Revenge of the Money Launderers

The “FinCen files” story reveals: getting caught doesn’t stop banks from taking dirty money. It may even encourage them

On December 11, 2012, U.S. Justice Department officials called a press conference in Brooklyn. The key players were once and future bank lawyer Lanny Breuer (disguised at the time as Barack Obama’s Assistant Attorney General in charge of the DOJ’s Criminal Division), and Loretta Lynch, the U.S. Attorney for the Eastern District of New York, and future Attorney General. The duo revealed that HSBC, the largest bank in Europe, had agreed to a $1.9 billion settlement for years of money-laundering offenses.

An alphabet soup of regulatory agencies was represented that day, from the Justice Department, to Immigration and Customs Enforcement (ICE), the U.S. Treasury, the New York County District Attorney, and the Office of the Comptroller of the Currency, among others.

The regulators outlined a slew of admissions, with HSBC’s headline offense being the laundering of $881 million for Central and South American drug outfits, including the infamous Sinaloa cartel.

The laundering was so brazen, regulators said, the bank’s Mexican subsidiary had developed “specially shaped boxes” for cartels to pack with cash and slide through teller windows. The seemingly massive fine reflected serious offenses, including violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA).

The next years would follow up with a flurry of similar settlements extracting sizable-sounding fees from other transnational banks for laundering money on behalf of terrorists, sanctioned businesses, mobsters, drug dealers, and other malefactors. Firms like JP Morgan Chase ($1.7 billion), Standard Chartered ($300 million), and Deutsche Bank ($258 million) were soon announcing settlements either for laundering, sanctions violations, or both.

Even seasoned financial reporters accustomed to seeing soft-touch settlements scratched their heads at some of the deals. In the case of HSBC, the stiffest penalty doled out to any individual for the biggest drug-money-laundering case in history — during which time HSBC had become the “preferred financial institution” of drug traffickers, according to the Justice Department — involved an agreement to “partially defer bonus compensation for its most senior executives.” If bankers can’t get time for washing money for people who put torture videos on the internet, what can they get time for?

When I did a story on the case in early 2013, I found the HSBC settlement was the latest step in a dizzying, decade-plus cycle of offenses and ignored reprimands, involving multiple regulatory bodies. The number of times HSBC had blown off compliance orders seemed too absurd to be real. In one stretch between 2005 and 2006, the bank received (and, apparently, ignored) 30 formal warnings just from the Office of the Comptroller of the Currency.

Prosecutors insisted the deferred prosecution settlements slapped on companies like HSBC, Standard Chartered, and JP Morgan Chase were tougher than jail terms. The deals would place banks in a permanent state of quasi-arrest, with regulators granted enormous supervisory power and serious charges pre-filed and hanging over the firms going forward.

As one federal investigator put it to me back then, “This way, we have them by the short ones.”

Fast-forward eight years. On September 20th, a combination of Buzzfeed and the International Consortium of Investigative Journalists (ICIJ) published the details of a major document leak highlighting a decade of money-laundering incidents, involving hundreds of billions of dollars and a number of the world’s biggest banks. The leak centered on a cache of over two thousand “suspicious activity reports,” or SARs, filed by those banks to the Financial Crimes Enforcement Network, a regulatory arm of the U.S. Treasury.

Though the ICIJ was also behind the release of the Panama Papers, investigative editor Michael Hudson told me he believes the FinCen leak is “the most important” project they’ve worked on. Instead of being about one group of actors, or one jurisdiction, these revelations span the banking sector as a whole.

“It shows the widest set of problems,” he says.

The story has been covered around the world, but some press accounts particularly here in the States seem to have missed the punchline, i.e. that the banks figuring most prominently in the FinCen leak are exactly the same institutions paraded before the public as subjects of “message-sending” punishments back in 2012-2014.

HSBC, for instance, continued to take in questionable money through 2012 and beyond, including $30 million from Hong Kong accounts related to a Ponzi scheme called World Capital Market. WCM was suspected of bilking “investors” — most of them ordinary people scraping together five or ten thousand dollars and throwing them at false promises of guaranteed returns — of nearly $80 million.

The leaked records show HSBC flagged the account as suspicious as early as 2013, but continued to take the money from this and a wide variety of other dicey accounts. Although regulators saw all of this information, the Department of Justice not only didn’t take action, it announced in 2017 that HSBC had “lived up to all of its commitments” and agreed to file a motion to lift the deferred prosecution deal.

A similar pattern held with JP Morgan Chase, which in 2013 was hit with a cease and desist order over “systemic deficiencies” in its money-laundering controls, yet continued to do business with rogue accounts, including some infamous and obvious ones. To give some sense of the sums involved, JPM made roughly a half-billion dollars just servicing the accounts for con artist Bernie Madoff.

As far back as 2006, JP Morgan Chase knew enough to pull its own money out of investments in hedge funds tied to Madoff, but never told investors, and continued to manage his accounts for years. The bank ultimately settled with the government over the Madoff episode in 2014, after the 2013 “cease and desist” order, while continuing to manage money for other malodorous accounts — including, according to the ICIJ, more than $1 billion for Jho Low, the fugitive financier behind Malaysia’s infamous 1MDB fund.

In a detail that should infuriate the #Resistance crowd, Jamie Dimon’s bank also continued to do business in huge sums for former Trump campaign manager Paul Manafort even after Manafort stepped down in scandal, and even after the bank flagged Manafort’s accounts. From the ICIJ report:

JPMorgan also processed more than $50 million in payments over a decade, the records show, for Paul Manafort, the former campaign manager for President Donald Trump. The bank shuttled at least $6.9 million in Manafort transactions in the 14 months after he resigned from the campaign amid a swirl of money laundering and corruption allegations spawning from his work with a pro-Russian political party in Ukraine.

“If you look at the cases where they tried to punish and deter the big banks, the headline-making efforts just haven’t worked,” says Hudson. “In the aftermath of these supposed crackdowns, the banks continued to move money in staggering amounts, for powerful and dangerous characters.”

“The big takeaway is, the system just doesn’t work,” adds former federal prosecutor Paul Pelletier. “I think these SARs represent about $2 trillion in suspicious transactions, and nearly all of it went through. And this is just a small fraction of the overall amount of money.”

According to Hudson, the FinCen files represent about two-tenths of one percent of the suspicious activity reports filed between 2011 and 2017.

In the aftermath of the HSBC deal in 2012, money laundering cases began to attract a fair amount of press attention. HSBC’s case even became one of the subjects for Oscar-winning documentarian Alex Gibney’s “Dirty Money” series:

At the time, there was an expectation that these stories could be told in the past tense, because firms like HSBC had been busted. The FinCen leaks show the opposite. The settlements may actually have been an accelerant, allowing for the appearance of regulation, while alerting banks to broader weaknesses that encouraged more brazen behavior going forward. We may have to change the way we think about “dirty money,” from being an outside contaminant, to endemic to the system at its core.


Public legend about movement of ill-gotten cash usually centers on crooks sitting under ceiling fans in tropical locales, receiving mysterious wire transfers in places outside the physical reach of American regulators, like VanuatuPanama, or the British Virgin Islands. The FinCen leaks make clear the real hub of money laundering is in what Hudson calls the “choke point” of New York, where the world’s largest financial institutions have streamlined the process of moving shady money.

SARs don’t always indicate a crime. They’re the regulatory equivalent of a call to police to check something out that doesn’t add up. Bank monitors who compile them might be spotting something in their account rolls like high numbers of cash transactions, large numbers of wire transfers to a country where the customer doesn’t do business, etc.

The requirement to produce these reports creates a cat-and-mouse game for banks. Every time compliance officers discover derogatory information that leads to an account being closed, it’s a direct hit to a bank’s revenues. On the other hand, to keep regulators off their backs, banks have to be seen to be doing all they can to sniff out illegalities. Therefore there’s an incentive for banks to cycle through creative ways of looking like they’re engaging in compliance, without actually doing so.

A bank might create sizable AML departments, but pad them with inexperienced, entry-level employees incapable of spotting problems (see here for the HSBC example I wrote about years ago). A firm may hire a top-of-the-line department head, but not give him or her real resources. Required hiring boxes may be checked, but the company may non-report or under-report problems. Companies may even generate huge numbers of suspicious activity reports while leaving key data like names or addresses missing.

In a different scenario, reports are filed too late for action to be taken. SARs are supposed to be filed within 30 days, for instance, but the FinCen documents were filed to the government an average of 166 days after the initial detection of a potential problem.

In another stalling method, banks informally agree not to close suspicious accounts until a certain number of SARs have accrued. When the Senate Permanent Subcommittee on Investigations looked at HSBC in 2012, for instance, they found internal emails from bank executives suggesting that HSBC’s Mexico operations had settled on a policy of not closing accounts until four SARs had been filed.

When the company’s chief compliance officer found out about its subsidiary HMEX’s standard, he wrote, in a bemused tone, “4 SARs seems awfully indulgent, even by local standards.” HMEX later cut the standard to two SARs, which seems to be the exception rather than the rule. In the FinCen leaks, companies are seen repeatedly filing reports about the same actor, each time implying they’ve dug just enough to write a report, but never quite enough to actually close the account.

Of course, in banking, size matters. “Maybe the bank looks at a wire transfer and says, ‘This smells.’ Do that in a $12,000 transaction, and they’ll kick you out of the bank,” says Pelletier. “Do it at $12 million, and they’ll let it go.”

What’s unique about this leak it shows bad behavior the banks actually reported. As one former investigator put it this week, “This is the stuff they actually have a suspicious activity report for!” That banks keep taking the money is bad, but the fact that regulators keep receiving the reports and letting shady transactions slide makes the dirty-money problem a bizarre symbiosis of private rapaciousness and (at best) governmental apathy.

While credit card companies are able to detect fraud and banks are able to detect suspicious activity thanks to technological advances, the government lacks the same capability, in part perhaps because the reporting system is not automated. Since it’s a crime to leak a “SAR” — you “literally have to steal one” to make one public, as one former investigator puts it — they’ve rarely been seen by the public. The ICIJ has now put them on display:

The government receives millions of these written reports, which often appear to reflect a fair amount of person-hours of research by the bank. However, the government lacks what one investigator described to me as an “AI-type test” for passive review of this material, and lacks the personnel to go through it all individually.

At best, a federal investigator may go through the SAR database to check an individual or company already targeted in another probe. This particular batch of SARs seems to have been gathered as part of a congressional investigation into Russian interference, for instance. The rest of the reports are fated to be memory-holed by overwhelmed regulators.

What do you get in this seeming worst-case scenario, when banks pretend to monitor, and regulators pretend to collect the monitoring? A short list of some of the messes found in the FinCen docs:

— In one ridiculous case, Deutsche Bank’s New York branch processed $2.6 billion and $700 million, respectively, for a pair of companies called Ergoinvest and Chadborg trade. Both companies declared annual incomes of $35,000, and the statements for both firms bear the signature of the same obscure dentist in Belgium, who claims he doesn’t even own a car. Yet the money kept rolling through! The companies earned British registrations through “formation agencies” located in the Baltics, where investigators have found a rat’s nest of problems in recent years. Deutsche Bank, the originator of 62% of the leaked SARs (perhaps reflecting the focus of the Russia investigation that produced the FinCen docs), moved at least $150 billion just from one small Tallinn-based bank, Danske Estonia, for instance.

— Ukrainian Ihor Kolomoisky was the subject of raids by federal investigators earlier this summer, and has been profiled in colorful news reports that read like movie scripts. In one piece, he allegedly dropped crayfish meat by remote control into a tank to be devoured by sharks in the middle of a meeting, as a Dr. Evil-style intimidation tactic.

ICIJ @ICIJorg

Learn about the 22 properties Kolomoisky and his associates purchased between 2006 and 2015 – with this interactive map made by @pirhoo. #FinCENFiles

Michael Sallah @MikeSallah7

The Oligarch Who Ate Cleveland: Untold story of how Deutsche Bank helped Igor Kolomoisky acquire an empire in real estate in America’s heartland — the money siphoned from Ukraine’s largest bank. @TanyaKozyreva and me and team from @ICIJorg https://t.co/2aWlZGtPQt via @ICIJorg

The crux of accusations by prosecutors is that Kolomoisky employed gangland tactics at home (including using “armed goons” to take over an oil company), then funneled the money to places like the States, to be invested in legit vehicles like real estate. This is exactly the kind of person the SAR process is designed to identify and disqualify quickly. Nonetheless, the FinCen files show Deutsche Bank, which had entered into a settlement deal in 2015 for moving over $11 billion in suspicious transactions, moved at least $240 million for a Kolomoisky-connected account at exactly that time, between 2015 and 2016.

— Even as Russian aluminum baron Oleg Deripaska garnered enormous media attention in recent years, including during the Russiagate furor, he continued to move money freely through the American banking system. The FinCen files contain a total of 58 SARs related to Deripaska, issued between 1997 and 2017, covering an amazing $12.41 billion in transactions. The Bank of New York Mellon flagged 16 transactions involving a Deripaska subsidiary company called Mallow Capital, but apparently kept doing business. To quote the ICIJ, “Mellon said Mallow Capital appeared to be a shell company operating in a high-risk area with no known legitimate business purpose. In 2012 and 2013, Mallow sent itself nearly $420 million using different British Virgin Islands addresses and different banks…”

The FinCen leaks highlight two major weaknesses of the regulatory system. One is the longstanding absence of a requirement that anyone opening a U.S. account name a “beneficial owner,” i.e. who is really controlling the account. The other is correspondent banking. Banks in the U.S. are required to “know your customer” in addition to monitoring and reporting domestic accounts. Still, any foreign bank with a license may open “correspondent” accounts in those same regulated Western banks. A lot of the worst instances catalogued in the FinCen leaks involve these correspondent accounts, opened in Asia, Eastern Europe, the Middle East, etc.

In the long run, the regulatory system ends up serving as a de facto partner for banks that all but admit they’re taking in money from Ponzi schemers, mobsters, drug lords, and rogue states.

This is a “feature, not a bug” problem. Going back to the years after the crash, regulators spoke often about the need to carefully construct settlements, so that even repeat offenders might remain viable.

In late 2012, for instance, at a press conference announcing a market manipulation settlement for the Swiss Bank UBS, Breuer told reporters, “Our goal here is not to destroy a major financial institution.”

This is a bank that has broken the law before,” a reporter said that day. “So why not be tougher?”

“I don’t know what tougher means,” Breuer answered.

Some time later, then-Attorney General Eric Holder gave a video message on the theme, “There is no such thing as Too Big to Jail.” While insisting “no one is above the law,” Holder pointed out that some criminal charges carried automatic regulatory penalties that “may even trigger the loss of that institution’s charter.” This, he implied, is not always a good thing.

This issue had come up at the HSBC press conference the previous year, when Breuer said, “had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the US.”

For that reason, Holder insisted, regulators often “must go the extra mile to coordinate closely with the regulators who oversee these institutions’ day-to-day operations.”

Translated, this meant the Justice Department was crafting punishments to make sure banks landed on their feet and remained functional as American businesses, even in the face of public reprimand.

A typical settlement involved a fine that sounded large but was really equal to months or weeks of profit, with penalties in some cases also being deductible, so taxpayers could share in the joys of paying a bank’s debt to society. In other words, settlements were designed not to hurt too much, but just the right amount.

Even a “record” harsh settlement doled out to the French bank BNP-Paribas in 2014 for sanctions violations, which included a rare plea to a real criminal charge in addition to a $9 billion penalty, only incurred a one-year exile from U.S. dollar transactions. Even when throwing the proverbial book at firms, regulators made sure to pave clear roads to redemption.

This was not necessarily a bad thing. There’s no reason why anyone should want systemically-important institutions (who are often major employers) to be wiped off the face of the earth, willy-nilly. The problem is that if you completely remove the threat of a lost charter, it signals to everyone that regulators will tolerate even open repeat violations. In this light, even a “tough” public punishment becomes a license to steal.

Hudson, for instance, notes that announcements of many of the biggest money laundering settlements involving the firms in the FinCen files were accompanied by jumps in the company’s share prices. HSBC’s shares rose in London and Hong Kong after the 2012 settlement, and even BNP’s criminal plea deal prompted a 3.6% jump in share price. Markets see the settlements as seals of approval going forward, and “send the signal that the regulators are looking to do a deal,” Hudson says.

The irony of all this is that the Trump era has seen much gnashing of teeth over America’s withdrawal from global bureaucracies like the Paris Agreement, the “Open Skies” arms control treaty, the Iran deal, and other conventions. Meanwhile, in the one place we want an isolationist-style wall, around the Federal Reserve-connected American banking system, barriers are wearing away. Only in crime, it seems, is America becoming more global in outlook.

Trump Campaign Secretly Paying $180,000 A Year To His Sons’ Significant Others

Lara Trump and Kimberly Guilfoyle are each receiving $15,000 per month through the campaign manager’s private company, GOP sources said, to dodge FEC rules.

President Donald Trump’s campaign is secretly paying one Trump son’s wife and another one’s girlfriend $180,000 a year each through the campaign manager’s private company, according to top Republicans with knowledge of the payments.

Kimberly Guilfoyle, the girlfriend of eldest son Donald Trump Jr., and Lara Trump, wife of middle son Eric Trump, are each receiving $15,000 a month, according to two GOP sources who are informal White House advisers and who spoke on condition of anonymity.

They were unsure when the payments began but say they are being made by campaign manager Bradley Parscale through his company rather than directly by either the campaign or the party in order to avoid public reporting requirements.

I can pay them however I want to pay them,” Parscale told HuffPost on Friday, but then declined to comment any further.

Critics of the arrangement, including Republicans, said the setup was designed to get around Federal Election Commission rules that require campaigns, political parties and other committees to disclose their spending in detail.

A lot of people close to Donald Trump are getting rich off of his campaign,” said Paul Ryan, a campaign finance legal expert at the watchdog group Common Cause. “They don’t want donors to know that they’re getting rich. Because, at the end of the day, it’s donor money.”

Stuart Stevens, a top aide to 2012 GOP nominee Mitt Romney’s campaign, was even more blunt: “That’s why Parscale has the job. He’s a money launderer, not a campaign manager.”

Lara Trump, 37, was a campaign “surrogate,” making appearances and conducting media interviews on behalf of her father-in-law, in the 2016 campaign and continues to participate in “Women for Trump” events as a 2020 campaign “senior adviser.” In early 2017, Parscale confirmed he had hired her to work for his company, which was, in turn, continuing to work for Trump’s campaign.

Guilfoyle, 51, has been accompanying Donald Trump Jr. to campaign events since they began dating two years ago. She had been a Fox News personality until she left the network in 2018. In January 2020, she was named chair of Trump Victory, a joint fundraising committee used to solicit and distribute money to the Trump campaign and the Republican National Committee.

“She’s doing stuff, but she’s just like this silly cheerleader,” one of the White House advisers said of Guilfoyle. “She gets on these donor calls, and it’s ridiculous.”

The existence of the payments, but not the amounts, was first reported by The New York Times, which recounted a scene in which Guilfoyle confronted Parscale about why her payment checks were always late and Parscale responded that he would look into it. That incident took place June 18, 2019, at a Trump reelection rally in Orlando, Florida, suggesting that payments to Guilfoyle had been taking place for some time.

FEC rules require that campaigns, political parties and other committees disclose all expenditures, including payments to employees. But the Trump campaign and the RNC have been getting around it by routing many of their payments through Pascale’s private companies.

In all, Parscale’s firms ― Giles-Parscale and Parscale Strategy LLC ― have been paid $38.9 million by Trump’s campaign, the RNC, joint fundraising committees and a pro-Trump super PAC between the day Trump took office through February 2020, according to the latest filings available.

Numerous RNC officials and members did not respond to HuffPost queries about the arrangement. One who did, Arizona committee member Bruce Ash, wrote: “Drop dead!”

Trump funneling donor money into his children’s households builds on his practice of funneling it into his own pocket, which began in 2016, right after he became the presumptive Republican nominee and began raising large amounts of GOP money. Trump immediately quintupled the rent he was charging his campaign at Trump Tower, from $35,458 per month to $169,758. He also began billing the campaign five- and six-figure sums for use of his hotels and golf courses for hosting fundraisers.

Those practices continued after his election and through to this day. His campaign still pays Trump Tower $37,542 a month in rent, even though it is based in a high-rise office building in Arlington, Virginia. The campaign and the RNC continue to host fundraisers at Trump’s properties, putting hundreds of thousands of dollars at a time into his own cash registers.

All of those entities are owned by the Trump Organization, which in turn is owned by a trust that Trump created after his election and of which he is the sole beneficiary.

Grift and graft is the family business,” said Robert Weissman, president of the liberal group Public Citizen.

The payments to Guilfoyle and Lara Trump may also complicate the Trump campaign’s efforts to attack presumptive Democratic nominee Joe Biden’s son Hunter Biden for accepting lucrative board memberships when his father was vice president.

Trump and his top aides in 2018 saw Joe Biden as the most dangerous threat to his reelection among the Democrats in the primary field and sought to damage his candidacy by raising questions about his son’s business activities. Indeed, Trump wound up getting impeached for trying to coerce the president of Ukraine into announcing an investigation into Hunter Biden, using $391 million in congressionally approved military aid as leverage.

Even some of the Republican senators who voted to acquit him said that what Trump did was wrong and illegal but not bad enough to warrant his removal from office.

Why is Trump getting hysterical over the Mueller’s probe if “there was no collusion”?

I’m going to suggest another, non-exclusive motive. It comes from living in NYC with Trump’s showboating since the late 1970s. We NYers have followed Trump’s trainwreck career for decades. He’s such a media hound that it was impossible not to. I even interviewed for an IT job at Trump Organization in the early 90s and met him briefly in the elevator on the way out. He wore way too much cologne.

Trump will be tough for Mueller to nail on conspiracy because he never has his fingerprints on any of the shady stuff. He has others do the jobs for him while he pleads ignorance. Trump is like a mafia godfather insofar as he has capos and soldiers do his dirty work and report back while he keeps clean hands. That was the role of sleazeballs like Michael Cohen and Felix Sater. They’re the ones who are exposed. It explains why Mueller has leaned so heavily on Cohen, Stone, Manafort, et al. But they’re just the latest in a line of such “fixers”.

During the Trump Tower-to-early Atlantic City days it was John Cody and Daniel Sullivan (Google them), both with strong connections to the Genovese and Gambino crime families through the construction unions. As those old mafia families were dismantled by DOJ, Trump cozied up to the growing Russian mob in NYC. Cohen and Sater were perfectly placed for that through the old El Caribe club, the US headquarters for Simion Mogilevich, the boss of all Russian bosses. Cohen’s family owned that club.

Trump is hysterical because Mueller, and by extension the NY AG, Tish James, have an all-access pass to Trump’s past — 35 years of questionable business dealings, curious partnerships and cash and potential illegal activities that have already cost Trump tens of millions in fines. Most of it is protected by the statute of limitations but a lot of it isn’t, fraud being the main one. Fraud includes money laundering: years and billions in illicit Russian cash flowing through Trump, his company and his holdings. I believe this is where Trump is most vulnerable. For that matter, so does Steve Bannon, who said as much. I also believe that’s why he won’t release his tax returns.

If Mueller can build a case of long-term, organized fraud, guess what? He has a RICO predicate. The evidence doesn’t even have to point at Trump directly… not anymore than it did Fat Tony Salerno of the Genovese family, Tony Ducks Corallo of the Lucchese family and Carmine Persico of the Colombo family, all of whom got in excess of a hundred years each. It just has to show that he profited from it, controlled it and had some knowledge of it.

Trump’s lapdog DOJ director won’t sign off on the RICO predicate? Doesn’t matter. NY state has its own RICO laws that are just as draconian.

IOW, I think Trump is less worried about Russian “collusion”, where he believes he’s provided plenty of denial room for himself, than he is a RICO case targeting Trump Org.

I also think it’s very possible that there was no actual collusion on Trump’s part to influence the 2016 election. It could well be that Putin decided unilaterally to get Trump elected because it was in his best interests and the interests of his oligarch friends to have Trump in the White House to protect the gravy train. It’s curious that Felix Sater’s name never comes up in the course of Mueller’s investigation. He would be the logical point man for any organized money laundering with Russia and the mob. Perhaps he was the first to willingly flip? Another felony conviction would be Strike Three for him and a very long prison sentence. He’s already flipped to the government once before so it’s definitely in his genes.

U.S. Rejects New European Dirty-Money Blacklist

List of 23 jurisdictions also includes Panama and Puerto Rico

The EU list includes Saudi Arabia and Panama, but it also U.S. territories such as the U.S. Virgin Islands and Puerto Rico, placing them alongside the likes of Iran, Syria and North Korea.

Banks in the EU will be required to use increased due diligence on financial operations involving customers and financial institutions from the blacklisted countries.

.. The U.S. Treasury Department said it “has significant concerns about the substance of the list,” saying its development was flawed. It said it didn’t expect U.S financial institutions to take the European Commission’s list into account as they carry out anti-money-laundering compliance.

.. The U.S. Treasury said the European Commission didn’t include sufficiently in-depth reviews, only gave affected jurisdictions a cursory basis for the determination, told the jurisdictions they were going to be included only days before the announcement and didn’t give them meaningful opportunity to challenge their inclusion.

.. Policy makers on both sides of the Atlantic need to acknowledge that nobody is doing enough to combat money laundering, said Clark Gascoigne, the deputy director of the Financial Accountability and Corporate Transparency Coalition, a consortium of research and advocacy groups.

Trump’s trip to Europe was a complete disaster, and not because he acted like a boorish bully

On his recent visit to Europe, he managed to convey once again his contempt for America’s European allies, and to demonstrate that he places more value on his own personal comfort than on the sacrifices that US soldiers have made in the past.

The trip itself cost millions of taxpayer dollars, yet Trump chose to skip a key ceremony honoring US war dead at Aisne-Marne American Cemetery because it was raining.

The White House offered up a cloud of unconvincing excuses for Trump’s absence, but other world leaders were not deterred by the fear of a few raindrops, and neither were past presidents ObamaClinton, Bush, or Kennedy back in their day.

By choosing to stay warm and dry in his hotel room while other world leaders acknowledged the heroism of those who fought and died for freedom, Trump gave the concept of “American exceptionalism” a whole new meaning.

Overall, Trump seemed intent on proving that while the obligations of being president might force him to go on such trips, he doesn’t have to behave himself while he’s there.

For example, Trump is correct to accuse China of engaging in a variety of predatory trade practices and of failing to live up to its World Trade Organization commitments. He is also right when he complains that Europe has neglected its own defenses and relies too much on American protection (though he still seems to think NATO is a club with membership dues)..

He is hardly the first US official to criticize European defense preparations but being unoriginal doesn’t make it wrong.

Trump is also correct in his belief that Europe, Russia, and the United States would be better off if the divisions that presently divide them could be bridged or at least alleviated.

It would be better for Europe if Russia withdrew from Ukraine, stopped trying to intimidate the Baltic states, and stopped murdering former spies in foreign countries.

It would be good for Russia if Western sanctions were lifted and it no longer had to worry about open-ended NATO expansion. And it would be good for the United States if Russia could be pulled away from its increasingly close partnership with China.

For that matter, Trump wasn’t wrong to see North Korea’s nuclear and long-range missile programs as a serious problem that called for creative diplomacy.

The real problem is that Trump has no idea what to do about any of these issues, and he seems incapable of formulating a coherent approach to any of them. To the extent that he does have an actual policy toward Europe, for example, it is the exact opposite of what the United States ought to be doing.

Trump’s broad approach to Europe is one of “divide and rule.” He’s called the European Union a “foe” of the United States, and he has backed a number of the political forces that are now roiling the Continent and threatening the EU’s long-term future.

He endorsed Brexit, expressed his support for Marine Le Pen in France, and thinks well of illiberal leaders like Viktor Orban of Hungary and Andrzej Duda of Poland. Why? Because he thinks dividing Europe into contending national states will allow the larger and more powerful United States to bargain with each European state separately rather than face all of them together, and thus secure better deals for itself.

This approach might be termed “Neanderthal realism.” Playing “divide and rule” is a good idea when dealing with real enemies, but it makes no sense to sow division among countries with whom one has generally friendly relations and close economic ties, and when their collective support might be needed in other contexts.

This approach also runs counter to Trump’s stated desire to reduce US security commitments to Europe and to get Europe to take on greater responsibility for its own defense.

If you really want the United States to get out of the business of protecting Europe, you should also want Europe to be tranquil, capable, prosperous, and united after the United States withdraws. Why? So that Washington doesn’t have to worry about developments there and can focus its attention on other regions, such as Asia.

A Europe roiled by xenophobia, resurgent hyper-nationalism, and persistent internal wrangling wouldn’t be to America’s advantage; it would be just another problem area we’d have to keep an eye on.

Nor would a divided Europe be of much use in addressing any of the other problems on America’s foreign-policy agenda.

Why doesn’t Trump see this? Possibly because he is reflexively relying on the same tactics that brought him to the White House.

It has worked tolerably well here in the United States, because a lot of Americans are still angry or fearful and Trump is both shameless and adept at fueling those emotions. This same instinct leads him to behave abominably abroad: Insulting British Prime Minister Theresa May and London Mayor Sadiq Khan, deriding Prime Minister Justin Trudeau of Canada as “Very dishonest & weak” or derisively tossing Starburst candies to German Chancellor Angela Merkel during a meeting of G-7 leaders.

.. The problem, of course, is that the boorish behavior and conflict-stoking policies tend to backfire on the world stage.

.. Trump’s bullying bluster didn’t win big trade concessions from Canada, Mexico, or South Korea; the shiny “new” trade deals Trump negotiated with them were nearly identical to the old arrangements and in some ways inferior to them.

And given how Trump has treated America’s allies, why would May, Merkel, Macron, Abe, or Trudeau do him (or the United States) any favors? The declining US image abroad compounds this problem, as foreign leaders know their own popularity will suffer if they help Trump in any way.

.. Trump’s personal conduct is not even the biggest problem. Arguably, an even bigger issue is the strategic incoherence of his entire transactional approach. His overarching objective is to try to screw the best possible deal out of every interaction, but this approach instead makes it more difficult for the United States to achieve its most important foreign-policy goals.

.. Threatening trade wars with allies in Europe or Canada makes little sense from a purely economic perspective, for example, and it has made it harder for the United States to address the more serious challenge of China’s trade policies.

If Trump were as worried about China’s trade infractions as he claims to be, he would have lined up Europe, Japan, and other major economic actors and confronted China with a united front. Similarly, pulling out of the Iran nuclear deal and threatening allies with secondary sanctions not only raises doubts about America’s judgment (because the deal was working, and the Europeans know it); it just fuels further resentment at America’s shortsighted bullying.

.. It is increasingly clear that Trump was never the brilliant businessman he claimed to be; he got most of his wealth from his father using various shady tax dodges, and the Trump Organization may have been heavily dependent on illegal activities like money laundering.

.. We should focus less on his personal antics and inadequacies and focus more on his inability to formulate effective policies, even on issues where his instincts are in fact mostly correct.

.. Sadly, the 45th US president possesses a world-class ability to get things wrong, even when he’s right.

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