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SWIFT and American Espionage

• March 10, 2010 • 5:00 AM

Europe’s newly empowered Parliament’s first muscle flex involves privacy and tracking terrorist finances.

Last month the European Union staged a minor revolt against American arrogance that must have felt, to some Europeans, like an episode of Asterix clobbering the Romans.

The European Parliament rejected a plan to let U.S. intelligence agencies monitor European bank transfers. The so-called “SWIFT agreement” was supposed to be a quick and relatively quiet extension of an unusual freedom the Americans had enjoyed for years after 9/11 — the capacity to scoop up masses of European bank data and sift them for evidence of terrorist funding.

Other, less democratic arms of the European Union were ready to wave the agreement through. But the European Parliament — the only elected group of EU lawmakers — had been granted new powers at the end of 2009, and on Feb. 11 asserted them by vetoing the SWIFT agreement, saying the U.S. would have too much command of personal data that was frankly none of its damn business.

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. The Brussels-based outfit arranges billions of dollars’ worth of bank transfers every day. Until 2009, it maintained a server in the United States, and just after the attacks on the World Trade Center and the Pentagon in 2001, the CIA and other intelligence-hungry government agencies subpoenaed SWIFT and started to help themselves to European data. Some European leaders knew about the snooping, but it belonged to a much wider surveillance project that was largely hushed up.

When American newspapers broke stories about the so-called “Terrorist Finance Tracking Program” in 2006, European privacy advocates howled. They said the Americans were taking data not even their own governments could legally see. “Why does the U.S. Secretary of Defense Donald Rumsfeld need to know when I transfer some money from Rabobank to the Sparkasse bank?” Luxembourg’s Foreign Minister Jean Asselborn said at the time.

The data helped catch terrorists, or so a restricted report on the program claims. Three of the four would-be terrorists who were sentenced last week for plotting an attack on German soil belonged to a group called Islamic Jihad Union, which U.S. and German officials reportedly tracked using SWIFT data. The Americans “shared information” with European law enforcement, and the European investigators didn’t mind being privy to otherwise restricted data from their own part of the world.

So the EU drafted a new agreement last year to keep the Terrorist Finance Tracking Program running even after the first of February, by which time SWIFT had moved its servers away from U.S. soil. But in December the EU had also ratified the Lisbon Treaty, a constitution-like document that gives new, more government-like powers to the EU’s lawmaking bodies. Now any international treaty entered into by EU executives in Brussels had to be approved by the normally feckless European Parliament.

The Parliament’s first high-profile act — in the face of Washington’s lobbyist armies led by Vice President Joe Biden — was to veto the SWIFT agreement. European legislators found it a shabby back-room deal, without enough privacy protection. They sent it back for a re-draft.

Some American commentators have lamented the loss of the agreement and accused Europe of leaving everyone more vulnerable to terrorism. But the European Parliament intends to reach a more detailed SWIFT agreement later this year and put the terrorist tracking program on a sound legal footing.

The irony is that politicians in Europe who have hollered loudest about the Americans’ cavalier attitude toward private European data are the ones most aligned with down-home American values. Europe’s liberals — Americans would call them “libertarians” — stand for smaller government, lower taxes, free markets and individual liberty. They came out swinging against the SWIFT agreement. It wasn’t quite Asterix clobbering the Romans, but Alexander Alvaro, a member of the Free Democrats, Germany’s liberal party, said the parliament’s decision was “a victory for European data protection and for European democracy.”

Washington — needless to say — saw things differently.

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Michael Scott Moore
Michael Scott Moore was a 2006-2007 Fulbright fellow for journalism in Germany, and The Economist named his surf travelogue, "Sweetness and Blood," a book of the year in 2010. His first novel, "Too Much of Nothing," was published by Carroll & Graf in 2003, and he’s written about politics and travel for The Atlantic Monthly, Slate, the Los Angeles Times, and Spiegel Online in Berlin, where he serves as editor-at-large.

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