Americans’ Financial Liberty Placed at Risk by Patriot Act

by James Bovard

The Justice Department recently revealed that the Patriot Act is being routinely used to prosecute a wide array of non-terrorist offenses. While many Americans assumed that the Patriot Act only concerned terrorists, the reality is that the act poses a grave threat to Americans’ financial privacy and property rights.

The Patriot Act makes it far easier for the feds to vacuum up Americans’ financial records without a warrant. Banks are now required to gather far more information on their clients - their background, their sources of income, their financial behavior, etc. Money Laundering Alert, a pro-government newsletter, described one financial provision of the Patriot Act as a “dream-come-true information gathering tool for U.S. agencies,” extending a “welcome mat to the Central Intelligence Agency, National Security Agency and other U.S. counterparts” to look at the new financial information on American citizens and others.


The Patriot act entitles the U.S. government to penalize anyone in the world who allegedly violates U.S. money laundering laws. If a foreign bank has a single dollar deposited or held in a U.S. bank, or wires a single dollar through the United States, the Bush administration claims jurisdiction over that bank’s operations anywhere in the world. Treasury Department chief counsel David Aufhauser warned foreign economics ministers that “there will be hell to pay” for any nation that doesn’t aid the U.S. war against terrorism.

The Justice Department is exploiting powers gained via the Patriot Act to confiscate millions of dollars from foreign banks operating in the United States in cases with no terrorist connections or allegations. The Justice Department used the Patriot Act to confiscate the bank accounts of Canadian telemarketers accused of fraud.

The Patriot Act creates other new pretexts to seize private property. In 1998, the Supreme Court ruled that the Customs Service’s routine confiscation of money from international travelers who failed to declare their cash to the government “violates the Excessive Fines Clause [of the Eighth Amendment of the Bill of Rights] if it is grossly disproportional to the gravity of a defendant’s offense.”


The Patriot Act effectively overturned the Supreme Court decision by creating a new crime of “bulk cash smuggling.” Anyone who leaves or enters the U.S. without declaring that they possess more than $10,000 in cash or currency instruments can be stripped of their money and sent to federal prison for five years.
The Patriot Act declared: “The intentional transportation into or out of the United States of large amounts of currency... is the equivalent of, and creates the same harm as, the smuggling of goods.” Congress never explained how a person became a smuggler merely by transporting his own money.

Customs inspectors have used this provision to confiscate the money of over 600 outbound travelers - many, if not most, of them American citizens.

While federal officials perennially portray these seizures as strikes against terrorist money, the government has offered no information linking the confiscations to terrorist activity. Most of these “forfeitures” have nothing to do with terrorism and everything to do with tightening controls on peaceful citizens.

It is paradoxical that Customs portrays seizures of outgoing currency as a major victory against terrorism when the overwhelming majority of money raised for Al Qaeda comes from wealthy donors in Saudi Arabia and other Gulf states. The report of the House and Senate intelligence committees into pre-9/11 federal failures concluded: “The activities of the September 11 hijackers in the United States appear to have been financed, in large part, from monies sent to them from abroad.”

In the wake of 9/11, the federal government rightfully concentrated far more resources in going after terrorist money. But the vast majority of the arrests and seizures have had little or no link to Al Qaeda.

In a speech last month at the FBI Academy, President Bush bragged, “Terror networks have lost access to some $200 million, which we have frozen or seized in more than 1,400 terrorist accounts around the world.”


Because the new standard of proof for asset freezes is so low, the raw amount of money frozen—rather than a gauge of victories over terrorism—is simply a measure of government power.

There is no need for the U.S. government to wait passively for the next wave of terrorist carnage.

But Congress and the Bush administration, rather than concentrating on Al Qaeda, enacted a laundry list of proposals to empower government bureaucrats to surveil on and punish citizens and businesses that pose no threat to national security. The government should concentrate on protecting Americans from aspiring foreign mass murderers and cease exploiting terrorist threats to intrude into Americans’ lives and wallets.

Tagline: James Bovard is the author of the new book, “Terrorism & Tyranny: Trampling Freedom, Justice & Peace to Rid the World of Evil.” PURCHASE THE BOOK AT