PRIVACY GROUPS MOBILIZE AGAINST BANK REPORTING

WASHINGTON - Flush with their success in forcing regulators to drop proposed
rules on tracking bank customers' habits, civil libertarians and other
groups are organizing a big e-mail campaign to end reporting requirements
for cash transactions.

Law enforcement authorities, in response, are warning against any weakening
of the Bank Secrecy Act.

Officials of the Justice and Treasury departments and the U.S. Customs
Service are expected to tell Congress today that the 1974 law is an
essential tool for detecting and prosecuting money launderers and drug
traffickers. They are scheduled to testify at a hearing of the House Banking
subcommittees on oversight and financial institutions.

For example, the Customs Service says it used about 80 suspicious activity
reports filed by banks under the law to identify bank accounts of money
launderers targeted in Operation Casablanca. That enabled Customs agents to
locate suspects' assets that were seized and forfeited in the 1998
operation.

Far-reaching legislation pushed by Rep. Ron Paul, R-Texas, would repeal the
Bank Secrecy Act, which requires banks to report customers' cash
transactions of $10,000 or more, as well as suspicious activities, to law
enforcement authorities.

The law is designed to combat money laundering techniques used by drug
traffickers and other criminals to hide illegal profits.

But Paul maintains it violates the Fourth Amendment prohibition against
unreasonable search and seizure and that at any rate, it has failed to help
catch drug dealers, who he says "are smarter than most bankers."

The Libertarian Party, the American Civil Liberties Union, privacy advocacy
associations and other groups are mobilizing to generate support for Paul's
bill.

Getz was referring to the earlier blitz of some 225,000 e-mail messages and
letters, nearly all in opposition, received by the Federal Deposit Insurance
Corp. on proposed anti-money laundering rules that would have tracked the
transaction patterns of bank customers.

Bowing to the public outcry over privacy, the FDIC and three other federal
banking agencies scrapped the proposal last month.