13 June 1998

Date: Fri, 12 Jun 1998 18:13:25 -0700
To: jya@pipeline.com
From: John Muller <johnmuller@earthlink.net>
Subject: Money Laundering Bill Passes First Hurdle

From the House Banking Committee Web site,


For Immediate Release                                              
Contact: David Runkel or
Andrew Biggs 

Thursday, June 11, 1998 


The House Banking and Financial Services Committee today approved two
pieces of legislation aimed at aiding law enforcement efforts in the fight
against money laundering. Passed by voice vote was H.R. 4005, "The Money
Laundering Deterrence Act of 1998," sponsored by Committee Chairman James
A. Leach (R-IA). Also approved by voice vote was H.R. 1756, "The Money
Laundering and Financial Crimes Strategy Act of 1997," sponsored by Rep.
Nydia Velázquez (D-NY). 

The bills were approved following a hearing held to review law enforcement
efforts against money laundering, including Operation Casablanca, a
recently concluded undercover investigation of drug-related money
laundering in Mexico and Venezuela.

H.R. 4005, co-sponsored by the Ranking Minority Member and several other
members of the Committee, does a number of things:

First, it transfers from the U.S. tax code to the Bank Secrecy Act the
requirement that merchants report cash transactions in excess of $10,000,
thereby making such reports more widely available within the law
enforcement community. •Second, it extends "safe harbor" protections to
accountants who file Suspicious Activity Reports. •Third, it clarifies
existing statutory language regarding the disclosure of the filing of a
Suspicious Activity Report. •Fourth, it provides financial institutions
with liability protection when supplying employment references that may
include suspicions of involvement in illegal activity, unless such
suspicions are known to be false or the institution has acted with malice
or reckless disregard for the truth. •Fifth, it makes Suspicious Activity
Reports available to self-regulatory organizations as defined by the
Securities and Exchange Act of 1934. •Sixth, it makes clear that violating
a geographic targeting order issued by the Treasury Department is illegal. 

Amendments to H.R. 4005 passed by voice vote include:

•A Managers amendment, making technical changes, passed on voice vote. •An
amendment sponsored by Rep. Jim Ryun (R-KS) adding two additional findings
dealing with money laundering by international organized crime syndicates.
•An amendment sponsored by Rep. Tom Campbell (R-CA) clarifying law
concerning the forfeiture of fungible property. •An amendment sponsored by
Rep. Waters (D-CA) requiring the Secretary of the Treasury to promulgate
"Know Your Customer" regulations within 120 days of enactment. •An
amendment sponsored by Rep. Waters (D-CA) requiring the Secretary of the
Treasury to submit to the House and Senate Banking Committees a report on
private banking. •An amendment sponsored by Rep. Waters (D-CA) outlawing
certain "concentration accounts," which pool accounts from various account
holders and prevents the name of an account holder from being associated
with the account activity of the account holder. •An amendment sponsored by
Rep. Waters (D-CA) and Rep. Maurice Hinchey (D-NY), requiring the Secretary
of the Treasury to develop criteria to identify areas outside of the United
States where money laundering is concentrated. •An Amendment by Rep. Barr
(R-GA) expressing a sense of the Congress that the Secretary of the
Treasury should make available to all Federal, State and local law
enforcement agencies and financial regulatory the full content of the data
base of reports filed pursuant to H.R. 1756, also with bipartisan
co-sponsorship, requires the Treasury Secretary to develop and implement a
national strategy for combating money laundering and related financial
crimes. The proposed legislation would also provide federal funding for
efforts by state and local law enforcement authorities to investigate money
laundering activities.

Amendments to H.R. 1756 passed by voice vote include:

•A Managers amendment, making technical changes, passed on voice vote.

John Muller
"Things are not as they seem, neither are they otherwise"

[Congressional Record: June 11, 1998 (Digest)] [Page D622-D625] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr11jn98-2] House of Representatives [Excerpt] MONEY LAUNDERING MEASURES Committee on Banking and Financial Services: Ordered reported amended the following bills: H.R. 4005, Money Laundering Deterrence Act of 1998; and H.R. 1756, Money Laundering and Financial Crimes Strategy Act of 1997. Prior to this action, the Committee held a hearing on these measures. Testimony was heard from Senator Grassley; the following officials of the Department of the Treasury: Raymond W. Kelley, Under Secretary, Enforcement; and Robert Serino, Deputy General Counsel, Office of the Comptroller of the Currency; Mary Lee Warren, Deputy Assistant Attorney General, Criminal Division, Department of Justice; Jonathan Winer, Deputy Assistant Secretary, International Narcotics and Law Enforcement Division, Department of State; and public witnesses. ---------- [Congressional Record: June 11, 1998 (Senate)] [Page S6181-S6205] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] [DOCID:cr11jn98-158] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS [Excerpt Page S6199] By Mr. GRASSLEY: S. 2165. A bill to amend title 31 of the United States Code to improve methods for preventing financial crimes, and for other purposes; to the Committee on Banking, Housing, and Urban Affairs. money laundering deterrence act of 1998 • Mr. GRASSLEY. Mr. President, recently, we have seen the culmination of one of the most successful undercover operations in history by the United States Customs Service. This effort, known as ``Operation Casablanca,'' has infiltrated and dismantled a group of international bankers, mostly in Mexico, who have been laundering drug money. The threat of drug trafficking is serious enough. But to have their financial advisors leading their effort to facilitate the smuggling of illicit narcotics is much worse. Complicit bankers devising schemes can make it much easier to move and hide the ill-gotten gains of drug cartels. As this latest law enforcement operation illustrates, we must be sure that we are taking the necessary steps to protect the citizens of our nation. We must prevent drug traffickers and organized crime groups from obtaining the profits of their illegal activities. Much has been done and said about the movement of illegal drugs into the United States. But the opposite side of the business does not always get the publicity, and is just as important. We need to go after the profits from drug sales and other illegal enterprises. Last week, Representative Leach, Chairman of the Committee on Banking and Financial Services introduced legislation to amend title 31, United States Code. The bill H.R. 4005, ``the Money Laundering Deterrence Act of 1998,'' would improve methods for preventing financial crimes. And as Operation Casablanca shows this legislation, is timely and needed. We need to tighten up our financial control capabilities to prevent criminal enterprises from abusing our financial and banking systems. The bill is supported by the American Banking Association (ABA), the Department of the Treasury, the Department of Justice and the Federal Reserve. Today, Chairman Leach's bill has already been marked up in the House. I call for my colleagues to help support this companion legislation. I hope this would be a continuation of efforts by Congress to go after the growing threat of money laundering not only to our nation, but worldwide.•