As more media companies realize Russia bought advertising space or promoted news stories — fake and otherwise — on their platforms, covert influence has become the new money laundering. Anti-money laundering laws provide useful lessons for combating covert influence and could be adapted for online media models that do not require users to be paid customers. And more recently, know-your-customer (or KYC) rules have required all financial institutions to verify the identity of their clients. The resulting paper trail has led to investigations in at least 79 countries. For example, new legislation proposed in Congress would require online platforms with more than 50 million users to report who their advertisers are and reveal the targets of messaging campaigns. All platforms could provide the option of being “verified” or not. This approach provides a framework for creating transparency, accountability and an audit trail by allowing users — and congressional investigators — to see whether news is being promoted by verified or unverified users. By applying a hybrid approach to know-your-customer rules, being a “known” customer would be voluntary — unlike in banking where it is mandatory — and Congress could design rules that allow non-paying users to either identify themselves or not, require advertisers to be identified and require record keeping by media companies for future investigations. Similarly, rules could be written in such a way to require to be reported suspicious online activity by foreign entities or unverified accounts. Americans’ First Amendment protections for these activities remain intact, despite the existence of both know-your-customer rules and financial reporting requirements.
Google is the most recent company known to have discovered evidence of Russian covert influence on its books. As more media companies realize Russia bought advertising space or promoted news stories — fake and otherwise — on their platforms, covert influence has become the new money laundering.
Both activities hide below the surface of legitimate enterprises, cast a shadow of disrepute on those very enterprises and can be neutralized through transparency and accountability.
Anti-money laundering laws provide useful lessons for combating covert influence and could be adapted for online media models that do not require users to be paid customers.
In the 20th century, the rise of organized criminal enterprises, like the Mafia and drug-smuggling cartels, led law enforcement officers and prosecutors to realize that investigating each murder, each coercion of a legitimate business and each drug shipment was an untenable and unsustainable investigative approach. Meanwhile, tax evasion was difficult to track and combat without documentation that held citizens accountable for their financial assets and earnings.
Government officials could not succeed against highly organized and sophisticated criminal activities simply by investigating and prosecuting each individual offense. They needed to track the flow of money, and create audit trails for the lifeblood that enabled these organizations and individuals to prosper.
For these reasons, anti-money laundering laws were created. In 1970, the Bank Secrecy Act required proper record-keeping, which officially made it illegal to conduct transactions “off the books.” In 1986, money laundering was designated a federal crime. And more recently, know-your-customer (or KYC) rules have required all financial institutions to verify the identity of their clients. These laws originated in the U.S., and have now been adopted in nearly 80 countries that want to disrupt illegal activities and do business with U.S. financial institutions.
Anti-money laundering laws have been successful in preventing criminals and terrorists from paying for goods and services with ease in the financial markets. Under these laws, nefarious actors have been relegated to using cash — which is significantly more cumbersome to transfer — or they risk leaving financial paper trails that can be presented to courtroom juries.
Social media benefits society by giving a voice and microphone to those who might otherwise be voiceless, but this same benefit becomes a liability in the hands of a sophisticated adversary.
The leak of more than 11 million financial and legal records in 2016, referred to as the Panama Papers, demonstrated the lengths people had gone to circumvent these laws and the power of transparency in holding wrongdoers responsible. The resulting paper trail has led to…