$200 Surveillance Raised to $1,000 Is Still Wrong

Nicholas Anthony

Amid failing to justify financial surveillance to Congress, the Financial Crimes Enforcement Network (FinCEN) quietly published a new requirement that allows the government to surveil transactions as little as $1,000.

If this announcement seems familiar, it may be because earlier this year, the agency tried to surveil transactions as little as $200 at the southern border. The order was quickly taken to court in Texas and California.

In Texas, the court described the $200 surveillance order as “unreasonable” because it “overreaches,” “defies common sense,” and “likely violates the Fourth Amendment.” The court therefore issued an injunction to put FinCEN’s surveillance on ice until each side could make its case. A similar injunction was issued in California.

Yet, it seems FinCEN is determined to defy the spirit of the court’s orders. It has since decided to reintroduce the requirement—albeit at $1,000 instead of $200. The only mention of the active cases came in the form of two footnotes saying that the parties in those cases are exempt from the new order until the injunctions are lifted.

Making matters worse, the order now applies to a vastly greater area. The original order covered as many as one million people living in the thirty affected zip codes in California and Texas. However, FinCEN has now expanded the order to cover 3.2 million people living across 126 zip codes in Arizona, California, and Texas. Part of this expansion occurred because FinCEN decided to target entire counties instead of individual zip codes. The motivation for this expansion, however, is unknown.

Yet, as if that was not enough, the requirement also went into immediate effect. It was published in the Federal Register and became effective on the same day. The only flexibility that was given was a 30-day transition period for the newly affected areas.

Even then, the most egregious part of this order may be an issue that predates even the first order. Put simply, sweeping financial surveillance is not effective at fighting crime.

In the announcement of the new order, FinCEN Director Andrea Gacki said, “The reports generated by this Geographic Targeting Order will continue to help law enforcement investigate powerful illicit networks operating along the southwest border and beyond.” Yet strangely, when Gacki appeared before Congress just a few days later, she was unable to say how many criminals were caught because of this surveillance regime.

What’s far more likely to happen is that this order will push entrepreneurs out of business and customers to the financial fringe. One small business estimated that it would likely go from filing nine reports per week to 50,000 reports per week under the initial order. That is nothing short of an impossible standard to comply with. In effect, both entrepreneurs and customers will suffer.

Republicans and Democrats may have different views about the border, but both sides should be able to unite in recognizing the costs this surveillance places on both American businesses and Americans’ civil rights.