HEARING ON MONEY LAUNDERING LEGISLATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01152R001001310023-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 27, 2016
• Document Release Date: August 31, 2010
• Sequence Number: 23
• Publication Date: July 24, 1985
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87M01152R001001310023-6
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OLL85-2369
24 July 1985
FROM: STAT
Office of Legislative' Liaison
SUBJECT: Hearing on Money Laundering Legislation
1. On 24 July 1985, I attended a hearing on money
laundering conducted by the Subcommittee on Crime of the House
Judiciary Committee. The purpose of the hearing was to review
various legislative proposals that would criminalize the
activity of money laundering. Representative Hughes, Chairman
of the Subcommittee on Crime, and Representative Gekas
conducted the hearing. Testifying before the Subcommittee was
John Walker, Assistant Secretary of the Treasury; Jay Stevens,
Associate Attorney General; and James Harmon, Executive
Director to the President's Commission on Organized Crime.
2. The hearing began with Mr. Stevens' testimony regarding
the Administration proposal. Mr. Stevens explained each
section of the bill. In comparing the Administration's bill to
the bill introduced by Congressman Hughes, Mr. Stevens noted
that the Administration bill took a much more comprehensive
approach to the problem. Mr. Walker's testimony focused on the
section of the bill that removes certain prohibitions against
banks disclosing financial information. Mr. Walker noted that
this section, in combination with the section giving Treasury
additional powers to seek financial data from banks, would
significantly improve the ability of the government to monitor
financial information. Finally, Mr. Harmon testified on the
scope of money laundering activities by organized crime and
their use of casinos to launder money.
3. Following the testimony of Messrs. Stevens, Walker and
Harmon, Congressmen Hughes proceeded to ask a series of
questions that focused on the scope of the Administration
proposal. Congressman Hughes stated that the bill was so broad
that it could apply to street robberies or other criminal acts
that are normally covered by state law. The Congressman also
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 Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152RO01001310023-6
expressed concern that the scienter standard used in the bill
was overbroad. Specifically, Congressman Hughes stated that
the provision in the bill that punishes an individual who
launders money in reckless disregard to whether the money is
derived from an illegal source is overbroad since an individual
may not be alert to the risk that the money is derived from an
illegal source. Because of these concerns, the Congressman
stated that the Committee would redraft the Administration
proposal so as to narrow its scope.
4. Although the Administration proposal will probably be
significantly narrowed in scope, the Agency's equities will
still be protected under a more narrowly drafted bill since the
promise by the Department of Justice to issue a Statement of
Policy regarding the inapplicability of the Money Laundering
bill to intelligence activities will not be affected by the
proposed changes that Congressman Hughes is considering.
I will, of course, continue to monitor the money laundering
bills being considered by the Committee to ensure that
intelligence activities will not be affected.
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Declassified in Part - Sanitized Copy Approved for Release 2012/11/15: CIA-RDP87MO1152RO01001310023-6