SCANDAL WIDENS AS LAWMAKERS TAKE STEPS TO AVOID REPEAT.

While senior Clinton administration officials were busy with their damage limitation efforts, the Russian money laundering scandal appeared to be widening. U.S. investigators were cited yesterday as saying that as many as ten banks may have been used to divert as much as US$15 billion from Russia. The anonymous sources named Fleet Financial Group Inc. in Boston as one such institution. The same sources were quoted as saying that BankBoston and J.P. Morgan have launched their own internal investigations “after identifying suspicious accounts” linked to Benex, the trading company headed by Peter Berlin, a Russian who is married to recently dismissed Bank of New York executive Lucy Edwards. The publishing newspaper repeated its assertion that investigators believe that up to US$10 billion from IMF loans were “diverted by Russian officials and organized crime groups through several of these banks and banks abroad” (USA Today, September 23).

One positive effect of the Bank of New York scandal is that it has prompted the administration to move ahead with new anti-moneylaundering regulations. U.S. Attorney General Janet Reno and Treasury Secretary Lawrence Summers announced yesterday a package of new laws aimed at thwarting the laundering of money, particularly drug-trafficking profits, through U.S. financial institutions. The new regulations will require that check cashing outlets, brokerage firms and casinos report suspicious activities, and make corruption and illegal arms dealing subject to prosecution under U.S. money laundering laws (AP, September 23).

REACTIONS FROM RUSSIA ALL CARRY SAME TONE.