6 ms·

The Cost of Dirty Money

88 points by crunchiebones 8y ago

deleted 8y ago
[deleted]
temp1928384 8y ago
Having worked at a payments company and helped evaluate anti-money laundering (AML) software with ex-commercial bank compliance people, I should not have been surprised but still was of how manual and subjective the entire AML investigative process is. At a high level, it's just a bunch of business rules that trigger a massive number of alerts that you then have analyst review one by one (and clear 99%+) without any more action. When you do come across something, you file a Suspicious Activities Report (SAR) to the gov't among other things. Very clear to me there's a market for a SaaS with some AI/ML/automation capability to reduce false positives and more easily investigate cases. The bar is very low.
gyaniv 8y ago
It's just a list of previous cases of money laundering and the fines to the entities (mostly banks) involved. Would be nice if for example they mentioned the overall impact of the illegal transactions on the entire systems, or maybe changes or actions that those banks made (other then paying fines). Basically, I feel like this misses either (or both) the overall, total impact of 'dirty money', the global scale of it, it's effect, etc. (because only the bigger cases that were caught were mentioned, it's interesting to see how big the phenomenal). And also I would like to understand what is being done to stop or prevent other and future instances.
- DyslexicAtheist 8y ago
  thanks for saving me the click.
- candiodari 8y ago
  It makes the point that governments "punish" these crimes with the velvet glove on. None of those fines are anywhere close to the point they'd endanger even one yearly profit of these institutions. Now try being suspected of tax cheating as a smaller company and see how governments punish that (not "convicted" mind you, "suspected", meaning you likely did nothing wrong, and even if you did there's a decent chance it's an accident/lack of knowledge/... rather than outright fraud). Let's see government limit themselves to not endangering even one year's profitability then.
  - sokoloff 8y ago
    I think it's unreasonable to consider fining a bank based on the yearly profits of the bank. If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits. If a small bank does $100M of tainted transactions and a large bank does the same, they should be fined the same, IMO. Your point about the small company is not an analog in my opinion. If you have $500K in profits and a tax cheating penalty of $1MM, it does not follow that the precedent is that tax penalties are 2x annual profits, but rather that tax penalties are proportionate to the tax cheating. If another company has a tax fraud of 50x the scope and 1000x the profits, their tax fraud fine should be 50x yours, not 1000x yours.
    - magpi3 8y ago
      > If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits If the penalty is meant to be a deterrent, then it should hurt. Otherwise it will not be a deterrent. You have to consider the bank's annual profit if you want it to hurt.
      - sokoloff 8y ago
        I believe that the annual profit on that tainted line of business is typically proportional to the size of that line of business, not to the sum of unrelated lines of business and that fines based on the size of fraud/error are appropriate deterrents. Imagine if See's Candy has a product recall due to malfeasance or NetJets has a crash based on pilot error. Should any penalties be based on the facts and circumstances of the situation or on the entire profits of Berkshire Hathaway?
      - leetcrew 8y ago
        depends on your philosophy regarding fines/punishment. personally I think punishments, particularly fines, should be proportional to the damage done to society, not jacked up as high as you feel is necessary to discourage the behavior. I don't think a large bank that does $50mm in illegal transactions did any more harm than a small one that did the same volume. also, as we see in criminal law, setting huge penalties doesn't work very well if you can only get a few convictions. it just turns into a game of hot potato where everyone still does the illegal thing to stay competitive and some unlucky firm occasionally gets stuck holding the bag. a free society should strive for reasonable penalties that are consistently enforced.
- pm24601 8y ago
  > And also I would like to understand what is being done to stop or prevent other and future instances. Nothing.
- godzillabrennus 8y ago
  Drug money saved the banking system: https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...
TrolTure 8y ago
I find the amount of money in these cases so staggeringly high that I can't imagine that a vast portion of 'those in power' are not complicit in some ways. There is simply no way to mix this amount of money back into the system without lots of people of statute being involved.
- lotsofpulp 8y ago
  Always make sure you have plausible deniability.
- candiodari 8y ago
  Actually given the size of these institutions I find the amounts fined staggeringly low. None of these institutions is remotely in danger of losing even one year's profits because of this. That's how you should judge this. The "highest fine ever" is $700M on a profit of $13400M (after tax) according to their financial report. Or something like $2k for someone making $100k yearly (again calculated as 4% on after tax). None of these institutions are in any danger of serious consequences. This is a "1% less hookers at the christmas party" punishment.
- weliketocode 8y ago
  Have you worked at a big company, let alone a big bank? When you have 100k+ employees, it's immensely difficult to keep tabs on every. single. thing. that's happening. If a bank sees asset flows into the trillions, even $1bn of tainted transactions is less than 0.1%. Do you or 'those in power' know 99.9% of what happens at your company?
  - ur-whale 8y ago
    I'm told that given enough data and fine-grained recording of money flows, AI will "save the day".
  - peterlk 8y ago
    > When you have 100k+ employees, it's immensely difficult to keep tabs on every. single. thing. that's happening. Tough. You want the big bucks? You gotta solve hard problems. Big companies shouldn't be able to whine or excuse their way out of problems because those problems are hard. If they're too hard to solve, pull an HP and split your company into lots of smaller companies.
chkaloon 8y ago
Fines are minuscule relative to the transaction amounts, and no jail time for execs. I'm shocked, SHOCKED, that this has had no effect.
- ourmandave 8y ago
  This will not stand! Come brethren! Let us gather our tents and once again Occupy Wall Street (tm). Until such time as they turn the firehoses upon us, we divide into factions and start infighting, or it just becomes to awkward to use the Starbucks bathroom without at least buying a scone.
kaptain 8y ago
Planet Money had a great podcast on this topic. https://www.npr.org/templates/transcript/transcript.php?storyId=654792142 https://www.npr.org/templates/transcript/transcript.php?stor...
cm2187 8y ago
I'd keep in mind three things. First, the direct consequence of tightening controls on payments to prevent money laundering is that you are tightening the control of government on anything happening in a society. I don't think any libertarian leaning people at least should be ok with this level of control. Like how would cannabis would have ever been legalised if a parallel, illegal market didn't exist to the point that the consensus moved toward legalisation. Second, as a private company, how to you go about ensuring that every single one of your customers is legit. Any paper you are given can be forged. Any explanation can be made up. You don't have police investigation powers. A car salesman has no way to check that you are not buying a car with profits from a ponzi scheme. Banks are becoming increasingly invasive in term of questions and documents they require, but this is an impossible task. Even auditors don't spot fraud every time (see Patisserie Valerie in the UK for a recent example). Third, in a 200,000 employees organisation, how do you ensure that every single one of your employees is honnest. At that scale it is just statistically impossible to not have a fraud somewhere. So how do these calls to bankrupt the company with fines if anything wrong happens (that I read in other comments) makes sense?
- someguydave 8y ago
  Agreed. Regulating “dirty money” is equivalent to regulating speech, and is therefore unconstitutional.
  - ur-whale 8y ago
    Assuming you're not being sarcastic: Hear Hear.
    - someguydave 8y ago
      No I'm not being sarcastic, I'm amazed that Americans put up with the level of government intrusion in our financial lives.
  - mindslight 8y ago
    The parallels are strong: - Lazily creates an appearance of addressing a problem by going after a sometimes-associated activity - Collateral damage to activities that aren't necessarily wrong, but that upset some group - Only affects the little guy (to the major players, it's just a cost of doing business) - Creates a purportedly-neutral cover on what is essentially political persecution - Based on the God delusion that assumes some ambient authority is capable of passing correct judgment on every situation
naringas 8y ago
from somekind of "Free Market" standpoint, how can there even be "dirty" money? isn't money just money? I sense some kind of double standard
- deleted 8y ago
  [deleted]
- perlgeek 8y ago
  A totally free market would be one without any regulations or laws, that can't have "dirty" money. But nearly all actual markets have some kind of regulation, and thus the potential for dirty money.
  - AnthonyMouse 8y ago
    > But nearly all actual markets have some kind of regulation, and thus the potential for dirty money. It is possible to have a wide variety of regulations without having monetary ones. Money is fungible. If you dump mercury in the river, you get fined or put in jail. It doesn't matter if the money you have to pay the fine with is the profit from the dumping or not, it only matters that it would bite enough to prevent anyone from doing it to begin with. In particular, you don't need banks to investigate customers or know anything about them, and asking them to causes all kinds of otherwise avoidable problems. The people who should be investigating criminals are law enforcement, not corporations. And if the criminals use banks, well, then you can go to the banks and seize their money etc., after you've proven their crimes to the satisfaction of a judge. Instead of having Paypal do it preemptively because it's easier to screw over many innocent small businesses than deal with regulators when 2% of them cause problems.
    - perl4ever 8y ago
      If banks don't need to be concerned with criminal activity by their patrons, does the same apply to pawn shops? Casinos? Scrap metal dealers?
      - 8y ago
imglorp 8y ago
I'll stand and take my downvotes like an adult, because everyone loves to hate on misapplied tech, but this is exactly the use case blockchain currency would be most useful for. Anyone can audit the complete trail of funds from source to holding to destination. The challenge would be to get banks on board, because they're making so much off this ill gotten flow. Once there, their profit (interest and fees) would also be transparent to everyone, another reason they'd hate this scheme. But it would be good for taxpayers, governments, and honest bank consumers.
- xchaotic 8y ago
  The cases you see at Bloomberg are well evidence, lack of tech is not a problem here. It's a bit like CCTV - the crimes were recorded Blockchain or not. But they were not prevented, and Blockchain isn't going to help with that.
  - HandsAtTheReady 8y ago
    > The cases you see at Bloomberg are well evidence, lack of tech is not a problem here. From TFA "From about 2007 until 2012, Banamex USA, a Citi subsidiary, processed more than $8.8 billion in transactions with almost no oversight.". > The cases you see at Bloomberg are well evidence > the crimes were recorded Blockchain or not imglorp suggested "Anyone can audit the complete trail of funds from source to holding to destination.". Was this evidence you mention publically auditable (i.e. what imglorp's suggesting would help)? > Blockchain isn't going to help with that It's at least plausible that a publically auditable log would have helped spot these issues.
- weliketocode 8y ago
  I think the main pushback you're going to get here is that the next step isn't a purely decentralized use case. There are around a dozen or two banks that, if they were to come together, could have a centralized database that better tracked flows of money all around the world. Note still that the scope of implementing, auditing, securing, and getting banks to reveal things that they likely consider very proprietary is already a monumental ask. Still, I'd say the better argument here is that there should be a superior way for information to be shared in a more centralized manner. Once that is done. Then maybe we can think about using a blockchain and decentralizing it.
jokoon 8y ago
From a political standpoint, I don't understand how the world is still tolerating such thing, and why it's not part of the public debate. I can understand why it exists, but I'm a little worried to see how widespread and out of control this has become. I just fear this has the potential to influence and topple governments (even the "solid" ones). People complain about money in politics, but when I see this, I see unchecked capitalism slowly obsoleting governments, because financial power is not under the control of institutions anymore. Money flies, there and there, and governments seem to be completely clueless and unable to work on fighting it. Worse, citizens don't even seem to pay attention. Money is truly invisible.
- ur-whale 8y ago
  To try and give you a partial answer, you may want to consider the fact that money is essentially equivalent to freedom. Giving governments absolute oversight of the flow of money and of a detailed accounting of who owns what is therefore equivalent to implementing a planet-scale fine-grained surveillance state. Yay. Is that a world you'd want to live in? Or more interestingly, if you're a government official that also happens to be a half decent human being (I'm told they do exist), wouldn't you carefully consider how much control you'd like a government to have over so-called "dirty money" vs having every single penny a citizen spends/owns recorded in a database? Or if you even want to be milder about it, where do you draw the line between total government control of money flows and privacy? This whole conversation around "dirty money" is the exact same old "won't you think of the children" bogeyman that's being bandied about every time the government wants to restrict freedoms and uses basic citizen's cowardice to entice them to make the trade of less freedom for more security. [edit]: by the way, you are very correct when you say that citizens aren't paying attention. With increased fine-grained control of money, one of their absolute basic freedoms is being not just eroded, but plain old erased. And no one is talking about it or debating it. Find me one mainstream politician in the anglo sphere that even has this problem on his radar.
  - kazagistar 8y ago
    Money is also power. And having some people with thousands of times the power as others also erodes freedoms. Perhaps those with the most power should be faced with the most scrutiny? This isn't about some global authoritarianism, but an attempt to mitigate oligarchy, and should only affect those who already have far more freedom then the majority of the population combined.
zaroth 8y ago
The graphics would have been a lot more fun if there was some sort of gauge or running totals of the cumulative amount of fraud versus the cumulative fines and prison time.
wand3r 8y ago
“Dirty” money is such an expansive term that encapsulates huge sums and many distinctly different schemes. The Guardian actually stated that the influx of cash from crime syndicates propped up the banks and significantly contributed to some banks financial health—- thus helping during the economic crisis. This money is part of the economy and it is hard to entirely crack doen on it less risking unforeseen issues. https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...
jwr 8y ago
One thing to keep in mind is that this story is from Bloomberg, who came up with "The Big Hack" story that proved to be completely unsubstantiated, and yet has never been retracted.
eeeeeeeeeeeee 8y ago
It's insane how small those fines are as a percentage of the amount laundered. There really doesn't seem to be any reason a bank should even bother, or at the very least, look the other way. And rarely do people ever go to jail over this sort of thing. And these are only the ones we know about.

88 points by crunchiebones 8y ago

deleted 8y ago

[deleted]

temp1928384 8y ago

Having worked at a payments company and helped evaluate anti-money laundering (AML) software with ex-commercial bank compliance people, I should not have been surprised but still was of how manual and subjective the entire AML investigative process is. At a high level, it's just a bunch of business rules that trigger a massive number of alerts that you then have analyst review one by one (and clear 99%+) without any more action. When you do come across something, you file a Suspicious Activities Report (SAR) to the gov't among other things. Very clear to me there's a market for a SaaS with some AI/ML/automation capability to reduce false positives and more easily investigate cases. The bar is very low.

gyaniv 8y ago

It's just a list of previous cases of money laundering and the fines to the entities (mostly banks) involved. Would be nice if for example they mentioned the overall impact of the illegal transactions on the entire systems, or maybe changes or actions that those banks made (other then paying fines). Basically, I feel like this misses either (or both) the overall, total impact of 'dirty money', the global scale of it, it's effect, etc. (because only the bigger cases that were caught were mentioned, it's interesting to see how big the phenomenal). And also I would like to understand what is being done to stop or prevent other and future instances.

DyslexicAtheist 8y ago
thanks for saving me the click.
candiodari 8y ago
It makes the point that governments "punish" these crimes with the velvet glove on. None of those fines are anywhere close to the point they'd endanger even one yearly profit of these institutions. Now try being suspected of tax cheating as a smaller company and see how governments punish that (not "convicted" mind you, "suspected", meaning you likely did nothing wrong, and even if you did there's a decent chance it's an accident/lack of knowledge/... rather than outright fraud). Let's see government limit themselves to not endangering even one year's profitability then.
- sokoloff 8y ago
  I think it's unreasonable to consider fining a bank based on the yearly profits of the bank. If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits. If a small bank does $100M of tainted transactions and a large bank does the same, they should be fined the same, IMO. Your point about the small company is not an analog in my opinion. If you have $500K in profits and a tax cheating penalty of $1MM, it does not follow that the precedent is that tax penalties are 2x annual profits, but rather that tax penalties are proportionate to the tax cheating. If another company has a tax fraud of 50x the scope and 1000x the profits, their tax fraud fine should be 50x yours, not 1000x yours.
  - magpi3 8y ago
    > If a bank does hundreds of billions of dollars of transactions globally and several hundred million of those are tainted, the sanctions in question should be based on the tainted transactions, not the annual revenue or profits If the penalty is meant to be a deterrent, then it should hurt. Otherwise it will not be a deterrent. You have to consider the bank's annual profit if you want it to hurt.
    - sokoloff 8y ago
      I believe that the annual profit on that tainted line of business is typically proportional to the size of that line of business, not to the sum of unrelated lines of business and that fines based on the size of fraud/error are appropriate deterrents. Imagine if See's Candy has a product recall due to malfeasance or NetJets has a crash based on pilot error. Should any penalties be based on the facts and circumstances of the situation or on the entire profits of Berkshire Hathaway?
    - leetcrew 8y ago
      depends on your philosophy regarding fines/punishment. personally I think punishments, particularly fines, should be proportional to the damage done to society, not jacked up as high as you feel is necessary to discourage the behavior. I don't think a large bank that does $50mm in illegal transactions did any more harm than a small one that did the same volume. also, as we see in criminal law, setting huge penalties doesn't work very well if you can only get a few convictions. it just turns into a game of hot potato where everyone still does the illegal thing to stay competitive and some unlucky firm occasionally gets stuck holding the bag. a free society should strive for reasonable penalties that are consistently enforced.
pm24601 8y ago
> And also I would like to understand what is being done to stop or prevent other and future instances. Nothing.
godzillabrennus 8y ago
Drug money saved the banking system: https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...

TrolTure 8y ago

I find the amount of money in these cases so staggeringly high that I can't imagine that a vast portion of 'those in power' are not complicit in some ways. There is simply no way to mix this amount of money back into the system without lots of people of statute being involved.

lotsofpulp 8y ago
Always make sure you have plausible deniability.
candiodari 8y ago
Actually given the size of these institutions I find the amounts fined staggeringly low. None of these institutions is remotely in danger of losing even one year's profits because of this. That's how you should judge this. The "highest fine ever" is $700M on a profit of $13400M (after tax) according to their financial report. Or something like $2k for someone making $100k yearly (again calculated as 4% on after tax). None of these institutions are in any danger of serious consequences. This is a "1% less hookers at the christmas party" punishment.
weliketocode 8y ago
Have you worked at a big company, let alone a big bank? When you have 100k+ employees, it's immensely difficult to keep tabs on every. single. thing. that's happening. If a bank sees asset flows into the trillions, even $1bn of tainted transactions is less than 0.1%. Do you or 'those in power' know 99.9% of what happens at your company?
- ur-whale 8y ago
  I'm told that given enough data and fine-grained recording of money flows, AI will "save the day".
- peterlk 8y ago
  > When you have 100k+ employees, it's immensely difficult to keep tabs on every. single. thing. that's happening. Tough. You want the big bucks? You gotta solve hard problems. Big companies shouldn't be able to whine or excuse their way out of problems because those problems are hard. If they're too hard to solve, pull an HP and split your company into lots of smaller companies.

chkaloon 8y ago

Fines are minuscule relative to the transaction amounts, and no jail time for execs. I'm shocked, SHOCKED, that this has had no effect.

ourmandave 8y ago
This will not stand! Come brethren! Let us gather our tents and once again Occupy Wall Street (tm). Until such time as they turn the firehoses upon us, we divide into factions and start infighting, or it just becomes to awkward to use the Starbucks bathroom without at least buying a scone.

kaptain 8y ago

Planet Money had a great podcast on this topic. https://www.npr.org/templates/transcript/transcript.php?storyId=654792142 https://www.npr.org/templates/transcript/transcript.php?stor...

cm2187 8y ago

I'd keep in mind three things. First, the direct consequence of tightening controls on payments to prevent money laundering is that you are tightening the control of government on anything happening in a society. I don't think any libertarian leaning people at least should be ok with this level of control. Like how would cannabis would have ever been legalised if a parallel, illegal market didn't exist to the point that the consensus moved toward legalisation. Second, as a private company, how to you go about ensuring that every single one of your customers is legit. Any paper you are given can be forged. Any explanation can be made up. You don't have police investigation powers. A car salesman has no way to check that you are not buying a car with profits from a ponzi scheme. Banks are becoming increasingly invasive in term of questions and documents they require, but this is an impossible task. Even auditors don't spot fraud every time (see Patisserie Valerie in the UK for a recent example). Third, in a 200,000 employees organisation, how do you ensure that every single one of your employees is honnest. At that scale it is just statistically impossible to not have a fraud somewhere. So how do these calls to bankrupt the company with fines if anything wrong happens (that I read in other comments) makes sense?

someguydave 8y ago
Agreed. Regulating “dirty money” is equivalent to regulating speech, and is therefore unconstitutional.
- ur-whale 8y ago
  Assuming you're not being sarcastic: Hear Hear.
  - someguydave 8y ago
    No I'm not being sarcastic, I'm amazed that Americans put up with the level of government intrusion in our financial lives.
- mindslight 8y ago
  The parallels are strong: - Lazily creates an appearance of addressing a problem by going after a sometimes-associated activity - Collateral damage to activities that aren't necessarily wrong, but that upset some group - Only affects the little guy (to the major players, it's just a cost of doing business) - Creates a purportedly-neutral cover on what is essentially political persecution - Based on the God delusion that assumes some ambient authority is capable of passing correct judgment on every situation

naringas 8y ago

from somekind of "Free Market" standpoint, how can there even be "dirty" money? isn't money just money? I sense some kind of double standard

deleted 8y ago
[deleted]
perlgeek 8y ago
A totally free market would be one without any regulations or laws, that can't have "dirty" money. But nearly all actual markets have some kind of regulation, and thus the potential for dirty money.
- AnthonyMouse 8y ago
  > But nearly all actual markets have some kind of regulation, and thus the potential for dirty money. It is possible to have a wide variety of regulations without having monetary ones. Money is fungible. If you dump mercury in the river, you get fined or put in jail. It doesn't matter if the money you have to pay the fine with is the profit from the dumping or not, it only matters that it would bite enough to prevent anyone from doing it to begin with. In particular, you don't need banks to investigate customers or know anything about them, and asking them to causes all kinds of otherwise avoidable problems. The people who should be investigating criminals are law enforcement, not corporations. And if the criminals use banks, well, then you can go to the banks and seize their money etc., after you've proven their crimes to the satisfaction of a judge. Instead of having Paypal do it preemptively because it's easier to screw over many innocent small businesses than deal with regulators when 2% of them cause problems.
  - perl4ever 8y ago
    If banks don't need to be concerned with criminal activity by their patrons, does the same apply to pawn shops? Casinos? Scrap metal dealers?
    - 8y ago

imglorp 8y ago

I'll stand and take my downvotes like an adult, because everyone loves to hate on misapplied tech, but this is exactly the use case blockchain currency would be most useful for. Anyone can audit the complete trail of funds from source to holding to destination. The challenge would be to get banks on board, because they're making so much off this ill gotten flow. Once there, their profit (interest and fees) would also be transparent to everyone, another reason they'd hate this scheme. But it would be good for taxpayers, governments, and honest bank consumers.

xchaotic 8y ago
The cases you see at Bloomberg are well evidence, lack of tech is not a problem here. It's a bit like CCTV - the crimes were recorded Blockchain or not. But they were not prevented, and Blockchain isn't going to help with that.
- HandsAtTheReady 8y ago
  > The cases you see at Bloomberg are well evidence, lack of tech is not a problem here. From TFA "From about 2007 until 2012, Banamex USA, a Citi subsidiary, processed more than $8.8 billion in transactions with almost no oversight.". > The cases you see at Bloomberg are well evidence > the crimes were recorded Blockchain or not imglorp suggested "Anyone can audit the complete trail of funds from source to holding to destination.". Was this evidence you mention publically auditable (i.e. what imglorp's suggesting would help)? > Blockchain isn't going to help with that It's at least plausible that a publically auditable log would have helped spot these issues.
weliketocode 8y ago
I think the main pushback you're going to get here is that the next step isn't a purely decentralized use case. There are around a dozen or two banks that, if they were to come together, could have a centralized database that better tracked flows of money all around the world. Note still that the scope of implementing, auditing, securing, and getting banks to reveal things that they likely consider very proprietary is already a monumental ask. Still, I'd say the better argument here is that there should be a superior way for information to be shared in a more centralized manner. Once that is done. Then maybe we can think about using a blockchain and decentralizing it.

jokoon 8y ago

From a political standpoint, I don't understand how the world is still tolerating such thing, and why it's not part of the public debate. I can understand why it exists, but I'm a little worried to see how widespread and out of control this has become. I just fear this has the potential to influence and topple governments (even the "solid" ones). People complain about money in politics, but when I see this, I see unchecked capitalism slowly obsoleting governments, because financial power is not under the control of institutions anymore. Money flies, there and there, and governments seem to be completely clueless and unable to work on fighting it. Worse, citizens don't even seem to pay attention. Money is truly invisible.

ur-whale 8y ago
To try and give you a partial answer, you may want to consider the fact that money is essentially equivalent to freedom. Giving governments absolute oversight of the flow of money and of a detailed accounting of who owns what is therefore equivalent to implementing a planet-scale fine-grained surveillance state. Yay. Is that a world you'd want to live in? Or more interestingly, if you're a government official that also happens to be a half decent human being (I'm told they do exist), wouldn't you carefully consider how much control you'd like a government to have over so-called "dirty money" vs having every single penny a citizen spends/owns recorded in a database? Or if you even want to be milder about it, where do you draw the line between total government control of money flows and privacy? This whole conversation around "dirty money" is the exact same old "won't you think of the children" bogeyman that's being bandied about every time the government wants to restrict freedoms and uses basic citizen's cowardice to entice them to make the trade of less freedom for more security. [edit]: by the way, you are very correct when you say that citizens aren't paying attention. With increased fine-grained control of money, one of their absolute basic freedoms is being not just eroded, but plain old erased. And no one is talking about it or debating it. Find me one mainstream politician in the anglo sphere that even has this problem on his radar.
- kazagistar 8y ago
  Money is also power. And having some people with thousands of times the power as others also erodes freedoms. Perhaps those with the most power should be faced with the most scrutiny? This isn't about some global authoritarianism, but an attempt to mitigate oligarchy, and should only affect those who already have far more freedom then the majority of the population combined.

zaroth 8y ago

The graphics would have been a lot more fun if there was some sort of gauge or running totals of the cumulative amount of fraud versus the cumulative fines and prison time.

wand3r 8y ago

“Dirty” money is such an expansive term that encapsulates huge sums and many distinctly different schemes. The Guardian actually stated that the influx of cash from crime syndicates propped up the banks and significantly contributed to some banks financial health—- thus helping during the economic crisis. This money is part of the economy and it is hard to entirely crack doen on it less risking unforeseen issues. https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims https://www.theguardian.com/global/2009/dec/13/drug-money-ba...

jwr 8y ago

One thing to keep in mind is that this story is from Bloomberg, who came up with "The Big Hack" story that proved to be completely unsubstantiated, and yet has never been retracted.

eeeeeeeeeeeee 8y ago

It's insane how small those fines are as a percentage of the amount laundered. There really doesn't seem to be any reason a bank should even bother, or at the very least, look the other way. And rarely do people ever go to jail over this sort of thing. And these are only the ones we know about.