Carl Levin

Mr. LEVIN

Mr. LEVIN. Mr. President, I understand that S. 1439, the Ballistic Missile Defense Act of 2001, which I introduced a few minutes ago, is at the desk, and I ask for its first reading.

Mr. LEVIN. Mr. President, I yield the floor.

Mr. LEVIN. Mr. President, I now ask for its second reading.

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that there be a short period of morning business.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to enter into a colloquy with the chairman of the Treasury and General Government Appropriations Subcommittee. First, I would like to commend the Chairman for his good work on this bill. I appreciate his leadership and commitment. I would like to confirm with the chairman my understanding of an amendment offered by the chairman and Senators Clinton and Schumer. The amendment proposes that a special commemorative semipostal stamp be issued to recognize the efforts of the brave emergency relief personnel who were killed in connection with last week's terrorist attacks. Existing Postal Service regulations state that the Postal Service will offer only one semipostal stamp for sale at any given time. It is my understanding that it would be consistent with these regulations for the Postal Service to designate the commemorative stamp created by the amendment as the one semipostal stamp to be offered, pursuant to the said regulations, for the period specified in the amendment, with the exception of the Breast Cancer Research Stamp previously exempted by law.

Mr. LEVIN

Mr. LEVIN. Mr. President, I now ask for its second reading.

Mr. LEVIN

Mr. LEVIN. Mr. President, I hope that the Senate will soon begin consideration of the National Defense Authorization Act for Fiscal Year 2002. This bill would authorize $343.5 billion for national defense programs, the full amount requested by the administration, including the $18.4 billion requested by the President in his amended budget request. The bill would also address a number of important priorities identified by the Armed Services Committee, adding significant funding for military compensation and quality of life, the readiness and transformation of the military services, and the capability of our armed forces to meet nontraditional threats, including terrorism. In light of recent events, we will obviously do more, as we already have, with the enactment of the $40 billion emergency supplemental appropriation bill last week. However, these are no ordinary times, and the debate on this bill will be no ordinary debate. Debate on a bill like this is an inherent part of our democracy, and while our democratic institutions are stronger than any terrorist attack, in one regard we operate differently in times of national emergency. We strive to set aside our differences, and ask decent people everywhere to join forces with us to seek out and to defeat the common enemy of the civilized world. For this reason, I am today introducing two new bills. The first bill is identical to S. 1416, as reported by the Senate Armed Services Committee in every respect but one--the removal of legislative language dealing with missile defense. The second bill, which would be deferred for debate at a later and more appropriate time, would include the missile defense language. I strongly believe that the missile defense provisions took an appropriate step on an issue of national importance, and I was disappointed that this single area of disagreement led the Republican Members of our committee to vote against this bill that is so important to our national security. In my view, however, this is the wrong time for divisive debate on issues of national defense. We cannot let issues like this pull us apart and undermine our common sense of national purpose in fighting terrorism. Rather, we should leave this debate to a later time and link arms against our attackers. When we take up the defense authorization act, I hope that my colleagues will join me in putting controversial issues aside and help us move forward together to pass this bill promptly and indicate our strong and unified support for the national defense with a minimum of divisive debate.

Mr. LEVIN

Mr. LEVIN. Mr. President, in the aftermath of Tuesday's tragic events, security has necessarily been tightened at all our borders. This includes the border crossings at the Port of Detroit, including the Ambassador Bridge, the Detroit-Windsor Tunnel, and the Blue Water Bridge in Port Huron. The U.S. Customs Service is inspecting every vehicle and almost every truck crossing into the United States at these ports of entry, which is what should be the case after such a terrible breach of our Nation's security. These ports of entry are important commercial routes for the transport of the just-in-time delivery auto parts to American auto manufacturing plants which are supplied from Canada and elsewhere. Just-in-time delivery means an industry must have the ability to move its products quickly from point to point. An unfortunate side effect of the tightened security is that significant delays of up to 12 hours in some cases have occurred at the bridges and tunnel. This has meant that the just-in-time delivery systems that the auto manufacturers rely on have broken down. As a result, automobile assembly plants in the United States do not have the necessary parts and many have shut down. Others may have to shut down soon for lack of parts. This backup at our northern border during these extraordinary times highlights and aggravates an existing and chronic problem of under- staffing of Customs inspection and INS personnel at the Port of Detroit and along the Northern border in general. Congress was already beginning to address this shortfall before Tuesday's tragedy exacerbated the problem. As we pass an emergency supplemental bill today that will provide $40 billion in disaster relief and humanitarian aid to help respond to the destruction caused by Tuesday's tragedy, we should not forget the security needs at our borders. Specifically, we need to be sensitive to the economic impact additional security measures have on industries that depend on just-in-time delivery of product from Canada and elsewhere. This doesn't mean that we should be any less vigilant in inspection at the border. To the contrary, it means we should be sure that we commit adequate resources to preform these inspections without hurting our economy in the process. The simple solution would be to direct a portion of the $40 billion to increase Customs and INS staffing levels at our northern border and at the Port of Detroit in particular where this need has been most clearly demonstrated. It makes good domestic security sense and it makes good economic sense.

Mr. LEVIN. Mr. President, I rise to express my strong support for S.J. Res. 23, the joint resolution for use of military force. As we consider this legislation, our fellow Americans in New York and at the Pentagon--indeed throughout this great country, are recovering those who are still lost, assisting their loved ones to cope, and determinately getting on with the effort to build that which has been torn down. The $40 billion supplemental appropriations bill that we just passed unanimously demonstrates our determination to assist in the recovery and rebuilding process. We still have some unfinished business that needs to be attended to today. In the aftermath of the treacherous terrorist attack on the United States and its citizens on September 11, I believe that it is extraordinarily important that the Congress speak with a united voice to authorize the President to use force. In doing so, we will send a strong message of unity behind the President to our fellow citizens, to the international community, and to those connected with these terrorist acts and those who might be considering future acts of terrorism against us. By this joint resolution, we are authorizing the President to take military action as necessary and appropriate against those nations, organizations, or persons who planned, authorized, committed, or aided those terrorist attacks or harbored such organizations or persons. In doing so, we will be empowering the President and expressing our strong support for him and for the men and women in our Armed Forces. In my view, it is only by doing so that we can prevent those nations, organizations, and persons from conducting terrorist attacks against us in the future. I believe it is important to note that this joint resolution would authorize the use of force even before the President or the Congress knows with certainty which nations, organizations, or persons were involved in the September 11 terrorist acts. This is a truly noteworthy action and a demonstration of our faith in the ability of our Government to determine the facts and in the President to act upon them. I believe it is also important to note that this authorization for the use of force is limited to the nations, organizations, or persons involved in the terrorist attacks of September 11. It is not a broad authorization for the use of military force against any nation, organization, or persons who were not involved in the September 11 terrorist attacks. This joint resolution is based upon and is an exercise of the Congress' constitutional war powers role as codified in the War Powers Resolution. It also expressly confirms the conditions on the exercise of Executive power under that resolution. In that regard, I want to note that the statement in the last ``Whereas'' clause relating to the constitutional authority of the President to take action to deter and prevent acts of international terrorism against the United States is to be read in conjunction with the War Powers Resolution. That is why words in earlier drafts of this joint resolution, which might have been interpreted to grant a broader authority to use military force, were deleted and that is why the references to the War Powers Resolution were added. It does not recognize any greater presidential authority than is recognized by the War Powers Resolution nor does it grant any new authority to the President. Finally, I want to encourage my colleagues to vote in favor of this joint resolution. It is my fervent hope that we will achieve a unanimous vote. I believe we owe it to those who have been lost, to their loved ones and friends, and to the men and women of our Armed Forces who will be placed in harms way to protect us from future terrorist acts.

Mr. LEVIN

Mr. LEVIN. Mr. President, on behalf of myself and Senator Warner, pursuant to section 3(b) of S. Res. 400 of the 94th Congress, we ask unanimous consent that S. 1428, the Intelligence Authorization Act for Fiscal Year 2002, be sequentially referred to the Committee on Armed Services for a period not to exceed 30 days.

Mr. LEVIN

Mr. LEVIN. This amends, though, our statutes. I am not arguing the pros and cons. It amends not just terrorism, but it amends the wiretap law and all criminal activity, including terrorism; is that correct?

Mr. LEVIN. Mr. President, I have one question I want to ask, perhaps, of my friend from Arizona.

Mr. LEVIN. If my friend will yield further, I understand we want to make sure terrorism is included in our statutes.

Mr. LEVIN. So it is broader than terrorism. I am not debating merits plus or minus. I am trying to understand what is in it since it came to me for the first time tonight. I want to be very clear, at least the way I read this, that this is not something that is just limited to counterterrorism, about which I think all of us would have a passion.

Mr. LEVIN. I make one request of my good friend from Vermont, the chairman, because he has raised some important questions about making sure we take the time to know what we are doing. We are not going to have that time tonight. That is obvious. I express the hope, given the kind of points that have been made here, that it would be possible, before this comes back in the form of a conference report, for there to be some review of some of these provisions by the Judiciary Committee.

Mr. LEVIN. I tend to agree with our friends that we need to strengthen the law on that point. I want to be clear on one point: We are not adding terrorism to make sure we are covered. We are applying these new standards to all criminal activity, not just terrorism.

Mr. LEVIN. I have not had a chance to read this language until tonight. I guess that is part of the problem. It also is clear this is going to be adopted. I want to ask one question for the record. This amendment goes beyond changes in the wiretap law as it relates to terrorism; is that correct? The language is ``any ongoing criminal investigation.''

Mr. LEVIN. But it does not relate.

Mr. LEVIN. Yes.

Mr. LEVIN

Mr. LEVIN. Mr. President, through our rage at the terrorist attacks on our people and our free institutions shines a focused determination to recover our loved ones and friends who are still lost, and to assist their loved ones to cope with the devastating void into which they have been plunged. Our fury at those who attack innocence is matched by our united determination to protect our citizens from more terror and by our resolve to track down, to root out, and to relentlessly pursue terrorists and those who would shelter or harbor them. Last night, at the Pentagon, I joined Secretary of Defense Rumsfeld, Senator Warner, and General Shelton in sharing that determination with the American people. That resolve is reflected by the fact that the Pentagon is functioning and the men and women who work there are assisting the heroic recovery efforts, although a few feet away loved ones and friends are still missing or presumed to have been killed, and while the smoke of the savagery is still permeating the Pentagon. The President, last night, spoke for all Americans and all civilized people everywhere about his commitment to recover, to deter, and then to root out and destroy the terrorists. Debate is an inherent part of democracy. And while our democratic institutions are stronger than any terrorist effort to shake them, in one regard we operate differently in times of national emergency. We set aside our differences to join forces together, with decent people everywhere, to seek out and defeat a common enemy of the civilized world. Our unity is unshakable, and, God willing, we will persevere and prevail. I yield the floor.

Mr. LEVIN. Mr. President, I ask unanimous consent that we be allowed to proceed--the two of us--for 2 minutes each.

Mr. LEVIN

Mr. LEVIN. Mr. President, the Brady law mandated the establishment of the National Instant Criminal Background Check System to allow federally licensed gun sellers to establish whether a prospective gun buyer is disqualified from purchasing a firearm. The NICS system is working. In its first 25 months of operation, more than 156,000 felons, fugitives and others not eligible to purchase a gun have attempted to do so and have been denied by an FBI NICS check. At the same time, NICS has not placed unreasonable constraints on law abiding citizens' ability to buy a gun. In fact, the Department of Justice reports that more than 7 out of 10 NICS background checks are completed immediately and 95 percent are completed within 2 hours. But I'm concerned that recent action by Attorney General Ashcroft could limit the effectiveness of NICS and hamper law enforcement efforts to keep guns out of the hands of criminals. Regulations issued in January allowed the FBI to keep NICS data for 90 days following a check. The 90-day period is critical to law enforcement's ability to audit the NICS system for errors, search for patterns of illegal or false sales, such as purchasers using fake ID's, and screen for gun dealers who may abuse the system. But in June, the Attorney General announced plans to reduce the length of time that law enforcement agencies can retain NICS data to 24 hours. The 24-hour period is insufficient and would severely restrain law enforcement's ability to target illegal purchasers and corrupt gun sellers. After reviewing Attorney General Ashcroft's action, I decided to cosponsor S. 1253, a bill introduced by Senators Kennedy and Schumer to maintain the 90-day period for law enforcement to retain NICS data. The bill takes a common sense approach to keeping guns out of the hands of criminals without compromising the privacy rights of law-abiding citizens. It is a good bill and the right remedy to the Attorney General's regrettable action.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to thank the chairman for addressing in this bill the severe INS staffing shortages at certain land border ports of entry. I would also like to thank him for recognizing and addressing the severe shortage of INS inspectors at Detroit's port of entry on the U.S.-Canadian border, which includes the Ambassador Bridge and the Detroit-Windsor Tunnel. I am pleased this bill provides $25,408,000 for 348 additional land border inspectors and specifically indentifies the Detroit bridge and tunnel port of entry as being understaffed by a whopping 151 people. I appreciate the efforts of this Committee to address the significant INS staffing shortages on the Detroit-Canadian border and that a portion of the increase in INS inspectors funded by this bill will be allocated to address the Detroit shortfall. I wish to seek clarification from the chairman of the Commerce- Justice-State Appropriations Subcommittee as to whether a significant portion of the funding provided for additional INS inspectors by this bill will be allocated to address the Detroit shortfall. The Ambassador Bridge is the most heavily traveled bridge and the most heavily traveled tunnel on the U.S.-Canadian border. Total traffic at the bridge has nearly doubled over the past 14 years. According to data compiled by the Bridge and Tunnel Operator's Association, in 1999 more than 12,000,000 auto and commercial vehicles crossed the Ambassador Bridge and more than 9,500,000 auto and commercial vehicles passed through the Detroit-Windsor Tunnel.

Mr. LEVIN

Mr. LEVIN. Mr. President, I rise today to ask my Senate colleagues to join with me in honoring dedicated activist and respected community leader Dr. Haifa Fakhouri. Dr. Fakhouri will be named a Lady of Charity by the Pontifical Institute for Foreign Missions (PIME Missionaries) at the 43rd Knights of Charity Award Dinner in Dearborn, Michigan on October 11, 2001. The Knights of Charity Award is presented each year to men and women who clearly exemplify ``Unity in Family Life with Person-to-Person Charity.'' This award is given to those whose words and actions promote the ideals of charity, friendship, love and interfaith and intercultural collaboration. Dr. Fakhouri clearly exemplifies these ideals. Since coming to America from Jordan in 1968, she has become one of the most respected leaders of the Arab-American community. Her most well known and far reaching achievement was helping to found, and serve as President and CEO of the Arab-American and Chaldean Council (ACC), the largest community based human services agency in the nation, serving the Arabic and Chaldean speaking population of southeast Michigan. Founded in Detroit in 1979, the ACC has quickly grown to offer 36 outreach centers and over 50 specialized programs to the Arab/Chaldean community in Detroit and the surrounding area. Under Dr. Fakhouri's leadership, the ACC has adopted goals and ideals that closely match those of the Knights of Charity Award. The ACC is dedicated to building community cooperation and coordination, increasing cross cultural understanding and raising the level of the community's general well-being. Because Dr. Fakhouri has been so successful in guiding the ACC towards achieving these goals, she has received recognition from numerous state and national organizations. For example, she has served as Special Advisor to the United Nations on the role and status of women and population policies in the Middle East Region, and she has received the 1999 Governor's Community Leadership Award, the 1999 Michigander of the Year Award and many others. Dr. Fakhouri's leadership, vision and compassion have made her one of the nation's greatest community activists. Her dedication to serving others have made her an invaluable part of the southeast Michigan community. I know that my Senate colleagues will join me in congratulating her on being named a Lady of Charity.

Mr. LEVIN

Mr. LEVIN. Mr. President, today I am introducing, along with my colleagues Senator Grassley, Senator Sarbanes, Senator Bill Nelson, Senator Mike DeWine, and Senator Jon Kyl, the Money Laundering Abatement Act, a bill to modernize and strengthen U.S. laws to detect, stop and prosecute money laundering through U.S. banks. The safety and soundness of our banking system, the stability of the U.S. dollar, the services our banks perform, and the returns our banks earn for depositors make the U.S. banking system an attractive location for money launderers. And money launderers who are able to use U.S. banks can take advantage of the prestige of these banks to lend credibility to their operations, reassure victims, and send wire transfers that may attract less scrutiny from law enforcement. So whether it is to protect their funds or further their crimes, money launderers want access to U.S. banks, and they are devising one scheme after another to infiltrate the U.S. banking system. The funds they want to move through our banks are enormous. Estimates are that at least $1 trillion in criminal proceeds are laundered each year, with about half of that amount, $500 billion, going through U.S. banks. Stopping this flood of dirty money is a top priority for U.S. law enforcement which spent about $650 million in taxpayer dollars last year on anti-money laundering efforts. That's because money laundering damages U.S. interests in so many ways, rewarding criminals and financing crime, undermining the integrity of international financial systems, weakening emerging democracies and distorting their economies, and impeding the international fight against corruption, drug trafficking and organized crime. The bill we are introducing today would provide new and improved tools to stop money laundering. Because it includes provisions that would outlaw the proceeds of foreign corruption, cut off the access of offshore shell banks to U.S. banks, and end foreign bank immunity to forfeiture of laundered funds, this bill would close some of the worst gaps and remedy some of the most glaring weaknesses in existing anti- money laundering laws. For example, the bill would: 1. add foreign corruption offenses, such as bribery and theft of government funds, to the list of foreign crimes that can trigger a U.S. money laundering prosecution; 2. bar U.S. banks from providing banking services to foreign shell banks, which are banks that have no physical presence in any country and carry high money laundering risks; 3. require U.S. banks to conduct enhanced due diligence reviews to guard against money laundering when opening (a) a private bank account with $1 million or more for a foreign person, or (b) a correspondent account for an offshore bank or foreign bank in a country posing high money laundering risks; and 4. make a depositor's funds in a foreign bank's U.S. correspondent account subject to the same civil forfeiture rules that apply to depositors' funds in other U.S. bank accounts. These provisions are the product of almost three years of work by my staff at the Senate Permanent Subcommittee on Investigations examining money laundering problems in the private and correspondent banking fields. Countless interviews with money laundering experts, bankers, regulators, law enforcement personnel, criminals and victims, and the careful review of literally tens of thousands of pages of documents led to the issuance of two staff reports in 1999 and 2001, and several days of Subcommittee hearings, setting out the problems uncovered and recommendations for strengthening U.S. enforcement efforts. The first Subcommittee investigation examined private banking, a growing and lucrative banking sector which offers financial services to wealthy individuals, who usually must deposit $1 million or more to open a private bank account. In return, the client is assigned a ``private banker'' who provides the client with sophisticated financial services, such as offshore accounts, shell corporations, and high dollar wire transfers, which raise money laundering concerns. A key issue to emerge from this investigation is the role that private banks play in opening accounts and accepting hundreds of millions of dollars in deposits from senior foreign officials or their relatives, even amid allegations or suspicions that the deposits may be the product of government corruption or other criminal conduct. The 1999 staff report described four case histories of senior government officials or their relatives depositing hundreds of millions of suspect dollars into private bank accounts at Citibank, the largest bank in the United States. These case histories showed how Citibank Private Bank had become the banker for a rogues' gallery of senior government officials or their relatives. One infamous example is Raul Salinas, the brother of the former President of Mexico, who is imprisoned in Mexico for murder and is under indictment in Switzerland for money laundering associated with drug trafficking. He deposited almost $100 million into his Citibank Private Bank accounts. Another example involves the three sons of General Sani Abacha, who was the former military leader of Nigeria and was notorious for misappropriating and extorting billions of dollars from his country. His sons deposited more than $110 million into Citibank Private Bank accounts. The investigation determined that Citibank's private bankers asked few questions before opening the accounts and accepting the funds. It also found that, because foreign corruption offenses are not currently on the list of crimes that can trigger a U.S. money laundering prosecution, corrupt foreign leaders may be targeting U.S. banks as a safe haven for their funds. Another striking aspect of the investigation was how a culture of secrecy pervaded most private banking transactions. Citibank private bankers, for example, routinely helped clients set up offshore shell companies and open bank accounts in the name of these companies or under other fictional names such as ``Bonaparte'' or ``Gelsobella.'' After opening these accounts, secrecy remained such a priority that Citibank private bankers were often told by their superiors not to keep any record in the United States disclosing the true owner of the offshore accounts or corporations they manage. One private banker told of stashing with his secretary a ``cheat sheet'' that identified which client owned which shell company in order to hide it from Citibank managers who did not allow such ownership information to be kept in the United States. On some occasions, Citibank Private Bank even hid ownership information from its own staff. For example, one Citibank private banker in London worked for years on a Salinas account without knowing Salinas was the beneficial owner. Salinas was instead referred to by the name of his offshore corporation, Trocca, Ltd., or by a code, ``CC- 2,'' which stood for ``Confidential Client Number 2.'' Citibank even went so far as to allow Mr. Salinas to deposit millions of dollars into his private bank accounts without putting his name on the wire transfers moving the funds, instead allowing his future wife, using an assumed name, to wire the funds through Citibank's own administrative accounts. Later, when Mr. Salinas' wife was arrested, Citibank discussed transferring all of his funds to Switzerland to minimize disclosure, abandoning that suggestion only after noting that the wire transfer documentation would disclose the funds' final destination. That's how far one major U.S. private bank went on client secrecy. The Subcommittee's second money laundering investigation focused on U.S. correspondent accounts opened for high risk foreign banks. Correspondent banking occurs when one bank provides services to another bank to move funds or carry out other financial transactions. It is an essential feature of international banking, allowing the rapid movement of funds across borders and enabling banks and their clients to conduct business worldwide, including in jurisdictions where the banks do not maintain offices. The problem uncovered by the Subcommittee's year-long investigation is that too many U.S. banks, through the correspondent accounts they provide to foreign banks that carry high risks of money laundering, have become conduits for illicit funds associated with drug trafficking, financial fraud, Internet gambling and other crimes. The investigation identified three categories of foreign banks with high risks of money laundering: shell banks, offshore banks, and banks in jurisdictions with weak anti-money laundering controls. Because many U.S. banks have routinely failed to screen and monitor these high risk foreign banks as clients, they have been exposed to poorly regulated, poorly managed, sometimes corrupt, foreign banks with weak or no anti- money laundering controls. The U.S. correspondent accounts have been used by these foreign banks, their owners and criminal clients to gain direct access to the U.S. financial system, to benefit from the safety and soundness of the U.S. banking system, and to launder dirty money through U.S. bank accounts. In February of this year, my staff released a 450 page report detailing the money laundering problems uncovered in correspondent banking. The report indicated that virtually every U.S. bank examined, from Chase Manhattan, to Bank of America, to First Union, to Citibank, had opened correspondent accounts for offshore banks. Citibank also admitted opening correspondent accounts for offshore shell banks with no physical presence in any jurisdiction. The report presents ten detailed case histories showing how high risk foreign banks managed to move billions of dollars through U.S. banks, including hundreds of millions of dollars in illicit funds associated with drug trafficking, financial fraud or Internet gambling. In some cases, the foreign banks were engaged in criminal behavior; in others, the foreign banks had such poor anti-money laundering controls that they did not know or appeared not to care whether their clients were engaged in criminal behavior. Several of the foreign banks operated well outside the parameters of normal banking practices, without basic fiscal or administrative controls, account opening procedures or anti- money laundering safeguards. All had limited resources and staff and relied heavily upon their U.S. correspondent accounts to conduct operations, provide client services, and move funds. Most completed virtually all of their transactions through their correspondent accounts, making correspondent banking integral to their operations. The result was that their U.S. correspondent accounts served as a significant gateway into the U.S. financial system for criminals and money launderers. In March 2001, the Subcommittee held hearings on the problem of international correspondent banking and money laundering. One witness was a former owner of an offshore bank in the Cayman Islands, John Mathewson, who pleaded guilty in the United States to conspiracy to commit money laundering and tax evasion and has spent the past 5 years helping to prosecute his former clients for tax evasion and other crimes. Mr. Mathewson testified that he had charged his bank clients about $5,000 to set up an offshore shell corporation and another $3,000 for an annual corporate management fee, before opening a bank account for them in the name of the shell corporation. He noted that no one would pay $8,000 for a bank account in the Cayman Islands when they could have the same account for free in the United States, unless they were willing to pay a premium for secrecy. He testified that 95 percent of his 2,000 clients were U.S. citizens, and he believed that 100 percent of his bank clients were engaged in tax evasion. He characterized his offshore bank as a ``run-of-the-mill'' operation. He also said that the Achilles' heel of the offshore banking community is its dependence upon correspondent banks to do business and that was how jurisdictions like the United States could take control of the situation and stop abuses, if we had the political will to do so. I think we do have that political will, and that's why we are introducing this bill today. Let me describe some of its key provisions. The Money Laundering Abatement Act would add foreign corruption offenses such as bribery and theft of government funds to the list of crimes that can trigger a U.S. money laundering prosecution. This provision would make it clear that corrupt funds are not welcome here, and that corrupt leaders can expect criminal prosecutions if they try to stash dirty money in our banks. After all, America can't have it both ways. We can't condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks profiting off that corruption. Second, the bill would require U.S. banks and U.S. branches of foreign banks to exercise enhanced due diligence before opening a private bank account of $1 million or more for a foreign person, and to take particular care before opening accounts for foreign government officials, their close relatives or associates to make sure the funds are not tainted by corruption. This due diligence provision targets the greatest money laundering risks that the Subcommittee investigation identified in the private banking field. While some U.S. banks are already performing enhanced due diligence reviews, this provision would put that requirement into law and bring U.S. law into alignment with most other countries engaged in the fight against money laundering. The Money Laundering Abatement Act would also put an end to some of the extreme secrecy practices at private banks. For example, if a U.S. bank or a U.S. branch of a foreign bank opened or managed an account in the United States for a foreign accountholder, the bill would require the bank to keep a record in the United States identifying that foreign accountholder. After all, U.S. banks already keep records of accounts held by U.S. citizens, and there is no reason to allow U.S. banks to administer offshore accounts for foreign accountholders with less openness than other U.S. bank accounts. The bill would also put an end to the type of secret fund transfers that went on in the Salinas matter by prohibiting bank clients from independently directing funds to be deposited into a bank's ``concentration account,'' an administrative account which merges and processes funds from multiple accounts and transactions, and by requiring banks to link client names to all client funds passing through the bank's concentration accounts. Our bill would also take a number of steps to close the door on money laundering through U.S. correspondent accounts. First and most importantly, our bill would bar any U.S. bank or U.S. branch of a foreign bank from opening a U.S. correspondent account for a foreign offshore shell bank, which the Subcommittee investigation found to pose the highest money laundering risks of all foreign banks. Shell banks are banks that have no physical presence anywhere--no office where customers can go to conduct banking transactions or where regulators can go to inspect records and observe bank operations. They also have no affiliation with any other bank and are not regulated through any affiliated bank. The Subcommittee investigation examined four shell banks in detail. All four were found to be operating far outside the parameters of normal banking practice, often without paid staff, basic fiscal and administrative controls, or anti-money laundering safeguards. All four also largely escaped regulatory oversight. All four used U.S. bank accounts to transact business and move millions of dollars in suspect funds associated with drug trafficking, financial fraud, bribe money or other misconduct. Let me describe one example from the Subcommittee's investigation. M.A. Bank was an offshore bank that was licensed in the Cayman Islands, but had no physical office of its own in any country. In 10 years of operation, M.A. Bank never underwent an examination by any bank regulator. Its owners have since admitted that the bank opened accounts in fictitious names, accepted deposits for unknown persons, allowed clients to authorize third parties to make large withdrawals, and manufactured withdrawal slips or receipts on request. Nevertheless, M.A. Bank was able to open a U.S. correspondent account at Citibank in New York. M.A. Bank used that account to move hundreds of millions of dollars for clients in Argentina, including $7.7 million in illegal drug money. After the Subcommittee staff began investigating the account, Citibank closed it. After the staff report came out, the Cayman Islands decided to close the bank, but since the bank had no office, Cayman regulators at first didn't know where to go. They eventually sent teams to Uruguay and Argentina to locate bank documents and take control of bank operations. The Cayman Islands finally closed the bank a few months ago. The four shell banks investigated by the Subcommittee are only the tip of the iceberg. There are hundreds in existence, operating through correspondent accounts in the United States and around the world. By nature, shell banks operate in extreme secrecy and are resistant to regulatory oversight. No one really knows what they are up to other than their owners. Some jurisdictions known for offshore businesses, such as Jersey and Guernsey, refuse to license shell banks. Others, such as the Cayman Islands and the Bahamas, stopped issuing shell bank licenses several years ago. In addition, both the Cayman Islands and Bahamas announced that by the end of this year, 2001, all of their existing shell banks, which together number about 120, must establish a physical office within their respective jurisdictions, or lose their license. But other offshore jurisdictions, such as Nauru, Vanuatu and Montenegro, are continuing to license shell banks. Nauru alone has licensed about 400. Here at home, many U.S. banks, such as Bank of America and Chase Manhattan, will not open correspondent bank accounts for offshore shell banks as a matter of policy. But other banks, such as Citibank, continue to do business with offshore shell banks and continue to expose the U.S. banking system to the money laundering risks they bring. Our bill would close the door to these money laundering risks. Foreign shell banks occupy the bottom rung of the banking world, and they don't deserve a place in the U.S. banking system. It is time to shut the door to these rogue operators. In addition to barring offshore shell banks, the bill would require U.S. banks to exercise enhanced due diligence before opening a correspondent account for an offshore bank or a bank licensed by a jurisdiction known for poor anti-money laundering controls. These foreign banks also expose U.S. banks to high money laundering risks. Requiring U.S. banks to exercise enhanced due diligence prior to opening an account for one of these banks would not only help protect the U.S. banking system from the money laundering risks posed by these foreign banks, but would also help bring U.S. law into parity with the anti-money laundering laws of other countries. Another provision in the bill would address a key weakness in existing U.S. forfeiture law as applied to correspondent banking, by making a depositor's funds in a foreign bank's U.S. correspondent account subject to the same civil forfeiture rules that apply to depositors' funds in all other U.S. bank accounts. Right now, due to a quirk in the law, U.S. law enforcement faces a significant and unusual legal barrier to seizing funds from a correspondent account. Unlike a regular U.S. bank account, it is not enough for U.S. law enforcement to show that criminal proceeds were deposited into the correspondent account; the government must also show that the foreign bank holding the deposits was somehow part of the wrongdoing. That's not only a tough job, that can be an impossible job. In many cases, the foreign bank will not have been part of the wrongdoing, but that's a strange reason for letting the foreign depositor who was engaged in the wrongdoing escape forfeiture. And in those cases where the foreign bank may have been involved, no prosecutor will be able to allege it in a complaint without first getting the resources needed to chase the foreign bank abroad. Take the example of a financial fraud committed by a Nigerian national against a U.S. victim, a fraud pattern which the U.S. State Department has identified as affecting many U.S. citizens and businesses and which consumes U.S. law enforcement resources across the country. If the Nigerian fraudster deposits the fraud victim's funds in a personal account at a U.S. bank, U.S. law enforcement can freeze the funds and litigate the case in court. But if the fraudster instead deposits the victim's funds in a U.S. correspondent account belonging to a Nigerian bank at which the Nigerian fraudster does business, U.S. law enforcement cannot freeze the funds unless it is prepared to show that the Nigerian bank was involved in the fraud. And what prosecutor has the resources to travel to Nigeria to investigate a Nigerian bank? Even when the victim is sitting in the prosecutor's office, and his funds are still in the United States in a U.S. bank, the prosecutor's hands are tied unless he or she is willing to take on the Nigerian bank as well as the Nigerian fraudster. That is one reason so many Nigerian fraud cases are no longer being prosecuted in this country, because Nigerian criminals are taking advantage of that quirk in U.S. forfeiture law to prevent law enforcement from seizing a victim's money before it is transferred out of the country. Our bill would eliminate that quirk by placing civil forfeitures of funds in correspondent accounts on the same footing as forfeitures of funds in all other U.S. accounts. There is just no reason foreign banks should be shielded from forfeitures when U.S. banks would not be. The Levin-Grassley bill has a number of other provisions that would help U.S. law enforcement in the battle against money laundering. They include giving U.S. courts ``long-arm'' jurisdiction over foreign banks with U.S. correspondent accounts; expanding the definition of money laundering to include laundering funds through a foreign bank; authorizing U.S. prosecutors to use a Federal receiver to find a criminal defendant's assets, wherever located; and requiring foreign banks to designate a U.S. resident for service of subpoenas. These are realistic, practical provisions that could make a real difference in the fight against money laundering. One state Attorney General who has reviewed the bill has written that ``there is a serious need for modernizing and refining the federal money laundering statutes to thwart the efforts of the criminal element and close the loopholes they use to their advantage.'' He expresses ``strong support'' for the bill, explaining that it ``will greatly aid law enforcement'' and ``provide new tools that will assist law enforcement in keeping pace with the modern money laundering schemes.'' Another state Attorney General has written that the bill ``would provide much needed relief from some of the most pressing problems in money laundering enforcement in the international arena.'' She predicts that the bill's ``effects on money laundering affecting victims of crime and illegal drug trafficking would be dramatic.'' She also writes that the ``burdens it places on the financial institutions are well considered, closely tailored to the problems, and reasonable in light of the public benefits involved.'' This country passed its first major anti-money laundering law in 1970, when Congress made clear its desire to not allow U.S. banks to function as conduits for dirty money. Since then, the world has experienced an enormous growth in the accumulation of wealth by individuals around the world, and in the activities of private banks servicing these clients. At the same time there has been a rapid increase in offshore activities, with the number of offshore jurisdictions doubling from about 30 to about 60, and the number of offshore banks skyrocketing to an estimated worldwide total of 4,000, including more than 500 shell banks. At the same time, the Subcommittee investigations have shown that private and correspondent accounts have become gateways for criminals to carry on money laundering and other criminal activity in the United States and to benefit from the safety and soundness of the U.S. banking industry. U.S. law enforcement needs stronger tools to detect, stop and prosecute money launderers attempting to use these gateways into the U.S. banking system. Enacting this legislation would help provide the tools needed to close those money laundering gateways and curb the dirty funds seeking entry into the U.S. banking industry. I ask unanimous consent that letters in support for the bill from the two State Attorneys General of the States of Massachusetts and Arizona, as well as a short summary of the bill, and the text of the bill be printed in the Record.