WHITE HOUSE SEEKS POWERS TO PREVENT MONEY LAUNDERING BY TERRORIST GROUPS

WASHINGTON -- As investigators try to piece together the finances of those
behind last month's attacks, Congress is moving to grant the president
powers to prevent terrorists, drug dealers and other criminals from moving
money through the financial system.

Bush administration officials went to Capitol Hill to press for action on
money-laundering legislation as part of a broad package of antiterrorism
measures. "We are fighting with outdated weapons in the money-laundering
arena today," Assistant Attorney General Michael Chertoff said in testimony
submitted to the House Financial Services Committee.

House lawmakers introduced a bipartisan money-laundering bill Wednesday,
and the Senate banking committee is set to take up legislation of its own
Thursday. Majority Leader Tom Daschle (D., S.D.) expects that bill to be
offered as an amendment when the full Senate considers antiterrorism
legislation next week. With the Sept. 11 attacks dominating the political
agenda, it seems likely Congress will grant the president at least some of
the authority he wants to mine the financial system for clues to
terrorists' activities.

Among the measures being considered:

a.. Making it a crime to launder proceeds of most foreign crimes. Under
current law it only is illegal to launder gains from bank fraud, terrorism
or drug trafficking. Terrorists sometimes make their money through other
crimes, then use it to finance terror operations.

a.. Controlling the movement of bulk cash over U.S. borders more stringently.

a.. Allowing the federal government to issue administrative subpoenas to
get account records from foreign banks that have correspondent banking
arrangements with U.S. institutions.

a.. Granting the Treasury secretary discretionary authority to impose
special controls on suspect foreign financial institutions or transactions,
including prohibiting a foreign bank from having a correspondent
relationship with a U.S. institution. The banking industry, cool to a
similar bill that ultimately foundered in Congress during the past year, is
endorsing tighter money-laundering controls this time around. "Obviously
we've looked at our position with fresh eyes since Sept. 11," said Edward
L. Yingling, chief lobbyist of the American Bankers Association.

But bankers, whose institutions handle $2 trillion a day, want a greater
role in writing the implementing rules that would accompany the law, and
are leery of some provisions in Senate versions of the bill.

Some lawmakers also are wary. GOP Sen. Phil Gramm of Texas wants the bill
to specify that those affected by the Treasury secretary's broad new
authority will be able to appeal those decisions. The administration also
supports such "due process" provisions.