FBI's Eye on Las Vegas Vexes Gaming Industry

Nov. 10--The issue of the FBI snooping on visitors to Las Vegas and their private lives is coming home to roost.

American Gaming Association Chairman Frank Fahrenkopf said the issue is a priority for his organization and will discuss it at the group's Dec. 7 board meeting in Las Vegas.

The problem for the gaming industry is that FBI sweeps of casino customers' information, especially those done without their knowledge, and widespread reports of the snooping could very well discourage visitors from coming to Las Vegas, he said.

"There is a point where it starts to hurt the industry," Fahrenkopf said. "I don't know how exactly to put it on a compass, but it's there."

Federal snooping on Las Vegas visitors first became public in December 2003 when the Review-Journal reported the FBI had served national security letters on casino companies and airlines for information on all their customers during the holiday season.

The FBI had also obtained similar information from the gaming companies immediately after the terrorist attacks on Sept. 11, 2001.

The data mining in Las Vegas arose again Sunday when The Washington Post in a front page article reported on FBI activities and its previously unknown policy of preserving all such information collected under the Patriot Act, rather than destroying it when it's no longer of use.

The FBI told the Post it could cite no incident where up to 1 million customer records gathered on Las Vegas visitors had ever been used in a useful way. Local FBI spokesman Todd Palmer could not be reached for comment.

Industry and civil rights organization officials said the FBI's information sweeps go too far and could damage casinos in Las Vegas.

"There's certain information about our customers that goes beyond what we feel is necessary for national security, and that constitutes an invasion of privacy. There are certain lines they shouldn't be able to cross in the name of national security," Fahrenkopf said.

Nevada Resort Association President Bill Bible echoed that concern.

"I think it could well become an issue for the industry. I don't know precisely where. But since they've had no appropriate use for the records, it's appropriate for them to stop. And why would they need to keep them forever?" he said.

Gary Peck, executive director of the ACLU of Nevada, praised the American Gaming Association's decision to address the issue publicly in December.

"There's no question but that the revelations about what went on New Year's Eve several years ago and the possibility it continues is bad for the industry," he said.

Spokesmen for hotel-casino operators said they are prohibited by federal statute from discussing whether the federal government is still mining their databases for information on guests or about the potential impact on customers.

However, one casino company spokesman who asked not to be named because of the gag order said he does not believe his company has received a national security letter in 18 months. However, he said, the company does still have a regular pipeline for exchanging information with the FBI.

Spokesmen for organizations that have not been served with national security letters are not prohibited under the law from speaking about the sweeps and were more open about the damage they could cause.

"People take the slogan 'What happens in Vegas, stays in Vegas' seriously. They have a right to expect that," Peck said. "There's no doubt many patrons and visitors would be troubled by having their business made an open book.

"Patrons of Las Vegas care about privacy. These are fundamental American values most people take very seriously. They believe the government has no business looking into their affairs unless there is a really good reason for it and that's not going on here," Peck said.

Before the Patriot Act, government generally could only seek information on specific individuals, and it had to show cause before a federal judge to get information on individual Americans.

Under the new law, the government has been able to conduct sweeps on vast numbers of unnamed individuals without cause and it has admitted preserving the information in perpetuity.

The Post article estimated that more than 30,000 national security letters are served on companies every year, each of which may sweep up information on thousands of individuals, as they have in Las Vegas.

The Post article said the data mining in Las Vegas started at the end of 2003 as part of an emergency operation, thought to be the first of its kind in the country.

The Department of Homeland Security declared an orange alert on Dec. 21 of that year, in part because of intelligence that hinted at a New Year's Eve attack in Las Vegas.

The FBI sent a little-known Proactive Data Exploitation Unit to assemble a real-time census of every visitor in the city.

Government and private- sector sources described epic efforts to vacuum up information.

An interagency task force began pulling together the records of every hotel guest, everyone who rented a car or truck, every lease on a storage space, and every airplane passenger who landed in the city.

The operation remained secret for about a week before it was reported in the Las Vegas Review-Journal.

Under former U.S. Attorney General John Ashcroft's revised policy, none of the information that was gathered has been purged. The Post reported the whole operation found no suspect, and the orange alert ended on Jan. 10, 2004.

"The whole thing washed out," one participant said.

Peck said there is every reason to believe the government is still abusing the law on a massive scale.

The national ACLU is litigating a case involving an affected individual that neither it nor Peck can discuss.

"The gag order is part of the law and has a profound chilling effect on discussing the policies, even on the ACLU," Peck said.

Fahrenkopf said any use of national security letters to solicit private information on seemingly innocent individuals constitutes an unacceptable intrusion on the privacy of our customers.

"Asking our companies to surrender records, (possibly) chronicling everything from where our visitors eat and what shows they see to what souvenirs they purchase and how much they gamble -- and making that information available to various sectors of the government and some private businesses -- simply goes too far," he said.

<<Las Vegas Review-Journal (KRT) -- 11/11/05>>

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