Clarification/Follow-up by excon on 10/19/06 1:16 pm:
Hello again, El:

I couldn’t help but notice a little bit of self righteousness in your adherence to the law. However, I’m just as just as self righteous in my dissent. You believe you’re doing good for the country by obeying the laws. I believe I’m doing good for the country by breaking them.

Here’s why.

In the long run, something more ominous is at work. If a free society is to work, the vast majority of citizens must reflexively obey the law not because they fear punishment, but because they accept that the rule of law makes society possible. That reflexive law-abidingness is reinforced when the laws are limited to core objectives that enjoy consensus support, even though people may disagree on means.

But, society is weakened every time a law is passed that large numbers of reasonable, responsible citizens think is stupid. Such laws invite good citizens to choose knowingly to break the law, confident that they are doing nothing morally wrong.

The reaction to Prohibition, the 20th century’s stupidest law, is the archetypal case.

And, liberals aren’t the only ones who do this – not by a long shot. All employers are confronted with rules and regulations from Occupational Safety and Health Administration and the Equal Employment Opportunity Commission that they regard with contempt — not because they cut into profits, but because they are, simply, stupid. They impede employers yet provide no collateral social benefit. And so employers treat the stupid regulations as obstructions to be fudged or ignored. When they have to comply, they do not see compliance as the right thing to do, but as placating an agency that will hurt them otherwise.

The temptation for good citizens to ignore a stupid law is encouraged when it is unenforceable. In this, the attempt to ban Internet gambling is exemplary. One of the four sites where I play poker has blocked United States customers because of the law, but the other three are functioning as usual and are confident that they can continue to do so. They are not in America, and it is absurdly easy to devise ways of transferring money from American bank accounts to institutions abroad and thence to gambling sites.

And so the federal government once again has acted in a way that will fail to achieve its objective while alienating large numbers of citizens who see themselves as having done nothing wrong.

Reflexive loyalty to the rule of law is an indispensable cultural asset. This we agree on. However, the more honest citizens who take for granted that they are breaking the law, the more their loyalty to the law, and to the government that creates it, is eroded.

excon

Clarification/Follow-up by ETWolverine on 10/19/06 1:36 pm:
>>>All employers are confronted with rules and regulations from Occupational Safety and Health Administration and the Equal Employment Opportunity Commission that they regard with contempt — not because they cut into profits, but because they are, simply, stupid.<<<

I disagree with this point. Employers disagree with stupid laws because they are a waste of money and cut into profits. If it didn't cost them anything, they'd comply no matter how stupid, because "you gotta go along to get along". But when a stupid law (and I agree that OSHA regulations tend to be among the dumbest anywhere) starts cutting into profitability, that's when the employer starts balking at "going along".

(By the way, OSHA was created by liberals who felt that employers and employees are too dumb to protect themselves while doing their jobs.)

But you are right that not only liberals break "stupid" laws. Conservatives do it too. The difference is in how we define "stupid laws". A conservative sees a stupid law as anything that cuts into profitability and efficiency without providing a mitigating benefit in return. A liberal defines a stupid law as any law he personally disagrees with. Not that the definition justifies the act of breaking the law. Breaking the law to increase profitability and efficiency is just as bad as breaking the law because you disagree with it. There's no real difference in my mind.

And again, if you wish to break the law in protest, that's your choice. Feel free. But don't complain when the result is enforcement of the law. If you make a choice to break the law, you need to be aware of and be willing to accept the consequences of doing so. I'm not willing to accept those consequences, so I don't break the law.

Look, I work in banking, one of the most over-regulated, over-watched industries in existence, especially in the post-911 environment. We have some of the stupidest regulations and governmental reporting requirements you have ever seen. And we all grumble about how much harder it makes our jobs, how much less time we have to spend on financial matters and how much more time we are spending on reporting and compliance issues, and how it has begun to inconvenience the clients. But we do it anyway, because the consequences of not doing it is that we can be fined, shut down, individually fired, etc. We don't like the laws, but we comply anyway because that's the law. If we decided not to comply or only partially comply because its too inconvenient, we'd be out of business in a heartbeat. So the fact that some business owner decides that a law is too stupid and causes too much inconvenience or costs too much for him to comply with, I find myself singularly unmoved by the argument.

Elliot

Clarification/Follow-up by ETWolverine on 10/19/06 1:56 pm:
BTW, the gambling thing... that's actually because the gambling websites are actually laundering money for terrorist groups. The law was a reaction to 9-11. That's the real reason that the gambling sites are being cracked down on.

AND there's the fact that they can't exactly be regulated for adherence to the rules of the games. But that's more of a case of "buyer beware": if you know the game is (or may be) rigged and are willing to play anyway, that's your choice. On that basis alone, I wouldn't have passed or voted for such a law. But the money-laundering thing makes it a national security issue. And for thaqt reason I agree with the law.

Elliot

Clarification/Follow-up by excon on 10/19/06 2:07 pm:

Hello again, El.

Yeah, of course that's the justification they give, and you apparently buy. ANYTHING, as long as it's in the name of fighting terrorisim.

However, upon further inspection the truth behind the new law becomes clear. It's about protecting their buddies, and protecting your morals. Tom is right on.

Nope, El - they're lying. Internet gambling sites don't take cash deposits. As a banker, you should know that once the money is in the bank, it's already been laundered.

excon

Clarification/Follow-up by ETWolverine on 10/19/06 2:09 pm:
Excon, do you think I'm that stupid? The money is NOT laundered once it hits the bank. At that point it is still hot. It has to go through a number of steps before it is laundered and untracable. These are:

- Placement - putting the money into an account.

- Structuring - creating "transactions" as a pretext to move the money from one place to another.

- Layering - the act of moving the money between multiple accounts to muddy the trail.

- Integration - taking the now-laundered money and putting it back into the market in the hands of those who wanted the funds laundered in the first place.


Here's the internet gambling money-laundering scenario:

1) Terrorist funder places money in an account. (Placement)

2) Terrorist funder bets and looses to internet gambling site. (Structuring - via front business)

3) Terrorist funder pays his gambling debt via credit/debit card linked to the acount with the money. (Layering)

4) The gambling site pays the "winnings" to its "shareholders" who are linked with terrorist organizations. Or else the gambler has "a sudden windfall of good luck" and is paid out in laundered funds.(Integration)

Simply placing money in an account doesn't launder it. There's still a trail that can be followed back to an individual. Only by going through a complex process of transactions that make that trail untracable can the money be laundered.

The job of the bank is to stop the money laundering at step one... when the money is placed in an account. It is our job to question the sources of the funds (within reason) and question/report anything that doesn't add up. For instance, why is a lawyer or doctor placing large amounts of cash in his account. His business isn't exactly a cash-heavy business. Usually attornies are paid by check, and doctors get insurance payments deposited into their accounts. Why is a grocery store owner placing large amounts of cash into the bank but not taking any out for daily use at the store? Why does someone who earnes $30k per year as a jobber at a factory suddenly have large cash deposits of $10,000 or more? THIS is where most money laundering is stopped, through the vigilance of tellers, branck operations people and other folks who seem to be taking long lunch breaks while you wait on long lines.

But the point is that online gambling sites are extremely condusive to money-laundering, especially since so little of the activity requires actual personal contact, making it harder to pin down the players in the laundering scheme, and because the critical parts are done offshore, where US law doesn't apply. That's why the laws against online gambling are in place.

Please, excon, when it comes to matters of finance, I really do know what I'm talking about.

Elliot

Clarification/Follow-up by excon on 10/19/06 2:13 pm:

Hello again, Wolverine:

Tell us the truth, El. Are you one of those guys who goes 55, or is THAT a law you can break?

excon

Clarification/Follow-up by ETWolverine on 10/19/06 2:38 pm:
Usually 55. Sometimes 80. But that's when I'm willing to suffer the consequences of the ticket. Like I said... if you want to break the law, fine. Just be willing to suffer the consequences, and don't complain when you do, because the consequences are of your own making.

Elliot

Clarification/Follow-up by excon on 10/19/06 2:54 pm:

Hello again, El.

You've been watching too much cops and robbers.

>>>It is our job to question the sources of the funds (within reason) and question/report anything that doesn't add up.<<<

You're not regulated by the $10,000 cash reporting requirement? Do you snitch on your customers who deposit less? Are you a cop or a banker? Of course, you're REQUIRED to report more. Doing so doesn't make you a great citizen.

>>>For instance, why is a lawyer or doctor placing large amounts of cash in his account.<<<

My bank doesn't know if I'm a lawyer or a doctor. Yours does? What's the name of this institution that I'll NEVER put MY money into?

>>>Why does someone who earnes $30k per year as a jobber at a factory suddenly have large cash deposits of $10,000 or more?<<<

My bank doesn't know how much I make a year. My bank doesn't know how I'm paid.

Are you telling me that MY bank operates that way?

excon

Clarification/Follow-up by tomder55 on 10/19/06 3:31 pm:
I do not know the ins or outs of laundry so I defer . Many of the internet sites that have decided not to do America after the law was signed were operating in the UK and I doubt they were front operations . I think the seedier sights that are/will still operate in the Grand Caymans who will still take a US bet probably are fronts for 'Terror INC'.

Indeed, the new law will do little to stop online gambling, say gamblers, betting companies, and industry analysts alike. Instead, the law will drive out regulated, publicly traded companies like PartyGaming, the Gibraltar-based parent of PartyPoker, and make way for private gambling companies and banks based in nations where such industries are loosely policed at best. As a result, the new law could ultimately make billions of dollars in U.S. online gambling transactions more difficult to trace, and increase the likelihood that funds end up in criminal hands. "It leaves an opening for some of the more unscrupulous companies coming in from unregulated places," says Frank Catania, past director of New Jersey's Division of Gaming Enforcement and president of Catania Consulting Group [see BusinessWeek.com, 7/12/06, "Betting Against Online Gambling"].



My point was that the reason there are no domestic sites was an attempt by legislators to protect tax revenues of the States and the profits of the casino "interests " . I think instead of outlawing it in this country they should've embraced it ;figured out a way to tax it ,and use the revenue to combat problem gambling or fund schools like they allegedly do with State run numbers games . Maybe instead of collecting the taxes direct they could set up a licensing system like they do in other 'gaming' like fishing and hunting .I guarantee that it wouldn't take long before reputable casino operators like Trump or Steve Winn would have their own on-line sites and they would give away computers to geezers with free instructions on how to use them .

Clarification/Follow-up by ETWolverine on 10/19/06 3:45 pm:
Excon,

>>>You're not regulated by the $10,000 cash reporting requirement?<<<

What $10,000 cash requirement? I never heard of a $10,000 cash requirement. If I admitted to such a requirement, it might be construed as assisting someone in structuring. So what $10,000 requirement are you referring to? >wink<

Seriously, I have to watch for structured transactions that may be less than $10,000 for each deposit, but as a whole add up to more than $10,000. And that is just for filing a Currency Transaction Report (CTR). I have to file a Suspicious Activity Report (SAR) for anything that seems suspicious or out of profile, regardless of dollar amount. All of this is part of the Bank Secrecy Act.

>>>My bank doesn't know if I'm a lawyer or a doctor. Yours does? What's the name of this institution that I'll NEVER put MY money into? <<<

The Bank Secrecy Act also has Know Your Customer (KYC) requirements. We are required to gather certain information on every customer at the time they open an account, including their occupation, profession, employer, nature of their business, etc. It is all collected on the account application, and if the bank can't verify the information, they shouldn't be opening the account (or should close it as soon as they find out that they can't verify it). They should also have your ID and SSN on file. How hard do you think it is to find out about your employer and your job description with that information.

Believe me, your bank has more information about you than you think they do, and they are particularly good at getting that information and keeping it secure.

>>>My bank doesn't know how much I make a year. My bank doesn't know how I'm paid.<<<

No. But they know how much the average guy in your occupation is paid and how, and if you are making cash deposits that are significantly outside that profile, they know it. So if you are a jobber at the factory in a job that ought to be making $30k a year and who gets paid by check or direct deposit, and you suddenly have three consecutive cash deposits of $8,000 each, the bank SHOULD be asking all sorts of questions, and if the answers don't add up, they should be reporting it, whether you know it or not. There are certain profiles, and if your transactions don't fit into the profile, the bank becomes quite aware of it.

>>>Are you telling me that MY bank operates that way? <<<

Only if your bank is within the 50 states of the Union. These are the regulations required by EVERY bank in the USA, and the FDIC and OCC have become very diligent in enforcing them. Several banks have been fined HUGE amounts (even by banking standards --- HSBC recently got nailed for something like half a billion dollars in fines and a couple of bigwigs lost jobs --- I think one guy will be doing time too) for not properly implementing the rules of the Bank Secrecy Act/Anti Money Laundering regulations, and so all of the banks have now become very diligent in their BSA/AML compliance.

Elliot