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Sunday, April 09, 2006

The "Bad Guy List"

Is there any reason not to conclude that the "Bad Guy List" is useless?:

Hit-and-Miss List If You're in This Directory, Forget Shopping, by Don Oldenburg, Washington Post: You know this is happening at the airports, where security pulls some guy out of the boarding line. You've heard about the feds being on the lookout for money launderers in high-stakes financial transactions. But a car dealership? Hey, how about the 7-Eleven? ...

Alan Dessoff was ... about to sign on the dotted line for a new 2006 Toyota Camry XLE ..., the sales manager glanced up from the printer and casually mentioned that Dessoff wasn't on "The List." Dessoff gulped, "What list?" ... The sales manager told Dessoff that car dealers are required to check every would-be buyer's name against a computerized list of "thousands of names." If the name's on The List, no deal.

When Dessoff asked where The List and the requirement to check it came from, the manager, he says, took on a confidential tone as if passing along a state secret and said, "the government." Dessoff thought he was kidding. ... But he was serious enough that he wouldn't say anything more about The List. "I was so taken back," says Dessoff. "But is it so? Like the no-fly list? A hidden part of the Patriot Act?"

Actually not so hidden. The so-called "Bad Guy List" is hardly a secret. The U.S. Treasury's Office of Foreign Assets Control maintains its "Specially Designated Nationals and Blocked Persons List" to be easily accessible on its public Web site. Wanna see it? Sure you do. Just key OFAC into your Web browser, and you'll find the 224-page document of the names of individuals, organizations, corporations and Web sites the feds suspect of terrorist or criminal activities and associations.

You might think Osama bin Laden should be at the top of The List, but it's alphabetized, so Public Enemy No. 1 is on Page 59 with a string of akas and spelling derivations filling most of the first column. ... The Bad Guy List's relevance to the average American consumer? What's not widely known about it is that by federal law, sellers are supposed to check it even in the most common and mundane marketplace transactions.

"The OFAC requirements apply to all U.S. citizens. The law prohibits anyone, not just car dealers, from doing business with anyone whose name appears on the ... list," says Thomas B. Hudson, senior partner at Hudson Cook LLP, a law firm ... Hudson says that ... supermarkets, restaurants, pawnbrokers, real estate agents, everyone, even The Washington Post, is prohibited from doing business with anyone named on the list. "There is no minimum amount for the transactions covered ..." says Hudson... "The law applies to you personally, as well."

But The Bad Guy List law (which predates the controversial Patriot Act) not only is "perfectly ridiculous," it's impractical, says Hudson. "I understand that 95 percent of the people whose names are on the list are not even in the United States. And if you were a bad guy planning bad acts, and you knew that your name was on a publicly available list that people were required to check in order to avoid violating the law, how dumb would you have to be to use your own name?"

Compliance is also a big problem. Think eBay sellers are checking the list for auction winners? Or that the supermarket checkout person is thanking you by name while scanning a copy of The List under the counter? ...

Even most car dealerships come up short on compliance, despite harsh penalties that include 30 years in jail and fines up to $10 million against corporations, and $5 million against individuals, and civil penalties of up to $1 million per incident. "Laws like this that are so ridiculous that no one obeys them do nothing to inspire respect in our legal system," says Hudson.

But while admitting that compliance is "obviously a challenge," U.S. Treasury spokeswoman Molly Millerwise says it is improving. ... We expect U.S. businesses to do all they can to comply with the law, but we do recognize there are challenges..." ...

FYI, as you're perusing The List to see if your name ... appears, be forewarned -- by going on the site you've consented that the feds can monitor your use of the site. Not that they'd do that...

Here's The List.

    Posted by on Sunday, April 9, 2006 at 12:06 AM in Economics, Politics, Regulation, Terrorism | Permalink  TrackBack (0)  Comments (3)

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