Secret surveillance program collects Americans’ money-transfer data, senator says

WASHINGTON – A law-enforcement arm of the Department of Homeland Security participated in a secret bulk surveillance program that collected millions of records about certain money transfers of some Americans without a warrant, according to officials and a U.S. senator.

The surveillance program, overseen by investigators with U.S. Immigration and Customs Enforcement, collected records of any money transfer greater than $500 to or from Mexico, Sen. Ron Wyden (D., Ore.) said in a letter sent to the DHS inspector general. It also collected information on domestic or international transfers exceeding $500 to or from the states of Arizona, California, New Mexico and Texas.

Officials at the Homeland Security Investigations unit at DHS provided staffers for Mr. Wyden with details about the surveillance activity last month after the senator's office first contacted the agency seeking information about the previously undisclosed program. The briefing was the first time Congress was made aware of the program's existence, according to Mr. Wyden's letter.

"Given the many serious issues raised by this troubling program, I request that you investigate the program's origins, how the program operated, and whether the program was consistent with agency policy, statutory law, and the Constitution," Mr. Wyden wrote in his letter to DHS Inspector General Joseph Cuffari, which was reviewed by The Wall Street Journal. Mr. Wyden also asked the inspector general to probe whether Homeland Security Investigations was operating similar programs and to ensure that such activities were subject to congressional oversight.

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A spokeswoman for DHS said the department is "committed to ensuring that our criminal investigative methods are not only effective in combating transnational criminal actors and other security threats, but also consistent with the law and best practices."

It couldn't be determined exactly how authorities were using the data at issue, which appeared to solely involve money-transfer services rather than banks. Such services are popular among people who don't have bank accounts and are commonly used to send money abroad, such as to family members back in an immigrant's country of origin.

The surveillance program's origins date to at least 2010, when the Arizona attorney general's office began collecting similar data from Western Union following a money-laundering settlement, according to Mr. Wyden's letter. Another money-laundering settlement between the two in 2014 included the creation of a nonprofit organization called the Transaction Record Analysis Center, or TRAC, to host the money-transfer data. Money-transfer companies including Western Union shared records voluntarily with TRAC until 2019, when its agreement with the Arizona attorney general's office ended, the letter states.

During that time, the nonprofit shared the money-transfer data with hundreds of federal, state and local law-enforcement agencies, who could mine the data for leads without being required to issue a warrant, according to Mr. Wyden's letter.

When its agreements with the companies lapsed, the letter says, the Arizona attorney general turned to ICE to compel the companies to continue sharing data, using its authority under law to investigate people and goods moving across borders. ICE issued six summons to Western Union, between July 2019 and January 2022, and two to Maxitransfers Corp., both in 2021.

"Western Union works with law enforcement to comply with valid subpoenas and other legitimate requests," said Claire Treacy, a spokeswoman for the company. "We are also committed to protecting the personal data of our customers and take our obligations regarding privacy very seriously."

Maxitransfers and TRAC didn't respond to requests for comment.

"Our office uses TRAC, a federally-funded program to legally monitor international wire cash transfers from border states to Mexico," Katie Conner, a spokeswoman for the office of Arizona Attorney General Mark Brnovich (R), said in a statement. "This is done to combat human and drug trafficking. It is ironic that during a historic border crisis, this would be the focus of any U.S. senator."

Under the program, ICE investigators collected approximately six million records of international money transfers from Western Union and Maxitransfers since 2019, the letter states. The agency issued eight customs summonses, a type of subpoena, to the two companies asking them to share all relevant money-transfer data for six months at a time. The data at issue is believed to have included names, addresses, and identification numbers associated with senders of the money transfers, as well as names and addresses of the recipients, a Wyden aide said.

Dozens of other money-transfer companies have voluntarily shared data through the program, the letter said.

DHS told Mr. Wyden's office that the six million records collected through the subpoenas amount to 3% of data held by TRAC, an aide for the senator said.

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The arrangement that involved customs summonses issued to Western Union and Maxitransfers ended in January after Mr. Wyden's office contacted DHS, according to the senator's office. Other aspects of the program that involved voluntary submission of records from other money-transfer entities are continuing, the Wyden aide and another government official said.

Though ICE has agreed to stop using its summons authority, it -- along with U.S. Customs and Border Protection -- still uses the data made available through TRAC for investigations, a government official said. ICE used data from the project to seize 150,000 counterfeit painkiller pills in Oregon, brought to the state by a Mexican drug smuggler whose financial transactions the government was able to track, the official said. Border agents and other officials also use the data as part of the process of vetting foreigners entering the country, the official said.

The official said lawyers at the DHS and officials with its Office for Civil Rights and Civil Liberties are reviewing the department's use of its customs authority to create guidelines so it is used more narrowly in the future.

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Privacy advocates briefed on the program by Mr. Wyden's staff said the use of a nongovernmental entity to act as a sort of clearinghouse for data that state and federal law-enforcement agencies could access was unusual.

"I cannot think of another arrangement like this that combines an illegal use of subpoenas with an inscrutable, private nonprofit just for the purposes of housing this information," said Nathan Freed Wessler, senior staff attorney with the American Civil Liberties Union. Such an entity may not be subject to government public records laws, which "has the effect of shielding this tremendously concerning program from public scrutiny," he said.