TO CURB DIRTY MONEY

Strengthen U.S. Laws Against Money Laundering.

Attorney General John Ashcroft got it right yesterday when he called
on Congress to strengthen U.S. laws against money laundering. Our
obsolete laws make it all too easy for organized crime operatives,
drug traffickers or corrupt foreign despots to hide their loot in U.S.
banks.

Thankfully, Congress can fix some of the worst loopholes by approving
the Money Laundering Abatement Act just introduced by Sens. Carl
Levin, D-Mich, Chuck Grassley, R-Iowa and Bill Nelson, D-Fla.

The legislation is well-conceived. Sen. Levin, chairman of the
Subcommittee on Investigations, spent three years analyzing U.S.
banking practices that welcome dirty money. He cites estimates that $1
trillion is laundered each year, with $500 billion -- half the world's
total -- moving through U.S. banks.

The bill takes aim at practices money launderers love: bank secrecy
that covers their identities and money trails; offshore shell banks,
which exist only on paper and funnel illicit money; and bank
forfeiture-rule loopholes that bar U.S. prosecutors from seizing dirty
assets from the U.S. accounts of foreign banks.

These are tools used by masters of corruption. Take Vladimiro
Montesinos, Peru's former spy master. He is accused of everything from
running death squads to amassing $270 million, which was laundered
through offshore shell banks that kept some of it in U.S. banks --
ready for him to dole out in bribes and kickbacks. He even had at
least two accounts in his own name at the Bank of New York, according
to Money Laundering Alert, a Miami newsletter.

The Levin bill would make it more difficult for the likes of
Montesinos. First, it would allow U.S. prosecutors to bring money-
laundering charges against depositors and U.S. institutions in cases
where funds originate from foreign-corruption offenses, such as theft
of public funds.

It would require banks operating here to conduct more-rigorous due-
diligence reviews on accounts of foreign clients that have more than
$1 million and on correspondent accounts of offshore banks based in
high-risk money-laundering countries.

Other provisions would bar U.S. banks from providing services to
offshore banks that have no physical presence; and would make deposits
in foreign banks' U.S. correspondent accounts subject to the same
forfeiture rules that now apply to other U.S. bank deposits.

The legislation doesn't cover everything. It leaves the securities
industry untouched, for example. The subcommittee plans to tackle that
next. Overall, it's a good start to curbing the uncontrolled wash of
illicit funds and international crooks seeking safe financial haven in
the United States.

By approving this commendable effort to keep U.S. banks clean,
Congress would send the message that the United States won't shelter
criminals or their profits.