Money Laundering Legislation on Hold for Now

12 October 2001
An anti-money laundering bill passed by a U.S. House of Representatives committee yesterday was dropped last night from anti-terrorism legislation considered by both the House and the U.S. Senate.

The press secretary for Rep. James Leach, R-Iowa, confirmed Tuesday that the House's anti-money laundering bill, which includes a section that would block Internet gambling, will be considered separately from the anti-terrorism bill being fast-tracked through Congress.

The anti-money laundering bill was approved by the House Financial Services Committee yesterday by a vote of 62-1. The Internet gambling section drew heated debate but an amendment proposed by Rep. Michael Castle, R-Del., to scratch the proposed ban on online betting lost on a 37-25 vote.

Congress opted yesterday to include the money laundering section in the anti-terrorism bill, but the financial services committees from the two houses couldn't come to terms on the provisions. The section was consequently dropped. The anti-terrorism act went to a full vote in the Senate last night and passed 96-1. A House version, minus the money laundering provisions, passed today on a 337-79 vote.

A money laundering bill will instead be considered as a free-standing piece of legislation.

Most representatives from the Internet gambling industry agree that the business is not the forum for money laundering that it's made out to be.

"Any business that deals in large amounts of cash could be a vehicle for money laundering," Nevada gaming attorney Anthony Cabot said. "But that being said, if it's properly regulated, then the prospects for money laundering decrease significantly and could effectively be eliminated."

Cabot also brought up a point that was frequently made during debates over online gambling prohibition legislation introduced during recent sessions of Congress: the absence of enforceability.

"If an offshore casino is engaged in money laundering, the fact that they (the U.S. government) said it's illegal now to process credit cards and other things, is effectively like telling bin Ladin that we're passing a law saying it's illegal to be a terrorist," Cabot said. "What we're going to have is a situation where it's already illegal to money launder, and it's not going to change their course of conduct because now it's double illegal."