by Jerry Brito

TIL: Instant run-off Trump and the origins of global AML

Instant run-off voting is an alternative voting system used in about two dozen city elections, including San Francisco and New York City. Instead of simply voting for one candidate, voters rank the candidates in order of preference. When the votes are counted, if a candidate gets more than half of all votes, he wins. If no one gets a majority, then the candidate with the fewest first-choice votes is eliminated. The votes that went to the eliminated candidate are redistributed to the second-choice candidates on those affected ballots. This keeps going until a candidate has more than half the votes and wins.

This is supposed to avoid results where most voters don’t like the winning candidate. Usually this happens when two or more ideologically similar candidates split the vote. For example:

In an IRV system, Al Gore could have won Florida (and with it, the presidential election) in 2000 when Ralph Nader voters might have picked Gore over George W. Bush as their second choice[.]

That’s from this interesting article from City Journal delving into IRV and how it helped the radical Chesa Boudin win the San Francisco DA election. But here’s what I learned that’s really interesting:

[I]n 2016, Donald Trump would have won the popular vote (and a few states that he barely lost, like Minnesota) when Gary Johnson and Evan McMullin voters could have chosen him as their second choice over Hillary Clinton.

It’s a little too subtle or he would have already banged on about this.

Here’s something else that amused me. According to this provocatively titled article, global AML harmonization—vital for the U.S.’s sanctions regime today—has a sneaky origin. Essentially,the industrialized powers “bypassed” having to reach global consensus through a multilateral treaty process. How? In 1989 the G7 simply created a“task force” to address drug trafficking, and it later expanded its remit to include money laundering. You may have heard of it; it’s called the Financial Action Task Force (FATF).

After a sluggish start, with few nations signing up to its compliance model, FATF made an offer governments couldn’t refuse … FATF rated countries’ anti-money laundering regimes and issued “black lists” and “grey lists” publicly naming those not meeting its “recommendations”. Banks did the rest. Treating the ratings and lists as a proxy for risk, access to the financial system became difficult for many countries. FATF’s intention (in its own words) was to “pressure” countries to comply, “to maintain their position in the global economy”.

Risking exclusion from financial markets, 205 countries and jurisdictions “voluntarily” joined the anti-money laundering movement.

The FATF’s legitimacy is solid, though. Democracy and sovereignty are, of course, secondary to fighting money laundering.