In previous notes, I have examined “The Narrative” underlying the drip-drip-drip of revelations about electoric snooping. The narrative (“We are watching everyone, everywhere, all the time”) has a number of useful infowar purposes: it makes IT less available to adversaries and it educates friends about the vulnerabilities of civilian IT.
One other benefit of the “NSA is collecting metadata” revelations to the US government is that is obscures other, far more important activities. Foremost among these is the monitoring and manipulation of money flows. Economic warfare is arguably more important national securitywise than all the phone and email records you could ever find. Indeed, one important use of all the metadata collection is to understand social networks in order to locate and block money.
We see today a story in the NYT that CIA (not the NSA) routinely collects records of money transfers. Scarcely a surprising “revelation”, but several points in the article are interesting. “The data does not include purely domestic transfers or bank-to-bank transactions” most likely because the other data is collected by other agencies which have domestic authority. I.e., the CIA doesn’t collect the domestic data because it is available via the FBI or Treasury.
Obviously, there is very good reason for US intelligence to track international financial transfers: global crime, weapons proliferation, terrorism, and economic warfare are dangerous threats.
For a flavor of what this data is for, see Treasury’s War, by Juan Zarate (PublicAffiars, 2013). This book lays out the strategic position of the US Treasury department, which does need FISA or any other special authority to monitor and intervene in banking and financial matters.
His book is a bit dry (but better than you might fear, from a bureaucrat) but quite clear. He lays out the view from inside the US government: the world of “bad actors” exploiting and corrupting the international financial system. Many dangerous activities, including nuclear dissemination, large scale criminal trafficking, and global jihadist movements depend on raising and moving money around the world. This is done via banks (subject to US and other governments) wire transfers, and couriers.
Zarate recounts the US Treasury Departments activities, under their authority to protect the banking system and combat money laundering. In case you didn’t realize it, all bank records (including transfers) are already subject to government monitoring and regulation. No warrants needed: if you use a normal bank, you are using a government supervised bank.
Treasury can, and does, conduct economic warfare. One of the most powerful “sanctions” that has been imposed on Iran in recent years is to cut it off from SWIFT, the official messaging system for interbank transfers. This dry, technical action by the US Treasury and others is actually one of the most powerful acts of war to date
This highly unusual action makes if very difficult for Iranian banks to conduct business with other banks, interfering with the sale of exported oil and the import of goods. Combined with other actions, this has brought the Iranians to the bargaining table. And we can be sure they will want these actions lifted as part of any deal.
Zarate’s book has some useful insights into interagency collaboration and lack thereof within the US government. It is important to understand the potential power of his kind of economic warfare, but also its limitations. It is not a pinpoint weapon, nor is it something that can be turned on an off. Many of the powers that be in Washington have very limited understanding of these issues.
I would comment that Zarate understand banks, but his views on macroeconomics are not especially deep or clever. Also, in passing, he notes that technological developments such as BitCoin are just what bad actors have been hoping for. Treasury has already acted on this, and don’t fool yourself—this means using BitCoins will be monitored just like cash. What did you expect?
So, what do we know? The US and other governments have very good reason and plenty of legal authority to monitor and intervene in financial transfers. In the US, multiple agencies are involved. We also see that the CIA and NSA also collect data outside the US (no doubt other national intelligence agencies collect such data as they can within the US). We even see hints of redundant coverage, covert acquisition of financial data (off the wire) which is also available from the participants (e.g., bank records).
Attention to the “all my Snowdens” soap opera, and fretting about NSA collecting metadata helps divert attention from these other activities which are, arguably, much more useful for national security, and also more invasive.
I note that the NSA is publicly indicating that they are going to “get out in front” of further “revelations”. This should interesting, for what they don’t say as much as what they do. I expect to witness a masterpiece of “narrative” from them.