Dirty Money: The Law, Politics, and Finance of Global (Anti-)Money Laundering

A new course I am teaching this week at Wharton has me very excited.

At Wharton, standing faculty are hired and promoted based almost exclusively on their research. The school puts enormous resources behind research support, more perhaps than any other school in America (certainly more than any I have ever encountered, and I know quite a few).

That said, as I noted last week, teaching MBAs is one of the highlights of my professional life. Our teaching loads are quite light, but the teaching I do is incredibly invigorating. Mostly, though, never the two lanes shall meet: I mostly teach in the required business ethics curriculum and do not work as a scholar in that field.

This week is different. Today is the second five-hour class (out of four total) of my new course, Dirty Money: The Law, Politics, and History of Global (Anti-) Money Laundering. It is taught as an intensive, immersive learning experience available to MBAs.

I am teaching the course for the first time and hope to write a book on the same theme. (Note to my editor: you’ll be getting this pitch after my book on Fed history ships!)

Here’s the course description from the syllabus:

In this course, we will explore a phenomenon that you will encounter – and indeed, have already encountered – on an almost daily basis, whether you know it or not: anti-money laundering. This curious set of practices and institutions explains most ways that money travels through the world. Criminals attempt to use money from illegal activities in ways that are otherwise legal; governments go to great lengths to forbid it. The result is that everyone – banks and businesses, consumers and entrepreneurs, politicians and citizens, immigrants and tourists, official institutions and a local food truck – is caught in a complex web of legal, historical, financial, and political factors that defines our modern financial system.

This course will equip students with an understanding of how and what money laundering is, what to expect as a business executive or entrepreneur in a world where money laundering and its prevention will motivate so many seemingly unrelated phenomena, and provide a broader context for understanding the modern global financial system.

For so quick a course – we have only a week together – we will focus on a wide variety of industries and practices. The sessions are roughly outlined below (please note that this syllabus will be revised in the coming weeks).

My pedagogical strategy is meant to guide and provoke. We will have debates about the appropriate role of government, regulations that strike you as sensible or not, compare different jurisdictions, watch depictions of money laundering in film and TV, have guest speakers, do breakout activities and other discussions, and much more.

The topics discussed include:

1. Session 1: Background, Structures, and the Mafia.

   1. Topics covered: Stages of money laundering, affected stakeholders, organized crime, strategies for money laundering, government responses, drug cartels

   2. Guest speaker: former FinCEN director and Wirecard CEO (the good one!) James Freis

2. Session 2: (Counter) Terrorism, Crypto and Digital Assets, Government Monopolies on Money and Its Alternatives

   1. Topics covered: Ideology and politics, money and war, the rise of crypto as AML evasion, current use cases of crypto/digital assets, evasion of oppression vs evasion of law (Venezuela vs US).

   2. Guest speaker: Grayscale Chief Compliance Officer Allison Roberts

3. Session 3: Sanctions and Banking

   1. Topics covered:

      1. Banking: AML/KYC, banker due diligence, beneficial ownership, infiltration, suspicious activity reports, fair banking/debanking.

      2. Sanctions: the rise of sanctions as a tool of statecraft, Russia invasion of Ukraine, SWIFT and its alternatives, international reserve currency status (uses and abuses), rivals to the dollar.

   2. Special activity: Anti-Money Laundering (AML) Movie with Zoom running commentary: The Laundromat

4. Session 4: AML and the Responsibility of Law-Abiding Businesses

   1. Topics covered: Shell corporations, tax avoidance vs evasion, jurisdiction shopping, bank and tax havens, profitable but immoral clients, AML and business ethics

   2. Special activity: Book club on Oliver Bullough, Moneyland and mock trial for the global tax avoidance industrial complex.

I may report back on the week’s events (I am writing this before class starts) but expect it will be a big success.