CAPITALISM'S ACHILLES HEEL Dirty Money and How to

• Global corruption probably has not yet turned down, despite a
decade of concerted effort.
• Abusive transfer pricing by corporations that break laws of tradingpartner
countries has become normalized, used by tens of thousands
of global businesses.
• The flow of tax-evading money out of the richer countries into tax
havens has soared.
• The torrents that have come out of Russia and other countries of the
former Soviet Union and China are probably the largest illegal flows
ever seen, as discussed in Chapter 3.
We seem to be failing across the board. Are there any bright spots at all?
Yes, the pursuit of terrorists’ financing is a bright spot. Which indicates what
can be accomplished given political will to tackle at least an element of the
dirty-money problem in a determined manner.
CHASING TERRORISTS’ MONEY
Magnitudes and Misunderstandings 183
When 9/11 occurred, there was “nothing, absolutely nothing” in place to go
after terrorist financing, according to David Aufhauser, at that time general
counsel at the U.S. Treasury Department. 23 Two years later, following his
leadership as chairman of the National Security Council’s “no-name committee”
on terrorist financing, he was able to say: “In broad strokes, Al
Qaeda is two-thirds less rich than they were when we started. The budget is
one-third of what it was when we started.” 24
It wasn’t anti–money laundering procedures that accomplished this; it
was just the opposite—post–money laundering procedures. U.S. authorities
looked for and found the hijackers’ financial transactions prior to 9/11 and
then traced the transactions to the persons, companies, banks, and charities
that had assisted them. This was an after-the-fact exercise, entirely different
from the before-the-fact efforts on which anti–money laundering is built.
“Following the money trail” means “we will freeze the accounts of people
whom we suspect are involved in terrorist financing, if we are lucky enough
to know their names.” 25
Three days after 9/11, President Bush activated the Foreign Terrorist