Pubdate: Thu, 18 Oct 2001
Source: Wall Street Journal (US)
Copyright: 2001 Dow Jones & Company, Inc.
Contact:  http://www.wsj.com/
Details: http://www.mapinc.org/media/487
Author: Michael M Phillips

SETTING STAGE FOR CONFLICT WITH SENATE, HOUSE PASSES MONEY-LAUNDERING BILL

WASHINGTON -- The House overwhelmingly approved legislation Wednesday aimed 
at making it more difficult for terrorists, drug traffickers and other 
criminals to launder money, but lawmakers dropped a provision barring 
credit-card use for Internet gambling.

As their staffs were preparing to evacuate their Capitol Hill offices to 
make way for an anthrax sweep, lawmakers voted 412-1 for a bill that would, 
among other things, make it a crime to secretly carry $10,000 or more in 
cash across U.S. borders; allow the Treasury secretary to set special 
controls on transactions with banks or countries suspected of money 
laundering; and force banks to collect more information about their wealthy 
private-banking clients and correspondent-banking partners.

The bill provides "a new array of weapons in the fight to disrupt the 
funding of international terrorist organizations," said Rep. John J. 
LaFalce (D., N.Y.), one of its sponsors.

At the last minute on Tuesday, however, the House abandoned a provision 
that would have banned the use of credit cards, debit cards and other 
monetary instruments to pay for Internet gambling. The credit-card 
industry, including Visa USA Inc. and MasterCard, lobbied hard against the 
measure.

Similar money-laundering legislation floundered last year, with banks, 
financial-privacy advocates and antitax conservatives leading the charge 
against it. Some conservatives argue that language in the bill could lead 
the Treasury to crack down on tax havens in the name of fighting money 
laundering; some lawmakers, such as House Majority Leader Dick Armey (R., 
Texas), say countries should compete by offering the lowest tax rates 
possible, while others see the havens as facilitating tax evasion. The 
Sept. 11 attacks made it all but impossible for lawmakers to be seen as 
actively opposed to the measure. Only Rep. Ron Paul (R., Texas), a longtime 
advocate of keeping financial records private, voted against the bill on 
the House floor. He called it a "package of unconstitutional expansions of 
the financial police state, most of which will prove ultimately ineffective 
in the war against terrorism."

To the frustration of their Democratic colleagues, House Republicans did 
manage to separate the money-laundering provisions from a larger 
antiterrorism bill passed earlier. The Democrat-led Senate included both 
issues in the same bill -- the approach favored by President Bush -- and 
the two chambers must now negotiate to reconcile their differences.
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