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FinCEN official accused of leaking secret bank records requests time served

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A former U.S. Department of Treasury employee convicted of leaking confidential bank intelligence documents to a journalist has asked a federal court for leniency, portraying herself in a court filing as a dedicated public servant and frustrated whistleblower who wanted to expose misconduct in the agency and protect national security.

In the filing, known as a sentencing memorandum, the attorney for Natalie Mayflower Sours Edwards says she believed sharing the confidential records with a journalist could pressure Congress to remedy what she believed were illegal and improper actions.

Among her concerns: that Treasury officials had illegally searched and stored banking data of U.S. citizens, and that her division, the Financial Crimes Enforcement Network, may not have been providing complete information to a congressional committee probing Russian interference in the 2016 election.

“Edwards not only believed that the people who were running Treasury were doing a very bad job, in her view some members of the Department were violating the law,” the filing in Manhattan federal district court says. “Policies and practices were putting American lives at risk. The privacy of the American people – an almost reverence for which had been imprinted on her during service . . . was not being respected.”

In the filing, Edwards’ lawyer says that BuzzFeed News reporter Jason Leopold encouraged Edwards to provide the documents to him, telling her that he would use information to write stories that would force Congress to investigate her allegations.

Edwards says that while Leopold encouraged her to share the SARs, she ultimately did so “of her own volition.” Leopold “did not force or trick her.”

BuzzFeed News published a series of reports in 2018 that appear to be based on leaked suspicious activity reports, or SARs, shared by Edwards. The reporting included new details about questionable money movements linked to Paul Manafort, the former Donald Trump presidential campaign advisor.

In September, BuzzFeed News, ICIJ and more than 100 news organizations around the world published a series of investigative stories known collectively as the FinCEN Files that chronicle persistent bank and regulatory failures to crack down on money laundering linked to terrorism, political corruption and other criminal activity. The investigation was based on more than 2,100 suspicious activity reports shared by BuzzFeed News with ICIJ. BuzzFeed News has not commented on the origin of those reports.

Edwards has pleaded guilty to unlawfully disclosing confidential Treasury documents. Her sentencing is scheduled for next month. The maximum sentence she could receive would be five years in prison.

“We stand unequivocally by Jason Leopold’s reporting and will have no comment on this case until after Ms. Edwards’ sentence is complete,” a BuzzFeed News spokesperson said in a statement. “We do not confirm or discuss confidential sources, but BuzzFeed News strongly supports the actions of whistleblowers who come forward with evidence of bad actors, misconduct, or neglect in our government.”

The filing by Edwards’ lawyers says she decided to make a career in government in the wake of the Sept. 11, 2001, terror attacks, wanting to do her part to protect the U.S. from similar assaults. Edwards was recruited to FinCEN in October of 2014, according to the filing, after jobs at the Central Intelligence Agency and the Bureau of Alcohol, Tobacco, Firearms and Explosives. At the CIA, she was detailed to the Office of the Director of National Intelligence, where she was characterized as “an exceptional staff officer,” according to the filing.

FinCEN attracted Edwards because it offered her more of an opportunity to play a role in shaping the office while allowing her to work from home, where she had a daughter to care for, according to the filing by her attorney.

In late 2015, the document says, Edwards became increasingly concerned that the Treasury Department may have been moving employees from FinCEN to another office without proper congressional authorization. Among her concerns was that the office, known as the Office of Intelligence and Analysis, had not properly sought authorization to collect information on people in the United States — and that the government was moving forward with such data-collection without adhering to basic safeguards.

Edward’s recent filing states that, after making repeated attempts to have the “impropriety” of the planned realignment addressed internally, she began sharing her concerns with congressional staffers. She eventually grew frustrated, the filing says, as she believed nothing was changing internally. In March 2017, she filed a separate whistleblower complaint. Meanwhile, the court filing says, she became concerned that FinCEN employees had become locked out of a system that allows government agencies to share information with each other — potentially hobbling their ability to provide information to law enforcement in the wake of terror attacks around the world.

Edwards also “grew to question,” the filing says, whether her agency was providing complete information to Congress in response to requests for information. “She was not alone in that belief,” the filing says. In May of 2017, Sen. Ron Wyden, a Democrat from Oregon, placed a hold on the appointment of a Treasury official pending the release to the Senate Intelligence Committee and Senate Finance Committee information related to Russia and its financial dealings with President Trump and his associates.

In the filing Edwards’ attorney acknowledges that leaking the records was illegal, and names Leopold, a veteran journalist known for breaking stories through aggressive use of the Freedom of Information Act, as the reporter who received them.

Throughout 2017 and 2018, Leopold told Edwards in WhatsApp conversations that he was committed to her cause of uncovering and remedying corruption in the Treasury department, according to the filing.

On one occasion, in October 2017, Leopold passed along a message from Wyden meant for Edwards, the filing says. “Please communicate to this Whistleblower that he or she has my full support and is a true champion of Justice. I and my staff will do everything in my power to help this person.” There’s no indication in the filing that Wyden suggested Edwards leak confidential materials.

Leopold told Edwards that he would use what she gave him to write stories that would force Congress to investigate her allegations, according to the filing. “Listen, I am going to make a case that we need to leak something and report it,” Leopold wrote to her in early 2018, according to the filing.

“[Leopold] assured her that the only way to revive Congressional interest was through media attention,” the filing says. “At his encouragement, she provided him with suspicious activity reports (“SARs”) and other internal Treasury Department documents.”

Edwards was arrested in October 2018 after U.S. government investigators obtained permission to use a pen register, a form of surveillance, on Edwards’ cellphone, according to the criminal complaint. It showed she had exchanged hundreds of encrypted communications with a reporter.

ICIJ asked Wyden about the message to Edwards. A spokesperson responded, “Senator Wyden is deeply concerned about the politicization of FinCEN, and took Dr. Edwards’ claims very seriously. However, neither he nor his staff sought or received SARs from her.”

Since her arrest, the filing says, Edwards has suffered psychological, social, physical, and financial distress. She and her husband were forced to sell the family home, and move in with relatives.

The filing describes her as someone who had spent decades working to keep her country safe, support friends and family and preserve Native American traditions. The filing says that she was the first member of Virginia’s Chickahominy Indian Tribe to earn a PhD. More than 50 people, including law enforcement officers, former colleagues and family members, have written to the judge on her behalf.

The filing requests that Edwards be sentenced to time served, effectively ending the case.

In a blog post, Marcy Wheeler, a journalist who writes frequently about national security and civil liberties, wrote that she found the filing notable.

“It is probably the most convincing example of a whistleblower-turned-leaker telling her story to explain why she did what she did. And while she was charged under a different statute than the Espionage Act — there’s a specific law prohibiting the leaking of SARs — it is a laudable effort to make a public interest defense.”

The post FinCEN official accused of leaking secret bank records requests time served appeared first on ICIJ.

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Election Integrity

Analyzing the Case for Election Fraud

Despite the overwhelming pressure, if you can’t help but feel that tingling sense of knowing that is telling you there’s more to the story, you are not alone. In fact, according to a new Rassmussen poll, nearly 50% of voters believe the election had issues. A quick look at the data blatantly shows that indeed, shenanigans abound (how can a state have 1+ million more mail-in ballots tallied than they sent out?). But was it fraud or masterful gamesmanship?

Adryenn Ashley

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The world, or at least the global media, has spoken: Biden won the 2020 Election.

UPDATED FREQUENTLY WITH NEW INFORMATION – Last update 12/21/2020

A quick Google search reveals pages upon pages of reports of why the Trump team’s assertions of vote fraud and election fraud and vote flipping are flat out fallacies. YouTube has announced a ban on any videos questioning the election results. And now on Monday all 538 electors have voted, formalizing Biden’s 306-232 win. And while there is still Congress to get through, and the inauguration, based on social media and television news and practically every other point of information bombarding society today, Biden is now the President-elect.

But why now, after Government officials confirmed during Senate testimony that a foreign adversary, Russia, attempted to interfere in the 2016 United States Presidential Election via “a multi-faceted approach intended to undermine confidence in our democratic process.” According to U.S. intelligence official reports, Russia targeted voter registration databases in at least 21 states and sought to infiltrate the networks of voting equipment vendors, political parties, and at least one local election board. And if their purpose was not so much to “hack” the election but create chaos and sow seeds of uncertainty around our election process, I would say they have won. But what if this cycle, it was Russia who somehow manipulated extra ballots and placed the blame on the Democrats? What if…?

Russian Experience With Voter Fraud

The 2004 presidential election in Ukraine saw suspiciously high turnout rates that “even Stalinist North Korea would envy,” the State Department declared!

Back then, the U.S. government decried as corrupt an earlier election where special voting boxes were created to help citizens vote from home, election observers were expelled from vote counts, pre-election polls were wildly off, and voter turnout in certain communities exceeded 90%.

But the story of that Ukrainian election as recounted by then-Ambassador John Tefft to a Senate committee in December 2004 raises a tantalizing question for voters distrustful of the Nov. 3 elections results in our own 2020 Presidential Election: If tactics and outcomes in the Ukrainian election back then were enough to cry foul, why can’t Americans debate similar concerns here?

Tefft’s testimony raises an important question: Should America, the greatest democracy in the world, share any of the fraudulent attributes of a Ukrainian election? The answer for most Americans is hopefully resounding “No.”

And despite continued and repeated headlines that there was no fraud, according to the Harvard Kenney School report on Election Integrity this cycle, expert assessments indicate that compared with 2016, the performance of this contest displays several warning flags, namely worsening confidence in the integrity of American elections and falling public trust, challenges to legitimacy arising from threats of campaign violence,legal disputes about the process and results, and public protests about the outcome, as well as growing attempts at voter suppression. 

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Investigations

Advocates celebrate major US anti-money laundering victory

Landmark laws to thwart the use of U.S. shell companies by terrorists, human traffickers, arms dealers and kleptocrats are set to be enacted after more than a decade of lobbying and politicking with rare bipartisan support.

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Advocates celebrate major US anti-money laundering victory

The sweeping anti-money laundering reforms hitched a lift in the annual defense spending bill that passed the Senate 84-13 today, and was approved by the House 355-78 earlier this week.

The Corporate Transparency Act requires U.S. companies to report their true owners to the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN — largely ending anonymous shell companies in the country.

The International Consortium of Investigative Journalists has repeatedly documented how the rich, the powerful and the criminal have used anonymous entities to hide their wealth, including in the 2016 Panama Papers and the 2020 FinCEN Files investigations.

Welcoming the clampdown, Transparency International’s U.S. director Gary Kalman said, “It is rare for such a simple measure to promise such an enormous impact.” Kalman added that the long sought anti-corruption reforms would “move us into a new era of enforcement.”

The new legislation will allow law enforcement agencies and financial institutions to request company ownership information from FinCEN. The data will not be publicly available.

FinCEN Files was based on a trove of suspicious activity reports filed by banks and other financial institutions to FinCEN. BuzzFeed News obtained the secret documents and shared them with ICIJ and more than 100 other media organizations.

The global investigation exposed how a broken U.S.-led enforcement system allows banks to continue to profit from moving dirty money tied to drug cartels, trafficking rings fueling the opioid crisis, fraud, organized crime, sanctions evasion, ruinous real estate schemes, and terrorism.

“Too many times, people … think money laundering is a federal, victimless crime. It is certainly not that,” Sen. Sherrod Brown of Ohio, the top Democrat on the Senate banking committee, told reporters on a call organized by the advocacy group the FACT Coalition. “Sinaloa cartel actors, fentanyl traffickers have been destroying thousands of families in my state and across the country.”

Earlier this year, Brown credited FinCEN Files for revealing the lack of forceful enforcement against banks that repeatedly violate the law. Advocates said a number of proposed bipartisan bills, including one co-sponsored by Brown, were instrumental in generating the support needed to attach the reforms to the spending bill.

“This is a really big deal to get this passed,” Brown said Thursday. “No more hiding these abuses in anonymous shell companies. It also cracks down on bank officials who look the other way or actively aid money laundering.”

A long time coming

ICIJ has shown how offshore shell companies have been used for dubious financial dealings and tax avoidance through a series of global exposés, including the Secrecy for Sale investigation, Panama Papers and Paradise Papers. U.S. lawmakers have repeatedly cited the investigations in proposing reforms over the years.

Countries like the United Kingdom, Indonesia and members of the European Union also took steps toward ending anonymous shell companies in response to ICIJ reporting.

“When the Panama Papers leaked, there was a huge flurry of interest because there’s all of a sudden this recognition that it was kleptocrats, money launderers, corrupt officials the world over, as well as criminals, were all using a very common structure to help evade law enforcement, which was setting up an anonymous company,” Lakshmi Kumar, policy director of Global Financial Integrity, said.

The phenomenon is not limited to the exotic offshore tax havens of popular imagination. U.S. jurisdictions like Delaware, Wyoming and Nevada are among the world’s top locations to set up anonymous companies. Legislation to require corporations to disclose their true owners was first proposed in the U.S. over a decade ago, co-sponsored by then-senator Barack Obama, and similar bills have been introduced over the years.

Advocates credit years of lobbying a broad coalition of stakeholders, including the U.S. Chamber of Commerce which had previously been a leading opponent, in getting the reforms across the finish line this year.

“What’s changed now is a growing understanding among various constituencies about the harms that anonymous companies pose, and the threats that they pose for our financial system, to our businesses,” Clark Gascoigne, senior policy advisor at FACT Coalition, said.

But it’s not a done deal quite yet.

Although the anti-money laundering proposals have had the support of the administration, President Donald Trump has repeatedly threatened to veto the National Defense Authorization Act over provisions unrelated to financial secrecy.

Both the House and the Senate votes surpassed the two-thirds margin that would be needed to override a veto, although some Republicans have indicated that they would not support what would be the first veto override of the Trump presidency.

But the NDAA has been reliably passed by Congress every year for six decades and advocates are confident that the time has come for the landmark financial transparency measure that’s included in the omnibus bill.

“It’s one of the few areas where the outgoing Trump administration agrees with the incoming Biden administration,” Gascoigne said. “It may be the first bill in the history of Congress that has the support of both Dow Chemical and Friends of the Earth. Heck, the state of Delaware even supports reform.”

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Muslim Brotherhood suspect and Saudi billionaire linked to same offshore companies, Austrian report says

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One of 30 people in Austria suspected to be members of the Islamic fundamentalist group Muslim Brotherhood was the director of offshore companies linked to a Saudi billionaire, according to an investigation by Austrian media outlets profil and Ö1.

The man, described as a 37-year-old Viennese entrepreneur with Iraqi roots, is suspected of “participating in a terrorist, subversive and criminal organization” and was a target of the police investigation into the group and the Palestinian extremist organization Hamas, the report said

The inquiry, which led 930 officers to raid 60 apartments, shops and clubs in four federal states last month, had no connection to the Vienna terror attack that killed four and injured 23 on November 2, according to officials cited by Deutsche Welle.

The Austrian report ー based on police records ー does not name the suspect, nor the Saudi businessman, for fear of hampering the ongoing probe into possible terror financing.

The pair’s link to shell companies in the British Virgin Islands and other offshore financial centers was revealed for the first time after the reporters’ examination of Paradise Papers, a trove of leaked documents obtained by Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists in 2017.

The 13.4 million files include incorporation documents, emails, contracts and other records from two offshore service providers and the company registries of some of the world’s most secretive countries.

The Austrian man was listed as the director of several companies in the BVI, Malta and the Bahamas, the media report said. His address on the documents referred to an apartment in Vienna that belongs to the wife of one of the main suspects in the police investigation, according to a review of Austria’s land registry records.

By cross-checking the confidential files with property records, the reporters also found that the shell companies owned properties in the U.K., including two office buildings, a commercial property and a retail park, worth about $73 million in total.

The documents show that a Liechtenstein trust owned by the Saudi businessman was behind those companies. The man is also known as a philanthropist who has financed Islamic studies at various European universities in recent years, including in Austria, the report added.

The complex offshore structure identified by the journalists is legal, the report said, but “can be used to disguise the flow of money and the identity of the true economic beneficiaries.”

Profil and Ö1, two ICIJ media partners in Austria, asked the Viennese suspect about the purpose of the offshore company network and his link with the Saudi billionaire. A lawyer representing him declined to comment.

The post Muslim Brotherhood suspect and Saudi billionaire linked to same offshore companies, Austrian report says appeared first on ICIJ.

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