WASHINGTON (Reuters) - A senior U.S. Treasury official on Friday confirmed the department has examined banking transactions in an international database in search of terrorist activity and insisted the secret program was legal.

"As part of our efforts to track the funds of terrorists, we are confirming that we have subpoenaed records on terrorist-related transactions from SWIFT (Society for Worldwide Interbank Financial Telecommunication)," said Under Secretary Stuart Levey.

"The legal basis for this subpoena is routine and absolutely clear," he added. The New York Times, in a report on Friday, quoted unnamed people who suggested the program took advantage of a "gray area" in law.

The program to examine banking transactions is run out of the Central Intelligence Agency (CIA) and overseen by the U.S. Treasury Department. The records examined mostly involve wire transfers and other methods of moving money overseas or into and out of the United States.

Levey said Treasury had briefed U.S. lawmakers as well as central bankers from the Group of 10 nations on the program and won support for it.

"The reaction from experts -- across the political spectrum -- has been that this is exactly the kind of creative and vigorous approach that is needed to combat the elusive terrorist threat that we face," he said.

Treasury took the somewhat unusual step of scheduling a news conference to confirm the secret program after the New York Times decided to publish its story on the programs despite Treasury's request that it not do so.

"This terrorist tracking program....is really government at its best," outgoing Treasury Secretary John Snow said at the beginning of the press conference.

Snow said it was "entirely consistent" with efforts to strengthen government activities and to protect America from potential attacks by terror groups.

____________________________________

© Reuters 2006. All Rights Reserved.