NEG
1NC
Money Laundering being successfully checked now
Schectman 15
(a reporter for Risk & Compliance Journal and previously wrote for CIO Journal, Joel, “U.S.
Official Says Money Launderers Have Been Hamstrung”, The Wall Street Journal, Jun 12, 2015,
http://blogs.wsj.com/riskandcompliance/2015/06/12/u-s-official-says-money-launderers-havebeen-hamstrung/, GCM)
The U.S. Treasury Department says its efforts to squeeze money launderers and terrorists out of
the U.S. financial system are working. Two Treasury Department assessments, released Friday,
found that new bank requirements, sanctions and a heightened culture of compliance had
effectively pushed illegal activity to the fringes of the financial system. Drug dealers and
terrorists are now often forced to rely on costly and inefficient ways of moving money, such as
shipments of hard cash, a senior Treasury official said on a conference call with reporters. The
Treasury assessment–the first in more than a decade–uncovered no new or emerging methods
used by criminals or terrorists, the official said. “[Money launderers] have been constrained in
their existing methods,” which include conspiring with employees at banks and using
unregistered foreign money transmitters, said the official, who the Treasury Department
requested not be named. Despite these successes, money launderers continue to use shell
companies to hide the purpose of transactions. One of the agency reports points out that under
state laws, businessmen can register corporate entities under an attorney’s name without
revealing the true owners. These corporate entities are sometimes used to covertly move illicit
funds, and skirt anti-money laundering rules, the report said. The Treasury Department is
pushing for legislation that would make sure beneficial ownership is recorded, the official said.
Mass data collection helps stop money laundering and drug trafficking
Heath 15
(An investigative reporter at USA TODAY, writing primarily about law and criminal justice- His work includes award-winning series on
misconduct by federal prosecutors and air pollution outside schools. He has a law degree from Georgetown University, Brad, “US
secretly tracked billions of calls for decades”, USA Today, April 8, 2015, http://www.usatoday.com/story/news/2015/04/07/deabulk-telephone-surveillance-operation/70808616/, ASN)
The DEA began assembling a data-gathering program in the 1980s as the government searched for new ways to battle Colombian drug cartels. Neither informants nor undercover agents had been enough to crack
the cartels' infrastructure. So the agency's intelligence arm turned its attention to the groups' communication networks. Calling records – often called "toll records" – offered one way to do that. Toll records are
, DEA agents had decades of
experience gathering toll records of people they suspected were linked to drug trafficking, albeit one
comparable to what appears on a phone bill – the numbers a person dialed, the date and time of the call, its duration and how it was paid for. By then
person at a time. In the late 1980s and early 1990s, officials said the agency had little way to make sense of the data their agents accumulated and almost no ability to use them to ferret out new cartel
The military responded
with a pair of supercomputers and intelligence analysts who had experience tracking the
communication patterns of Soviet military units. "What they discovered was that the incident of a communication was perhaps as important as the content of a communication," a
former Justice Department official said. The military installed the supercomputers on the fifth floor of the DEA's headquarters, across from a shopping mall in Arlington, Va. The system they
built ultimately allowed the drug agency to stitch together huge collections of data to map
trafficking and money laundering networks both overseas and within the USA. It allowed agents to link the call records
connections. Some agents used legal pads. "We were drowning in toll records," a former intelligence official said. The DEA asked the Pentagon for help.
its agents gathered domestically with calling data the DEA and intelligence agencies had acquired outside the USA. (In some cases, officials said the DEA paid employees of foreign telecom firms for copies of call
The result "produced
major international investigations that allowed us to take some big people," Constantine said, though he said he could not
logs and subscriber lists.) And it eventually allowed agents to cross-reference all of that against investigative reports from the DEA, FBI and Customs Service.
identify particular cases. In 1989, President George H.W. Bush proposed in his first prime-time address using "sophisticated intelligence-gathering and Defense Department technology" to disrupt drug trafficking.
the drug agency intensified its intelligence push, launching a
"kingpin strategy" to attack drug cartels by going after their finances, leadership and communication. In 1992, in the last months
Three years later, when violent crime rates were at record highs,
of Bush's administration, Attorney General William Barr and his chief criminal prosecutor, Robert Mueller, gave the DEA permission to collect a much larger set of phone data to feed into that intelligence
operation. Instead of simply asking phone companies for records about calls made by people suspected of drug crimes, the Justice Department began ordering telephone companies to turn over lists of all phone
calls from the USA to countries where the government determined drug traffickers operated, current and former officials said. Barr and Mueller declined to comment, as did Barr's deputy, George Terwilliger III,
"It has been apparent for a long time in both the law enforcement and intelligence
worlds that there is a tremendous value and need to collect certain metadata to support
legitimate investigations." The data collection was known within the agency as USTO (a play on the fact that it tracked calls from the U.S. to other countries). The DEA obtained
though Terwilliger said,
those records using administrative subpoenas that allow the agency to collect records "relevant or material to" federal drug investigations. Officials acknowledged it was an expansive interpretation of that
authority but one that was not likely to be challenged because unlike search warrants, DEA subpoenas do not require a judge's approval. "We knew we were stretching the definition," a former official involved in
the process said. Officials said a few telephone companies were reluctant to provide so much information, but none challenged the subpoenas in court. Those that hesitated received letters from the Justice
Department urging them to comply. After Sprint executives expressed reservations in 1998, for example, Warren, the head of the department's drug section, responded with a letter telling the company that
he initiative has been determined to be legally appropriate" and that turning over the call data
was "appropriate and required by law." The letter said the data would be used by authorities "to focus scarce investigative resources by means of sophisticated
"t
pattern and link analysis." The letter did not name other telecom firms providing records to the DEA but did tell executives that "the arrangement with Sprint being sought by the DEA is by no means unique to
Sprint" and that "major service providers have been eager to support and assist law enforcement within appropriate bounds." Former officials said the operation included records from AT&T and other telecom
companies. A spokesman for AT&T declined to comment. Sprint spokeswoman Stephanie Vinge Walsh said only that "we do comply with all state and federal laws regarding law enforcement subpoenas." Agents
said that when the data collection began, they sought to limit its use mainly to drug investigations and turned away requests for access from the FBI and the NSA. They allowed searches of the data in terrorism
cases, including the bombing of a federal building in Oklahoma City that killed 168 people in 1995, helping to rule out theories linking the attack to foreign terrorists. They allowed even broader use after Sept. 11,
2001. The DEA's public disclosure of its program in January came in the case of a man charged with violating U.S. export restrictions by trying to send electrical equipment to Iran. At first, officials said the DEA
gathered records only of calls to a handful of countries, focusing on Colombian drug cartels and their supply lines. Its reach grew quickly, and by the late 1990s, the DEA was logging "a massive number of calls,"
said a former intelligence official who supervised the program. Former officials said they could not recall the complete list of countries included in USTO, and the coverage changed over time. The Justice
Department and DEA added countries to the list if officials could establish that they were home to outfits that produced or trafficked drugs or were involved in money laundering or other drug-related crimes. The
Justice Department warned when it disclosed the program in January that the list of countries should remain secret "to protect against any disruption to prospective law enforcement cooperation." At its peak, the
operation gathered data on calls to 116 countries, an official involved in reviewing the list said. Two other officials said they did not recall the precise number of countries, but it was more than 100. That gave the
collection a considerable sweep; the U.S. government recognizes a total of 195 countries. At one time or another, officials said, the data collection covered most of the countries in Central and South America and
the Caribbean, as well as others in western Africa, Europe and Asia. It included Afghanistan, Pakistan, Iran, Italy, Mexico and Canada. The DEA often — though not always — notified foreign governments it was
collecting call records, in part to make sure its agents would not be expelled if the program was discovered. In some cases, the DEA provided some of that information to foreign law enforcement agencies to help
them build their own investigations, officials said. The DEA did not have a real-time connection to phone companies' data; instead, the companies regularly provided copies of their call logs, first on computer disks
and later over a private network. Agents who used the system said the numbers they saw were seldom more than a few days old. The database did not include callers' names or other identifying data. Officials said
agents often were able to identify individuals associated with telephone numbers flagged by the analysis, either by cross-referencing them against other databases or by sending follow-up requests to the phone
companies. To keep the program secret, the DEA sought not to use the information as evidence in criminal prosecutions or in its justification for warrants or other searches. Instead, its Special Operations Division
passed the data to field agents as tips to help them find new targets or focus existing investigations, a process approved by Justice Department lawyers. Many of those tips were classified because the DEA phone
searches drew on other intelligence data. That practice sparked a furor when the Reuters news agency reported in 2013 that the DEA trained agents to conceal the sources of those tips from judges and defense
lawyers. Reuters said the tips were based on wiretaps, foreign intelligence and a DEA database of telephone calls gathered through routine subpoenas and search warrants. As a result, "the government shortcircuited any debate about the legality and wisdom of putting the call records of millions of innocent people in the hands of the DEA," American Civil Liberties Union lawyer Patrick Toomey said.
Money Laundering erodes political and social systems affecting stability,
diminishes economic growth, and hurts basic individual liberties
Crime and Misconduct Commission 05
(The Crime and Corruption Commission (CCC) is a statutory body set up to combat and reduce
the incidence of major crime and corruption in the public sector in Queensland. Its functions and
powers are set out in the Crime and Corruption Act 2001, “Background intelligence brief Money
laundering,” Crime and Corruption Commission, July 2005, http://www.ccc.qld.gov.au/researchand-publications/publications/crime/money-laundering.pdf, GCM)
There are many reasons why money laundering is harmful in society. Some examples are listed
below. It makes crime pay. Money laundering allows drug traffickers, smugglers and other
criminals to accumulate economic power and expand their operations. This has the potential to
erode the political and social systems of a country, and could affect stability and the general rule
of law (Alweendo 2005). This in turn drives up the cost of law enforcement and the spin-off
costs of health care in the treatment of problems such as drug addiction. It has the potential to
undermine the financial community because of the sheer magnitude of the sums involved.
Money laundering on a grand scale has the potential to change the demand for cash, make
interest rates and exchange rates more volatile, and cause high inflation rates for a country.
Laundering diminishes economic development because it undermines legitimate business,
competition and government tax revenue, and therefore indirectly harms honest taxpayers and
reduces legitimate job opportunities. Money laundering Perceived ease of entry to a country
attracts an undesirable element across its borders, degrading quality of life and raising concerns
about national security (Solicitor General Canada 1998). The crimes perpetrated by these
undesirable elements erode basic individual liberties by threatening rights to life and
entitlements to own property. There are great incentives, therefore, for governments and
private enterprise to work together to combat money laundering locally and globally.
Economic decline risks extinction
Auslin & Lachman, 2009, The Global Economy Unravels, Forbes, [Resident Scholar –
American Enterprise Institute; Resident Fellow – American Enterprise Institute, Michael;
Desmond], March 6, p. http://www.aei.org/article/100187
What do these trends mean in the short and medium term? The Great Depression showed how social and global
chaos
followed hard on economic collapse. The mere fact that parliaments across the globe, from America to Japan, are
unable to make responsible, economically sound recovery plans suggests that they do not know what to do and are simply hoping
for the least disruption. Equally worrisome is the adoption of more statist economic programs around the globe, and the concurrent
decline of trust in free-market systems. The threat of instability is a pressing concern. China, until last year the world's fastest
growing economy, just reported that 20 million migrant laborers lost their jobs. Even in the flush times of recent years, China faced
upward of 70,000 labor uprisings a year. A
sustained downturn poses grave and possibly immediate threats
to Chinese internal stability. The regime in Beijing may be faced with a choice of repressing its own people or diverting
their energies outward, leading to conflict with China's neighbors. Russia, an oil state completely dependent on energy sales, has
had to put down riots in its Far East as well as in downtown Moscow. Vladimir Putin's rule has been predicated on squeezing civil
liberties while providing economic largesse. If that devil's bargain falls apart, then wide-scale
repression inside Russia,
along with a continuing threatening posture toward Russia's neighbors, is likely. Even apparently
stable societies face increasing risk and the threat of internal or possibly external conflict. As Japan's exports have plummeted by
nearly 50%, one-third of the country's prefectures have passed emergency economic stabilization plans. Hundreds of thousands of
temporary employees hired during the first part of this decade are being laid off. Spain's unemployment rate is expected to climb to
nearly 20% by the end of 2010; Spanish unions are already protesting the lack of jobs, and the specter of violence, as occurred in the
1980s, is haunting the country. Meanwhile, in Greece, workers have already taken to the streets. Europe
as a whole will
face dangerously increasing tensions between native citizens and immigrants, largely from poorer Muslim nations,
who have increased the labor pool in the past several decades. Spain has absorbed five million immigrants since 1999, while nearly
9% of Germany's residents have foreign citizenship, including almost 2 million Turks. The xenophobic labor strikes in the U.K. do not
bode well for the rest of Europe. A
prolonged global downturn, let alone a collapse, would dramatically raise
tensions inside these countries. Couple that with possible protectionist legislation in the United States, unresolved ethnic
and territorial disputes in all regions of the globe and a loss of confidence that world leaders actually know what they are doing.
The result may be a series of small explosions that coalesce into a big bang.
Uniqueness
Frontline
AML in the squo prevents money laundering
Sareena M. Sawhney 4/25/14 (CONSEQUENCES OF HAVING A POOR ANTI-MONEY LAUNDERING
PROGRAM, Sareena M. Sawhney, MBA, CFE, CAMS, MAFF, is a Director in the Litigation and
Corporate Financial Advisory Services Group at Marks Paneth LLP,
http://www.markspaneth.com/publications/consequences-of-having-a-poor-anti-moneylaundering-program, ZV)
Section 352 of the Patriot Act requires all financial institutions to establish AML programs
inclusive of the following: Establish internal policies, procedures, and controls to prevent money
laundering; Designate a money laundering compliance officer; Establish an ongoing training
program for awareness of money laundering; Establish an independent audit function to test
the programs. Section 326 of the Patriot Act expands on the Bank Secrecy Act by requiring
financial institutions to implement Customer Identification Programs (“CIPs”). The CIPs are to be
incorporated into financial institutions’ money laundering programs and should verify and
maintain records of any individual seeking to open an account. The Patriot Act also prohibits
foreign shell banks from maintaining correspondent accounts at any US financial institution.
“Shell banks” lack a physical presence[4] in any country. It is strongly encouraged that the US
institutions verify all the information provided by the foreign institution at least every two years.
Additionally, financial institutions are required to establish due diligence policies, procedures
and controls that are designed to detect money laundering through private and correspondent
bank accounts[5] held by non-US citizens. Brokers and dealers in securities must file with FinCEN
(Financial Crimes Enforcement Network) a report of any suspicious activity that involves funds
or assets of at least $5,000, and the broker-dealer knows, suspects or has reason to suspect that
the transaction involves illegal activity, evades regulations under the Bank Secrecy Act or has no
business or lawful purpose in which a particular customer would expect to engage in.
There is no guaranteed way to stop money laundering. – but constant vigilance
is key.
Chianuri 6/23/15,
(Certified Anti-Money Laundering Specialist (CAMS) from the Association of Certified Anti-Money
Laundering Specialists (ACAMS), Valerie, “Treasury Department Publishes National Money Laundering Risk
Assessment and National Terrorist Financing Risk Assessment”, Davis Wright Tremaine LLP, 6/23/15,
http://www.jdsupra.com/legalnews/treasury-department-publishes-national-92243/, GCM)
The Department acknowledged that there is no “silver bullet” to combating money laundering
and terrorist financing in its press release accompanying the NMLRA and the NTFRA
and stresses that institutions should not use these assessments as sole sources of
information for developing their compliance efforts. The responsibility for development of
comprehensive compliance programs resides squarely with the institutions which should remain
constantly vigilant to the new money laundering methods developed by criminals.
Extentions
1/3 of FBI’s criminal referrals were money laundering
Megan Wallin 6-24-15 (“NSA can still see you”, Megan Wallin is a young writer with a background in
the social sciences, http://baltimorepostexaminer.com/nsa-can-still-see-you/2015/06/24, ZV)
Between 2003 and 2005, government records show that 143, 074 letters were issued by FBI
agents approving their ability to obtain secure information from individuals. Of the 53 actual
criminal referrals resulting, 17 were for money laundering, 17 for illegal immigration charges, 19
involved cases of fraud, and not a single one was turned in for suspected terrorism. That’s right.
According to UCLA’s analysis of the records, titled “Surveillance Under the Patriot Act,” fewer
than five years after the 9/11 attacks, the findings produced no progress toward seeking out
terrorists
Links
Link – Generics
Electronic surveillance prevents crimes with different methods.
Solove 4, Daniel J. Solove, Reconstructing Electronic Surveillance Law, 72 Geo. Wash. L. Rev.
1264 (2004).
http://scholarship.law.gwu.edu/cgi/viewcontent.cgi?article=2088&context=faculty_publications
, TK
Electronic surveillance is one of the central tools of modern law enforcement. It can aid
significantly in the investigations of crimes, for it allows the government to watch and listen to people during their unguarded
moments, when they may speak about their criminal activity. Video cameras may capture criminals in the act and aid
in their identification and arrest. Surveillance can also assist in preventing crimes because it
enables the government to learn about criminal activity that is afoot and to halt it before it
happens. Few would argue that these are not significant benefits. Surveillance can also prevent crime in another way. In 1791, Jeremy Bentham
imagined a new architectural design for a prison which he called the Panopticon.17 As Michel Foucault describes it: [A]t the periphery,
an annular building; at the centre, a tower; this tower is pierced with wide windows that open onto the inner side of the ring; the peripheric building is
divided into cells, each of which extends the whole width of the building . . . . All that is needed, then, is to place a supervisor in a central tower and to
shut up in each cell a madman, a patient, a condemned man, a worker or a schoolboy. By the effect of backlighting, one can observe from the tower,
standing out precisely against the light, the small captive shadows in the cells of the periphery. They are like so many cages, so many small theatres, in
which each actor is alone, perfectly individualized and constantly visible.18 The Panopticon achieves
obedience and discipline by
having all prisoners believe they could be watched at any moment. Their fear of being watched
inhibits transgression. Surveillance can thus prevent crime by making people decide not to
engage in it at all. More generally, surveillance is good because it is a highly effective tool for maintaining social order. We want to
foster a society where people are secure from theft, vandalism, assault, murder, rape, and
terrorism. We thus desire social control, and surveillance can help achieve that end.
Link – CCTV
CCTV use is increasing and is able to monitor more areas
Kille and Maimino 14
(Director at the Harvard Kennedy School – seven year assistant editor at the Boston Phoenix – managing editor at the San Francisco
Bay Guardian – research on environment, energy, sustainability, transportation and urbanism, Leighton and Martin, “The effect of
CCTV on public safety: Research roundup”, Shorenstein Center on Media, Politics and Public Policy, February 11, 2014,
http://journalistsresource.org/studies/government/criminal-justice/surveillance-cameras-and-crime, ASN)
Millions of closed-circuit television (CCTV) cameras are installed in streets and businesses throughout the world with the stated goal
of reducing crime and increasing public safety. The United Kingdom is one of the most enthusiastic proponents, with an estimated
1.9 million cameras in 2011 — one for every 32 U.K. residents — and the number continues to rise. Chicago reportedly has at least
15,000 cameras installed in one of the largest U.S. networks — which has prompted civil liberties groups to express strong concerns
— while in New York, cameras are increasingly found both on public transit as well as in businesses and even high-end residences.
The 9/11 attacks led many municipalities to start installing CCTV systems, but sometimes what’s put in
place goes beyond the original mandate: For example, Oakland, Calif., took $7 million of federal money intended for safeguarding its
port and is using it to create a citywide surveillance system instead. According to industry estimates, the
global video
surveillance market is expected to grow from $11.5 billion in 2008 to $37.7 billion in 2015. A 2013 New York
Times/CBS poll found that 78% of respondents supported the use of surveillance cameras in public
places, and authorities tend to point to spectacular successes — for example, crucial images
cameras provided of the Boston Marathon bombing suspects or the identification of those responsiblefor the
2005 London attacks. Still, concerns remain about systems’ potential to violate personal privacy as well as their overall costeffectiveness. A 2013 Chicago Tribune opinion piece quoted a city spokesman as saying that surveillance cameras helped solve 4,500
crimes over four years, but the writer notes that more than a million are estimated to have taken place over that time period —
meaning that the cameras’ contribution was 0.05% at best. CCTV cameras also have the potential of creating unintended effects,
good and bad. The “halo effect” refers to the potential for greater security in areas outside the view of cameras; this could be offset
by the “displacement effect,” which pushes antisocial activity to other parts of the city. Cameras could also promote a false sense of
security and lead citizens to take fewer precautions, or they could also cause more crimes to be reported, and thus lead to a
perceived increase in crime. And as with the 2013 revelations of widespread data collection by the U.S. National Security
Administration, the indiscriminate gathering of information on law-abiding citizens, however well-intentioned, has the potential for
misuse. The Washington Post reported in February 2014 that new
aerial video surveillance technologies are
being deployed that can monitor virtually everything in an area the size of a small city. A 2010
document from the European Forum for Urban Security, “Charter for a Democratic Use of Video-Surveillance,” provides a useful
overview of the issues at stake as well as a set of principles and tools to ensure that citizens’ rights are
respected with CCTV systems. These include: Necessity: The use of camera systems must be justified
empirically, ideally by an independent authority. Objectives and intended outcomes must be defined. Proportionality:
CCTV equipment must be appropriate for the problem it is intended to address. Technology should
“respond to the established objectives, without going further.” Data should be protected and the length of time it is retained be
clearly defined. Transparency: Citizens should know what the objectives of a CCTV system are, what its
installation and operational costs are, the areas being surveyed, and what the results are. Reports should occur regularly so citizens
can make informed decisions. Accountability:
Those in charge of public CCTV systems should be clearly
identified and accountable to the public, whether the systems are run by the government or private firms.
Independent oversight: An external body should be charged with ensuring that systems respect
the public’s rights and are achieving their stated objectives. Ideally citizens would have a voice in the oversight
process.
Link – DEA
Curtailing surveillance crushes DEA crime prevention.
Wing, 14
Nick Wing, Senior Viral Editor at The Huffington Post., 10/24/14(“The DEA Once
Turned A 14-Year-Old Into A Drug Kingpin. Welcome To The War On Drugs”,
The Huffington Post, October 24th, 2014,
http://www.huffingtonpost.com/2014/10/24/dea-war-ondrugs_n_6030920.html, Accessed: July 13th, 2015, DSF)
The DEA has been spying on U.S. citizens with a surveillance program more expansive than the
NSA's.
Just months after Edward Snowden unmasked the National Security Agency's massive domestic
spying program, The New York Times broke news of the Hemisphere Project, which pairs experts
from telecommunications giant AT&T with federal and local anti-drug officials, including DEA
agents. It gives law enforcement officials access to "every call that passes through an AT&T
switch -- not just those made by AT&T customers -- and includes calls dating back 26 years,"
according to the Times report. That's around 4 billion call records every day, each logged with
information on the location of callers. The official government slideshow describing the program
suggested it had been helpful in tracking drug dealers who frequently change phones, or use
disposable "burner" phones.
The White House attempted to allay privacy concerns about the Hemisphere Project last year,
noting that AT&T stores the collected data, unlike in the NSA's program, in which data is turned
over to the government. Federal officials can quickly access the records, however, often within
an hour of a subpoena.
Mass data collection helps stop money laundering and drug trafficking
Heath 15
(An investigative reporter at USA TODAY, writing primarily about law and criminal justice- His work includes award-winning series on
misconduct by federal prosecutors and air pollution outside schools. He has a law degree from Georgetown University, Brad, “US
secretly tracked billions of calls for decades”, USA Today, April 8, 2015, http://www.usatoday.com/story/news/2015/04/07/deabulk-telephone-surveillance-operation/70808616/, ASN)
The DEA began assembling a data-gathering program in the 1980s as the government searched for new ways to battle Colombian
drug cartels. Neither informants nor undercover agents had been enough to crack the cartels' infrastructure. So the agency's
intelligence arm turned its attention to the groups' communication networks. Calling records – often called "toll records" – offered
one way to do that. Toll records are comparable to what appears on a phone bill – the numbers a person dialed, the date and time
of the call, its duration and how it was paid for. By then,
DEA agents had decades of experience gathering toll
records of people they suspected were linked to drug trafficking, albeit one person at a time. In the late
1980s and early 1990s, officials said the agency had little way to make sense of the data their agents accumulated and almost no
ability to use them to ferret out new cartel connections. Some agents used legal pads. "We were drowning in toll records," a former
intelligence official said. The DEA asked the Pentagon for help. The
military responded with a pair of
supercomputers and intelligence analysts who had experience tracking the communication
patterns of Soviet military units. "What they discovered was that the incident of a communication was perhaps as important as
the content of a communication," a former Justice Department official said. The military installed the supercomputers on the fifth
floor of the DEA's headquarters, across from a shopping mall in Arlington, Va. The
system they built ultimately
allowed the drug agency to stitch together huge collections of data to map trafficking and
money laundering networks both overseas and within the USA. It allowed agents to link the call records its
agents gathered domestically with calling data the DEA and intelligence agencies had acquired outside the USA. (In some cases,
officials said the DEA paid employees of foreign telecom firms for copies of call logs and subscriber lists.) And it eventually allowed
agents to cross-reference all of that against investigative reports from the DEA, FBI and Customs Service. The result
"produced major international investigations that allowed us to take some big people," Constantine
said, though he said he could not identify particular cases. In 1989, President George H.W. Bush proposed in his first prime-time
address using "sophisticated intelligence-gathering and Defense Department technology" to disrupt drug trafficking. Three years
later, when violent crime rates were at record highs, the drug agency intensified its intelligence
push, launching a "kingpin strategy" to attack drug cartels by going after their finances,
leadership and communication. In 1992, in the last months of Bush's administration, Attorney General William Barr and
his chief criminal prosecutor, Robert Mueller, gave the DEA permission to collect a much larger set of phone data to feed into that
intelligence operation. Instead of simply asking phone companies for records about calls made by people suspected of drug crimes,
the Justice Department began ordering telephone companies to turn over lists of all phone calls from the USA to countries where
the government determined drug traffickers operated, current and former officials said. Barr and Mueller declined to comment, as
did Barr's deputy, George Terwilliger III, though Terwilliger said, "It
has been apparent for a long time in both the
law enforcement and intelligence worlds that there is a tremendous value and need to collect
certain metadata to support legitimate investigations." The data collection was known within the agency as
USTO (a play on the fact that it tracked calls from the U.S. to other countries). The DEA obtained those records using
administrative subpoenas that allow the agency to collect records "relevant or material to"
federal drug investigations. Officials acknowledged it was an expansive interpretation of that authority but one that was
not likely to be challenged because unlike search warrants, DEA subpoenas do not require a judge's approval. "We knew we were
stretching the definition," a former official involved in the process said. Officials said a few telephone companies were reluctant to
provide so much information, but none challenged the subpoenas in court. Those that hesitated received letters from the Justice
Department urging them to comply. After Sprint executives expressed reservations in 1998, for example, Warren, the head of the
department's drug section, responded with a letter telling the company that "the
initiative has been determined to be
legally appropriate" and that turning over the call data was "appropriate and required by law."
The letter said the data would be used by authorities "to focus scarce investigative resources by means of sophisticated pattern and
link analysis." The letter did not name other telecom firms providing records to the DEA but did tell executives that "the
arrangement with Sprint being sought by the DEA is by no means unique to Sprint" and that "major service providers have been
eager to support and assist law enforcement within appropriate bounds." Former officials said the operation included records from
AT&T and other telecom companies. A spokesman for AT&T declined to comment. Sprint spokeswoman Stephanie Vinge Walsh said
only that "we do comply with all state and federal laws regarding law enforcement subpoenas."
Agents said that when
the data collection began, they sought to limit its use mainly to drug investigations and turned
away requests for access from the FBI and the NSA. They allowed searches of the data in
terrorism cases, including the bombing of a federal building in Oklahoma City that killed 168
people in 1995, helping to rule out theories linking the attack to foreign terrorists. They allowed even
broader use after Sept. 11, 2001. The DEA's public disclosure of its program in January came in the case of a man charged with
violating U.S. export restrictions by trying to send electrical equipment to Iran. At first, officials said the DEA gathered records only of
calls to a handful of countries, focusing on Colombian drug cartels and their supply lines. Its reach grew quickly, and by the late
1990s, the DEA was logging "a massive number of calls," said a former intelligence official who supervised the program. Former
officials said they could not recall the complete list of countries included in USTO, and the coverage changed over time. The
Justice Department and DEA added countries to the list if officials could establish that they were
home to outfits that produced or trafficked drugs or were involved in money laundering or other
drug-related crimes. The Justice Department warned when it disclosed the program in January that the list of countries
should remain secret "to protect against any disruption to prospective law enforcement cooperation." At its peak, the operation
gathered data on calls to 116 countries, an official involved in reviewing the list said. Two other officials said they did not recall the
precise number of countries, but it was more than 100. That gave the collection a considerable sweep; the U.S. government
recognizes a total of 195 countries. At one time or another, officials said, the data collection covered most of the countries in Central
and South America and the Caribbean, as well as others in western Africa, Europe and Asia. It included Afghanistan, Pakistan, Iran,
Italy, Mexico and Canada. The DEA often — though not always — notified foreign governments it was collecting call records, in part
to make sure its agents would not be expelled if the program was discovered. In some cases, the DEA provided some of that
information to foreign law enforcement agencies to help them build their own investigations, officials said. The DEA did not have a
real-time connection to phone companies' data; instead, the companies regularly provided copies of their call logs, first on computer
disks and later over a private network. Agents
who used the system said the numbers they saw were
seldom more than a few days old. The database did not include callers' names or other
identifying data. Officials said agents often were able to identify individuals associated with
telephone numbers flagged by the analysis, either by cross-referencing them against other
databases or by sending follow-up requests to the phone companies. To keep the program secret, the DEA
sought not to use the information as evidence in criminal prosecutions or in its justification for warrants or other searches.
Instead, its Special Operations Division passed the data to field agents as tips to help them find
new targets or focus existing investigations, a process approved by Justice Department lawyers.
Many of those tips were classified because the DEA phone searches drew on other intelligence data. That practice sparked a furor
when the Reuters news agency reported in 2013 that the DEA trained agents to conceal the sources of those tips from judges and
defense lawyers. Reuters said the tips were based on wiretaps, foreign intelligence and a DEA database of telephone calls gathered
through routine subpoenas and search warrants. As a result, "the government short-circuited any debate about the legality and
wisdom of putting the call records of millions of innocent people in the hands of the DEA," American Civil Liberties Union lawyer
Patrick Toomey said.
DEA using wiretaps and pen registers to catch international drug cartels
Kenny 11, Michael Kenny, August 15, 2011, From Pablo to Osama: Counter-terrorism Lessons
from the War on Drugs, Survival: Global Politics and Strategy,
http://dx.doi.org/10.1080/00396338.2003.9688585, TK
Michael Kenney is assistant professor of public policy at the School of Public Affairs at
Pennsylvania State University, Harrisburg
The Colombian cocaine ‘cartels’3 can be traced back to the 1970s, when numerous entrepreneurs sought to exploit the
demand for cocaine in US illegal drug markets by transporting small quantities of the drug from Ecuador, Bolivia and Peru to
Colombia, where it underwent further refinement in makeshift laboratories before final shipment northwards. Over time and
through repeated exchange, numerous entrepreneurs developed far-flung transportation and distribution networks capable of
coordinating several multi-tonne cocaine shipments a year. These ‘wheel networks’ contained
a core group that
coordinated activities among functionally specific nodes, including cocaine base suppliers,
processing labs, transportation rings and distribution groups that delivered cocaine to
independent retailers and funnelled the profits to network leaders and investors.4 While core groups
were generally based in Colombia, support nodes were located in different countries, giving these networks a transnational
dimension. To
reduce their exposure to law-enforcement penetration, participants in cross-border
transportation or wholesale distribution activities were often compartmentalised into small
working groups or ‘cells’ that maintained close communication with core groups and followed
elaborate procedures for delivering large amounts of drugs to independent wholesalers and
conducting other hazardous activities. The core groups directed the transnational enterprise, providing security and
resolving disputes and securing resources from independent investors. They also gathered intelligence about government drug
enforcement efforts and served as the communications hub for the network, coordinating transactions among peripheral nodes. If
something went wrong, informal relations of vertical accountability ensured that peripheral nodes answered to the core, protecting
kingpins and investors from theft and other risks. Decision-making authority generally flowed out and downwards from the core,
beginning with one or more kingpins that directed the transnational enterprise. Below them were ‘managers’ responsible for line
functions, such as transportation and wholesale distribution. Beneath managers were cell workers that carried out much of the daily
work of the enterprise. Kingpins or their day-to-day administrators sought to maintain control over their operations through
frequent communication with overseas managers, often mediated through brokers that provided an additional layer of insulation
from law enforcement. The predominantly vertical direction of command authority – proceeding from the hub of the core group
along spokes to the most peripheral operatives – and its multiple vectors made the cartels ‘wheel networks’. By the mid-1980s, US
and Colombian officials were fully attuned to the danger represented by a handful of wheel networks, particularly the notorious
Medellín and Cali enterprises. With
US assistance, Colombian drug enforcers launched several
crackdowns against the leaders of these transnational enterprises between 1984 and 1988, destroying processing
labs, seizing cocaine shipments and arresting (and occasionally extraditing) lower and middle-level
traffickers. However, core-group kingpins were not greatly affected by these short-lived offensives, as their elaborate security
arrangements allowed them to continue their illicit activities relatively unimpeded. Throughout the 1980s, police officials discovered
numerous multi-tonne cocaine shipments in the US, indicating the growing capacity of Colombian trafficking networks. Yet even the
largest of these seizures failed to put a significant dent in drug availability. While the estimated average price of cocaine at the
‘dealer’ level dropped from $191 per gram in 1981 to $65 per gram in 1989, during the same period the estimated purity of cocaine
at the same transaction level rose from 60% to 80%. The US
Drug Enforcement Administration (DEA)’s
response, in 1992, was the kingpin strategy. Leveraging the DEA’s investigative and intelligence
strengths, this initiative involved the aggressive use of electronic surveillance technologies,
including wiretaps, pen registers and trap-and-trace devices. A kingpin was defined as the leader of an
international trafficking enterprise who directs the production, transportation, and distribution of large quantities of cocaine or
heroin, as well as the organisation’s financial operations. By ‘neutralising’ kingpins and dismantling their criminal infrastructures, the
DEA hoped that it would be able to ‘significantly reduce the availability of drugs in the United States’.5 Principal targets of the
kingpin strategy were the leaders of the Colombian cocaine cartels. The initial list included Pablo Escobar, José Santacruz Londoño,
Gilberto and Miguel Rodríguez Orejuela, Helmer Buitrago Herrera, and Iván and Jairo Urdinola Grajales. In
close cooperation
with the Colombian National Police (CNP), the DEA sought to disable their trafficking networks
by attacking their communications, transportation and finance systems. After just a year and a
half of operation, the DEA reported that kingpin investigations had led to the seizure of $210
million in drug proceeds, the confiscation of 144 aircraft and 91 boats, trucks and cars, and the
arrest of over 713 ‘significant’ traffickers.6 In Colombia, elite drug enforcement units destroyed
hundreds of cocaine processing labs, seized thousands of kilograms of cocaine base and cocaine
hydrochloride, eradicated hundreds of thousands of hectares of coca leaf plantings, and
arrested hundreds of traffickers. Remarkably, by 1996 all of the original kingpins were either dead or in jail, and their
trafficking networks severely disrupted. Notwithstanding reports that some entrepreneurs continued to manage scaled-down
smuggling operations from behind bars, a number of government officials crowed that the days of the cocaine cartels were over.
Some went even further. Following the arrest of Gilberto Rodríguez-Orejuela, Colombian prosecutor general Alfonso Valdivieso
exulted that ‘narco-trafficking is in the way of disappearing from Colombia’.7 In
a war marked by considerable
frustration for lawenforcement agencies, the state appeared to have earned a major victory.
Link – Drug crime
USFG surveillance k2 stop the worst of drug crime. - empirics
US Courts, 12
US Courts, 12/31/2012 (“Wiretap Report 2012”, This report covers intercepts
concluded between January 1, 2012, and December 31, 2012, and provides
supplementary information on arrests and convictions resulting from intercepts
concluded in prior years, uscourts.gov, December 31, 2012,
http://www.uscourts.gov/statistics-reports/wiretap-report-2012, Accessed:
July 13th, 2015, DSF)
Drug offenses were the most prevalent type of criminal offenses investigated using wiretaps.
Table 3 indicates that 87 percent of all applications for intercepts (2,967 wiretaps) in 2012 cited
illegal drugs as the most serious offense under investigation. Homicide, the second-most
frequently cited crime, was specified as the most serious offense in more than 3 percent of
applications. Racketeering, the third-most frequently cited crime, was specified in less than 3
percent of applications. Many applications for court orders revealed that multiple criminal
offenses were under investigation, but Table 3 includes only the most serious criminal offense
listed on an application.
In 2012, installed wiretaps were in operation for an average of 39 days, 3 days below the
average in 2011. The federal wiretap with the most intercepts occurred in the Western District
of Missouri, where a narcotics investigation involving cellular telephones resulted in the
interception of 34,261 messages over 60 days. The second-highest number of intercepts
stemmed from a cellular telephone wiretap for a narcotics investigation in the District of Maine.
This wiretap, active for 55 days, resulted in a total of 32,578 interceptions, including 18,500
incriminating interceptions.
Federal wire taps increasingly k2 quell big drug crime
US Courts, 12
US Courts, 12/31/2012 (“Wiretap Report 2012”, This report covers intercepts
concluded between January 1, 2012, and December 31, 2012, and provides
supplementary information on arrests and convictions resulting from intercepts
concluded in prior years, uscourts.gov, December 31, 2012,
http://www.uscourts.gov/statistics-reports/wiretap-report-2012, Accessed:
July 13th, 2015, DSF)
Data on individuals arrested and convicted as a result of interceptions reported as terminated
are presented in Table 6. As of December 31, 2012, a total of 3,743 persons had been arrested
(up 6 percent from 2011), and 455 persons had been convicted (down 2 percent from 2011).
Federal wiretaps were responsible for 34 percent of the arrests and 25 percent of the
convictions arising from wiretaps for this period. The Central District of California reported the
largest number of arrests (139) for a federal jurisdiction, and the Western District of Texas
reported the most convictions (27). The Central District of California also reported the most
arrests for an individual federal wiretap in 2012; a wiretap used in a murder investigation in that
district resulted in the arrest of 52 individuals and 4 convictions.
Link – Face Recognition
Face Recognition Key to solve crime
Ng, 6
Rudy Ng, University of California, Hastings College of the Law, J.D. Candidate, 2006; San
Francisco State University, M.S. in Biochemistry, 2001; University of California, Berkeley, B.A. in
Biochemistry, 1996. I would like to thank my family and friends for their loving support and
encouragement, especially Queenie Mak for editing this Note and for keeping me sane
throughout this adventure called law school., Spring 2006, copyright Hastings College of Law,
http://www.lexisnexis.com.proxy2.cl.msu.edu/hottopics/lnacademic/, Accessed: July 20th,
2015, DSF)
The concept of identifying people via their unique biometric identifiers is not a new idea. It has
long been recognized that a person's fingerprint is a unique way to identify that person. n1
However, some more recent advances in technology have called into question the
constitutionality of these new forms of biometric [*426] identification. n2 After the September
11, 2001, terrorist attacks, one of our primary concerns has been ensuring for our homeland
security. n3 New, more rigorous forms of biometric screening have been proposed and
implemented in some instances. n4 For example, San Francisco International Airport has
installed hand geometry identification stations for employees in some secure areas. n5 Before
being allowed to proceed into restricted areas, employees must place their hand on a biometric
reader, which scans their hand and compares it to images stored in a database. n6
Another area of concern is tracking known or suspected criminals. A proposed method to
achieve this is to use face recognition technology which can quickly scan an individual's facial
geometry from a surveillance video and attempt to match that person's face to a database of
millions of known or suspected criminals. n7 The science fiction movie Minority Report
illustrated the use of iris scanners not only to provide positive identification of individuals who
had been apprehended by the police, but also to identify ordinary citizens walking down the
street in order to project personalized advertisements to them. n8 The future may not be as far
away as we think. Foreign and domestic banks have experimented with the use of fingerprint
and iris scanning technologies in ATMs. n9 In addition, police in London, England have been
using face recognition technology as part of their Citywatch program aimed at reducing crime in
the community. n10 The question is how far we are willing to take this technology, especially in
regards to tracking known or suspected criminals.
[*427] In United States v. Kincade, n11 the Ninth Circuit upheld the constitutionality of the DNA
Analysis Backlog Elimination Act of 2000, which required certain convicted felons to submit
blood samples from which authorities could obtain their DNA profile. n12 Convicted felons' DNA
profiles are kept in a DNA data bank to either provide evidence against or exonerate them if
they were ever suspected of another crime. n13 This ruling by the Ninth Circuit could potentially
pave the way to requiring convicted felons to submit to the collection of other types of
biometric identification data, such as iris or face recognition scans. As with current DNA
databases, iris and face recognition data would then be stored in databases and shared with
authorities throughout the nation. n14 Tracking suspected criminals could be as easy as
matching an image of their face from a surveillance video at their local shopping mall to an
image in the face recognition database. n15 How far are we willing to invade the privacy rights
of individuals in the name of security?
These concerns are not restricted to convicted felons. While there are statutes in all fifty states
which require certain convicted felons to submit DNA samples so law enforcement can maintain
their DNA profile, n16 these DNA data banks are being supplemented with DNA profiles from
people who have been arrested but have not been convicted of crimes. n17 If people not
convicted of any crimes are being included in DNA data banks, then is this opening the door for
the collection of other types of biometric data, such as face or iris recognition data, from people
who are merely suspected of committing a crime? Is this the beginning of the slippery slope that
may lead us to a world where a person suspected of committing a crime has to seek out an
unscrupulous back-alley physician to perform an eye transplant surgery in order to maintain his
or her freedom and privacy, as in the movie Minority Report? Clearly there are other concerns
besides keeping our streets safer by making it easier for law enforcement personnel to identify
recidivist activities.
[*428] Part II of this note is an overview of biometric recognition technology, especially iris
scanning and face recognition technology. Part III provides an analysis of individual privacy rights
under the Fourth Amendment in relation to biometric technology, the compulsory DNA
sampling of convicted felons, and DNA databases, especially in light of recent Federal Court of
Appeals decisions and recently passed legislation. Part IV presents legislative considerations for
the collection of less invasive biometric data that is easier to collect and monitor passively, such
as facial recognition data. Finally, Part V provides a summary of the discussion.
Biometrics are highly important in crime-stopping activities. – Finger prints and
facial recognition
Ng, 6
Rudy Ng, University of California, Hastings College of the Law, J.D. Candidate, 2006; San
Francisco State University, M.S. in Biochemistry, 2001; University of California, Berkeley, B.A. in
Biochemistry, 1996. I would like to thank my family and friends for their loving support and
encouragement, especially Queenie Mak for editing this Note and for keeping me sane
throughout this adventure called law school., Spring 2006, copyright Hastings College of Law,
http://www.lexisnexis.com.proxy2.cl.msu.edu/hottopics/lnacademic/, Accessed: July 20th,
2015, DSF)
A. Biometrics
Biometrics refers to the automated methods of identifying a person based on their unique
physical characteristics. n18 In a typical application, an individual's physical traits are scanned by
a machine and then a comparison is made to a database containing previously stored
information about that individual. n19 This process is used to positively identify the individual
and is referred to as verification, or one-to-one matching. n20 For example, one-to-one
matching could be used at a security checkpoint before allowing individuals access to restricted
areas of a building. n21 Biometric scanning can also be used to identify a person by comparing
their biometric data to all of the records that have been stored in the database. n22 This process
is referred to as identification, or one-to-many matching. n23 For example, one-to-many
matching could be used to identify an unknown person by trying to match their biometric data
to the data of known individuals saved in a database. n24
B. Fingerprints
Historically, fingerprints have been the most common and widely accepted form of biometric
identification. n25 Fingerprint identification has been used by law enforcement since the early
twentieth century. n26 Fingerprint identification initially required the fingerprint examiner to go
through the tedious process of manually comparing ink fingerprints fixed onto fingerprint cards.
n27 This process was very time consuming and could often take months to complete. n28
However, the fingerprint identification process has been computerized and automated. n29 The
Federal Bureau of Investigation (FBI) now uses the Integrated Automated Fingerprint
Identification System (IAFIS). n30 IAFIS contains the fingerprints and corresponding criminal
history information for more than 47 million subjects, making it the largest biometric database
in the world. n31 The process of matching fingerprints, which used to take months to complete,
can now be performed in a few hours. n32 For example, the FBI can identify an unknown person
who left a latent fingerprint at a crime scene by comparing the crime scene fingerprint to the
IAFIS database. n33
Fingerprint identification involves comparing an individual's unique ridge formations or patterns
found on the fingertips. n34 These fingertip patterns include ridge formations called whorls,
arches and loops. n35 Fingerprint identification relies on the empirically validated assumptions
that no two persons have the exact same arrangement of ridge patterns on their fingertips, and
that an individual's fingerprints remain unchanged throughout their life. n36
[*430] An advantage of fingerprint identification is that it is widely accepted by the public and
law enforcement as an accurate and repeatable means for identifying individuals. n37 In
addition, finger scanning technology is a quick, non-invasive method of gathering biometric
data. n38 A disadvantage of finger imaging is that dirt, oils or cuts on a person's finger can lead
to errors in the results. n39
Link – FBI
FBI drones are key to solve a swath of crime
Cratty, 13
Carol Cratty, CNN Senior Producer, 6/19/15 (“FBI uses drones in U.S., says
Mueller”, CNN, June 19th 2015, http://security.blogs.cnn.com/2013/06/19/fbiuses-drones-in-u-s-says-mueller/, Accessed: July 13th, 2015, DSF)
FBI Director Robert Mueller acknowledged the law enforcement agency uses drone aircraft in
the United States for surveillance in certain difficult cases.
Mueller told the Senate Judiciary Committee on Wednesday that drones are used by the FBI in a
"very, very minimal way and very seldom."
He did not say how many unmanned surveillance vehicles (UAVs) the FBI has or how often they
have been used.
But a law enforcement official told CNN the FBI has used them a little more than a dozen times
but did not say when that started. The official said drones are useful in hostage and barricade
situations because they operate more quietly and are less visible than traditional aircraft such as
helicopters.
The FBI said it used a UAV earlier this year to monitor the situation where a boy was held
hostage in a bunker in Alabama.
Bureau spokesman Paul Bresson said their use allows "us to learn critical information that
otherwise would be difficult to obtain without introducing serious risk to law enforcement
personnel."
Link – Mass Data
Mass data collection helps stop money laundering and drug trafficking
Heath 15
(An investigative reporter at USA TODAY, writing primarily about law and criminal justice- His work includes award-winning series on
misconduct by federal prosecutors and air pollution outside schools. He has a law degree from Georgetown University, Brad, “US
secretly tracked billions of calls for decades”, USA Today, April 8, 2015, http://www.usatoday.com/story/news/2015/04/07/deabulk-telephone-surveillance-operation/70808616/, ASN)
The DEA began assembling a data-gathering program in the 1980s as the government searched for new ways to battle Colombian
drug cartels. Neither informants nor undercover agents had been enough to crack the cartels' infrastructure. So the agency's
intelligence arm turned its attention to the groups' communication networks. Calling records – often called "toll records" – offered
one way to do that. Toll records are comparable to what appears on a phone bill – the numbers a person dialed, the date and time
of the call, its duration and how it was paid for. By then,
DEA agents had decades of experience gathering toll
records of people they suspected were linked to drug trafficking, albeit one person at a time. In the late
1980s and early 1990s, officials said the agency had little way to make sense of the data their agents accumulated and almost no
ability to use them to ferret out new cartel connections. Some agents used legal pads. "We were drowning in toll records," a former
intelligence official said. The DEA asked the Pentagon for help. The
military responded with a pair of
supercomputers and intelligence analysts who had experience tracking the communication
patterns of Soviet military units. "What they discovered was that the incident of a communication was perhaps as important as
the content of a communication," a former Justice Department official said. The military installed the supercomputers on the fifth
floor of the DEA's headquarters, across from a shopping mall in Arlington, Va. The
system they built ultimately
allowed the drug agency to stitch together huge collections of data to map trafficking and
money laundering networks both overseas and within the USA. It allowed agents to link the call records its
agents gathered domestically with calling data the DEA and intelligence agencies had acquired outside the USA. (In some cases,
officials said the DEA paid employees of foreign telecom firms for copies of call logs and subscriber lists.) And it eventually allowed
agents to cross-reference all of that against investigative reports from the DEA, FBI and Customs Service. The result
"produced major international investigations that allowed us to take some big people," Constantine
said, though he said he could not identify particular cases. In 1989, President George H.W. Bush proposed in his first prime-time
address using "sophisticated intelligence-gathering and Defense Department technology" to disrupt drug trafficking. Three years
later, when violent crime rates were at record highs, the drug agency intensified its intelligence
push, launching a "kingpin strategy" to attack drug cartels by going after their finances,
leadership and communication. In 1992, in the last months of Bush's administration, Attorney General William Barr and
his chief criminal prosecutor, Robert Mueller, gave the DEA permission to collect a much larger set of phone data to feed into that
intelligence operation. Instead of simply asking phone companies for records about calls made by people suspected of drug crimes,
the Justice Department began ordering telephone companies to turn over lists of all phone calls from the USA to countries where
the government determined drug traffickers operated, current and former officials said. Barr and Mueller declined to comment, as
did Barr's deputy, George Terwilliger III, though Terwilliger said, "It
has been apparent for a long time in both the
law enforcement and intelligence worlds that there is a tremendous value and need to collect
certain metadata to support legitimate investigations." The data collection was known within the agency as
USTO (a play on the fact that it tracked calls from the U.S. to other countries). The DEA obtained those records using
administrative subpoenas that allow the agency to collect records "relevant or material to"
federal drug investigations. Officials acknowledged it was an expansive interpretation of that authority but one that was
not likely to be challenged because unlike search warrants, DEA subpoenas do not require a judge's approval. "We knew we were
stretching the definition," a former official involved in the process said. Officials said a few telephone companies were reluctant to
provide so much information, but none challenged the subpoenas in court. Those that hesitated received letters from the Justice
Department urging them to comply. After Sprint executives expressed reservations in 1998, for example, Warren, the head of the
department's drug section, responded with a letter telling the company that "the
initiative has been determined to be
legally appropriate" and that turning over the call data was "appropriate and required by law."
The letter said the data would be used by authorities "to focus scarce investigative resources by means of sophisticated pattern and
link analysis." The letter did not name other telecom firms providing records to the DEA but did tell executives that "the
arrangement with Sprint being sought by the DEA is by no means unique to Sprint" and that "major service providers have been
eager to support and assist law enforcement within appropriate bounds." Former officials said the operation included records from
AT&T and other telecom companies. A spokesman for AT&T declined to comment. Sprint spokeswoman Stephanie Vinge Walsh said
only that "we do comply with all state and federal laws regarding law enforcement subpoenas."
Agents said that when
the data collection began, they sought to limit its use mainly to drug investigations and turned
away requests for access from the FBI and the NSA. They allowed searches of the data in
terrorism cases, including the bombing of a federal building in Oklahoma City that killed 168
people in 1995, helping to rule out theories linking the attack to foreign terrorists. They allowed even
broader use after Sept. 11, 2001. The DEA's public disclosure of its program in January came in the case of a man charged with
violating U.S. export restrictions by trying to send electrical equipment to Iran. At first, officials said the DEA gathered records only of
calls to a handful of countries, focusing on Colombian drug cartels and their supply lines. Its reach grew quickly, and by the late
1990s, the DEA was logging "a massive number of calls," said a former intelligence official who supervised the program. Former
officials said they could not recall the complete list of countries included in USTO, and the coverage changed over time. The
Justice Department and DEA added countries to the list if officials could establish that they were
home to outfits that produced or trafficked drugs or were involved in money laundering or other
drug-related crimes. The Justice Department warned when it disclosed the program in January that the list of countries
should remain secret "to protect against any disruption to prospective law enforcement cooperation." At its peak, the operation
gathered data on calls to 116 countries, an official involved in reviewing the list said. Two other officials said they did not recall the
precise number of countries, but it was more than 100. That gave the collection a considerable sweep; the U.S. government
recognizes a total of 195 countries. At one time or another, officials said, the data collection covered most of the countries in Central
and South America and the Caribbean, as well as others in western Africa, Europe and Asia. It included Afghanistan, Pakistan, Iran,
Italy, Mexico and Canada. The DEA often — though not always — notified foreign governments it was collecting call records, in part
to make sure its agents would not be expelled if the program was discovered. In some cases, the DEA provided some of that
information to foreign law enforcement agencies to help them build their own investigations, officials said. The DEA did not have a
real-time connection to phone companies' data; instead, the companies regularly provided copies of their call logs, first on computer
disks and later over a private network. Agents
who used the system said the numbers they saw were
seldom more than a few days old. The database did not include callers' names or other
identifying data. Officials said agents often were able to identify individuals associated with
telephone numbers flagged by the analysis, either by cross-referencing them against other
databases or by sending follow-up requests to the phone companies. To keep the program secret, the DEA
sought not to use the information as evidence in criminal prosecutions or in its justification for warrants or other searches.
Instead, its Special Operations Division passed the data to field agents as tips to help them find
new targets or focus existing investigations, a process approved by Justice Department lawyers.
Many of those tips were classified because the DEA phone searches drew on other intelligence data. That practice sparked a furor
when the Reuters news agency reported in 2013 that the DEA trained agents to conceal the sources of those tips from judges and
defense lawyers. Reuters said the tips were based on wiretaps, foreign intelligence and a DEA database of telephone calls gathered
through routine subpoenas and search warrants. As a result, "the government short-circuited any debate about the legality and
wisdom of putting the call records of millions of innocent people in the hands of the DEA," American Civil Liberties Union lawyer
Patrick Toomey said.
Link – NSA Metadata
NSA metadata used to help other domestic crime fighting agencies.
McGovern, 14
Ray McGovern, works with Tell the Word, a publishing arm of the ecumenical Church of the
Saviour in inner-city Washington. He was an Army officer and CIA analyst for a total of 30 years
and is now on the Steering Group of Veteran Intelligence Professionals for Sanity (VIPS), 6/2/14
(“How NSA Can Secretly Aid Criminal Cases”, Consortium News, June 12, 2014,
https://consortiumnews.com/2014/06/12/how-nsa-can-secretly-aid-criminal-cases/, Acessed:
July 19, 2015, DSF)
Though the NSA says its mass surveillance of Americans targets only “terrorists,” the spying may
turn up evidence of other illegal acts that can get passed on to law enforcement which hides the
secret source through a ruse called “parallel construction,” writes ex-CIA analyst Ray McGovern.
Rarely do you get a chance to ask a just-retired FBI director whether he had “any legal qualms”
about what, in football, is called “illegal procedure,” but at the Justice Department is called
“parallel construction.”
Government wordsmiths have given us this pleasant euphemism to describe the use of the
National Security Agency’s illegal eavesdropping on Americans as an investigative tool to pass on
tips to law enforcement agencies which then hide the source of the original suspicion and
“construct” a case using “parallel” evidence to prosecute the likes of you and me.
For those interested in “quaint” things like the protections that used to be afforded us by the
Fourth and Fifth Amendments to the Constitution, information about this “parallel construction”
has been in the public domain, including the “mainstream media,” for at least a year or so.
So, I welcomed the chance to expose this artful practice to still more people with cameras
rolling at a large conference on “Ethos & Profession of Intelligence” at Georgetown University
on Wednesday, during the Q & A after former FBI Director Robert Mueller spoke.
Mueller ducked my question regarding whether he had any “legal qualms” about this “parallel
construction” arrangement. He launched into a discursive reply in which he described the
various “authorities” enjoyed by the FBI (and the CIA), which left the clear impression not only
that he was without qualms but that he considered the practice of concealing the provenance of
illegally acquired tip-off information somehow within those professed “authorities.”
Bottom line? Beware, those of you who think you have “nothing to hide” when the NSA scoops
up your personal information. You may think that the targets of these searches are just potential
“terrorists.” But the FBI, Internal Revenue Service, Drug Enforcement Administration and
countless other law enforcement bodies are dipping their cursors into the huge pool of mass
surveillance.
And, chances are that if some of your scooped-up data gets shared with law enforcement and
the Feds conclude that you’ve violated some law, you’ll never become aware of how they got
onto you in the first place. They’ll just find some “parallel” evidence to nail you.
After all, it’s altogether likely for a great majority of us that some dirt can be retrieved with the
NSA’s voluminous files an inviting starting point. AT&T, for example, apparently has kept
metadata about its customers, as well as all other traffic going through its switches, for the past
27 years.
For those who are Caesar’s-wife pure and whose loved ones also approach perfection,
“constructing” a prosecutable case may be more of a challenge. But relax not. If for some reason
the government decides to get you – if you’ve popped up as somehow an obstacle to “national
security” – it is not impossible. Even in recent decades, critics of government policies have
ended up facing dredged-up, if not trumped-up, criminal charges over some past indiscretion or
misdeed.
Learning Curve
It has been my good fortune this year to sponge up data and wisdom – in equal measure – from
NSA alumni like Bill Binney, Kirk Wiebe, Tom Drake, and Ed Loomis, who in early January
authored “NSA Insiders Reveal What Went Wrong.”
More recently (on May 31), Bill and I took part in a panel discussion in New York, so this freshly
sponged-up learning still dwelled in my frontal lobe when I was interviewed by RT on June 5, the
anniversary of the first-published disclosure from Edward Snowden.
When asked how “ordinary people” in the U.S. were being affected by the disclosures about
bulk collection, I passed along what I had recently learned from Bill and other whistleblowers
regarding how law enforcement is masking illegal surveillance to the severe detriment of
defendants’ constitutional rights.
Former FBI Division Counsel in Minneapolis Coleen Rowley – who, with Jesselyn Radack, Tom
Drake and me, visited Snowden in Russia last October – told me of two legal doctrines
established many decades ago: the “exclusionary rule” and the rule regarding the “fruit of the
poisonous tree.”
These were designed to force over-zealous law enforcement officers to adhere to the
Constitution by having judges throw out cases derived from improperly obtained evidence. To
evade this rule, law enforcement officials who have been on the receiving end of NSA’s wiretap
data must conceal what tipped off an investigation.
After the Tip-Off
Among the revelations over the past year was DEA’s definition of “parallel construction” as “the
use of normal [read legal] investigative techniques to re-create the information received by
DEA’s Special Ops Division” from NSA or other sources that can’t be acknowledged. Some of
these sources may be confidential informants whose identities need protecting, but the NSA’s
massive database has become a very inviting place to trawl for valuable leads.
As Reuters reported last August, “A secretive U.S. Drug Enforcement Administration unit is
funneling information from intelligence intercepts, wiretaps, informants and a massive database
of telephone records to authorities across the nation to help them launch criminal investigations
of Americans.
“Although these cases rarely involve national security issues, documents reviewed by Reuters
show that law enforcement agents have been directed to conceal how such investigations truly
begin – not only from defense lawyers but also sometimes from prosecutors and judges.
“The undated documents show that federal agents are trained to ‘recreate’ the investigative
trail to effectively cover up where the information originated, a practice that some experts say
violates a defendant’s Constitutional right to a fair trial. If defendants don’t know how an
investigation began, they cannot know to ask to review potential sources of exculpatory
evidence – information that could reveal entrapment, mistakes or biased witnesses.”
So, in this way, the NSA’s warrantless surveillance can result in illegal law enforcement. And the
FBI, the DEA and other organs of the deep state have become quite good at it, thank you very
much.
Here’s how it works: NSA’s domestic surveillance – though supposedly restricted to detecting
terrorism – gets wind of some potentially illegal activity unrelated to terrorism. So, NSA passes
the information on to the relevant law enforcement agency. It could be a vehicle transporting
illegal drugs or a transfer of suspicious funds or pretty much anything.
This evidence then sparks an investigation, but the original information can’t be used legally
because it was acquired illegally for “national security” purposes. After the tip, “parallel” law
enforcement techniques are introduced to collect other evidence and arrest and charge the
suspects/defendants.
The arrest is made to appear the splendid result of traditional detective techniques. However, if
the court learns of the initial shenanigans, the defendant may be released because her/his
constitutional rights were violated.
To avoid that possibility, the government simply perjures itself during the court discovery
process by concealing the key role played by the NSA database, exculpatory evidence that could
weaken or destroy the government’s case.
Last week a journalist asked me why I thought Congress’ initial outrage – seemingly genuine in
some quarters – over bulk collection of citizens’ metadata had pretty much dissipated in just a
few months. What started out as a strong bill upholding Fourth Amendment principles ended up
much weakened with only a few significant restraints remaining against NSA’s flaunting of the
Constitution?
Let me be politically incorrect and mention the possibility of blackmail or at least the fear among
some politicians that the NSA has collected information on their personal activities that could be
transformed into a devastating scandal if leaked at the right moment.
Do not blanch before the likelihood that the NSA has the book on each and every member of
Congress, including extramarital affairs and political deal-making. We know that NSA has
collected such information on foreign diplomats, including at the United Nations in New York, to
influence votes on the Iraq War and other issues important to U.S. “national security.”
We also know how the late FBI Director J. Edgar Hoover used much more rudimentary
technology a half century ago to develop dossiers on the personal indiscretions of political and
ideological opponents. It makes sense that people with access to the NSA’s modern surveillance
tools would be sorely tempted to put these new toys to use in support of their own priorities.
I happened to be with a highly accomplished attorney – one not involved in security law – when
we saw TV reporting that the Solicitor General of the United States had misled the U.S. Supreme
Court. My lawyer friend kept shaking his head, with his mouth agape: “Now THAT is not
supposed to happen” is all he could muster.
Other than the Supreme Court justices themselves, the Solicitor General is among the most
influential members of the legal community. Indeed, the Solicitor General has been called the
“tenth justice”as a result of the relationship of mutual trust that tends to develop between the
justices and the Solicitor General.
Thus, while it is sad, it is hardly surprising that no one took Solicitor General Donald Verrilli Jr. to
the woodshed. There are seldom penalties in Washington for playing fast and loose with the
truth.
Verrilli, sworn in as Solicitor General three years ago, assured the Court in the “Clapper v.
Amnesty International USA” case that defendants would be informed of evidence coming from
NSA. The Department of Justice had reviewed his draft testimony and did not tell Verrilli that
this was not the truth.
In the case, a majority of the Supreme Court justices decided to wait until a criminal defendant
was actually convicted with the admitted use of NSA evidence before ruling on whether this
violates the Fourth Amendment and the requirement of court warrants based on “probable
cause” before police searches can be conducted.
The result of the Supreme Court’s decision was that the challenge to the constitutionality of
NSA’s mass collection was abruptly stopped, and the mass surveillance continued. But Verrilli
subsequently found out that his assurances had been false, and there ensued an argument with
the Department of Justice, which opposed revealing use of NSA sources in any court.
Verrilli apparently prevailed partially, with the government subsequently notifying a few
defendants in ongoing terrorism cases that NSA sources were used.
Separation of Powers?
We cannot escape some pretty dismal conclusions here. Not only have the Executive and
Legislative branches been corrupted by establishing, funding, hiding and promoting
unconstitutional surveillance programs for over 12 years, but the Judicial branch has been
corrupted, too.
The discovery process in criminal cases is now stacked in favor of the government through its
devious means for hiding unconstitutional surveillance and using it in ways beyond the narrow
declared purpose of thwarting terrorism.
Moreover, federal courts at the district, appeals and Supreme Court levels have allowed the
government to evade legal accountability by insisting that plaintiffs must be able to prove what
often is not provable, that they were surveilled through highly secretive NSA means. And, if the
plaintiffs make too much progress, the government can always get a lawsuit thrown out by
invoking “state secrets.”
The Separation of Powers designed by the Constitution’s Framers to prevent excessive
accumulation of power by one of the branches has stopped functioning amid the modern
concept of “permanent war” and the unwillingness of all but a few hearty souls to challenge the
invocation of “national security.” Plus, the corporate-owned U.S. media, with very few
exceptions, is fully complicit.
Thus, a massive, intrusive power now looms over every one of us – and especially those few
brave individuals with inside knowledge who might be inclined to inform the rest of us about the
threat. Whistleblowers, like Chelsea Manning and Edward Snowden, face decades in prison for
divulging important secrets to the American people. And so the legal rot continues.
The concept of a “United Stasi of America,” coined by Pentagon Papers whistleblower Daniel
Ellsberg a year ago, has been given real meaning by the unconstitutional behavior and
dereliction of duty on the part of both the George W. Bush and Obama administrations.
Just days after the first published disclosure from Snowden, Ellsberg underscored that the NSA,
FBI and CIA now have surveillance capabilities that East Germany’s Stasi secret police could
scarcely have imagined.
What, We Worry?
Last June, Mathew Schofield of McClatchy conducted an interesting interview of Wolfgang
Schmidt, a former lieutenant colonel in the Stasi, in Berlin. With the Snowden revelations
beginning to tumble out into the media, Schofield described Schmidt as he pondered the sheer
magnitude of domestic spying in the United States.
Schmidt: “You know, for us, this would have been a dream come true.”
Schofield continues: “In those days, his department was limited to tapping 40 phones at a time,
he recalled. Decide to spy on a new victim and an old one had to be dropped, because of a lack
of equipment. He finds breathtaking the idea that the U.S. government receives daily reports on
the cellphone usage of millions of Americans and can monitor the Internet traffic of millions
more.”
“So much information, on so many people,” says Schmidt who, at that point, volunteers a stern
warning for Schofield and the rest of us:
“It is the height of naiveté to think that, once collected, this information won’t be used. This is
the nature of secret government organizations. The only way to protect the people’s privacy is
not to allow the government to collect their information in the first place.” [emphasis added]
(For those who missed it, “The Lives of Others,” a 2006 film, offers a chilling depiction of the
Stasi, a far more capable incarnation of which may soon be coming to your home or
neighborhood with assistance of “parallel construction.”)
Take note, those of you who may still feel fearless, those of you with “nothing to hide.”
NSA metadata key to solve domestic crime
Powell, 13
Stewart M. Powell, writer for Connecticut Post, 8/4/13 (“NSA handing over
non-terror intelligence”, CT Post, Updated 9:37 pm, Sunday, August 4, 2013,
http://www.ctpost.com/local/article/NSA-handing-over-non-terrorintelligence-4706227.php, Accessed: July 19th, 2015, DSF)
WASHINGTON --
The National Security Agency is handing the Justice Department information,
derived from its secret electronic eavesdropping programs, about suspected criminal activity
unrelated to terrorism. This little-known byproduct of counterterrorism surveillance continues
amid controversy over the NSA's wide-ranging collection of domestic communications
intelligence, including Americans' telephone calling records and Internet use. It is unclear
whether the referrals have been built upon the content of telephone calls and emails.
Administration officials have previously assured Congress that NSA surveillance focuses on socalled metadata and in the main does not delve into the content of individual calls or email
messages.Also, some in the legal community question the constitutionality of criminal
prosecutions stemming from intelligence-agency eavesdropping. Current and former federal
officials say the NSA limits non-terrorism referrals to serious criminal activity inadvertently
detected during domestic and foreign surveillance. The NSA referrals apparently have included
cases of suspected human trafficking, sexual abuse and overseas bribery by U.S.-based
corporations or foreign corporate rivals that violate the Foreign Corrupt Practices Act. "We can't
task the collection of information for those purposes, and the Department of Justice can't ask us
to collect evidence of that kind of a crime," said Robert Litt, general counsel for the Office of the
Director of National Intelligence. "If the intelligence agency uncovers evidence of any crime
ranging from sexual abuse to FCPA, they tend to turn that information over to the Department
of Justice," Litt told an audience at the Brookings Institution recently. "But the Department of
Justice cannot task the intelligence community to do that." Litt declined to discuss NSA referrals
to the Justice Department when asked about the practice by Hearst Newspapers after a Senate
Judiciary Committee hearing last week. The super-secret NSA surveillance disclosed by fugitive
leaker Edward Snowden has already sparked a public outcry and congressional hearings, and
threatened congressional intervention to limit the programs. Litt's acknowledgement that the
NSA is handing off intelligence to federal prosecutors could further stoke controversy and calls
for action on Capitol Hill. "If the information from surveillance or wiretaps is used by the NSA
inconsistently with the warrant or other permission from the FISA court, certainly there would
be a violation of law," said Sen. Richard Blumenthal, D-Conn., a former U.S. attorney and state
attorney general. "Unfortunately we have no access to the FISA court opinions or orders that
may authorize this activity because they're largely secret. This presents yet another clear and
powerful reason that we need more transparency in the FISA court." Sen. John Cornyn, R-Texas,
a former Texas Supreme Court judge and state attorney general, said, "There's certainly room to
improve the process and to reassure the American people that their privacy rights are being
protected while at the same time making sure that we have the tools in place to keep us safe."
After intelligence-based information is referred to the FBI, the domestic law enforcement
agency would have to prove probable cause to a federal judge to obtain a warrant to conduct
electronic surveillance or a physical search as part of any domestic criminal investigation. But
some lawyers, particularly in the criminal defense community, see that process as
constitutionally flawed. "The NSA intercepts, whether they are mail covers, metadata or what
have you, are in essence general warrants," said Harold Haddon, a prominent criminal defense
attorney from Denver. Using information from those warrants as the basis for a criminal
prosecution "is a bright-line Fourth Amendment violation," Haddon said, referring to the
constitutional protection against unreasonable search and seizure.
NSA data mining can help stop cybercrime
Micheals, 2013, Michaels is a military writer for USA TODAY and has covered wars around the
world. He is a former Marine infantry officer and author of the book "A Chance in Hell: The men
who triumphed over Iraq's deadliest city and turned the tide of war.", Jim, NSA data mining can
help stop cybercrime, analysts say, 4:50 p.m. EDT June 6, 2013,
http://www.usatoday.com/story/news/politics/2013/06/06/nsa-data-mining-cyber-crimedata/2397165/, js
The huge volume of telephone records turned over
to the U.S. government could help investigators
identify and deter a range of terrorist acts, including cyberattacks, analysts say. "Once you have this big
chunk of data and you have it forever… you can do all sorts of analytics with it using other data sources," said
Joseph DeMarco, former head of the cybercrime unit in the U.S. attorney's office in New York City. "A data set like this is the gift that
keeps on giving," said DeMarco, a partner at the law firm DeVore & DeMarco. The government obtained an order from the Foreign
Intelligence Surveillance Court ordering a Verizon subsidiary to turn over phone records to the National Security Agency. The records
do not include the content of phone calls and the order does not authorize eavesdropping. Still, the information
can be
helpful to investigators looking for patterns, linking people and networks. Also, phone numbers
can be attached to computers, allowing hackers to get into networks through telephone lines.
The data can also be viewed against other databases that help investigators see patterns and
links among people and networks. "All the data is critical," said Robert Rodriguez, a cybersecurity expert and
former Secret Service agent. The government considers many cyberattacks to be acts of terror, DeMarco said. "The definition of
terrorism includes cyberterrorism," he said. The court order also raises questions about the relationship between the government
and industry at a time when so much critical infrastructure, such as power grids and banking, is in the hands of industry and may be
vulnerable to cyberattack. In the Verizon case, the NSA got a court order to get the phone records. But to combat cyberattacks, the
government has been struggling with ways to compel more cooperation between government and industry. President Obama issued
an executive order this year aimed at encouraging the sharing of information, such as reports of attacks on industry and threat
information. The White House has said that legislation is also needed to develop a strong defense against cyberattacks. A key
provision lawmakers are considering would include civil protections so that private companies could not be held liable for turning
information over to the government. A similar provision was included in the 2008 reauthorization of the Foreign Intelligence
Surveillance Act, the 1978 law that created the court that approved the NSA's Verizon request.
Link – PATRIOT ACT and Money laundering
Anti-Money laundering tech helps mass surveillance - Means there is a clear
tradeoff with the plan
DeWeese 3
(a candidate for the Ohio Legislature, served as editor of two newspapers, and has owned several businesses, led the only privatelyfunded election-observation team to the Panamanian elections, invited to Cambridge University to debate the issue of the United
Nations before the Cambridge Union, serves as Founder and President of the American Policy Center and editor of The DeWeese
Report, Tom, “Total surveillance equals total tyranny”, American Policy Center, August 25, 2003,
http://americanpolicy.org/2003/08/25/total-surveillance-equals-total-tyranny/, ASN)
In the name of fighting terrorism a new kind of government is being implemented in Washington, D.C. We are witnessing the birth of
a powerful multi-billion dollar surveillance lobby consisting of an army of special interest groups, Washington lawyers, lobbyists, and
high-tech firms with wares to sell. The
personal rights of American citizens, protected until now by the Bill
of Rights, are the farthest thing from their minds as they seek to fill their pockets while enabling
government to monitor and control our lives to a degree unheard of prior to September 11,
2001. This army seeks riches as it pushes for laws and regulations to spy on and control the lives of law-abiding Americans. The
Government Electronics and Information Technology Association (GEIA) reports that there are
more than 100 federal entities involved in forging the largest conglomeration of governmentprivate contractor interests since the creation of the Pentagon. GEIA represents hundreds of corporate
members seeking to cash in on the Homeland Security-citizen-surveillance-spending spree. GEIA told the news media that the
“needed technologies include those providing digital surveillance, data mining, advanced encryption, smart cards, censors and early
warning and profiling tools.” In September 2002, dozens of major high tech companies formed the “Homeland Security Industries
Association”. A key objective of the association is to win a piece of the action for the creation of national ID cards for travelers. The
November 25 edition of Business Week reported that the
SAS Institute is among many corporations scrambling
to launch a whole new line of anti-money laundering software designed to help insurance
companies, investment banks and brokerage firms spy on their clients’ financial activities on
behalf of the government in compliance with the Patriot Act. According to Bert Ely, the head of a
consulting company for financial institutions, the new anti-money laundering provisions of the
Patriot Act will do nothing to stop the financing of international terrorists. At best, he says, the new
provisions will actually provide evil doers with a road map to avoid detection. What the new Patriot Act provisions are really about,
says Ely, is to have the United States fall into line with an international campaign being waged by the Organization for Economic
Cooperation and Development and the Financial Action Task Force against countries that serve as tax havens. The newly enacted
regulations are being applied in the name of fighting terrorism, but are really about a different agenda. In mid-September 2002, the
U.S. Department of Commerce and the Office of Homeland Security held an exposition in Washington. Medium and small firms from
across the nation were invited in to showcase the very latest in citizen surveillance wares. This tradeshow and others like it have
attracted hundreds of corporations who’ve shown their high-tech products to top government planners responsible for creating and
implementing new restrictions on privacy in the name of “national security.” PoliticalMoneyline says that 444 groups and individuals
have registered as lobbyists to deal with “terror” and “security” issues. IBM has opened a “Government Solutions Center” in Vienna,
Virginia. The high-tech Unisys Corporation has established a similar exhibition for inspection by federal surveillance planners, called
the “Homeland Security Center for Excellence.” Both
corporations are racing to cash in on billions of dollars
for facial recognition systems at airports, and in anticipation of “trusted traveler” cards, a hightech ID tied to extensive background checks and biometric identification. In February 2003, it
was discovered that the Department of Justice was drafting legislation to radically expand the
reach of the federal government into the lives of every American citizen. The official title of the
document is the “Domestic Security Enhancement Act of 2003. It’s been given the nickname,
Patriot 2. The bill has not yet been introduced in Congress and only a very few key government leaders including Vice President
Cheney and House Speaker Dennis Hastert have reviewed it. It is suspected by many that the delay in officially offering the bill to
Congress is a direct result of public attacks on the bill by privacy advocates, but it is feared that the Justice Department would get
very bold in rushing it through should another terrorist attack occur. Here are just a few of the more frightening provisions of Patriot
2.
By definition in the bill, almost any American citizen can arbitrarily be designated a terrorist.
Section 101 of this act will give the executive branch the power to declare any American a
“foreign power” and therefore not a citizen. Those designated will be exempt from the protections of the
Constitution. Keep in mind that the Patriot Act was passed by Congress, sight unseen, in the middle of an Anthrax scare. Every
member of Congress was warned that if they failed to pass it then the next terrorist attack would be on their hands. That’s why the
Patriot Act allows for wiretaps without warrants. And it’s why all the other surveillance a-go-go is in full swing. In
the name of
fighting terrorism, our government has gained the ability to see our every movement, inspect
every transaction, and walk into our homes without our knowing it. For those of you who feel protected;
who feel the government is just doing its job to defeat terrorism, I’m very sad to tell you that our government is not being honest
with us. Terrorism is the excuse, not the motivation, for the massive drive toward Big Brother. We are not being protected. We are
being wrapped in a cocoon of tyranny. All of the signs are there. Consider the power which we have now granted to the federal
government twenty years down the road, driven by more technological developments that we can’t even pretend to foresee.
Imagine the America that you are allowing the government to create for your children. What will their lives be like? Will they know
freedom or oppression? We are making those decisions for our children today. The only way to make sure that government doesn’t
abuse its power is to not grant it in the first place.
PATRIOT ACT is Key to effective counter-money laundering operations.
White Paper on the USA PATRIOT ACT, 14
White Paper on the USA PATRIOT ACT, 2014 (“The USA PATRIOT ACT”, Lexis Nexis, August 2014,
https://cert-www.lexisnexis.com/risk/intl/en/regulations/USA-Patriot-Act.pdf, Accessed: July
20th, 2015, DSF)
Money laundering is defined as the transfer of cash and valuables that are the product of and /
or intended for the facilitation and execution of a crime. The Act strengthens federal efforts
against money laundering in the areas of regulations, criminal sanctions and forfeiture. The
Act broadens the Secretary of the Treasury’s authority to regulate the activities of the
institutions that function within the United States financial system. This is especially true in
reference to foreign entities. The Act provides the position to promote the following
regulations:
• Securities brokers, commodity merchants, dealers, pool operators and advisors must file
(SARs) suspicious activity reports
• Businesses are required to report cash transactions that involve sums that are greater than
$10,000 to the IRS in addition to filing a SAR
• Additional “special measures” and “due diligence” requirements to combat foreign money
laundering
• Financial institutions are prohibited from maintaining a correspondent account for foreign
shell banks
• Financial institutions are prohibited from permitting their customers to hide their financial
activities by leveraging the institutions concentration account processes
An Effective Approach for News Screening 4




• Introducing new customer identification (CIP) standards in addition to recordkeeping, as well
as recommending effective processes to verify the identity of foreign customers
• Exhorting financial institutions as well as law enforcement in sharing information concerning
suspected terrorist activity and money laundering
• Institutingtherequirementthatfinancialinstitutionsmaintainantimoneylaunderingprograms,compliance personnel, employee training programs, internal
policies, procedures and controls as well as an independent audit feature
The Act introduced a series of new money laundering crimes and amendments, in addition to
increasing the penalties for previous offenses. Among these it:
• Prohibits laundering (in the United States) the proceeds from foreign crimes and or political
corruption
• Prohibits laundering the proceeds for supporting terrorist organizations as well as for
cybercrimes
• Increases the penalty for counterfeiting
• Sought to override a Supreme Court decision indicating that the confiscation of over $300,000
(for attempting to leave the country without reporting the funds to customs) was an
unconstitutionally exorbitant fine
• Allows for the authority to prosecute fraud committed overseas involving U.S.-based credit
cards
• Promotes the prosecution of money laundering in the location where the offense occurred
The Act created two types of forfeitures in addition to modifying several confiscations-related
procedures. The
Act allows the confiscation of an individual’s or entity’s property who either plans in or
participates in an act of international or domestic terrorism. The Act also allows for the
confiscation of property that is derived from or used to facilitate international or domestic
terrorism. Under the constitution’s due process, double jeopardy and the ex post facto clauses,
the scope of these provisions may be limited. From a procedural perspective the Act:
• Provides mechanisms to extend jurisdiction in cases concerning forfeiture proceedings over
individuals and entities
• Provides for property confiscation in the United States for a broader range of crimes
committed in violation of foreign law
• Allows the United States enforcement of foreign forfeiture orders
• Permits the seizure of foreign correspondent accounts that are held in United States financial
institutions for foreign banks who in turn hold forfeitable assets overseas
• Denies corporate entities the right to contest a confiscation if their principal shareholder is a
fugitive
Link – Pen Register/Trap and Trace
Pen register super useful in fighting crime
POV, 12
Point Of View, 1/1/12 (“Obtaining Electronic Communications and Records”, ALAMEDA COUNTY
DISTRICT ATTORNEY’S OFFICE, January 1st, 2012,
http://le.alcoda.org/publications/point_of_view/files/ELECTRONIC_RECORDSx.pdf, Accessed:
July 21st, 2015, DSF)
Every day, virtually every criminal in the U.S. (at least those who aren’t incarcerated) will use a
phone, send or receive email, surf the internet, or all four. So it is not surprising that many of
the records pertaining to these communications can help investigators solve crimes and assist
prosecutors in obtaining convictions. Among other things, they may reveal the identities of the
suspect’s accomplices, establish the dates and times of their contacts, and prove the suspect’s
whereabouts when a crime occurred. As the California Supreme Court observed, “[A] record of
telephone calls provides a virtual current biography.”2 In fact, electronic communication records
now permit officers to follow a suspect by obtaining realtime reports of the locations of the cell
phone towers that are receiving signals from his phone.
The question, then, is what are the legal requirements for obtaining these records?
Unfortunately, the answer is not crystal clear. And the reason is the same as the reason that
officers are having trouble figuring out the rules for obtaining copies of the communications
themselves (which was the subject of the previous article). Simply put, both subjects are
regulated by a federal law that was badly written and poorly organized, and which has not kept
pace with changes in technology.
Another consequence of this uncertainty is that overcautious service providers sometimes
demand legal process beyond that required by the law. As a result, officers who have complied
with all the legal requirements will sometimes be told by the provider that it’s not enough. And
this can result in delays that seriously impair investigations.
For example, homicide investigators in Hayward obtained a search warrant for a murder victim’s
AT&T records and voicemail. They needed this infor- mation because they had virtually no leads
in the case and they thought it would help if they knew the identities of the people who recently
spoke with the victim. But AT&T refused to turn over the records or tapes unless the officers
obtained a wiretap order. We challenged this in court, and won. But the incident cost time and
money, and it needlessly delayed the investigation.
Nevertheless, it is possible to make sense of this area of the law, and that is the purpose of this
article. But before we begin, there are four things that should be noted. First, there is a
significant differ- ence between communications (or “content”) and records, although a
summary will suffice here be- cause we discussed this issue at length in the accom- panying
article. A communication is the message that was sent or received, while a record consists of
information that is ancillary or incidental to its transmission, such as information about the subscriber, the phone numbers and email addresses of the senders and recipients of messages, and
exactly when those messages were made or received.3
Second, the rules for obtaining copies of elec- tronic communication records are set forth in the
federal Electronic Communications Privacy Act (ECPA). In particular, the section known as the
Stored Communications Act (SCA) covers the acquisition of subscriber and transaction records,
while data pertaining to pen registers and connec- tion traps are covered in a separate chapter
which also (arguably) covers the means by which officers can obtain cell tower location
records.5
DEA using wiretaps and pen registers to catch international drug cartels
Kenny 11, Michael Kenny, August 15, 2011, From Pablo to Osama: Counter-terrorism Lessons
from the War on Drugs, Survival: Global Politics and Strategy,
http://dx.doi.org/10.1080/00396338.2003.9688585, TK
Michael Kenney is assistant professor of public policy at the School of Public Affairs at
Pennsylvania State University, Harrisburg
The Colombian cocaine ‘cartels’3 can be traced back to the 1970s, when numerous entrepreneurs sought to exploit the
demand for cocaine in US illegal drug markets by transporting small quantities of the drug from Ecuador, Bolivia and Peru to
Colombia, where it underwent further refinement in makeshift laboratories before final shipment northwards. Over time and
through repeated exchange, numerous entrepreneurs developed far-flung transportation and distribution networks capable of
coordinating several multi-tonne cocaine shipments a year. These ‘wheel networks’ contained
a core group that
coordinated activities among functionally specific nodes, including cocaine base suppliers,
processing labs, transportation rings and distribution groups that delivered cocaine to
independent retailers and funnelled the profits to network leaders and investors.4 While core groups
were generally based in Colombia, support nodes were located in different countries, giving these networks a transnational
dimension. To
reduce their exposure to law-enforcement penetration, participants in cross-border
transportation or wholesale distribution activities were often compartmentalised into small
working groups or ‘cells’ that maintained close communication with core groups and followed
elaborate procedures for delivering large amounts of drugs to independent wholesalers and
conducting other hazardous activities. The core groups directed the transnational enterprise, providing security and
resolving disputes and securing resources from independent investors. They also gathered intelligence about government drug
enforcement efforts and served as the communications hub for the network, coordinating transactions among peripheral nodes. If
something went wrong, informal relations of vertical accountability ensured that peripheral nodes answered to the core, protecting
kingpins and investors from theft and other risks. Decision-making authority generally flowed out and downwards from the core,
beginning with one or more kingpins that directed the transnational enterprise. Below them were ‘managers’ responsible for line
functions, such as transportation and wholesale distribution. Beneath managers were cell workers that carried out much of the daily
work of the enterprise. Kingpins or their day-to-day administrators sought to maintain control over their operations through
frequent communication with overseas managers, often mediated through brokers that provided an additional layer of insulation
from law enforcement. The predominantly vertical direction of command authority – proceeding from the hub of the core group
along spokes to the most peripheral operatives – and its multiple vectors made the cartels ‘wheel networks’. By the mid-1980s, US
and Colombian officials were fully attuned to the danger represented by a handful of wheel networks, particularly the notorious
Medellín and Cali enterprises. With
US assistance, Colombian drug enforcers launched several
crackdowns against the leaders of these transnational enterprises between 1984 and 1988, destroying processing
labs, seizing cocaine shipments and arresting (and occasionally extraditing) lower and middle-level
traffickers. However, core-group kingpins were not greatly affected by these short-lived offensives, as their elaborate security
arrangements allowed them to continue their illicit activities relatively unimpeded. Throughout the 1980s, police officials discovered
numerous multi-tonne cocaine shipments in the US, indicating the growing capacity of Colombian trafficking networks. Yet even the
largest of these seizures failed to put a significant dent in drug availability. While the estimated average price of cocaine at the
‘dealer’ level dropped from $191 per gram in 1981 to $65 per gram in 1989, during the same period the estimated purity of cocaine
at the same transaction level rose from 60% to 80%. The US
Drug Enforcement Administration (DEA)’s
response, in 1992, was the kingpin strategy. Leveraging the DEA’s investigative and intelligence
strengths, this initiative involved the aggressive use of electronic surveillance technologies,
including wiretaps, pen registers and trap-and-trace devices. A kingpin was defined as the leader of an
international trafficking enterprise who directs the production, transportation, and distribution of large quantities of cocaine or
heroin, as well as the organisation’s financial operations. By ‘neutralising’ kingpins and dismantling their criminal infrastructures, the
DEA hoped that it would be able to ‘significantly reduce the availability of drugs in the United States’.5 Principal targets of the
kingpin strategy were the leaders of the Colombian cocaine cartels. The initial list included Pablo Escobar, José Santacruz Londoño,
Gilberto and Miguel Rodríguez Orejuela, Helmer Buitrago Herrera, and Iván and Jairo Urdinola Grajales. In
close cooperation
with the Colombian National Police (CNP), the DEA sought to disable their trafficking networks
by attacking their communications, transportation and finance systems. After just a year and a
half of operation, the DEA reported that kingpin investigations had led to the seizure of $210
million in drug proceeds, the confiscation of 144 aircraft and 91 boats, trucks and cars, and the
arrest of over 713 ‘significant’ traffickers.6 In Colombia, elite drug enforcement units destroyed
hundreds of cocaine processing labs, seized thousands of kilograms of cocaine base and cocaine
hydrochloride, eradicated hundreds of thousands of hectares of coca leaf plantings, and
arrested hundreds of traffickers. Remarkably, by 1996 all of the original kingpins were either dead or in jail, and their
trafficking networks severely disrupted. Notwithstanding reports that some entrepreneurs continued to manage scaled-down
smuggling operations from behind bars, a number of government officials crowed that the days of the cocaine cartels were over.
Some went even further. Following the arrest of Gilberto Rodríguez-Orejuela, Colombian prosecutor general Alfonso Valdivieso
exulted that ‘narco-trafficking is in the way of disappearing from Colombia’.7 In
a war marked by considerable
frustration for lawenforcement agencies, the state appeared to have earned a major victory.
Link – Police Body Cameras
Federal push for police body cameras helps with solving crimes such as
domestic violence because of the better evidence
Shepherd 14
(Reporter for Centralmaine – Covers Maine’s 2nd Congressional district – News and Politics reporter for the Kennebec Journal,
Michael, “Police Body Cameras Already Catching on in Central Maine”, Centralmaine.com, December 7, 2014,
http://www.centralmaine.com/2014/12/07/police-body-cameras-already-catching-on-in-central-maine/, ASN)
Gove’s department is one of the scattershot cities and towns
in central Maine that began using chest-worn
cameras department-wide well before a recent national push for police to adopt them. Three years
ago, Gardiner Police Chief James Toman said his department started using body cameras during traffic stops, crime scene visits and
most other interactions with the public. Now the department has seven of them. They cost $700 to $800 per unit, cheap compared
to the in-car units that Gardiner hasn’t had and would have had to pay thousands to install. Toman said officers
have
embraced the body cameras, which help them write reports, document cases and guard against
citizen complaints. “I think it’s one of the best things we’ve purchased, actually,” the chief said. Other area departments using
them include those in Wilton, Farmington, Richmond and Monmouth. They bought them in the last few years as a more portable
and cheaper alternative to dashboard cameras, which are more common. Meanwhile, larger Maine police agencies — including the
Maine State Police and departments in Portland, Bangor, Lewiston and Augusta — haven’t bought body cameras. Those
departments say they would consider using body cameras, but they cited cost as a main prohibitive factor. Departments
nationwide, though, will get help with that if President Barack Obama gets his way. Last week,
he asked Congress to spend $263 million over three years to give police cameras, training and
other resources in an effort to increase public confidence in law enforcement. Of that, the
federal government would use $75 million to help buy 50,000 body cameras for police through a
program that would match state and local funding. The proposal was a response to recent events in Ferguson,
Mo., where racial divides were highlighted after Michael Brown, an unarmed black 18-year-old suspected of robbery, was shot and
killed by white police officer Darren Wilson after a scuffle in August. Brown’s death sparked protests in the St. Louis suburb and
nationwide, prompting further debate about police use of riot gear, tear gas and armored vehicles to tamp down demonstrations.
After a grand jury decided in November not to charge Wilson in Brown’s death, protesters took to the streets again. Brown’s family
has said they would work “to ensure that every police officer working the streets in this country wears a body camera,” but Obama’s
proposal wouldn’t get close to that: 50,000 cameras would cover less than a tenth of the nation’s police officers, estimated at just
under 700,000 people. In Maine and across the nation, cameras in police cruisers are common, but not quite standard: In 2003, the
U.S. Department of Justice said 72 percent of state police and highway patrol cars had cameras, up from 11 percent in 2000. The
Maine State Police installed cruiser cameras in 1995, but like most agencies nationwide, they don’t use body cameras. A Justice
Department survey of a sampling of police agencies in July 2013 found that 75 percent of those departments didn’t use them. But
calls for them have grown louder of late, with New York City, Chicago and Philadelphia rolling out pilot programs. In some places,
police unions have opposed mandatory expansion of body camera use, but there’s little opposition to the concept among police in
Maine. The
American Civil Liberties Union, which generally opposes many government
surveillance programs, supports the concept of body cameras as long as individual privacy is
protected. Robert Schwartz, executive director of the Maine Chiefs of Police Association, said he didn’t oppose the idea, but
departments must set clear expectations for officers before using them. “There’s a lot of things to be discussed before you just put a
camera on,” he said. With body cameras, the onus is typically on the officer to turn them on. In Gardiner, Toman has issued a
written policy on body camera footage, which says officers
must switch their cameras on when exiting their
cruiser ahead of interactions. It can be switched off only after interactions. The policy says that
videos must be kept for at least three months in Gardiner, but if there’s an arrest, they are
maintained indefinitely and handed to prosecutors as evidence. Rachel Healy, a spokeswoman for the ACLU
of Maine, praised Gardiner’s policy overall, especially the part that makes officers leave cameras on throughout interactions. She
said she
would liked to have seen certain allowances made for recording inside homes and
disclosing the fact that officers often are recording, but she said Gardiner is well ahead of most
agencies. “In the end, when these ultimately will be routine and technology advances, these problems will work themselves out,”
Healy said. Gardiner is ahead of Wilton, whose department is more casual about using the cameras. Police Chief Heidi Wilcox said
there’s no written policy for her officers, who follow “best-use” practices when using body cameras. The
Waterville Police
Department doesn’t provide body cameras to its police, but Officer Damon Lefferts bought one
for his own use last year. He told the Morning Sentinel that it once helped him get evidence in a
domestic violence case. However, Police Chief Joseph Massey said last week that he’ll ask Lefferts to stop using it until the
department can develop protocols and determine how they would respond to public-access requests for his footage. Kennebec
County District Attorney Maeghan Maloney said “the
best evidence we have in a case is often from a body
camera,” saying that footage of victim interviews has led to convictions in domestic violence
cases. That worked in the case of David L. Dixon. Last year, he admitted to Gardiner police Sgt. Todd Pilsbury that he had choked
and “tried to kill” a woman. Pilsbury was wearing a body camera. Dixon eventually was found guilty and sentenced to six months in
jail. The footage, which the department provided to the Kennebec Journal for review, also showed an interview with the victim, who
had visible red marks around her neck.
Link – Stored Communications Act
SCA is super useful in fighting crime – Courts Say
POV, 12
Point Of View, 1/1/12 (“Obtaining Electronic Communications and Records”, ALAMEDA COUNTY
DISTRICT ATTORNEY’S OFFICE, January 1st, 2012,
http://le.alcoda.org/publications/point_of_view/files/ELECTRONIC_RECORDSx.pdf, Accessed:
July 21st, 2015, DSF)
Every day, virtually every criminal in the U.S. (at least those who aren’t incarcerated) will use a
phone, send or receive email, surf the internet, or all four. So it is not surprising that many of
the records pertaining to these communications can help investigators solve crimes and assist
prosecutors in obtaining convictions. Among other things, they may reveal the identities of the
suspect’s accomplices, establish the dates and times of their contacts, and prove the suspect’s
whereabouts when a crime occurred. As the California Supreme Court observed, “[A] record of
telephone calls provides a virtual current biography.”2 In fact, electronic communication records
now permit officers to follow a suspect by obtaining realtime reports of the locations of the cell
phone towers that are receiving signals from his phone.
The question, then, is what are the legal requirements for obtaining these records?
Unfortunately, the answer is not crystal clear. And the reason is the same as the reason that
officers are having trouble figuring out the rules for obtaining copies of the communications
themselves (which was the subject of the previous article). Simply put, both subjects are
regulated by a federal law that was badly written and poorly organized, and which has not kept
pace with changes in technology.
Another consequence of this uncertainty is that overcautious service providers sometimes
demand legal process beyond that required by the law. As a result, officers who have complied
with all the legal requirements will sometimes be told by the provider that it’s not enough. And
this can result in delays that seriously impair investigations.
For example, homicide investigators in Hayward obtained a search warrant for a murder victim’s
AT&T records and voicemail. They needed this infor- mation because they had virtually no leads
in the case and they thought it would help if they knew the identities of the people who recently
spoke with the victim. But AT&T refused to turn over the records or tapes unless the officers
obtained a wiretap order. We challenged this in court, and won. But the incident cost time and
money, and it needlessly delayed the investigation.
Nevertheless, it is possible to make sense of this area of the law, and that is the purpose of this
article. But before we begin, there are four things that should be noted. First, there is a
significant differ- ence between communications (or “content”) and records, although a
summary will suffice here be- cause we discussed this issue at length in the accom- panying
article. A communication is the message that was sent or received, while a record consists of
information that is ancillary or incidental to its transmission, such as information about the subscriber, the phone numbers and email addresses of the senders and recipients of messages, and
exactly when those messages were made or received.3
Second, the rules for obtaining copies of elec- tronic communication records are set forth in the
federal Electronic Communications Privacy Act (ECPA). In particular, the section known as the
Stored Communications Act (SCA) covers the acquisition of subscriber and transaction records,
while data pertaining to pen registers and connec- tion traps are covered in a separate chapter
which also (arguably) covers the means by which officers can obtain cell tower location
records.5
Link – Wiretapping (Generic)
Wiretapping is key to check organized crime
Wade, 15
Christian M. Wade, State house reporter, 1/9/15 (“Essex County DA Blodgett
calls for updated wiretap law”, Salem News, Janyary 1st, 2015,
http://www.salemnews.com/news/local_news/essex-county-da-blodgett-callsfor-updated-wiretap-law/article_ebfcb081-27a7-54e0-b768d45f0d2598f5.html, Accessed: July 13th 2015, DSF)
BOSTON — Law enforcement officials are planning another push to update the state’s
antiquated wiretapping laws to include cell phones, as part of a broader effort to target drug
gangs and human traffickers.
Such a measure would also expand the definition of organized crime beyond traditional mafia
activity and allow police to ask judges for wiretaps on narcotics and human trafficking networks.
“One of the biggest instruments in criminal activity these days is the cell phone,” said Essex
County District Attorney Jonathan Blodgett. “The drug cabals and the human traffickers —
they’re all doing it with their cell phones.”
Blodgett, who heads the Massachusetts District Attorneys Association, said the group will seek a
lawmaker to sponsor a measure broadening wiretap authority to include cases involving
homicides, firearms and drug distribution, even if not part of organized crime.
Link – Wiretapping (Money Laundering)
Wiretaps and other forms of surveillance help curb Money Laundering
Auten 13 (Matthew R. Auten is a J.D. Candidate, Pace University School of Law (2013); B.A., McGill
University (2002) - 2013- “Money Spending or Money Laundering: The Fine Line between Legal and Illegal
Financial Transactions” - http://www.lexisnexis.com.proxy2.cl.msu.edu/hottopics/lnacademic/)
To determine whether sufficient evidence to support a conviction for money laundering
has been produced by the prosecution, the most clear-cut cases rely on probative
statements made by the defendant.
http://www.lexisnexis.com.proxy2.cl.msu.edu/lnacui2api/frame.do?tokenKey=rsh20.976477.4087765907&target=results_DocumentContent&returnToKey=20_T22355215367&p
arent=docview&rand=1437401604139&reloadEntirePage=true - n37 Direct evidence of this
kind is often obtained through wiretaps, or through the testimony of co-conspirators. However,
more often than not, the prosecution relies on circumstantial evidence--often with the interpretive help of
an expert witness--to make their case that a dual-purpose transaction should be characterized as money
laundering. In some instances,
circumstantial evidence may provide a clear inference that a
particular dual-purpose transaction, or series of transactions, should be characterized as
money laundering, because the intent to conceal is clear. n41
Increase of wiretapping has resulted in more arrests of drug cartels
McCombs 14, Brady Mccombs Arizona Daily Star, 12-14-2010, "Wiretap use expands in fight
against drug lords," Arizona Daily Star, http://tucson.com/news/local/crime/wiretap-useexpands-in-fight-against-drug-lords/article_0d98c151-27b8-5cb5-888f-436c60487c12.htm, TK
Prosecutors had plenty of evidence against two members of the Dominguez drug smuggling
organization, but it was a recording of the defendants arranging a cocaine deal that nailed the
conviction. "Tell him to get me the job, the other kind, the Guero," said Ricardo Varela, using the slang term for cocaine in an exchange with
Maria Isabel Dominguez. "I'm going to tell him," she said. "I need one or two there," Varela said. "I'll go over and buy it from him." The
conversation was one of hundreds recorded in the summer of 2004 in a wiretap investigation by
the Counter Narcotics Alliance that led to the 2008 conviction of Varela and 35 others from the
organization. Dominguez pleaded guilty before trial. Though expensive and time-consuming, wiretap
investigations are on the rise in Arizona and across the nation because they help investigators catch
high-ranking targets and because, most importantly, the live recordings pack a punch in the
courtroom that can't be matched by regular testimony. "You see the lights come on and the jury realizing, 'Holy moly,
these guys were going to keep doing this until they got stopped,'" said Richard Wintory, who now heads the Arizona Attorney General's border crime
enforcement team but was the prosecutor in the Dominguez case as a deputy Pima County attorney. That wiretap was one of only 29 in Arizona in
2004. Since then, the number of wiretaps authorized by judges has nearly doubled to 55 in 2009, records from the Office of United States Courts show.
This year's total is expected to match or exceed last year's. Nationally,
wiretaps have doubled since 2000 and are up
one third in the last five years. "Wiretaps are devastatingly effective for law enforcement," said
Tucson defense attorney Walter Nash, who is considered one of the foremost experts on litigating against them. "Nobody will dispute that. It gives
them real-time evidence that can be the ball game." In Arizona, three-fourths are used to investigate drug cases and all tap into cell phones. Critics of
wiretapping say law-enforcement agencies seem to be rushing to use them when traditional law-enforcement tactics would suffice. That should worry
everyone, defense attorney Nash said, considering it's so intrusive. "I don't break any laws but - I don't know about you - I would be mighty
uncomfortable knowing somebody is listening to my conversation," Nash said. Real wiretap investigations don't resemble the ones you see in the
movies - they are expensive, time-consuming and strenuous. "It's not at all like the movies, where you see these knuckleheads in a van with
headphones on and cheeseburgers being eaten," Wintory said. "There is so much involved in these investigations." The work begins long before
investigators ever listen to a phone conversation. To get permission from a judge, they must show: • That the person they want to investigate is
committing or about to commit a serious crime. • That he or she is using phones to commit the crime, which requires showing a pattern of phones
being used repeatedly by suspected criminals. • That authorities have exhausted traditional methods and cannot further the investigation without a
wiretap. Police often come to Wintory's office wide-eyed about potential wiretap cases only to leave frowning when they realize they haven't used all
the traditional methods, which include surveillance, record checks, trash pickups and informants or undercover officers. This high standard is why the
American Civil Liberties Union isn't concerned about the increase in wiretaps, said the organization's legislative counsel, Chris Calabrese. Once a
wiretap application is sent to a judge, it's hardly ever rejected. Only two applications have been denied since 2000, compared with 17,278 approved,
show records from the Office of United States Courts. Critics call this proof that getting wiretaps is no more than a rubber-stamp process, but Wintory
said hundreds of wiretap applications never reach a judge; they fizzle in internal reviews by committees that meticulously inspect them, he said. Once a
judge approves a wiretap, suppressing the evidence it gathers is difficult, time-consuming and expensive for a defense attorney. For instance, Nash has
to contract investigators to prove the agency could have used tactics it said it couldn't, such as surveillance. Deciphering codes Once a wiretap has been
approved, the long hours begin. "It's not just somebody flipping a switch somewhere and listening in a room," said Glenn McCormick, deputy criminal
chief in charge of the U.S. Attorney Office's organized crime and drug enforcement task force section. Monitors, usually Spanish speakers, listen to
phone conversations, trying to make sense of what amounts to code language. Agents go to locations mentioned in the calls to watch houses or talk
with people discreetly to connect the dots between what they are hearing and what is actually happening. " Stops
are made, people are
arrested and what do you know, they find 20 pounds of meth in the car and the phone
conversation was talking about, 'You taking those 20 windows?' 'Yeah, we've got those 20
windows,'" McCormick said. Each wiretap authorization is good for 30 days, with extensions available for 30 additional days at a time.
Investigators sometimes get approvals to tap new phones they discover during an investigation. In 2009 in Arizona, wiretap cases
lasted an average of 71 days. Agents made an average of 145 intercepts per day. Arizona
wiretap cases cost an average of $203,800 in 2009, including four cases that exceeded $800,000.
A federal drug investigation that began in May 2008 and led to the arrest of 169 people cost
$821,067. A state case out of Maricopa County that began in October 2008 and hasn't yielded any arrests cost $978,720. The manpower - paying
people to listen, translate and transcribe the conversations and agents to conduct surveillance and make stops - accounted for 87 percent of the costs
in Arizona cases in 2009. Agencies are able to do more of them because they have more staff and funds. The U.S. Attorney's Office in Arizona has added
42 assistant U.S. attorneys since 2006, bringing the total to 152. State agencies tap into federal grants for border security and forfeiture money. Drug
cartels are well aware of the increase in wiretaps and try to thwart them by frequently
changing cell phone numbers, said Anthony Coulson, a recently retired assistant special agent in charge of the Drug Enforcement
Administration's Tucson office. For a while, cartels would only use a phone up to 20 times, knowing the Department of Justice required investigators to
show the use of a phone number 21 times in applications for wiretaps, Coulson said. That requirement has since changed .
Drug smuggling
organizations also try to use other means of communication or cut down on phone calls, but
cell phones are vital to their operations, Coulson said. "There is no other way to do it," he said. "You can't do it through
telepathy." No independent monitoring During a wiretap investigation, agents are to make reasonable attempts not to listen to conversations
unrelated to the criminal activity being investigated. That doesn't always happen, defense attorney Nash said. Sometimes authorities listen in on
privileged conversations between a lawyer and client, or to irrelevant banter such as two teenagers chatting, he said. But Wintory says officers get so
many warnings about the law that they've missed out on key conversations when an overly careful officer switched off a recording because he thought
he wasn't allowed to listen in. The
wiretap model "is the most scrupulously respectful process of civil
liberties that has ever been created" Wintory said. Wiretaps are an important tool in the
difficult fight against powerful drug-trafficking organizations, he said: "They give us the opportunity to reach out
through those phone lines, jerk them up by the nape of their necks and drag them back to Tucson to face justice."
DEA using wiretaps and pen registers to catch international drug cartels
Kenny 11, Michael Kenny, August 15, 2011, From Pablo to Osama: Counter-terrorism Lessons
from the War on Drugs, Survival: Global Politics and Strategy,
http://dx.doi.org/10.1080/00396338.2003.9688585, TK
Michael Kenney is assistant professor of public policy at the School of Public Affairs at
Pennsylvania State University, Harrisburg
The Colombian cocaine ‘cartels’3 can be traced back to the 1970s, when numerous entrepreneurs sought to exploit the
demand for cocaine in US illegal drug markets by transporting small quantities of the drug from Ecuador, Bolivia and Peru to
Colombia, where it underwent further refinement in makeshift laboratories before final shipment northwards. Over time and
through repeated exchange, numerous entrepreneurs developed far-flung transportation and distribution networks capable of
coordinating several multi-tonne cocaine shipments a year. These ‘wheel networks’ contained
a core group that
coordinated activities among functionally specific nodes, including cocaine base suppliers,
processing labs, transportation rings and distribution groups that delivered cocaine to
independent retailers and funnelled the profits to network leaders and investors.4 While core groups
were generally based in Colombia, support nodes were located in different countries, giving these networks a transnational
dimension. To
reduce their exposure to law-enforcement penetration, participants in cross-border
transportation or wholesale distribution activities were often compartmentalised into small
working groups or ‘cells’ that maintained close communication with core groups and followed
elaborate procedures for delivering large amounts of drugs to independent wholesalers and
conducting other hazardous activities. The core groups directed the transnational enterprise, providing security and
resolving disputes and securing resources from independent investors. They also gathered intelligence about government drug
enforcement efforts and served as the communications hub for the network, coordinating transactions among peripheral nodes. If
something went wrong, informal relations of vertical accountability ensured that peripheral nodes answered to the core, protecting
kingpins and investors from theft and other risks. Decision-making authority generally flowed out and downwards from the core,
beginning with one or more kingpins that directed the transnational enterprise. Below them were ‘managers’ responsible for line
functions, such as transportation and wholesale distribution. Beneath managers were cell workers that carried out much of the daily
work of the enterprise. Kingpins or their day-to-day administrators sought to maintain control over their operations through
frequent communication with overseas managers, often mediated through brokers that provided an additional layer of insulation
from law enforcement. The predominantly vertical direction of command authority – proceeding from the hub of the core group
along spokes to the most peripheral operatives – and its multiple vectors made the cartels ‘wheel networks’. By the mid-1980s, US
and Colombian officials were fully attuned to the danger represented by a handful of wheel networks, particularly the notorious
Medellín and Cali enterprises. With
US assistance, Colombian drug enforcers launched several
crackdowns against the leaders of these transnational enterprises between 1984 and 1988, destroying processing
labs, seizing cocaine shipments and arresting (and occasionally extraditing) lower and middle-level
traffickers. However, core-group kingpins were not greatly affected by these short-lived offensives, as their elaborate security
arrangements allowed them to continue their illicit activities relatively unimpeded. Throughout the 1980s, police officials discovered
numerous multi-tonne cocaine shipments in the US, indicating the growing capacity of Colombian trafficking networks. Yet even the
largest of these seizures failed to put a significant dent in drug availability. While the estimated average price of cocaine at the
‘dealer’ level dropped from $191 per gram in 1981 to $65 per gram in 1989, during the same period the estimated purity of cocaine
at the same transaction level rose from 60% to 80%. The US
Drug Enforcement Administration (DEA)’s
response, in 1992, was the kingpin strategy. Leveraging the DEA’s investigative and intelligence
strengths, this initiative involved the aggressive use of electronic surveillance technologies,
including wiretaps, pen registers and trap-and-trace devices. A kingpin was defined as the leader of an
international trafficking enterprise who directs the production, transportation, and distribution of large quantities of cocaine or
heroin, as well as the organisation’s financial operations. By ‘neutralising’ kingpins and dismantling their criminal infrastructures, the
DEA hoped that it would be able to ‘significantly reduce the availability of drugs in the United States’.5 Principal targets of the
kingpin strategy were the leaders of the Colombian cocaine cartels. The initial list included Pablo Escobar, José Santacruz Londoño,
Gilberto and Miguel Rodríguez Orejuela, Helmer Buitrago Herrera, and Iván and Jairo Urdinola Grajales. In
close cooperation
with the Colombian National Police (CNP), the DEA sought to disable their trafficking networks
by attacking their communications, transportation and finance systems. After just a year and a
half of operation, the DEA reported that kingpin investigations had led to the seizure of $210
million in drug proceeds, the confiscation of 144 aircraft and 91 boats, trucks and cars, and the
arrest of over 713 ‘significant’ traffickers.6 In Colombia, elite drug enforcement units destroyed
hundreds of cocaine processing labs, seized thousands of kilograms of cocaine base and cocaine
hydrochloride, eradicated hundreds of thousands of hectares of coca leaf plantings, and
arrested hundreds of traffickers. Remarkably, by 1996 all of the original kingpins were either dead or in jail, and their
trafficking networks severely disrupted. Notwithstanding reports that some entrepreneurs continued to manage scaled-down
smuggling operations from behind bars, a number of government officials crowed that the days of the cocaine cartels were over.
Some went even further. Following the arrest of Gilberto Rodríguez-Orejuela, Colombian prosecutor general Alfonso Valdivieso
exulted that ‘narco-trafficking is in the way of disappearing from Colombia’.7 In
a war marked by considerable
frustration for lawenforcement agencies, the state appeared to have earned a major victory.
Impact
Crime Bad (Deontology)
Crime is psychologically destructive –
Wolff, 5
Jonathan Wolff, Dean of Arts and Humanities and Professor of Philosophy, University College
London, 2005 (“What’s So Bad About Crime?”, Bentham Lecture UCL, November 30th, 2005,
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDUQFjADahU
KEwjl17Pt6ezGAhVHig0KHZTLCrg&url=http%3A%2F%2Fwww.homepages.ucl.ac.uk%2F~uctyjow
%2FWBC.doc&ei=3YuuVaX1H8eUNpSXq8AL&usg=AFQjCNFuT2F_VHWzdADYp7oxpDA2lKh1AQ&
sig2=68O_yxrVLih1gd74Hc2oPQ, Accessed: July 21st, 2015, DSF)
All of this, though, rings rather hollow, and perhaps does more to discredit particular economic
indicators rather than show that crime is a good thing, after all. However I raise the question
‘what’s so bad about crime?’ not from the standpoint of an economist, but from the standpoint
of moral and political philosophy. Asking this question, and thereby placing crime in a broader
context, may help with two tasks; not only understanding what is so bad about crime, but
understanding what is so bad about anything at all. That is to say, any philosophical account of
human well-being will have to be able to give an account of what it is about crime which gives
rise to so much misery. Hence crime is an important testing ground for philosophical theory.
To understand what it is for a human life to go well or badly we need some sort of theoretical
approach. One standard answer is that a good life is one filled with happiness or satisfaction; a
different answer is that a good life is one that is well-resourced, in terms of income and wealth,
allowing a good standard of living. The two accounts are, of course, related insofar as resources
can buy happiness, but it is well-known that the correlation is imperfect. A life can be intolerable
even though well-resourced, and happy though poorly resourced, at least by normal standards,
for a whole range of reasons.
According to the first theory presumably what is wrong with crime is that it makes people
unhappy in some way. There is, no doubt, a great deal of truth in this. One has only to think of
the misery, to the point of despondency, in which a mugging or burglary can leave people. A
convicted housebreaker told me that he went straight after his parents were burgled and he
saw at first hand for the first time, how devastating this was for them, even though they hardly
lost anything. He said that he had no idea that breaking into people’s houses could have such an
effect, and it shocked him to find out what he must have been doing to people. Perhaps this was
because he formerly had implicitly held the second view of well-being; that a good-life is a wellresourced one, or, more likely that there is a strong correlation between possession of goods
and happiness. So if you steal from the rich, as he had been doing, or from the adequately
insured, this should not affect their well-being in any serious way. Yet the experience of this
burglar’s parents convinced him, I suppose, that this view was wrong.
The happiness view seems closer to the truth, yet it also seems in some way superficial. What it
doesn’t tell us is why crime makes people so unhappy. My own experience of having to deal
with a minor burglary is that, objectively, it is comparable to having to put together some badly
made self-assembly furniture with some missing pieces, while at the same time querying a utility
bill and investigating the mis-location of a recorded delivery parcel. Very nasty, but, in itself, no
worse than a visit from the Quality Assurance Agency. A mugging, in its purely physical aspects,
is about at the same level as a mid-scale sporting injury. A character in Ian McEwan’s Saturday,
expecting to receive a beating in the street, has a flash forward to the months of convalescence
and recovery that would follow. This would be to take a purely ‘objective’ aspect of crime. Yet
these objective aspects hardly seem to capture what we worry about, as McEwan’s novel
brilliantly illustrates. There is something about being a victim of crime which goes much deeper
than this. Hence fear of crime is not, or at least not always, for example, fear of the average
expected objective effects of crime.
Jeremy Bentham, as so often, clarifies the issue:
The great point is, to clear the country of those crimes, each instance of which is sufficient to
awaken and keep alive, in every breast within a certain circle, the fear of boundless injury to
person or property, as well as of destruction to life itself – in comparison of this wide-spreading
– this almost universally extending mischief – this fear of boundless injury – the sum of the
mischiefs resulting in each instance from losses and other injuries actually sustained would be
found relatively inconsiderable. Jeremy Bentham Panoptican Versus New South Wales (p. 244)
Money Laundering BAD – Laundry List of Reasons
Money Laundering erodes political and social systems affecting stability,
diminishes economic growth, and hurts basic individual liberties
Crime and Misconduct Commission 05
(The Crime and Corruption Commission (CCC) is a statutory body set up to combat and reduce
the incidence of major crime and corruption in the public sector in Queensland. Its functions and
powers are set out in the Crime and Corruption Act 2001, “Background intelligence brief Money
laundering,” Crime and Corruption Commission, July 2005, http://www.ccc.qld.gov.au/researchand-publications/publications/crime/money-laundering.pdf, GCM)
There are many reasons why money laundering is harmful in society. Some examples are listed
below. It makes crime pay. Money laundering allows drug traffickers, smugglers and other
criminals to accumulate economic power and expand their operations. This has the potential to
erode the political and social systems of a country, and could affect stability and the general rule
of law (Alweendo 2005). This in turn drives up the cost of law enforcement and the spin-off
costs of health care in the treatment of problems such as drug addiction. It has the potential to
undermine the financial community because of the sheer magnitude of the sums involved.
Money laundering on a grand scale has the potential to change the demand for cash, make
interest rates and exchange rates more volatile, and cause high inflation rates for a country.
Laundering diminishes economic development because it undermines legitimate business,
competition and government tax revenue, and therefore indirectly harms honest taxpayers and
reduces legitimate job opportunities. Money laundering Perceived ease of entry to a country
attracts an undesirable element across its borders, degrading quality of life and raising concerns
about national security (Solicitor General Canada 1998). The crimes perpetrated by these
undesirable elements erode basic individual liberties by threatening rights to life and
entitlements to own property. There are great incentives, therefore, for governments and
private enterprise to work together to combat money laundering locally and globally.
Money Laundering - Turns Democracy
Money Laundering damages the integrity of the entire society, and undermines
democracy.
FATF 15 (Financial Action Task Force - The Financial Action Task Force (FATF) is an inter-governmental
body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to
set standards and promote effective implementation of legal, regulatory and operational measures for
combating money laundering, terrorist financing and other related threats to the integrity of the
international financial system. – “How does Money laundering Affect Business?” - http://www.fatfgafi.org/pages/faq/moneylaundering/- KR)
The integrity of the banking and financial services marketplace depends heavily on the perception that it functions
within a framework of high legal, professional and ethical standards. A reputation for integrity is the one of
the most valuable assets of a financial institution. If funds from criminal activity can be easily
processed through a particular institution – either because its employees or directors have been bribed or
because the institution turns a blind eye to the criminal nature of such funds – the institution could be drawn
into active complicity with criminals and become part of the criminal network itself. Evidence of
such complicity will have a damaging effect on the attitudes of other financial intermediaries and
of regulatory authorities, as well as ordinary customers. As for the potential negative macroeconomic consequences of
unchecked money laundering, one can cite inexplicable changes in money demand, prudential risks to bank soundness,
contamination effects on legal financial transactions, and increased volatility of international capital flows and
exchange rates due to unanticipated cross-border asset transfers. Also, as it rewards corruption and crime,
successful money laudering damages the integrity of the entire society and undermines
democracy and the rule of the law.
Money Laundering – Developing Countries
Money Laundering damages developing countries internally
World Bank 03 (World Bank is s a vital source of financial and technical assistance to developing
countries around the world, World Bank, “The Adverse Implications for Developing Countries,” 3/30/3,
http://www1.worldbank.org/finance/assets/images/02-chap02-f.qxd.pdf) RR
Criminal enterprises and terrorist financing operations succeed largely to the extent that they
are able to sanitize and conceal their proceeds by moving them through national and
international financial systems. The absence of, or a lax or corrupt, anti-money laundering
regime in a particular country permits criminals and those who finance terrorism financing to
operate, using their financial gains to expand their criminal pursuits and fostering illegal
activities such as corruption, drug trafficking, illicit trafficking and exploitation of human beings,
arms trafficking, smuggling, and terrorism. While money laundering and the financing of
terrorism can occur in any country, they have particularly significant economic and social
consequences for developing countries, because those markets tend to be small and, therefore,
more susceptible to disruption from criminal or terrorist influences. Money laundering and
terrorist financing also have significant economic and social consequences for countries with
fragile financial systems because they too are susceptible to disruption from such influences.
The economy, society, and ultimately the security of countries used as money-laundering
platforms are all imperiled. Money laundering helps make criminal activities profitable. Thus, to
the extent that a country is viewed as a haven for money laundering, it is likely to attract
criminals and promote corruption. If money laundering is prevalent in a country, it generates
more crime and corruption. It also enhances the use of bribery in critical gateways, such as:
lawyers and accountants, the legislature, police authorities, the courts. A reputation as a money
laundering or terrorist financing haven, alone, could cause significant adverse consequences for
development in a country. Foreign financial institutions may decide to limit their transactions
with institutions from money laundering havens; subject these transactions to extra scrutiny,
making them more expensive; or terminate correspondent or lending relationships altogether.
Even legitimate businesses and enterprises from money laundering havens may suffer from
reduced access to world markets or access at a higher cost due to extra scrutiny of their
ownership, organization and control systems.
Money Laundering impedes growth of countries and shows criminals that
money laundering pays off leading to more fraud and corporate embezzling
Layton 06
(Julia Layton holds a B.A. in English literature from Duke University and a M.F.A. in creative
writing from the University of Miami, Julia Layton, “How Money Laundering Works,”
HowStuffWorks.com, June 01, 2006, http://money.howstuffworks.com/moneylaundering5.htm, GCM)
Depending on which international agency you ask, criminals launder anywhere between $500
billion and $1 trillion worldwide every year. The global effect is staggering in social, economic
and security terms. On the socio-cultural end of the spectrum, successfully laundering money
means that criminal activity actually does pay off. This success encourages criminals to continue
their illicit schemes because they get to spend the profit with no repercussions. This means
more fraud, more corporate embezzling (which means more workers losing their pensions when
the corporation collapses), more drugs on the streets, more drug-related crime, lawenforcement resources stretched beyond their means and a general loss of morale on the part
of legitimate business people who don't break the law and don't make nearly the profits that
the criminals do. The economic effects are on a broader scale. Developing countries often bear
the brunt of modern money laundering because the governments are still in the process of
establishing regulations for their newly privatized financial sectors. This makes them a prime
target. In the 1990s, numerous banks in the developing Baltic states ended up with huge, widely
rumored deposits of dirty money. Bank patrons proceeded to withdraw their own clean money
for fear of losing it if the banks came under investigation and lost their insurance. The banks
collapsed as a result. Other major issues facing the world's economies include errors in
economic policy resulting from artificially inflated financial sectors. Massive influxes of dirty cash
into particular areas of the economy that are desirable to money launderers create false
demand, and officials act on this new demand by adjusting economic policy. When the
laundering process reaches a certain point or if law-enforcement officials start to show interest,
all of that money that will suddenly disappear without any predictable economic cause, and that
financial sector falls apart. Some problems on a more local scale relate to taxation and smallbusiness competition. Laundered money is usually untaxed, meaning the rest of us ultimately
have to make up the loss in tax revenue. Also, legitimate small businesses can't compete with
money-laundering front businesses that can afford to sell a product for cheaper because their
primary purpose is to clean money, not turn a profit. They have so much cash coming in that
they might even sell a product or service below cost. The majority of global investigations focus
on two prime money-laundering industries: Drug trafficking and terrorist organizations. The
effect of successfully cleaning drug money is clear: More drugs, more crime, more violence. The
connection between money laundering and terrorism may be a bit more complex, but it plays a
crucial role in the sustainability of terrorist organizations. Most people who financially support
terrorist organizations do not simply write a personal check and hand it over to a member of the
terrorist group. They send the money in roundabout ways that allow them to fund terrorism
while maintaining anonymity. And on the other end, terrorists do not use credit cards and
checks to purchase the weapons, plane tickets and civilian assistance they need to carry out a
plot. They launder the money so authorities can't trace it back to them and foil their planned
attack. Interrupting the laundering process can cut off funding and resources to terrorist groups.
Money Laundering - Econ
Money Laundering hurts the economy severely- list of reasons
FIU 15 (The Financial Intelligence Unit is assigned to conduct research on the causes and consequences
of money laundering and terrorist financing through participation in projects, FIU, “Consequences of
Money Laundering,” 7/20/15,
http://www.fiumauritius.org/index.php?option=com_content&view=article&id=1&Itemid=2&lang=en) RR
Money laundering impairs the development of the legitimate private sector through the supply of
products priced below production cost, making it therefore difficult for legitimate activities to
compete. Criminals may also turn enterprises, which were initially productive into sterile ones to launder
their funds leading ultimately to a decrease in the overall productivity of the economy. Furthermore, the
laundering of money can also cause unpredictable changes in money demand as well as great volatility in
international capital flows and exchange rates. While the financial sector is an essential constituent in the financing of
the legitimate economy, it can be a low-cost vehicle for criminals wishing to launder their funds.
Consequently, the flows of large sums of laundered funds poured in or out of financial institutions might
undermine the stability of financial markets. In addition, money laundering may damage the reputation of financial
institutions involved in the scheming resulting to a loss in trust and goodwill with stakeholders. In worst-case scenarios, money
laundering may also result in bank failures and financial crises. Money laundering also reduces tax
revenue as it becomes difficult for the government to collect revenue from related transactions, which frequently take place in
the underground economy. The socio-economic effects of money laundering are various because as dirty money generated from
criminal activities are laundered into legitimate funds; they are used to expand existing criminal operations and finance new ones.
Further to that money laundering may lead to the transfer of economic power from the market,
the government and the citizens to criminals, abetting therefore crimes and corruption.
Money Laundering is devastating to the private sector, and can destabilize the
economy.
FIU 13 (FIU is the financial intelligence unit, it has published numerous works regarding issues and risks
in the finance world-“Consequences of money Laundering”http://www.fiumauritius.org/index.php?option=com_content&view=article&id=18%3Amoneylaundering&catid=3&lang=en&limitstart=3-KR)
Money laundering impairs the development of the legitimate private sector through the supply of
products priced below production cost, making it therefore difficult for legitimate activities to
compete. Criminals may also turn enterprises which were initially productive into sterile ones to
launder their funds leading ultimately to a decrease in the overall productivity of the economy.
Furthermore, the laundering of money can also cause unpredictable changes in money demand as well
as great volatility in international capital flows and exchange rates. While the financial sector is an essential constituent
in the financing of the legitimate economy, it can be a low-cost vehicle for criminals wishing to launder their funds.
Consequently, the flows of large sums of laundered funds poured in or out of financial institutions
might undermine the stability of financial markets. In addition, money laundering may damage the reputation
of financial institutions involved in the scheming resulting to a loss in trust and goodwill with stakeholders. In worst
case scenarios, money laundering may also result in bank failures and financial crises. Money
laundering also reduces tax revenue as it becomes difficult for the government to collect revenue from related
transactions which frequently take place in the underground economy. The socio-economic effects of money
laundering are various because as dirty money generated from criminal activities are laundered into
legitimate funds; they are used to expand existing criminal operations and finance new ones.
Further to that money laundering may lead to the transfer of economic power from the market, the
government and the citizens to criminals, abetting therefore crimes and corruption.
Money Laundering has terrible consequences for Econ growth
Pahuja 09 (Rajana Pahuja is an investment banker, who has interest in Macroeconomic events MBA,
Asian Institute of Management – “Effects of Money Laundering on economy” - http://fenotes.blogspot.com/2009/10/effects-of-money-laundering-on-economy.html - KR)
1. Direct Effects: Money laundering distorts
the investments and depresses the productivity. Diverting
resources to less-productive activity, and by facilitating domestic corruption and crime, which in turn depress
economic growth. For developing countries, the diversion of such scarce resources to less productive domestic
assets or luxury imports is a serious detriment to economic growth. 2. Effect on Corporate competitiveness and
Taxation: Money laundering has a bearing on taxation and small business competition. Laundered
money is usually untaxed, meaning that the rest of the people ultimately have to make up the loss
in tax revenue. Furthermore, legitimate small businesses cannot compete with money launderingfront businesses that can afford to sell a product cheaply because their primary purpose is to clean
money, not turn profit. 3. Effect on Interest and Exchange Rates: Money Laundering has adverse consequences on
the interest rates and the exchange rate volatility particularly in developing nations and dollarized nations. It
complicates the government effort to manage the economic policies. It affects the income distribution,
contaminated the legal transactions, and has potential to destabilize the economy by inefficient
movements, which reduces the GDP growth.4. Effect on Foreign Investment:Although developing economies cannot
afford to be too selective about the sources of capital they attract, but postponing action is dangerous. There is a
damping effect on foreign direct investment when a country’s commercial and financial sectors
are perceived to be subject to the control and influence of organized crime. For business friendly
environment these impedances have to be weeded out.
Impacts of Money Laundering on Cost of Capital
Pahuja 09 (Rajana Pahuja is an investment banker, who has interest in Macroeconomic events MBA,
Asian Institute of Management – “Effects of Money Laundering on economy” - http://fenotes.blogspot.com/2009/10/effects-of-money-laundering-on-economy.html - KR)
When Money Laundering takes place, the capital is reduced due to which the supply curve of
capital moves towards the left. In this case due to the scarcity of the capital (credit crunch even when the central
bank is infusing cash in the financial system) available the cost of capital increases. As can be seen from the
various money-laundering mechanism typologies reports, money laundered through channels other than
financial institutions is often placed in what are known as "sterile" investments, or investments that do not
generate additional productivity for the broader economy.
Impacts of Money Laundering on Financial Sector
Pahuja 09 (Rajana Pahuja is an investment banker, who has interest in Macroeconomic events MBA,
Asian Institute of Management – “Effects of Money Laundering on economy” - http://fenotes.blogspot.com/2009/10/effects-of-money-laundering-on-economy.html - KR)
Since financial institutions are critical to economic growth, reputation and
confidence plays an important
part in the developing countries. 1. Customer Confidence: Reputation and integrity are valuable assets of a
financial institution and the perceived risk to depositors and investors from institutional fraud and corruption
is an obstacle to such trust. When customers are defrauded by the corrupt individuals within the
institutions it causes loss of business for the financial institutions. Prudential risks to bank soundness,
contamination effects on legal financial transactions, and increased volatility of international capital flows and
exchange rates due to unanticipated cross-border asset transfers. 2. Dampening of Entrepreneurial environment:
Strong financial systems are incubators of entrepreneurial growth. For developing nations, technological
change is often associated with the investment and new machinery. To adopt the more productive technologies from
advanced nations requires entrepreneurship. At the most fundamental level, innovation and technology thrive when
property rights are clear and taxes and other drains on profits (such as corruption) are low and predictable. 3.
Investment: The nations in which crime and corruption are prevalent, investors are reluctant to invest and obtain the
ownership. 4. Money Laundering erodes financial institutions themselves due to vulnerability to
corruption by criminal elements seeking to gain further influence over their money-laundering
channels.
Money laundering damages the financial sectors/institutions that are key to
economic growth
Bartlett 2002 (Prior to joining Dewey & LeBoeuf LLP, Mr. Bartlett advised on the economic
aspects of national security issues and served on the U.S. Secretary of State's Policy Planning
Staff, Brent L., THE NEGATIVE EFFECTS OF MONEY LAUNDERING ON ECONOMIC DEVELOPMENT,
May 2002, http://mcta.org.au/wp-content/uploads/2014/06/the-negative-effects-of-moneylaundering-on-economy.pdf, JS)
money laundering on economic development are difficult to quantify, yet it is clear that
such activity damages the financial-sector institutions that are critical to economic growth, reduces
productivity in the economy's real sector by diverting resources and encouraging crime and
corruption, which slow economic growth, and can distort the economy's external sector—international trade and
The negative economic effects of
capital flows—to the detriment of long-term economic development. Developing countries' strategies to establish offshore financial
centers (OFCs) as vehicles for economic development are also impaired by significant money-laundering activity through OFC
channels. Effective anti-money-laundering policies, on the other hand, reinforce a variety of other good-governance policies that
help sustain economic development, particularly through the strengthening of the financial sector. A broad range of recent
economic analyses points to the conclusion that strong developing-country financial
l institutions—such as banks, nonbank
financial institutions (NBFIs), and equity markets—are critical to economic growth. Such institutions allow for
the concentration of capital resources from domestic savings—and perhaps even funds from abroad—
and the efficient allocation of such resources to investment projects that generate sustained
economic development. Money laundering impairs the development of these important financial institutions for two
reasons. First, money laundering erodes financial institutions themselves. Within these institutions, there is often
a correlation between money laundering and fraudulent activities undertaken by employees. At
higher volumes of money-laundering activity, entire financial institutions in developing countries are vulnerable
to corruption by criminal elements seeking to gain further influence over their moneylaundering channels. Second, particularly in developing countries, customer trust is fundamental to the growth of sound
financial institutions, and the perceived risk to depositors and investors from institutional fraud and corruption is an obstacle to such
trust.
Money laundering is serious harm-2 reasons
Levi, 2002(David M. Rubenstein Senior Fellow for Energy and the Environment and Director of
the Maurice R. Greenberg Center for Geoeconomic Studies, Micheal, “Money laundering and its
regulation”, ANNALS, AAPSS, July 2002, http://ann.sagepub.com/content/582/1/181.full.pdf JS)
Laundering can be considered important for three reasons: 1. It facilitates crime by capacitating
crime groups and networks to self-finance, diversify, and grow. 2. It can have a corrosive impact
on financial institutions and other parties. However, there is an element of paradox here. For centuries, onshore and offshore
bankers have been tolerantly laundering proceeds of many crimes and from many countries without obvious harm to them or to their economies.
Criminal (as opposed to moral) corruption of bankers and trust/company formation agents in some jurisdictions has been made necessary as a
consequence of the criminalization of laundering and of regulations intended to stop willful blindness. Given those regulations, laundering
can
be harmful to the financial system of laundering countries and creates serious reputational risk
irrespective of the impacts on domestic crime there. In the Third World (including the former Soviet Union), the issues are
more complex. Their economies vitally need investment capital, and if launderers provided venture capital without eliminating indigenous people from
this function (economically and/or physically), then this might not be harmful. However, in practice, criminal funds can be used to create a license to
operate piratically in a hollow state rather than for productive purposes, and criminally owned banks created to launder funds can also be used to
defraud the public (though to do so will terminate their usefulness as laundering vehicles since normally they will close down as a result). 3. A third
measure of harm is the extent of laundering, though this depends on which crimes are included and on harm to legitimate capital; unfortunately, there
is no consensus on what this is. Figures of $300 billion to $500 billion for international flows are banded around and become &dquo;facts by
repetition,&dquo; but there is very little evidence to justify them (van Duyne 1998; van Duyne and de Miranda 1999). For an FATF exercise that ended
in fundamental disagreement, Walker (1999) heroically attempted to construct money flows into all-crime and drug laundering guesstimation
exercises, while Reuter (2000) made a sophisticated attempt to construct global expenditure on drugs as the sum of national estimates; outside the
United States, national expenditure data are deeply unreliable, and even in the United States, the range is a broad $40 billion to $100 billion. Moreover,
money laundered in year 1 may have to be relaundered in year 2, when it may have to be invested. Finally, criminal business costs (including protection
and salaries to terrorist or crime gang members) and lifestyle expenditures-both high in multilayered drug business-have to be subtracted from the
crime proceeds data before we reach the laundering figures, which are anyway dependent on the savings ratios of offenders. (Part of the business costs
take the form of income for others and flow directly into the GNP.)
Money laundering enables crime and corruption, leading to economic decline
Bartlett 2002 (Prior to joining Dewey & LeBoeuf LLP, Mr. Bartlett advised on the economic
aspects of national security issues and served on the U.S. Secretary of State's Policy Planning
Staff, Brent L., THE NEGATIVE EFFECTS OF MONEY LAUNDERING ON ECONOMIC DEVELOPMENT,
May 2002, http://mcta.org.au/wp-content/uploads/2014/06/the-negative-effects-of-moneylaundering-on-economy.pdf, JS)
Money laundering also facilitates crime and corruption within developing economies, which is
antithetical to sustainable economic growth. Just as an efficient financial sector is a key "input" to other productive
processes in a developing economy— such as manufacturing—an efficient money-laundering channel is a key "input" to
crime because the financial proceeds from crime are less valuable to the criminal (in a sense, an "unfinished
product") than are laundered funds. The less expensive the money-laundering "input" to crime is as a result of lax antimoney-laundering policies, the more "productive" (active) the criminal element will be, just as in any industry or business. As
numerous studies
have demonstrated from statistical and anecdotal evidence, substantial crime and
corruption act as a brake on economic development, while other studies have shown that anti-money-laundering
policies can deter such activity.
ATA’s
AT London center of money laundering
Lammy will stop the money laundering going on in London.
Hanning and Connett 15
(James and David, July 4, http://www.independent.co.uk/news/uk/crime/london-is-now-theglobal-moneylaundering-centre-for-the-drug-trade-says-crime-expert-10366262.html, “London
is now the global money-laundering centre for the drug trade, says crime expert”, twm)
Labour MP David Lammy, who met Mr Saviano last week, said the UK needed to take “very seriously” his
claims about its financial services’ role in the international drugs trade. Mr Lammy, who is seeking to
become Mayor of London in 2016, said: “We are rightly proud of our financial services industry in this country, but we cannot afford
to be complacent. “I
am particularly concerned that London’s inflated property prices are fuelled by
dirty money and I will do everything in my power as mayor to ensure that money laundering and
tax evasion are rooted out by the authorities.”
AFF
US isn’t key – London is the center of money laundering.
Hanning and Connett 15
(James and David, July 4, http://www.independent.co.uk/news/uk/crime/london-is-now-theglobal-moneylaundering-centre-for-the-drug-trade-says-crime-expert-10366262.html, “London
is now the global money-laundering centre for the drug trade, says crime expert”, twm)
The City of London
is the money-laundering centre of the world’s drug trade, according to an
internationally acclaimed crime expert. UK banks and financial services have ignored so-called
“know your customer” rules designed to curb criminals’ abilities to launder the proceeds of
crime, Roberto Saviano warned. Mr Saviano, author of the international bestseller Gomorrah, which exposed the workings of the
Neapolitan crime organisation Camorra, said: “The British treat it as not their problem because there aren’t
corpses on the street.” His warning follows a National Crime Agency (NCA) threat assessment which stated: “We assess that
hundreds of billions of US dollars of criminal money almost certainly continue to be laundered
through UK banks, including their subsidiaries, each year.”
Money laundering is a very small part of domestic surveillance.
Jenifer Fenton 7-17-2015( Activits: US overstates encryption threat, underreports wiretap
figures, Executive Producer Talk to Al Jazeera at Al Jazeera Media Network,
http://america.aljazeera.com/articles/2015/7/17/overstating-encryption-threatunderreporting-wiretap-numbers.html ZV)
But the most “prevalent type of criminal offense investigated using wiretaps” – 89 percent – was
drug offenses. Four percent were related to homicide and the others included smuggling and
money laundering, according to the Wiretap Report. “They are conflating two different sets of
issues and they are doing it intentionally,” said Gidari.
Effective control in the united states will push money laundering to other
countries – means all of their impacts are still triggered.
Financial Action Task Force 15
(an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions, FATF, 2015, http://www.fatfgafi.org/pages/faq/moneylaundering/, ASN)
Launderers are continuously looking for new routes for laundering their funds. Economies
with growing or developing
financial centres, but inadequate controls are particularly vulnerable as established financial
centre countries implement comprehensive anti-money laundering regimes. Differences
between national anti-money laundering systems will be exploited by launderers, who tend to
move their networks to countries and financial systems with weak or ineffective
countermeasures. Some might argue that developing economies cannot afford to be too selective about the sources of capital
they attract. But postponing action is dangerous. The more it is deferred, the more entrenched organised
crime can become. As with the damaged integrity of an individual financial institution, there is a
damping effect on foreign direct investment when a country’s commercial and financial sectors
are perceived to be subject to the control and influence of organized crime. Fighting money laundering
and terrorist financing is therefore a part of creating a business friendly environment which is a precondition for lasting economic
development.
Non unique – US not stopping money laundering now
Hanning and Connett 15
(James and David, July 4, http://www.independent.co.uk/news/uk/crime/london-is-now-theglobal-moneylaundering-centre-for-the-drug-trade-says-crime-expert-10366262.html, “London
is now the global money-laundering centre for the drug trade, says crime expert”, ellipses in
original, twm)
Interviewed by The Independent on Sunday, Mr Saviano said of the international drugs trade that “Mexico is its heart and London is
its head”. He said the cheapness and the ease of laundering dirty money through UK-based banks gave London a key role in drugs
trade. “Antonio Maria Costa
of the UN Office on Drugs and Crime found that drug trafficking
organisations were blatantly recycling dirty money through European and American banks, but no
one takes any notice,” he said. “He found that banks were welcoming dirty money because they need cash,
liquidity during the financial crisis. The figures are too big to be rejected …. Yet there was no reaction.”
London and Austria block EU efforts to fight money laundering.
Hanning and Connett 15
(James and David, July 4, http://www.independent.co.uk/news/uk/crime/london-is-now-theglobal-moneylaundering-centre-for-the-drug-trade-says-crime-expert-10366262.html, “London
is now the global money-laundering centre for the drug trade, says crime expert”, twm)
He accused the
British Government, together with Austria, of consistently blocking anti-moneylaundering moves by the European Union. “They will carry on like that until someone gets killed
here by the Russians or the Italians. ” he said. Mr Saviano said he feared one reason was because
banks are a key source of political funding. “Every time there’s an election campaign, I wonder if someone will come
forward and start a campaign on money laundering ... but it never happens. The reason, I am convinced but I don’t have the proof, is
that a
good part of the money that comes from money laundering goes into the election
campaign. Not illegally, legally, because it can come in because of a lack of regulation.”
Non-unique criminal organizations are too embedded - in some instances they
are running their own banks.
Hanning and Connett 15
(James and David, July 4, http://www.independent.co.uk/news/uk/crime/london-is-now-theglobal-moneylaundering-centre-for-the-drug-trade-says-crime-expert-10366262.html, “London
is now the global money-laundering centre for the drug trade, says crime expert”, twm)
Twenty years ago, drug money was laundered offshore because the top international banks
“were afraid of opening their doors to dirty money, they were afraid of losing control”, he said.
“The more criminal capital comes in, the more criminals there are on the boards. The Mafia set
up its own bank, Michele Sindona’s Banca Privata Finanziaria, and the other banks would have
nothing to do with them,” he said. “Not any more. Now, because of the problem of cash, they
can’t wait to get the Mafia organisations in.”
Impact turn - Less money laundering will actually hurt economies.
Quinn 13
(freelance journalist in Guadalajara where he writes about technology, real estate and security
issues faced by international companies, “ Mexico’s new anti-money laundering law is bad for
business”, Quartz, October 29, 2013, http://qz.com/139570/mexicos-new-anti-moneylaundering-law-is-bad-for-business/, GCM)
Money laundering in Mexico is big business: $10 billion in drug money was washed there in
2012, according to global risk management firm Kroll. Even so, Mexico’s latest attempt to crack
down on the crime puts a hefty burden on the private sector in a country that’s been slow to
target known launderers. The law went into effect in July and focuses on “vulnerable activities,” or industries like gaming,
jewelry, automobile, art and real estate that are often targets for money laundering because they
handle large amounts of cash. The requirements vary per sector, but for most, cash transactions over a
certain amount (pdf) must be reported to the government. In certain cases, identification is required for
purchases regardless of the form of payment. Jewelers will have to maintain files for customers who make purchases valued at more
than 52,000 pesos, or roughly $4,000. This
create challenges for jewelers who deal with international
clients, said Miguel Cotero Ochoa, the president of the state of Jalisco’s Jewelry Chamber. Those clients will likely turn to
other countries that don’t require such bureaucratic entanglements, he said. “We support the
authorities in their effort to combat this problem. However, some of the regulations in the law
leave us out of the global competition,” Cotero Ochoa said in an interview in Spanish. A consultant in Mexico
City estimated the requirements will likely cost businesses in the affected industries 3-8% of
their income (link in Spanish). Businesses are required to train employees and maintain an archive of those transactions that
meet the law’s requirements, said Cotero Ochoa. “The majority of our companies are small firms and the
requirements and regulations the secretary of finance is placing are going to be impossible—or
very complicated—to fulfill,” he said. The jewelry industry plans to work with authorities to modify the
law based on some of their concerns, Cotero Ochoa said. And they’re not the only ones challenging it.
Large retail chains in Mexico, including department stores like El Palacio de Hierro, Liverpool,
Sears, and Sanborns, have already taken legal action (link in Spanish) claiming that the law violates
their constitutional rights of equality and non-discrimination, free economic competition and tax
equity. They, along with members of the real estate and automotive industries, argue that their businesses have
been unfairly targeted while British bank HSBC was fined a mere $27.5 million in Mexico for its
lax money-laundering controls.