By James Plummer

Newsweek has pointed out yet another egregious provision of the USA PATRIOT Act, one that both violates privacy and raises costs - and does so inefficiently to boot. It comes into play whenever someone buys some real estate.

As reported previously in this space, last year's Intelligence Authorization bill expanded the definition of "financial institution" subject to warrantless searches known as "National Security Letters" to include "persons involved in real estate closings and settlements."

Well, it turns out that a September 2001 Executive Order similarly expanded another definition of "financial institutions" which must, according to Newsweek, "create anti-money-laundering compliance programs" under the USA PATRIOT Act. So, title companies must now run the names of everyone involved in a real estate transaction against a list of "terrorists" maintained by the Treasury Department's Office of Foreign Assets Control.

The American Land Title Association points out the unlikeliness of residential property being used for "money-laundering," since it is "not a very liquid investment." And someone with the ACLU rightly pointed out to Newsweek that anyone dealing with large amounts of money with a bank has already had their names run through federal background checks as it is.

And that list that often costs about $30 for each person involved on both sides of the transaction? It comes up blank for the name "Osama bin Laden."

For passing on to consumers the cost of this ineffective, redundant, and generally dubious system, the Office of Foreign Assets Control is the Privacy Villain this week.

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