Crime School: Money Laundering, by Chris Mathers.
I've been meaning to review this book all summer. Luckily, its subject matter has been getting more topical every day. The author, Chris Mathers, is a former undercover cop and an internationally recognized expert on money laundering. Crime School is equal parts police procedural, international finance primer, memoir, and polemic. It's also really funny.
As an RCMP officer, Mathers often posed as a money launderer to drug dealers. He writes about the trials and tribulations of this difficult job:
Which brings me to another issue: how to prepare the cash. Most people, including drug dealers seem to think that money should be packaged in amounts, as opposed to denominations. Invariably, when we would start to deal with a new drug organization, I would have to sit down and explain how they would package the money to bring us. It would usually take a few weeks to filter through their entire organization
We would explain to them that the bank likes the money in stacks of the same denomination, not a "party-pack" of fives, tens, and twenties thrown together to make a million." [pg 30]
Mathers explains what money laundering is, how it's done, who's involved, and how it affects international security and the global economy. He also answers such important questions as "How much does $1 million US weigh?" FYI, a million dollars' worth of crisp new $100 bills weighs about 22 pounds-but bills wick moisture and dirt, so used bills can weigh up to 20% more than fresh ones. Mathers discusses dozens of money laundering scams, including many you've probably never heard of. For example, I had no idea that pay parking lots were one of the most important channels for money laundering in North America.
One of the main themes of the book is the intimate connection between organized crime and terrorism. Mathers notes that every organized crime syndicate in the world has its roots in ideological struggle (even outlaw biker gangs) [pg 105].
Mathers argues that the fight against organized crime and the fight against terrorism are one and the same. Money laundering is particularly insidious because it introduces the proceeds of crime into the "legitimate" financial system, often through the complacency or complicity of mainstream financial institutions. (E.g. the disgraced Riggs Bank, money launderers to Pinochet, Prince Bandar, and the dictator of Equatorial Guinea.)
There's been a lot of talk in the media about the booming opium trade in Afghanistan. As Mathers points out, money laundering is the mainspring that connects drugs and terrorism. Without money laundering Al Qaeda and the warlords can't convert the drugs into cash to buy weapons, build training camps, or disseminate propaganda. (Since 9/11 the international community has taken renewed interest in money laundering and many millions of dollars of Al Qaeda assets have already been seized.)
Fortunately or unfortunately, Mathers writes like a hardboiled cop. It's refreshing to hear him explain high finance clearly using terms like "the condom theory of correspondent banking." His incessant references to "the bad guys" and his slightly xenophobic posturing get a little annoying.
Despite these tics, Mathers is clearly driven to protect the powerless from the powerful. Money laundering persists because of a multitiered system of oppression, violence, coercion, and greed. Terrorists and money launderers advance their aims on the backs of the world's most vulnerable and desperate people (e.g. the poor, immigrants, sex workers, addicts). The profits fund civil wars and terror bombings.
The final chapter is called "Cops, Cash, and Corruption." Mathers would probably deny this, but this is a chapter about the phenomenology of temptation. He gives a very frank assessment of what it's like to be a money laundering undercover cop
For some people, though, the problem with a job like this is that they can't get over the novelty of handling huge amounts of cash. Sometimes one of the younger guys would hold up a big stack of money and say something like "I could pay off my house with this." I found that kind of talk troubling and I told them so. I told them that it wasn't money, it was evidence, and it had to be treated like evidence. You should never start equating amounts of seized money to actual things. [Emphasis added.]
That last line reminded me of a discussion at Emiratio about vegetarianism. Sheiva, the author, wondered if it was okay for vegetarians to allow themselves to savor the smell of meat even if they think it's wrong to eat it. An interesting discussion ensued. I side with Mathers in the view that behavior is inertial. There's nothing intrinsically wrong with enjoying the smell of meat or the fantasy of pocketing "evidence"--but there are good practical and theoretical reasons not to indulge in these pleasures if you want to be an ethical person in the long run. One might argue, as someone in Sheiva's comments thread did, that it is wrong to do intrinsically benign things that increase one's risk of future harmful transgressions. I won't argue this point here, but I think the Mathers' passage is an interesting example of someone who thinks this attitude pays off in real life.