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Dope Money V


The biggest facade in the war on drugs continued yesterday as a Senate report was released which details how "vulnerable" US banks are to the illegal practice of money laundering. The report reveals the size and extent to which illegally obtained profits are cleaned up, through a variety of financial practices, in both domestic and financial banking institutions. But for all of the proof that has been found of how widespread the problem is, not a single major US bank, that has been involved with money-laundering has lost its charter, or right to do business.

The most recent spin on the supposed fight against money-laundering has been to portray US banks as victims of the sophisticated financial maneuvers of "corrupt dictators" who somehow are able to figure out the most complicated ways in which to hide money that they have stolen from the taxpayers and foreign aid in off-shore banking facilities. Russia and Nigeria have been the most visible targets of such arguments.

But that story is laughable as it has always been someone inside of a bank who has walked wealthy customers through a step-by-step process detailing how all of the various client services, financial instruments and wire transfers enable an individual to move funds in and out of various accounts in a way that enables one to at least avoid paying taxes.

Private banking services and concentration accounts lend themselves to money laundering and the bankers who designed and sell such accounts to customers know this better than anybody. Interestingly, even the spin that dictators are abusing a legitimate system hasn't inspired any action on the part of bank regulators. Currently, there are no penalties for laundering the funds of corrupt dictators, as such.

While many in the mainstream media and America's government would like the public to believe that the drug problem in America is due to some Mexicans and Columbians who seem to be able to create an unlimited supply of drugs, we know better and realize that it also is the demand for drugs among US citizens, and the demand for the profits that laundering drug money produces that makes the international drug trade possible.

Yet and still it is the small-time drug dealers and users who get locked up on mandatory-minimum sentences while the bankers get only a slap on the wrist and even the free excuse that they were unaware of what is going on.

Even the movie "Traffic", made in consultation with the US government, conveniently addresses every aspect of the drug-trade except the money laundering that takes place inside of the United States of America. It is hard to believe that the producers and director of the movie were unaware of the role money-laundering plays in drug trafficking

Or maybe they were aware of the reality of money laundering but it just didn't fit the script already written and promoted everyday by the mainstream media and US government.

Below is a story that details the extent of the money-laundering problems and some of the banks involved:

U.S. banks said vulnerable on laundering

By Andrew Clark

WASHINGTON, Feb 5 (Reuters)
- Congressional investigators said on Monday that major U.S banks holding accounts for foreign counterparts have been used as conduits for laundering millions of dollars of dirty money flowing from drug trafficking, corruption and organized crime. After a year-long probe, Democratic staff of the Senate Investigations subcommittee said they had found U.S. banks' complacency and lax controls of so-called correspondent accounts provided a ``significant gateway'' for money launderers to move their ill-gotten gains into the U.S. financial system. ``Inattention and disinterest by U.S. banks in screening the foreign banks they take in as clients have allowed rogue foreign banks and their criminal clients to carry on money laundering and other criminal activity in the United States,'' said the panel's ranking Democrat, Michigan Sen. Carl Levin. Estimates of the amount of dirty money flowing through the global financial system each year range from $500 billion to more than $1.5 trillion. Money laundering refers to the practice of moving illicit funds through a series of financial institutions to disguise their origin and ownership.

BANKS CRITICIZED The committee report criticized major U.S. banks, including Citigroup (NYSE:C - news), Bank of America (NYSE:BAC - news), First Union (NYSE:FTU - news), and Chase Manhattan (NYSE:JPM - news), saying they often operated "in an atmosphere of complacency, with lax due diligence, weak controls and inadequate responses to troubling information." It advised Congress to act to bar U.S. banks from opening correspondent accounts for so-called "shell" banks, which have no physical presence anywhere, and to tighten due diligence requirements for dealings with offshore banks and institutions located in secretive financial havens. U.S banks should also review their correspondent accounts to identify and eliminate high-risk foreign banks and should receive greater assistance from regulators and law enforcement agencies in identifying problem clients, it said. Levin said the Investigations subcommittee would hold hearings on the issue next month after which he would introduce legislation to implement the recommendations. "I think our banks have too often been asleep at the switch, or simply do not care," he said. "They are, in effect, aiding and abetting an activity we spend billions of dollars trying to stamp out."

GROWING CONCERNS Concern about U.S. banks' role in what has come to be seen as a major, and growing, global problem has been heightened by a series of embarrassing revelations in recent years. The Senate investigation was launched after the Bank of New York (NYSE:BK - news) was caught up in a probe of alleged money laundering by suspected Russian mobsters and businessmen. However, attempts to tighten U.S. money laundering rules during the last Congress foundered amid opposition from the banking industry and privacy concerns. Industry officials argue banks have already taken major steps to address the problem. "We agree correspondent bank activity needs enhanced due diligence," said John Byrne, general counsel of the American Bankers Association. "Where there are gaps, where there are areas for improvement, we will approach those appropriately. "But there is no reason to pass any additional laws or regulations in the money laundering prevention area," he said.


Tuesday, February 6, 2001

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