Pubdate: Thu, 04 Oct 2001
Source: Wall Street Journal (US)
Section: Politics & Policy
Copyright: 2001 Dow Jones & Company, Inc.
Contact:  http://www.wsj.com/
Details: http://www.mapinc.org/media/487
Author: Michael M Phillips

WHITE HOUSE SEEKS POWERS TO PREVENT MONEY LAUNDERING BY TERRORIST GROUPS

WASHINGTON -- As investigators try to piece together the finances of those 
behind last month's attacks, Congress is moving to grant the president 
powers to prevent terrorists, drug dealers and other criminals from moving 
money through the financial system.

Bush administration officials went to Capitol Hill to press for action on 
money-laundering legislation as part of a broad package of antiterrorism 
measures. "We are fighting with outdated weapons in the money-laundering 
arena today," Assistant Attorney General Michael Chertoff said in testimony 
submitted to the House Financial Services Committee.

House lawmakers introduced a bipartisan money-laundering bill Wednesday, 
and the Senate banking committee is set to take up legislation of its own 
Thursday. Majority Leader Tom Daschle (D., S.D.) expects that bill to be 
offered as an amendment when the full Senate considers antiterrorism 
legislation next week. With the Sept. 11 attacks dominating the political 
agenda, it seems likely Congress will grant the president at least some of 
the authority he wants to mine the financial system for clues to 
terrorists' activities.

Among the measures being considered:

a.. Making it a crime to launder proceeds of most foreign crimes. Under 
current law it only is illegal to launder gains from bank fraud, terrorism 
or drug trafficking. Terrorists sometimes make their money through other 
crimes, then use it to finance terror operations.

a.. Controlling the movement of bulk cash over U.S. borders more stringently.

a.. Allowing the federal government to issue administrative subpoenas to 
get account records from foreign banks that have correspondent banking 
arrangements with U.S. institutions.

a.. Granting the Treasury secretary discretionary authority to impose 
special controls on suspect foreign financial institutions or transactions, 
including prohibiting a foreign bank from having a correspondent 
relationship with a U.S. institution. The banking industry, cool to a 
similar bill that ultimately foundered in Congress during the past year, is 
endorsing tighter money-laundering controls this time around. "Obviously 
we've looked at our position with fresh eyes since Sept. 11," said Edward 
L. Yingling, chief lobbyist of the American Bankers Association.

But bankers, whose institutions handle $2 trillion a day, want a greater 
role in writing the implementing rules that would accompany the law, and 
are leery of some provisions in Senate versions of the bill.

Some lawmakers also are wary. GOP Sen. Phil Gramm of Texas wants the bill 
to specify that those affected by the Treasury secretary's broad new 
authority will be able to appeal those decisions. The administration also 
supports such "due process" provisions.
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