Money laundering, both for terrorist finance and tax evasion, threatens national security. Now a private group that watchdogs the quality of anti-money laundering efforts has put forth a smart plan to modernize and upgrade our government's capacity to track illicit cross-border financial transactions—news you will be hard-pressed to find elsewhere.
Jim Henry, DCReport's economics correspondent, has spent decades documenting illicit money flows. He estimates from analysis of official banking and trade documents that at least $40 trillion of illicit money sloshes around the globe. The total may be $50 trillion. To get an idea of the gigantic size of that corrupt money bag consider this: Henry's lower-end estimate almost equals the combined annual economic output of the world's two largest economies, America and China.
The George W. Bush administration was so averse to a serious hunt for big-league tax cheats, it disconnected from a nascent movement by major countries to coordinate their tax policies, a boon to tax cheats. It even refused to hire 80 more IRS investigators to hunt for transactions by Al Qaeda and other terrorist groups in the wake of 9/11.
The official excuse was that taxpayers couldn't afford an extra $12 million in spending, an absurdity when trillions were being spent on the wars in Afghanistan, still underway, and Iraq. But the funding denial made perfect sense if you knew that anti-money laundering nets catch tax cheats along with terrorists. And since the political donor class is rife with tax cheating, catching tax cheats can be inconvenient for politicians in power, and fellow party members, as a Congressional staffer recently reminded me.
