The Other Feds-Snooping-On-Foreigners Scandal

HuffPost broke a big exclusive today with a story by Glenn Greenwald, Ryan Grim, and Ryan Gallagher about NSA monitoring the porn viewing habits of targets the agency has deemed to be radical.

It's a great story, but it also provides an interesting contrast with this investigation from McClatchy, on a new federal policy requiring foreign banks to turn over private financial information on U.S. citizens, including those living overseas. The new policy is aimed at catching tax cheats by pressuring countries into abandoning long-held policies (most notably, in Switzerland) of keeping bank accounts and other financial information private, including from foreign governments. The law has led to a record number of American ex-pats renouncing their citizenship. And we aren't just talking about Facebook billionaires and hedge fund managers, here.

For Ruth Anne Freeborn, it boiled down to a choice between country and family.

Born in Oklahoma, Freeborn has lived in Kingston, Ontario, for more than 30 years as an American expatriate, with a Canadian husband and 22-year-old son . . .

But a U.S. law passed in 2010 that will require international financial institutions to provide the Internal Revenue Service with information on their U.S. account holders forced her to weigh her citizenship. Her husband, a $51,000-a-year electronics technician and the family's sole income earner, strenuously objected to having his financial data shared with a foreign nation.

"My decision was either to protect my Canadian spouse and child from this overreach or I could relinquish my U.S. citizenship," she said. "It was with great sorrow I felt I had to relinquish, but there was no other choice for me and many like me."

Progressives who are concerned about NSA spying and U.S. bullying of other countries in the war on terror tend to be supportive of laws like this one, in which the U.S. bullies other countries into complying U.S. financial disclosure laws, ostensibly to catch tax cheats and shut down tax shelters. But this idea that U.S. law applies globally is troubling, for lots of reasons. It's been used to nab executive of online gambling sites, for example, even though those sites were based in countries where online gambling is legal. It also puts the U.S. in a precarious position when the tables are turned on a U.S. citizen.

Freeborn notes the disconnect:

"My husband cannot understand why Americans are so offended by having their personal emails and phone calls monitored by the NSA yet are very comfortable requiring a Canadian to hand over their bank account data, which is far more sensitive," Freeborn said.

Indeed, the federal government's claims of global jurisdiction with respect to financial laws ought to concern progressives for reasons other than just logical consistency. Bullying foreign banks into complying with U.S. law makes it more difficult for organizations like Wikileaks to collect donations and obtain funding, particularly from U.S. citizens. If the federal government ever decides to go after media outlets that publish whistle-blower documents, including outlets based overseas, you can bet they'll use the same tactics.



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