Car salesmen and travel agents are being drafted into the war on terrorism. Many of them don't like it.

The USA Patriot Act, that sweeping anti-terrorism law that creates massive new police powers, also brings auto dealers and travel agents into the category of businesses who must report transactions to Uncle Sam as part of new anti-money laundering requirements.

This means new training, new audits and new paperwork along with more costs for what many consider to be questionable benefits.

"I just don't think it's necessary," says Greg Lanker, president of the Acura of Modesto, California, dealership. "We're already swimming in regulations, and it's getting to be so bad."

A Northern Virginia auto dealer who asked not to be identified says the new regulations require him to "spy on my customers and become a stool pigeon for the government. I don't like it. I don't like it at all." 

The Treasury Department is still inviting public comment on just how far the anti-money laundering rules should go. Under pressure from some members of Congress, officials postponed imposing the rules on certain businesses, even though President Bush signed the anti-terrorism law 16 months ago.

"Will it be time consuming? Of course it will," says Randy Crump, general manager of Roseville Volkswagon. "Will it cost money? Of course. Do I see any benefit to this? No."

Passed  quietely and quickly after the Sept. 11 attacks, the USA Patriot Act gave federal law enforcement police state powers: Wiretap authorities without court order, secret court proceedings without traditional Constitutional protections  and other provisions which have outraged privacy adovates and Constitutional scholars.

"The USA Patriot Act has done more to destroy the traditional protection of American freedoms promised by the Bill of Rights than any single piece of legislation passed by Congress in the history of the Republic," says retired federal judge Angus Watkinson. "It creates a police state in a free society. That should not be possible in this society." 

Negotiated in secret, the 131-page bill was presented to House members on the same day they were to approve it, and was sent to the White House without the usual committee report that explains and justifies legislation. Some of the lower-profile provisions are only now emerging into view to a shocked public.

Mark Lewis, owner of the Fresno-based Mark Lewis Travel Network, said the new regulations could kill a small businesses like his.

"It won't work if it's a financial burden on a small company," Lewis said. "It'll just put everybody out of business."

Under the new law, auto dealers and travel agents are considered "financial institutions" and come under Treasury Department oversight.

Under current law, auto dealers and travel agents, for instance, must report customers who pay with $10,000 or more in cash. The new anti-terror law lowers the threshold and further extends Treasury Department powers over the two, requiring them to report more detail about customers' transactions, including names, addresses, financial data, travel schedules and other personal information.

The new requirements include developing internal policies and controls, designating compliance officers, undertaking ongoing employee training and bringing in outside auditors to test how everything is working.

"Will it do a lot to stop terrorism? No," Lanker said of the new rules.

In Washington, auto dealers have a strong political voice. The National Auto Dealers Association, through its political action committee, contributed $2.5 million to federal candidates for the 2002 election, which is why members of Congress have intervened.

The Treasury Department responded to Congressional complaints by twice postponing application of the new rules, citing "the economic significance of this industry."

The temporary exemptions have run out, officials will be deciding what kind of auto dealers and travel agents - if any - should be covered by the new rules. The rules potentially could be modified, covering for instance only businesses of a certain size, or the industries could be permanently exempted altogether.

"The threshold issue ... is the extent to which vehicle sellers pose a significant risk of money laundering," the Treasury Department stated Monday, noting that "a money laundering risk is presented where a vehicle is purchased with cash."

More than 8.7 million new automobiles were sold at retail last year, according to the Transportation Department.

But the new rules also cover cars purchased by check or credit card or even those financed if they fall under expanded criteria which is still being developed.

The Small Business Administration, however notes that more than 99 percent of identified travel agencies count as small businesses, where the risk of money laundering is considered less severe.

"It (is) difficult to assess the benefits and burdens associated with imposition of anti-money laundering regulations on this industry," the Treasury Department acknowledges.

Still, travel agents worry about becoming spies for the federal government.

"The new regulations would require me to report where my customers are going, how often they travel there, and how they pay for their trips," says Maryland travel agent Michelle Goode. "I don't think that is the government's business. My clients are law-abiding citizens. They should not be treated like crooks."