Date: 1988-10-21
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. I strongly urge my colleagues to pass H.R. 5210. the Omnibus Drug Initiative Act of 1988. The drug situation In the United States today has reached intolerable proportions. The war against drugs must not only be fought in the trenches but in the board rooms of the American banking institutions as well. Recent Federal Indictments in Tampa. FL. of some 80 individuals and a U.S. bank on money laundering charges only reemphasizes the need for strong legislation directed at curtailing the problem of drug trafficking In American today. Mr. Speaker. I would direct my colleagues attention to title VI of the billthe Money Laundering Control Amendments of 1988. Mr. Speaker. I strongly believe that title VI cf this act addresses the problem of drug trafficking and the massive sums of cash upon which that industry thrives. To win this "war on drugs". we must cut off all avenues in which drug traffickers slip their cash into the mainstream of American commerce. We cannot allow financial institutions. insured by the U.S. Government to be usedwhether by design or accidentas a laundromat to clean the tainted money of drug dealers. When it comes to drug related money. title VI of this bill goes a long way in saying to the dope dealers "American banks are closed to your business"! Title VI shuts down the accessibility of the U.S. banks to the fraudulent practices and contrivances of those trafficking In illegal drugs in America today. It accomplishes this In three major ways. First. financial Institutions in certain geographic areas will be targeted. at the directive of the Secretary of the Treasury. for monitoring where money laundering is suspected and where it Is occurring in transactions below the $10.000 reporting threshold. Second. it prohibits all financial Institutions from Issuing a negotiable instrument to any individual In connection with a transaction that involves cash of $3.000 or more unless that individual fulfills the necessary identification and the banks comply with reccrdkeeping requirements. Third. It attacks insider fraud and abuse. The Right to Financial Privacy Act was never intended to be a protective shield for selfdealing Insiders to hide behind. This legislation Is directed to show zero tolerance of any abuses from an insider or anyone acting in concert with an insider of a financial institution when it Is related to the manipulation of banking resources for the criminal laundering of drug money. Mr. Speaker. the members of the Banking Committee strongly believe that these and numerous other provisions contained In title VI of this bill will shut tight the leaking faucet in which tainted drug money has been profusely seeping Into the American stream of commerce. In addition to title VI. title IV of this bill. the section on restricting laundering of U.S. currency. is also designed to combat the drug money issue on an international level. That title authorizes specific sanctions against those foreign institutions which are identified as a conduit for drugrelated U.S. currency. While I have some reservations about how the provision will be administered. I believe title IV does address a most serious problem Involving the use of U.S. currency worldwide In the financing and trafficking of illegal drugs. In conclusion. Mr. Speaker. I want to thank the ranking minority member of the committee. Mr. WYLIE and other members of the committeeboth majority and minorityparticularly Mr. BARNARD and Mr. TORRES for their frill cooperation for the work the committee has done under title VI. Only with this kind of participation and full cooperation can we truly combat effectively the drug epidemic that unfortunately engulfs this Nation. Mr. Speaker. I want to include for the RECORD an exchange of letters between Chairman FASCELL and me regarding our understanding concerning a provision of this logislalion.