When I was a boy, I loved the fairytale, "The Emperor Wears No Clothes."

Unfortunately, the metaphor could well be used to describe our efforts against international money laundering. The overwhelming majority of observers are unwilling to see what is obvious: our anti-money laundering efforts are just a percentage point away from total failure.

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But, this is no fairytale. The worldwide failure to combat money laundering has a dramatic impact. Why? Because outside of crimes of passion—for example, murder committed in a jealous rage—criminals, kleptocrats, and some unscrupulous companies are motivated by greed.

In today’s interconnected world, the manifestations of unfettered avarice impact us all. We see it in our communities: the opioid, meth, and cocaine epidemics are devastating. Human trafficking, fraud in government programs, and identity theft can affect our daily lives. Of course, money laundering and terror finance also impact national security.

Sometimes law enforcement, policymakers, and the media get so distracted with the immediacy of the criminal behavior that they forget the aim of criminal activity isn’t the crime itself—but the proceeds of the crime. Just about everybody agrees that the “War on Drugs” failed. But we do not acknowledge that our inability to stop the laundering and seize the proceeds fuels the greed behind the drug trade.

How much money is being laundered? Estimates are all over the map, but the bottom line is: a lot. The IMF and United Nations Office on Drugs and Crime (UNODC) estimate the scale of global money laundering falls somewhere around two to five percent of global gross domestic product, roughly the size of the U.S. federal budget. The IRS says that “money laundering is tax evasion in progress.” If tax evasion here and abroad is included in the count, the magnitude of international money laundering is staggering.

“Total Failure Is Just a Decimal Point Away”

How well are we doing in fighting the problem? The data present a bleak picture. Despite periodic, positive pronouncements from Treasury and various administrations, here are a few sobering numbers:

According to the UNODC, less than one percent of global illicit financial flows are seized and forfeited.

Raymond Baker, a financial crime expert, notes that the numbers show enforcement fails 99.9 percent of the time. “In other words, total failure is just a decimal point away.”

Dated information suggests money launderers face a less than five percent risk of conviction in the U.S. And, according to the State Department—buttressed by my personal observations—the situation in most areas of the world is even worse.

As a former Treasury special agent who investigated money laundering and terrorist finance, I have the utmost respect for law enforcement personnel who work hard to follow the money trails—sometimes at great personal risk. Make no mistake, cases are being made. Some investigations are complex and truly innovative. But dividing the amount of money laundered by the number of successful cases demonstrates that our current efforts are essentially futile.

What Can Be Done?

Since retiring, I’ve advanced a number of “steps-forward” on how to more effectively combat money laundering.

One of the things we must do immediately is end the incorporation of anonymous shell companies. The U.S. is one of the easiest places in the world where terrorists, human traffickers, and corrupt foreign politicians can open anonymous companies to launder illicit money with impunity. When investigating the most heinous crimes, it is commonplace for law enforcement to hit a dead-end when encountering a shell.

“Anonymous shell companies… are one of the primary tools used by bad guys to openly acquire and access nefarious funds,” wrote Dennis Lormel, the FBI’s former anti-terror finance chief, in 2013. “These dubious dealings are not limited to… ‘offshore’ tropical islands. The United States is among the most egregious offenders with its woeful lack of regulations requiring the true ownership of companies to be identified.”

Little has changed since then.

In April, Patrick Fallon, head of the FBI’s financial crimes section, noted “While we [in the U.S. talk] about offshore accounts in other countries, I think we have a lot of room for improvement here to promote transparency… It is a significant impediment to our investigations when we can’t determine who the true owner is of a company.”

There is bipartisan legislation that would give our law enforcement officials the information they need to keep us safe.

This month, the nation’s top banks endorsed the legislation to ensure that they are not misused to launder illicit proceeds.

In addition to the banks, the measure enjoys widespread support from law enforcement groups like the Federal Law Enforcement Officers Association, as well as a broad array of anti-corruption, human rights, and taxpayer advocates.

Failure is hard to acknowledge and some benefit from the status quo, but the time has come to get this done.

We need to take a hard look at our anti-money laundering efforts. Congress should begin by acting to protect the American people from the harms associated with anonymous companies. Until then, we have to recognize the naked truth: “the emperor wears no clothes.”

John A. Cassara is a former U.S. Treasury special agent, who spent much of his career investigating money laundering and terrorist financing. His latest book is titled “Trade-Based Money Laundering: The Next Frontier in International Money Laundering Enforcement.”

The views expressed by authors are their own and not the views of The Hill.