CAPITALISM'S ACHILLES HEEL Dirty Money and How to

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CHAPTER 4
MAGNITUDES AND
MISUNDERSTANDINGS
THIS IS a number no one wants to know.” Jack Blum, the most aggressive
American lawyer chasing dirty money, is lamenting with me the lack of
official attempts to estimate illegal financial flows. Because hundreds of billions
are known to stream annually out of other countries into western coffers,
U.S. and European governments are guided by the old adage, “Mum’s
the word.”
HOW MUCH MONEY?
There is no place in international financial statistics where you can find
“dirty money” or “laundered proceeds” or “flight capital” or “trade mispricing”
or any account remotely suggesting such figures. Most illicit flows are
either disguised or invisible, as shown in the Dirty-Money User Manual,
and therefore hard data are nonexistent.
There are two ways to produce assessments of global dirty money: top
down and bottom up. By top down I mean approximating dirty money as a
percentage of global GDP. By bottom up I mean constructing a total from
component parts added together.
First, the top-down approach. In 1998, Michel Camdessus, then
managing director of the IMF, said in a speech in Paris that “estimates of
the present scale of money laundering transactions are almost beyond
imagination—2 to 5 percent of global GDP would probably be a consensus
range.” 1 I was delighted that, finally, someone had mentioned a figure.
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