money laundering

Miguel writes in, again:

"I pinged a high-level person at Common Cause about this story, and they said they had never heard of anyone bundling unitemized contributions before. Here was their take on it:

"I have not heard of this practice - but then I am endlessly surprised at the various schemes for raising funds. This one, however, sounds too logistically complex for what is likely not a huge amount of money, and very risky given it's foreign contributions."

This will be part of the challenge we face: some of the mainstream campaign finance reform groups might not have sufficient imagination to believe that contributions can be bundled this way.

The big question: how are the Turkish nationals able to handle this "logistically complex" problem of getting all their friends to write checks under $200? "

Miguel adds:

"It just occurred to me that this campaign finance scheme is a little bit like "smurfing" in the world of money laundering. A "smurf" opens up a bank account for just under $10,000, which is the threshold after which banks have to report to the tax authorities. So if a criminal organizations wants to hide illegal money, they sometimes use these smurfs to open up hundreds of small bank accounts.

In this case, the Turks appeared to be "smurfing" the campaign system by writing checks under $200."

Indeed - that's exactly what it is (although i'm unfamiliar with the term) - I apologise if that wasn't made clear earlier. It's a standard trick (in both legal and illegal activities) - you look at the law, see what you are permitted to do, and then find a way around it.

The person at Common Cause has a valid point in that "tens of thousands" isn't a whole lot of money - although at the same time, we've seen that just about every other congresscritter can be bought for that amount.

Let's go back to David Rose:

"According to some of the wiretaps, the F.B.I.’s targets had arranged for tens of thousands of dollars to be paid to Hastert’s campaign funds in small checks. Under Federal Election Commission rules, donations of less than $200 are not required to be itemized in public filings. "

Rose specifically says that the contributions were in 'checks' - that language may or may not precise - and even if his language is literally true, he's only quoting people in the wiretaps - and their language may or may not be precise it may be shorthand for 'contributions'. Again, I'm not exactly sure about the campaign finance laws - is it possible to donate in cash? If it is possible to donate in cash, then it doesn't make much sense that they would use checks if they were trying to get the cash in Hastert's account(s) without any fingerprints.

Similarly, if it is possible to donate in cash (presumably with 'receipts' with a name and address), and presuming they were specifically trying to launder the money, then I expect that most of the names and addresses are either:

a) completely fictitious or
b) a bunch of repeats (i.e. just a few people making many donations of $199)

On the other hand, if cash donations are forbidden, then Rose must be correct when he talks of checks. Obviously. The question remains, though, why would they bundle a whole bunch of checks under the $200 radar? Common Cause suggests that it would be "logistically complex" - i guess they are presuming that the bribers would have to round up hundreds of individual donors - but that wouldn't make any sense. If they had hundreds of donors, then they wouldn't have to hide under the $200 radar - the donations would simply appear to come from a particular lobbying/interest group. Therefore, if this money did indeed come via checks (or 'cheques' as we call 'em here), my bet is that the 'tens of thousands' came from just a handful of bank accounts. And if that's the case, then it's more than likely that the owners of those bank accounts have broken the law by donating more than the legal maximum - and they 'knew' that they could get away with it because the $<200>very risky given it's foreign contributions" - but again, this misses the point. If the purpose was to get around the laws, then the purported 'donors' wouldn't be foreign - the money will have been washed through a US citizen - perhaps the secretary or someone else at the ATAA who would be a 'legitimate' donor.

Let me add here, that those looking for 'foreign names' in Denny's donor list ought be careful - the answer will neither prove or disprove anything.

I do agree with the person at Common Cause when they say "I am endlessly surprised at the various schemes for raising funds" - that's the point. If there's a way, it'll be done.

Having said that, none of this is very elaborate, or unusual - just consider as an example that Christine DeLay 'worked' for Alexander Strategy Group.


Update: for all of the reasons mentioned above, Denny must Disclose! Fully. Any partial nonsense like 'in October, only $1000 wasn't from Illinois' can never be satisfactory

(cross-posted at Disclose, Denny)

(and thanks again to miguel)