[Congressional Record Volume 144, Number 148 (Friday, October 16, 1998)]
[House]
[Pages H11029-H11031]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MONEY LAUNDERING AND FINANCIAL CRIMES STRATEGY ACT OF 1998
Mr. BACHUS. Mr. Speaker, I move to suspend the rules and concur in
the Senate amendment to 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 crime strategy to combat money
laundering and related financial crimes, and for other purposes.
The Clerk read as follows:
Senate amendment:
Page 2, strike out all after line 20, over to and including
line 3 on age 3 and insert:
``(2) Money laundering and related financial crime.--The
term `money laundering and related financial crime'--
``(A) means the movement of illicit cash or cash equivalent
proceeds into, out of, or through the United States, or into,
out of, or through United States financial institutions, as
defined in section 5312 of title 31, United States Code; or
``(B) has the meaning given that term (or the term used for
an equivalent offense) under State and local criminal
statutes pertaining to the movement of illicit cash or cash
equivalent proceeds.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Alabama (Mr. Bachus) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Alabama (Mr. Bachus).
General Leave
Mr. BACHUS. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 1756.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Alabama?
There was no objection.
{time} 1330
Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 1756 is the Money Laundering and Financial Crimes
Strategy Act of 1998. It was introduced by the gentlewoman from New
York (Ms. Velazquez), the gentleman from Iowa (Mr. Leach) and myself,
and it directs the Secretary of the Treasury to create a national
strategy for combating money laundering and other financial crimes by
coordinating money laundering and other financial crimes. It also
supplies resources to Federal, state and local agencies in the
coordination of their efforts.
I would explain to Members what is so important about money
laundering. Money laundering is the flip side of narcotics trafficking.
When we talk about the war on drugs, when we talk about our efforts
against drugs, some people do not realize that it is a two-way street.
On the TV we observe pictures of large amounts of drugs being seized,
of drugs being destroyed, of them being intercepted, and, in fact, we
have been very successful in seizing a great percentage of the drugs
coming into this Nation.
Where we have failed, where we have not addressed the problem that
needs to be addressed, is in money laundering. When drugs are sold, for
them to be profitable to the money launderers and the drug cartels
overseas, they not only have to sell their product, they have to reap
their profit. That means that the money must flow back out of the
country. They must get the money back out.
In fact, law enforcement agencies and policy makers tell us that if
you want to hit the drug cartels where it hurts the worst, you do not
seize the drugs, because there is an endless supply of that; you seize
the money. And that is what this new strategy is about. Unfortunately,
we estimate we are seizing less than 1 percent of drug proceeds money,
and, therefore, this legislation I think is going to be a hallmark and
really a nail in hopefully the coffin of drug cartels overseas which
are preying on our young men and women on the streets of America.
The legislation provides for the designation of high risk money
laundering areas for the purpose of providing those localities with
increased Federal attention and funding for state and local law
enforcement efforts.
We had a pilot project in New York City in the district of the
gentlewoman from New York (Ms. Velazquez), who, I am sure, will cover
this in more detail. But to tell you about the gravity of this
situation, this effort was headed up by the New York police, the city
police, New York State police, Customs. In a short period of time, over
$1 billion of money transfers to Colombia were intercepted during this
effort. I am not talking about $1 million, I am not talking about tens
of millions of dollars. Over $1 billion in transfers were intercepted.
So that gives you some idea about the magnitude of this problem.
Now, the House passed this measure earlier this month by voice vote.
On Wednesday, the Senate passed it with an amendment, again by
unanimous consent. The Senate amendment is relatively modest in scope.
I think it improves the bill, and I have been asked by Members of the
Committee on the Judiciary and the Committee on Commerce to explain
that amendment for the record.
As passed by the House, this act provided that the Secretary of the
Treasury's authority to develop a national strategy for combating money
laundering and related crimes extended to all potential violations of
title 18, sections 1956 and 1957. Those sections are the basic criminal
money laundering provisions of our Federal law, and they contain more
than 100 predicate offenses involving crimes as varied or desperate as
obscenity and arms control export violations.
The Federal Bureau of Investigation raised concerns that the shear
breadth of the criminal conduct covered by these two sections, 1956 and
1957, might complicate the Treasury Department's ability to develop a
coherent national strategy for combating money laundering and in
allocating scarce law enforcement resources to initiatives undertaken
at the state and local level.
In response to that, we in the House, the gentlewoman from New York
(Ms. Velazquez), requested and the Senate conceded and actually offered
an amendment, and also the Senate was very supportive of this amendment
and amended the bill to provide that the national strategy should be
directed at the movement of elicit cash or cash equivalent proceeds
into, out of and through the United States, or into, out of and through
United States financial institutions, because many of these are
electronic transfers, rather than directing the scope to the more broad
offenses delineated in title 18 and other portions of the U.S. Code. We
all agree this is a good amendment that strengthens the bill.
I also want to, at the request of the Committee on Commerce, take
this opportunity to clarify the legislative intent behind another
provision of H.R. 1756, and that is section 2.
[[Page H11030]]
Section 2 amends chapter 53 of title 31 of the U.S. Code to direct
the Secretary of the Treasury to regularly review enforcement efforts
under the chapter and under the subchapter and other provisions of the
law, and, when appropriate, modify existing regulations or prescribe
new regulations for the purposes of preventing money laundering and
related financial crimes.
On June 25, 1998, the distinguished chairman of the Committee on
Commerce, the gentleman from Virginia (Mr. Bliley) wrote to the
gentleman from Iowa (Mr. Leach), the gentlewoman from New York (Ms.
Velazquez) and myself, to express concern that such a broad mandate
could be interpreted to authorize the Secretary of the Treasury to
review enforcement actions under the Federal securities laws or to
modify regulations promulgated pursuant to Federal security laws or to
grant the Secretary of Treasury new or additional authority to
prescribe regulations applicable to entities that are regulated
pursuant to the Federal securities law.
In response, the gentleman from Iowa (Mr. Leach) affirmed that it is
not the Committee on Banking and Financial Services's intent for the
language in section 2 to grant the Secretary of Treasury any new or
additional authority over entities that are regulated pursuant to the
Federal securities law or to require or encourage the Secretary of the
Treasury to review enforcement actions under the Federal securities
law, or to modify or recommend the modification of regulations
promulgated under the Federal securities laws. That response has been
accepted.
Mr. Speaker, in closing I want to emphasize that H.R. 1756 is an
excellent example of the spirit of bipartisanship and comity that has
historically characterized the Committee on Banking and Financial
Services's deliberation on anti-money laundering initiatives.
We do hear a lot of partisanship and wrangling in this body. That is
not always the case. In bringing this bill before both the House and
the Senate, Democrats and Republicans have joined together, they worked
closely with the administration, and the result has been a nonpartisan
or bipartisan effort, which we believe will go a long way in combating
illegal drugs and money laundering.
The gentlewoman from New York (Ms. Velazquez) should be particularly
commended for her work, and by this I mean her hard work on this
matter. She has been a big help in dealing with the law enforcement
agencies.
In addition, I would like to commend and give special recognition to
the gentleman from Iowa (Chairman Leach) and to the ranking minority
member, the gentleman from New York (Mr. LaFalce) for their efforts in
moving this important bill through the Committee on Banking and
Financial Services.
Also I want to commend members of the Subcommittee on General
Oversight and Investigations staff for their hard work on money
laundering in this Congress.
An example of the administration and the Congress working together on
this bill is that Dave Cohen from my staff, who basically worked with
Ms. Velazquez on a daily basis in the particulars of this bill, as a
result of working with Customs, he is no longer with the subcommittee.
He was in fact hired by Customs, which sort of pays us a compliment to
his ability. Dave, within the last month, has taken the position as
assistant to the Commissioner, Ray Kelly, at Customs. So I think that
ought to be a compliment to the entire Congress and to the staff that
worked on this bill.
In addition, I would like to compliment the legal staff that worked
on this bill. Jim Clinger, the Clinger name is a name that most of us
in Congress recognize. His father, Bill Clinger, served in this body
with distinction. Jim Clinger and Win Yerby, legal counsel for the
majority, worked closely on this bill. I am particularly pleased that
Win Yerby is a native Alabamian.
On the democratic side, Rick Maurano, who is seated at the table with
Ms. Velazquez, also did yeoman's work on this bill. Again, this was a
totally nonpartisan effort.
As Chairman of the Subcommittee on Oversight and Investigations, I
will say in closing that I have had six money laundering hearings. In
fact, money laundering has been the central focus of the subcommittee's
work, because I see it as one of the most important responsibilities of
the Committee on Banking and Financial Services Subcommittee on General
Oversight and Investigations. The reason I do is because the threat
that narcotic drugs has in every community, in every state, in every
locality, to us, to the integrity of our law enforcement agencies, and
to the safety and welfare of our citizens.
As I said, again, thanks to the gentlewoman from New York, this bill
will go a long way in hitting the drug cartels where it hurts the
worst, in the pocketbook.
Mr. Speaker, H.R. 1756, the Money Laundering and Financial Crimes
Strategy Act of 1998, introduced by the gentlelady from New York, Ms.
Velazquez. Chairman Leach, Representative Gonzalez, and myself, directs
the Secretary of the Treasury to create a national strategy for
combating 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
attention and funding for State and local law enforcement efforts.
The House passed this measure earlier this month by voice vote, and
on Wednesday, the other body passed it with an amendment by unanimous
consent. The Senate amendment is relatively modest in scope.
As passed by the House, H.R. 1756 provided that the Secretary of the
Treasury's authority to develop a national strategy for combating
``money laundering and related crimes'' extended to all potential
violations of 18 U.S.C. sections 1956 and 1957, the basic criminal
money laundering provisions, which themselves contain more than 100
predicate offenses involving crimes as disparate as obscenity and arms
control export violations. After the Federal Bureau of Investigation
raised concerns that the sheer breadth of criminal conduct covered by
sections 1956 and 1957 might complicate the Treasury Department's
ability to develop a coherent national strategy for combating money
laundering and to allocate scarce law enforcement resources to
initiatives undertaken at the State and local levels, the Senate
amended the bill to provide that the national strategy should be
directed at the ``movement of illicit cash or cash equivalent proceeds
into, out of or through the United States, or into, out of or through
United States financial institutions,'' rather than at the specific
underlying offenses delineated in title 18 and other portions of the
United States Code.
Mr. Speaker, I also want to take this opportunity to clarify the
legislative intent behind another provision of H.R. 1756. Section 2 of
the legislation amends chapter 53 of title 31 of the United States Code
to direct the Secretary of the Treasury to ``regularly review
enforcement efforts under this subchapter and other provisions of laws
and, when appropriate, modify existing regulations or prescribe new
regulations for purposes of preventing'' money laundering and related
financial crimes. On June 25, 1998, the distinguished chairman of the
Committee on Commerce, Mr. Bliley, wrote to Chairman Leach to express
the concern that ``such a broad mandate could be interpreted to
authorize the Secretary of the Treasury to review enforcement actions
under the Federal securities laws or to modify regulations promulgated
pursuant to the Federal securities laws, or to grant the Secretary of
the Treasury new or additional authority to prescribe regulations
applicable to entities that are regulated pursuant to the Federal
securities laws.''
In response, Chairman Leach affirmed that it is not the Banking
Committee's intent for the language in section 2 to grant the Secretary
of the Treasury any new or additional authority over entities that are
regulated pursuant to the Federal securities laws, or to require or
encourage the Secretary of the Treasury to review enforcement actions
under the Federal securities laws or to modify, or recommend the
modification of, regulations promulgated under the Federal securities
laws.
In closing, Mr. Speaker, let me emphasize that H.R. 1756 is an
excellent example of the spirit of bipartisanship and comity that has
historically characterized the Banking Committee's deliberations on
antimoney laundering initiatives. The gentlewoman from New York Ms.
Velazquez, should be particularly commended for her hard work on this
matter. Special recognition should also be accorded to Chairman Leach
and to the ranking minority member, Mr. LaFalce for their efforts in
moving this important bill through the Banking Committee. I also want
to commend members of the Banking Oversight Subcommittee for their hard
work on money laundering in this Congress. As chairman of the Oversight
Subcommittee, I have made money laundering a central focus of the
subcommittee's work because I see it as one of the most important
responsibilities of the Banking and Financial Services Committee.
[[Page H11031]]
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 again thanking the gentleman
from Iowa (Mr. Leach), the gentleman from New York (Mr. LaFalce), and
the gentleman from Alabama (Mr. Bachus) for all their work on this
legislation. Also I would like to recognize the work that for the last
four years my legislative director, Catherine Cruz Wojtasik, has been
doing on this legislation.
This bill proves that crime fighting is a bipartisan issue. Today's
Money Laundering and Financial Crimes Strategy Act is the same anti-
money laundering legislation that passed the House last week. Technical
changes were made by the Senate that will broaden the definition of
money laundering. These changes are endorsed by the Treasury
Department, the Justice Department, the FBI and the local district
attorneys in New York City.
In the expanded definition we allow Federal, state and local law
enforcement officials to keep up with the changing trends in money
laundering. It will provide police officers and prosecutors with the
tools that they need to effectively combat large and sophisticated
crime syndicates.
The Money Laundering and Financial Crimes Strategy Act is an
important step in helping communities fight drug traffickers that
launder money in their neighborhood. I urge all Members to support this
bill.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to say in conclusion that Catherine Cruz
Wojtasik did work very hard on this bill. I think it shows that the
gentlewoman from New York (Ms. Velazquez) has assembled a good staff,
and I would like to commend Ms. Cruz Wojtasik on her work on the bill.
{time} 1345
Mr. Speaker, I apologize for that oversight.
Mr. BACHUS. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Brady of Texas). The question is on the
motion offered by the gentleman from Alabama (Mr. Bachus) that the
House suspend the rules and concur in the Senate amendment to H.R.
1756.
The question was taken; and (two-thirds having voted in favor
thereof) the rules suspended and the Senate amendment was concurred in.
A motion to reconsider was laid on the table.
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