Page 143 - Information and American Democracy Technology in the Evolution of Political Power

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Political Organizations
political infrastructure, and it bears a closer examination as the first of
31
the full case studies. The “Know Your Customer” regulations proposed
by the FDIC and other federal agencies in 1998 constituted the latest
move in a long series of efforts to identify money laundering through the
nations’ banks. 32 The Bank Secrecy Act of 1970 requires private banks
to file currency transaction reports for banking transactions involving
more than $10,000 in cash and also to report any “suspicious” activities,
such as customer refusals to show identification.
In the 1980s and early 1990s, Congress tightened efforts to control
money laundering through half a dozen new laws. 33 For instance, the
MoneyLaunderingControlActof1986madeitafederalcrimeknowingly
to help launder money from a criminal activity, engage in a transaction of
more than $10,000 involving property from a criminal activity, or struc-
ture transactions so as to avoid the Bank Secrecy Act. The Federal Deposit
Insurance Corporation Improvement Act of 1991 allowed banking
authorities in the United States to share with foreign governments finan-
cial information gained through their own monitoring or investigations
of banking transactions in the United States. The Housing and Com-
munity Development Act of 1992, also known as the Annunzio-Wylie
Anti-Money Laundering Act, authorized the federal government to seize
banks found guilty of money laundering. 34 To comply with the various

31 This case is based on an examination of public records and sixteen interviews. Inter-
viewees include five staff members of the Federal Deposit Insurance Corporation; one
staff member of the Office of Thrift Supervision; one official of the Federal Reserve;
one of the Office of the Comptroller of the Currency; one staff member of the House
Committee on Banking and the Senate Committee on Banking, Housing and Urban
Affairs; two staff members of the Senate Committee on Banking, Housing and Urban
Affairs; one staff member of the office of Representative Robert Barr; and two offi-
cials of the Libertarian Party. Names and affiliations are provided in citations below
in cases where informants granted permission. Most of the research and an initial
written description of the case was prepared by Diane Johnson, doctoral student in
the Department of Political Science at UCSB.
32
“Money laundering” refers to efforts at concealing the illegal nature of a source of
money, such as drug trafficking, though a series of financial transactions. Moving
money through bank accounts, for example, can obscure its original origins in a
criminal activity.
33
These are: the Money Laundering Control Act of 1986; the Anti-Drug Abuse Act of
1988; the Crime Control Act of 1990; the Federal Deposit Insurance Corporation
Improvement Act of 1991; the Housing and Community Development Act of 1992,
also known as the Annunzio-Wylie Anti-Money Laundering Act; and the Money
Laundering Suppression Act of 1994.
34
Department of the Treasury, Office of the Comptroller of the Currency, “Money
Laundering: A Banker’s Guide to Avoiding Problems,” Washington, D.C., 2001,
http://www.occ.treas.gov/launder/origa.htm.

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