Money Laundering Measure Near Dead
WASHINGTON (AP) _ Bipartisan legislation designed to fight money laundering
appears doomed in Congress, while the United States and its economic allies
complain that Russia, Israel and 13 other countries are failing to crack
down on such illegal commerce.
Following heavy lobbying against the bill by bankers, especially from Texas,
the Senate Banking Committee chairman has pronounced the measure dead.
``I think the clock's run out on that,'' Sen. Phil Gramm, R-Texas, said
recently in response to a question about the bill's prospects.
With Congress racing toward adjournment for the year and only a few work
days remaining, the money-laundering legislation has not been scheduled for
a vote in the House or Senate _ despite overwhelming approval by the House
Banking Committee in early June.
``This is an important piece of legislation needed in the continued
crackdown on illegal drug cartels and other international criminal
syndicates,'' Rep. Jim Leach, R-Iowa, chairman of the House banking panel,
said Monday. ``Unfortunately, it has ... been the subject of ... quiet but
effective interest-group opposition.''
The legislation, a result of cooperation between the Clinton administration
and key Republican lawmakers, would allow the Treasury Department to ban
some transactions between U.S. banks and offshore havens in an effort to
combat laundering of dirty money.
``I think it's too much power to give the secretary of the Treasury,'' Gramm
said.
As time was running out on Capitol Hill, U.S. representatives began meeting
Monday in Madrid, Spain, with counterparts from the 29-nation task force
that created in June the ``blacklist'' of 15 countries and territories
deemed uncooperative in the fight against money laundering.
The list was published in July, and followed by an advisory from the United
States and other countries to their domestic banks, warning they could
inadvertently make illegal transactions with the named countries and
territories.
And last week, European Union finance ministers agreed on rules
strengthening anti-money-laundering regulations by requiring accountants and
lawyers to report suspicious activities by their clients to authorities.
U.S. officials are disappointed they don't have the new legislation in hand
in time for the meeting of the task force, part of the Organization for
Economic Cooperation and Development, which is expected to review progress
by the 15 countries and territories.
``Let me be clear: without the passage of this bill, the U.S. will have a
much weaker hand when dealing with recalcitrant money-laundering havens,''
Deputy Treasury Secretary Stuart Eizenstat said in a recent speech to an
international group.
He noted that the legislation had been drafted earlier this year in
consultations among the administration, lawmakers and the banking industry.
Treasury officials weren't immediately available for comment Monday.
Texas bankers ``let their feelings be known'' to lawmakers because, among
other things, they fear the legislation could increase the regulatory and
reporting burden on smaller banks, said Christopher Williston, president and
chief executive officer of the Independent Bankers Association of Texas.
Because they are in a border area with a history of money-laundering
problems, many Texas bankers already have had to file numerous reports to
regulators on suspicious activities of customers, he noted.
``Community banks already know their customers so well,'' Williston said in
a telephone interview.
Most money laundering involves illicit profits from drug trafficking,
prostitution or other criminal activities, which are moved through a series
of bank or brokerage accounts to make them appear to be proceeds of
legitimate business activity.
Money laundering is estimated to absorb nearly $600 billion annually, or up
to 5 percent of the world's gross domestic product. Public attention focused
on money laundering after it was revealed last year that the Bank of New
York, one of the nation's largest, had served as a conduit for an
astonishing $7 billion in Russian money, some of it believed to be from
criminal activities.
The 15 countries and territories named by the international task force are
the Bahamas, the Cayman Islands, the Cook Islands, Dominica, Israel,
Lebanon, Liechtenstein, the Marshall Islands, Nauru, Niue, Panama, the
Philippines, Russia, St. Kitts and Nevis, and St. Vincent and the
Grenadines.
