CAPITALISM'S ACHILLES HEEL Dirty Money and How to

190 CAPITALISM’S ACHILLES HEEL
money we don’t want. The global anti–money laundering regime has indeed
grown, but it remains ineffective because it is narrowly defined, easily circumvented,
and poorly enforced.
The linkage, the synergy, the similarity among all forms of dirty money
is not widely understood in western business and government circles. It is
clearly understood by every drug kingpin, criminal syndicate head, and terrorist
mastermind.
The idea at the core of U.S. and European thinking about illicit money is
flawed. The idea that we can successfully protect ourselves from a narrow range
of dirty money we think hurts us, while at the same time cultivating a much
broader range of dirty money we think helps us, is fundamentally unworkable.
The situation is far worse than simply holding open the bank vaults to
dirty money in its various forms. We’re not passive; we’re active in this pursuit.
Western banks solicit, transfer, accumulate, and manage dirty money in
the trillions of dollars, raking in hundreds of billions every year. The tension
between anti–money laundering compliance and bringing in business is no
contest. New bank deposits, private accounts, and fee services win nearly
every time. When knowledgeable experts on these matters get together, they
often talk about how anti–money laundering regimes are designed, first, to
offer financial institutions “plausible deniability” when caught with laundered
money and only secondarily to avoid actually receiving dirty money.
Western corporations divert profits out of many countries where they
are in business, including where they are headquartered. An entire structure
has been created, as laid out in the Dirty-Money User Manual, that facilitates—that
guarantees!—illicit financial flows. This structure consists of
dummy corporations, tax havens, secrecy jurisdictions, shielded trusts,
anonymous foundations, flee clauses, falsified pricing arrangements, fake
transactions, disguised transfer techniques, and more, which I have been
writing about. And this structure and the trillions of dollars it shelters and
shifts is without question the biggest loophole in the free-market system. A
brief review of its size is appropriate. On this subject, reality resides in grasping
the enormity of the problem:
• More than 60 tax havens and secrecy jurisdictions spread across the
world.
• More than a million dummy corporations shielding their owners’
identities.