FROM THE OFFICE OF PUBLIC AFFAIRS

I want to join with Secretary Summers and Attorney General Reno in showing our appreciation for the hard, demanding work that law enforcement does each day. The agents and prosecutors in this room, and the state and local enforcement agencies which have participated in this Conference, have launched an unprecedented effort to crack down on money laundering at home and abroad. As co-chair of the Money Laundering Steering Committee with Deputy Attorney General Holder, I have seen what has been accomplished so far. The IRS Criminal Investigation Division and the U.S. Customs Service have substantially increased the number of money laundering cases they have investigated and referred for prosecution. Cases like Operation Casablanca have had both a domestic and international reach. The types of cases discussed in the working group sessions of this Conference will have an impact beyond our country's borders. It is an impressive record, especially since you are working with limited resources. It is one of which you all can be proud.

Treasury, in close partnership with the Department of Justice, has made a commitment to help you do an even better job, and to extend our collaboration with financial regulators and appropriate state and local law enforcement agencies. We believe that designating HIFCAs will allow all our agencies to work cooperatively and collaboratively to tighten the noose around those who engage in these crimes. I am told that yesterday's session on the organization and the goals of the HIFCAs was especially useful. You can be sure that Eric Holder and I will be watching this program closely as it develops.

One of the most important parts of our national money laundering strategy is that which seeks to strengthen partnerships between the Federal government and State and local governments. The C-FIC program is the centerpiece of that effort. C-FIC provides seed capital for state and local enforcement efforts to detect and prevent money laundering and other financial crimes, whether related to narcotics crimes or other underlying offenses. C-FIC grants help states and local communities marshal the information and expertise they need to build innovative approaches to money laundering control and enforcement. The Bureau of Justice Assistance, which administers C-FIC, will require award winners to coordinate their activities with the HIFCA action teams wherever possible, to create a close working relationship between the HIFCAs and recipients of C-FIC grants.

You may have noticed that three of the four HIFCA areas are represented in the first C-FIC awards: the Southwest border, New York/New Jersey, and Los Angeles. We did not receive any applications from Puerto Rico, and I would like to encourage those of you who serve there to discuss again the possibility of applying for C-FIC grants with your local colleagues.

I want to give you some examples of how the recipients announced by the Secretary plan to use their C-FIC funds.

• The San Diego Police Department will use its award to fund two full-time detectives to work on money laundering investigations and participate on the existing SAR review team run by the U.S. Attorney's Office for the Southern District of California. The detectives will concentrate on casas de cambio and large-scale money laundering operations.
• The New York State Police will use the funds to create a financial crimes investigation team to focus on money laundering investigations in upstate New York. It will work with other State and local law enforcement agencies, regulatory agencies, and financial institutions to identify suspicious activity and conduct preliminary investigations.
• The Arizona Attorney General's Office will fund a Southwest Border Money Transmitter Program to examine the domestic movement of laundered funds through money transmitters and MSBs.
• The grant to the Special Crimes Division of the Texas Attorney General's Office will fund a project to expand the number of bulk cash smuggling investigations and prosecutions. The project will focus on the movement of the cash through correspondent accounts, money exchanges, and armored car and other delivery and courier services.
• The Illinois State Police will fund a money laundering intelligence and investigations support unit to provide strategic and tactical analytical support to its investigators. The unit will cooperate with State regulators to identify emerging patterns and to target suspected money laundering activity, particularly in the Chicago area.
• The Florida State Attorney's Office in West Palm Beach will form a task force to review Suspicious Activity Reports in order to identify and target significant money laundering targets in the region.

I want to thank our Under Secretary for Enforcement Jim Johnson for heading up the selection process and the many people at BJA, Justice, and Treasury who worked on launching this initiative.

You have heard a good deal at this conference about the National Money Laundering Strategy, the yearly report mandated by the Congress on what we are doing, why we are doing it, and why it is important. In their March 7, 2000 joint memorandum to the field, Secretary Summers and Attorney General Reno asked for your help in implementing some of the more important items in the Strategy. I look forward to receiving a full briefing on the district-by-district reports that you have been making this afternoon.

While I have great respect for the headquarters personnel who work so hard on developing the Strategy, I do not pretend that we in Washington have all the answers or even that we have covered all the issues. You have all received copies of the 2000 Strategy. It was an ambitious document and I am pleased we have achieved a large percentage of the milestones set out in that document. Drafting of the 2001 Strategy will begin shortly. We need your input and your participation in preparing it. We welcome your ideas about what works best. We also need your help to identify the state and local enforcement officials who might have new ideas. We want the 2001 Strategy to be a collaborative document, containing the best thinking distilled from all of our experience.

Before I close, let me just say a few words about the domestic anti-money laundering legislation that Justice and Treasury sent to Congress and that should again be sent to Congress in January. The bill contained important provisions designed to enhance the ability of law enforcement to investigate and prosecute domestic money laundering cases. It would have:

• expanded the Bank Secrecy Act to create a new criminal offense of bulk cash smuggling in amounts exceeding $10,000, and authorized the imposition of a full range of criminal sanctions when the offense is discovered. As you have discussed at this conference, this kind of provision would help prevent the flow of illicit cash proceeds out of the United States.
• made it a criminal offense for a courier to transport more than $10,000 of currency in interstate commerce, knowing that it was unlawfully derived; and
• closed a legal loophole by making it clear that the federal money laundering statutes apply to both parts of a parallel transaction when only one part involves criminal proceeds. In other words, if a launderer were to move drug money from Account A to Account B, and then replenish Account A with the same amount of funds from Account C, the second transaction would also constitute a money laundering offense.

These are reasonable and sensible provisions that will help you do your jobs even more effectively, and we hope and expect that the Congress will pass them next year. I also hope the Congress will again consider our international money laundering legislation and give the Secretary tools additional tools and flexibility he needs to combat money laundering.

Once again, thank you for all your hard work. I am pleased that the Departments of Treasury and Justice can work together so well in combating money laundering, and I look forward to even better cooperation and coordination in the future. As the Secretary said, we have time to answer a few questions.