Financial crime-fighter sees banks as allies.

Bankers, get ready: The government is about to enlist you in the fight against money laundering.

Stanley E. Morris, appointed May 16 as director of Fincen, the Treasury Department's Financial Crimes Enforcement Network, is the newest leader in the war. His goal is to form a partnership between the Treasury and the banking industry.

In return for their help, banks can expect somewhat lighter paperwork.

"In this partnership we don't want the banking industry to be.. filling out forms" just by rote, he said in a recent interview. "We do want them to do what they do well, which is assess their customers, understand what kinds of activities are clearly appropriate, and those that are highly suspicious."

Expert Help

In April, the Treasury showed that it wanted outside help by creating the Bank Secrecy Act Advisory Board, whose 30 public and private members include many bankers. Its goal is to tap more resources to fight financial crime.

"It is clear to me that the expertise of how the money flows is with the people in the money business," Mr. Morris said.

Previously chief of staff to Ronald K. Noble, the assistant Treasury secretary for enforcement, Mr. Morris has a reputation as a hard-hitting crime fighter. From 1989 to 1991, he was deputy director to drug czar William Bennett. And before that, he had been director of the U.S. Marshals Service.

The enforcement network, established in 1990 to collect financial crime data, has a direct link to banks through currency transaction reports, suspect-transaction referrals, and other industry data.

Not just a run-of-the-mill data base, the network is a highly sophisticated system that recently helped the Central Intelligence Agency nab Russian spy Aldrich Ames and provided evidence against the convicted World Trade Center bombers.

Mr. Morris, 52, is still too young to be called an elder statesman, but he's on his way. He has, after all, worked in the Ford, Carter, and Bush administrations, as well as this one.

He said his current mission, fighting money laundering, is the most exciting area in law enforcement today. And it's the best time to link the banking industry and the Treasury, he said, because it's been obvious for a long time that banks have a clear advantage in catching money launderers. Criminals go to banks - not to the government. But the relationship between banks and the feds was too combative in the '70s and '80s for an alliance to be feasible, Mr. Morris said. Now, banks are more willing to accept the responsibility, and agencies are more sensitive to the way banks operate.

"The time is right," Mr. Morris said. "There's a new administration, and we have a secretary [Lloyd Bentsen] who wants to deal with the problem. We want not just commitment; we want help."

Banks must develop formal plans to monitor customer activity. While most banks already have some kind of "know your customer" guidelines, these would be official rules. They are expected this fall. The Treasury is now trying to figure out how specific the rules should be, Mr. Morris said. "We're leaning more toward a general regulation," he said.

Mr. Morris also plans to invite bank executives to spend a month or so at the enforcement network to learn by sharing stories and strategies.

A Window of Opportunity

John Byrne, senior counsel at the American Bankers Association and a member of the BSA advisory group, said bankers should weigh in now, before changes arc made. "We have a window of opportunity that has never been offered to us before," he said last week at the ABA's National Regulatory Compliance Conference in Washington.

But if the government is going to ask banks to work harder to catch crooks, it's only fair to cut back on paperwork, Mr. Morris said. The Treasury may soon drop a requirement that banks record all sales of monetary instruments, such as cashier's checks and travelers checks, that exceed $3,000. "The regulations go well beyond the... law," he said.

The agency also is overhauling the exemption process for currency transaction reports.

Currently, exemption rules are so confusing that banks don't know who they must report on, Mr. Morris said. In fact, the single largest group of CTRs are filed on the U.S. Postal Service, though banks have every right to exempt post offices, he said.

"You have to be trained as a Jesuit scholar to work your way through the exemption system," he said.

"The goal of Fincen is to not constantly be two steps behind the bad guys," he said. "We used to be six steps behind. I think we're gaining, but I don't think we've caught up."BORN: Feb. 17. 1942, Hayward, Calif. TITLE: Director, Financial Crimes Enforcement Network CAREER: 1992 too 1994. chief of staff for Ronald K. Noble. Treasury's assistant secretary for enforcement: 1989 to 1991, deputy director in White House office of national drug control policy: 1983 to 1989, director of the U.S. Marshals Service at the Justice Department Has held other positions in the Justice Department, at the Office of Management and Budget, and in the former Health, Education and Welfare Department EDUCATION: BA in Political Science, San Jose (Calif.) College: MA in Public Law and Government, Columbia UniversityHOME: Washington, D.C.FAMILY: Divorced, daughter Courtney, 23INTERESTS: Visiting his daughter in Santa Fe, N.M.; reading mysteries

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