Feds Tap Data Surveillance Firm for Money Laundering Investigations

The federal government has tapped data surveillance provider Palantir to help civilian intelligence agencies collaborate on money laundering investigations.

The five-year $9.9 million sole source contract follows independent efforts by the departments of Justice, Treasury and Homeland Security to use the tools, according to contracting documets. 

Primarily, feds need the technology to quickly spot puzzle pieces that are not easy to search, such as personnel records and corporate organization charts.

Justice and agency partners sometimes have "urgent financial investigative needs," wherein "millions of documents need to be reviewed and the content of those documents must be connected to each other to identify relationships between policy decisions and specific financial transactions," states a January Justice justification for the hire. The documents were released on Wednesday.

The evidence, which usually comes in disparate formats, also can include corporate meeting notes, emails and bank account records. 

Palantir’s software might be used to address violations of sanctions under the International Emergency Economic Powers Act against, for example, individuals in Russia. Other applications could involve metadata analysis for terrorist financing probes under the Bank Secrecy Act and Trading with the Enemy Act, according to the documents. 

"Sophisticated and specialized tools must be used to determine the scope of financial activity involved in the scheme and the specific intent" of criminal organizations or corporate officers who are implicated, Justice officials said.

Currently, each agency establishes its own contract with Palantir as needs arise, on a case by case basis, which can be costly, officials said. The government will get a bulk discount rate under the new arrangement. By setting "pre-negotiated, discounted pricing," Justice expects to attain "economies of scale" in terms of the costs for product, licensing and support,” officials said.

The contract approval signed on Jan. 27 includes software licenses, training, and analyst support, among other services. 

Justice officials said they awarded the job without inviting competitors to bid because market research revealed "the department's needs in large-scale investigations cannot be met by an alternative source's product." 

In addition, "no reasonable alternatives exist that will not require an extensive overhaul of the department's urgent and necessary investigative capabilities,” they said.

SAC Capital, a recent target of federal money laundering and insider trading probes, reportedly also just hired the firm to monitor employees' compliance with financial regulations. 

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