Tracking Terrorist Financing By Molly Ivins

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Thu, 14 Apr 2005 23:23:22 -0700 (PDT)

Tracking Terrorist Financing By Molly Ivins

 

 

 

Tracking Terrorist Financing

http://www.issuesandalibis.org/

 

By Molly Ivins

 

AUSTIN, Texas -- Freshly returned from a week of intellectual sparring

at the Conference on World Affairs, the annual gabfest in Boulder,

Colo. (the late jazz critic Leonard Feather called it " the leisure of

the theory class " ), I find making connections between headlines mere

child's play.

 

After a week of contemplating Persian poetry, the possible aphrodisiac

effect of black licorice, American foreign policy, what we do in the

name of God (an actual panel title), war and medicine, I scarcely

blink, much less boggle, at such simple topics as tax policy,

international finance, terrorism and offshore money laundering.

 

This all started with a report in The New York Times last week that

the administration is finding heavy sledding in its efforts to go

after terrorist financing. But who could oppose such a worthy

endeavor? For starters, this administration. You may recall that Bill

Clinton had commenced an international effort to track terrorist

money, but the Bushies, upon arriving, denounced it as yet another

soft-headed multilateralist initiative and promptly abandoned it. Then

came 9-11, and suddenly it was in vogue again, though experts in the

field, such as Sen. Paul Sarbanes, criticized the administration's

initial efforts as lukewarm and half-hearted.

 

The Times reports a classic " little-noted provision " (oh, the trouble

caused by " little-noted provisions " ) in the intelligence reform bill

passed by Congress in December. It gives the government new tools to

go after specific suspects and, " more broadly, to analyze patterns in

terrorist financing and other financial crimes. They said they were

mindful of privacy concerns that such a system is likely to provoke

and wanted to include safeguards to prevent misuse of what would

amount to an enormous cache of financial records ... tactics ...

 

(that) have already caused something of a backlash among banking

compliance officers -- and even some federal officials, who say the

effort has gone too far in penalizing the financial sector for lapses

and has effectively criminalized what were once seen as technical

violations. "

 

Like what " technical violations " ? Perhaps we find a hint in a recent

report by the Tax Justice Network, an international group of tax

experts and economists. The Network estimates the rich have stashed an

impressive $11.5 trillion in tax havens. John Christensen, coordinator

of the Network and former adviser to the government of the tax haven

island of Jersey, told The Observer of London: " This is one of the

defining crises of our times. One of the most fundamental changes in

our society in recent years is how money and the rich have become more

mobile. This has resulted in the wealthy becoming less inclined to

associate with normal society and feeling no obligation to pay taxes. "

 

Now see if you can make a connection to this report in the March 30

New York Times: America lost more than a quarter of a trillion dollars

a year in tax revenue due to cheating in 2001. " The IRS said that 80

percent of taxes owed but not paid by individuals were a result of

underreporting of income, often by people working in the service

sector. " " Ah ha! " you think. " All those waitresses failing to report

their cash tips. " Nope, according to the IRS, underreporting of

" business income " by individuals costs the treasury $100 billion,

while underreporting of wages, salaries and tips accounts for $18 billion.

 

" Business income " means sole proprietorships, S corporations --

lobbyists, sports agents, political consultants, etc. The IRS said in

total it was cheated out of as much as $353 billion in 2001, the most

recent such study since 1998. That would cover the cost of Medicare

and the war in Iraq, with change left over.

 

Which brings us back to the howling over the plan to give government

access to possibly hundreds of millions of international banking

records in order to track and deter terrorism. As a good civil

libertarian, I'm concerned about the privacy issues here myself. But

money laundering, whether for terrorist purposes or tax evasion, is a

crime.

 

Now consider the plight of the Bush administration. It has done gone

and upset the banking industry, rather a large donor to the Republican

Party. Fifty-two banking associations around the country wrote a

letter to the Treasury Department in January complaining that they

should not be held responsible if drug dealers dump duffel bags with

hundreds of thousands of dollars in cash with them. (They didn't

actually say that, it's just what they meant.) A mere technical

violation. Not to mention the fact that many of the " mobile rich " who

stash their money offshore are also generous donors to Republican

causes. What's a poor party to do? Quel political pickle.

 

The Times reports a growing backlash among " congressional leaders. "

What do you think will happen now? Any chance the Justice Department

will be reined in from its " overly aggressive tactics " in this field?

 

Good for you. Now you, too, are ready to go to Boulder and find the

connections between Persian poetry and licorice.

© 2005 Molly Ivins