Pubdate: Sat, 10 May 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: David Migoya
Page: 17A

TREASURY: ADVICE TO BANKS NOT MEANT AS POT APPROVAL

A Director Denies That the Tips on Handling Marijuana-Related Firms
Were Words of Support.

The director of the Treasury Department division that offered banks
guidance on how to deal with marijuana-related businesses denied it
was encouraging the practice.

In a letter Thursday to senators who questioned the guidance,
Treasury's Financial Crimes Enforcement Network director Jennifer
Shasky Calvery said the guidance was intended to give law enforcement
"greater insight into marijuana-related business activity."

"FinCEN does not purport to enhance the availability of financial
services for illegal drug traffickers," Calvery wrote Sens. Dianne
Feinstein, D-Calif., and Charles Grassley, R-Iowa. "The primary
objective ... is to enhance financial transparency."

The senators, who co-chair the Senate Caucus on International
Narcotics Control, in April questioned FinCEN's authority to usurp
federal laws that keep the sale and possession of marijuana illegal,
despite Colorado and Washington voter approval to legalize it.

FinCEN and the U.S. Department of Justice in February offered guidance
to banks interested in doing business with the legal-marijuana trade,
which the senators said "turns FinCEN's mission on its head."

The agency's primary function is to safeguard the nation's financial
system from illicit use and to combat money laundering.

Feinstein and Grassley demanded answers to eight specific questions
about how FinCEN justifies giving advice to banks about how to deal
with pot money.

Grassley said Calvery's response proves "FinCEN's guidance to
financial institutions is absolutely contrary to the mission of the
agency."

February's guidance offered bankers little comfort with working with
marijuana businesses, instead requiring additional paperwork that
identified who was behind any banking transaction. Bankers said they
were not offered reprieve from prosecution should they unknowingly do
business with a criminal enterprise.

In her letter, Calvery said FinCEN wasn't telling banks they were free
from prosecution simply because marijuana was legal in Colorado and
Washington.

"Only the Department of Justice has discretion to determine whether to
prosecute violations of the (Bank Secrecy Act)," she wrote.

The Justice Department in February said it would be primarily
interested in businesses that violated any of eight "red-flag" areas
of interest, such as whether trafficking crossed state lines.

Grassley warned banks anew that working with marijuana businesses was
risky. "There are risks in doing business with the marijuana industry,
which should give the financial services industry little confidence
that it will be protected should an institution be federally
prosecuted for getting involved in illegal activities," he said Friday.
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MAP posted-by: Matt