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Say that you are one of those fortunate people who manage to pay off most of their credit cards every month. Then imagine your surprise when one of your cards is cancelled for no apparent reason. You’d be outraged, especially if you found out this was only happening to you and your friends.

That’s exactly what Farooq Firdous experienced. Last summer, Firdous, a Pakistani who got his green card in 1997 after 11 years of legal residence in the U.S., received a phone call from an American Express representative regarding a credit card he held. The rep requested that he send the company a mountain of paperwork: three years of tax returns, six months of bank statements and a job verification letter.

His wife, Yasmin Khan, who is Indian, received a separate phone call that same day for her own AmEx credit card. In each case, the rep told them they had 15 days to submit the paperwork or their cards would be cancelled. Firdous and Khan called back later–twice–to ask reps if they could send the request in writing. They refused.

Firdous and Khan were confused, to say the least, because they always paid off their AmEx cards on time. After conferring with his wife, Firdous called the company back again. “I told them strictly, ‘You’re probably discriminating against minorities with Muslim names,'” he recalls. He and his wife refused to submit the documentation, which on at least three different occasions company reps said they needed for “security reasons.”

A few weeks later, each received a letter saying his or her credit card was cancelled: “You did not provide the banking information, financial statements, income tax return, and/or identification documents requested.” The letters also stated that the reasons for cancelling the account included “information received from a consumer reporting agency,” hinting that credit problems might be to blame.

But Firdous’ credit is excellent, according to the credit report he subsequently obtained. (Indeed, after his AmEx card was cancelled, he immediately applied for and received a Citibank Mastercard.) The status of his closed AmEx account reads “Paid/Never late.”

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The government’s post-9/11 infringements on civil liberties have been well documented and debated. But what happens when private companies take the fight against terrorism into their own hands? If you’re Pakistani, or Muslim, or both, you might just find your credit cards cancelled, despite the good credit you’ve worked hard to build.

City Limits has found 12 cases in which Muslims, nearly all Pakistani-Americans, with good credit, all of whom claim they made no unusual or exorbitant charges or late payments, had their American Express credit cards cancelled. We found no cases of non-Muslims’ credit cards being cancelled outright, or even non-Muslims who were asked to send in paperwork for existing accounts.

For Pakistanis in particular, losing access to financial services is neither simply the misfortune of discrimination, nor minor fallout from the U.S. war on terrorism. All over New York City, Pakistanis are proprietors of small businesses: medical practices, bodegas, restaurants and, in Firdous’ case, a computer store in Sheepshead Bay. For them, maintaining access to credit and other financial services is a matter of survival.

So Firdous was alarmed when he soon began hearing more stories like his. He had considered the AmEx matter a freak event–until he brought it up at a dinner party a couple of months later on Long Island. That’s when he and his wife realized they weren’t alone.

Two other guests at the table, Dr. Iqbal Siddiqui and his wife, Dr. Faizah Zuberi, who live in a stately home in New Jersey, had gone through almost exactly the same baffling series of events: Same request, same documents, same cancellation. And the same, immediate suspicion of discrimination. “They asked for too much stuff. I said, ‘Why are you asking all this? We have very good credit. There’s no need to do this,'” says Siddiqui. “We are sympathetic Americans; we like America. They gave me bullshit on the phone.” Siddiqui and Zuberi recall reps telling them that they had been selected at random. The couple had used their AmEx almost exclusively to buy groceries at the local Costco.

After the dinner party, Firdous conducted his own informal survey. He discovered that American Express reps had contacted at least five more of his friends and acquaintances, requesting information for their existing American Express accounts. All of the friends’ cards were then cancelled, whether they sent in the paperwork or not. All are Muslim, while none of his Jewish or Chinese friends, he says, have received the dreaded call. “He was pretty angry about it,” recalls one American-born Chinese friend who did not want to be named.

Zuberi noticed the same trend, and even asked the AmEx representative, “‘How come I ask a lot of family members and friends and they say it all happened to them, but when I ask my American colleagues it hasn’t happened to them?'” she recalls. “They say, ‘We have a lot of Joneses and Smiths on the list, too.'” Zuberi wasn’t convinced.

American Express Vice President of Public Relations Tony Mitchell claims that company policy prohibits him from going into detail on Firdous’ or Khan’s specific cases, even though City Limits obtained their permission to do so. “We routinely monitor all of our card accounts,” Mitchell says. “As part of that, we may ask a card member for additional financial information to gain a fuller picture of the account and to assess the current credit and financial condition of the cardholder.”

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Financial institutions have always had to be diligent about checking customers’ identities. After September 11, notes American Bankers Association spokesperson John Hall, the federal government has increasingly scrutinized all financial institutions, especially their ability to identify customers. “There’s a need to go beyond just checking ID and actually verify who they are,” says Hall.

The banking industry has been actively assisting the government in post-9/11 efforts to find and block money directed to terrorists, using the same tools they’ve employed for years in the war on drugs. Financial institutions work with the Financial Crimes Enforcement Network, or FinCEN, part of the Department of Treasury. Companies and banks check names against the 80-page-long list of names maintained by OFAC, the Treasury’s Office of Foreign Assets Control. It includes approximately 5,000 “Specially Designated Nationals and Blocked Persons”–people and organizations with whom Americans are not supposed to do business, including terrorists, narcotics traffickers and money-launderers. Banks have used this list for about a decade, but “September 11 served as a stark reminder to everyone involved that they should really be rigorous in looking at these names,” says OFAC spokesperson Tony Fratto.

When new names are added, financial institutions check them against their own customer lists. The repercussions of noncompliance with reporting requirements are very serious: Institutions can be held liable if they even inadvertently do business with one of the Treasury Department’s banned customers–up to $10 million in fines and 30 years in prison.

None of the full names of people mentioned in this story appear on OFAC’s master list. But other lists of alleged terrorism supporters are now proliferating. Just after September 11, the FBI drew up a list of names of people it wanted to question, giving the dossier out to private businesses, such as hotels and airlines, here and abroad, as a new experiment in information-sharing called Project Lookout.

But the FBI soon lost control of the Project Lookout list, and bootleg copies with added names and even typos were passed around the private sector. As many as 50 different versions may now exist. “This thing took on a life of its own,” says FBI spokesperson Bill Carter, who says that from the very beginning, companies may have misinterpreted it as a list of people not to do business with. “It’s a defunct list that shouldn’t be used for that purpose.”

And it’s not the only one. Among the other watchlists businesses or local governments can refer to (and which sometimes overlap) are the “Denied Persons List” and an “Entities List,” both issued by the Commerce Department. The “Debarred Parties” list comes from the Office of Defense Trade Controls in the State Department. There’s a “World Bank Debarred Parties” list, a “Blocked Officials File,” a “Bank Secrecy Act,” the FBI’s “Violent Gang and Terrorist List,” and, of course, the USA PATRIOT Act’s “Terrorist Exclusion List.”

Joshua Salaam of the civil rights department of the Council for American-Islamic Relations, a Washington, D.C.-based nonprofit that conducts public education and advocacy about Islam, says the lists “are powerful, infiltrating Muslims’ daily lives, affecting them more than they know and more than the general public knows.”

A Brooklyn man named Muhammad found that out for himself when he tried to wire $80 to Connecticut via Western Union. His transaction at the Western Union office completed–or so he thought–Muhammad went home, only to later receive a call from the company requesting that he come back in to show photo ID and reveal his country of birth. If he didn’t, the rep informed him, Western Union would neither send nor release his $80. Muhammad’s full name, it turns out, is on the OFAC list.

Among Muslims, the likelihood that many people will have the same or very similar names is huge. “Muhammad is the most common name in the world,” says Susan Attar of the Muslim Public Affairs Council. “The majority of Muslims probably have at least one person in their family with that name.” That’s a lot of Muhammads: There are upwards of 4 million Muslims in the U.S.

Lists aren’t the only measures making financial institutions exceedingly cautious about whom they do business with. The PATRIOT Act, which stipulates strict new reporting requirements on currency transfers and suspicious financial activities, is now prompting further vigilance. Western Union has already been fined for violating the reporting rules, paying $3 million in March 2003 (without admitting any wrongdoing).

“There are all kinds of things going on here,” says Kevin Jackson, assistant professor of business ethics at Fordham University and a scholar of corporate liability. “Corporations are trying to protect themselves, and then either acting appropriately or inappropriately to deal with enhanced liability.” The question for financial institutions and private companies then becomes how to fight corruption, credit card fraud and money laundering without inculpating innocent consumers and violating procedural norms.

“It’s a delicate balancing act,” says the Bankers Association’s Hall, noting that law enforcement agencies must subpoena a bank to receive client records. “We want to do our part in the war on terrorism, but at the same time we need to protect our customers’ privacy. That’s the bottom line.”

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After getting hit by punitive credit card cancellations, the owners of small businesses are wondering what’s left for them in the city they have called home for decades.

The bright red profile of New Kantacky Halal Fried Chicken anchors its corner of Coney Island Avenue, which cuts an industrialized swath through a neighborhood of charming two-story homes. Kantacky co-owner Ahsin Choudhry, a gold chain tucked into his elegant cream-colored Izod sweater, has had no credit problems, yet he’s received more than his fair share of credit card cancellations.

Last year, he says, American Express closed his personal account right after he paid it off; he didn’t even get the initial request for documents that other cardholders received. For a new business account he had recently opened, an AmEx rep called and asked him to send in W-2 forms. He told the rep that since they had already cancelled his personal account outright, he didn’t want to bother sending in paperwork for the business card they had issued to him. He activated the business card, and within an hour, he says, it was void.

For Choudhry, it wasn’t just AmEx. In order to get his business up and running two and a half years ago, he charged about $10,000 worth of kitchen equipment on his Discover card. His wife, Zubaida Choudhry, charged $15,000 on her own Discover card for the business and home mortgages. After both the accounts were paid in full last year, Discover representatives called and asked the Choudhrys for tax returns for both accounts for “security purposes,” he says. They sent them in. Their cards were summarily cancelled anyway. “We never missed a payment or anything,” he says calmly but with obvious frustration.

Just down the block, the owner of a Halal bodega, who didn’t want to be named, was contacted by American Express for his merchant’s account. Last spring, a representative called to request that he send in tax returns and three months of bank statements. He couldn’t find his tax returns, so he just sent in the bank statements. His account was closed, and now he can no longer take American Express cards from customers. He claims that the representative told him that because customers who charged items at his store with their AmEx cards were not paying off the charges, the company had to cancel his merchant’s account. An AmEx rep then requested that he send in paperwork for his personal account also; since they had nixed his merchant’s account, he didn’t want to bother, figuring they would do whatever they wanted regardless. So they cancelled his personal card, too. “It’s like they put duct tape over his mouth, plastic on his face,” says his best friend, also Pakistani, who didn’t want to be named either. “It’s a shame really. Who’s gonna listen?”

Still more Pakistani businesses have been targeted. Hani Khoury, a lawyer and vice-president of the Arab-American Anti-Discrimination Committee of New Jersey, mentions the money-wiring business belonging to one of his clients. The man, he says, has always been licensed, kept detailed records, played by the book and even gave customer information to the FBI. Yet late last year, Citibank and the Bank of New York called and told him they were dropping his accounts with them–claiming, according to Khoury, that they were entitled to close accounts at any time without having to offer any explanation. “He was considering hiring a blond, blue-eyed American woman to deflect suspicion,” says Khoury. (The Bank of New York has since reopened his account.)

For Pakistanis without green cards, the Bureau of Citizenship and Immigration Services’ new special registration program has provided one more opportunity for prying into financial records. Sin Yen Ling, staff attorney at the Asian American Legal Defense and Education Fund, reports that during the government’s special registration interviews, immigrants are repeatedly asked for detailed information about their credit cards. It’s “as if being South Asian and Muslim and using a credit card is a huge crime,” she says.

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A slow but steady stream of customers flows into the computer store that Farooq Firdous co-owns. A trio of young kids with dreadlocks and knit caps wait for their father to finish his transaction with Firdous. The shop’s fake pine-paneled walls are bare of decoration but plastered with cables, cords, software, games, printers, headphones, and other computer bits and parts.

Business here was good until 2000, when the stock market sagged, say Firdous and his business partner. They haven’t escaped the post-9/11 economic sinkhole, either. But in Muslim communities, tough economic times are exacerbated by pervasive fear.

First there were hate crimes: the 481 reported incidents in the U.S. in 2001 against Muslims included 3 murders and 35 arsons. Ordinary Muslim-Americans were subjected to shouts of “Terrorists, go home!” in random encounters on the street, which happened to Khan and her 4-year-old son.

Since then, government intrusion into nearly every facet of Pakistanis’ lives has created a sense of vulnerability that has slowly soaked through entire communities. Now there’s a fear of deportation, even for green card holders like Firdous.

The FBI has visited Firdous’ business three times and his home twice. They marched into the store, looked around and then left. He says he was afraid to ask why they were there. “When you ask one question, you don’t know what will happen,” he says. “I stayed quiet.” At home, an agent first showed Khan a photo, and asked her if she knew the man in it. On the second occasion, the FBI asked her name and left.

“In these neighborhoods, there’s a lot of surveillance and movement of law enforcement agencies, which has created a lot of harassment and intimidation,” says Ahsanullah “Bobby” Khan, founder of the interfaith Coney Island Avenue Project, which he set up right after September 11 to provide legal, financial and educational assistance to Muslims. “Those neighborhoods are marked,” he says. “Now they don’t think that this is the place for them to live, and they’re leaving voluntarily.”

Thousands of Pakistanis, most but not all undocumented, have tried to flee to Canada. From this January to March 15, more than 1,600 applied for refugee status after crossing the Canadian border. Many others are returning to Pakistan.

Coney Island Avenue’s moniker, “Little Pakistan,” may not ring true for much longer. Proprietors of Pakistani establishments are moving out of Brooklyn, waiting only to see if they can get a good price for their business, and restaurateurs have never before seen so few customers. “Brooklyn in Midwood, if you go to Brighton Beach and downtown Brooklyn, if you go in Queens, Jackson Heights, Astoria, Steinway Street,” says Bobby Khan, “all these shopping areas were relying on these immigrants.”

Their absence in public life is obvious. On religious holidays, Firdous and his partner go to a Brighton Beach mosque, a building that was donated years ago by the father of Firdous’ partner. The place is usually packed. But during Eid ul-Adha this February, it was practically empty. “Everyone is leaving,” sighs Firdous.

Firdous and Khan often discuss what they would do if they and their kids were forced to leave, even though that’s an unlikely scenario. “We discuss contingency plans,” he says. “She’s Indian; I’m from Pakistan. Our position is very difficult. She doesn’t want to go to Pakistan, and I don’t want to go to India.” Their children only speak English. “We’re very confused,” he repeats three times. “They can come and take me away anytime. What will my family do?”

As Firdous talks about the case, he absentmindedly taps a neon orange pen, which blinks red every time it hits the desk. In his methodical manner of speech, which is almost a drawl, he says, “A lot of people are scared to come forward. They said ‘Forget it,’ like I did.”