The International League of Dark Money

Donald Trump and Vladimir Putin are bent on destroying the peaceful international order that the United States built after World War II. They're hostile to the World Trade Organization, NATO, you name it. But Trump is not the only complicit American here. Because Trump and Putin are champions are a very different, more lawless international order, which many wealthy Americans participate in and derive benefit from: the international league of dark money.

Whatever else does or doesn't bind Trump and Putin, they're united by their dependence upon international money laundering, which moves large amounts of cash across borders in disguised transactions. Putin's oligarchs routinely move their dirty money into the West through shady means, and Trump's real estate business has become heavily dependent on Russian customers whose money should not be examined too closely. The Trump Organization may not actually launder money, but they accept a lot of well-fluffed money straight out of the laundry room. Both Trump and Putin have strong vested interests in keeping the dark money flowing and keeping it out of sight.

They're not alone. There is a robust international infrastructure of shell companies, off-shore banks, and shady middlemen devoted to moving money around while disguising where it comes from. This is especially convenient for people who can't admit where how they got that money or even that they have it. Money laundering allows corrupt government officials in Russia or Nigeria to spend their graft in the West. It allows organized criminals to spend their profits from drugs, gun-running, and human trafficking. And it allows international terrorists to fund operations overseas. So there are strong reasons for the world community, working through the post-WWII international order, to close the flow of laundered money down.

Without access to money laundering, big-time criminals would not be able to use most of their ill-gotten money, because to spend it they would need to explain where they got it. Without access to money laundering, money stolen by corrupt officials could only be spent in the same country those officials help to impoverish. Without money laundering, terrorists could not support sleeper cells in foreign countries or fly volunteers to battle areas. A world where every bank transaction was transparent and on the level would be a better and safer place.

But the money-laundering infrastructure also enables tax evasion. (I mean, no one launders money so they can pay taxes on it.) And many wealthy and prominent people in America and the rest of the developed West use their legal resources to evade taxes. They use shelters and shell companies and foundations to avoid paying their full share of the tax burden, to pass on multi-million-dollar inheritances tax free, and to disguise some of the ways they spend their money. Take a look at the Panama Papers some time, which opens to a window on a single law firm's efforts to get around tax laws for its clients. You see both Russian oligarchs and Western celebrities and politicians, including a former British Prime Minister, in those pages. Lots of nominally law-abiding people rely on offshore accounts and tax havens and largely fictitious legal entities to keep from paying taxes like the rest of us. Closing down the money-laundering system on criminals and terrorists would also close down the tax-evasion system on otherwise legitimate rich people. After all, they're the same system.

Trump and Putin want a world where legal and financial accountability stops at every border, where moving money overseas moves it out of the authorities' sight forever. The existing maze of international loopholes, which already allows tens of billions of secret dollars to flow through anonymous bank accounts, is still too transparent for them. So they want to destroy any lawful international agencies which might have the tools to close down the dark money. They want a world without effective international institutions, because only international institutions can effectively fight money laundering.

But you will find plenty of well-placed Americans and Europeans who don't want international financial controls, either. They want their shell companies and make-believe charitable foundations and secret accounts in the Caymans. They might not care much for Putin. They might detest the jihadists or the Mafia or the Crips. But they won't support the steps necessary to close down Putin or the Crips, because that would mean closing down other businesses that they actually own. It is just one of the many ways that elements of our ruling class are complicit in Russia's attacks on this country.

cross-posted from Dagblog; please comment there, not here

On the