Despite this heated protest, the fact is, Philip Morris products frequently turn up in money-laundering and smuggling cases. In her testimony before Congress, Kertzman noted that if all the cigarettes arriving in Aruba and Panama– both notorious transshipment sites for contraband bound for Colombia–were actually consumed locally, “each Panamanian or [Arubian]–men, women, and children–would have to smoke 10 packs of cigarettes per day.” And one of the firms that had its money seized in the Carranza case was Panamanian company Marlex S.A.–a former distributor of Philip Morris products. “Philip Morris terminated its sales to Marlex in 1997,” notes Leiber, “and has taken steps since the end of 1998 to assure that Marlex is not supplied with any products that we sell to our customers.”
FIRST LINE OF DEFENSE
Ultimately, the first line of defense for any company is its employees, who must balance a natural desire to make sales and please the customer with the seemingly remote possibility that they will suddenly find themselves awash in cocaine money.
That’s exactly what happened to salesman Dwayne Kahl at GE’s Louisville-based appliance division. His delight at landing a $40,000 sale of air conditioners quickly turned to suspicion when the payment arrived. “I had requested a certified check,” he says, “and they sent me about 35 money orders. I was really confused. I’d never had that happen.”
Kahl turned to his risk manager, David Purdie, who called the customer. “[He] answered on a cell phone [at what] sounded like a dock,” says Purdie. “He was very short, very abrupt.” Thanks to GE’s anti-money-laundering policy, Purdie asked only a few questions before he hit the mute button and told Kahl they couldn’t accept the sale.
Kahl and Purdie now star in GE’s corporate integrity training video, which not only emphasizes GE’s formal know-your-customer and acceptable- payment policies, but also encourages employees to report any concerns about suspicious activity. “We walk away from business, I’m sure, every day around the world,” CFO Keith Sherin notes in the video. “And that’s OK.”
Tim Reason is a staff writer at CFO.
A FISTFUL OF PESOS
The Colombian Black Market Peso Exchange (BMPE) was formed more than 50 years ago, not to launder drug money, but to offer Colombian importers in need of U.S. dollars an alternative to the Colombian Central Bank exchange, which enforces import duties and tariffs. It is technically illegal but widely tolerated. There are six basic steps to laundering drug money through the BMPE:
1. Colombian drug cartels smuggle narcotics into the United States, where they are sold for dollars at profits as high as 5,000 percent.
2. With the dollars in safe houses in the United States, the Colombian cartels contact a peso broker, or cambista.
3. The cambista sends his agents in the States to collect the dollars, and pays off the drug cartel in Colombian pesos–minus a steep discount of as much as 20 to 40 percent.