131 Cong Rec E 4626 Wednesday, October 16, 1985

Congressional Record -- Extension of Remarks

Wednesday, October 16, 1985

99th Cong. 1st Sess.

131 Cong Rec E 4626

REFERENCE: Vol. 131 No. 137

TITLE: DICK ARCARA TESTIFIES BEFORE HOUSE COMMITTEE

SPEAKER: HON. JACK F. KEMP OF NEW YORK
IN THE HOUSE OF REPRESENTATIVES

TEXT:  
   Text that appears in UPPER CASE identifies statements or insertions which are not spoken by a Member of the House on the floor.  

MR. KEMP. MR. SPEAKER, I RISE TODAY TO CALL THE ATTENTION OF MY COLLEAGUES TO THE TESTIMONY OF ERIE COUNTY DISTRICT ATTORNEY RICHARD J. ARCARA BEFORE THE HOUSE JUDICIARY COMMITTEE'S CRIME SUBCOMMITTEE ON SEPTEMBER 12, 1985. MR. ARCARA'S EXTENSIVE EXPERIENCE AND EXCELLENT RECORD IN THE AREA OF LAW ENFORCEMENT, AS WELL AS HIS ROLE WITH THE NATIONAL DISTRICT ATTORNEY'S ASSOCIATION, MAKE HIM A VALUABLE SOURCE OF INFORMATION ON THE SUBJECT OF MONEY LAUNDERING.

I URGE MY COLLEAGUES TO CAREFULLY CONSIDER MR. ARCARA'S THOUGHTFUL SUGGESTIONS CONCERNING THIS MATTER.

THE TESTIMONY FOLLOWS:

TESTIMONY OF RICHARD J. ARCARA

Mr. Chairman and members of the House Crime Subcommittee, my name is Richard Arcara. I am a former United States attorney for the western district of New York and the district attorney for Erie County, Buffalo, New York and I speak to you today on behalf of the National District Attorneys Association. Our association represents 6,300 local prosecutors from around the country.

We thank you for this opportunity to address our concerns regarding the various money laundering bills which you consider today. My remarks will be confined to those proposed legislative changes which would create the new crime of money laundering and to forfeiture proceedings. The Nataional District Attorney's Association's primary concerns are that the legislation be broad enough to provide the Government a most effective tool to combat organized criminal groups, from drug trafficking rings to more traditional organized crime (families), yet narrow enough to avoid cumbersome, unnecessary and undesirable intrusions into matters of State concern.

Mr. Chairman, we feel that you have our latter concern in mind when you offered House Resolution 1474. You eliminate the intrusive aspects of the legislation by including as a crime only those transactions involving a financial institution. You further limit the scope of the proposed crime by including those transactions involving property derived from a crime under the Rico statute. In so limiting the offense, H.R. 1474 avoids the possibility of Federal intrusion into the province of the State. I think that all parties would agree, however, that organized crime does not confine its money laundering operation to financial institutions, nor does organized crime limit its illegal but profitable operations to violation of the Rico statute. While we understand that rationale for these restrictions, we feel that the desired harmony with State law may be achieved through means which would afford the Federal Government a greater opportunity to assail money laundering operations.

While the administration's proposals, H.R. 2785 and 2786, attempt to provide the Government with the ability to strike at virtually all money laundering operations, we feel that a literal interpretation of the administration's legislation may result in unintended Federal intrusions into crimes which are better suited to State prosecution. Specifically, any crime involving the transfer of money, checks, or other monetary instruments could be considered a money laundering "transaction" under the administration's proposal. A theft, a robbery, a bad, forged or altered check would become a Federal money laundering offense.

We came not to criticize, but to offer constructive alternatives which may reconcile the two important concerns of Federalism and effective law enforcement. Firstly, we recommend as an alternative to the limitation in scope to Rico offenses that the prohibited transaction be defined in such a manner that State crimes would not constitute a "transaction." Perhaps the transaction could be defined as a voluntary, non-fraudulent transaction between the parties. This should eliminate conflict with existing State laws. As an additional safeguard, we recommend that a jurisdictional threshold be imposed, such as a $10,000 minimum, in the definition of the proscribed transaction. This limit should not hinder the money laundering legislation's effectiveness, since the Federal Government lacks the resources to pursue smaller incidents. Also, it is unlikely that organized crime would engage to any great degree in laundering operations smaller in size.

Secondly, we recommend that the offense include the laundering of money obtained from State crimes. Since little, if any, State regulation exists in this area, and since the control of organized crime is historically and logically an area for Federal legislation, we feel comfortable with the application of the proposed money laundering offense to the illicit proceeds of State crimes.

Finally, we are quite concerned that the forfeiture provisions of the administration's proposals could lead to unnecessary interference with State forfeiture proceedings. Currently, approximately one half of the States provide for the forfeiture of proceeds of illicit activities. It would cause serious discord between the Federal and State enforcement agencies if Federal agencies were allowed to institute proceedings which would conflict with State forfeiture actions. Therefore, if this committee is inclined to include a forfeiture provision, we would urge you to codify a policy granting deference to State forfeiture laws or at the very least, prohibiting Federal preemptions of previously initiated State forfeiture proceedings. I thank you for your attention and stand ready to answer questions.