- The Washington Times - Friday, October 5, 2001

ASSOCIATED PRESS

The Senate Banking, Housing and Urban Affairs Committee yesterday unanimously approved a bill to expand the government's power to block financing for terrorist organizations, as the Bush administration seeks new authority to fight money laundering and track money flows.

The panel's speedy 21-0 vote sent the bill to the full Senate.

"Terrorist attacks require major investments of time, planning, training and practice and the financial resources to pay the bills," said Sen. Paul S. Sarbanes, Maryland Democrat. "Money laundering is the transmission belt that gives terrorists the means to carry out their campaigns."

The bill was the product of compromise with longtime foes of tighter laws against money laundering, most notably Sen. Phil Gramm, Texas Republican, the committee's former chairman. Its provisions include new restrictions on correspondent banking, a lucrative activity in which banks provide each other services such as moving funds or exchanging currencies, which allows banks to conduct business in countries where they have no physical presence.

Senate investigators have found that many large U.S. banks that engage in correspondent banking, including Bank of America and Citibank, have become conduits for illicit foreign money and unwittingly aided drug trafficking, fraud and other crimes.

Mr. Gramm had earlier expressed concern that the bill could trample the civil rights of people whose assets are seized or frozen. In its current form, he said, "it basically protects the civil liberties of our people."

Similar legislation is pending in the House, with lawmakers primed to act quickly in the wake of last month's attacks on the World Trade Center and the Pentagon.

The administration wants to include the bill targeting terrorists' finances in an anti-terrorism package it proposed. After weeks of negotiations, Congress has started moving the plan, with a House committee putting its stamp of approval on one version and Senate negotiators agreeing to introduce another. The House and Senate bills have significant differences, however, guaranteeing days of additional debate before a consensus can be reached and sent to President Bush.

Some of the proposals have sparked opposition from liberals and conservatives alike, who fear they would infringe on civil liberties.

Treasury Secretary Paul H. O'Neill and Justice Department officials told lawmakers Wednesday that U.S. allies are helping in the effort to dissect the complex financial network of suspected terrorist mastermind Osama bin Laden.

Members of the House Financial Services Committee were sympathetic but said they have misgivings about law enforcement agencies' ability to work together against terrorists, given their history of turf guarding and reluctance to share information.

Mr. O'Neill acknowledged previous "blockages." Now for the first time, he said, enforcement agencies are engaged in "dedicated and determined" sharing of information to help the campaign against international terror.

Last week, Mr. Bush moved to freeze the assets of bin Laden, an exiled Saudi multimillionaire, and 26 other persons and organizations with suspected links to terrorism. The administration says that so far, some $6 million has been blocked and 50 bank accounts frozen, 30 in this country and 20 overseas.

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