let me take the 

first one first, which is, is it possible that they knew about this? 

I think this is the exchange I had with Mrs. Maloney. 

I have testified that there is a trend that the terrorists have 

moved towards cash couriers and hawallahs. I think that is part 

of what Mrs. Maloney was referring to. I have been very open to 

that. But a trend doesn’t mean 100 percent. 

Yes, some terrorists have moved to cash couriers and hawallahs. 

But what I was very adamant with her, and what I will say to you 

as well, is I know for a fact that some terrorist facilitators and 

some parts of these terrorist networks were still using this traditional banking system and we were capturing that information by 

targeted searches through this SWIFT data and it was yielding 

value up until the time of this disclosure. That is just a fact. 

I don’t know for sure why. We can speculate why. But that is the 

fact. I do know that. That is what I think is lost. 

This question that you asked, and I think it is an important 

point you are making, are we just getting more data and just collecting as much as we can? I think our record on this program is 

really quite good, because what we have done over the course of 

time is look at the data that we are getting from SWIFT in response to our subpoena. What we do is we search the data and we 

see where the value is in that data; and what we have done is 

stopped collecting from them, stopped getting from them, the parts 

of the data that are not yielding value. 

In addition to that—this really goes to the points you are getting 

at—we have deleted the data going back historically that wasn’t 

29

valuable to a terrorism investigation. That is a very strong indication of our good faith, that we are only using this for terrorism purposes. That is our only intention in getting the data, and that is 

the only use we are trying to put it to. 

Mr. PAUL. I yield back. 

Chairwoman KELLY. Thank you, Mr. Paul. 

We have been called for a vote, but I think we have time to fit 

Mr. Davis in. 

Mr. DAVIS OF ALABAMA. Thank you, Madam Chairwoman. 

Have you read the One Percent Doctrine by Ron Suskind? 

Mr. LEVEY. No, sir, I have not. 

Mr. DAVIS OF ALABAMA. Among other things, there is a reference 

in the One Percent Doctrine to human intel that the United States 

obtains from al Qaeda. There is a description of a particular operative. There are references to specific conversations that the informant had with al Qaeda leadership. There is a reference in the book 

to locations of those conversations. There is a reference to the exact 

nature of those conversations. That is information that it would 

seem to a reasonable listener would provide some information 

about who the operative was. 

There is also a description in the One Percent Doctrine of a particular device called I think a muftaker which could possibly be 

used to release or discharge chemical weapons. There is a detailed 

description of how big it is, how wide, its dimensions, what it looks 

like, a comparison of things it looks like. Obviously, a reasonable 

al Qaeda operative reading that book could decide to make a 

change in tactics and come up with a new device of which we have 

no knowledge. 

Tell me why the Administration is not as outraged by the One 

Percent Doctrine as it is with the New York Times? 

Mr. LEVEY. Um—as I said, I haven’t read that book. 

Mr. DAVIS OF ALABAMA. ‘‘Um’’ is not a good answer. 

Mr. LEVEY. Oh, I am sorry. My answer wasn’t satisfactory? Give 

me another chance, okay? 

I think that we are concerned about that book and the types of 

revelations that are made in that book. 

Mr. DAVIS OF ALABAMA. Has there been any Congressional resolution introduced, to your knowledge, regarding that book, Mr. 

Levey? 

Mr. LEVEY. I have no idea. You would be in a better position. 

Mr. DAVIS OF ALABAMA. Madam Chairwoman, can I inquire of 

the Chair if the Chair knows of any resolution relating to the One 

Percent Doctrine? 

Chairwoman KELLY. Not that I know of. 

Mr. DAVIS OF ALABAMA. Go ahead, Mr. Levey. 

Mr. LEVEY. I think I have answered your question, that I don’t 

know whether there has been a resolution. 

Mr. DAVIS OF ALABAMA. Do you agree, Mr. Levey, that the information contained in the One Percent Doctrine could cost us an 

operational advantage against al Qaeda? 

Mr. LEVEY. I can’t comment on the specific parts of the book that 

you have referenced, although I have read the muftaker part but 

not the others. From your description—and I would assume your 

30

description is accurate—I would agree that those are not the kinds 

of things we would want to see published. 

Mr. DAVIS OF ALABAMA. So, therefore—and I am not going to use 

up my time so that other members can question—but my point, Mr. 

Levey, I think is fairly straightforward. This is the concern that 

some of us have. You are not terribly animated about the One Percent Doctrine because, frankly, it is obvious the Administration 

was a very significant, extensive source for the author of that book. 

Frankly, for those who read it, it is also clear that the Administration is portrayed in a pretty favorable light. 

The New York Times I don’t think anyone in this room believes 

necessarily portrays the Administration in a favorable light. So it 

leaves the inexplicable conclusion, Mr. Levey—and I think it is a 

pattern if you look at the Plame disclosures—your Administration 

is deeply concerned when some sources reveal classified intel; it is 

not terribly animated when other sources reveal classified intel. 

That is exactly the reason why so many people on both sides of 

these daises have a problem or a question with the kind of unilateral authority the Administration seeks to gather upon itself. 

It is crystal clear that anyone reading the One Percent Doctrine 

knows a great deal about American intelligence gathering operations. It is far more detailed and specific than the New York 

Times story, and it has not produced a peep of outrage from the 

people you work for. 

I will yield back. 

Chairwoman KELLY. Thank you, Mr. Davis. 

Mr. McHenry. 

Mr. MCHENRY. Thank you, Madam Chairwoman. 

Mr. Under Secretary, you are Under Secretary of what? 

Mr. LEVEY. Terrorism and Financial Intelligence. 

Mr. MCHENRY. Terrorism and Financial Intelligence. 

Mr. LEVEY. Yes, sir. 

Mr. MCHENRY. So what do you deal with, mainly? 

Mr. LEVEY. Well, the broad mandate, it is terrorism was sort of 

the founding principle upon which the office was created, but, over 

time, we have done a lot of work on counterproliferation and sanctions and so forth using the financial system and financial intelligence to advance national security goals, including proliferation 

finance as well. But terrorism still remains the number one priority. 

Mr. MCHENRY. Okay. I recognize that may seem a silly question 

to you, but we are dealing with Congress here. Based on the rhetoric I have heard this morning from my colleagues, it seems a new 

fact to them that indeed you are trying to deal with the financing 

of terrorism. You have tools in place to monitor the financing systems of these terrorists, including one that was disclosed, a classified program, which I would hope, Mr. Under Secretary, that you 

do have classified programs to root out and find these terrorists 

and their funding mechanisms. Do you not have tools to do this? 

I would say you don’t have to answer, but I am saying, rhetorically, it seems ridiculous, the rhetoric that has been used here. 

Now, additionally, the ranking member of this committee had a 

level of outrage that you had not come before this committee and 

disclosed to all that can listen, that can watch it on C–SPAN, whoVerDate 0ct 09 2002 15:26 Jan 30, 2007 Jkt 031534 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\DOCS\31534.TXT HFIN PsN: TERRIE
31

ever wants to fall asleep can watch it on C–SPAN, about this program. 

Were you asked indirectly about anything related to this SWIFT 

program by anyone from this committee? 

Mr. LEVEY. I am not sure I understand the question, but I don’t 

believe I was ever asked about this program by anyone on this 

committee. 

Mr. MCHENRY. Okay. Or anything related to it? 

Mr. LEVEY. I don’t believe so, no. 

Mr. MCHENRY. But you did disclose this program to the Intelligence Committee, which also has oversight over your activities? 

Mr. LEVEY. The Intelligence Committee definitely has oversight 

of our activities, including our intelligence office, for obvious reasons. 

Mr. MCHENRY. I have two quick questions, because we have been 

called to vote on the Floor. 

You said in your testimony that you received written output from 

the program as part of your daily intelligence briefings and that 

you, ‘‘cannot remember a day when that briefing did not include at 

least one terrorism lead from the program.’’ Do you believe that 

this disclosure will, in the end, reduce the number of leads that you 

will have in this program? Or have you seen a result yet? 

Mr. LEVEY. As I indicated to Mr. Frank, we haven’t seen the result yet because the data that we are accessing right now was data 

that was created before the news stories. It is a matter of logic that 

I would think the public discussion of this would be harmful to the 

program. But, as I also said to Chairwoman Kelly, I am hopeful 

that we will still have some value from the program, and we intend 

to continue with it. 

Mr. MCHENRY. Briefly, you also touched on the difference between the wiretapping program, the national security wiretapping 

program, versus what you are doing with financial tracking. 

Mr. LEVEY. If you are referring to the NSA program? 

Mr. MCHENRY. Yes. 

Mr. LEVEY. I am happy to say I was not read into the NSA program, so I am happy to say I don’t know the details of the differences between that program and this one. But there are a couple 

of things that I think are fairly obvious. 

One is that we are obtaining records by subpoena that are kept 

in the ordinary course of business. We are collecting business 

records that SWIFT keeps in the United States in the ordinary 

course of business. From what I have read, I think it is a different 

legal authority being used in the other programs. But, again, I 

state very clearly, I don’t know for sure. I wasn’t read in. 

Mr. MCHENRY. Thank you, Mr. Under Secretary. I certainly appreciate your being here today. 

Just in conclusion, I think it is a big difference that we are discussing here. It is the difference between a classified program and 

a headline. Certainly, classified programs are not meant to be 

headlines so we can protect our operational advantage over our enemies. 

I thank you for your service and thank you for your testimony 

and thank you for answering these questions today, however outrageous some of them have been. 

32

Mr. LEVEY. Thank you. 

Chairwoman KELLY. Thank you very much. 

We have been called for a vote. I know that the Secretary needs 

to leave. Mr. Scott has a question he would like to ask. If you could 

briefly answer that, we would be appreciative. 

Mr. SCOTT. Let me just call your attention to what the Act says, 

because I believe if this Administration had followed the law, had 

done what the Act expressly says, we wouldn’t even be in this 

shape we are in today. 

It clearly states that the President shall—shall, not may—‘‘shall 

consult with Congress before exercising any of the authorities 

granted by this Act and shall consult regularly with the Congress 

so long as such authorities are exercised. Whenever the President 

exercises any of the authorities granted, he shall immediately 

transmit to Congress a report specifying, among other things, the 

authorities to be exercised, the actions to be taken in exercise of 

those authorities to deal with those circumstances.’’ 

We are not here to talk about the SWIFT program or what it has 

done or all of this. That is fine. There is no problem with that. But 

it is important for this Administration to understand that they 

have violated the law. They have not allowed Congress to do its 

job. 

You have people who run not every 6 years, not every 4 years, 

but every other year. The mandate from the people is to do our 

charge. The charge of this committee is the oversight and investigation of terrorist financing. Here we are 5 years after and no report. 

So when you look at what the New York Times has put forward—and let me just state this very clearly. This is no ordinary 

leak. I don’t think it has been made known that this is no ordinary 

leak. That story in the New York Times was put together—and the 

Washington Post—by a compilation of 20 Bush officials who saw 

something enough wrong that something needed to be done about 

this. 

This is no ordinary leak. This is no story of whether you are 

strong on terror or not. It is whether or not you are going to stand 

up for the principles that this country stands for. And had we done 

what the emergency act says for us to do, clearly we would not be 

in this position. 

When 20—not some clerk, not some disgruntled employee, we are 

talking about 20 Bush officials, administrators in your Administration, who saw something wrong with the direction in which we 

were going to say let us pause here for a moment so that—this is 

a dangerous road we are going on that undermines the very system. 

At some point, this Administration, as I said before, needs to 

clearly look in the mirror and see where the wrong is coming from. 

I am going to vote, Mr. Chairman. 

Chairwoman KELLY. Thank you, Mr. Scott. 

Mr. LEVEY. Again, that was not a question, so I will not have a 

response. 

Chairwoman KELLY. I would like to go and vote, also, but I think 

it is far more important that we get some of these questions answered, so I am going to stay here and ask a few more questions. 

33

One is a question that you did not have an opportunity to answer, 

evidently, Mr. Under Secretary. 

I asked you about the tracking program that you mentioned 

might be useful, continue to be useful, with regard to tracking activities of charities and wealthy individuals that support terrorism. 

The Saudis, for instance, have not yet set up a functioning commission over their charities. I wants to know why there is this lag, and 

I want to know if this program would be helpful in that regard. 

Mr. LEVEY. If I could, Chairwoman Kelly, I would like to respond 

to those separately, rather than together, because I don’t want to 

talk about the use of this program with respect to any particular 

country. 

As I said to you earlier in response to another question, it is my 

hope—because, as you point out, there is a multilayered factor to 

a terrorist network and there may well be parts of terrorist networks where this program, even after its disclosure, will remain 

valuable because people will still be using the banking system. It 

is my hope—I hope Mr. Frank is right when he said it will still be 

valuable. I hope that is right. I don’t really care about winning 

some political argument. What I want to do is get at the terrorist 

financing. I would be happy if there was no damage at all. Unfortunately, I don’t think that will be the case. 

With respect to the Saudi charity commission, this is an issue 

that I know we have discussed both in this room and in your office 

on several occasions. There is no country that we have spent more 

time with in terms of trying to work with them on terrorist-financing issues. 

The Saudis, as we have said—this will sound repetitive to you 

because I have said to this to you before, but I think it is important 

to say the whole piece, which is when it comes to counterterrorism 

generally and fighting al Qaeda cells in Saudi Arabia, they have 

been extremely aggressive and effective, and their security services 

have had causalities, and they are really in the fight in a way that 

I think is valuable not just in Saudi Arabia. But al Qaeda is a 

worldwide threat, so when they are fighting cells in Saudi Arabia, 

that is of benefit to us all. 

On terrorist financing, there are a number of issues where, as 

you put it—and I guess you were quoting me, so I know I agree 

with it—there has been a real lag between what they say they were 

going to do and what they do. The charities commission is a perfect 

example. We haven’t seen the charities commission. It is a matter 

of years now, and there is no charities commission. I am not satisfied—you work personally on getting their FIU up and running. I 

think that is a project that still requires a lot of work. 

The specific thing I was referring to when I made this suggestion 

about lag and gap in a prior statement was holding individual financiers personally responsible in Saudi Arabia. This is something 

where the Foreign Minister, Prince Saud, has said they intend to 

hold people personally accountable; and that has not yet happened. 

As I say, there is a lag between what they are saying and the facts 

on the ground. We will see if there is a gap between what they say 

and what they do. 

I think I have been to Saudi Arabia three or four times, and I 

spent a lot of time and effort on this, and I know you do, too. I am 

34

going to keep at this and do everything I can both to encourage 

them and to help them fight terrorism more effectively. 

Chairwoman KELLY. We have both been advocates for the work 

of the Egmont Group, the financial intelligence units of a number 

of different countries. I want to know how the TFTP program complements our technical assistance programs with those groups. 

Mr. LEVEY. I have to think about that a little bit, Chairwoman 

Kelly. I think they may be separate enterprises. They fit together 

in one sense, which is that effective counterterrorism and, frankly, 

effective anti-money laundering policy requires the exchange of information and exploiting that information. Egmont is a great forum 

for doing that on an international basis, and we continue to work 

on it. A new director of FinCEN, Bob Horner, has taken up the 

torch on this and is doing a great job and takes this all very seriously. 

But, frankly, this program that we are discussing today was one 

that is separate. It is limited only to terrorism and not to all law 

enforcement and money laundering efforts like the Egmont group 

is. So it is narrower in that sense, and the sharing mechanisms are 

different. 

Chairwoman KELLY. How do you evaluate what is working and 

what is not? 

Mr. LEVEY. This has been a very difficult problem ever since I 

started this job. I think this is something we discussed when I first 

testified. 

A lot of the indices of how effective we are are things that we 

see only in intelligence reporting, and, therefore, you have to wonder whether you are getting the full story. Because the way intelligence reporting works is you get some information, but you don’t 

know whether there is reporting bias or collection bias or whatever. 

There are two things I can point to that I take some heart in. 

One would be is that, as I indicated in my written statement, we 

have seen a terrorist organization that was under so much pressure that the intelligence suggested they could not conduct a sophisticated attack because they lacked the funding to do so. 

You saw another indication like that in the letter Zawahiri wrote 

to the now deceased Zarqawi asking for money and saying that the 

al Qaeda leadership, and Zawahiri, lacked money and their lines 

have been cut off. That is, of course, a great symbol of success. 

I also point the committee to the assessment the 9/11 Commission public discourse project gave us, which was a fairly tough assessment across the board, but when it comes to this issue in particular, they graded the interagency effort as an A-minus, their 

highest mark. And I should say I have seen some news reporting 

in recent weeks that that was a grade for the Treasury Department. I want to make clear that wasn’t a grade for the Treasury 

market. That was a grade for the entire government’s efforts, including, I would say, this committee. 

Chairwoman KELLY. Thank you. 

You said that the G–10 central banks were kept informed of the 

program. But in some countries, like the United Kingdom and others, the Egmont group, the Egmont member FIU, isn’t part of the 

Central Bank. So did they know about SWIFT or were they left in 

the dark? 

35

Mr. LEVEY. As I said, the ones that were informed were the Central Bank governors, not necessarily FIU’s. 

Chairwoman KELLY. So other country FIU’s may not have known 

about the SWIFT? 

Mr. LEVEY. That is correct. 

Chairwoman KELLY. And therefore were not able to use it? 

Mr. LEVEY. That is a separate question which I would like to discuss with you in another setting. 

Chairwoman KELLY. I thank you. 

I have just been reminded that there was a question that I didn’t 

really get an answer to, another section of a question, and that is 

the question about the UAE and Bahrain and whether they are living up to their stated commitments to combat terrorist finance. 

Mr. LEVEY. I think that the general answer is that we have very 

good relationships there, and our cooperation is strong. I think I 

can give you a more satisfying answer if I respond to that in writing, if that would be okay with you. 

Chairwoman KELLY. That is fine. You can give it to us in a more 

detailed answer, if you would like to, in a confidential briefing. 

I need to do a bit of business here. There are a number of things 

that we have been requested to insert in the record. One is the list 

that Mr. Frank had on what Members of Congress were briefed 

and what the dates were. 

The other is the CRS report for Congress entitled Treasury’s Terrorist Finance Programs: Access to Information Held by the Society 

for Worldwide Interbank Financial Telecommunication. 

The next one is Reports of U.S. Monitoring of Swift Transactions 

Are Not New: The Practice Has Been Known by Terrorism Financing Experts for Some Time, by Victor Comras. 

Another, A Secret the Terrorists Already Knew, by Richard A. 

Clarke and Roger W. Cressey. 

And the final one, Continued Debate Over the Swift Disclosure, 

by the New York Times by Dennis M. Lormel. 

So moved that they be put in the record. 

Chairwoman KELLY. With that, the Chair notes that members 

will have additional questions for this panel that they will submit 

in writing. So, without, objection the hearing record will remain 

open for 30 days for members to submit written questions to this 

witness and to place their responses in the record. 

With that, we thank you very much, Mr. Secretary. You have 

been very patient with us all. 

This hearing is adjourned. 

[Whereupon, at 12:08 p.m., the subcommittee was adjourned.] 

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A P P E N D I X

July 11, 2006

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