Deputizing the Private Sector

Radley Balko | March 28, 2007

The latest chapter in the troubling trend of the federal government asking private companies to police the transactions of their customers:

Tom Kubbany is neither a terrorist nor a drug trafficker, has average credit and has owned homes in the past, so the Northern California mental-health worker was baffled when his mortgage broker said lenders were not interested in him. Reviewing his loan file, he discovered something shocking. At the top of his credit report was an OFAC alert provided by credit bureau TransUnion that showed that his middle name, Hassan, is an alias for Ali Saddam Hussein, purportedly a "son of Saddam Hussein.

Kubbany's the victim of a list of suspected terrorists the Treasury Department forbids American companies from doing business with. The burden is on private companies to sniff out false positives, but given that they can face fines of up to $10 million and 10-30 years in prison for violating the law, and face nothing other than lost business for over-compliance, most would rather err on the side of compliance. That sucks if the "OFAC" warning appears at the top of your credit report, and you happen to be innocent.

"The law is ridiculous," said Tom Hudson, a lawyer in Hanover, Md., who advises car dealers to use the list to avoid penalties. "It prohibits anyone from doing business with anyone who's on the list. It does not have a minimum dollar amount. . . . The local deli, if it sells a sandwich to someone whose name appears on the list, has violated the law."

I happen to know someone (who's about as far from a terrorist as one could imagine) on the airport "watch list." Once the federal government has flagged you with one of these labels, it's extremely difficult to clear your name.

Comments

|3.28.07 @ 10:38AM|#

It's really these people's own fault for having suspicious-sounding names. And what's wrong with preventing terrorists from getting deli sandwiches? We can starve them that way.

|3.28.07 @ 10:46AM|#

Denny Crane!!!

Timothy|3.28.07 @ 10:57AM|#

They've been doing this kind of crap to banks and other financial institutions since the 70s. It's fucking ridiculous, maybe one day it'll go far enough that people care.

|3.28.07 @ 11:04AM|#

I've got a friend who has one of the perennial top-ten first names from the 20's through the 80's (Biblical, New Testament) and one of the most common last names (English job description) and his name got put on the watch list.

Not his middle name. Just his first and last.

|3.28.07 @ 11:06AM|#

I don't have a beef with this. Treasury publishes the list online, much better than the no-fly list:

www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf

The credit agency and the mortgage company were retarded in not looking at the list (which contains about 100 "Hassans", no "Kubbanys") but libertarians aren't concerned about retarded private businesses.

|3.28.07 @ 11:07AM|#

They've been doing this kind of crap to banks and other financial institutions since the 70s. It's fucking ridiculous, maybe one day it'll go far enough that people care.

Not if they do it gradually enough, and back it with big excuses like "preventing terrorism". People will roll over, do what they're told, and even pay for the cost themselves. They'll grumble about it, but they'll do it.

|3.28.07 @ 11:08AM|#

What, exactly, will get you put on the watch list? Bomb-making convictions? Past arrests? Having the same name as a terrist? Not respecting the baggage screener's authoritah?

|3.28.07 @ 11:26AM|#

There are many, many Hassans. It's a common freakin' name. The presence of "Hassan" tells you no more about the guy than if someone had "William" as his middle name.

Is Obama on a bunch of watch lists because his middle name is "Hussein"?

|3.28.07 @ 11:34AM|#

"but libertarians aren't concerned about retarded private businesses."

Because if the government didn't have the stupid list to start with, or wasn't so willing to prosecute the everliving fuck out of anyone who even inadvertently crosses the line, this kind of thing wouldn't happen.

GILMORE|3.28.07 @ 11:35AM|#

*I'm* on the freaking airport watch list! I've been bitching about it since... well, since the OTHER John Gilmore decided to sue the AG over secret TSA rules, and the TSA responded by putting ALL us JG's on the No Fly list.

Whats so depressing is that the flight booking agents KNOW it's total bullshit, and once you get to the front of the line and explain the deal, they waive the thing and get you cleared no questions asked. But it still means that you have to kill an extra hour in lines for simple domestic flights that normally you could 'eTicket' and board immediately.

What, exactly, will get you put on the watch list?

In all the cases I've come across (1/2 dozen, mostly pissed off dude in lines in airports) it's been cases of Having The Wrong Name. And by wrong name, it doesnt have to be Osama Jihad - it can be Tom Smith. If some Tom Smith somewhere happens to send money to Palestine charities or something. The reason the flags apply to so many people is that the TSA doesnt disclose anything BUT the names, so that all people with certain names have to be manually 'cleared' for individual flights.

I was told by a TSA rep that I can file a complaint (send this form in with copy of your SS Card, Passport, etc), but that my name would not be removed, only 'tagged' differently so that in subsequent revisions of the list I "May" be reclassified.

Here's some stuff from the DHS site

Q: "How do I know if I am on a Government Watch List?

The U.S. government does not reveal whether a particular person is on the terrorist watch list, which is administered by the Terrorist Screening Center. If the government revealed who was on the terrorist watch list, terrorist organizations would be able to circumvent its purpose by determining in advance which of their members are likely to be questioned or detained. More information on the Terrorist Screening Center.

Many people are erroneously told or led to believe that they are on a watch list during a screening process, when in fact they are merely experiencing a delay caused by a name similarity to a person who is on the watch list. DHS TRIP can help resolve these inconveniences. - Go To Step 2

I find it funny they set up the question, then more or less say, "YOU CANT EVER KNOW FOR SURE IF WE PUT YOU ON THE LIST. THANKS FOR ASKING THOUGH"

Bhh|3.28.07 @ 11:36AM|#

Turning your bank into a spy on you is one of the more evil trends over the last few decades. Will probably turn out as bad as payroll taxes.

I rolled over a 401k into a Roth IRA last year and I knew it was taxed. But I thought "I'd rather not have a portion of that flushed down the toilet." Then I read the fine print about how this info had already been shared with the good people in DC.

|3.28.07 @ 11:43AM|#

Here's a fun question: has the No-Fly List ever actually been successful in its intended purpose? Has any actual "terrorist" on the list ever been arrested at the airport trying to board a plane?

|3.28.07 @ 11:49AM|#

Is anybody surprised this was on his TransUnion report? I review my credit regularly, and TU is consistently blowing me away with its creativity. On an old store-card account long-since closed, TU writes "consumer is deceased."

If I'm so fucking deceased, then who's been making my mortgage payments the last 5 years?

TransUnion needs to be abolished; maybe we need to get Project Mayhem back together.

|3.28.07 @ 12:30PM|#

An amazing number of Spanish names are on the OFAC list too. It's a pretty simple procedure to check if the person applying for credit is the actual person on the list. The mortgage broker who told him no credit is a maroon.
That said, OFAC compliance is a joke. It's a stupid intrusion that accomplishes nothing and the gov't should not be asking citizens to keep tabs on other citizens. I believe that every merchant of every kind is actually supposed to check your name against the list on every transaction. Yes, that's right, your goddam grocer is supposed to check when you buy eggs. In practice, you only hear about it when you apply for a loan because the agencies compiling credit reports check it automatically. Don't blame TransUnion. It's not their list.

|3.28.07 @ 12:37PM|#

independent worm,

You're operating under the assumption that you are TransUnion's customer and they want to please you. They do not.

They want to please credit providers, not credit users. They also did not invent the "Customer is deceased" info. A previous creditor told them so, or you got an erroneous update in a file match to recently deceased folks.

If you bug them enough they will update (same with the other two.)

|3.28.07 @ 12:53PM|#

highnumber beat me to it--there are tons of Spanish names on the list. This whole mess is complete nonsense--unfunded mandates; making the private sector do police work; too much chaff, not enough wheat; ridiculous penalties; invasion of consumer privacy; etc. OFAC, BSA, KYC, CTR, blah, blah, blah. Pre-9/11, the banks fought this stuff tooth and nail. Now they can't, and, as highnumber noted, this nonsense has spread past banks into every financial institution and many non-financial institutions. Egad.

|3.28.07 @ 12:53PM|#

1ST RULE OF PROJECT MAYHEM IS: YOU DO NOT ASK QUESTIONS!

|3.28.07 @ 12:55PM|#

By the way, I think that that Tom Hudson isn't just some Maryland lawyer, he's an expert in consumer finance (including auto finance). I used to outsource some work to his (assuming it's him) firm, Hudson and Cook.

TSA AUTORESPONSE|3.28.07 @ 1:14PM|#

Here's a fun question: has the No-Fly List ever actually been successful in its intended purpose? Has any actual "terrorist" on the list ever been arrested at the airport trying to board a plan

THANK YOU ___________James | March 28, 2007, 11:43am | #_________

= (ENTERINTOSUSPICIOUSQUESTIONERDB#^#A)

WE ARE HAPPY TO ANSWER YOUR QUESTION "JAMES".

WE CAN NOT TELL YOU IF THEY NO-FLY PROGRAM IS WORKING OR NOT WORKING SINCE THIS INFORMATION WOULD LET TERRORISTS KNOW ABOUT THE EFFECTIVENESS OF OUR INITIATIVES, THUS ARMING THEM WITH INFORMATION THEY CAN USE AGAINST US
( --STANDARD NON-DISCLOSURE ARGUMENT #1B--)
REST ASSURED THE SECRET PLANNERS ARE WORKING EXTRA HARD TO ESTABLISH SECRET RULES WHICH, WHILE INCONVENIENT, PROVIDE US EXCELLENT EXCUSE FOR SPENDING BILLIONS OF DOLLARS..(GLITCH!ERRORREPORT>NOTIFYDHSWEBADMIN>) CORRECTION> PROVIDE THE NATION WITH HIGHLY VISIBLE SIGNS THAT WE ARE DOING EVERYTHING WE CAN TO LOOK LIKE WE ARE PROTECTING HONEST CITIZENS FROM TERRORISTS OR DISHONEST CITIZENS THAT LIVE....AMONG.....usssssss

|3.28.07 @ 1:58PM|#

When did America turn into a giant Kafka novel?

On a side note, given the real estate downturn, the OFAC alert may have done Mr. & Mrs. Kubbany a big favor, since I imagine a "KMart cashier" would only be buying California real estate with some form of untenable exotic mortgage.

Russ 2000|3.28.07 @ 2:07PM|#

An amazing number of Spanish names are on the OFAC list too...The mortgage broker who told him no credit is a maroon.

In some cases they might think the guy is a bad credit risk and use the OFAC compliance as an excuse to avoid any charges of racism. Or the mortgage officer COULD be a staunch racist and the government has now given him a convenient excuse to be as racist as he wants to be.

|3.28.07 @ 2:21PM|#

jimmydageek,

I think the first rule is that you DON'T TALK ABOUT PROJECT MAYHEM!

|3.28.07 @ 2:24PM|#

The credit agency and the mortgage company were retarded in not looking at the list (which contains about 100 "Hassans", no "Kubbanys") but libertarians aren't concerned about retarded private businesses.

Typical government worshiper - the government makes a law that threatens financial ruin and life in prison for violating a retarded law, and then you blame companies for following the law. I mean, obviously companies *LOVE* to maintain a super expensive watch list, that forces them to turn away customers and lose even more money!

Here's a fun question: has the No-Fly List ever actually been successful in its intended purpose? Has any actual "terrorist" on the list ever been arrested at the airport trying to board a plane?

I think Ted Kennedy was stopped from flying to Washington DC one time. Does that count?

Robert|3.28.07 @ 2:26PM|#

The solution is simple: People on the list should do business only with each other. OFAC could become a world economic power!

|3.28.07 @ 3:37PM|#

"I think Ted Kennedy was stopped from flying to Washington DC one time. Does that count?"

Only if he intends to drive a car off into a bridge or something.

|3.28.07 @ 9:32PM|#

where is the link to this list? I either sold or bought (or thought) I sold a bag of herbs to someone named "hashassin." If he(she) is on the list I want to know if I should buy/sell/stand at ease. Or break the law with out knowing/habeoas corpos(SICK)/pleading the fifth/water-boarding... my how easy it is to fall from grace. Or protection; I beleive in God, fuck Gonzales. If I die for faith....I am a terrorist.
I did drink once..I was an American. Non_bitter