Foreign leaders and their families are still able to channel hundreds of millions of dollars in potentially corrupt money into the United States despite post-Sept. 11 laws cracking down on money laundering, according to a report released at a Senate hearing Thursday.
Sen. Carl Levin, head of a Senate Homeland Security panel, said that while financial institutions have become better at detecting possibly tainted money, glaring loopholes remain in anti-money laundering law established in the 2001 Patriot Act. He said this has allowed lawyers, real estate agents, lobbyists and others to act as conduits for foreigners seeking to move their wealth into the United States.
A report issued by the Democrat and Sen. Tom Coburn, the top-ranking Republican on the panel, detailed how the son of the president of Equatorial Guinea was able to move US$110 million in suspect funds into the United States from 2004 to 2008, while an Angolan arms dealer, now in a French jail, maintained 30 US bank accounts handling some $60 million in transactions between 1997 and 2007.
"Laundered money is used to train and provide support for terrorists and terrorism," Levin said. "If we want to credibly lead efforts to stop illegal money abroad, we've got to stop it here at home as well."
The 330-page report concluded that powerful foreign officials and their families, known internationally as "politically exposed persons" or PEPs, have used lawyers, real estate and escrow agents, lobbyists, bankers and university officials to circumvent anti-corruption laws.
It noted that the US Treasury Department exempted some industries, such as hedge funds and the real estate industry, from Patriot Act anti-money laundering requirements, and that many of the professionals examined were under no legal obligation to take anti-money laundering precautions when dealing with a foreign official.
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