CAPITALISM'S ACHILLES HEEL Dirty Money and How to

“I Don’t Understand” and “Don’t Tell Anyone” 253
staffs, it was noted that the two institutions could “increase their participation
in the global fight against financial abuse and money laundering” by
“recognizing” FATF standards, “publicizing” the need for strengthened measures,
and “working” with others taking the lead on these issues. 10 “Principal
contributions” stem from the promotion of “stronger financial, economic
and legal systems in general.” 11 Even a year after 9/11, some IMF economists
continued to eschew any meaningful leadership on anti–money laundering
and terrorist financing efforts: “[W]hile the main responsibility for
these activities rests with governments, financial institutions, and citizens of
individual countries, the IMF could play a facilitating role—focusing on the
integrity and stability of the international financial system and working
closely with the FATF, other standard setters, and the World Bank.” 12
In 2002 the Bank and Fund launched an “assessment” process, whereby
they set up a collaborative framework to evaluate how countries were performing
in efforts aimed at anti–money laundering and combating the financing
of terrorism, called the AML/CFT program. Between the Bank, the
Fund, and FATF and its affiliates, some 50 pilot studies were conducted in
2003, using measures of compliance with FATF’s 40 + 8 recommendations,
discussed in Chapter 4. Of course, the United States refused to be assessed.
The World Bank and the IMF, the two premiere global financial institutions,
have declined to take a leading role on the cross-border dirty-money
issue. A secondary role, yes, but out in front, no. Despite the damage done
by international flows of dirty money—worsening poverty, advancing crime,
facilitating terrorism, curtailing trade, limiting investment, generating massive
tax evasion, upsetting banking systems, causing financial instability,
promoting failing states, spawning conflict—these institutions will not
point a finger at western complicity in the process. To do so would place
their appointed directors and employed staffs at odds with western country
governments and private sectors. As a former top World Bank (nonwestern)
official said to me about illicit flows and flight capital: “The World Bank
and IMF cannot touch such issues. They are the extension of national bureaucrats.
They favor the status quo. They are not there to experiment. Anyone
trying to do so will be stamped down. The Bank and the Fund are
primarily concerned with their owners, that is, the wealthy countries.” 13 He
is an unusually committed and articulate individual, and I’ve heard the same
disappointment expressed in many similar conversations over the past several
years.