July 7 (Bloomberg) -- Lawyer Buddy Parker assumed years ago that the U.S. government had tracked every penny that went into and out of the accounts of his client, suspected of laundering money for terrorists.

What he can't comprehend is the stir created by reports that the feds are monitoring international banking records.

``It's a yawner,'' says Parker, a former assistant U.S. attorney and now a white-collar defense lawyer in Atlanta.

The shocker was the front-page placement the New York Times, Wall Street Journal and Los Angeles Times gave the story. Anyone who knows anything about international banking surely assumes government scrutiny.

``We've been announcing that we've been tracing assets and financial transactions for a long time,'' says Victor Comras, a retired U.S. diplomat who oversaw a United Nations program aimed at tracking terrorist funds. ``The fact of the matter is that terrorists knew we were tracking their assets and they took countermeasures early on,'' Comras said in a telephone interview.

For disclosing that which was already public, journalists -- particularly those at the New York Times -- are being skewered as traitors and threatened with prosecution.

``We're at war, and for the Times to release information about secret operations and methods is treasonous,'' Representative Peter King, a New York Republican and chairman of the House Homeland Security Committee, declared last week.

What secret?

Executive Order

You can still read on the White House Web site a Sept. 23, 2001, executive order from President George W. Bush that calls for ``cooperation with, and sharing information by, United States and foreign financial institutions'' so as ``to combat the financing of terrorism.''

That order got plenty of publicity when it came out, thanks to the White House.

Likewise, international news coverage in 2002 reported on the broader conclusions of a Web-posted report for the UN Security Council, which specifically mentioned Swift. That's the Society for Worldwide Interbank Financial Communication, whose complicity in financial investigations is supposed to be one of the secrets the Times gave away.

The UN report said Swift and two other financial clearinghouses were ``rich with payment information.'' It said the U.S. ``has begun to apply new monitoring techniques to spot and verify suspicious transactions.''

Congressional Testimony

Then there was congressional testimony by Treasury officials in 2002, and the sensitive details that then-Treasury Secretary John Snow gave journalists in 2003.

``This was not news to terrorists,'' two other former counterterrorism officials, Roger Cressey and Richard Clarke, wrote in an op-ed essay for the New York Times last week.

True, digging information out of government documents isn't as easy as reading it on the front page of the Times. But the government can't honestly call it criminal for journalists to release information the government itself put into the public domain.

Besides, there is no applicable law for prosecuting journalists.

``There's a lot of talk about treason and violating national security laws, but unless and until someone parses through the very specific language of the statute and lays it up against the actual facts of the case, then that's just rhetoric,'' says Sandra Baron, executive director of the Libel Defense Resource Center, funded by news organizations and their lawyers.

World War I

Unless Congress passes a new law, prosecutors would have to use either what's left of a World War I-era statute, the Espionage Act, or a 1950 amendment to it, neither of which mentions journalists, says Lee Levine, a First Amendment expert and partner in Washington's Levine Sullivan Koch & Schulz.

The 1950 provision does outlaw ``publishing'' certain intelligence information. But that law prohibits disclosing codes and cryptography, not more general national security issues.

Buried within the law is more general language some suggest could be used by prosecutors. But that would require interpretation so broad as to make the law unconstitutional when considered against First Amendment concerns, experts say.

Besides, prosecutors would have to show the disclosures created a ``clear and present danger'' or did ``direct, immediate and irreparable'' injury to the nation's security, according to language in various Supreme Court cases. How could it be dangerous to report that which terrorists already know?

Keeping Secrets

``The government has every right to keep secrets,'' says Levine, ``But the press's job is to ferret out government secrets and to exercise its independent judgment whether it's in the public interest to publish what it knows.''

This is an uncomfortable arrangement, to be sure, and one that demands responsible conduct by unelected, largely anonymous news editors. Most people would rather be safe, given the choice between being terrorized and murdered or being ill-informed about the details of secret government operations.

But that isn't the choice here, as Comras, Cressey, Clarke and Parker make clear. And yet, it is on that basis that some in Washington want to prosecute journalists.

Arrogant though we can be, as many blunders as we have made, it's worth remembering that the founders considered journalism so critical that they enshrined a free press in the Constitution.

``The government's power to censor the press was abolished so that the press would remain forever free to censure the government,'' Justice Hugo Black wrote in 1971. That was when the Supreme Court ruled 6-3 against restraining the New York Times and Washington Post from publishing a classified history of events leading to the Viet Nam war, the Pentagon Papers.

``Only a free and unrestrained press can effectively expose deception in government,'' Black wrote.

There are places where this concept isn't at work, as Representative Jane Harman, a Democrat from California, told her colleagues last week.

``If anyone wants to live in a society where journalists are thrown in prison,'' she said, ``I encourage them to move to Cuba, China or North Korea to see if they feel safer.''

(Ann Woolner is a columnist for Bloomberg News. The opinions expressed are her own.)

To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net.

Last Updated: July 7, 2006 00:05 EDT