"The goal of this bill is to strike at drug traffickers where they feel it the most, in their pocketbooks," Grassley said. "To protect American citizens, the federal government must take all necessary steps to prevent drug traffickers, organized crime and terrorist groups from receiving the profits of their illegal activities."
Specifically, the bill Grassley introduced today with Sen. Alfonse D'Amato of New York would require the President of the United States to consult with the U.S. Attorney General, various federal law enforcement officials and individuals involved in financial institutions and financial market regulations to develop a comprehensive strategy to fight billion dollar money laundering crimes. The strategy must include:
"A big part of the strategy advocated by this bill is to target problem areas. The bill would require government officials to identify the specific criminal activity that affects the specific geographic areas, payment systems and financial institutions with the greatest potential to be abused by criminals," Grassley said. The bill would authorize the Treasury Secretary to establish High Risk Money Laundering Zones. These areas would be eligible for increased federal law enforcement assistance and federal financial crimes grants.
Grassley said this bill -- the Money Laundering and Financial Crimes Strategy Act of 1997 -- represents an important battlefront in the war on drugs because money laundering provides the resources for drug dealers, terrorists, arms dealers and other criminals to operate and expand their criminal enterprises.
Today, experts estimate that money laundering has grown into a $300 billion program worldwide, with $40-80 billion of that in the U.S. drug trade alone. Money laundering involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Through money laundering the criminal transforms the monetary proceeds derived from the criminal activity into funds with an apparently legal source.
Grassley serves as Chairman of the Senate Caucus on International Narcotics Control. The bill he introduced today with D'Amato also is sponsored by Sens. Dianne Feinstein of California, Tim Hutchinson of Arkansas, and Bob Graham of Florida. A companion measure was introduced in the House of Representatives by Rep. Nydia M. Velazquez of New York, with the support of Rep. Jim Leach of Iowa. The bills have been directed to the respective banking committees for consideration.