Administration unveils new strategy to fight money laundering

Wednesday, September 19, 2001

AP Business Writer

WASHINGTON (AP) --The Bush administration on Wednesday unveiled a new strategy to fight money laundering, targeting big illicit operations that could be used by terrorist groups.

The new strategy comes at a time Osama bin Laden's sophisticated financial network is looming large.

The U.S. effort, required annually by law and the first of George W. Bush's presidency, focuses more on prosecuting large, professional money-laundering organizations than did the Clinton administration policy. To dismantle them, the government said it intends to prosecute professional money launderers, including "corrupt lawyers, bankers and accountants."

As part of the strategy, the government also is setting up new law-enforcement teams in Chicago and San Francisco to investigate and prosecute money laundering by suspected terrorists.

The strategy's first goal is "to focus law enforcement's efforts on the prosecution of major money-laundering organizations and systems," the Treasury Department said in its report on the new policy.

Although past law-enforcement efforts had resulted in successful investigations into money laundering, the report said, "The fact remains that money laundering is seldom the primary focus and objective of the criminal investigation. Our efforts must ensure that money laundering is not simply a 'tag-along' count added to an indictment."

The Clinton strategy tended to concentrate enforcement efforts on local money-laundering operations in areas with heavy drug crime.

Under the new strategy, the Bush administration also plans to ask Congress for legislation to expand the government's law-enforcement powers in pursuing money laundering, including easing privacy restrictions that limit the Internal Revenue Service's ability to share tax data with other agencies.

The strategy already had been drafted by Treasury other agencies when the World Trade Center towers and the Pentagon were smashed by jetliners in terrorist attacks Sept. 11. Its release, originally planned for the day after the attacks, was postponed until Wednesday.

The fight against money laundering -- moving profits from drug or arms trafficking, political corruption, prostitution and other illicit activities through a series of bank accounts or businesses to disguise them as proceeds of legitimate business -- has gained new urgency since the attacks.

"Our fight against terrorism must include preventing terrorists from using U.S. banks and the international banking system to facilitate terrorist activities," said Sen. Carl Levin, D-Mich., chairman of the Senate Governmental Affairs Committee's investigative panel, which has closely examined money laundering.

The FBI has asked all U.S. banks and foreign banks with operations in this country to check their records for any relationships or transactions with the individuals who have been publicly named as being under investigation by the law-enforcement agency.

Bin Laden's financial empire encompasses ostrich farms in Kenya, forestry interests in Turkey, diamond trading in Africa, bridge construction in Sudan and agricultural holdings in Tajikistan, and the exiled Saudi multimillionaire is believed to use his companies to launder donations from supporters in the Persian Gulf, North Africa and Europe.

The U.S. government has identified bin Laden, who experts say uses his estimated $300 million to fund his al-Qaida network of as many as 3,000 Islamic militants, as the No. 1 suspect in the attacks in New York and Washington.

Bin Laden's network also is believed to use the hawala, an underground banking system in the Middle East and Far East which shifts large amounts of cash between small teams of people in different locations. With everything done verbally in a paperless network based on personal trust, it is easy to obscure the money trail, a government source said.

The system is similar in concept to the Western Hemisphere's biggest money-laundering network, the black-market peso exchange, used by drug cartels.

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