Why is ICE tracking millions of wire transfers to Mexico? Critics question 'bulk surveillance'

Rafael Carranza
Arizona Republic

PHOENIX – The chairman of the Senate Committee on Finance is asking for an investigation of what he called a secret mass surveillance program to collect information indiscriminately on millions of money transfers sent mostly by immigrants living in the four Southwest border states to Mexico. 

But officials that led efforts to begin scrubbing money transfer data more than a decade ago say this is a valuable, proven tool to combat human smuggling and money laundering along the U.S.-Mexico border. 

Sen. Ron Wyden, D-Ore., sent a letter on Tuesday to the inspector general at the U.S. Department of Homeland Security asking him to look into Homeland Security Investigations, the subagency within U.S. Immigration and Customs Enforcement specializing in investigating transnational crime.

Wyden asked the inspector general to investigate whether HSI officials in Phoenix violated any laws when they issued eight customs summons – a request similar to a subpoena – to have two wire transfer companies provide more than 6.2 million records from their customers' wire transfers of more than $500.

Sen. Ron Wyden speaks to reporters on Capitol Hill on May 2, 2017.

The transfers were sent to Mexico from Arizona, California, New Mexico and Texas from July 2019 to January 2022.

"The customs summons authority only permits the government to seek records that are 'relevant' to the investigation. HSI should have known that this authority could not have been used to conduct bulk surveillance," Wyden said in the letter addressed to Joseph Cuffari, the Homeland Security inspector general.

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Oregon Sen. Ron Wyden asked a Department of Homeland Security watchdog office to investigate a program tracking millions of wire transfers to Mexico.

The two companies, Western Union and Maxi, are used widely by immigrants to send remittances to their home countries. HSI then shared the data provided by the two companies with the Transaction Record Analysis Center, a 501(c)3 anti-money laundering nonprofit based in Phoenix, which makes this data accessible to other law enforcement agencies.  

Wyden said HSI paused its use of the customs summons to collect data in January after his office inquired about it.

Immigration and Customs Enforcement deferred comment to the Department of Homeland Security.

Homeland Security confirmed that information in an emailed statement, expressing their commitment to using effective and lawful procedures to fight transnational criminal groups.

"HSI has paused its use of customs summonses while it works to ensure that policy properly guides the agency’s use of these and other administrative subpoenas and accounts for the appropriate role of such summonses in supporting criminal investigations," the statement said. 

The Homeland Security Office of the Inspector General did not respond to a request for comment. 

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Surveillance tool rooted in 2010 settlement

Before 2019, Homeland Security Investigations and other law enforcement agencies along the Southwest border could access wire transfer data as part of a 2010 settlement agreement between Western Union and the Arizona attorney general's office over allegations that the company facilitated money laundering. 

As part of the $100 million settlement, Western Union agreed to share transaction data from its customers with the state attorney general's office. Half of the settlement funds went toward establishing a revolving fund to help law enforcement in the four U.S. border states weed out any potential money laundering or human smuggling. 

This Feb. 24, 2015, file photo shows the Homeland Security Department headquarters in Washington.

Terry Goddard, the state's Democratic attorney general at the time, said Arizona's status as a major human smuggling corridor – which it maintains to this day – made investigating these crimes a major priority. 

He explained that since it was too dangerous for people being smuggled to carry large amounts of cash in person, they would provide coyotes or smugglers with a small down payment. After they crossed the border, the smugglers then would keep people in stash houses in urban areas until they paid off the remaining amount, usually through wire transfers.

"It was not until we figured out this whole business of money laundering prosecutions by sweeping transactions above a certain amount or targeting them, when we figured it out that they were going to the same source," Goddard said. "We could actually seize them with court permission. And that's how this whole operation developed." 

Combing through wire transactions above a certain monetary amount allowed them to identify significant money flows, alerting them to the possible presence of human smuggling rings, he said.

In 2014, Western Union entered an amended settlement with the Arizona attorney general based on the 2010 agreement over money laundering charges.

It resulted in the creation of the Transaction Record Analysis Center and required Western Union to provide its wire transfer records for five years. Other wire service companies also began to contribute their records voluntarily, the senator's letter said.

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Richard Lebel, executive director for the Transaction Record Analysis Center in Phoenix, told The Arizona Republic, part of the USA TODAY Network, that Wyden's letter was misleading.

He refuted the notion of the group's work was "secretive" or that the data was obtained illicitly, adding that a Maricopa County Superior Court judge approved the program in open court proceedings.  

He said the 2014 amended agreement acknowledged the special circumstances that made border states especially prone to money laundering and smuggling and therefore required coordinated efforts from law enforcement agencies at all government levels to fight them.

"Quite simply, the challenges facing law enforcement today in battling transnational criminal organizations (TCOs) are unprecedented, and the use of money service businesses by TCOs is greater than ever," Lebel said via email.

The nonprofit listed in its most recent tax filing from 2020 that it spent $1.5 million "to educate law enforcement and industry to implement anti money laundering techniques and trends," according to the website Charity Navigator.

ForcePoint, the software company that built the database used by law enforcement, explained on its website that the wire transfer records within TRAC contain more "relevant" information to help law enforcement identify signs of criminal activity.

"The data access enables investigators to geospatially visualize criminal corridors of illegal transactions, saving thousands of man hours and lengthy delays in the usual subpoena process," the company said. 

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Mark Brnovich became Arizona attorney general in 2015, after the money laundering settlements and the creation of the TRAC database. His spokeswoman, Katie Conner, said the attorney general's office has continued to use the database.

"Our office uses TRAC, a federally funded program to legally monitor international wire cash transfers from border states to Mexico. This is done to combat human and drug trafficking," she said.

Brnovich, who is running for the Republican nomination for a U.S. Senate seat in Arizona, has turned up the heat on his comments about the U.S.-Mexico border. He published an opinion as attorney general last month likening the arrival of migrants and asylum seekers at the border as an "invasion," and his office has reliably challenged some of Biden's immigration policies in federal court.

"It is ironic that during a historic border crisis, this would be the focus of any U.S. senator," Conner said.

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Although Goddard says customs summons are an important and effective tool to take on transnational criminal groups, he shared some of the concerns about oversight that Wyden detailed in his letter. 

As attorney general, he said he always had the permission from a state court to collect and access wire transfer data. During his tenure, the attorney general's office seized about $20 million as part of anti-money laundering and smuggling efforts. 

While he said he has unfamiliar with how the process worked currently, Goddard cautioned against having law enforcement agencies untethered from court supervision indiscriminately accessing large amounts of financial data. 

"We went out of our way to make sure we weren't targeting any single transactions, any transactions that had legitimate purposes, and the fact that none of our seizures were challenged in court I think speaks for itself," he said. 

Wyden pointed to that as one of his key concerns. He noted that the TRAC database containing millions of customer financial records – including data provided by Homeland Security Investigations – are accessible to federal, state and local law enforcement agencies without any scrutiny from the courts. 

"Instead of squandering resources collecting millions of transactions from people merely because they live or transact with individuals in a handful of Southwestern states or have relatives in Mexico, HSI and other agencies should focus their resources on individuals actually suspected of breaking the law," Wyden said.

Lebel said the $500 threshold on wire transfers was put in place to keep out regular transactions sent by families, while allowing law enforcement to focus on larger amounts that could point to criminal activity.

"The procedures and processes put in place in 2014 to maintain the confidentiality of personal information contained within those transactions, which include both cybersecurity and stringent data use oversight, remain in place today," he said.

Some immigrant rights activists said they, too, were alarmed by the scope of the collection of the financial data and lack of transparency about how that information is used. 

Jacinta Gonzalez, a senior campaign organizer with the Phoenix-based advocacy group Mijente, said this could create a chilling effect among immigrant communities who rely on these types of services to get by. 

"How can immigrants exist in American society if every institution they rely upon is feeding data back to those seeking to deport them?" she said. 

Follow reporter Rafael Carranza on Twitter at @RafaelCarranza.

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