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  Conference Report: Dirty Money and National Security


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On September 10, 2003, CRT participant Raymond Baker organized a second conference with The Brookings Institution to highlight the dysfunctional impact on globalization of the flow of “dirty” money from poor, developing and emerging market nations to the money centers of the world such as London and New York City. This year the focus of discussion was the implications of “dirty” money, or what one speaker also called “rogue” capital, for national security concerns of the United States in particular.

Last year the focus of the conference had been on the negative impact on economic growth for poor, developing and emerging market nations of these capital outflows. Subsequent to that conference, the Caux Round Table (“CRT”) had issued a policy statement calling for the reduction of “dirty” money flows.

Raymond Baker defines “dirty” money as money that is illegally acquired, illegally transferred or illegally used. Primarily it is money that either originates in illegal activities such as drug sales, corruption in the purchase of special favoritism, or tax evasion, or is transferred into secrecy accounts and then laundered to facilitate terrorism, crime or other illegal activities.

Senator Grassley (R-Iowa), Chairman of the US Senate Committee on Finance, in a speech delivered by Eric Akers, opened the discussions with the forceful point that money fuels efforts to commit crimes. Desire for money is the motivation for many illegal and unjust activities. If the gains from crime could be nullified so that “crime would not pay,” criminal activity would decrease.

For example, the drug trade in the United States is a lucrative industry. The distribution and sale of illegal drugs in the United States grosses some $62 billion a year. Of those proceeds, only some $300 million are confiscated by authorities, a loss easily built into cost of sales.

The large flows of “dirty” money, according to Senator Grassley, are a danger to stable economies for the impact on exchange rates, the monetary base of a national economy, and interest rates. And, what “dirty” money can finance in illegal activity such as terrorism is of great concern.

Senator Grassley called for the formation of a national money-laundering strategy to illuminate 1) interests, goals and needs; 2) needed tools and mechanisms; 3) implementation protocols; and 4) resources needed.

The system and mechanisms of “dirty” money flows need to be exposed and explained to all concerned so that the true costs of the status quo are better understood as a spur to remedial action. 


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