Press Releases 2005
June 21, 2005
DEA Administrator Karen Tandy visits Panama
Administrator Tandy addresses banking officials in Panama City
Good afternoon. On behalf of the Drug Enforcement Administration, I am honored to join with Panamanian banking and government officials to discuss our joint efforts to target money launderers and the drug trade.
Ambassador Watt, when we met last summer in Washington, I was thrilled to take you up on your offer to visit Panama to see first-hand the great progress this country is making combating drugs and money laundering.
Seňora Cardenas, I cannot thank you enough for the strong support you have given the efforts of both our countries in the fight against drug trafficking and money laundering. We greatly value your friendship.
It’s been a terrific morning. My visit with President Torrijos was outstanding. We discussed the DEA and Panamian law enforcement’s long friendship. DEA and our predecessor agencies have been in Panama for 33 years. Three decades later, we count ourselves both fortunate and proud to have Panama as a partner.
I enjoyed meeting with Panama National Police (PNP) Director General Perez and his staff and also Judicial Technical Police (PTJ) Director General Jacome and his staff. Our agencies have some terrific joint investigations we’re working targeting drug traffickers and money launderers.
I’ve seen and learned that Panama is setting a new course, implementing harsher penalties and stricter laws to prevent money laundering. Your amended money-laundering legislation has gone a long way in this fight:
- by expanding the list of entities required to report currency transactions over $10,000,
- by requiring the reporting of suspicious activities, and
- by implementing controls to identify customers and report transactions that could constitute money laundering.
By also requiring remittance companies to adhere to “Know-Your-Customer” requirements, you’ve also closed off an avenue for drug traffickers and launderers to exploit. And by amending Panama’s penal code to expand the list of predicate offenses for which laundering proceeds is a crime from one offense to ten, this country has demonstated its determination to end this crime.
You should be very proud that Panama’s anti-money-laundering legislation is now considered to be some of the strongest in the region. The fact that your government has been asked to assist several nations is evidence that you are now viewed as a regional leader in the fight against money laundering.
I was also fortunate enough to visit this morning with Attorney General, Gomez. We had an excellent discussion about the leadership role that Panama can play throughout the region in fighting money laundering.
There is an opportunity here to build a partnership that is not unique to governments, that cannot occur without financial experts like you. Your expertise can help establish Panama as a leader in the financial fight against money laundering. I am looking forward to working with Panama and building this important partnership.
I want to commend all of you for this rapid progress and your commitment to combating international money laundering organizations that seek to corrupt and use Panama as a base of operations.
These actions are of course particularly critical in Panama, with its U.S. dollar economy, sophisticated banking sector, its status as the second largest free trade zone in the world and banking center for the region—all the same factors that make this country attractive to drug traffickers seeking to manipulate your system to their advantage.
Let these drug kingpins be on notice: We in law enforcement and the banking industry are using that same financial system to our advantage. While money is a drug trafficker’s number one objective, it also is his number one vulnerability. We are focusing our attack where money movement is most visible.
Every criminal involved in illegal drug trafficking -- from the kingpin and the enforcer, down to the courier and the street dealer -- all have the same motivation. It is all about the money.
To make a significant impact on the drug trade, there is no strategy more effective than following the money back to the drug source, targeting its laundering network, and eliminating the profit.
It is the profit that fuels the operations of drug cartels, their financial infrastructure, and the illicit systems through which drug money is laundered. When the profit goes, they will go.
At the DEA, we have put financial investigations at the forefront of our operating plan. DEA is making unprecedented seizures of drug traffickers’ illicit drug proceeds and related assets. DEA asset seizures totaled more than $500 million last year, an increase of 40 percent over the previous year.
But it is not enough. When I think about how much money changes hands every year in the United States for drugs, I know we have barely found the tip of the iceberg. $65 billion changes hands every year for drugs in the United States, and we have not even reached $1 billion yet.
I tell my DEA agents and state and local officers that following the money doesn’t mean you have to be an expert in financial matters—as I know many of the people in this room are. I tell our officers all it means is asking the basic questions. It is making sure that every person law enforcement debriefs is asked, “How much money is moving and how is it moving?”
When you know the answers, and they can work with experts such as yourselves, the investigation can follow the money. In the United States, we have great relationships with financial institutions and government regulators, and they are a tremendous asset in our investigations.
We are doing much better, but we have to do more. For DEA, I have set a goal to reach a $3 billion seizure mark in five years. Why $3 billion? Because the financial experts tell me that if you really want to hurt the command and control of these drug organizations, obviously you have got to take the profits away from them.
If you really want to hurt them and get into their pocket, you have to hit at least $3 billion because that is the measurable amount they will feel the loss of and which ultimately will start to diminish their desire to be in this business --- the declining profit simply won‘t be enough to overcome the costs and risks. So we are going to hit $3 billion.
Just last week, we concluded Operation Mallorca, a 2-year investigation targeting the money laundering activities of Colombian money brokers who funneled drug proceeds through the Black Market Peso Exchange. Some of these funds flowed through Panama. We arrested 36 people in the United States and Colombia and seized more than $7 million. What was tremendous in this case was that we were able to link the money to 13 major traffickers in Colombia and charge them in the United States.
This operation and ones like it that we are conducting bi-laterally in Panama are an important strategy. We must deprive drug trafficking organizations of their criminal proceeds before we can put them out of business for good. And law enforcement’s success in doing that comes from collaborating with you, the banking industry and government regulators.
I am honored to join with you, our Panamanian friends, who work together with us in the fight against money laundering. You are an important partner. Together, both our countries are making progress in the fight against drug traffickers who seek to take criminal advantage of our financial institutions and undermine our economy. These important efforts will help the citizens of both our nations live in the peace and safety to which they are entitled, free of drugs and their corrupting influence. Thank you.