The Foreign Service Journal, July-August 2005

local media channels; revival of American centers, English language programs and libraries overseas; expanded and reinvigorated exchange programs; revival of VOA Arabic; and, perhaps most fundamental, consoli- dation of clear lines of authority for public diplomacy at the Department of State. He calls for funding to be quadrupled to at least $4 billion annu- ally. The Council’s report could not be timelier, for the necessary consensus to improve exists. I agree with the report’s action plan, with the excep- tion of simply restoring VOA Arabic: I would prefer a country-specific approach targeted at key Arab states, as Radio Free Iraq was created to do. A new public diplomacy team, headed by Karen Hughes, is taking over (though not until the fall, regrettably). After four discouraging years, there appears to be a chance for a fresh start on Israeli-Palestinian peace, however long the odds; the situation in Iraq may still be salvage- able; and democratic trends are stir- ring tentatively in the region. Taking advantage of new developments, however, will involve more than increased resources or better mar- keting. It will require, in my view, acknowledgement of the resentment Arabs feel over U.S. policies affect- ing the Palestinians and a “decent respect to the opinions of mankind” — aspects of the problem all recent public diplomacy studies have addressed only lightly. David Newton was U.S. ambassador to Iraq and Yemen during his 36-year Foreign Service career. He served as a special envoy for public diplomacy after his 1998 retirement and then for six years as director of Radio Free Iraq. He joined the Public Diplomacy Council earlier this year, after this book was published. International Cooperation Pays Off Chasing Dirty Money: The Fight Against Money Laundering Peter Reuter and Edwin M. Truman, Institute for International Economics, 2004, $23.95, paperback, 218 pages. R EVIEWED BY T ODD K USHNER Combating money laundering — defined as the act of hiding the source, ultimate destination or intended use of funds — has long been a key com- ponent of the State Department’s International Narcotics Control Strategy. But even before the 9/11 attacks, the global anti-money laun- dering regime (known as AML) had begun to expand from that initial focus on drug trafficking and the criminal organizations behind it into an inter- national campaign which now also encompasses terrorist financing, cor- ruption, kleptocracy and other non- drug-related crimes. As a result, assessing and reporting efforts by host governments to comply with AML standards has become an increasingly important task for all Foreign Service posts in recent years. Money-laundering techniques have become more complex as criminals devise ways to beat the system arrayed against them, while the AML system has had to contend with multiple goals and institutional and attitudinal differ- ences among countries. It is timely, then, that Peter Reuter, a senior economist and criminology professor, and Edwin M. Truman, a former director of the Division of International Finance of the Board of Governors of the Federal Reserve System, have teamed up to produce a seminal study of this important sub- ject. In Chasing Dirty Money: The Fight Against Money Laundering , the two have put together a wide-ranging but compact book that demystifies the intricacies of money laundering and international efforts to counter it. Frequently drawing on economic and other analytical techniques, they set forth the important contributions of AML efforts, not only to fighting crime but to ensuring global financial system integrity and overall stability. Chapters three and four, in particu- lar, provide effective overviews of money-laundering mechanisms and techniques (placement, layering, integration) as well as the system of international standards and national laws and regulations set up to thwart them. Throughout the book, the authors discuss and demonstrate the analytical and policy challenges faced in attempting to evaluate the money- laundering problem and policy responses to it. No credible measure has been devised, for example, for the scope of money-laundering worldwide: various techniques produce estimates ranging from the small hundreds of millions to the trillions of dollars. Similarly, there is a dearth of credible performance measures to assess accurately the effects of AML measures, whether these are aimed primarily against crime or terrorism. The authors set forth some useful suggestions for improving assessments of overall money laundering and regimes to combat it. Despite those obstacles, however, Reuter and Truman make a com- pelling case that AML policies and measures are likely having positive and important — although possibly mod- est — results, even though these ben- efits are difficult to precisely measure. This book will be especially valu- able to those evaluating money-laun- dering challenges and responses. But it should also be of interest to all read- 80 F O R E I G N S E R V I C E J O U R N A L / J U LY- A U G U S T 2 0 0 5 B O O K S u