Dallas Morning News
September 27, 2001


Senate Pledges Fight Against Terrorist Money-Laundering


By ROBERT DODGE

WASHINGTON -- Senators from both sides of the aisle pledged Wednesday to expedite legislation that would make it difficult for terrorists to launder money through financial institutions.

While Senate Banking Committee Chairman Paul Sarbanes, D-Md., said there are enough money-laundering proposals available to craft a bipartisan bill, Sen. Phil Gramm, R-Texas, said he wanted a chance to craft his own version. Mr. Gramm, the ranking Republican on the committee, wants assurances that U.S. banks' foreign assets will adequately be protected.

Mr. Sarbanes said the committee will move quickly on the anti-money-laundering proposal.

"It is more urgent now than ever before for us to develop and put in place ... tools necessary to trace and interdict the funds on which terrorists like Osama bin Laden rely to pay for their operations," he said.

Renewed congressional interest in money laundering issues came two days after President Bush ordered U.S. financial institutions to freeze any assets belonging to groups and individuals associated with Mr. bin Laden, the prime suspect in the Sept. 11 terrorist attacks on New York and Washington.

A Justice Department official said the administration's anti-terrorism proposal would contain anti-money-laundering provisions. But banking committee members from both parties said they want to work on a proposal of their own.

Mr. Gramm said he wants to be the lead sponsor of a bipartisan proposal and has met with Treasury Secretary Paul O'Neill to discuss content. And Mr. Gramm warned that he would oppose any legislation that did not contain sufficient safeguards for civil liberties.

Specifically, Mr. Gramm is concerned with giving the government the power to seize the foreign financial assets of U.S. banks.

Last year, when Mr. Gramm was chairman of the banking committee, he killed a proposal that granted such powers. Mr. Gramm said the bill, while approved by the House, did not give banks a method to protect their assets or sufficient time to assert their innocence.

"There are some people who believe that the way you deal with problems is to give government massive unilateral power," Mr. Gramm said. "And that just violates the Constitution, for one thing. And that's not what we need to fight terrorism."

Before assets are seized, Mr. Gramm said, banks should have a chance to rebut money-laundering allegations. If the case involves issues of national security, he said, a federal judge could view the treasury findings in private.

"If the secretary of the treasury is going to make a unilateral decision to force American banks to shut down their operations in another country, the secretary should be required to issue findings which are potentially rebuttable in court," Mr. Gramm said.

Sen. John Kerrey, D-Mass, said he agreed with Mr. Gramm that civil liberties must be protected: "It is time to get tough – tough but fair."

Many of the proposals were originally intended to thwart money laundering involving drugs, gambling, firearms and other illicit activities. The terrorist attacks have created a new sense of urgency.

"They cannot exist and survive and flourish if they can't fund their activities," said Michael Chertoff, an assistant attorney general.

Copyright 2001. Dallas Morning News . All rights reserved.

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