U.S. criticizes E.U. rejection of agreement that would help track suspected terrorists

By Ellen Nakashima
Friday, February 12, 2010

Obama administration officials said Thursday that the European Union's rejection of an agreement to share banking information will "disrupt" efforts to track suspected terrorists and is a "setback" for counterterrorism cooperation.

Top officials from the State and Treasury departments, including Secretary of State Hillary Rodham Clinton, had lobbied the Europeans to maintain the interim agreement, but the parliament invoked privacy concerns to nix the deal to keep alive a program that dates to George W. Bush's administration and the weeks after the attacks of Sept. 11, 2001.

Meeting in Strasbourg, France, the parliament voted 378 to 196 to reject the agreement, which would have enabled U.S. authorities to have access for the next nine months to portions of vast databases of financial transactions maintained by a Brussels-based consortium of banks called the Society for Worldwide Interbank Financial Telecommunication, or SWIFT. The deal was to last while a longer-term agreement was reached.

While publicly lobbying hard in recent days, administration officials spoke only on the condition of anonymity about Thursday's vote, hoping to continue the negotiations.

"For the last nine years, the terrorist finance tracking program has been instrumental in protecting the citizens of the United States and Europe and has played a key role in multiple terrorism investigations," a Treasury official said. "Today's outcome is a setback . . . and leaves all of our citizens less safe."

The program has resulted in more than 1,500 reports and numerous leads about terrorism investigations for European authorities, officials said. The United States had access to the information until this year, when SWIFT put in place a computer system that walled off European bank data. That move prompted the need for a new agreement.

The European lawmakers' vote will complicate the Obama administration's push to disrupt terrorist financing, analysts said.

"Europe obviously is a financial superpower with some of the largest banks in the world," said William Keylor, a Boston University professor of international relations. "For it not to be part of this program is a real challenge to the Obama administration, which is taking the lead in promoting this campaign of drying up the finances of the terrorist groups. It will make waging a war on terrorism much more difficult."

Stewart A. Baker, former Department of Homeland Security assistant secretary for policy, said the European parliament was effectively "creating a safe haven for terrorist finance."

But U.S. and European privacy advocates praised the vote. Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, said the vote should send a message to other legislative bodies to stand up for "fundamental freedoms and transparency."

Also driving the vote was lawmakers' anger that they had been left out of negotiations about the interim deal, which was concluded in November between the United States and the Council of the European Union, the union's principal decision-making body. The Treaty of Lisbon, which took effect in December, gave lawmakers the power to review and approve measures that affect internal security and counterterrorism, and their vote was seen as a flexing of that new power.

E.U. officials remain hopeful that another deal can be reached. "We will work with our U.S. partners to ensure that the new SWIFT agreement will at the end be able to receive the consent of the European Parliament," said Viviane Reding, E.U. commissioner for justice.

U.S. officials did not indicate what their next move will be.

Last week, William E. Kennard, the U.S. ambassador to the European Union, threatened to bypass the federation entirely in counterterrorism efforts if the parliament rejected the agreement.

The administration could choose to negotiate directly with individual countries, such as the Netherlands, where the computers holding the European financial information are located.

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