Livingston Financial Planning

Follow The Money
(c) Buz Livingston

In the film adaptation of Carl Bernstein and Bob Woodward’s 'All the President’s Men,' their confidential source, 'Deep Throat' played by Hal Holbrooke, reminded them to follow the money.

Holbrooke also had a multi-decade career playing the role of 'Mark Twain.' Samuel Clemens also portrayed 'Mark Twain' and would find the adult film reference amusing.

However, laws and regulations in the United States make it difficult, sometimes impossible, to follow the money. The Tax Justice Network ranks the United States third in secrecy behind Hong Kong and Switzerland.

But, like college football recruiting, differences exist in how teams are ranked. Andrew Penney argues the United States is the number one tax haven globally. While Arthur Bullough claims the United Kingdom is the top dog. Regardless of who is on top, money laundering is a worldwide problem.

Criminals launder money by using multiple transactions through seemingly unrelated companies. For example, in his book 'Me, The Mob and The Music,' Tommy James of the Shondells fame recounts his adventures with Morris Levy.

James signed a record deal with Levy, who was later convicted of extortion along with a high-ranking Genovese family crime figure. Levy, for instance, owned musical venues, record-pressing plants, recording studios and record labels, along with a chain of record stores.

James left New York to avoid a mob war.

Crooks often use shell companies to hide ownership and the source of funds. Moving money from one shell company to another is a way to clean money. In early 2021, Congress included the Corporate Transparency Act (CTA) with a defense authorization bill. The law went into effect after both houses overrode a late-term Trump veto.

While a much-needed step, unfortunately the CTA provides for ownership disclosure to remain private and only available to state and federal officials generally under only a court order.

Real estate and art purchases are another way dirty money is cleaned up. Art sales traditionally have been secret. Both art and real estate transactions depend on how much someone is willing to pay. Last year, an unnamed Russian bought a $140 million home in South Florida. If they overpaid, so what. They have a marketable asset.

Money laundering takes different forms. Unsavory characters use philanthropy to polish their image and ingratiate themselves into society. American universities, charities and museums have accepted millions of dollars from Russian oligarchs. Venerated names include New York’s Museum of Modern Art, the Guggenheim Museum, the Massachusetts Institute of Technology and the Mayo Clinic.

Under the CTA, beneficial ownership information is reported to the Financial Crimes Enforcement Network (FinCEN), the Treasury Department’s financial intelligence unit. FinCEN is woefully underfunded. Currently, its budget is roughly the cost of a single F-35.

Dark money is as dangerous as any foreign threat.

For years, some downplayed the role of dark money, but Putin’s brutal invasion of Ukraine belies that argument. The Russian oligarchs who park their money in the United States are extensions of Moscow. The politicians, pundits and people who support them are useful idiots.

You can’t always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.

Walton Sun

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