CAPITALISM'S ACHILLES HEEL Dirty Money and How to

180 CAPITALISM’S ACHILLES HEEL
banks and no more secret offshore entities. It’s the security and safety of
our nation first, and it’s our bottom line second. We’re here to help in
every conceivable way.
In the weeks following 9/11, Citibank, arguing vehemently against key
aspects of the Patriot Act, vividly demonstrated its lack of perspective and
patriotism. The relatives of the victims and, more broadly, the people of
New York deserve an apology from Citigroup’s highest executives.
Now, for the Patriot Act itself. Covering such areas as domestic surveillance
and security procedures, border protection, coordination of investigations,
improving intelligence, and strengthening criminal laws, its
longest section is Title III, known as the “International Money Laundering
Abatement and Anti-Terrorist Financing Act.” Key anti–money laundering
provisions of this section are briefly summarized in the box on
page 181. Clearly, the Patriot Act is the most comprehensive and important
piece of anti–money laundering legislation adopted in years. Belated
as it may be, it requires better identification of account holders, extends
the range of financial institutions that must set up programs, suggests the
need for better customer due diligence, begins to address concentration
accounts, criminalizes handling the proceeds of foreign corruption, takes
shell banks off the table, forces hawaladars to register, and offers sweeping
definitions of terrorist acts and resources. In the minds of some people
this caps three decades, since the Bank Secrecy Act was passed in 1970, of
great progress on the anti–money laundering front.
I do not agree that great progress is anywhere evident. The distinction
that has to be made is between efforts and results. I wrote the following
in the November–December 2001 issue of Foreign Affairs: “The
proper measure of success is not the level of well-intentioned activity but
how many billions of fraudulently acquired dollars are prevented from
being legalized.” 22
So the question is, what are the results of now 35 years of anti–money
laundering efforts? Or, what is not included in the legislation of the United
States, European Union countries, and other states that still sustains the
level of criminal, corrupt, and commercial dirty money I am writing about?
How can a trillion dollars a year—or more—of illicit funds, despite all the
laws we have passed and programs we have set up, still move with ease and
abandon around the globe?