[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[House]
[Pages H9480-H9484]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       MONEY LAUNDERING AND FINANCIAL CRIMES STRATEGY ACT OF 1998

  Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 1756) to amend chapter 53 of title 31, United States Code, to 
require the development and implementation by the Secretary of the 
Treasury of a national money laundering and related financial crimes 
strategy to combat money laundering and related financial crimes, and 
for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 1756

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Money Laundering and 
     Financial Crimes Strategy Act of 1998''.

     SEC. 2. MONEY LAUNDERING AND RELATED FINANCIAL CRIMES.

       (a) In General.--Chapter 53 of title 31, United States Code 
     is amended by adding at the end the following new subchapter:

    ``SUBCHAPTER III--MONEY LAUNDERING AND RELATED FINANCIAL CRIMES

     ``Sec. 5340. Definitions

       ``For purposes of this subchapter, the following 
     definitions shall apply:
       ``(1) Department of the treasury law enforcement 
     organizations.--The term `Department of the Treasury law 
     enforcement organizations' has the meaning given to such term 
     in section 9703(p)(1).
       ``(2) Money laundering and related financial crime.--The 
     term `money laundering and related financial crime' means an 
     offense under subchapter II of this chapter, chapter II of 
     title I of Public Law 91-508 (12 U.S.C. 1951, et seq.; 
     commonly referred to as the `Bank Secrecy Act'), or section 
     1956, 1957, or 1960 of title 18 or any related Federal, 
     State, or local criminal offense.
       ``(3) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(4) Attorney general.--The term `Attorney General' means 
     the Attorney General of the United States.

   ``Part 1--National Money Laundering and Related Financial Crimes 
                                Strategy

     ``Sec. 5341. National money laundering and related financial 
       crimes strategy

       ``(a) Development and Transmittal to Congress.--
       ``(1) Development.--The President, acting through the 
     Secretary and in consultation with the Attorney General, 
     shall develop a national strategy for combating money 
     laundering and related financial crimes.
       ``(2) Transmittal to congress.--By February 1 of 1999, 
     2000, 2001, 2002, and 2003, the President shall submit a 
     national strategy developed in accordance with paragraph (1) 
     to the Congress.
       ``(3) Separate presentation of classified material.--Any 
     part of the strategy that involves information which is 
     properly classified under criteria established by Executive 
     Order shall be submitted to the Congress separately in 
     classified form.
       ``(b) Development of Strategy.--The national strategy for 
     combating money laundering and related financial crimes shall 
     address any area the President, acting through the Secretary 
     and in consultation with the Attorney General, considers 
     appropriate, including the following:
       ``(1) Goals, objectives, and priorities.--Comprehensive, 
     research-based goals, objectives, and priorities for reducing 
     money laundering and related financial crime in the United 
     States.
       ``(2) Prevention.--Coordination of regulatory and other 
     efforts to prevent the exploitation of financial systems in 
     the United States for money laundering and related financial 
     crimes, including a requirement that the Secretary shall--
       ``(A) regularly review enforcement efforts under this 
     subchapter and other provisions of law and, when appropriate, 
     modify existing regulations or prescribe new regulations for 
     purposes of preventing such criminal activity; and
       ``(B) coordinate prevention efforts and other enforcement 
     action with the Board of Governors of the Federal Reserve 
     System, the Securities and Exchange Commission, the Federal 
     Trade Commission, other Federal banking agencies, the 
     National Credit Union Administration Board, and such other

[[Page H9481]]

     Federal agencies as the Secretary, in consultation with the 
     Attorney General, determines to be appropriate.
       ``(3) Detection and prosecution initiatives.--A description 
     of operational initiatives to improve detection and 
     prosecution of money laundering and related financial crimes 
     and the seizure and forfeiture of proceeds and 
     instrumentalities derived from such crimes.
       ``(4) Enhancement of the role of the private financial 
     sector in prevention.--The enhancement of partnerships 
     between the private financial sector and law enforcement 
     agencies with regard to the prevention and detection of money 
     laundering and related financial crimes, including providing 
     incentives to strengthen internal controls and to adopt on an 
     industrywide basis more effective policies.
       ``(5) Enhancement of intergovernmental cooperation.--The 
     enhancement of--
       ``(A) cooperative efforts between the Federal Government 
     and State and local officials, including State and local 
     prosecutors and other law enforcement officials; and
       ``(B) cooperative efforts among the several States and 
     between State and local officials, including State and local 
     prosecutors and other law enforcement officials,
     for financial crimes control which could be utilized or 
     should be encouraged.
       ``(6) Project and budget priorities.--A 3-year projection 
     for program and budget priorities and achievable projects for 
     reductions in financial crimes.
       ``(7) Assessment of funding.--A complete assessment of how 
     the proposed budget is intended to implement the strategy and 
     whether the funding levels contained in the proposed budget 
     are sufficient to implement the strategy.
       ``(8) Designated areas.--A description of geographical 
     areas designated as `high-risk money laundering and related 
     financial crime areas' in accordance with, but not limited 
     to, section 5342.
       ``(9) Persons consulted.--Persons or officers consulted by 
     the Secretary pursuant to subsection (d).
       ``(10) Data regarding trends in money laundering and 
     related financial crimes.--The need for additional 
     information necessary for the purpose of developing and 
     analyzing data in order to ascertain financial crime trends.
       ``(11) Improved communications systems.--A plan for 
     enhancing the compatibility of automated information and 
     facilitating access of the Federal Government and State and 
     local governments to timely, accurate, and complete 
     information.
       ``(c) Effectiveness Report.--At the time each national 
     strategy for combating financial crimes is transmitted by the 
     President to the Congress (other than the 1st transmission of 
     any such strategy) pursuant to subsection (a), the Secretary 
     shall submit a report containing an evaluation of the 
     effectiveness of policies to combat money laundering and 
     related financial crimes.
       ``(d) Consultations.--In addition to the consultations 
     required under this section with the Attorney General, in 
     developing the national strategy for combating money 
     laundering and related financial crimes, the Secretary shall 
     consult with--
       ``(1) the Board of Governors of the Federal Reserve System 
     and other Federal banking agencies and the National Credit 
     Union Administration Board;
       ``(2) State and local officials, including State and local 
     prosecutors;
       ``(3) the Securities and Exchange Commission;
       ``(4) the Commodities and Futures Trading Commission;
       ``(5) the Director of the Office of National Drug Control 
     Policy, with respect to money laundering and related 
     financial crimes involving the proceeds of drug trafficking;
       ``(6) the Chief of the United States Postal Inspection 
     Service;
       ``(7) to the extent appropriate, State and local officials 
     responsible for financial institution and financial market 
     regulation;
       ``(8) any other State or local government authority, to the 
     extent appropriate;
       ``(9) any other Federal Government authority or 
     instrumentality, to the extent appropriate; and
       ``(10) representatives of the private financial services 
     sector, to the extent appropriate.

     ``Sec. 5342. High-risk money laundering and related financial 
       crime areas

       ``(a) Findings and Purpose.--
       ``(1) Findings.--The Congress finds the following:
       ``(A) Money laundering and related financial crimes 
     frequently appear to be concentrated in particular geographic 
     areas, financial systems, industry sectors, or financial 
     institutions.
       ``(B) While the Secretary has the responsibility to act 
     with regard to Federal offenses which are being committed in 
     a particular locality or are directed at a single 
     institution, because modern financial systems and 
     institutions are interconnected to a degree which was not 
     possible until recently, money laundering and other related 
     financial crimes are likely to have local, State, national, 
     and international effects wherever they are committed.
       ``(2) Purpose and objective.--It is the purpose of this 
     section to provide a mechanism for designating any area where 
     money laundering or a related financial crime appears to be 
     occurring at a higher than average rate such that--
       ``(A) a comprehensive approach to the problem of such crime 
     in such area can be developed, in cooperation with State and 
     local law enforcement agencies, which utilizes the authority 
     of the Secretary to prevent such activity; or
       ``(B) such area can be targeted for law enforcement action.
       ``(b) Element of National Strategy.--The designation of 
     certain areas as areas in which money laundering and related 
     financial crimes are extensive or present a substantial risk 
     shall be an element of the national strategy developed 
     pursuant to section 5341(b).
       ``(c) Designation of Areas.--
       ``(1) Designation by secretary.--The Secretary, after 
     taking into consideration the factors specified in subsection 
     (d), shall designate any geographical area, industry, sector, 
     or institution in the United States in which money laundering 
     and related financial crimes are extensive or present a 
     substantial risk as a `high-risk money laundering and related 
     financial crimes area'.
       ``(2) Case-by-case determination in consultation with the 
     attorney general.--In addition to the factors specified in 
     subsection (d), any designation of any area under paragraph 
     (1) shall be made on the basis of a determination by the 
     Secretary, in consultation with the Attorney General, that 
     the particular area, industry, sector, or institution is 
     being victimized by, or is particularly vulnerable to, money 
     laundering and related financial crimes.
       ``(3) Specific initiatives.--Any head of a department, 
     bureau, or law enforcement agency, including any State or 
     local prosecutor, involved in the detection, prevention, and 
     suppression of money laundering and related financial crimes 
     and any State or local official or prosecutor may submit--
       ``(A) a written request for the designation of any area as 
     a high-risk money laundering and related financial crimes 
     area; or
       ``(B) a written request for funding under section 5351 for 
     a specific prevention or enforcement initiative, or to 
     determine the extent of financial criminal activity, in an 
     area.
       ``(d) Factors.--In considering the designation of any area 
     as a high-risk money laundering and related financial crimes 
     area, the Secretary shall, to the extent appropriate and in 
     consultation with the Attorney General, take into account the 
     following factors:
       ``(1) The population of the area.
       ``(2) The number of bank and nonbank financial institution 
     transactions which originate in such area or involve 
     institutions located in such area.
       ``(3) The number of stock or commodities transactions which 
     originate in such area or involve institutions located in 
     such area.
       ``(4) Whether the area is a key transportation hub with any 
     international ports or airports or an extensive highway 
     system.
       ``(5) Whether the area is an international center for 
     banking or commerce.
       ``(6) The extent to which financial crimes and financial 
     crime-related activities in such area are having a harmful 
     impact in other areas of the country.
       ``(7) The number or nature of requests for information or 
     analytical assistance which--
       ``(A) are made to the analytical component of the 
     Department of the Treasury; and
       ``(B) originate from law enforcement or regulatory 
     authorities located in such area or involve institutions or 
     businesses located in such area or residents of such area.
       ``(8) The volume or nature of suspicious activity reports 
     originating in the area.
       ``(9) The volume or nature of currency transaction reports 
     or reports of cross-border movements of currency or monetary 
     instruments originating in, or transported through, the area.
       ``(10) Whether, and how often, the area has been the 
     subject of a geographical targeting order.
       ``(11) Observed changes in trends and patterns of money 
     laundering activity.
       ``(12) Unusual patterns, anomalies, growth, or other 
     changes in the volume or nature of core economic statistics 
     or indicators.
       ``(13) Statistics or indicators of unusual or unexplained 
     volumes of cash transactions.
       ``(14) Unusual patterns, anomalies, or changes in the 
     volume or nature of transactions conducted through financial 
     institutions operating within or outside the United States.
       ``(15) The extent to which State and local governments and 
     State and local law enforcement agencies have committed 
     resources to respond to the financial crime problem in the 
     area and the degree to which the commitment of such resources 
     reflects a determination by such government and agencies to 
     address the problem aggressively.
       ``(16) The extent to which a significant increase in the 
     allocation of Federal resources to combat financial crimes in 
     such area is necessary to provide an adequate State and local 
     response to financial crimes and financial crime-related 
     activities in such area.

       ``Part 2--Financial Crime-Free Communities Support Program

     ``Sec. 5351. Establishment of financial crime-free 
       communities support program

       ``(a) Establishment.--The Secretary of the Treasury, in 
     consultation with the Attorney General, shall establish a 
     program to support local law enforcement efforts in the 
     development and implementation of a program for the 
     detection, prevention, and suppression of money laundering 
     and related financial crimes.

[[Page H9482]]

       ``(b) Program.--In carrying out the program, the Secretary 
     of the Treasury, in consultation with the Attorney General, 
     shall--
       ``(1) make and track grants to grant recipients;
       ``(2) provide for technical assistance and training, data 
     collection, and dissemination of information on state-of-the-
     art practices that the Secretary determines to be effective 
     in detecting, preventing, and suppressing money laundering 
     and related financial crimes; and
       ``(3) provide for the general administration of the 
     program.
       ``(c) Administration.--The Secretary shall appoint an 
     administrator to carry out the program.
       ``(d) Contracting.--The Secretary may employ any necessary 
     staff and may enter into contracts or agreements with Federal 
     and State law enforcement agencies to delegate authority for 
     the execution of grants and for such other activities 
     necessary to carry out this chapter.

     ``Sec. 5352. Program authorization

       ``(a) Grant Eligibility.--To be eligible to receive an 
     initial grant or a renewal grant under this part, a State or 
     local law enforcement agency or prosecutor shall meet each of 
     the following criteria:
       ``(1) Application.--The State or local law enforcement 
     agency or prosecutor shall submit an application to the 
     Secretary in accordance with section 5353(a)(2).
       ``(2) Accountability.--The State or local law enforcement 
     agency or prosecutor shall--
       ``(A) establish a system to measure and report outcomes--
       ``(i) consistent with common indicators and evaluation 
     protocols established by the Secretary, in consultation with 
     the Attorney General; and
       ``(ii) approved by the Secretary;
       ``(B) conduct biennial surveys (or incorporate local 
     surveys in existence at the time of the evaluation) to 
     measure the progress and effectiveness of the coalition; and
       ``(C) provide assurances that the entity conducting an 
     evaluation under this paragraph, or from which the applicant 
     receives information, has experience in gathering data 
     related to money laundering and related financial crimes.
       ``(b) Grant Amounts.--
       ``(1) Grants.--
       ``(A) In general.--Subject to subparagraph (D), for a 
     fiscal year, the Secretary of the Treasury, in consultation 
     with the Attorney General, may grant to an eligible applicant 
     under this section for that fiscal year, an amount determined 
     by the Secretary of the Treasury, in consultation with the 
     Attorney General, to be appropriate.
       ``(B) Suspension of grants.--If such grant recipient fails 
     to continue to meet the criteria specified in subsection (a), 
     the Secretary may suspend the grant, after providing written 
     notice to the grant recipient and an opportunity to appeal.
       ``(C) Renewal grants.--Subject to subparagraph (D), the 
     Secretary may award a renewal grant to a grant recipient 
     under this subparagraph for each fiscal year following the 
     fiscal year for which an initial grant is awarded.
       ``(D) Limitation.--The amount of a grant award under this 
     paragraph may not exceed $750,000 for a fiscal year.
       ``(2) Grant awards.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary may, with respect to a community, make a grant 
     to 1 eligible applicant that represents that community.
       ``(B) Exception.--The Secretary may make a grant to more 
     than 1 eligible applicant that represent a community if--
       ``(i) the eligible coalitions demonstrate that the 
     coalitions are collaborating with one another; and
       ``(ii) each of the coalitions has independently met the 
     requirements set forth in subsection (a).
       ``(c) Condition Relating to Proceeds of Asset 
     Forfeitures.--
       ``(1) In general.--No grant may be made or renewed under 
     this part to any State or local law enforcement agency or 
     prosecutor unless the agency or prosecutor agrees to donate 
     to the Secretary of the Treasury for the program established 
     under this part any amount received by such agency or 
     prosecutor (after the grant is made) pursuant to any criminal 
     or civil forfeiture under chapter 46 of title 18, United 
     States Code, or any similar provision of State law.
       ``(2) Scope of application.--Paragraph (1) shall not apply 
     to any amount received by a State or local law enforcement 
     agency or prosecutor pursuant to any criminal or civil 
     forfeiture referred to in such paragraph in excess of the 
     aggregate amount of grants received by such agency or 
     prosecutor under this part.
       ``(d) Rolling Grant Application Periods.--In establishing 
     the program under this part, the Secretary shall take such 
     action as may be necessary to ensure, to the extent 
     practicable, that--
       ``(1) applications for grants under this part may be filed 
     at any time during a fiscal year; and
       ``(2) some portion of the funds appropriated under this 
     part for any such fiscal year will remain available for grant 
     applications filed later in the fiscal year.

     ``Sec. 5353. Information collection and dissemination with 
       respect to grant recipients

       ``(a) Applicant and Grantee Information.--
       ``(1) Application process.--The Secretary shall issue 
     requests for proposal, as necessary, regarding, with respect 
     to the grants awarded under section 5352, the application 
     process, grant renewal, and suspension or withholding of 
     renewal grants. Each application under this paragraph shall 
     be in writing and shall be subject to review by the 
     Secretary.
       ``(2) Reporting.--The Secretary shall, to the maximum 
     extent practicable and in a manner consistent with applicable 
     law, minimize reporting requirements by a grant recipient and 
     expedite any application for a renewal grant made under this 
     part.
       ``(b) Activities of Secretary.--The Secretary may--
       ``(1) evaluate the utility of specific initiatives relating 
     to the purposes of the program;
       ``(2) conduct an evaluation of the program; and
       ``(3) disseminate information described in this subsection 
     to--
       ``(A) eligible State local law enforcement agencies or 
     prosecutors; and
       ``(B) the general public.

     ``Sec. 5354. Grants for fighting money laundering and related 
       financial crimes

       ``(a) In General.-- After the end of the 1-year period 
     beginning on the date the 1st national strategy for combating 
     money laundering and related financial crimes is submitted to 
     the Congress in accordance with section 5341, and subject to 
     subsection (b), the Secretary may review, select, and award 
     grants for State or local law enforcement agencies and 
     prosecutors to provide funding necessary to investigate and 
     prosecute money laundering and related financial crimes in 
     high-risk money laundering and related financial crime areas.
       ``(b) Special Preference.--Special preference shall be 
     given to applications submitted to the Secretary which 
     demonstrate collaborative efforts of 2 or more State and 
     local law enforcement agencies or prosecutors who have a 
     history of Federal, State, and local cooperative law 
     enforcement and prosecutorial efforts in responding to such 
     criminal activity.

     ``Sec. 5355. Authorization of appropriations

       ``There are authorized to be appropriated the following 
     amounts for the following fiscal years to carry out the 
     purposes of this subchapter:

The amount authorized is:
$5,000,000.............................................................
$7,500,000.............................................................
$10,000,000............................................................
$12,500,000............................................................
$15,000,000.''.........................................................
       (b) Clerical Amendment.--The table of subchapters for 
     chapter 53 of title 31, United States Code, is amended by 
     adding at the end the following item:

    ``SUBCHAPTER III--MONEY LAUNDERING AND RELATED FINANCIAL CRIMES

``5340. Definitions.

   ``Part 1--National Money Laundering and Related Financial Crimes 
                                Strategy

``5341. National money laundering and related financial crimes 
              strategy.
``5342. High-risk money laundering and related financial crime areas.

       ``Part 2--Financial Crime-Free Communities Support Program

``5351. Establishment of financial crime-free communities support 
              program.
``5352. Program authorization.
``5353. Information collection and dissemination with respect to grant 
              recipients.
``5354. Grants for fighting money laundering and related financial 
              crimes.
``5355. Authorization of appropriations.''.
       (c) Report and Recommendations.--Before the end of the 5-
     year period beginning on the date the 1st national strategy 
     for combating money laundering and related financial crimes 
     is submitted to the Congress pursuant to section 5341(a)(1) 
     of title 31, United States Code (as added by section 2(a) of 
     this Act), the Secretary of the Treasury, in consultation 
     with the Attorney General, shall submit a report to the 
     Committee on Banking and Financial Services and the Committee 
     on the Judiciary of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs and the 
     Committee on the Judiciary of the Senate on the effectiveness 
     of and the need for the designation of areas, under section 
     5342 of title 31, United States Code (as added by such 
     section 2(a)), as high-risk money laundering and related 
     financial crime areas, together with recommendations for such 
     legislation as the Secretary and the Attorney General may 
     determine to be appropriate to carry out the purposes of such 
     section.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Iowa (Mr. Leach) and the gentlewoman from New York (Ms. Velazquez) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Iowa (Mr. Leach).
  Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. LEACH asked and was given permission to revise and extend his 
remarks.)
  Mr. LEACH. Mr. Speaker, H.R. 1756, the Money Laundering and Financial 
Crimes Strategy Act of 1998, directs the Secretary of the Treasury to 
create a national strategy for combatting

[[Page H9483]]

money laundering and other financial crimes by coordinating Federal, 
State and local efforts and resources.
  The legislation provides for the designation of high-risk money 
laundering areas for the purpose of providing these localities with 
increased Federal assistance and access to information related to money 
laundering and other financial crimes.
  The bill also provides a mechanism to fund money laundering 
investigations conducted by State and local law enforcement agencies.
  Efforts by law enforcement officials to combat money laundering, the 
process by which criminal elements seek to legitimize the proceeds of 
their illegal activities, have taken on particular urgency as 
operations of large-scale criminal organizations in the United States 
and abroad have grown increasingly sophisticated.
  Money laundering and related financial crimes are often inextricably 
tied to the illegal drug trade that has ravaged so many communities in 
rural as well as urban sectors of America. State and local law 
enforcement officials and prosecutors, particularly in less urbanized 
areas, often find themselves overwhelmed by the sheer size and scope of 
the criminal enterprises arrayed against them and encounter particular 
difficulty in following the complex money trails by which these 
organizations conceal and launder their ill-gotten gains.
  Recent law enforcement initiatives have demonstrated that working 
partnerships among Federal, State and local agencies can yield 
impressive results in the fight against drug-related money laundering. 
Perhaps the best example of the benefits of a coordinated law 
enforcement response to money laundering can be found in the Treasury 
Department's successful use of a geographic targeting order, or GTO, in 
1996 and 1997 to combat money laundering in a segment of the money 
transmitter industry in the New York City metropolitan area.
  H.R. 1756 is designed to apply the lessons of the New York GTO to 
other communities in other parts of the country by calling for the 
formulation of a national strategy for combatting money laundering and 
related financial crimes that emphasizes the importance of coordination 
and information sharing among Federal, State and local authorities and 
by singling out localities in which money laundering is particularly 
widespread for increased Federal law enforcement support and financial 
assistance.
  The bill directs the Secretary of the Treasury, in consultation with 
the Attorney General, to assist such localities by providing grants, 
technical assistance and training in information on best practices to 
support their efforts to detect and prevent money laundering and 
related financial crimes.
  In closing, Mr. Speaker, let me say that H.R. 1756 is another example 
of the spirit of bipartisanship and comity that I believe characterized 
the work of the Committee on Banking, Housing and Urban Affairs in this 
particular area. Introduced by the gentlewoman from New York (Ms. 
Velazquez) and approved by the committee by a voice vote, the 
legislation commands broad bipartisan support.
  Companion legislation introduced by the Senator from Iowa, Mr. 
Grassley, is now pending in the other body.
  In addition to congratulating the gentlewoman from New York (Ms. 
Velazquez) in developing and championing this legislation, I would like 
to commend the ranking minority Member, the gentleman from New York 
(Mr. LaFalce), and the gentleman from Minnesota (Mr. Vento) for their 
invaluable assistance in moving this important bill through our 
committee.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would like to begin by thanking the chairman, the 
gentleman from Iowa (Mr. Leach), and the gentleman from New York (Mr. 
LaFalce) for their help in passing this important legislation. I would 
also like to thank Queens District Attorney Richard Brown who was 
helpful in crafting this bill.
  The Money Laundering and Financial Crimes Strategy Act is the result 
of many long years of hard work, and Congress' consideration to date 
marks an important step in the war against crime.
  As we heard earlier, there have been many successful efforts to 
combat money laundering. What many of those stories overlooked is that 
this criminal activity has been a plague in communities, like the one 
that I represent, for years. There are many great local law enforcement 
officials who have been working hard and who have been successful at 
stopping these criminals.
  To many, money laundering seems like something from a spy novel. To 
the families and the communities that I represent, these criminal 
enterprises are a reality. The fact remains that these criminals are 
attracted to low-income and immigrant communities. That is how I became 
involved.
  About 4 years ago, I began working with the Queens District 
Attorney's Office and residents of Jackson Heights in Queens to address 
the growing problem of money laundering in that area.
  There is a section of the Roosevelt Avenue in Jackson Heights that 
law enforcement officials call Ground Zero. That neighborhood is home 
to many hard-working, low-income families. The tragedy is that it is 
also home to hundreds of money wire services that transfers up to $1.3 
billion in illegal drug proceeds to South America.
  While legitimate companies struggle to provide valuable services to 
the families in those neighborhoods, neighborhoods that do not have 
access to banks or other financial institutions, criminals set up shop 
in businesses ranging from beeper outlets to travel agencies to 
convenience stores. Instead of helping to create jobs, economic 
development and a better way of life for my constituents, they bring 
fear, violence and drugs. For that reason, the DA's office approached 
me for help.
  Working with them, I conceived the Money Laundering and Financial 
Crimes Strategy Act. That was 3 years ago. The main goal of my 
legislation is to provide local law enforcement and prosecutors the 
hand they need to combat these criminal syndicates.
  For a moment, just consider the sheer size and changing nature of 
money laundering enterprises. Then consider the burden on local law 
enforcement officials. They need our help.
  Some local police departments and prosecutors are expected to battle 
crime networks with budgets bigger than some States. They must fight 
crime syndicates that can relocate anywhere at any time. For that 
reason, it is time that Washington reach out and become a real partner 
in this war. My legislation directs the Department of the Treasury, in 
consultation with the Attorney General, to develop a national strategy 
to combat money laundering and related financial crimes.

                              {time}  1800

  The strategy would include goals for reducing money laundering as 
well as coordinated regulatory efforts to prevent exploitation of the 
financial sector in the United States. Other elements are operational 
initiatives to improve the detection of money laundering, and 
intergovernmental initiatives and actions to fight these crimes.
  The key component of this legislation is the designation of areas as 
high risk money laundering areas. Any area designated a high risk area 
would be eligible for increased Federal law enforcement assistance and 
access to information sharing. These localities would also be eligible 
for Federal financial crimes grants.
  The Money Laundering and Financial Crimes Strategy Act would bring 
everyone combating these financial crimes to the table for 
consultation. It would also coordinate and strengthen relationships 
formed with those fighting on the front lines. Most importantly, 
greater attention would be paid to areas at high risk of money 
laundering activity. Participation by local law enforcement and even 
the private sector in those areas would be fostered. If localities are 
going to keep winning, we must give them the best tools.
  Mr. Speaker, I yield back the balance of my time.
  Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. In 
conclusion, let me just state that this is a very subtle bill that 
would not be before the House if it were not for the commitment as well 
as the persistence of the gentlewoman from New York (Ms. Velazquez). 
Her hard work and

[[Page H9484]]

thoughtfulness in my judgment deserve very serious commendation in this 
body.
  Mr. LaFALCE. I rise to urge the adoption of H.R. 1756, the Money 
Laundering and Financial Crimes Strategy Act of 1998, legislation 
sponsored by Nydia Velazquez, a distinguished and hard-working Member 
of the Banking Committee.
  Mr. Speaker, in separate legislation considered today in the House, 
Members were asked to support amendments to the Bank Secrecy Act, 
thereby authorizating additional steps to combat money laundering 
activities. As a result of that bill and a host of other amendments to 
the Bank Secrecy Act enacted in recent years, H.R. 1756 is logical and 
much needed because it requires the Secretary of the Treasury to 
develop and implement a national strategy for combating money 
laundering and related financial crimes. Further, to the extent funds 
can be appropriated in the future, H.R. 1756 establishes a federal 
funding program to support efforts by state and local law enforcement 
authorities to investigate and prosecute money laundering practices.
  The adoption of the bill is necessary because I am pleased to report 
to the House that we have reached the point where we need a 
comprehensive strategy specifically focusing on the federal 
government's money laundering initiatives. We have on the books 
significant reporting requirements and numerous deterrence programs. We 
have seen anti-money laundering statutes used as the basis for the 
successful prosecution of criminal and, most recently, we have 
witnessed the use of stings and other investigative tactics designed 
solely to strike at the criminal's ability to legitimize illegal 
profits by washing them through the financial system.
  Because of our success, we must now develop a national strategy to 
ensure that the high demand for the limited resources available to 
combat money laundering are properly targeted to those activities that 
return the best results. H.R. 1756 accomplishes this purposes and 
deserves the full support of the House of Representatives.
  I would be remiss if I did not comment on the role the sponsor of the 
bill has played in the effort to combat financial crime. Congresswoman 
Nydia Velazquez did not sit by when money wire transfer businesses in 
her New York Congressional District were identified as suspected money 
laundering entities, transferring huge amounts of cash into the 
financial system without filing the required reports or taking the 
appropriate actions required by the ``know your customer'' standards. 
Congresswoman Velazquez personally participated in the law enforcement 
effort to shut down the unlawful operations and today's bill is but 
another example of ongoing efforts to protect the residents of her 
Congressional community.
  I also commend Chairman Leach for scheduling the legislation for the 
consideration of the Banking Committee and for working with me to bring 
this important legislation to the floor of the House today.
  I strongly urge the adoption of this much needed legislation.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  The SPEAKER pro tempore (Mr. Miller of Florida). The question is on 
the motion offered by the gentleman from Iowa (Mr. Leach) that the 
House suspend the rules and pass the bill, H.R. 1756, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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