Another memo in the Fonda file, this one dated January 20, 1972, again reviews her Morgan Guaranty accounts and lists the details of 10 checks written to various groups, including the National Welfare Rights Organization. The same document shows that FBI agents traveled to the City National Bank, 300 North Fairfax Avenue, Los Angeles, and took notes on 18 checks drawn against account No. 011 024759, kept in the name of Ellen Lustbader, who is identified as "Fonda's personal secretary. A third document, dated March 12, 1971, reiterates the same check details found in the first Fonda memo. This one, however, contains the following notation: The aforementioned information is not to be made public except in a usual proceeding following issuance of a subpena duces tecum directed to Mr. Arthur W. Herbert, Assistant Secretary, Morgan Guaranty Trust Company, 522 Fifth Avenue, New York, New York. The implication is clear, Mr. Chairman: The FBI obtained their information of Miss Fonda's checking accounts on an informal basis, without a subpena, and with the full cooperation of Mr. Herbert or one of his deputies. Another memo I am submitting comes from the FBI's file on pediatrician Benjamin Spock. Dr. Spock, of course, is a vocal opponent of the Vietnam war and has thus aroused the curiosity of the FBI. The Spock memorandum shows that on December 12, 1967, he received a $500 check from an organization called the "Fifth Avenue Vietnam Peace Parade Committee." The document then states the following: The above check information cannot be made public except in the usual proceedings following the issuance of a subpena duces tecum The person to be subpoenaed in this matter is Miss Sara T. Malloy, Senior Vice President, Amalgamated Bank of New York, 11-15 Union Square, New York, New York. The same memorandum on Dr. Spock contains an appendix with information on an organization called the "Doctor Edward Barsky Dinner Committee." "A fourth source on February 17, 1967," the memo states, "made available information regarding the checking account of the Dr. Edward Barsky Dinner Committee." The above information is not to be made public without the issuance of a subpena duces tecum, directed to Mr. Irwin H. Sklar, Manager, Chemical Bank of New York Trust Company, 260 Columbus Avenue, New York City. Finally, I would like to cite an excerpt from a document contained in the FBI file on black activist Floyd McKissick, the alleged "subversive" who has recently become an outspoken supporter of President Nixon. McKissick, it seems, received a $2,500 check from a foundation which the FBI doesn't approve of. But this information is not to be made. public, the FBI warns in the memo, "without the issuance of a subpena duces tecum, direct to Mr. Henry F. Skelton, vice president, Manufacturers Hanover Trust Company, 40 East 42nd Street, New York, N.Y." This documentation, Mr. Chairman, proves that the FBI has been nosing into private bank accounts for years, with the full cooperation of bank executives. When scanning these bank records, furthermore, the FBI has not always been in hot pursuit of criminals, but has been searching for confidential information about people they simply don't like. That, in my opinion, is a grave encroachment on our civil liberties and ought to be stopped. Mr. Chairman, we are available to answer any questions that the committee may have. Senator PROXMIRE. Thank you very much, Mr. Anderson, for a very interesting statement indeed. You seem to take a position and I want to be sure I understand it, that, No. 1, bankers should not disclose information about the financial transactions of a depositor without a subpena. Mr. ANDERSON. I certainly do. Senator PROXMIRE. Do you feel that the law should so state? Mr. ANDERSON. I certainly do. I believe that ought to be made a matter of law, because of the documented abuses of the present system. Senator PROXMIRE. How about exceptions, a kind of a hot-pursuit doctrine? Suppose you had the kind of situation that you did mention, and suppose you had to act very, very fast. There is a kidnaping and the trail might lead through a bank, and it might be necessary for the FBI to go as quickly as they can to the banker, and getting a subpena might take a matter of several hours, enough to frustrate the effectiveness of the FBI pursuing the kidnaper. Would you say in the event that it can be shown to be connected with a crime of this kind that there might be exceptions? Mr. ANDERSON. I think this is something I would leave to the committee to study. I would like to know more about how long it would take. It seems to me that the FBI ought to be able to get a subpena in very short order. I doubt very much that it would cause a great delay in any kind of a criminal search. Senator PROXMIRE. Do you think there is any other safeguard that we should have except that a subpena be required, a safeguard for the individual? If a judge is willing to provide a subpena, should there be guidelines set down for the judge to determine whether or not a person's bank account should be made available to a Federal agency? Mr. ANDERSON. I haven't thought this through, Mr. Chairman. I am here at the committee's invitation to furnish the documentary evidence. But my feeling is that the Government which is supposed to serve us, which was created for this purpose, increasingly is requiring us to serve them and that it is growing into a Frankenstein's monster, and that it is demanding more and more information about us, and demanding more and more services from us, is issuing every day new regulations and new forms for us to fill out, and I believe that this kind of encroachment by the people who are supposed to serve us, by people who are more and more becoming our masters, should be limited, and this is one very important example. Senator PROXMIRE. Did either you or Mr. Spear talk to bankers to determine whether this information was released in response to a subpena? Mr. ANDERSON. Mr. Spear can respond to that. Mr. SPEAR. Senator, I made an attempt to reach every individual that we mentioned, every banking person. I was successful in many in stances. For example, we mention Mr. Arthur Herbert, who was mentioned in one of the I believe it was the Fonda memorandum-as the individual to contact when the information-when a subpena was to be served. Mr. Herbert suggested, or rather, I will put it their way, he staunchly denied that he himself released the information. He said that the bank's policy is not to give out information of that nature unless they are subpenaed, and he suggested that perhaps his counsel was the one who had released the information. Miss Sara T. Malloy Senator PROXMIRE. Did you talk to his counsel? Mr. SPEAR. No, sir; I did not. I talked to other counsel, and I will tell you about that in a moment. Miss Sara T. Malloy refused to discuss it. She refused to make any comment whatsoever. I talked to her immediate superior, a man by the name of Nicholas Agneta. Senator PROXMIRE. Would you identify the bank again that Miss Malloy is with? Mr. SPEAR. Yes, just a moment. Senator PROXMIRE. That is the Amalgamated Bank of New York? Senator Sparkman tells me it is. Mr. SPEAR. I believe it is. I talked to Nicholas Agneta, executive vice president of the bank. He said that, to his knowledge, the bank does not as a matter of as a routine matter-release information without a subpena. I did get in touch with the attorney for the bank, a man by the name of Alan Blumberg. Mr. Blumberg told me that the suggestion that the various counsel of the bank would release this information was just unacceptable. He said that, on the contrary, the counsel usually are the ones who suggest that they do not cooperate, that, in fact, the bank objective is to cooperate day in and day out routinely with Government investigators and that the lawyers are the ones who are forever saying, "Please don't do it, you are going to get in trouble." Senator PROXMIRE. As far as that was concerned, you got a mixed and contradictory response, and it was difficult to determine whether the executives or the counsel released it; there is a contradiction. Mr. SPEAR. That is correct. Senator PROXMIRE. There isn't any question that this was released without a subpena? Mr. SPEAR. Not to my mind. Senator PROXMIRE. Mr. Anderson, to what extent do your files indicate such practices going on generally? Mr. ANDERSON. We have dozens of files we have gotten out of the FBI, and I would say there is financial information in all of them. I couldn't testify that the financial information always came from a bank, because there are other sources for this kind of information, but it is quite clear from these documents that banks do furnish detailed, precise information including check numbers, dates, times, and specific information from banking accounts. How widespread it is, I have talked to my sources in the FBI, and they told me it is widespread, but I can't define it beyond that. Senator PROXMIRE. Is it your impression that the source from which the information was derived by the FBI, officially from the bank itself, or some other source midway between the bank and the FBI? 83-436 0-72——10 Though not clearly explicit in the notification aspect of the proposed legislation, it would appear that the statutes seeks to give standing to the account holder to raise the Fourth and Fifth Amendment objections against the acquisition of bank records by subpoena-a standing rejected by the courts and one which would promote delay, dilatory tactics, and additional litigation at the investigative stage of the criminal process. Mr. Miller (p. 2 of his statement) and Ms. Eastman (pp. 2 and 6 of her statement) both suggest that the present state of the law concerning inspection of bank records results in "a preferential treatment to those who deal in cash" (p. 2 of Mr. Miller's statement). A consideration of this novel suggestion reveals, with great force, the pernicious effect which the bills would have on the Government's efforts to curb organized crime. While it is true that a person who deals in cash and keeps his own records is protected by the Fourth Amendment from seizure of those records unless such seizure is pursuant to a warrant issued upon probable cause, it is also true that such a cash-basis individual cannot avail himself of the United States mails, the banks and clearinghouses, to transfer such cash to another individual. Rather, he must deal face-to-face with transferee. This makes him vulnerable to other investigative techniques. Such a person cannot impose on another a requirement of non-disclosure to legitimate inquiries of law enforcement under sanctions of criminal penalties such as the proposed statutes would give to one who uses banking channels to facilitate his criminal activities. The imposition of such sanctions on the disclosure of bank records would appear to be as legislatively unsound as it would be to legislate that one who is a payee or endorser of a check could not voluntarily disclose the transaction to legitimate law enforcement inquiry without subpoena, notification, etc., to the drawer of the check. Throughout their testimony and statements, Messrs. Anderson, Miller, and Raible make reference to the allegedly unwarranted monitoring of the financial records of persons and organizations expressing unpopular or radical ideas. These charges comprise their principal evidence of the Federal Government's abuse of its access to bank records. While I am not at liberty to discuss the activities of any particular individual or organization, I am compelled to point out that the exercise of First Amendment rights does not immunize individuals from responsibility for any criminal acts which they may have committed. Most certainly, public dissent should not subject one to Government persecution, but at the same time it should not shield him from legitimate investigation for suspected offenses. Ms. Eastman (at p. 1 of her statement) voices the fear that the required maintenance of bank records will become the tool of “political surveillance” of any bank customer. If one assumes the bad faith of the Executive Branch (Legislative, too, since she refers to "congressional files") of this Government, an absurdly large increase in the investigative capabilities of the Executive Branch and the total passivity of both the citizenry and the other branches of Government, Ms. Eastman's fears may be plausible. None of these assumptions are realistic. Moreover, Mr. Morthland (p. 2 of his statement) indicates the Promethean dimensions of such surveillance when he estimates the volume of checks "in California alone to be one-quarter billion copies of checks a month" (his emphasis). During a colloquy on August 14, Senator Tunney refers to a "pocket subpoena which the Internal Revenue Service uses, and I understand the FBI uses, too ..." (Transcript, p. 156). This undoubtedly is a reference to an Internal Revenue Service administrative summons. 26 U.S.C. Section 7602. The Federal Bureau of Investigation does not issue administrative summonses, since it has no statutory power authorizing issuance of such a summons. In summary, it is clear that the present method of inspecting a bank's records poses no violation of rights guaranteed by the Fourth Amendment and that the minimal good the bills would do is far outweighed by the deleterious effect that the bills would have on legitimate law enforcement activities. With regard to your question during my testimony at the hearing concerning the liability of a bank to an account holder for disclosure of financial information to a law enforcement officer, our review of the case law has not uncovered a case directly on point and we are not able to give you a definitive answer. Sincerely, WILLIAM S. LYNCH, THE AMERICAN BANKERS ASSOCIATION, Hon. WILLIAM PROXMIRE, Washington, D.C. DEAR SENATOR PROXMIRE: This is in response to your letter of September 11 inviting additional comments on a letter received from the Justice Department in reference to our testimony before the Senate Subcommittee on Financial Institutions of the Senate Committee on Banking. Housing and Urban Affairs concerning legislation to amend the Bank Secrecy Act. The American Bankers Association does not agree with the Justice Departient's contention that the banker-depositor relationship does not create a confidential relationship. We recognize that the courts have uniformly held the communications between banks and their customers are not "privileged communications" in the technical sense of that term as applied to such intimate personal relationships as priest-penitent, husband-wife, attorney-client, and doctor-patient. At the same time, the courts have long recognized the existence of a "right of privacy" (The Right to Privacy, S. Warren and L. D. Brandeis, 4 Harvard Law Review 193, (1890)). Bank customers expect their banks to grant them privacy concerning details of their personal financial affairs, and society has recognized this expectation as reasonable and proper. The courts have recognized this right of privacy of bank records for many years, as shown in the materials we previously submitted to the Subcommittee supplementing our testimony (Paton's Digest and a case noted from the University of Florida Law Review). Congressional recognition of this right of privacy with respect to credit and other financial matters was most recently manifested last year during the deliberations surrounding passage of the Fair Credit Reporting Act (P.L. 91-508, Title VI of the Consumer Credit Protection Act). Accordingly, while it is clear that the degree of confidentiality surrounding the relationship between a bank and its customers is not a true “privileged” relationship in the evidentiary sense, nevertheless, the bank-customer relationship is one that is subject to a "right of privacy". It is this right of the individual bank customer that we are anxious to preserve. In order to assure members of the public that their bank records will not be available to Government agencies, except under proper safeguards, we believe that additional positive legislation is needed and that our recommendation which extends the language of present section 241 (b) to all provisions of Public Law 91-508 would accomplish this. Sincerely, CHARLES R. MCNEILL, AMERICAN CIVIL LIBERTIES UNION, Senator WILLIAM PROXMIRE, Washington, D.C. DEAR SENATOR PROXMIRE: In your letter of September 11, 1972 to Hope Eastman, Associate Director of the ACLU Washington office, you extended her an opportunity to comment on a letter from the Justice Department concerning her testimony before the Financial Institutions Subcommittee. I am responding on her behalf. The Justice Department letter asserts that contrary to Ms. Eastman's testimony, bank depositors have no Fourth Amendment interest in securing their checks and other account information from unreasonable governmental searches, and accordingly have no standing to challenge government inspection of their bank records with the consent of the bank. It follows, contends the Justice Department, that a depositor should not be given notice of the service of summons or subpoena of his records on his bank, or the bank's informal "cooperation" with government agents, since he has no Fourth Amendment interest in the records. Contrary to the assertions of the Justice Department, decisions of the Federal courts do not support this position. In Reisman v. Caplin, 375 U.S. 400 (1964), a taxpayer's attorney sought injunctive and declaratory relief against the enforcement by the Internal Revenue |