CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Magnitudes and Misunderstandings 189
funds violates U.S. anti–money laundering laws. A blank space means that
handling such funds does not violate U.S. anti–money laundering laws.
As the right-hand column shows, there are a great many more open
holes than closed avenues if the money is coming from abroad. Profits from
alien smuggling by our Singapore-based businessman are right up there on
the legal list. Also not illegal are proceeds arising from crimes such as racketeering,
securities fraud, credit fraud, forgery, counterfeiting, trafficking in
counterfeit and contraband goods, trafficking in stolen property, loan sharking,
protection rackets, advance fee fraud, asset stripping, foreign money
laundering, sexual exploitation, prostitution, slave trading, and much more.
And tax evasion? Forget that one. The United States is wide open to just
about every dollar of foreigners’ tax-evading funds that can be found.
Compared to the United States, some other western countries are more
open to dirty money and some are less open, and variations in laws are far
too extensive to comment upon in depth here. Suffice it to say that no country
puts the full range of dirty money on its list of laundered money. 32
Take just tax-evading money as an example; these proceeds flow illegally
out of every developing and transitional economy into every major western
economy I have ever researched. The following testimony is revealing: “Private
bankers go to foreign countries to recruit capital flight and to meet with the
clients who have taken billions of dollars out of the countries. . . . [R]egarding
the tax issues and the laws of the foreign country, . . . it is best not to ask those
questions of the client because it is not our responsibility . . . if the client is
complying with . . . any laws within their country.... Basically it is that we
don’t want to know....” 33 In other words, the easiest thing for criminals to do
is make their criminal money look like it is merely tax-evading money, and
when they do it passes readily into foreign economies. 34
The fact is that laundered proceeds of drug trafficking, racketeering, corruption,
and terrorism tag along with other forms of dirty money to which the
United States and Europe extend a welcoming hand. These are two rails on
the same tracks through the international financial system. Holes intentionally
left in anti–money laundering laws provide a road map to foreigners, showing
them how to relabel their money in order to get it into the western financial
system. This is the reason western countries, by their own estimates, have better
than a 99 percent failure rate in stopping deposits of laundered money. 35
When we remain legally open to many forms of dirty money we do want, we
remove the possibility of successfully curtailing a few forms of laundered