A June 29 Washington Post article by staff writers Charles Babington and Michael Abramowitz reported outgoing Treasury Secretary John W. Snow's claim that the June 23 report by The New York Times of a Treasury Department program designed to monitor terrorists' international financial transactions “undermined a highly successful counter-terrorism program and alerted terrorists to the methods and sources used to track their money trails.” While the article also noted that former State Department official Victor Comras said it was " 'doubtful' that the disclosure had much impact because many terrorists have taken steps in recent years to mask their transactions, aware they might be under surveillance," the story at no point mentioned the numerous instances in which administration officials have publicly touted their efforts to track terrorist finances. Nor did the article note that nearly two years ago, Treasury Department official Stuart A. Levey acknowledged in testimony before Congress that terrorists were increasingly using alternate means of transferring money to elude detection.

By contrast, The New York Times reported on June 29 that government agencies “have often trumpeted their successes in tracking terrorist funding” in the years following the September 11, 2001, terrorist attacks, noting that, while the Treasury program was never mentioned by name, officials “have repeatedly described their cooperation with financial networks to identify accounts held by people and organizations linked to terrorism.”

Further, as Media Matters for America previously noted, the cooperative effort to track terrorist financing between the banking consortium known as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and the U.S. government was a matter of public record long before the Times detailed the Treasury program, and government officials have previously stated that a shift had been observed in the way terror suspects moved money. Levey, the Treasury Department's undersecretary for terrorism and financial intelligence, testified before Congress on September 22, 2004, that the government had begun “working closely” with the international Financial Action Task Force to interdict terrorist organizations' increased use of cash. Levey said, “As the formal and informal financial sectors become increasingly inhospitable to financiers of terrorism, we have witnessed an increasing reliance by Al Qaida and terrorist groups on cash couriers. The movement of money via cash couriers is now one of the principal methods that terrorists use to move funds.”

From the June 29 article in The Washington Post

Last week, the New York Times, Wall Street Journal and Los Angeles Times reported that the banking surveillance program used a new interpretation of the Treasury Department's administrative authority to bypass traditional banking privacy protections, sweeping up large numbers of international money transfers in a bid to identify terrorist funding operations. The Washington Post quickly matched the reports, which were posted on Web sites Thursday night.

There is growing debate about whether the disclosures aided terrorists or added to the government's burden. Victor Comras, a retired diplomat and consultant on terrorism financing, said he finds it “doubtful” that the disclosure had much impact because many terrorists have taken steps in recent years to mask their transactions, aware they might be under surveillance.

“I can understand why people are upset when any classified information is leaked, but I wouldn't call this a major damage to our national security or to the war on terror,” Comras said in an interview. “A terrorist would have to be pretty dumb not to know that this was happening.”

Administration officials disputed such claims, saying there is a big difference between a terrorist thinking the government may be watching him and knowing exactly what the government is doing to monitor financial flows. In a letter to the New York Times posted on the Treasury Department's Web site, outgoing Secretary John W. Snow wrote, “In choosing to expose this program, despite repeated pleas from high-level officials on both sides of the aisle, including myself, the Times undermined a highly successful counter-terrorism program and alerted terrorists to the methods and sources used to track their money trails.”

From the June 29 article in The New York Times:

Mr. [Andrew C.] McCarthy [a former federal prosecutor] said he thought the Swift disclosure might encourage terrorist plotters to stop moving money through the banking system, depriving the United States and its allies of a valuable window on their activities. “Methods they assumed were safe they now know are not so safe,” he said.

But Bob Kerrey, a member of the 9/11 commission and former Democratic senator from Nebraska, took a different view, saying that if the news reports drive terrorists out of the banking system, that could actually help the counterterrorism cause.

“If we tell people who are potential criminals that we have a lot of police on the beat, that's a substantial deterrent,” said Mr. Kerrey, now president of New School University. If terrorists decide it is too risky to move money through official channels, “that's very good, because it's much, much harder to move money in other ways,” Mr. Kerrey said.

A State Department official, Anthony Wayne, made a parallel point in 2004 before Congress. “As we've made it more difficult for them to use the banking system,” Mr. Wayne said, “they've been shifting to other less reliable and more cumbersome methods, such as cash couriers.”

As such testimony suggests, government agencies have often trumpeted their successes in tracking terrorist funding. President Bush set the tone on Sept. 24, 2001, declaring, “We're putting banks and financial institutions around the world on notice -- we will work with their governments, ask them to freeze or block terrorists' ability to access funds in foreign accounts.”

Since then, the Treasury Department has produced dozens of news releases and public reports detailing its efforts. Though officials appear never to have mentioned the Swift program, they have repeatedly described their cooperation with financial networks to identify accounts held by people and organizations linked to terrorism.

Working with “our allies abroad and our partners in the private sector,” an April news release said, “Treasury follows the terrorists' money trails aggressively, exploiting them for intelligence.”