Journal: Illicit Money, Illegitimate Governments, and More…

03 Economy, 08 Wild Cards, 10 Transnational Crime, Commerce, Commercial Intelligence, Ethics, Law Enforcement

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Volume 56, Number 19 · December 3, 2009

Illicit Money: Can It Be Stopped?

By Eva Joly, Raymond Baker

On May 4, the Obama administration announced a plan to crack down on offshore tax havens, which it said are costing the United States tens of billions of dollars each year. The President’s proposals were primarily aimed at finding ways to increase revenue from wealthy companies and investors who use loopholes in the law and offshore subsidiaries to reduce their US taxes. But the administration is largely missing a far more devastating problem related to offshore finance: money gained from criminal and other illicit sources. With the use of tax havens and other elements of an increasingly complex ‘shadow’ financial network, vast sums of illegal money are being shifted throughout the global economy virtually undetected.

Phi Beta Iota: The illicit global economy is at least two trillion dollars a year against a seven trillion dollar a year legitimate economy, and the latter is both full of legal crime and legal tax avoidance, as well as focused on the one billion rich rathyer than the five billion poor.  One of the many dirty not-so-little secrets about Wall Street is that it relies heavily on laundered drug money for its liquidity; another is that the banking community has been all too happy to manage the funds of dictators and war lords and others.  Below are just three of the many books we recommend in this area.

Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy (Hardcover)

Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil (Paperback)