WASHINGTON — Disgusted by online gambling’s impact on society and the economy, former House Banking Committee Chairman Jim Leach has broken his silence on all things financial.

The Iowa Republican is speaking out on an issue that makes his blood boil and the bill he is pushing to cool it down.

“We’re about to see the largest growth of any financial industry in America in Internet gambling,” Rep. Leach said this week in a phone interview from his new “little country house” outside Iowa City. “It’s preposterous for the economy, devastating for many, many individuals … and in the vested interest of financial institutions to assist in holding back the Internet gambling business because of projected costs from credit card losses and bankruptcy.”

Rep. Leach has reintroduced the Unlawful Internet Gambling Funding Prohibition Act — which cleared the banking panel last year but never reached the full House for a vote — and made a rare appearance before a House Financial Services subcommittee last month to argue its merits.

The bill would bar financial companies from settling illegal online gambling transactions paid for by credit or debit cards. Its civil and criminal penalties would be reserved for companies that offer illegal online betting, and the bill would offer a “safe harbor” for financial firms involved unknowingly.

But industry officials, including those from Visa U.S.A. Inc. and Wachovia Bank Card Services, oppose the legislation. They argue gambling companies could easily circumvent bank systems intended to deny authorization for Internet gambling transactions, and that financial services companies could be held liable for unknowingly making payments to illegal online casinos.

Rep. Leach is not convinced.

“In theory Internet gambling is illegal, but there are over 600 casinos now operating online,” he said. “So you need an enforcement mechanism, and the only enforcement I can conceive of — and we’ve looked at many alternatives — is to simply say financial instruments can’t be used to settle wagers that are illegal.

“There is, without a doubt, a little extra cost to be asked to have systems in place that can stop this,” he acknowledged. “On the other hand … the cost involved in credit card losses and bankruptcies will be far higher” if online betting is not curbed.

Rep. Leach expects a subcommittee vote on the measure as early as mid-September, and he said his bill could be tied to a Judiciary Committee measure intended to clarify the definition of illegal online gambling. A similar bill has been introduced in the Senate by Jon Kyl, R-Ariz.

But the measures face an uphill battle. Financial companies have teamed up with the technology and gambling industries to lobby to weaken, if not defeat, the legislation, as they did last year.

The congressman — who described his current participation on the committee he ran for six years, now known as House Financial Services, as “laid back,” so he does not interfere with the new leadership — is also pushing the World Bank and International Monetary Fund to do more to combat AIDS in developing countries.

Redistricting for next year’s elections split his district, leaving his Davenport home in the First District that he has represented since 1977, but more than 60% of his constituents in the Second District. So Rep. Leach and his family put the house up for sale, and last week they moved 60 miles to the outskirts of Iowa City, where he will run for reelection next year to represent the new Second District.

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