New York Times House and Senate Leaders Clash on Banking Measuree By JOSEPH KAHN and KURT EICHENWALD WASHINGTON -- With some bankers and conservative groups alarmed about
legislation intended to make it harder for terrorists to move money
through the banking system, House and Senate leaders are clashing
about whether to include banking controls in the pending terrorism
bill. Leaders in the Republican-controlled House say broad new rules
designed to crack down on domestic and international money
laundering should be dealt with separately from a bill that would
provide the government with more policing power to combat
terrorism. The Senate has passed a single, comprehensive bill. Democratic
leaders say that they will not take any more action on the overall
bill unless it includes tougher banking rules. Terrorists involved in the Sept. 11 attacks left a long paper
trail of bank accounts, credit cards and money transfers showing
that they used the ordinary banking system with little scrutiny. As
a result, both sides in the debate say the attacks highlight the
need for tougher banking procedures. Money-laundering legislation in
the House and Senate would impose similar mandates on banks to
scrutinize customers and report suspicious activity. It would also
give the Treasury secretary broad powers to track money overseas and
to punish foreign governments that fail to help in the
crackdown. But the urgency of fighting terrorism has not entirely overtaken
a longstanding debate about whether banks are doing enough to make
sure that criminals do not use the international financial system to
help commit crimes. The philosophical differences, people involved in the wrangling
said, were revealed in procedural battles because opponents were
reluctant to formally oppose any measures viewed as vital to
fighting terrorism. Senate Democrats said the banking controls must be considered as
a package with the new terrorism law. Otherwise, Republican
opponents will find a way to delay or kill the provisions, said
Senator Carl Levin, Democrat of Michigan, whose money-laundering
bill was incorporated into the Senate's terrorism bill. "If the bill is separated, it could be the death warrant for our
anti-money laundering legislation," Mr. Levin said. Senator Tom Daschle of South Dakota, the majority leader, has
said repeatedly that there will be no terrorism bill without the
money-laundering measures included. On the House side, Representative Dick Armey, Republican of
Texas, told reporters today that the House will vote on its own
money-laundering bill "no later than tomorrow." But he continued to
reject the Senate strategy of linkage. "We want to deal with them separately," Mr. Armey told
reporters. Though the White House backed the Senate bill when it was
completed last week, it has taken a largely hands-off position on
the tussle between the House and Senate over how to handle the
banking rules. Claire Buchan, a White House spokeswoman, said that the Bush
administration wants the terrorism package become law as quickly as
possible. If the banking rules get in the way of doing that, she
said, then the administration does not oppose handling them
independently. "If it's possible to move them together quickly, then we'd like
to see them together," Ms. Buchan said. "If not, then we'd like to
see the counter- terrorism bill done quickly" and the banking
legislation done shortly thereafter, she said. The neutral position, several lawmakers and Congressional aides
said, reflects a debate within the administration over how strongly
to push the new banking controls. Law enforcement officials,
including Attorney General John Ashcroft, have pushed hard for new
rules that would allow law enforcement officers to scrutinize bank
accounts and have easier access to bank records filed with the
Internal Revenue Service and other federal agencies. Treasury Secretary Paul H. O'Neill and Lawrence B. Lindsey, the
White House economic adviser, often criticized money-laundering
rules as burdensome and ineffective before the Sept. 11 attacks.
Since, Mr. O'Neill has been leading the administration's high
profile campaign to curtail terrorist access to the financial
system. Mr. Lindsey has continued to oppose some new banking measures as
draconian. His office has taken the lead in seeking to work out
differences between House and Senate versions of the terrorism
bills, Congressional staffers and White House officials said. Conservative groups and bankers have lobbied against the
measures, although their approach has been low key relative to the
intensive efforts to kill such legislation in the past. Some 25 conservative leaders organized by the Center for Freedom
and Prosperity sent a letter to President Bush earlier this month
urging him to reject the Senate's money- laundering proposals. They
called the new rules a backdoor attempt to eliminate international
competition in the financial industry and complained that it gave
too much power to the Treasury secretary. Some banking groups, including the influential Texas Bankers
Association, have also pushed House supporters, including Mr. Armey,
to strip some of the most contentious provisions out of the banking
bill, Congressional aides said. "Bankers are very uncomfortable with this bill. It tries to turn
banks into spies for the government," said Bert Ely, a banking
consultant who opposes the new legislation. "But in this
environment, most bankers are very shy about saying
so." Copyright © 2001. New York Times Company. All rights reserved. saved from url: http://www.nytimes.com/2001/10/17/national/17MONE.html
October 17, 2001
FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of criminal justice, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.
