[109036] in Cypherpunks
March 11 column -- "Know Your Customer"
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Tue Mar 9 09:01:33 1999
Date: Tue, 9 Mar 1999 08:19:47 -0500
To: cypherpunks@cyberpass.net
From: Robert Hettinga <rah@shipwright.com>
Reply-To: Robert Hettinga <rah@shipwright.com>
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Resent-Date: Tue, 9 Mar 1999 00:13:44 -0700
Date: Mon, 8 Mar 1999 23:15:28 -0800 (PST)
To: vinsends@ezlink.com
From: Vin_Suprynowicz@lvrj.com (Vin Suprynowicz)
Subject: March 11 column -- "Know Your Customer"
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FROM MOUNTAIN MEDIA
FOR IMMEDIATE RELEASE DATED MARCH 11, 1999
THE LIBERTARIAN, By Vin Suprynowicz
But failure is always an orphan
In the classic Agatha Christie mystery "Murder on the Orient Express"
the question, as usual, was "Who Done It." What was refreshing was that,
for a change, virtually everyone done it.
As usual, all the suspects had a motive for murdering the old reprobate
(played by Richard Widmark in the 1974 film.) But as it turned out,
virtually everyone aboard had taken a turn sticking some kind of sharp
implement into the deceased's brisket before the night was through.
Similarly, days before the official period for public comment on the
Federal Deposit Insurance Corporation's proposed "Know Your Customer"
regulation was due to expire on March 8, the only remaining mystery was
whether there was anyone left in the country who hadn't shoved a knife into
the misbegotten thing.
"LP launches new website to defeat FDIC's Know Your Customer proposal,"
was the banner headline on the March edition of the national Libertarian
Party's tabloid "LP News."
"We've never talked about an issue that has produced this kind of reaction
from radio talk show hosts -- or the American public," remarked George
Getz, press secretary at the Washington headquarters of America's
less-government party.
"It's dead" the usually cautious Ted Wehking, executive vice president of
the Nevada Bankers Association, told me on March 4.
"They're just going to stake it and bury it at the crossroads?" I asked.
"That thing has no breath in it whatsoever. That was so overreaching,
they got something like 75,000 responses, more than they've any gotten to
any other proposed regulation."
As it turned out, the FDIC and the Federal Reserve called in a favor
over in the chambers of the U.S. Senate on Friday March 5, the senators
voting 88-0 to formally ask the Clinton administration to take the poor
little monster out behind the barn and shoot it, thus sparing the
regulators the embarrassment of putting it out of its misery in public.
(Though the vote was not binding, which couldn't possibly mean "Know Your
Customer" will be back under a new name a few years down the road, do you
think?)
One of the last men aboard, Nevada Congressman Jim Gibbons had piled on
the day before, writing a March 4 letter to Robert E. Feldman, executive
secretary of the FDIC, declaiming "The proposed 'Know Your Customer' rule
is an action that treads on very serious ground, the right to personal
privacy. This particular rule seeks to undermine and destroy the right to
information privacy of all individuals who happen to have a bank account.
Moreover, once the federal government starts to invade information privacy
how long will it be before bodily privacy, communications privacy, and
territorial privacy are erased from the citizens of the United States?"
While it's nice to hear Congressman Gibbons finally come out so firmly
against Breathalyzers, DEA body cavity searches, FBI wiretaps, and the
federal income tax, a skeptic might ask whether Americans really have much
"financial privacy" left to guard. Responding to Bill Clinton's 1995
assertion that America remains the freest nation on earth, Canadian scholar
and author Charles Adams, author of "For Good and Evil: The impact of Taxes
on the Course of Civilization," told me in May of that year: "They should
say 'used to be.' America of all the Western nations is the worst. No one
else lets the government go through your bank records, no one else makes
you file a form when you hire a baby-sitter, when you hire a sophomore to
mow your lawn. ..."
"The government does have a lot of access," responds Alan B. Rabkin,
senior vice president and general counsel for Sierra West Bank in Reno,
"but they have to follow certain procedures. They have to show cause."
On the other hand, Rabkin explained last week, "Know Your Customer" would
have required bankers to develop profiles of the "normal account activity"
of their customers, reporting to the government any "out-of-the-ordinary"
cash transactions which might even theoretically be evidence of drug
dealing or any other kind of participation in the unregulated, "gray"
economy.
"It was just one more layer of things that we'd rather not be doing,"
Rabkin explains.
Curious. Earlier this winter, about the only national columnist writing
on the "Know Your Customer" proposal -- even as Internet users were burning
up the wires organizing opposition -- was Phyllis Schlafly of the Copley
News Syndicate, who wrote in early February: "The Clinton administration's
stealth plan to monitor everyone's personal bank account has hit a bump in
the road. With the public comment score now standing at 20,000-to-18
against the controversial 'Know Your Customer' regulation, the
once-friendly Federal Deposit Insurance Corp. is rethinking its plan to
require every bank to computerize a financial profile on every customer
(including the source of all funds) and report 'inconsistent' withdrawals
to the federal gestapo. ..."
But -- get this -- "About 93 percent of the critical comments received by
the FDIC came from individuals, not banks. ... The small number of
complaints from bankers reflects the fact that the American Bankers
Association originally endorsed the regulation and may have helped to draft
it. The big banks are only too happy to use federal regulation as a 'cover'
for computerizing nosy details about their customers that are so valuable
for marketing purposes."
Yet now the whole thing was some kind of misunderstanding that the
bankers never wanted, "one more layer of things that we'd rather not be
doing"?
Et tu, Brutus?
Vin Suprynowicz is assistant editorial page editor of the Las Vegas
Review-Journal. His new book, "Send in the Waco Killers" is available at
$21.95 plus $3 shipping ($6 UPS; $2 shipping each additional copy) through
Mountain Media, P.O. Box 4422, Las Vegas, Nev. 89127. The 500-page trade
paperback may also be ordered via web site
http://www.thespiritof76.com/wacokillers.html, or at 1-800-244-2224.
***
Vin Suprynowicz, vin@lvrj.com
The evils of tyranny are rarely seen but by him who resists it. -- John
Hay, 1872
The most difficult struggle of all is the one within ourselves. Let us not
get accustomed and adjusted to these conditions. The one who adjusts ceases
to discriminate between good and evil. He becomes a slave in body and
soul. Whatever may happen to you, remember always: Don't adjust! Revolt
against the reality! -- Mordechai Anielewicz, Warsaw, 1943
* * *
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-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
