[Congressional Record Volume 142, Number 134 (Wednesday, September 25, 1996)]
[Senate]
[Pages S11287-S11288]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ILLEGAL DRUG TRADE

  Mr. GRASSLEY. Mr. President, a few steps from this Capitol Building 
is a combat zone. In just a few blocks from here lies the killing 
ground that is one of the consequences of the illegal drug trade in 
this country. On average, over 400 people in Washington are murdered 
every year. That is roughly 60 lives lost per 100,000 population. The 
national average is 6 per 100,000. That makes Washington the Nation's 
murder capital. Those casualties, the lives lost and maimed, occur in 
just a few neighborhoods. They are not spread out over the whole city. 
Much of this carnage is directly the result of drugs and the harm that 
they cause, a harm that falls disproportionately on a few 
neighborhoods.
  Now, virtually every ounce of illegal drug you can buy within a 
stone's throw of here--and that is just about any drug you could want 
in any quantity you care to buy--is produced overseas. It is imported 
into this country. Washington is not on the border with Mexico. We 
don't grow poppies in ward 6 or coca in Anacostia. These drugs find 
their way here in commercial cargo, in motor homes, in peoples' 
stomachs. They fly, walk, drive, and float into this country every day 
in a thousand ways. That availability is killing us. But the story does 
not stop here.
  The criminal thugs that bring drugs into this country are not 
philanthropists. They are in the business to make money. And lots of 
it. That's why they come to the world's largest emporium. And they do 
well. But that leaves them with the problem of what to do with all the 
loot: how to turn all that dirty money into nice, clean cash. To do 
this, they exploit our banks and business. They smuggle cash out in 
bulk. They use our electronic highways.
  As the Center for Technology Assessment noted last year, our 
``Financial institutions and their wire transfer systems provide the 
battleground to control money laundering.'' Criminal gangs employ a 
thousand techniques that fertile imaginations--the best that money can 
buy--can devise. They do all of this in defiance of our laws, in 
vicious contempt for common decency. And when these sorry riches find 
their way into secure havens, they are then used to corrupt and 
intimidate individuals, institutions, and whole governments. The 
vicious cycle is complete and begins again.
  These criminal gangs, to push their drugs and launder their millions, 
make use of the very same systems that are the sources of our 
prosperity. They smuggle drugs in and they sneak the cash out. They 
exploit our financial processes and our commercial mechanisms to do 
this. We must not permit this to happen. There in lies our dilemma.
  On the one hand, we must decide on those policies and practices that 
will most effectively facilitate our trade and finance. We must do this 
in order to sustain our continued prosperity and competitiveness. On 
the other hand, we must decide how best to discourage the criminal 
exploitation of our financial systems and our commercial arrangements. 
This clash of interests is no easy problem to deal with, but deal with 
it we must.
  Unfortunately, this country has a major drug problem. As it is in 
virtually every other area of economic activity, the United States is 
the world's largest market for illegal drugs. Americans have more money 
and more time than do many other people. This means that every 
entrepreneur in the world is out to make it big in the U.S. market. 
Some of the most skilled, intelligent, and ruthless of these 
entrepreneurs are drug traffickers.
  We are not dealing here with mom-and-pop operations. We are dealing 
with well-financed, international business enterprises with a global 
reach. They are sophisticated and dangerous. Let there be no mistake, 
the criminal organizations that traffic in drugs or other illegal goods 
are among the most significant threats to our well-being that we 
currently face.
  The major international criminal organizations--based in Asia, 
Europe, Africa, and Latin America--now dispose

[[Page S11288]]

of economic resources that enable them to defy local and international 
law. They are richer than many countries. They are ruthless, and they 
are remorseless. Either through a process of threat and intimidation or 
by bribery and financial manipulation, they are able to challenge the 
authority of governments. They are able to undermine the integrity of 
public and private institutions. Where they cannot suborn they subvert. 
Where they cannot corrupt they kill.
  The rollcall of countries currently facing direct and serious 
challenges from these groups is disturbing. Today criminal gangs in 
Russia, China, Italy, Nigeria, Mexico, and Colombia openly operate or 
have been able to penetrate into the depths of the political, social, 
and economic systems in those countries. Many smaller countries, 
without the range of resources available elsewhere, are simply 
overmatched and outmaneuvered in trying to enforce their own 
sovereignty. In some cases, criminal penetration has become so serious 
that it raises questions about the future stability of the country in 
question. There is growing concern about the ability of many 
governments, often deeply penetrated by criminal corruption, to respond 
meaningfully--if at all--to these criminal gangs.
  In addition, banks and businesses pay out billions of dollars every 
year, directly or indirectly, to these same criminal gangs. Whether in 
protection money or in losses suffered from sophisticated scams. 
Whether in extortion or swindles, individual businesses and national 
economies are routinely ripped off, to the tune of billions of dollars 
annually, by ruthless criminal thugs.
  The cost of their activities are not paid out just in the crimes that 
they commit. They also exact a cost in terms of trust. They undermine 
good faith. When left unchecked, they pervert the very ideas of a free 
market. The bleed public establishments of public support. They 
threaten democratic institutions and the social, political, and 
economic circumstances that must sustain those institutions. We can see 
that process at work in Colombia, and Russia, and next door in Mexico. 
But the problem does not stop here.
  In this country, these criminal gangs daily kill and maim more 
Americans than have suffered at the hands of terrorist bombs. They have 
done more damage to our social fabric and well-being than has any rogue 
political leader in Libya or Iran. They have caused more real harm in a 
day than all the illegal videotapes produced in China. Through the 
drugs that these scoundrels make and sell, they sow havoc in our homes 
and neighborhoods, on our streets, and in our clinics.
  We must take the steps necessary to ensure that our citizens are 
secure from harm and that the very processes of our well-being are 
protected from abuse. We must ensure that the free-trade highway does 
not become an expressway for drug smuggling. We have to ensure that 
banking without borders does not become an opportunity for banking 
without conscience. But how to do that without smothering legitimate 
activity? We must devise the means to disrupt criminal enterprise 
without destroying free markets. We must ensure effective international 
cooperation and yet work with countries often incapable of taking 
effective action. We must lead, but we cannot succeed without 
cooperation.
  That is what this hearing is about. We must look at what we are doing 
and what we can do better. We need to consider what works and what does 
not. We need to cast a critical eye on our actions and those of our 
allies and friends to determine what more we can do. I am concerned 
that our policies are not up to the task. I am concerned that we have 
put our priorities in the wrong places. Frankly, we have a long way to 
go and a lot of work ahead of us. More kids are starting to use drugs. 
We are seeing more calls for legalization. We have dropped the ball on 
fighting back.
  In the meantime, the criminals are getting richer and more 
sophisticated. As we face 21st century thugs, we need 21st century G-
men. We need to be smarter and faster. We need to be focused and 
consistent. As one Treasury official put it, money laundering is a 
``crime hidden in the details of legitimate commerce.'' The same is 
true for smuggling. The devil is in the details. It is the details that 
we want to get at. It is how to respond effectively to the details of 
these criminal activities that we must address in our policies.

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