'I think people need to know that nobody is safe from, in some cases, really ridiculous scrutiny,' Sister Jean Abbott says of the Patriot Act, which was cited when the nuns? account was frozen.Photo by: TODD DAVIS / WFLA
The nuns of the Holy Name Monastery say they have been swept into the
net cast by the nation's antiterrorism laws.
The sisters say the monastery's main bank account was frozen without explanation
in November, creating financial headaches and making the Benedictine nuns hopping
mad. They were told the Patriot Act was the cause.
"I think the Patriot Act is unwise, let's say, and that if it happened
to us, it can happen to anybody," said Sister Jean Abbott, the monastery's
business manager. "I think people need to know that nobody is safe from,
in some cases, really ridiculous scrutiny."
The nuns didn't know anything was amiss until Nov. 10, when their checks started
bouncing without warning and the account wouldn't accept deposits, including
paychecks from state agencies where some of the sisters hold jobs.
Two of the bounced checks had gone to other charities, Abbott said. Others
went to pay Visa and utility bills. In all, the account was frozen for a week.
In that time, 22 checks were returned with an ominous but baffling stamp: "Refer
Before everything was straightened out, the nuns ran up $399.56 in fees, which
were later reimbursed by their apologetic local bank, Abbott said. The mess
took nearly three months to remedy, she said.
"It was annoying," Abbott said. "I wasn't angry with our local
bank because they were doing the best they could." The corporate entity
that owns the bank is another issue.
Sister Mary Clare Neuhofer said it was Wachovia.
Kevin Bezner, a spokesman for Wachovia, declined to comment, citing privacy
Problems Began With 80-Year-Old
Abbott said she was told the troubles started because one 80-year-old nun who
is a signatory to the account didn't have her Social Security number and photo
ID on file.
"Clearly an international spy," Abbott said wryly.
None of the nuns has given the bank that information, Abbott said. "We've
been in business 116 years. No one's ever asked."
Against the Patriot Act from the start, the sisters have members of Congress
on speed dial, Abbott said. "They'll be hearing from us now that this is
Among the lesser-known parts of the USA Patriot Act are banking provisions
designed to help law enforcement agents track potential terrorists and money
launderers. The law holds financial institutions accountable if money is funneled
through them to terrorist organizations.
Consequently, experts say, banks have set up a variety of rules intended to
ensure they know who their customers are.
But legal experts familiar with the Patriot Act disagree about what the act
One thing is clear. "The Patriot Act does not require that nuns' bank
accounts be frozen," said Chris Hansen, a staff attorney with the American
Civil Liberties Union in Washington. "The Patriot Act has a lot of problems,
but that's not one of them."
But Hansen said he has no reason to doubt that the nuns were told the Patriot
Act was behind their troubles. "It is our experience that there are a lot
of things these days where people say, 'The Patriot Act made us do it.' Often
it's true, but it isn't always true."
Chris Hoofnagle, senior counsel at the Electronic Privacy Information Center,
said the Patriot Act requires banks to verify client information on all new
bank accounts but not on existing accounts. Many banks, however, are checking
information on existing accounts as well.
"They don't want to look at their rolls and see Osama bin Laden and then
risk the wrath of Congress," he said.
Situation Doesn't Make Sense
Peter Djinis, a Virginia lawyer, formerly headed the regulatory program of the
Financial Crimes Enforcement Network, better known as FinCen, a bureau of the
Treasury Department. He said the nuns' situation doesn't make sense.
"The Patriot Act under these circumstances would not require a bank to
freeze anything," Djinis said. "It required the Treasury Department
and federal banking agencies to establish minimum customer identification standards
for setting up new accounts." That information includes the person's name,
address, birth date and Social Security number. No account could be opened after
Oct. 1, 2003, without that information.
The point is to allow investigators to track transactions with accurate information
about the parties involved, Djinis said. Its aim is to keep accounts from being
established under false names.
"It's very confusing to me, unless they had some reason to suspect that
the information supplied by those poor, hapless nuns was not reliable,"
Louis Harvey, president of Dalbar Inc., a securities research firm in Boston,
said banks are required by law to make sure their records are in order. He said
there are good reasons the bank didn't notify the monastery its account was
"Let's assume that it was not nuns and it was some money-laundering scheme
run by terrorists," Harvey said. "The last thing in the world you'd
expect the bank to do is notify the terrorists."
He said banks look for patterns of activity, such as large transactions that
could raise red flags. But exactly what constitutes a pattern of activity is
unclear, Harvey said. The rules are vague by design.
When a bank detects suspicious activity, he said, it freezes the account and
refers the matter to federal regulators.
Anne Marie Kelly, a spokeswoman for FinCen, said banks are required to file
suspicious activity reports, also known as SARS, but not to freeze accounts.
That would be up to the bank, she said, and possibly the Office of Comptroller
of the Currency.
A spokesman for the comptroller's office declined to comment Tuesday.
"Last year, we had what we called defensive filings of SARS, a number
of banks filing on a number of accounts that upon review were not deemed suspicious,"
Kelly said. "This could have been an example of that."