Thank you, Mr. Chairman. I'm glad that you have called this hearing.
The legislation that this Committee considered shortly after the September 11th attacks and that was ultimately incorporated into the USA Patriot Act of 2001 was profoundly important and truly historic.
As you have noted, it brings a new level of scrutiny to money laundering activities.
And, we should acknowledge the hard work of so many of our colleagues. We are fortunate today to be joined by a few key leaders on the subject.
I would like to welcome the senior Senator from my home state, Senator Carl Levin, whose thorough investigations on this subject are well-known by all of us here and are deeply appreciated.
I would also like to welcome Senator Grassley and the leaders of the House Financial Services Committee: Chairman Oxley and Ranking Member LaFalce.
The final legislation that we reported out of this Committee is a demonstration of what is possible when we join together in a spirit of cooperation in the best interests of the country.
I am happy that we were able to incorporate important amendments that I offered to the bill. In particular I am glad that we have enacted strong "due diligence" requirements and that we have clarified the ability of the Treasury to issue regulations to crack down on the "concentration accounts loophole."
The concentration accounts loophole is a serious concern of mine and I want to take a moment to highlight the subject.
As all of us know, concentration accounts are internal, administrative accounts that financial institutions operate to temporarily aggregate incoming monies until those funds can be properly identified and credited to an appropriate account.
In the past, there is evidence that some institutions have allowed concentration accounts to serve as a secret conduit for drug monies.
This has been such a problem that, over 4 years ago, the Federal Reserve raised a red flag about lax concentration account protocols in its Sound Practices for Private Banking. However, the Fed issued only guidance and its warning does not have the impact of a regulation.
That is why I felt it was so important for us to address this loophole with a regulation.
Recently, my colleagues, Senators Levin and Grassley, joined me in writing to Treasury Secretary Paul O'Neill. We urged him to act quickly on his new explicit authority.
In the aftermath of September 11th, Senators Levin, Grassley, and I remain concerned about drug money laundering, but also are newly concerned that terrorists might seek to use the concentration account loophole to hide transfers of money among terrorist operatives around the world.
I hope that our witnesses appearing before us today from Treasury will be able to update us on the preparation that the Department is doing so that they may proceed with a proposed concentration accounts rule.
I think it would be very unfortunate for the Administration not to move forward with their new explicit authority.
We all realize that the war against terrorism is going to be a prolonged struggle. The decisive steps that this Committee, the entire Congress, and the Administration have taken show that we are completely committed to stopping the flow of terrorist money, eradicating terrorism, and protecting our families both abroad and on our own soil.
I look forward to hearing from our witnesses today about how the new law is being implemented. Thank you, Mr. Chairman.