GROUPS AGAINST BANK REPORTING LAW

WASHINGTON (AP) When it went after suspected money launderers in
Operation Casablanca last year, the U.S. Customs Service used about 80
suspicious activity reports filed by banks under a 1974 law to
identify their bank accounts.

That enabled Customs agents to locate suspects' assets that were
seized and forfeited in the operation, which was the biggest drug
money-laundering case in U.S. history.

The Customs Service is pointing to it as an example of the Bank
Secrecy Act's value, as civil libertarians and other groups organize a
big campaign to end the law's reporting requirements for cash
transactions.

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.

Officials of the Justice and Treasury departments and the Customs
Service are telling Congress that the Bank Secrecy Act is an essential
tool for detecting and prosecuting money launderers and drug
traffickers.

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.

"We will try to inundate Congress with another torrent of e-mails,"
Libertarian Party spokesman George Getz said Monday.

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.

This time, Getz said, the Libertarians want people to contact their
member of Congress, since the Bank Secrecy Act already is law and
there is no request for public comment from the banking regulators.

"We've got a bigger gun this time," he said, explaining that the group
can draw on the people who earlier protested the so-called "Know Your
Customer" rules.

Gregory Nojeim, legislative counsel for the ACLU, said the group
recently started a "Know Your Banker" campaign on its Web site to help
consumers understand banks' current monitoring practices and encourage
competition among banks based on their privacy policies.

Legislative prospects for Paul's bill appear dim, as they do for a
companion measure he proposed that would let people see the files on
them created by the federal Financial Crimes Enforcement Network.

Rep. Marge Roukema, R-N.J., chairwoman of the financial institutions
subcommittee, said Monday she does not want the Bank Secrecy Act repealed.

"We need to deal with the real world of money laundering, and the Bank
Secrecy Act has helped (law enforcement) do an excellent job," Roukema
said in a telephone interview. She said she may seek changes in the
law to improve law enforcement's ability to fight money laundering.

As of Monday, Paul had found only two co-sponsors for his bill, Reps.
John Thune, R-S.D., and Bob Schaffer, R-Colo.

Money laundering, which is a major concern of law enforcement
officials, reached an estimated $30 billion in this country last year.

Laundering includes the use of wire transfers and bank drafts as well
as "smurfing," the practice of breaking down transactions into smaller
amounts that do not have to be reported under the Bank Secrecy Act.