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By Eric Lichtblau
The New York Times
Washington - The Bush administration is signaling that it plans to turn again to a legal tool, the "state secrets" privilege, to try to stop a suit against a Belgian banking cooperative that secretly supplied millions of private financial records to the United States government, court documents show.
The suit against the consortium, known as Swift, threatens to disrupt the operations of a vital national security program and to disclose "highly classified information" if it continues, the Justice Department has said in court filings.
A hearing on the suit is scheduled for Friday in federal court in Alexandria, Va.
The "state secrets" privilege, allowing the government to shut down litigation on national security grounds, was once rarely used. The Bush administration has turned to it more than 30 times in terrorism-related cases, seeking to end public discussion of cases like the claims of an F.B.I. whistle-blower and the abduction of a German terrorism suspect.
Most notably, the administration has sought to use the privilege to kill numerous suits against telecommunications carriers over the National Security Agency's eavesdropping program.
But a judge in California rejected the argument because the program had been discussed so widely. The government challenge is pending before the United States Court of Appeals for the Ninth Circuit, where judges at a hearing two weeks ago expressed skepticism on the secrecy argument.
Asserting the privilege requires the director of national intelligence and the attorney general to certify legally the potential harm to national security.
If the administration makes good on its intention to invoke the privilege in the Swift suit, it would be one of the most significant tests of the privilege.
Swift is considered the nerve center of the global banking industry, routing trillions of dollars each day among banks, brokerage houses and other financial institutions. Its partnership with Washington, reported in The New York Times in June 2006, gave Central Intelligence Agency and Treasury Department officials access to millions of records on international banking transactions.
The access was part of an effort to trace money that investigators believed might be linked to financing of terrorism.
Months after the Sept. 11, 2001, attacks, Swift began turning over large chunks of its database in response to a series of unusually broad subpoenas from the Treasury Department.
Administration officials have defended the program as an important tool in the war on terror. European banking regulators and privacy advocates were quick to denounce the program as improper and possibly illegal.
The pressure resulted in an agreement this year by Swift and United States officials to tighten restrictions for using the data.
Two American banking customers also sued Swift on invasion-of-privacy grounds. Legal and financial analysts had expected that the suit would have been thrown out because American banking privacy laws are considered much laxer than those in much of Europe.
But the chief judge in Federal District Court in Chicago, James F. Holderman, ruled in June that he would allow the suit to proceed, partly on grounds of claims of a Fourth Amendment violation and his finding that Swift's arguments on that point were "unpersuasive."
"The decision in Chicago was a pretty big win for our side," Steven E. Schwarz, a lawyer in Chicago who represents the plaintiffs, said in an interview.
The Swift program, Mr. Schwarz said, "is an Orwellian example of government overreaching and unfettered access to private financial information that is not consistent with the values upon which our country was founded."
Judge Holderman did agree to move the suit to the federal court in Alexandria at the request of Swift lawyers. Its main American arm operates from Manassas, Va.
The hearing on Friday is on a motion by Swift for Judge T. S. Ellis to reconsider Judge Holderman's ruling.
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