The no-buy list

We've all heard of the "no fly" list the airlines maintain to keep terrorists from getting on board a plane, and how flawed it is.  Now comes news of what you might call the "no buy" list.  From today's Washington Post:

Private businesses such as rental and mortgage companies and car dealers are checking the names of customers against a list of suspected terrorists and drug traffickers made publicly available by the Treasury Department, sometimes denying services to ordinary people whose names are similar to those on the list.

The Office of Foreign Asset Control's list of "specially designated nationals" has long been used by banks and other financial institutions to block financial transactions of drug dealers and other criminals. But an executive order issued by President Bush after the Sept. 11, 2001, attacks has expanded the list and its consequences in unforeseen ways. Businesses have used it to screen applicants for home and car loans, apartments and even exercise equipment, according to interviews and a report by the Lawyers' Committee for Civil Rights of the San Francisco Bay Area to be issued today.

"The way in which the list is being used goes far beyond contexts in which it has a link to national security," said Shirin Sinnar, the report's author. "The government is effectively conscripting private businesses into the war on terrorism but doing so without making sure that businesses don't trample on individual rights."

Businesses that conduct transactions with someone on the list face penalties of fines up to $10 million and prison sentences up to 30 years.  Little wonder that more and more businesses are consulting the list:

The law is ridiculous," said Tom Hudson, a lawyer in Hanover, Md., who advises car dealers to use the list to avoid penalties. "It prohibits anyone from doing business with anyone who's on the list. It does not have a minimum dollar amount. . . . The local deli, if it sells a sandwich to someone whose name appears on the list, has violated the law." 

And the article goes on to relate the Kafkaesque stories of people who've been denied loans, etc. because their names resemble those of people on the list.  Insane.

Oh, the journalist in me must offer this bit of media criticism:  Why did the WaPo put this story about a major civil liberties issue on the front page of its business section? 

The Daily Reckoning