Magazine article Insight on the News

Federal Protection System Could Double as Spy Scam

Magazine article Insight on the News

Federal Protection System Could Double as Spy Scam

Article excerpt

The Deposit Tracking System is being touted as the next technological step in combating organized crime and protecting national security. But a closer look reveals disturbing capabilities for spying on the finances of Americans.

A system is ready for implementation by executive order that would allow the IRS to monitor every bank account in the country in what may be the most brazen plan in U.S. history to spy on Americans.

Four years ago the Federal Deposit Insurance Corp., or FDIC, began developing blueprints to build a multi-million-dollar computer center as a base for this operation. The facility ostensibly would be used to determine at any given moment how much money should be in government coffers to protect depositors against bank failures. But the plans the FDIC turned over to lawmakers look disturbingly like an unprecedented mechanism for spying on the finances of every American.

Had the order to prepare these plans been widely known at the time, it would have deeply alarmed many already concerned about government snooping. It certainly has attracted attention in federal law-enforcement and intelligence circles, although no one is saying as much on the record. Known as the Deposit Thacking System, or DTS, it is seen by authorities as the next technological step to combat organized crime and protect national security against the usual suspects - drug distributors, international crime syndicates, terrorists and the like. Whether it is established now or in the future, government insiders say, is only a matter of political opportunity.

The Orwellian system imagined by the FDIC is the result of a scarcely noticed feasibility study required by an amendment offered by longtime House issues dabbler Rep. Bruce Vento, a Democrat and Farm Labor liberal from Minnesota. It was buried in the Federal Deposit Insurance Corp. Improvement Act, or FDICIA, one of the legislative responses to the savings and loan debacle. Vento's amendment called for the FDIC to perform an 18-month study of the "costs, feasibility and privacy implications of tracking deposits" - all deposits.

Late in the summer of 1993 the FDIC handed its 235-page report to the House Banking Committee, where it remains like an irregularly ticking time bomb awaiting only the jar of the next financial crisis or a campaign against international crime or tax cheats.

The DTS "would virtually eliminate personal financial privacy," warned Diane Casey, former executive director of the Independent Bankers Association of America. "It would change fundamentally the relationships among banks, consumers and the government in ways that have implications beyond banking policy. Our open and democratic society would be changed profoundly if any agency of the government maintained the scope of information on private citizens described in this proposal "

The American Bankers Association, or ABA, also sees the threat, observing that "it is inconceivable such a database could be used only by the FDIC in deposit-insurance coverage functions. Such a database could be searched by various governmental agencies for all of the deposit accounts of selected Social Security numbers and Taxpayer Identification Numbers and would provide a wealth of information for investigations being conducted by the Federal Bureau of Investigation, the Drug Enforcement Agency, the Internal Revenue Service, to name but a few. Like the baseball diamond in [the movie] Field of Dreams, build this database and THEY will come. Eventually, whether legally or illegally, they will gain access to the database."

One banker said he would get out of banking altogether if anything like the DTS is imposed upon the American people: "Regardless of what pretense the federal government uses to require that account balances of this bank's customers be reported to Washington, please know I shall not be complying with any requirements of this nature. I shall get out of banking if necessary. …

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