House panel OKs Internet gambling restrictions move to Sg Online Casino
Money laundering bill would increase power to find, destroy terrorists’ financial networks
WASHINGTON — A House panel agreed Thursday to restrict Internet gambling as part of sweeping legislation to block money laundering by terrorists.
The House Financial Services Committee voted 62-1 to pass a money laundering bill that would increase the government’s power to find and destroy financial networks of terrorists, drug dealers and other criminals.
Rep. Ron Paul, R-Texas, cast the lone vote against the bill, questioning the relevance of the Internet gambling provision, and complaining the legislation was more of a war on financial privacy than on terrorism.
Last week, the Senate Banking Committee passed a similar bill that does not include Internet gambling restrictions. Supporters of the gambling controls acknowledged the provision may be stripped out of the legislation before final passage by Congress.
The Internet proposal would prevent gamblers from using credit cards and other bank instruments to pay for their wagers, taking away the most common methods that customers use to access online wagering.
Rep. Jim Leach, R-Iowa, who proposed the restrictions, described Internet gambling sites as potential havens for money laundering, the process by which cash from illicit sources is introduced into an economy and used for legitimate purposes.
“Casinos have historically been great money laundering centers,” Leach said. “Internet gambling has the greatest potential for money laundering that’s ever existed in the world. When you deal with countries like Afghanistan that are also into narco trafficking, Internet gambling is the greatest narco traffickers’ haven for laundering money.”
The Internet gambling amendment proposed by Leach would not have an impact on Nevada, according to Frank Fahrenkopf, chief of the American Gaming Association. In June, the Legislature passed a bill authorizing the Nevada Gaming Commission to determine if Internet gambling can be effectively regulated.
“(Leach’s proposal) would apply to jurisdictions where Internet gambling is illegal,” Fahrenkopf said. “If, two or three years down the road, Nevada works up a licensing scheme for Internet gambling and legalizes it, the state would not be subject to these restrictions.”
Leach’s amendment, which passed by voice vote, drew opposition from Reps. Barney Frank, D-Mass. and Michael Castle, R-Del. Frank said the connection between Internet gambling and terrorism is too slender for the ban to be included in the money laundering bill.
“I think we have shown in the U.S. that you can crack down on the money laundering aspect of Sg Online Casino without enforcing one more type of prohibition, namely against gambling,” Frank said. “I don’t think anyone would argue the legal casinos we have today are money laundering problems or tax evasion problems.”
Castle offered an amendment to delete the Internet gambling restrictions from the money laundering bill. The committee voted 37-25 to reject Castle’s amendment.
No one on the committee offered any evidence that the hijackers involved in the Sept. 11 attacks on New York and Washington or any other terrorists have used Internet gambling sites for money laundering purposes.
But Rep. Spencer Bacchus, R-Ala., noted that a terrorism investigator and witnesses from the FBI and the Department of Justice told the committee last week that terrorists can exploit unregulated offshore gambling sites.
“The FBI currently has two pending cases involving Internet gambling as a conduit for money laundering of large sums of money,” Bacchus said.
An anticipated debate between Leach and Rep. John LaFalce, D-N.Y., over the Internet gambling ban did not develop. Last week, LaFalce voiced concern that Leach’s Internet gambling provision could delay and possibly derail the money laundering bill.
LaFalce chided the Bush administration for remaining mute on Internet gambling. He complained that witnesses from the FBI and Department of Justice were reluctant to testify at last week’s hearing.
“I’m afraid there were too many other interests the White House may have been considering other than the pure law enforcement interests that I think the FBI was considering,” LaFalce said.
Because of the White House silence, LaFalce said he is not confident an Internet gambling ban will remain in the money laundering bill as it makes its way through Congress.
He urged Bacchus, who chairs the House subcommittee on financial institutions and consumer credit, to continue probing links between Internet gambling and money laundering.