Megan McArdle passes on word from Mark Kleiman that Rush Limbaugh could be indicted for money laundering.

How was Limbaugh laundering money? Did he have a dummy corporation into which he was funneling money from his drug and prostitution ring? Not exactly. He apparently withdraw legitimate funds from his legitimate banking account in $10,000 increments, a level which is under the amount needed to trigger an automatic reporting of the transaction. Notes Kleiman, this is technically a crime:

Here’s the statutory language (18 U.S.C. Sec 1956):

Whoever, with the intent –

(A) to promote the carrying on of specified unlawful activity;

(B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or

(C) to avoid a transaction reporting requirement under State or Federal law,

Megan is quite incensed by this potential misuse of the law, and says we all should be regardless of our feelings about Limbaugh, hypocrisy, or drug laws.

Even if you’re against drug laws — and I am — there is a legitimate case for them. We do prohibit behaviors that aren’t by themselves harmful because of the harm they might cause to others, and even libertarians accept some of those excercises of state power as legitimate. For example, most libertarians are in favor of laws prohibiting drunk driving, even though most drunk drivers make it home just fine without killing anyone, because drunk driving represents an unacceptable risk of bad accidents. Now, personally I think that the costs of drug prohibition are too high relative to its effectiveness, and that there are better places — such as the operation of automobiles or firearms — to draw a bright legal line so as to wall off potential harm to bystanders. But there are reasonable, smart people (such as Mark Kleiman) who believe differently.

Not so with money laundering. The “crime” is now at least three steps removed from any potential harm to others: remove money, buy drugs, consume drugs, operate automobile . . . casting a net this wide presents a potential intrusion into every facet of our lives in a way that prohibiting the purchase of certain chemicals does not. It also makes it more and more difficult to know whether or not you’re breaking the law . . . if I want to go buy a boat costing $15K, and the seller demands cash, and I withdraw the money in two $7500 lots to avoid the hassle of filling out a form, am I “laundering money”? Should ordinary citizens have to have a law degree to obey the law?

Money laundering statutes and their ilk illustrate beautifully one of the major potential costs of ineffective legislation. If you outlaw something that a motivated group of people really, really want to do, you will find that many of them still do it. Many of these people will be very dedicated to keeping you from catching them. Because it is hard to catch them (and because prohibition tends to produce nasty blackmarkets, with the associated crime), legislators will find it convenient to pass more laws making ancillary behaviors illegal. If left unchecked, this process will make so many things illegal that prosecutors can always get you for something. The prosecutorial wisdom that “they got Al Capone for tax evasion” is an extremely dangerous thing. Prosecutors know that they are good people, and criminals are not; it is natural that they should want as much power as possible to pursue them. (Which is why Janet Reno and John Ashcroft seem to be about equally hard on civil liberties.) But prosecutors are not perfectly wise, and it is folly to trust them with so much power.


Sadly, we’re doing this a lot of late. We passed RICO because organized crime bosses had gotten sufficiently clever that catching them commiting real crimes was difficult. With RICO, we can get them for doing things associated with crimes, which is much easier. And, because they’re the worst of the worst, few people object. But now we use RICO to go after anti-abortion activists. For that matter, we passed anti-terrorism legislation in the wake of 9-11 and are now using it against the DC snipers, who previously would have been thought of simply as murderers.

Whatever the merits of applying those laws creatively–and I suspect where you stand depends on where you sit with them–the potential for abuse under Administrations with agendas different from yours is always there–even 50, 100 years down the road. And what we wind up doing is undermining one of the most basic of our civil liberties, the protection against ex post facto laws. It’s rather hard to follow the law if its meaning can be determined post hoc to suit the needs of prosecutors. The Right, quite correctly, was up in arms in the 1960s and 1970s about criminals getting off on technicalities. But we’re now in danger of putting people in jail on technicalities. I’d say that’s worse.

FILED UNDER: Law and the Courts, Terrorism, , , , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Gabe Posey says:

    I agree completely and I think the point made here is glaring and obvious. We must strive to attain true balance. That is, in my humble opinion, the truest persuit of democracy. No one voice above any other but all heard in equality.

    But like too many laws, the hard part will be finding the line when both sides seek to move it for their own reasons. Democrats don’t typically tend to speak up for less government intervention but they do tend to speak up on rights of privacy. Republicans will most always proclaim the wonder of small government, except when it means giving people the death penalty.

    So where do we find the line? Where is the standard?

  2. Paul says:

    Well, I guess I’m going to the federal pen now.

    NOT ONLY have I gotten 9000 bucks out to avoid paperwork but I have counseled others to do the same.

    In one case I drove while my accomplice (er mother) did the transaction.

    Somebody bake me a cake with a nail file in it.

  3. Ross Judson says:

    I don’t see why this is much of a problem. The invisible movement of large sums of cash is what crime needs to survive. Being able to track the movement of large sums is critical to getting the criminals.

    On one hand I don’t necessarily like the government knowing what’s going on with my money, but on the other hand we all fill out a pretty extensive tax return every year…

    Just how bad is this form? I’ve never seen it, so I don’t know…

  4. Kevin Drum says:

    You know, I basically agree with Megan, but….

    Rush was doing this to buy illegal drugs, which is exactly what the law was intended for. It’s not as if this is some wild stretch.