The full text of the letter follows:
July 19, 2007
The Honorable David M. Walker
Comptroller General of the
441 G Street NW
Dear Mr. Walker:
The Subcommittee on Oversight and Investigations recently held a hearing on the actions being taken by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), federal law enforcement agencies, and depository institutions pursuant to the Bank Secrecy Act (BSA). This hearing and other events have raised questions about the efficiency and effectiveness of BSA administration and enforcement. As you know, GAO is currently reviewing one aspect of this process—the filing and use of Currency Transaction Reports, or CTRs—in response to a mandate in the Financial Services Regulatory Relief Act of 2006 (Public Law 109-351). We are asking for your assistance in looking more comprehensively at the current framework for achieving the goals of the BSA.
One area of concern is the mission and operational capacity of FinCEN, which was established in 1990 as a government-wide, service-oriented, financial information-sharing agency. FinCEN’s general mission is to help safeguard the
Specific questions warranting GAO’s review in this area include the following:
1. How has FinCEN’s mission evolved in response to statutory, technological, or other changes? Have the agency’s management, staffing, and operations kept pace with changes in role/mission?
2. In what ways does FinCEN currently serve law enforcement agencies? How should it be serving them, in terms of both "proactive" efforts (analysis of BSA data) and "reactive" efforts (responding to requests for data on specific cases)?
3. What constraints, if any, on FinCEN’s ability to achieve its mission arise from the cooperative arrangements with IRS in maintaining BSA data?
4. Are the BSA data systems secure? Are the systems for filing and aggregating BSA data sufficiently timely to meet the goal of assisting law enforcement efforts?
A second area of concern is the Suspicious Activity Report (SAR) process. According to FinCEN, over one million SARs were filed in 2006, and depository institutions and firms in the securities and futures industries accounted for over half of them. At the May hearing, a number of banking industry witnesses commented that they lacked clear guidance on what law enforcement is looking for and finds u