PATRIOT act's reach expanded despite part being struck down.

• Author: Swartz, Nikki
• Position: Up front: news, trends & analysis

On the same day Saddam Hussein was captured by U.S. troops in Iraq, President Bush signed into law a new bill giving the FBI increased surveillance powers, effectively expanding the reach of the USA PATRIOT Act--even though part of the original act was recently struck down as unconstitutional. While Hussein's December 13, 2003, capture made headlines around the world, the signing of the Intelligence Authorization Act for Fiscal Year 2004--which includes some of the provisions of the PATRIOT II draft legislation that created a firestorm of opposition when it was leaked to the media last year--received little media notice.

The Intelligence Authorization Act, which funds all intelligence activities of the federal government, grants the FBI unprecedented power to obtain records from financial institutions without a court order to access such records. Previously, under the PATRIOT Act, the FBI had to submit subpoena requests to a federal judge. Now, agents do not need to obtain prior judicial approval or demonstrate probable cause or a reason to believe that a targeted individual is involved in terrorist activity--or even a crime. The new law allows an agent to simply issue a "National Security Letter" to the entity from which it is requesting financial data.

The law prohibits subpoenaed businesses from revealing to anyone, including individuals who may be under investigation, that the government has requested records of their transactions or that businesses have turned over their records to the FBI. If a financial institution breaches the gag order, it faces criminal penalties. In addition, the FBI is no longer required to report to Congress how often its agents have used the National Security Letters.

The law also broadens the definition of "financial institution" to include insurance companies, travel and real estate agencies, stockbrokers, the U.S. Postal Service, jewelry stores, casinos, airlines, car dealerships, and any other business "whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters." By this definition, the FBI could potentially demand school transcripts, medical records, real estate records--or the financial records of virtually any organization involved in business that the government deems to be useful in an investigation--without the knowledge of the individual whose information is in those records.

Several representatives expressed concern that the financial provision was slipped into...