Int J Polit Cult Soc (2008) 20:21-40 DOl 10.

1007 /s 1 0767-007-9020-6

A Leviathan Rejuvenated: Surveillance, Money Laundering, and the War on Terror

William Vlcek

Published online: 12 February 2008

Cg Springer Science + Business Media, LLC 2008

Abstract Efforts to prevent and preempt further terrorist attacks in the United States and other developed countries have intruded into many spheres of public and private life. This article provides a short assessment of the redeployment of anti-money laundering regimes to combat the financing of terrorism. This expansion of financial surveillance is directed by international organizations and domestic legislation in the belief that terrorists and their financiers may be found, identified and detained. After providing background to the antimoney laundering regime, the article looks at the domestic and extraterritorial application of the USA PATRIOT Act. One conclusion of this analysis finds that a financial panopticon has coalesced out of the wide range of financial and non-financial businesses now required to report "suspicious financial activity."

Key words Surveillance USA PATRIOT Act money laundering· terrorist financing

A variety of actions, initiatives and programs began as a response to the terrorist attacks of 11 September 2001. These "counter-terror" movements comprise what the U.S. Administration identified as a global war on terror and they operate both in full public knowledge and in secret (until revealed to the public by the media). Many domestic measures introduced to counter terrorism at the same time serve to reduce civil liberties, again both visibly and invisibly. Some of them conduct searches to identify and reveal the

A respectful nod of acknowledgement must be made to an anonymous referee for suggesting that the presence of the Leviathan in this article should start with the title. The revised version of this article benefited greatly from work completed while I was a member of the London School of Economics team in the European Commission-funded project CHALLENGE (The Changing Landscape a/European Liberty and Security) and I remain grateful for the financial support received during that time. For more information on the scope and dimensions of the project, see <www.libertysecurity.org>.

W. Vlcek

Institute of Commonwealth Studies, University of London, 28 Russell Square, London WCIB 5DS, UK

W. Vlcek (C8J)

28 Russell Square, London WC1B 5DS, UK e-mail: william.vlcek@sas.ac.uk

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presence of a terrorist or potential terrorist through the collection, aggregation and analysis of disparate sets of data. The financial war on terror is a leading example of the effort to seek out the terrorist through their financial and business activities. There are domestic and international aspects to the financial war on terror involving United Nations Security Council Resolutions directing the suppression of terrorist financing, guidance from international organizations for establishing the necessary financial surveillance regimes and national legislation to implement them. 1 This article considers the reduction of liberty arising from the expansion of financial surveillance in liberal democracies as particularly represented by the USA PATRIOT Act in the United States?

It can be argued that the state has always imposed limits on the liberty of its citizens, and that citizens accept these limitations as the price of admission into the protecting embrace of the Leviathan. A close reading of Thomas Hobbes finds this in Leviathan at the point when the free individual in the state of nature chooses to join the commonwealth, they accept the fact that they have given up the total freedom of that ungoverned space and have subjected themselves to the civil law. "To live as a subject is, by definition, to live in subjection to law.,,3 Quentin Skinner goes on to argue that Hobbes presented two reasons for why the citizen obeys the law now that they are subject to it. The first relies on that inherent rational mind that having chosen to join the commonwealth also knows that to obey is to act in the best interests of the individual. The second reason is more likely than the first, particularly for the citizen of the security state, that the citizen obeys the law out of fear for the consequences of not obeying it. Where in the state of nature an individual's actions were guided by emotions and desires, in the commonwealth actions are guided by a fear of the visible power of the sword of state." Or, as Michel Foucault would describe it, the citizen disciplines him or her self."

A visual depiction of the Sovereign Prince bearing his scepter of church and sword of state provided the frontispiece of the first edition of Hobbes' Leviathan in 1651. The artist clearly understood some of the implications of the text, for the body of the Sovereign in the image is composed of his subjects, all looking up at his face for guidance, while the Sovereign himself looks outward towards the viewer.6 The body of the Sovereign (state) consists of the subjugated bodies of his (its) citizens, such that protection not only comes at the cost of absorption into the commonwealth, but it is also the duty and responsibility of the citizens that form the body of the Sovereign to maintain and reproduce it. Thus security comes at a double cost, first when the citizen exchanges liberties for increased security and second when the citizen accepts the obligation to contribute to the maintenance of the security of the state. It is this second cost that is at issue here, for it includes the increased

1 United Nations Security Council, "Resolution 1373 (2001)," SIRESI1373 (2001) (2001); Financial Action Task Force, The Forty Recommendations (2003), English, 20 June 2003 2003, PDF file, Available: http:// www.fatf-gafi.org/dataoecd/38/47/34030579.PDF [accessed 30 June 2003].

2 Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. No. 107-56, 115 Statute 272. The PATRIOT Act was reauthorized in 2006 with a number of civil liberties safeguard provisions introduced in response to criticisms made concerning the initial version of the legislation.

3 Quentin Skinner, Visions of Politics, volume 3: Hobbes and Civil Science, 3 vols. (Cambridge: Cambridge University Press, 2002), p. 220.

4 Ibid., p. 222

5 Michel Foucault, Discipline & Punish: The Birth of the Prison, trans. Alan Sheridan, Second Vintage ed. (New York: Vintage Books, 1995); Michel Foucault, "Society Must Be Defended" Lectures at the College de France, 1975-1976, trans. David Macey (New York: Picador, 2003).

6 Norman Jacobson, "The Strange Case of the Hobbesian Man," Representations, no. 63 (1998).

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surveillance of both ourselves and those in society around us for signs of threat and danger to the continued existence of the Sovereign."

The specific question related to this concern may be found in the phrase - Quis custodiet ipsos custodes? - which is generally translated as "Who guards the guardians?"." The question is rather apropos in the context of a "war of terror," when an entire population has become suspect; yet it may better be phrased as "who guards usfrom the guardians?". Such a revision is crucial when U.S. government officials treat the worries and fears expressed over the PATRIOT Act as immaterial and irrelevant." The guardians ofthe state are honest, trustworthy people, sufficiently skilled to handle the data collected on individual citizens and to expose the suspicious individuals present in the population. They are acting in our behalf as representatives of the state and we should have no concern about the associated decline in personal privacy-unless you have something to hide. The suggestion that everyone inherently desires privacy, whether or not they are acting in an honest manner, is poo-pooed away.l" Honest citizens need not be concerned. Nevertheless, who will protect us from these representatives of the Orwellian State?

The concern is not simply with the Leviathan state assuming further features of the surveillant "Big Brother" found in George Orwell's Nineteen Eighty-Four, it is the explicit enlistment of citizens to become our "little brothers" to tattle and report anything that they feel is suspicious. Such was the publicly announced objective of the short-lived U.S. "Terrorism Information and Prevention System" (Operation TIPS) program in 2002. By design, this homeland defense program would involve letter carriers, truckers, and utility employees amongst others as observers for suspicious activities throughout civil society." The chilling potential effect from such a shift in society threatens a reduction in social interaction accompanied by the development of a monolithic structure of informants such as existed as a cancerous tumor in the former East Germany.V

To understand the impact ofthe increased surveillance of financial transactions undertaken in the recent past, we must step back into the 20th century and start with the crime of money laundering, and its origins in the "war on drugs." Financial surveillance then, is juxtaposed to financial surveillance now, accompanied by examples of excess and the global impact of US. domestic law. To develop this line of argument the article is structured in four sections with some closing remarks. The first section outlines the emergence of fmancial surveillance in the form of anti-money laundering as part of the war on drugs and its evolution since 2001 as part of the fmancial war on terror. With this background, the second section looks at the specific legislative tool that established this surveillant assemblage, the USA PATRIOT Act, in the domestic context. Following the domestic perspective is a section outlining the extraterritorial reach of the PATRIOT Act into the international. The emergence ofa financial

7 An argument for a re-reading of Hobbes in order to secure liberty from within the security confines of the state was made by Claudia Aradau, see Claudia Aradau, The Other Hobbesian State, 19 April 2005, Web page, Challenge, Available: http://libertysecurity.org/article213.html [accessed 20 July 2005].

8 Juvenal, Satires

9 "When civil libertarians complained the law could lead to abuses, Attorney General John Ashcroft derided them as 'hysterics."? Michael Isikoff, "Show Me the Money," Newsweek, I December 2003, p. 36.

10 Privacy in this context is essentially the simple right to be left alone by both the state and society. Laura K. Donohue, "Anglo-American Privacy and Surveillance," The Journal of Criminal Law & Criminology 96, no. 3 (2006), p. 1066.

11 Ibid. p. 1197.

12 Brian Doherty, An American Stasi, 16 July 2002, Web page, Reason Online, Available: www.reason.com! news/show/33671 [accessed 26 April 2007]. The original webpage for the program, 'Operation TIPS Fact Sheet' is archived at www.politechbot.com/docs/tips.deleted.112002.html [last visited 26 April 2007].

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panopticon from the combination of the PATRIOT Act with UN Security Council Resolution 1373 (2001) is presented in the fourth section, which is followed by some brief closing remarks. The goal is to convince the reader that measures taken in the financial war on terror have reduced liberty in the commonwealth that is liberal democratic society.

Money Laundering-Financial Surveillance in Pursuit of Criminality

Money laundering was not considered a crime in and of itself in the United States until 1986. To define money laundering as an independent crime served to open up a second front in the war on drugs. 13 In a fashion similar to the arrest and conviction of Al Capone for income tax evasion on his unreported illegal income, the government thought to pursue and convict drug lords for possessing illegal profits from drug trafficking. To launder money is to take an action or series of actions to disguise its origins or ownership. However, it does no good to criminalize the activity domestically if our suspected criminal sends their cash abroad to be deposited in a foreign bank and then sends a wire transfer back to the U.S. from that foreign bank. As far as the American bank would know, it had received a completely legitimate transfer of legal money. Because of the integrated international relationship of national banking systems, the problem of money laundering therefore required a consistent and comprehensive international approach. It became critical to the U.S. war on drugs to establish an international solution to this international problem.

The U.S. succeeded in convincing the other members of the G7 by 1989 to direct the creation of an international organization to lead and coordinate international efforts to eliminate the money laundering associated with drug trafficking. The Financial Action Task Force (FATF) was tasked to study the techniques used to launder money and then to create procedures for use in preventing or discovering money-laundering activity within the financial system.!" It is important to understand the role of the FATF as a source of global financial governance and the point of origin for the standards and best practices used in global finance to counter financial crime. Since 2001, that role has been expanded with the increase of the FATF's mandate to include the financing of terrorism, given the belief by some that the measures taken to combat money laundering may be just as effective against the financing of terrorism. IS

13 Prior to this time, the money was simply part of the underlying (predicate) crime, or treated as tax evasion. See Teresa E. Adams, 'Tacking on Money Laundering Charges to White Collar Crimes: What did Congress intend, and what are the courts doing?," Georgia State University Law Review 17, no. 2 (2000), p. 538; U.S. Congress Office of Technology Assessment, Information Technologies for Control of Money Laundering (Washington, D.C.: U.S. Government Printing Office, 1995), p. 3.

14 As of October 2006 the FATF had 33 member jurisdictions: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, China, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Kingdom of the Netherlands, New Zealand, Norway, Portugal, Russian Federation, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom, and United States; and there are two special observers, China and South Korea. Financial Action Task Force, FATF invites the Republic of Korea to be an Observer, 8 August 2006, Press release, Available: http://www.fatf-gafi.org/dataoecd/25/ 39/37260684.pdf [accessed 23 September 2006]. Changes to the membership structure of the FATF are forthcoming as it introduces the category of 'associate member' for the FATF-style regional bodies (for example, the Council of Europe's Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL) performs this function in Western Europe). Financial Action Task Force, Annual Report 2005-2006, English, 23 June 2006, PDF file, Available: http://www.fatf-gafi.org/dataoecd/38/56/ 37041969.pdf [accessed 18 July 2006], pp. 4-5.

15 William F. Wechsler, "Follow the Money," Foreign Affairs 80, no. 4 (2001).

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The issue of terrorist financing first appeared in FATF reports on the methods and techniques used to launder money in the 1999. At that time, it involved a presentation discussing the extension of anti-money laundering laws to combat terrorist financing by the United States. The question that needed to be answered by the FATF at that time was 'whether the distinction between legal and illegal sources of funding has an effect on the ability of countries to use anti-money laundering measures to detect, investigate and prosecute potential terrorist related money laundering.' 16 This is an important point, because money laundering involves money that comes from a criminal act, e.g. bank robbery or drug trafficking. The financing of terrorism on the other hand does not necessarily come from an illegal source, but just as easily might come from a charity or something as simple as passing around a collection cup at the pub to help the freedom fighters.l ' In other words, money laundering involves money that was already considered illegal, because of some past activity, whereas terrorist financing may involve money that is legal up until it has been used to commit an act of terrorism. It becomes illegal after the event. Some government officials have called this 'reverse money laundering' because it moves money from legal sources to an illegal activity while concealing or hiding the origins of the money. IS

The challenge for the F ATF when developing new guidance against the financing of terrorism was the use by terrorist groups of funds originating from both legitimate and illegitimate sources. Approaching the problem from a law enforcement background it should not be surprising that the delegates to the FATF meeting found that " ... [upon] examination of terrorist related financial activity, the FATF experts concluded that terrorists and their support organisations use the same laundering methods as criminal groups, ... " 19 At the same time, some member jurisdictions reported "the fact that terrorist financing might not meet the definition of money laundering meant that they were limited in the actions they could take against terrorist monies in the framework of anti-money laundering laws.,,2o Consequently, it has become necessary in many countries to either rewrite existing laws or to write new laws against terrorist financing and to make it illegal to contribute to a charity or collection cup if you knew that your contribution was going to help a terrorist group. Consider for example the definition found in the European Union's (EU) Third Money Laundering Directive, which reads,

For the purposes of this Directive, 'terrorist financing' means the provrsion or collection of funds, by any means, directly or indirectly, with the intention that they should be used or in the knowledge that they are to be used, in full or in part in order to carry out any of the offences [that have been defined as terrorism]."

16 Financial Action Task Force, Report on Money Laundering Typologies, 2000 2001, English, I February 2001, PDF file, Available: www.oecd.org/fatf/pdf/TY2001_en.pdf[accessed 21 March 2002], p. 19.

17 This example represents the personal experience of the author at an Irish pub in Boston, Massachusetts in 1985 where they were collecting for the Irish Republican Army (IRA).

18 Stefan D. Cassella, "Forfeiture of Terrorist Assets Under the USA PATRIOT Act of2001," Law and Policy in International Business 34 (2002), p. 11.

19 Financial Action Task Force, Report on Money Laundering Typologies, 2000 2001, English, 2002, PDF file, Available: www.oecd.org/fatfipdflTY2002_ en. pdf [accessed 21 March 2002], p. 4.

20 Ibid., p. 2.

21 European Parliament and Council of the European Union, "Directive 200S160/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing," Official Journal of the European Union L series 309 (2005), Article 1(4).

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Measures against money laundering as distinct from other criminal activity have been in place since 1986. However, the intensity and scope of the surveillance of financial and financial-related transactions expanded significantly after 2001. The reaction to the terrorist attack gave state authorities the opportunity to include businesses that they had previously been unable or unwilling to force into the campaign against money laundering. This change is reflected in the PATRIOT Act revisions to U.S. banking and anti-money laundering laws, the 2003 revision of the FATF Forty Recommendations for anti-money laundering legislation, the EU's Third Money Laundering Directive and the laws of every country that is revising their legislation in order to comply with UN Security Council Resolution 1617 (2005).22 The explicit inclusion of various non-financial services business activities and individuals, conscripts them into the fight against both money laundering and the financing of terrorism. In the earlier version of the Forty Recommendations the statement was that "appropriate national authorities should consider applying" the Recommendations to any financial transactions a non-financial services firm might perform for, or on the behalf of, a customer. With the latest revision these "designated non-financial businesses and professions" are now explicitly identified and they include casinos, realtors, lawyers, accountants, jewelers, and trust and company service providers. Moreover, Recommendation 20 encourages the application of the F ATF Recommendations to other businesses and professions "that pose a money laundering or terrorist financing risk.'.23

At the same time, the sheer magnitude of the task expected of these firms must be recognized. Every significant financial transaction (one that is either suspicious or in excess of US$l 0,000) is subject to review and analysis. In the instance where a report has been submitted, the firm or individual making the report is prohibited from disclosing this fact "to any person involved in the transaction that the transaction has been reported.t'r" Raw data on the number of Suspicious Activity Reports (SARs) filed with FinCen (Financial Crimes Enforcement Network, U.S. Department of the Treasury) reflects the change in reporting requirements after 2001. In 1996 a total of 62,473 reports were filed, in 2000 there were 163,184 and in 2001 there were 204,915 reports filed. These figures record the reports filed by depository institutions and casinos/card clubs, the only businesses required to file at the time. From 2002, money services businesses (MSBs, including check cashing and wire transfer businesses) and the securities and futures industries were required to begin filing SARs. In the total number of SARs filed for 2005 (the latest full year of data available at the time of writing), 522,655 were from depository institutions, 383,567 from MSBs, 6,072 from casinos/card clubs and 6,936 from security and futures firms giving a grand total of 919,230 reports.F'

In 1995 an Office of Technology Assessment report contained the widely repeated figures of700,000 wire transfers a day occurring in the United States for a total in excess of US$2 trillion ("of which perhaps from 0.05% to 0.1 % represent money Iaundering'tj.i" This

22 The latter Resolution "strongly urges" that all states fully implement the FATF's Forty Recommendations. 23 Financial Action Task Force, The Forty Recommendations (2003a, b), p. 7.

24 USA PATRIOT Act, Section 351 "Amendments relating to reporting of suspicious activities." See also Financial Action Task Force, The Forty Recommendations (2003a, b).

25 As a point of comparison, for the United Kingdom in 2005 there were "just under 195,000" SARs filed, of which 'just under 2,100" (l %) were thought to be of interest to those authorities involved in combating terrorist financing. See Sir Stephen Lander, Review of the Suspicious Activity Reports Regime (The SARs Review), (United Kingdom: Serious Organised Crime Agency, 2006), p. 13, Available: http://www.soca.gov. ukidownloadsiSOCAtheSARsReview _FINAL _ Web. pdf [accessed 14 June 2006].

26 U.S. Congress Office of Technology Assessment, Information Technologies for Control of Money Laundering, p. 9.

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figure represents a mixture of domestic and cross-border wire transfers. Since 2001, the concern has shifted from domestic money laundering to the cross-border flows of potential terrorist financing. The full measure of U.S. government surveillance in the pursuit of global terrorism emerged into the public domain in June 2006, when several prominent U.S. newspapers exposed a government program collecting the transaction details that accompany international wire transfers.i" The U.S. Department of the Treasury served administrative subpoenas on the Society for Worldwide Interbank Financial Telecommunication (SWIFT, a financial industry-owned cooperative) which provides a secure communications network for its users to exchange wire transfer information. SWIFT operates the communications backbone used by a total 8,141 institutions located in 207 countries, with average daily traffic of over 12 million messages in February 2007.28 Combined with nearly a million domestic SARs, a huge amount of raw data on financial transactions is collected by the U.S. government. Nevertheless, just as academics and researchers find themselves overwhelmed by the sheer mass of information available, in print and electronically, so are financial analysts, bank staff, and regulatory and law enforcement agencies. Essentially, by propagating the pursuit of money laundering and the financing of terrorism to include "non-financial businesses and professions" and attempting to monitor vast streams of ordinary daily transactions the effect has been to carpet bomb the global financial system in pursuit of a handful of needles buried in a global hay stack (to seriously mangle metaphors). The imposition of increased data collection only serves further to conceal suspicious transactions, notwithstanding arguments for efficient datamining techniques and "link analysis" to connect otherwise unrelated dots." These methods are more likely to produce a "false positive" than they are to identify a previously unknown terrorist suspect.

False positives cloud the pursuit of money laundering through the collection and

analysis of Suspicious Activity Reports.

It's a huge burden on the banks. It could mean that every time somebody trades in some stock and just buys other stock with the same money, it's got to be reported to FinCEN. [FinCEN bureaucrats] are giving themselves millions of times more information than they can possibly handle or analyze ... What if you get a $25,000 or $50,000 book advance? "Oh, that's an anomaly; let's look at this guy." Think of the probably millions of anomalies occurring every day. It's really stupid."

27 Josh Meyer and Greg Miller, "Secret U.S. Program Tracks Global Bank Transfers," Los Angles Times 23 June 2006, Available: http://www.latimes.com/news/printedition/la-na-swift23jun23. I ,35783 8 .story [accessed 24 June 2006]; Eric Lichtblau and James Risen, "Bank Data Sifted in Secret by U.S. to Block Terror," New York Times 23 June 2006, Available: http://www.nytimes.com!2006/06/23/washington/23intel. html [accessed 23 June 2006]; Barton Gellman, et al., "Bank Records Secretly Tapped," Washington Post 23 June 2006.

28 "Swift in figures-SWIFTNet FIN traffic February YTD" at http://www.swift.com/index.cfi:n? item_id=61597 accessed 27 April 2007. Peak daily message traffic was recorded at 14,658,980 on 20 December 2006. The list of "countries" includes dependent territories like Jersey, Guernsey, Hong Kong and the Cayman Islands.

29 However, not everyone in the government agreed with this depiction of the process. '''It is not "data mining," or trolling through the private financial records of Americans. It is not a "fishing expedition," but rather a sharp harpoon aimed at the heart of terrorist activity,' [Secretary of the Treasury John Snow] said." Gellman, et aI., "Bank Records Secretly Tapped."

30 John Berlau, "Show Us Your Money," Reason, November 2003, p. 27, Available: http://www.reason.com! 03111fe.jb.show.shtml. Berlau is quoting J. Michael Waller, vice president of the Center for Security Policy ("a hawkish D.C. think tank") and professor of international communications at the Institute of World Politics.

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One solution to this challenge has been to decentralize the investigatory function for eliminating false positives to the local financial institution. Consider the experience related by George Paine concerning his bank account, as reported at http://www.warblogging.com/. His ATM card stopped working on 31 December 2003 and it required a visit to his bank in order to review his account for possible fraud. Tn the course of this meeting, it rapidly became apparent that the tracks left by his card usage, retained in the memory of the financial system, allowed the reconstruction of his life's activities. As Paine related it, "This man, my banker, knows some very private details of my life. He knows where I eat dinner on a daily basis. He knows where I get my coffee. He knows what bars I go to, and when I go to them. ... ,,31 It was ultimately an innocuous visit to his bank, because they determined that his record of transactions had triggered a false positive in the bank's fraud detection software.

While meeting with his banker, however, Paine noted the presence of a small advertising announcement sitting on the desk, identifying the bank's PATRIOT Act compliance software vendor. This led him to explore the compliance software industry, highlighting another aspect of the present situation. The war on terror has seen the expansion of a burgeoning security industry, of high-tech firms developing hardware and software to identify faces in a crowd, or the suspicious purchases made with your ATM card. The military-industrial complex has expanded into a security-industrial complex comprising financial institutions, the u.s. Treasury and related government offices, and suppliers of government and business software and services. An estimate of the total cost of the AMLI CFT regime (hardware, software, maintenance and other compliance related activity) in the United States for the period 2005 to 2008 was forecast at US$14.7 billion.32 A report prepared in 2006 for the Financial Services Authority (FSA), the government regulator for the financial services industry in the United Kingdom, estimated the cost of anti-money laundering regulation at £274 million annually, 40% of the total cost burden of financial regulations.+' A separate study prepared for the FSA in 2003 put the estimated compliance cost of a single anti-money laundering regulation to verify customer identity at £2 per person, with a total program cost estimated at £174 million.34

The US$26.3 billion global industry for anti-money laundering surveillance translates into a US$26.3 billion invoice served upon the public. These costs will not be absorbed by the financial services firm, their shareholders wouldn't stand for it. Consequently, these costs will be passed on to the consumer-effectively a stealth tax to support the war on

31 George Paine, Your Bank Account, Your Liberties, 2 January 2003, Web page, Warblogging.com, Available: http://www.warblogging.com/archives/000783.php [accessed 14 January 2003].

32 Manu Joseph, Your Money Under More Scrutiny, 26 April 2005, Web page, Wired, Available: http://www. wired.com/politics/security/news/2005/04/67249 [accessed 29 April 2007]. The same industry expert predicted the cost for Europe and Asia would be another US$11.6 billion.

33 Real Assurance Risk Management, Estimation of FSA Administrative Burdens, (London: 2006), Available: http://www.fsa.gov.uk/pubs/other/Admin_Burdens_ Report_ 2006062l.pdf [accessed 29 April 2007].

34 Pricewaterhouse Coopers LLP, Anti-money laundering current customer review cost benefit analysis, (London: 2003), Available: http://www.fsa.gov.uk/pubs/other/ml_cost-benefit.pdf [accessed 27 April 2007].

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terrorism, and jointly, the war on drugs and anyone else charged with money laundering." The consumer cannot change financial service providers in order to reduce the cost of banking, all firms are expected to meet the requirements, and consequently will pass on the costs. Even attempts to drop out of the system are contravened, check cashers, convenience shops, pawn shops, etc. are now required to participate in this system of surveillance, all due to the possibility that their customers are either laundering money or financing terrorism.36 With this broadening and widening of the parameters of money laundering, how far do we go? Should higher education institutions be performing "Know Your Customer" evaluations of prospective students' parents, in order to determine the legitimate source of their income? If not, could universities become a money laundering conduit as criminals seek a better life for their children by financing their university degrees with illicit funds?37

In turn, and even though Operation TIPS is officially defunct, the employees of the various firms (financial institutions and designated non-financial businesses and professions) have been conscripted into the financial surveillance regime. They are metamorphosed into informants for the state; bank tellers must now report all suspicious transactions and are subject to criminal penalties should they fail to do SO.38

"The Patriot Act is imposing a citizen-soldier burden on the gatekeepers of the fmancial institutions," said David Aufhauser, general counsel at the Treasury Department and head of an inter-agency task force on terrorist finance. "In many respects, they are in the best position to police attempts by people who would do ill to us in the U.S., to penetrate the financial systems.,,39

As a result, this government official believes that the transformation of citizens into informants should be greeted with approval. The structural changes to society engendered by the PATRIOT Act, and its companion legislation in other developed countries, goes beyond simply the confidential relationship that citizens formerly had with their bank.

In the United Kingdom for example, lawyers are expected to ignore the concept of privileged client communications, in the event that they suspect for example during a

35 Money laundering charges are frequently added to the charge sheet if any money or property is involved. Moreover, Justice Department spokesman Mark Corallo said, "If these provisions are good enough to go after terrorists, they're good enough to go after drug dealers and child molesters." John Berlau, "Money Laundering and Mission Creep," Insight on the News, 6 January 2004, Available: http://www.insightmag. comlnews/2004/0 1 106/N ational/Money.Laundering.And.Mission.Creep- 5781 04.shtml [accessed 27 January 2004].

36 As required in order to comply with the PATRIOT Act, the Recommendations of the FATF and UN Security Council Resolution 1617 (2005).

37 My thanks to Padideh Tosti, who suggested such a possibility about the London School of Economics and Political Science to me, given the large percentage of foreign students attending this fine institution of higher learning, and paying the substantial "non-resident" tuition and fees. This point was later made in the press and a number of universities in the UK now mention their reporting obligations under the Money Laundering Regulation 2003 with regards to large cash payments of tuition and fees. See Miranda Green, "Universities alerted to money-laundering risk from foreign fees," The Financial Times (London), 9 February 2005, Available: http://www.ft.comlcms/s/780afad2-7a41-11d9-9b93-00000e2511c8.html [accessed 29 April 2007].

3R Dean Calbreath, "Wells Fargo must pay $1.15 million to woman wrongly arrested by FBI," The San Diego Union-Tribune 19 November 2002, Available: http://www.signonsandiego.com/news/business/20021119- 9999_lbI9wells.html [accessed 27 November 2002].

39 Robert O'Harrow, Jr., "In Terror War, Privacy vs. Security," The Washington Post 3 June 2002, Available:

Lexis-Nexis [accessed 24 January 2004].

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divorce case that tax evasion previously had occurred. They are expected to report it to the appropriate state authorities, or "risk committing a criminal offence." The senior judge's ruling concerned a specific divorce case, in which she held "that the Proceeds of Crime Act, which extended an anti-money laundering law aimed at drug traffickers to 'criminal property' generally, also applies to the transfer of assets during a divorce.T'" Similarly, at a money laundering conference in Canada, a lawyer was quoted as saying, "We can't become spies on our clients, but we have a social responsibility and we have to find a way to meet it." At the same time however, an assistant commissioner of the Royal Canadian Mounted Police explained to the conference why law enforcement agencies felt they needed this change. "The fact that lawyers are exempt from reporting their clients' transactions under the [existing] legislation poses an obstacle for law enforcement agencies investigating alleged money laundering activities.,,41 It was on this point, the erosion of lawyer-client confidentiality resulting from the imposition of anti-money laundering provisions on lawyers, that prevented the approval of the EU's Second Money Laundering Directive for over 2 years. The Directive was only approved by the European Parliament after the terrorist attacks in 2001 because of the argument that efforts to control terrorist financing required more effective laws against money laundering.V

Domestic Use of the PATRIOT Act

In the United States itself, the use of money laundering charges are no longer limited to drug dealers, or those helping drug dealers to launder their money. With the expanded defmition brought about by the PATRIOT Act, there has developed an expanded application of the criminal charge of money laundering. For example, Customs officials report using the expanded provisions to open up money laundering cases against Latin American government officials accused of laundering their money in the United States.43 The laws have now been used to seize funds from the U.S. branches of foreign banks. Previously the U.S. government would have to request assistance from the foreign government involved to retrieve the illicit funds. A money laundering law expert and publisher of Money Laundering Alert, Charles A. Intriago was quoted as saying that this power to seize foreign bank accounts may be "the most startling provision of the Patriot Act. It's an awesome power, and it may even go too far because of the diplomatic problems it could

40 Ed Harris, Divorce lawyers told to report tax dodges, 9 October 2003, Web page, Evening Standard (London), Available: http://www.thisislondon.co.uk/news/articles17100598?version=1 [accessed 3 November 2003].

41 Karen Howlett, "Ottawa taking aim at lawyers in money laundering move," Globe and Mail (Toronto), 7 October 2003, Available: http://www.globeandmail.com/servlet/story/RTGA M.2003 I 007 .r-money-laundering07 I BNStoryiBusinessl [accessed 3 November 2003].

42 Valsamis Mitsilegas, Money Laundering Counter-Measures in the European Union: A New Paradigm of Security Governance Versus Fundamental Legal Principles (The Hauge, London, New York: Kluwer Law International, 2003), 95-102.

43 Eric Lichtblau, "U.S. Uses Terror Law to Pursue Crimes From Drugs to Swindling," New York Times (New York), 28 September 2003, p. 1, Available: Lexis-Nexis [accessed 4 November 2003a, b, c]. See also Eric Lichtblau, "U.S. Wants Foreign Leaders' Laundered Assets," New York Times (New York), 23 August 2003, Available: Lexis-Nexis [accessed 4 September 2003].

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cause." However he also felt that, "If Congress had wanted this tool to be limited to terrorism, it would have done so. It didn't.,,44

Domestically, the laws have been used to identify and retrieve the financial records of suspects under investigation. In effect, investigators are fishing for possible incriminating evidence when in the past they were required to already possess evidence requiring access in order to get a subpoena for financial records. Using figures from the Treasury Department, Newsweek found that the federal government employed the PATRIOT Act to fish for information on 962 suspects in 2003. Ofthe 6,397 financial records retrieved, "two thirds (4,261) were in money-laundering cases with no apparent terror connections." These included requests from the IRS investigating tax fraud, the Postal Service investigating postal fraud, the Secret Service investigating counterfeiting, and the Agriculture Department's investigation of an apparent case of food-stamp fraud."

The PATRIOT Act mandates the collection and retention of massive amounts of data, and provides the means for easy access to the data by law enforcement officials. The ability to request evidence of the existence of an account, for any specific name at any financial institution in the nation, is "the functional equivalent of a national subpoena.T" Moreover, the government is not limiting itself to the expansive use of just the anti-money laundering provisions of the Act. In one case, a man accused of operating a methamphetamine lab has been charged with manufacturing chemical weapons.V Elsewhere, a lovesick 20 year old woman was found guilty of threatening "terrorism against mass transportation systems" in reaction to notes she placed on a cruise ship in order to cut short a family holiday." However, government officials are not about to let the criticism that these are extreme responses to ordinary crimes deter them from their use of the PATRIOT Act.

"There are many provisions in the Patriot Act that can be used in the general criminal law," Mark Corallo, a [Justice] department spokesman, said. "And I think any reasonable person would agree that we have an obligation to do everything we can to protect the lives and liberties of Americans from attack, whether it's from terrorists or garden-variety criminals.v'"

Accompanying this statement is the unspoken implication that critics are not part of the category of "any reasonable person" because we discriminate between the actions and activities of terrorists and the actions and activities of those "garden-variety" criminals.

Taking the PATRIOT Act Across the Border

The global influence of the U.S. compels a global regime, or failing that, the extraterritorial application of its domestic regime. Section 377 of the PATRIOT Act is quite clear in this

44 Eric Lichtblau, "U.S. Cautiously Begins to Seize Millions in Foreign Banks," New York Times (New York), 30 May 2003, Available: Lexis-Ncxis [accessed 16 June 2003a, b, c].

45 Isikoff, "Show Me the Money," p. 36.

46 Ibid. The article quoted Peter Djinis, a banking lawyer.

47 Associated Press, "Anti-Terror Laws Capture Common Criminals," New York Times 14 September 2003, Available: http://www.nytimes.com/aponline/national/ AP-Anti- Terror-Laws.html [accessedl4 September 2003].

48 Lichtblau, "U.S. Uses Terror Law to Pursue Crimes From Drugs to Swindling." 49 Ibid., p. 1.

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respect. With a heading of "Extraterritorial Jurisdiction," this section of Title III amends the relevant U.S. law on money laundering offenses.

Any person who, outside the jurisdiction of the United States, engages in any act that, if committed within the jurisdiction of the United States, would constitute an offense under subsection (a) or (b) of this section, shall be subject to the fines, penalties, imprisonment, and forfeiture provided in this title ...

Therefore, if some connection to a financial account or institution in the United States can be established, then the federal government may attach, or seize it. An article in May 2003 reported that up to that time this tactic had been used in a half dozen cases involving 15 banks. This included an American lawyer accused of embezzling clients before fleeing to Belize. Efforts to get the cooperation of Belize to freeze his accounts had met with problems, therefore the Justice Department simply seized US$1.7 million from the correspondent accounts that Belizean banks had with American banks, using the provisions of the PATRIOT Act.5o Similarly, the actions of the U.S. Department of the Treasury when imposing unilateral U.S. financial sanctions reverberate through the country's economic and social sphere. The text on the Terrorism Sanctions web page of the U.S. Department of the Treasury's Office of Foreign Assets Control reminds Americans that the sanctions regulations apply to "All U.S. persons and entities (companies, non-profit groups, government agencies, etc.) wherever located.v" Consequently, any individual or firm engaged in any foreign business transaction may be held liable, and potentially complicit, in the financing of terrorism. 52

The influence of the U.S. may be seen beyond instigating and guiding the revisions made to the Forty Recommendations to include terrorist financing.f A United Nations Security Council Resolution (1373) was approved in September 2001 that also mandated member states to take measures against terrorist financing. "The resolution was 'one of the most intrusive the organization has ever passed,' says John Ruggie, a Harvard professor of international relations and former U.N. official.v'" The intrusiveness of the Resolution extends beyond the International Convention for the Suppression of the Financing of Terrorism opened for signature in 1999. As noted by Jose E. Alvarez, while Security Council Resolution 1373 (2001) contains elements of the Convention it also included measures reaching beyond those found in the Convention. In essence, these additional

50 Lichtblau, "U.S. Cautiously Begins to Seize Millions in Foreign Banks."

51 See http://www.ustreas.gov/offices/enforcementiofac/programs/terror/ten·or.shtm!.

52 For example, Ibrahim Warde recounts the story of Ptech, a Massachusetts-based software finn co-founded by a Lebanese immigrant, see Ibrahim Warde, The Price of Fear: Al-Qaeda and the Truth Behind the Financial War on Terror (London: LB. Tauris, 2007), p. 113.

53 John B. Taylor, Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World (New York & London: W. W. Norton & Company, 2007), p. 12, 18.

54 Alix M. Freedman and Bill Spindle, "Global Upheaval Shakes Roots of U.N. Mandate to their Foundations," The Wall Street Journal Europe (Brussels), 19 21 December 2003, p. 8.

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measures were imposed 'by fiat' in that they did not the result from negotiations, compromise and consensus involving all interested state parties in the same way that the Convention had been agreed. Arguably, this Resolution represents a case of the Security Council acting as a "global legislator.v"

Beyond the global directives of the UN Security Council, foreign firms with offices in the US., or that conduct business with US. firms are obligated to comply with PATRIOT Act provisions. An editorial in The Manila Times highlighted the magnitude of fines facing Filipino financial institutions with U.S. branches if they failed to have satisfactory financial surveillance controls in place.

Even ifthere isn't a clear-cut money laundering case, poor AML controls can also lead to fines. A US Money Services Business - Western Union - has had to pay a fine of US$8 million for poor AML controls. The New York branch of the Bank of China was fined US$20 million in January 2002 by the US OCC [Office of the Comptroller of the Currency] for irregular loans-they are also embroiled in a nasty money laundering scam that Iinks from China to Hong Kong and Canada.i"

The global reach of these requirements is such that U.S. financial institutions must verify that all correspondent account holders (foreign financial firms) meet U.S. standards of financial surveillance. 57 This requirement has created an expensive obligation for banks on both sides of the correspondent relationship, leading some banks in Latin America to shift their business away from Miami to Europe and denominating it in Euros rather than U.S. dollars.i" A further aspect was identified in a New Zealand business weekly, which alerted its readers to the impact of the PATRIOT Act for local financial institutions, using as its example ubiquitous credit card services. If an American bank is unable to certify that its foreign partner has implemented effective systems for verifying the identity of its customer, the American bank is "forbidden" from doing business with it.59 The other side of the equation may be just as intimidating, for example when a Bahamian bank refused to provide MasterCard account information to the US. Internal Revenue Service (IRS) because the bank determined that reporting account data to the U.S. government was a customer responsibility. The IRS didn't see it the same way and responded by pressuring

55 Jose E. Alvarez, "The Security Council's War on Terrorism: Problems and Policy Options," Review of the Security Council by Member States, eds. Erika de Wet, Andre Nollkaemper and Petra Dijkstra (Antwerp:

Intersentia, 2003), p. 121. On this point, Eric Rosand suggested that the "legislative" action of the Security Council with this Resolution was a "pragmatic triumph" when compared to the longstanding deadlock in the General Assembly over a comprehensive convention against international terrorism. See Eric Rosand, "The Security Council as "Global Legislator": Ultra Vires or Ultra Innovative?," Fordham International Law Journal 28 (2005), pp. 548-549. However, his perspective must be viewed through the lens of his official position as Deputy Legal Counselor in the U.S. Mission to the United Nations in New York, even though the views and opinions expressed are his and not necessarily those of the U.S. government.

56 Rohan Bedi, "The new anti-money laundering regime," The Manila Times 3 March 2003, Available: http://www.manilatimes.net/nationaI/2003/mar/03/0pinion/200303030pi5.html [accessed 7 March 2003].

57 Ethan Preston, 'The USA PATRIOT Act: New Adventures in American Extraterritoriality," Journal of Financial Crime 10, no. 2 (2002), pp. 107-108.

5R Jane Bussey, "Anti-money laundering compliance sparks debate," The Miami Herald 15 February 2007, Available: http://origin.miami.com/mld/miamiheraldlbusiness/ 16700079. htm?source=rss&channel=m iam i herald_business [accessed 27 April 2007].

59 Lesley Springall, "Conscripted By US Patriot Act," The Independent (Auckland), 22 November 2002, Available: http://xtramsn.co.nzlbusiness/0,,5007-1938571,00.hlrnl [accessed 27 November 2002].

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MasterCard International into withdrawing the bank's license to issue credit cards, affecting thousands of customers and not simply the U.S. citizens sought by the IRS.60

The Financial Panopticon

In his 1989 book, Necessary Illusions, Noam Chomsky quoted the Keynote speech made by U.S. Supreme COUli Justice William Brennan to the conference, "Free Speech and National Security," at the Law School of Hebrew University on 22 December 1987. Chomsky was concerned at that time with allusions to the freedom of the press and of the events then occurring in Nicaragua. 6 I However, the continued relevance of Justice Brennan's speech was recognized in the aftermath of the passage of the PATRIOT Act, and it was made available for a time on the website of the Brennan Center for Justice at NYU School of Law.62

For as adamant as my country has been about civil liberties during peacetime, it has a long history of failing to preserve civil liberties when it perceived its national security threatened. This series offailures is particularly frustrating in that it appears to result not from informed and rational decisions that protecting civil liberties would expose the United States to unacceptable security risks, but rather from the episodic nature of our security crises. After each perceived security crisis ended, the United States has remorsefully realized that the abrogation of civil liberties was unnecessary, But it has proven unable to prevent itself from repeating the error when the next crisis came along.63

The extension of surveillance into all forms of finance and the use of PATRIOT Act provisions for non-terrorist investigations underscore the threat to civil liberty, particularly when the use of cash and the failure to follow a consistent historical pattern of banking activity transforms the citizen into a suspect. The campaigns against money laundering and terrorist financing have been identified as reasons to reduce the quantity of large denomination bills in circulation and even the complete elimination of cash altogether." Accompanying this elimination of cash and its attendant capacity for anonymity is one small point that policy advocates fail to mention. Forgotten is the profit that will accumulate

60 Lindsay Thompson, "Clients' job to provide credit card data to U.S. TRS," The Nassau Guardian (Bahamas), 18 March 2003, Available: http://www.thenassauguardian.comlbusiness/28421S73S11IS17.php [accessed 3 April 2003]; Martella Matthews, "IRS pressure kills Leadenhall Mastercards," The Nassau Guardian (Bahamas), 30 July 2003, Available: http://www.thenassauguardian.com/business/ 278287488782622.php [accessed 19 August 2003].

61 Noam Chomsky, Necessary Illusions (South End Press, 1989), Available: http://www.zmag.org/chomsky/ ni/ni-contents.html [accessed 19 December 2003].

62 William Brennan, The Quest to Develop a Jurisprudence of Civil Liberties in Times of Security Crises, 1987, PDF, Brennan Center for Justice at NYU School of Law, Available: http://www.brennancenter.org! resources/resources_national_security.html [accessed 19 December 2003]. No longer present on the Center's website at time of writing, a copy is on file with the author.

63 Ibid. However, it should also be noted that the version ofthe speech available from the Brennan Center for Justice had been edited, which was noted by the presence of an ellipse at the beginning of the final paragraph. It no longer contained the references to Israel and the preservation of civil liberties within Israel as quoted by Chomsky. The complete lecture is available in Yoram Dinstein, ed., Israel Yearbook on Human Rights, vol. 18 (Dordrecht, Netherlands: Martinus Nijhoff Publishers, 1988).

64 Financial Action Task Force, Report on Money Laundering Typologies, 1998-1999, English, 10 February 1999, PDF file, Available: http://www.fatf-gafi.org/dataoecd!29/38/34038177.pdf [accessed 21 March 2002].

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from the increased number of transaction fees collected by banks, credit card companies, payment associations and mobile phone companies.F

Have we now entered a space were a Monty Python tag line has become reality? It is now true that while "Nobody expects the Spanish Inquisition!" your business activities are subject to interrogation. It is a space where your bank has become part of the structure of the inquisitive apparatus of the state, of its surveillant assemblage." To live in a risk society is not only to live in fear of terrorists and other criminals, but to also live in fear of the state surveillance apparatus and its exuberant efforts to protect citizens from risk. 67 With the implementation of the PATRIOT Act, this surveillance apparatus, and the measures taken by the U.S. government, are not limited to its citizens and residents, as was the case for the historical examples provided by Justice Brennan.

As is evident from the sampling of news stories illustrating this article, the financial surveillance mechanism has become pervasive. It now inquires into every transaction performed electronically, as well as the use of cash at many businesses (in real estate, jewelry, pawnshops, casinos, travel agents, etc.). Moreover, the system of financial surveillance is increasingly global, sliding its tendrils into the financial and non-financial institutions of developed and developing states alike.68 Traditional systems of exchange outside of banking (the formal financial sector) are suspect because they are unknown. The FATF defines them as "alternative remittance systems" and acknowledges that they serve a valuable function in some contexts.i" However, their concern is that as the formal sector more aggressively pursues money laundering and terrorist finance, this activity will be displaced into the informal financial sector. Consequently, the FATF urges the regulation (licensing and registration) of the alternative remittance systems, the implementation of comparable surveillance mechanisms, and sanctions for the individuals and firms that don't comply with the new regulation. In essence, they desire to make the informal, formal.i''

Yet another instance of collateral damage in the financial war on terror includes those individuals unable to meet the requirements to present identify documents at a bank and those deemed to be a "risk". The "know your customer" requirements placed on financial institutions as part of these initiatives to combat the financing of terrorism and money laundering not only includes assuring the person opening a new account is not a terrorist, but also verifying that all current account holders are not involved in financing terrorism or money laundering. The problematic aspect here is that the requirements to produce

65 Anonymous, "The future of money: A cash call," The Economist, 17 February (2007).

66 Kevin D. Haggerty and Richard V. Ericson, "The surveillant assemblage," British Journal of Sociology 51, no. 4 (2000).

67 Ulrich Beck, "Living in the World Risk Society," Lecture given at the London School of Economics and Political Science on IS February 2006 (2006), Available: http://www.lse.ac.uk/coliections/LSEPublicLecturesAndEvents/ events/2006/20051215t1424z001.htrn; Ulrich Beck, "The Terrorist Threat: World Risk Society Revisited," Theory, Culture & Society 19, no. 4 (2002).

es For a comparative analysis between the United Kingdom and South Africa, see Louis De Koker, "Money laundering control and suppression of financing of terrorism: Some thoughts on the impact of customer due diligence measures on financial exclusion," Journal of Financial Crime 13, no. I (2005).

69 Financial Action Task Force, Combating the Abuse of Alternative Remittance Systems: International Best Practices, English, 20 June 2003, PDF file, Available: http://www.fatf-gafi.org'!pdf/SR6-BPP_en.pdf [accessed 30 June 2003].

70 William Vlcek, "Surveillance to Combat Terrorist Financing in Europe: Whose liberty, whose security"," European Security 16, no. I (2007).

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documentation to prove identity and residency can be difficult for migrants (both legal and illegal), people that frequently move house (like students), and the homeless. The effect will be to further increase financial exclusion as banks seek to avoid the risk that these groups could include a terrorist and consequently they will be denied an account. 71

Finally, the fact that the tools provided by the PATRIOT Act to counter terrorism also enhance the pursuit of "garden-variety criminals" has been represented by the government as a benefit. Too late, after the smoke has dissipated and emotions settled down, do our elected representatives realize they have offered up the individual liberty and personal freedom of all of us, and not just that of the criminal terrorists.F The result has also been to expand the scope of surveillance in society, to implement elements of the panopticon into the structure of the financial network." This extends the scope of state power and knowledge over what heretofore had been viewed by many as their private business dealings. The citizens have been fully consumed by the Sovereign. A quotation by Benjamin Franklin dating from the Revolutionary Period increasingly has seen print since 2001, "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."

Closing Remarks

Clearly the surveillance and monitoring of populations has evolved and increased over recent years. This change is particularly obvious to anyone old enough to recall arriving at the airport minutes before departure and literally running through the terminal to board your flight." The primary focus of the preceding discussion, however, has been on the less visible and thus less obvious expansion of surveillance into our financial lives. Discussing this topic with friends and colleagues in the past few years frequently has resulted in shocked and worried reactions-"can they really do that?". There has been a steady erosion of privacy and the anonymity of our individual financial dealings, as unwittingly we have permitted legislatures and governments to extend surveillance throughout society in an attempt to reduce or expose criminal conduct. The criminal, however, is very aware of these initiatives and simply undertakes the maneuver of "displacement," thus street crime moves to an area without CCTVand money launders move to bulk cash transfers. " The FATF is well aware of this displacement, which simply means that the next shift in the flows of criminal money has not yet been definitively identified.I"

71 Louise Amoore and Marieke de Goede, "Governance, risk and dataveillance in the war on terror," Crime, Law and Social Change 43, no. 2-3 (2005); Marieke de Goede, "Financial Regulation and the War on Terror," Global Finance in the New Century: Beyond Deregulation, eds. Libby Assassi, Anastasia Nesvetailova and Duncan Wigan (Basingstoke: Palgrave Macmillan, 2007).

72 A conversation between a Representative from Nevada and the local FBI office left her unsettled. Shelley Berkley says "never. .. did the FBI say we needed additional tools to keep this nation safe from strip-club operators." Tsikoff, "Show Me the Money," p. 36.

73 Stephen Gill, "American Transparency Capitalism and Human Security: A Contradiction in Terms"," Global Change, Peace and Security 15, no. 1 (2003); Stephen Gill, "The Global Panopticon? The Neoliberal State, Economic Life, and Democratic Surveillance," Alternatives 20, no. 1 (1995).

74 An activity the author will admit to having performed once or twice in the 1980s.

75 Brandon C. Welsh and David P. Farrington, "Surveillance for Crime Prevention in Public Space: Results and Policy Choices in Britain and America," Criminology & Public Policy 3, no. 3 (2004), pp. 510-513. 76 Financial Action Task Force, Money Laundering and Terrorist Financing Typologies, 2004-2005, English, 10 June 2005, PDF file, Available: http://www.fatf-gafi.org/dataoecd/16/8/35003256.pdf [accessed 24 June 2005], p. 85.

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Defending society from criminal conduct and terrorist attacks is important. But at the same time, democratic societies must not forget what it is that citizens value about living in a democracy-liberty, as well as security. Any governmental and social structure can provide security, at least for a few; however, liberty for the majority is unique to modem democratic societies. The increased incidence of domestic surveillance as discussed here, moves Western societies further into the condition Michel Foucault has named "governmentality," These changes involve many other areas of public/private life, including transportation, borders, medical care, and higher education. The incremental loss of liberty, in pursuit of security, may appear to be a slippery slope. Instead, we must believe in two things-first that contrary to the labors of Sisyphus, it is possible to reverse the trend, and to push society up and over the crest to liberty. Second, that society recognizes and desires liberty, even at the cost of some parts of the security blanket offered by the government.

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