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Congress Ignores Money Laundering By Biggest Bankers Are legislators deliberately ignoring the big banks that have been accused of money laundering in the past and instead going after small-time Muslim exchange networks and “shell” banks, trying to give the impression of diligently searching for terrorist money? Exclusive to American Free Press By Christopher J. Petherick As part of the anti-terrorism legislation passed by Congress in late October and signed into law by President Bush, legislators paved the way for toughening rules for banks in regard to money laundering. The Patriot Bill of 2001 now bars financial organizations from dealing with so-called shady foreign “shell” banks which have no permanent address and requires that banks maintain better records on their clients and account holders. However, federal regulators had the opportunity two years ago to punish some of the biggest facilitators of international cash washes but shied away when investigators uncovered a network of mega-money laundering that reached the highest levels of some of the most respectable banks in the world. In a series of groundbreaking reports, the late Spotlight diplomatic correspondent Andrew St. George exposed trillions of dollars of dirty money dealings involving the world’s largest financial organizations, including David Rocke feller’s Chase Manhattan Bank, Citibank and the Bank of New York. St. George reported that the Senate Permanent Sub committee on Investigations headed by Sen. Susan Collins (R-Maine) quietly probed the underbelly of illicit financial transactions in two brief committee hearings in November 1999 but quickly dropped the issue when it was learned just what they had unearthed. “Wall Street’s private banks are estimated to hide an eye-popping $21.5 trillion in such deviously deodorized deposits, according to an unpublished estimate by the Or ganization for Economic Cooperation and Development,” St. George wrote under the pseudonym, Martin Mann, in the Dec. 6, 1999, issue of The Spotlight. However, St. George wrote, “the Senate’s money-laundering hearings shied away from exploring such potentially explosive issues.” Despite the bad publicity, banks fervently resisted legislation that sought to close the loopholes which allow trillions of dollars of illicit money made off of drugs and arms smuggling to be sanitized through “reputable” banks in countries with loose banking regulations such as Israel, Belize and the Cayman Islands. In addition, the Federal Reserve, the official watchdog of the U.S. banking system, has taken lightly existing initiatives intended to clamp down on suspect transactions that would cut off a steady supply of cash from questionable sources, banking experts have complained. But the Fed has a history of overlooking massive corrup tion, according to St. George. When the top Mexican financial institutions were teetering on the verge of insolvency in 1994, Federal Reserve Chairman Alan Greenspan “rushed some $30 billion from the Fed’s own closely held slush fund to save Mexico’s banks from going belly up,” St. George wrote in The Spot light’s April 10, 2000, issue. “A year-and-half after this bold bailout . . . the three largest Mexican money centers the Fed had rescued were indicted in the United States on drug-money laundering charges.” Legislators, rather than going after the billionaire bank sters, are targeting an informal financial system in the Middle East and Asia that exists outside the established banking system known as hawala or “transferring of debt.” More or less based on the honor system, hawala refers to a principle in which a debtor can “transfer” his debt to a third party who agrees to take on the first person’s financial burden. Often it takes place within the confines of families and the deal is usually based on a verbal agreement that is binding under tradition. Because there is no written record of the transaction, it is impossible to track these kinds of deals. And that is what is upsetting to lawmakers. According to the Koran, it is illegal to charge usury. But rather than target the largest purveyors of money laundering, the international banking system, federal investigators working with the private banking cartel, the Federal Reserve, and the Securities and Exchange Commission are going after small potatoes money exchange networks such as those under hawala. H |
