ITALY'S RESPONSE: TERRORIST FINANCE TRACKING

S E C R E T ROME 001866 SIPDIS NOFORN SIPDIS STATE FOR P,E,EUR/PGI:LREASOR, EB/ESC/TFS:DNELSON, DBROWN, EUR/WE:AYOUNG, EUR/ERA:EBROWN, NP/RA:RMETCALF TREASURY FOR U/S LEVEY, ASZUBIN, JSERAFINI, JFOWLER, CCLARK E.O. 12958: DECL: 06/24/2016 TAGS: EFIN IT PTER SUBJECT: ITALY'S RESPONSE: TERRORIST FINANCE TRACKING PROGRAM AND NEW YORK TIMES STORY REF: SECSTATE 103650 Classified By: Acting Economic Minister Counselor Kathleen Reddy for re asons 1.5 (b,d) ¶1. (U) This is an action request. Please see para 7. ¶2. (S) A/ECMIN and EconOff delivered reftel talking points June 23 to Carlos Baldocci, Ministry of Finance (MoF) Diplomatic Advisor, (senior advisor on international affairs),and Giuseppe Maresca, Director General of the MoF's Office for Financial Crimes and recognized expert on terrorism financing. ¶3. (S) Drawing from reftel points, A/ECMIN began by stressing the legal basis of the Terrorist Finance Tracking Program, and the rigorous safeguards in place to protect privacy. She also expressed regret that the New York Times published the article, as public dissemination of sources and methods diminish national security and our government's efforts to prevent terrorist activity. ¶4. (S) EconOff also noted that the recently-appointed Minister of Finance, Padoa-Schioppa, may have previous knowledge of this program, as he was a member of the European Central Bank's Executive Board, and head of departments for banking supervision, settlement systems, and foreign relations, from 1998 - 2005. Maresca said he was unaware if the Minister knew about this program, but agreed that he might. ¶5. (S) Baldocci said he would inform the Minister (then at an all-day Council of Ministers' meeting on the budget) as soon as possible, and said he would prepare him for possible questions from the press. Baldocci and Maresca also asked: -- Who in the USG issues the subpoenas to SWIFT? -- What was the legal basis for SWIFT's entering into this arrangement, and who at SWIFT would have authorized the program? -- Had Italian citizens' financial records been targeted under this program? -- Did the U.S. Treasury Secretary inform the Italian Minister of Finance when the program was initiated? ¶6. (S) Maresca said he may have additional questions after reviewing the material. ¶7. (S) Comment and Action Request: It was clear Baldocci was uninformed about this program, but not clear whether Maresca had previous knowledge. Embassy requests Washington agencies provide any available information for us to respond to para 5 questions. End Comment and Action Request. SPOGLI