Dirty Money

The New York Times devoted a lot of ink to the Bush Administration's practice of secretly rummaging through international banking transactions in pursuit of terrorists. But, frankly, I had a hard time grasping the scandal.

After all, the Treasury announced it was going to do something like this after 9/ll -- a legitimate, legal method of discovering the networks financing terrorist cells.

So I called an old friend and source for elucidation. Jack Blum is a legendary investigator and lawyer in Washington, who for decades has tenaciously uncovered the global flows of dirty money. Jack confirmed my hunch. He was outraged, but not by the Times revelations.

The scandal here is not government over-reach, he tells me. The scandal is the pitiful reluctance of this administration (and others before it) to get serious about the problem.

Bankers, Blum explained, "have fended off every conceivable rule that would really be effective. Why are we pandering to them if we say we are in such a desperate situation?"

The political influence of bankers tops all other sectors, I learned as a young reporter. Regardless of party or ideology, politicians seek their friendship. So the United States has created a truly bizarre banking code that legalizes--and keeps secret--vast flows of ill-gotten gains. For what purpose? Terrorist financing, yes, but that business is dwarfed by the drug trade profits, insider looting of corporations, offshore tax evasion, securities fraud, plain-vanilla fraud and other uses.

The American dollar is lingua fria for illegal commerce and Congress protects the sanctity of its privacy, even allows it the criminal proceeds to flow freely through government-chartered and regulated financial institutions. This shady business is not an inconsequential profit center for banks (a bit like pornography for Microsoft).

The monitoring system described by the Times seems unexceptional to Blum. Indeed, his complaint is that it's so narrowly focused that it mostly harvests empty information. "Meanwhile, the biggest purveyor of terrorist money, as everyone knows, are accounts in Saudi Arabia," Blum observes. "Nobody will deal with it because the Saudis own half of America." An exaggeration, but you get his point.

Blum knows the offshore outposts where US corporations and wealthy Americans dodge taxes or US regulatory laws. Congress could shut them tomorrow if it chose. Instead, it keeps elaborating new loopholes that enable the invention of exotic new tax shelters for tainted fortunes. The latest to flourish, he says, are shell corporations-- freely chartered by states.

"The GAO says this device is being used for money laundering by everyone else in the world," Blum says. "Congress ought to start there." He is not holding his breath.

My point is, individual privacy deserves vigorous defense against the government. But who is the victim when the government itself shields the criminals and their bankerly accomplices from exposure?.

Comments (27)

1. * From an administration that has put a virtual standstill to enforcement of provisions not to hire illegal aliens, which is the part of the "immigration crisis" that they want to avoid talking about * From an administration that invaded Iraq and turned it into a terrorist breeding area instead of pursuing al-Qaeda in Afghanistan with the full force that could be brought to bear

   Is it any WONDER that they have been lax in chasing up the dirty money?

   I cannot for the life of me work out why the Times would be worked up about this administration getting off its posterior and getting something right for a change. Give credit where credit is due ... this is exactly what they are supposed to be doing, and what they have been telling all of us that they have been doing for years.

   Far from being a privacy scandal, this is something we have every right to expect. No matter how high the risk of catching someone (in either party) with their hands in the cookie jar, chasing the money is the very first thing to do.

   Posted by BruceMcF at 06/23/2006 @ 10:37pm

2. The establishment of the Federal Reserve (which is in reality a banking cartel) institutionalized the fleecing of the American people by the US government.

   Posted by FREIHEIT 06/24/2006 @ 12:38am

   ah yes... the old taxation without representatiion argument

   except, we do have representation.

   admit it freibaby, you just don't think the government should be allowed to tax

   except the constitution gives the govenrnment the power to tax

   Posted by Will C. at 06/24/2006 @ 01:10am

3. maddening isn't it

   Posted by Will C. at 06/24/2006 @ 01:10am

4. Time for PLUNGER to show up with a 2500 word cut & paste from www.mindcontrolprevention.org indicating that the "International Bankers" (of "a certain religious/ethinic origin") are the "responsible ones"!

   Posted by Mask at 06/24/2006 @ 07:19am

5. Posted by MASK 06/24/2006 @ 07:19am

   :O

   Posted by ibbleblibble at 06/24/2006 @ 08:45am

6. http://www.ustreas.gov/cc/ccletterjun07.pdf

   The link is to a letter from Treasury Secretary Lawrence Summers "expressing the administrations strong support for HR 3886, the International Counter Money Laundering Act of 2000" - which failed on a party line vote as we all know.

   Conservatives disgrace - coming here to defend what Conservative policies have done, cracking your dammn jokes, saying ha ha I want to see liberals spout some conspiracy theories for entertainment. Dammn you for what you have done, Conservatives. Screw the banks - financial privacy should be for the little guy, Republicans protect the banks that launder the money. Screw the privacy of the Caymans and the US Banks that operate there to hide money.

   Posted by conshame at 06/24/2006 @ 09:22am

7. Unfortunately (and as usual), the Dems are merely not as egregious as the Repubs in their subservience to the banking lobby; that their noses are simply not as far up the bankers' chocolate highway is nothing to be proud of. If the electorate could be made aware of how hard the Bushies are NOT fighting the Pattycake On Terror, we'd see some changes. But we're back to the same old same-old: Because such a large percentage of Americans are gullible morons, addicted to shopping and celebrity culture, and forever voting against their own best interests, the fundemental problems of justice and fairness (like the ability of the banking industry to dictate banking legislation) will never be addressed.

   Posted by bookmanjb1 at 06/24/2006 @ 10:37am

8. Time for PLUNGER to show up with a 2500 word cut & paste from www.mindcontrolprevention.org indicating that the "International Bankers" (of "a certain religious/ethinic origin") are the "responsible ones"!

   Posted by MASK 06/24/2006 @ 07:19am

   Go for it, Mask...

   Tell us all about how the Federal Reserve System works, who actually controls it and why it is that Alan Greenspan was preaching the benefits of switching from a fixed rate mortgage to an ARM when interest rates were at their lowest, knowing full well that he was going to trap 50% of the American Public in adjustable rate financing just in time to send interest rates to the moon - in order to fight the inflation that he caused.

   Tell us everything you know about the Fed, Mask.

   Posted by plunger at 06/24/2006 @ 12:06pm

9. http://moneycentral.msn.com/content/P73977.asp

   "In a rare evaluation of interest-rate options that households face, Federal Reserve Chairman Alan Greenspan questioned whether American homeowners are well served by popular fixed-rate long-term mortgages."

   Turning to a more objective analysis in The New York Times of Feb. 24, titled "Greenspan says personal debt Is mitigated by housing value,"

   "Bankruptcy rates are not a reliable measure of the overall health of the household sector," Greenspan said, "because they do not tend to forecast general economic conditions."

   So the most irresponsible central banker in the history of the world created the biggest bubble in the history of the world, which had disastrous consequences for the stock market and the economy. In order to ameliorate that, he has created bubble-like conditions and absurd financing schemes in real estate.

   Posted by plunger at 06/24/2006 @ 4:12pm

10. Look before you leap on Greenspan's ARM plug

    March 4, 2004

    BY TERRY SAVAGE SUN-TIMES COLUMNIST

    Don't follow Alan Greenspan's advice! The Federal Reserve chairman isn't supposed to forecast interest rates, but there he was last week, warning home buyers against fixed-rate mortgages and promoting adjustable-rate mortgages to achieve financial "flexibility." Instead, it's likely he's luring many households into financial disaster.

    So why would he lead homeowners into a trap that could cost them plenty of money if long-term interest rates rise in the coming years?

    A record of mistakes

    Greenspan has a track record of forecasting mistakes. For instance, in 1990 he said, "I see no recession on the horizon." That was just before a very tough recession. Also of note, in the early 1970's, Greenspan went on record as saying there was no reason for gold to trade over $32 an ounce. Gold subsequently soared over $800 an ounce.

    Every forecaster makes mistakes. But now Greenspan is advising homeowners to play the interest-rate market by taking on adjustable-rate mortgages. He also stated that he's not worried about American household balance sheets, in spite of record bankruptcies, because rising real estate prices bolster consumer finances. That's the logic that produced the stock market bubble.

    What if Mr. Greenspan is wrong again? What if interest rates rise? Home values will fall. And the burden of adjustable-rate mortgages will be huge.

    March 6, 2000 -- four days before the all-time peak in the Nasdaq index and the subsequent meltdown -- he was publicly extolling the virtues of the new era in technology.

    http://www.mtgprofessor.com/A%20-%20ARMs/does_greenspan_favor_arms.htm

    March 8, 2004

    "I wonder what you thought of Fed Chairman Greenspan's statements that mortgage borrowers could save a lot of money if they opted for adjustable rate mortgages (ARMs) rather than fixed-rate mortgages (FRMs)?"

    While the Chairman's remarks were carefully hedged, he certainly seemed intent on conveying the view that more borrowers should select ARMs. He made two arguments, neither of which withstand close scrutiny.

    ___________________________

    Clearly - Greenspan's timing and his advice have been designed specifically to screw everybody but the BANKSTERS.

    No surprise there.

    Posted by plunger at 06/24/2006 @ 4:21pm

11. Plunger, I think you are conflating central reserve banking in general and the right wing "fight inflation first, promote growth last, fight unemployment never" central reserve banking.

    Posted by BruceMcF at 06/24/2006 @ 6:36pm

12. ah yes... the old taxation without representatiion argument

    except, we do have representation.

    except the constitution gives the govenrnment the power to tax

    Posted by WILL C. 06/24/2006 @ 01:10am | ignore this person

    We don't really have representation in the Federal Reserve. The Federal Reserve System (in spite of its name) is a private banking interest. Members of the Federal Reserve Boards are not elected, they are appointed. We used to do the same with the US Senate, but then the people actually got enough power to make them have to be elected. We should at least get to elect the Fed Reserve board members.

    The constitution specifically states that only Congress may print money (via the US Treasury), yet the Federal Reserve notes are printed by a private banking organization. We are foolishly paying interest on the money the government borrows from the Federal Reserve rather than printing our own money interest free.

    Posted by bjkron at 06/24/2006 @ 7:26pm

13. Posted by BJKRON 06/24/2006 @ 7:26pm

    The federal reserve act was inacted by congress. George Bush just appointed a new fed chairmen. His hamster congress just approved the new fed chairman. The people who did these things are elected by the people of the United States of America... and are your representation.

    If anybody doesn't like what your representation is doing... change it.

    By the way, thanks for pointing out just one more example why talk the talk hamster conservatives are um... just talk.

    they claim to be strict constructionists but guess what?

    That's only for abortion.

    Posted by Will C. at 06/24/2006 @ 7:50pm

14. Posted by PLUNGER 06/24/2006 @ 12:06am | ignore this person

    Tell me something, PLUNGE....all those "International Bankers"...

    Do they go to "church" on Sundays?.....or...uh...Saturdays?

    To the rest here, how long have the conspiracy nuts been on about the "Federal Reserve" now?....forty, fifty years? I seem to remember the John Birch Society was "anti-Federal Reserve", anybody got anything older than that?

    Posted by Mask at 06/25/2006 @ 09:25am

15. PLUNGER,

    Thanks for keeping your posts short on this thread. Now I actually read them, instead of just scrolling past...

    Posted by ILOVEPHYSICS at 06/25/2006 @ 12:57pm

16. We are foolishly paying interest on the money the government borrows from the Federal Reserve rather than printing our own money interest free.

    Posted by BJKRON 06/24/2006 @ 7:26pm

    Yeah, just what I want: The George W. "I can't borrow $ fast enough!" Bush's Dept. of the Treasury printing its own money.

    Children, can you say "hyperinflation"? I knew you could...

    Posted by ILOVEPHYSICS at 06/25/2006 @ 12:59pm

17. Note that MASK seems to have no ability to articulate what the Federal Reserve is or whom it serves. He was quick to mention that matter of religion for some reason, but failed to shed any "light" on the subject at hand.

    Posted by plunger at 06/25/2006 @ 1:11pm

18. Fact or fiction? Creature From Jekyll Island; A Second Look at the Federal Reserve

    Posted by dycel8r at 06/25/2006 @ 1:30pm

19. Speaking of protecting dirty money, I'd like to mention a really spectacular lapse in the government's history of monitoring financial transactions. The insider trading that took place in the days before 9-11 is smoking-gun evidence of specific foreknowledge of the attacks. Who were these people? The fact that the question was never asked, let alone answered - is surely one of the simplest and most obvious indicators of some level of involvement of the Bush administration. A government interested in pursuing the real terrorists should have begun any serious investigation with forcing disclosure of the identities of the traders. In a long and uninvestigated list of no-brainer, unasked, and unanswered questions regarding 9-11, that one really stands out. In the aftermath of the 9-11 attacks, any government that wanted that information could have had it with one phone call. If Bush were even mildly interested in looking for real "terrorists," he would have started there. Would someone please, please stand up and ask him why he didn't?

    Posted by rrooks at 06/25/2006 @ 2:44pm

20. Marx said that hyperinflation, credit inflation were permanent features of the capitalist economy once it began to move towards expansion and empire. I was just studying through chapters 4-8 of the first volume of Capital, where he lays it all out, especially the trend towards debt service economy as a feature of late capital. Of course, Marx is completely disproven just because the stalinist bastardization of his economic thinking collapsed, so never mind. I suppose people who dismiss Marx's are much akin to people who dismiss Jefferson just because his agrarian ideal of yeoman farmers and democracy didn't pan out, but gee, obviously if everything a political economist comes up with isn't correct, everything that person thinks is wrong, yes?

    In any event, all the fuss about the Federal Reserve is an old argument, one which political economists were breaking down a lot more concretely 12 decades ago. Certainly a lot more concretely then the damn Federal Reserve ever will.

    Posted by JRJunior at 06/25/2006 @ 4:25pm

21. The problem is nicely stated. The solution undisclosed.

    I suggest this problem, and a laundry list of others, could be quickly resolved by a total change in the way government revenues are presently raised, whichg is by taxes on individuals, corporations and consumers, all managed at a terrible price to the suffering taxpayers. If, instead, we taxed the flow of money as it passes through the economy, that flow would become completely transparent and, at an incrementally tiny .25% tax automatically collected by computer from each financial transaction of every nature whatsoever, this and that laundry list of problems, including saving Security, paying off the National Debt, saving Medicare, politicians on the take -- you name it -- would disappear.

    Lew Warden

    Join The Howard Beale Memorial Society. Denounce the Hypocrisies of Our Times. Get Mad! Fight Back! Get Even! See http://www.networkcentralca.net/

    Posted by Lew Warden at 06/25/2006 @ 5:30pm

22. The problem is nicely stated. The solution undisclosed.

    I suggest this problem, and a laundry list of others, could be quickly resolved by a total change in the way government revenues are presently raised, whichg is by taxes on individuals, corporations and consumers, all managed at a terrible price to the suffering taxpayers. If, instead, we taxed the flow of money as it passes through the economy, that flow would become completely transparent and, at an incrementally tiny .25% tax automatically collected by computer from each financial transaction of every nature whatsoever, this and that laundry list of problems, including saving Security, paying off the National Debt, saving Medicare, politicians on the take -- you name it -- would disappear.

    Lew Warden

    Join The Howard Beale Memorial Society. Denounce the Hypocrisies of Our Times. Get Mad! Fight Back! Get Even! See http://www.networkcentralca.net/

    Posted by Lew Warden at 06/25/2006 @ 5:35pm

23. Posted by PLUNGER 06/25/2006 @ 1:11pm | ignore this person

    Geez, PLUNGE....why go over the bleedin' obvious?

    How many Jewish International Bankers do I have to name?

    Posted by Mask at 06/25/2006 @ 8:13pm

24. RROOKS

    Got info? Sounds intriguing

    Posted by leftofcenter at 06/26/2006 @ 12:28am

25. Today is "Clean Money Day".

    Go to the Common Cause website or BraveNewFilms.org to find a local screening of "The Big Buy", Robert Greenwald's doc about Tom Delay, and the role he played in selling off our democracy.

    Get off your ass and get together in real time with real, like-minded people to discuss and further the notion of restoring our democratic process.

    We can well afford to leave this site and let the wingers wank on each other for an evening.

    Posted by drhammer at 06/27/2006 @ 07:29am

26. FREIHEIT

    I'd be interested in knowing if Mr Greider thinks the money HE received from the Rockefellers for writing his Federal Reserve whitewash, "Secrets of the Temple", is dirty money too?

    After all, Rockefellers were also behind funding the Council on Foreign Relations whose founder was Col. Edward Mandel House, Wilson's alter ego and an admitted socialist with delusions of "administrative" grandeur. He helped push Wilson into signing the 1913 Fed Reserve Act.

    Read "Wilson's War" for the wake up call the "sleepy" American citizenry sorely needs. The citizenry that the majority of which can't name all three branches of their own Govt.

    Will C is bereft any intellectual honesty regarding taxation - Americans are historically & economically ignorant. The Fed AND taxation came just in time to finance WWI that Wilson had promised we would NOT enter.

    Here's that scoop, long well spun, or never mentioned, by self interested educrats or the MSM parasites for which Govt provides them the lion's share of their copy.

    "Merchants of Death" revisited: Armaments, Bankers and the First World War http://www.mises.org/journals/jls/19_1/19_1_4.pdf

    The rest of these links are just excellent for filling in those educational holes left by our inglorious public educrats. Every American should be aware of the considerable and not widely known truths in them:

    The State as an Organization (video) terrific! http://www.mises.org/multimedia/video/asc2006/asc06-Rozeff.wmv

    Taking money back (completely logical and constitutional) http://www.mises.org/rothbard/moneyback.asp

    How Progressives Rewrote the Constitution (video) http://www.cato.org/realaudio/cbf-02-15-06.ram

    The Issue of Tariffs: How U.S. Revenue Collection Was Turned Inside-Out (video) http://mises.org:88/Sophocleus

    Size Matters: How Big Government Puts the Squeeze on America's Families, Finances, and Freedom And Limits the Pursuit of Happiness (video) http://www.cato.org/realaudio/cbf-02-02-06.ram

    Big Business and the Rise of American Statism (exc. essay) http://praxeology.net/RC-BRS.htm

    The Founding of The Federal Reserve (video) http://mises.org:88/Rothbard-Fed

    The Great Depression, World War II, and American Prosperity, Part I (video) http://www.mises.org/multimedia/video/Woods/Woods5.wmv

    Secrets of the Federal Reserve (the web of power is phenomenal) http://www.barefootsworld.net/fs_m_ch_01.html

    Jackson's 2nd Bank US VETO (very important - what he correctly and constitutionally opposed is just what we ended up with in 1913) http://alpha.furman.edu/~benson/docs/ajveto.htm

    "The Separation of Commercial and Investment Banking: The Morgans vs. the Rockefellers" (the true thieves of the taxpayers and absconders of the const) http://www.mises.org/journals/qjae/pdf/qjae1_1_1.pdf

    Bureaucracy and the Civil Service in the United States http://www.mises.org/story/2181

    The Case of Government Retirement Programs http://www.mises.org/story/2196

    Posted by marxbites at 06/28/2006 @ 10:13am

27. ZERO

    Our dollar is currently worth 3% of it's 1932 value, all due to the Fed which collects interest income for it's PRIVATE shareholders which up to 1/3rd are foreigners.

    The elites who fought ceasely from America's beginnings for a privately owned central bank (the world's largest Banking houses) are the same ones who wrote the Fed Reserve Act in total secrecy. One has to ask why it was secret at all?

    Edward Griffin's "The Creature from Jekyll Island" puts the LIE to Greider's Fed whitewash "Secrets of the Temple" published for Rockefeller by Rockefeller. IOW's, he's a political water boy of the limosine elites.

    Posted by marxbites at 06/28/2006 @ 10:26am