Senate investigations have a way of taking on lives of their own. In Senator John Kerry's case, the knowledge he gained as chairman and ranking Democrat of the Senate Subcommittee on Terrorism, Narcotics, and International Operations from 1987 to 1997 led him from the dark world of corruption and money laundering to book publishing. His findings, published in The New War: The Web of Crime that Threatens America's Security, are startling. In 1992, the Russian "Mafiya" offered to launder $7.8 billion (USD) in Sicilian and American Mafia money through their Russian banks by swapping it for $140 billion rubles, which the Westerners would use to buy strategic metalsocopper, nickel, for exampleothat could be sold in the West for three to four times their Russian value. That was just one scheme they found out about. Since then, Russia has become the global capital of money laundering, mainly conducted through banks the Mafiya has come to own outright through its version of a hostile takeoverowalk into the boardroom and shoot the chairman. The Mafiya needs the dollars they acquire this way to launder their own money, which they are exporting at the minimum rate of $1.5 billion per month. Part of this trove comes from the seven percent of the Russian economy they are paid as protection money, some comes from the arms they smuggle into the United States, some from drugs. But, of course, money laundering is profitable all by itself. The criminal enterprises that Senator Kerry depicts are taking "full advantage of the fall of communism and advances in communications and transportation technology to circumvent existing laws." High-speed modems and encrypted faxes? You bet. He draws on his experience to show how this moneyoand other billions made by cooperation among the Russians, Sicilian and American Mafia, Columbian cocaine cartels, Chinese triads and Japanese Yakuzaogoes to fuel a global war on the political and financial security of the West and, especially, the United Statesoa war that the rest of the world fights locally, while criminals communicate with encrypted messages from their private jets, en route to lake-side villas in Switzerland. Senator Kerry's main point is that in an era of global business, crime is as global as anything else, while law enforcement is hopelessly mired in nationalism. He offers story after story to prove how meaningless many law enforcement efforts areolike the time in June 1996 when institutions in the City of London admitted to The Times that they had paid "huge sums" to cyber-terrorists for the previous three years, after criminals demonstrated they could crash at will the systems in question. More dismaying yetoespecially for bankersois the Senator's discussion of global money laundering, a business he calls the third biggest business in the world after currency exchange and car production. The worst news isn't just how quasi-outlaw banking centers in the Caymans, Vanuatu, Cyprus, and the Seychelles all make their living by providing total secrecy for anonymous depositors who patronize the many banks on their otherwise barren economic shores; it's how deeply enmeshed the entire, legitimate global banking system has become in what is apparently part of the warp and woof of criminal global commerce. Evidence: The Russian Mafiya owns or controls most of that nation's 2,048 banks. Bad enough. It's been established that Russia is now the world's money laundering center. No better. But then Senator Kerry tells us that "five nights a week Delta Flight 30 leaves New York for Moscow, carrying in its hold more than a ton of crisp $100s fresh from the mint, amounting to $100 million. An estimated $40 billion has been shipped to Russia this way since January 1994, an amount greatly in excess of the total value of all Russian rubles in circulation." A Fed spokesman says this: "We don't sell them to Russia Republic National Bank of New York is selling the dollars to a customer." A spokesman for Republic refuses to comment "for security reasons." The Fed, reports Senator Kerry, makes $99.96 per bill. News like that recalls Lenin's comment that American capitalists will sell the Russians the rope they'll use to hang us. But the reality is even grimmer: Money from crime is so endemic, so vast, so corrupting; ethnically based criminal enterprises are all working in alliance, while international law enforcement efforts are mired in bureaucratic logjams and diplomatic tantrums; and ordinary citizens wink at crime when it means cheap consumer goods or recreational drugs. Banks are faced with a choice of cooperating with each other and with legitimate government to defeat crime, or waking up one day to discover that criminals have become the governments here, too, as they are in Russia. And resisting the temptation to not ask too many questions about an easy money transfer is only the first step in the fight. Senator Kerry has given us an important book; whether we listen to it is another matter. -reinbach tfn.com
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