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. - --- MAP posted-by: Larry Stevens