By Ellen Nakashima
Washington Post Staff Writer
Wednesday, March 19, 2008
One man went into a Glen Burnie, Md., Toyota dealership to buy a car, only to be told that a name check revealed he was on a U.S. Treasury Department watchlist of suspected terrorists and drug dealers. He had to be "checked for tattoos," he said, to make sure he wasn't the suspect.
An 18-year-old found he could not open an account to accept credit card payments for his fledgling technology consulting business because his name was similar to that of a Libyan official on the watchlist.
A former U.S. Navy officer who served in the Persian Gulf and whose father was killed in the Korean War when he was a child, found himself locked out of his PayPal account because his name was similar to one on the watchlist.
"What do I need to do to remove my name from this list?" the officer wrote to Treasury's Office of Foreign Assets Control, which compiles the list. He signed off, "An EXTREMELY insulted veteran of the U.S. Navy."
More American consumers have gotten caught up in a special brand of watchlist purgatory because their names are similar to ones on OFAC's list of "specially designated nationals," according to e-mails and other documents released under court order yesterday. By law, businesses are barred from conducting transactions with anyone on the list. Yesterday's court-ordered release of documents to the Lawyers Committee for Civil Rights of the San Francisco Bay Area, offers a window into the kinds of disruptions suffered by those ensnared in the process, as well as the difficulty of clearing their names.
More businesses are seeking, as part of a credit check, to know whether a person is also on the OFAC list. Failure to do so can bring a stiff penalty. Often a person whose name is similar to a name on the watchlist will be flagged by credit bureaus, which produce the reports businesses use to decide who is eligible for a car or home loan or to rent an apartment.
The Lawyers Committee sued the Treasury Department last year under the Freedom of Information Act for records of complaints relating to OFAC's list. Last year, the group documented the cases of at least a dozen people denied services, including being blocked from buying exercise equipment. Yesterday's partial release of records raised at least 30 new cases in which people sought OFAC help.
"OFAC's list of designated individuals and entities is a powerful tool that disrupts financial flows to terrorists, narcotics traffickers and proliferators of weapons of mass destruction," Treasury spokesman John Rankin said. "This vigilance has an important deterrent effect and shines a light on illicit conduct.''
But Thomas R. Burke, lead counsel in the group's FOIA case, said he suspected the watchlist is causing problems for many more people than revealed by the cases so far. Moreover, he asserted, "There isn't a program [of redress]. There isn't an ombudsman. There isn't a procedure to help consumers clear their names."
The Glen Burnie auto customer -- whose name was redacted by the government to protect his privacy -- began his quest for relief with the car dealer, according to the documents. The dealer referred him to the credit-reporting agencies, Experian and Equifax, but he was left in electronic voice-directory limbo, he said. That was only the beginning of "a revolving-door nightmare," he said.
He called the credit-check company, and a tech-support supervisor told him he would look into it. He checked with the FBI because there was some suggestion he was on the "Ten Most Wanted" list. The FBI told him he was not on any FBI list and suggested he check with the Treasury.
According to the documents, the man said he then left a message at OFAC, followed by an e-mail. He said he also contacted the Federal Trade Commission.
When an OFAC representative called back, he was told that he should contact the three major credit bureaus and request they remove his name from the list. The documents do not reveal whether he succeeded in removing it.
"I am not a criminal," he wrote in an e-mail aimed at the director of OFAC compliance, according to the documents obtained by the Lawyers Committee. "I spent my entire career as a police officer fighting crime."
Stuart Pratt, president and chief executive of a credit-reporting trade group, the Consumer Data Industry Association, said OFAC does not give adequate guidance on how to determine a watchlist match. "Do you match just on the last name, on the first name, on the first name and middle initial?" Pratt said. "OFAC doesn't really give much guidance."
He also said he thinks the biggest problem is lenders who do not know how to respond to an alert. "Clearly OFAC would say, you don't stop the transaction," he said. "You just look for a way to validate the consumer's identity."
Rankin said people with concerns could call the OFAC hot line at 800-540-6322. Many callers have their issues immediately resolved, he said.
"The Treasury Department takes this problem seriously and recognizes the frustration of law-abiding citizens whose names and identities have been confused with names on the OFAC list," he said.