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Immigration Reform, Bulk Cash, and Border Security

January 30, 2013

By Ann Hollingshead

Ann Hollingshead is a Financial Transparency Coalition blog contributor, whose posts appear weekly. Formerly a Junior Economist at Global Financial Integrity, Ann is now pursuing a Master of Public Policy (MPP) from the University of California Berkeley. Follow her on Twitter: @AnnHollingshead.

flickr / aresauburn

The last blue moon occurred on August 31st of 2011 and we won’t enjoy another until 2015. In the meantime, the Senate has fulfilled its duty to introduce truly bipartisan legislation on a hot button political topic exactly once. I’m talking about the Senate’s immigration reform plan—which this week a group of senators from both parties unveiled and President Obama promptly endorsed.

One key element of the Senate’s plan is a provision which stipulates that illegal immigrants would not be able to become American citizens until the U.S. government takes action to adequately secure the border. Of course, this brings up the question of what does a “secure border” even mean? At what point can we say that the border is completely secure? And given our looming budget problems, how much will the boots, trucks, x-rays, fencing, dogs, and cameras we need to get to that complete security cost us?

Over the last ten years, the focus in the conversation about border control has shifted several times. Just after 9/11, the U.S. bolstered border security out of the fear that terrorists could sneak weapons in from Mexico. Later, when cartels threatened to unravel Mexico, these concerns were overshadowed by drug trafficking. Then, when unemployment in America soared, the central theme in the issue turned to illegal immigrants.

Despite the tone of our current debate about the line that separates the United States from Mexico, border security is not, in fact, exclusively about illegal immigrants. In fact, over the last three decades, and particularly in the last few years, the number of U.S. border patrol agents and funding for Customs and Border Protection has increased dramatically. Meanwhile, illegal immigration has dropped by half in the last five years, a testament to this dramatic increase.[1]

Missing from this conversation is not the emphasis on illegal movements of humans, but rather the illegal flows of cash.

On this blog, we talk a lot about illicit financial flows through trade mispricing, transfer pricing, and banking channels. Much of this is recordable, albeit indirectly. What we don’t talk about as much are the movements of cash carried in suitcases. But it’s not because it’s small potatoes. In fact, federal authorities estimate that between $18 and $39 billion in illicit cash is laundered across the southwestern border between the U.S. and Mexico every year. And as we step up our scrutiny of banks, expect criminals to increasingly resort to physically moving money.

Given how much money we’re already spending on the “boots on the ground” approach to border security, you might ask how throwing more money, officers, and x-rays at this problem will stem the flow. And you’d be right. While ramping up security has increased bulk cash seizures from $7.3 million in 2005 to $150 million in 2011, we’re still a long, long away from putting a dent in this problem. Doing the math, $150 million is less than 1% of 18 billion—the low end of the estimated range.

In fact, the more compelling solutions (and, not coincidentally, instances of large cash seizures) occur in joint operation and cooperation between U.S. law enforcement officials with their counterparts domestically, in Mexico, and even further south into South America, where much of these tributaries of illegal money flow. Yet much of our law enforcement in this area—as with national security—is highly compartmentalized given the nature of the sensitive information it involves. Yet as Officer Andrew Tammaro argues in a recent paper on the issue:

Getting high-value information into the hands of law enforcement officers as quickly as possible leverages information across a wider community of interest to identify and disrupt illegal activity. Achieving greater coordination among national law enforcement elements serves as a force multiplier by offering greater potential for individual jurisdictions to find relevance in seemingly unconnected events. This increased capacity can effectively disrupt and ultimately dismantle the means of sustainability for criminal organizations or the illicit systems they employ.

The issues involved in immigration reform are tightly interwoven with this issue. None of these dynamics exist in a vacuum; drug trafficking, human trafficking, movements of bulk, and illegal immigration are interlinked. The discussion of tightening border security we’re having under the conversation about immigration reform must also address the imperative to secure the border by reducing movements of bulk cash between the U.S. and Mexico. But there is no reason to limit the idea of “border security” to boots on the ground. Better information sharing, cooperative investigations, and cross-jurisdictional and cross-national cooperation are all components of this imperative. I’ll keep my fingers crossed we don’t have to wait for the next blue moon for the Senate to take action.


[1] This is also a result of the fact that there are fewer jobs in the United States attracting immigrants looking for work.

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Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.

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