Waters Introduces Legislation to Deter Money Laundering and Hold Bankers Responsible

In the wake of massive money laundering scandals at U.S. banks that allowed terrorist, drug and other illicit money to flow through the U.S. economy, Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, introduced legislation to strengthen U.S. anti-money laundering laws, close loopholes, encourage the flow of information, and give financial regulators enhanced civil powers to hold bank executives accountable for misconduct on their watch.

Entitled the "Holding Individuals Accountable and Deterring Money Laundering Act," the legislation would strengthen the government's ability to go after individuals for violations of the Bank Secrecy Act (BSA), which requires U.S. financial institutions to work with government agencies to detect and prevent money laundering. Among other provisions, the bill makes bank executives personally liable for misconduct and gives regulators the tools to remove or permanently ban from the industry top bankers who violate the law.

Recent enforcement actions against a number of banks revealed how some systematically violated the Bank Secrecy Act in order to increase profits. Although a number of record fines were levied against some of these institutions, no bank executives have been held responsible for any violations.

"A number of recent, high-profile cases show how several multinational banks actively turned off anti-money laundering controls to accommodate terrorist financing and drug cartels," said Waters.

"The Justice Department and federal agencies have levied a number of record-breaking fines against these banks, but not a single individual has been held accountable," Waters added. "And yet thousands of men and women — many non-violent offenders who played no role in drug cartels — remain in prison today for drug offenses far less serious than the banks that allowed hundreds of millions in drug proceeds to flow through the U.S. economy. My bill, in part, seeks to correct that injustice by making it easier to go after unscrupulous bankers and mandating punishments as strict as those the imposed on the drug dealers themselves."

For individuals convicted of willfully evading an institution's BSA program or controls, the bill raises the current cap of five years on the maximum term of imprisonment to 20 years, ensuring parity with the prison terms under current law for individuals convicted of laundering monetary instruments.

For over 20 years, Congresswoman Waters has been a leader in the fight against the unfair mandatory minimum sentencing laws that have sent tens of thousands of low-level drug offenders to prison over nearly thirty years. Last month, Waters hosted a panel discussion at the Congressional Black Caucus Foundation's Annual Legislative Conference in Washington, D.C., which featured U.S. Attorney General Eric Holder as the keynote speaker. The panel discussed the failed and unfair mandatory minimum sentencing policies for low-level drug offenders and urged a more effective approach focusing on efforts to target money laundering and major drug traffickers.

The Waters legislation is supported by a number of investor and civil society organizations, including labor unions, financial watchdog and good governance groups. These include AFL-CIO, Citizens for Responsibility and Ethics in Washington (CREW), Global Financial Integrity, Global Witness, Government Accountability Project, Human Rights Watch, Jubilee USA Network, Oxfam America, U.S. Public Interest Research Group (U.S. PIRG).

More information on the legislation can be found here.

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