MASS E-MAIL PROTEST TARGETS RULE REQUIRING REPORTS ON CASH DEALS

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, which was the biggest drug money-laundering case in U.S. history.

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.

"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.