WASHINGTON -- Obama administration lawyers have been debating whether the Treasury Department must inform the people or groups it lists as foreign terrorists when it relies on surveillance without a warrant as the basis for the designation, officials familiar with the deliberations said.
Intelligence officials are said to oppose being more forthcoming about who has been subjected to surveillance, especially in cases involving noncitizens abroad -- who do not have Fourth Amendment privacy rights -- because such information would tip them off that the National Security Agency had intercepted their communications.
But a provision in the Foreign Intelligence Surveillance Act requires the government to disclose when it uses information from eavesdropping in any "proceeding" against people. In 2008, Congress made the NSA's surveillance program a part of the law, but the full implications of applying its disclosure provision to that program were initially overlooked.
Outside specialists said the same part of the law may apply to other government decisions that rely on such intelligence, including adding names to the no-fly list and deciding whether to approve visas and licenses that require a security screening.
"This has so many potential spillovers that it's fascinating," said Robert Chesney, a law professor at the University of Texas at Austin.
The government began to scrutinize how the disclosure provision applied to the no-warrant surveillance program in the summer of 2013, when leaks from Edward Snowden, a former NSA contractor, shined a spotlight on surveillance-related policies.
The scrutiny began in the Justice Department, where it became clear that prosecutors in the National Security Division had been concealing from criminal defendants -- Americans protected by the Fourth Amendment -- that some of the evidence they faced had been derived from wiretapping without warrants.
In August 2013, the department changed that practice and began notifying criminal defendants. Some of them have since challenged the program's constitutionality, so far without success, though the litigation is early.
Now the ripples have spread to the Treasury Department, where the Office of Foreign Assets Control administers and enforces sanctions against people or groups that it designates as foreign terrorists, drug lords or other wrongdoers. Any U.S.-based assets of those designated entities are frozen, and Americans may not do business with them.
Over the summer, lawyers for the Treasury Department had discussions with the National Security Division about whether -- or at what stage -- that process should count as a "proceeding" that falls under the disclosure provision, said officials, who spoke on the condition of anonymity to discuss internal deliberations.
When designating groups for sanctions, the Treasury Department announces its decision without prior notice. The designated groups can request that it reconsider, and if that effort fails, they can file a lawsuit. Neither the designated groups nor their lawyers get to see any classified evidence against them, but at the lawsuit stage, a judge is shown that information.
Erich Ferrari, a lawyer who represents foreign clients who have challenged their designations by the Treasury Department, said the government typically provided very little information about the basis for its decisions. He said he considered even the administrative reconsideration stage to be a "proceeding," but he added, "I think they would try to find a way to get out of that."
Jimmy Gurule, a Notre Dame law professor who served from 2001 to 2003 as the Treasury Department's undersecretary for enforcement, a post that oversees the Office of Foreign Assets Control, said there was a strong argument that every stage of the process be counted as a "proceeding" because the statute is written broadly, meaning the notice law should apply from the start.
The Treasury Department refused to explain how it has decided to interpret its obligations under the disclosure rule, although it provided a general statement.
"The Office of Foreign Assets Control is committed to complying fully with FISA, which we implement in close consultation and collaboration with the Department of Justice," it said. "We are confident in the legality and validity of our designation actions, including decisions taken in response to delisting requests."
A Section on 10/01/2014