Note: At presstime, the U.S. House of Representatives was preparing to discuss legislation that could change the way the Patriot Act is enforced.-Ed.
On Oct. 26, 2001, just six weeks after the terrorist attacks on American soil, the Patriot Act was passed into law. The U.S. Department of Justice says that it’s needed to prevent future terrorist attacks. Proponents say it gives too much power to domestic law enforcement and foreign intelligence agencies, and that it eliminates the checks and balances that ensure the powers are not being abused.
The act allows the FBI to seek and seize government records without a search warrant, which is normally a violation of the U.S. Constitution. The FBI can get a warrant from a “special court” by merely certifying that the information it seeks is relevant to a terrorist investigation.
“As long as the government can demonstrate they are in the midst of an investigation of terrorism as defined under the Act, our standard constitutional safeguards for due process are for all intents and purposes eliminated,” says Marcos Ronquillo, president, COO and managing partner at Godwin Pappas Langley Ronquillo LLP.
Smart Business asked Ronquillo about the status of the act and how that might change in the future.
What are some of the biggest issues concerning the Patriot Act?
The Patriot Act was passed at a time when the country was united in response to acts of terror as a result of Sept. 11 at home and abroad. Since that time, many of our national, regional and local business organizations that originally supported the administration’s war on terror have essentially turned away. National organizations such as the U.S. Chamber of Commerce are now strongly supporting the repeal of various sections of the Patriot Act — particularly Section 125, which permits the FBI to obtain third-party business records. In addition, the House is expected to pass legislation in the next couple of weeks to continue several sections of the more controversial provisions of the Act that are, by law, ready to be eliminated under the sunset provisions.
Another issue is the recent legislation [Secured Borders and Open Doors in the 21st Century Initiative] introduced by Secretary of State Condoleeza Rice and Secretary of Homeland Security Michael Chertoff, which serves to improve security while facilitating and expediting international travel.
A unique partnership between the American Civil Liberties Union and the U.S. Chamber Commerce will weigh in on consumer privacy issues that have surfaced as a result of the Patriot Act Legislation. Historically, this is the first time since the act became law that business organizations have begun to challenge the FBI’s ability to search and seize their records and have questioned the ability of the FBI and other law enforcement agencies to seize assets without due process.
What businesses are affected more than others by the Patriot Act?
Banks, financial institutions and companies that do business abroad have been especially hard hit. Domestic and foreign corporations have been forced to look at their internal policy on how they do business and with whom. This has resulted in the hiring of compliance officers, lawyers and risk specialists to ensure compliance with all of the provisions of the Patriot Act.
Companies need to position themselves to be able to handle those incidents where law enforcement agencies subpoena their business records and seize corporate assets.
Financial institutions have to keep a laundry list of records with respect to their customers and the services provided to those customers. There is actually a list put together by the U.S. Government with the names of known or suspected terrorists that is as thick as a telephone book. Domestic and foreign corporations must scroll through that list and make sure that they are not providing services for anyone whose name appears. If the name of a client, customer or service provider shows up on that list, then the company should stop, look and evaluate whether it should continue to provide services or do business with that individual. If not, there is the possibility of criminal penalties and civil fines that could range in the millions of dollars.
In the end, every company that is affected by the Patriot Act must and should keep accurate records in order to demonstrate compliance with the Act.
What should businesses do to comply with the act?
Company risk managers and executives must make sure that they conduct a legal audit and assign someone to be the Patriot Act compliance officer. The company should ensure that executives, upper-level risk managers and legal department personnel are familiar with the Patriot Act, and should design and document a well-thought-out compliance program with periodic reviews of corporate compliance. It is very important for the company to develop a policy for responding to government inquiries or investigations and to handle subpoenas and attempts by the government to seize corporate records and assets.
MARCOS RONQUILLO is president, COO and managing partner of Godwin Pappas Langley Ronquillo LLP in Dallas. Reach him at (214) 939-8633.
