U.S. GOVERNMENT TARGETS MONEY-LAUNDERING CRIME

Global Effort To Combat Drug, Arms Dealers

WASHINGTON -- The federal government Thursday launched a global
initiative to crack down on drug dealers, arms traders and corrupt
politicians who try to hide their gains in legitimate bank accounts
and businesses.

The Treasury and Justice departments, in an attempt to stop "money
laundering," pledged to intensify efforts to uncover financial
deposits by criminals and to encourage foreign countries to do the
same.

For example, Treasury Department officials said the government might
use its leverage with international lending institutions to raise
rates for nations who fail to adopt and enforce anti-laundering laws.

In a money-laundering scheme, a person seeks to disguise illegal
proceeds by putting them into the stream of legitimate finance and
commerce.

The administration, in announcing its National Money- Laundering
Strategy, did not say how much illegally received money is funneled
through legitimate businesses but said the international total runs
into the hundreds of billions of dollars annually.

"Our work is cut out for us," Treasury Secretary Lawrence Summers said
of the government's effort. "We will go forward with
determination."

Attorney General Janet Reno called money laundering a "very
sophisticated crime" that undermines the integrity of financial
institutions.

Anti-laundering laws primarily target drug dealers and criminal
organizations. The Clinton administration said it will propose
legislation that would also target international arms dealers and
corrupt foreign officials.

Sen. Charles Grassley, R-Iowa and a frequent administration critic,
hailed the government's strategy.

The federal initiative will "hit the traffickers where it will hurt
the most" by eliminating their ability to hide illegal revenue, he
said.

The effort to crack down on money laundering comes amid allegations
that Russian mobsters have channeled $10 billion through the Bank of
New York. But Justice and Treasury department officials said their
investigation of the United States' 15th largest bank had nothing to
do with their decision to release the anti-money laundering strategy,
which they said has been in the works for many months.

USA Today reported Thursday that as many as 10 banks might have been
involved in the alleged Russian laundering scheme. Federal
law-enforcement officials, however, declined to comment on what they
called a pending investigation.

Under its initiative, the Clinton administration said it will enlist
the private sector's help by requiring casinos and brokerage houses to
report cash transactions from suspicious customers and clients.