Via Glenn Reynolds, I just watched “The Failure of Anti-Money Laundering Laws” — a very disturbing video about money laundering. The facts and figures are appalling. As Dan Mitchell of the CATO Institute shows, over 18 million “suspicious transactions” are monitored annually, yet this yields only 900 or so actual money-laundering convictions. Not only are the banks burdened by enormous costs which they pass on to consumers, but customers and depositors (including missionaries and nuns) are treated as criminals. And it’s not just banks. Jewelers and dealers in precious metals and precious stones are now required to be government rats.
But the bottom line is that it catches very few actual money launderers. No doubt that’s because the latter are in the business of money laundering, know the ins and outs of the law, and how to evade scrutiny.
Watch it and weep:
I have to say that I admire Dan Mitchell’s patience. Every inch the reasonable man, he assumes the government is acting on good faith. This is reflected in the fair-minded questions he raises:
Why does the government devotes so much time and resources to such a failed program?
If catching money launderers is the goal and it isn’t working, then why conduct massive surveillance on honest ordinary Americans?
Why indeed. The fact that the program continues to be endlessly expanded despite such a huge rate of failure makes me suspect that catching actual money launderers might not be the primary goal. Rather, it all begs the question of whether it’s simply an excuse for snooping on millions of Americans.
I think the whole thing is an intolerable invasion of privacy. As far as I’m concerned, if you have no privacy in your finances, then it really isn’t your money.
But considering that the money laundering scheme was created by bipartisan legislation, where are we supposed to go for relief?
If massive surveillance does not stop Money Laundering, why do we have it?
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6 responses to “If massive surveillance does not stop Money Laundering, why do we have it?”
If snooping is the goal of the legislation, what does the government hope to learn?
Probably the same thing they want to learn about guns. Where they are, where they go, who has what.
It’s usually about control.
Do you really think Nancy Pelosi, Harry Reid and Obama think their “reforming” of health care will improve things?
Or do you think that it’s a naked power grab?
Or do you just try not to think about it so you don’t kick your dog?
Yes, mostly it is about control. We shouldn’t think 900 convictions is too high or too low; we just don’t know.
Privacy is a vague right. Legally we have much less than we believe or may want. Ask those found out in the UBS tax evasion scandal recently.
The government will keep monitoring because they don’t stop until they must.
e.g. if Yucca Mountain stays closed for a century some government workers and consultants will be paid to restudy the matter every year.
Y’all just don’t get it.
They KNOW that the 900 cases are just the tip of the iceberg. It’s obvious. Since they’re not catching more than 900 that means they have to intensify the effort and that means increase the budget, hire more people and oh, yeah they need more powers. Got it now?
I work in the brokerage industry and this has been one of my personal bugaboos for years. Anti-money laundering laws are merely symptoms of failure in other areas of policy, namely drug and tax policy. Most drug transactions are cash so the theory goes that if you make it hard to use cash maybe people won’t sell drugs for cash… just brilliant. With tax policy, the IRS is wholly ineffective in dealing with persons who transact their otherwise lawful businesses with cash. The simple fact of the matter is that we would not need anti-money laundering laws if we legalized drugs and we eliminated the income tax and replaced it with a national sales tax. Tax compliance is much higher at the state level and the states collect nearly as much revenue as the feds with barely a tenth of the revenue collection costs. The reason is that the lions share of state revenue is from sales and property tax.