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The Washing Machine:
Money, Crime and Terror in the Offshore System



Brief contents

Section One: Criminal Oligarchy
When Russia cast off the Communist system, Western financial institutions moved in with the help of Russian Mafia, oligarchs and local corrupt institutions. American banks became conduits for illegal money, which moved under the world's anti-money laundering radar.

Individuals who are financially creative harness established systems to their illicit purposes. Often brilliant schemes are devised to deceive the authorities. Here we see the Russian genius for deception and black wealth creation.

Section two: Terrorist Anomalies
The terrorist may leech off the launderers' schemes. He is a counterparty to deception, but not necessarily a deceiver himself. The money he needs for his purposes is small and much is 'legally' earned or donated by supporters. However, Al Qaida and the IRA have their own money making, and money hiding schemes, described here in detail. These may ensure longevity and additional security risk.

Section Three: Black markets
Criminal gangs and cartels in Cali or the United States exploit loopholes in the financial and legal loopholes to transport dirty money earned from the sale of drugs and cigarettes. Vast fortunes have accrued to those who are ruthless and cunning. The largest players in the global market are sometimes the most apparently prestigious.

Section Four: Bad banks
Banks are the carriers of the dirty money, as well as clean, and the more they have explored markets in the developing world, the more they have had to treat with criminal elements and corrupt governments. When Blue chip bank meets famous politician bearing gifts, the greed imperative poisons discrimination.

Section Five: What the World's Doing about Money Laundering
Politicians are reaping the fruits of their belief in free markets. The removing of constraints on currency controls and the opening of world markets to corporate pressures put power into the hands of those that could not be trusted. Breakthroughs on a political level have poisoned trust and confidence in markets. The men who have to row back the political tide are reactive not proactive, they are willing policemen in small teams, under financed, under-resourced.

Politicians saw their dependence on these authorities in the wake of September 11. Few believe they can hold back the tide of liberated markets and black money.