[Page: H11029]
Mr. BACHUS. Mr. Speaker, I move to suspend the rules and concur in the Senate amendment to the bill ( H.R. 1756) to amend chapter 53 of title 31, United States Code, to require the development and implementation by the Secretary of the Treasury of a national money laundering and related financial crime strategy to combat money laundering and related financial crimes, and for other purposes.
The Clerk read as follows:
Senate amendment:
Page 2, strike out all after line 20, over to and including line 3 on age 3 and insert:
`(2) Money laundering and related financial crime: The term `money laundering and related financial crime'--
`(A) means the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States, or into, out of, or through United States financial institutions, as defined in section 5312 of title 31, United States Code; or
`(B) has the meaning given that term (or the term used for an equivalent offense) under State and local criminal statutes pertaining to the movement of illicit cash or cash equivalent proceeds.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Alabama (Mr. Bachus) and the gentlewoman from New York (Ms. Velazquez) each will control 20 minutes.
The Chair recognizes the gentleman from Alabama (Mr. Bachus).
Mr. BACHUS. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 1756.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Alabama?
There was no objection.
[TIME: 1330]
Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 1756 is the Money Laundering and Financial Crimes Strategy Act of 1998. It was introduced by the gentlewoman from New York (Ms. Velazquez), the gentleman from Iowa (Mr. Leach) and myself, and it directs the Secretary of the Treasury to create a national strategy for combating money laundering and other financial crimes by coordinating money laundering and other financial crimes. It also supplies resources to Federal, state and local agencies in the coordination of their efforts.
I would explain to Members what is so important about money laundering. Money laundering is the flip side of narcotics trafficking. When we talk about the war on drugs, when we talk about our efforts against drugs, some people do not realize that it is a two-way street. On the TV we observe pictures of large amounts of drugs being seized, of drugs being destroyed, of them being intercepted, and, in fact, we have been very successful in seizing a great percentage of the drugs coming into this Nation.
Where we have failed, where we have not addressed the problem that needs to be addressed, is in money laundering. When drugs are sold, for them to be profitable to the money launderers and the drug cartels overseas, they not only have to sell their product, they have to reap their profit. That means that the money must flow back out of the country. They must get the money back out.
In fact, law enforcement agencies and policy makers tell us that if you want to hit the drug cartels where it hurts the worst, you do not seize the drugs, because there is an endless supply of that; you seize the money. And that is what this new strategy is about. Unfortunately, we estimate we are seizing less than 1 percent of drug proceeds money, and, therefore, this legislation I think is going to be a hallmark and really a nail in hopefully the coffin of drug cartels overseas which are preying on our young men and women on the streets of America.
The legislation provides for the designation of high risk money laundering areas for the purpose of providing those localities with increased Federal attention and funding for state and local law enforcement efforts.
We had a pilot project in New York City in the district of the gentlewoman from New York (Ms. Velazquez), who, I am sure, will cover this in more detail. But to tell you about the gravity of this situation, this effort was headed up by the New York police, the city police, New York State police, Customs. In a short period of time, over $1 billion of money transfers to Colombia were intercepted during this effort. I am not talking about $1 million, I am not talking about tens of millions of dollars. Over $1 billion in transfers were intercepted. So that gives you some idea about the magnitude of this problem.
Now, the House passed this measure earlier this month by voice vote. On Wednesday, the Senate passed it with an amendment, again by unanimous consent. The Senate amendment is relatively modest in scope. I think it improves the bill, and I have been asked by Members of the Committee on the Judiciary and the Committee on Commerce to explain that amendment for the record.
As passed by the House, this act provided that the Secretary of the Treasury's authority to develop a national strategy for combating money laundering and related crimes extended to all potential violations of title 18, sections 1956 and 1957. Those sections are the basic criminal money laundering provisions of our Federal law, and they contain more than 100 predicate offenses involving crimes as varied or desperate as obscenity and arms control export violations.
The Federal Bureau of Investigation raised concerns that the shear breadth of the criminal conduct covered by these two sections, 1956 and 1957, might complicate the Treasury Department's ability to develop a coherent national strategy for combating money laundering and in allocating scarce law enforcement resources to initiatives undertaken at the state and local level.
In response to that, we in the House, the gentlewoman from New York (Ms. Velazquez), requested and the Senate conceded and actually offered an amendment, and also the Senate was very supportive of this amendment and amended the bill to provide that the national strategy should be directed at the movement of elicit cash or cash equivalent proceeds into, out of and through the United States, or into, out of and through United States financial institutions, because many of these are electronic transfers, rather than directing the scope to the more broad offenses delineated in title 18 and other portions of the U.S. Code. We all agree this is a good amendment that strengthens the bill.
I also want to, at the request of the Committee on Commerce, take this opportunity to clarify the legislative intent behind another provision of H.R. 1756, and that is section 2.
Section 2 amends chapter 53 of title 31 of the U.S. Code to direct the Secretary of the Treasury to regularly review enforcement efforts under the chapter and under the subchapter and other provisions of the law, and, when appropriate, modify existing regulations or prescribe new regulations for the purposes of preventing money laundering and related financial crimes.
On June 25, 1998, the distinguished chairman of the Committee on Commerce, the gentleman from Virginia (Mr. Bliley) wrote to the gentleman from Iowa (Mr. Leach), the gentlewoman from New York (Ms. Velazquez) and myself, to express concern that such a broad mandate could be interpreted to authorize the Secretary of the Treasury to review enforcement actions under the Federal securities laws or to modify regulations promulgated pursuant to Federal security laws or to grant the Secretary of Treasury new or additional authority to prescribe regulations applicable to entities that are regulated pursuant to the Federal securities law.
In response, the gentleman from Iowa (Mr. Leach) affirmed that it is not the Committee on Banking and Financial Services's intent for the language in section 2 to grant the Secretary of Treasury any new or additional authority over entities that are regulated pursuant to the Federal securities law or to require or encourage the Secretary of the Treasury to review enforcement actions under the Federal securities law, or to modify or recommend the modification of regulations promulgated under the Federal securities laws. That response has been accepted.
Mr. Speaker, in closing I want to emphasize that H.R. 1756 is an excellent example of the spirit of bipartisanship and comity that has historically characterized the Committee on Banking and Financial Services's deliberation on anti-money laundering initiatives.
We do hear a lot of partisanship and wrangling in this body. That is not always the case. In bringing this bill before both the House and the Senate, Democrats and Republicans have joined together, they
worked closely with the administration, and the result has been a nonpartisan or bipartisan effort, which we believe will go a long way in combating illegal drugs and money laundering.
The gentlewoman from New York (Ms. Velazquez) should be particularly commended for her work, and by this I mean her hard work on this matter. She has been a big help in dealing with the law enforcement agencies.
In addition, I would like to commend and give special recognition to the gentleman from Iowa (Chairman Leach) and to the ranking minority member, the gentleman from New York (Mr. LaFalce) for their efforts in moving this important bill through the Committee on Banking and Financial Services.
Also I want to commend members of the Subcommittee on General Oversight and Investigations staff for their hard work on money laundering in this Congress.
An example of the administration and the Congress working together on this bill is that Dave Cohen from my staff, who basically worked with Ms. Velazquez on a daily basis in the particulars of this bill, as a result of working with Customs, he is no longer with the subcommittee. He was in fact hired by Customs, which sort of pays us a compliment to his ability. Dave, within the last month, has taken the position as assistant to the Commissioner, Ray Kelly, at Customs. So I think that ought to be a compliment to the entire Congress and to the staff that worked on this bill.
In addition, I would like to compliment the legal staff that worked on this bill. Jim Clinger, the Clinger name is a name that most of us in Congress recognize. His father, Bill Clinger, served in this body with distinction. Jim Clinger and Win Yerby, legal counsel for the majority, worked closely on this bill. I am particularly pleased that Win Yerby is a native Alabamian.
On the democratic side, Rick Maurano, who is seated at the table with Ms. Velazquez, also did yeoman's work on this bill. Again, this was a totally nonpartisan effort.
As Chairman of the Subcommittee on Oversight and Investigations, I will say in closing that I have had six money laundering hearings. In fact, money laundering has been the central focus of the subcommittee's work, because I see it as one of the most important responsibilities of the Committee on Banking and Financial Services Subcommittee on General Oversight and Investigations. The reason I do is because the threat that narcotic drugs has in every community, in every state, in every locality, to us, to the integrity of our law enforcement agencies, and to the safety and welfare of our citizens.
As I said, again, thanks to the gentlewoman from New York, this bill will go a long way in hitting the drug cartels where it hurts the worst, in the pocketbook.
Mr. Speaker, I reserve the balance of my time.
[Page: H11031]
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to begin by again thanking the gentleman from Iowa (Mr. Leach), the gentleman from New York (Mr. LaFalce), and the gentleman from Alabama (Mr. Bachus) for all their work on this legislation. Also I would like to recognize the work that for the last four years my legislative director, Catherine Cruz Wojtasik, has been doing on this legislation.
This bill proves that crime fighting is a bipartisan issue. Today's Money Laundering and Financial Crimes Strategy Act is the same anti-money laundering legislation that passed the House last week. Technical changes were made by the Senate that will broaden the definition of money laundering. These changes are endorsed by the Treasury Department, the Justice Department, the FBI and the local district attorneys in New York City.
In the expanded definition we allow Federal, state and local law enforcement officials to keep up with the changing trends in money laundering. It will provide police officers and prosecutors with the tools that they need to effectively combat large and sophisticated crime syndicates.
The Money Laundering and Financial Crimes Strategy Act is an important step in helping communities fight drug traffickers that launder money in their neighborhood. I urge all Members to support this bill.
Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to say in conclusion that Catherine Cruz Wojtasik did work very hard on this bill. I think it shows that the gentlewoman from New York (Ms. Velazquez) has assembled a good staff, and I would like to commend Ms. Cruz Wojtasik on her work on the bill.
[TIME: 1345]
Mr. Speaker, I apologize for that oversight.
Mr. BACHUS. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Brady of Texas). The question is on the motion offered by the gentleman from Alabama (Mr. Bachus) that the House suspend the rules and concur in the Senate amendment to H.R. 1756.
The question was taken; and (two-thirds having voted in favor thereof) the rules suspended and the Senate amendment was concurred in.
A motion to reconsider was laid on the table.
END