1995 Congressional Hearings
Intelligence and Security

June 13. 1995

     Chairman Hyde, Ranking Member Conyers, and Members, I

am pleased to appear before you today to discuss a proposal

contained in the anti-terrorism bill in which I've held a

long and serious interest. That proposal would amend the

Fair Credit Reporting Act to provide the FBI with mandatory

access to consumer reporting agency information. I believe

that if approved by Congress, this amendment will add

significantly to the FBI's investigative capabilities. In

fact, I'm told that senior FBI and Justice Department

officials view this proposal as the most important element

of the anti-terrorism package because it will so

significantly augment the ability of the U.S. to combat

terrorist and espionage activities.

     I am a Member of the Subcommittee on Financial

Institutions and Consumer Credit of the Banking and

Financial Services Committee. As the Chairman is aware, I

also served for six years as a Member of the Intelligence

Committee. Thus, I believe I have a unique perspective on

both intelligence and banking concerns regarding an

amendment to the FCRA.

     An amendment to the Fair Credit Reporting Act addresses

an anomaly in existing law. Under the Right to Financial

Privacy Act (RFPA), the FBI is entitled to obtain Bank and

Credit Card Records. However, before the FBI can request

access to an individual's records under the RFPA, agents

must first identify which financial institutions that

individual is using. Consumer identifying information and

reports maintained by credit bureaus are a ready source of

this information. Financial records are needed to track the

activities of suspected spies or terrorists. In the area of

counterintelligence, there is a growing need in

counterintelligence investigations to follow financial

transactions, as foreign intelligence services are

increasingly operating under nonofficial cover. And, as the

Committee is aware, effective detection of the movement of

terrorist funds is essential to detecting terrorist

capabilities, funding raising activities and criminal


     The amendment to the FCRA as it appears in the

Administration's legislative package Committee's bill would

permit the FBI to obtain limited information regarding a

consumer, upon National Security Letter certification by the

FBI Director. This limited Information would include the

names and addresses of all financial institutions at which a

consumer maintains or has maintained an account, and

identifying information respecting a consumer -- limited to

name, address, former addresses, places of employment, or

former places of employment. In addition, the bill specifies

that the FBI may obtain a consumer report on a consumer if

the director of the FBI obtains a court order that certifies

that there are specific and articulable facts that show that

such information is necessary for an authorized

counterintelligence investigation. It is judged by the

administration that an investigation would seldom, if ever,

require the full consumer report.

     The amendment to the Fair Credit Reporting Act would

permit the FBI to conduct investigations of suspected spies

and terrorists more efficiently, effectively and with

greater security. At this time, the FBI, under a court

order, can obtain credit information from a consumer credit

agency. However, because of

the semi-public nature of the court order process, and

because notice to the target would be required at some

point, the FBI prefers not to seek court orders. Today's

counterintelligence target is generally a sophisticated one;

the same can be said of many terrorist groups, who, as the

Committee knows, seem to have a good grounding in U.S. law

and frequently have devised ways to exploit or evade its


     It is true that information on an individual's

financial associations can be obtained by other

investigatory activities. These activities could include

mail covers, surveillance, or interviews with associates.

However, these are much more time consuming, and they are

potentially more invasive to the suspected individual's

privacy. Moreover, due to their invasiveness, there is an

increased likelihood of detection by the suspect party. Any

hint to the subject that he or she is under investigation

will likely cause that individual to cease activity and thus

the ability to prosecute the case may be lost through a

failure to prove the necessary elements. The Bureau needs

other less intrusive and lower risk techniques to obtain the

lead material to bring a case to a prosecutive stage and to

maximize the intelligence to be gained prior to a case

becoming public. Granting

the FBI mandatory access via a National Security Letter to

consumer credit information can shorten the investigatory

process and lesson the chance of detection.

     Mr. Chairman, this amendment has enjoyed the support of

the House. Last year, while still a Member of the

Intelligence Committee, I introduced the FBI

Counterintelligence Act that sought to amend the Fair Credit

Reporting Act. This was done to follow up on an agreement

made between the Intelligence Committees during their

conference on the FY95 Intelligence Authorization Act. The

Intelligence Committees supported the amendment and were

prepared to act on the amendment in their conference.

However, the Committees agreed to defer any action due to

the jurisdictional concerns of the House Banking Committee.

The House Banking Committee also introduced legislation

similar to mine following the Intelligence conference. Both

measures were passed by the House, but unfortunately were

not acted on in the final hours of Senate's 103rd session.

At the beginning of the 104th Session, I once more

introduced identical legislation as H.R. 68.

     The proposal to amend the FCRA in the Committee's anti-

terrorism bill mirrors H.R. 68, and I look forward to seeing

it approved as part of your Committee's anti-terrorism

legislation. I understand that there has been some

discussion on dropping the sunset provision, and I am fully

supportive of doing So, if that is the determination of this


     Mr. Chairman, permitting the FBI mandatory access to

consumer credit reporting information is an important step

toward improving our nation's ability to combat terrorism in

that it will permit investigations to be conducted with

greater efficiency and effectiveness.

     Thank you for asking me here today to comment on this

proposal. I would be glad to answer any questions that the

Committee might have.