By Wally Adeyemo
Today, the US Department of the Treasury’s Office of Terrorism and Financial Intelligence held the third annual Partnership to Combat Human Rights Abuse and Corruption. The event brought together government officials, the financial industry, and non-governmental organizations and discussed global efforts to enhance financial transparency and practical ways beneficial ownership information has been used to address corruption and human rights abuse, among other topics. International partners representing France, the United Kingdom, and the Financial Action Task Force (FATF) also participated in the event.
I’m especially proud welcome my counterpart from the French Treasury, representatives from the United Kingdom, and the President of the Financial Action Task Force, who is helping to lead our global efforts to combat money laundering and financial crime and advance financial transparency.
Combatting corruption, the abuse of authority in government, business, or society for personal gain, is a priority for Treasury and for the Biden administration because it is essential to a well-functioning society, where the powerful and wealthy are required to following the same rules of the road as everyone else. Addressing corruption is about ensuring that governments and public resources actually serve the public, not private interests. This is the only way we can address the challenges we face not only in the United States, but also across the globe. In order to meaningfully address inequality, promote racial equity, and ensure we have the resources we need to make lasting investments in children, care, and competitiveness, it is essential that we address corruption.
This is my second tour of duty serving in government, and my second time serving at the Treasury. What drew me to public service in the first place and what brought me back is the opportunity to use the levers of government to improve people’s lives. It’s the chance to put money into the pockets of those in need, or to use the America’s position of global leadership to fight human rights abuses.
Corruption is the antithesis of these goals. It undermines our ability to help those who are vulnerable when others capture the resources they need. And around the world, it can be a source of financial sustenance for those who commit human rights abuses and undercut the rule of law.
These threats are real, and they demand our collective attention and action. And let me be clear: this is not a problem that exists only in far-away places, or in countries without democratic systems. It is a problem facing all nations rich and poor, near and far, including our own. Corruption undermines all of these goals, and its why we are so committed to the work all of you do.
Today, I want to outline the three values that motivate our work to fight corruption and the human rights abuses found most often in societies with poor anti-corruption track records: Fairness, Integrity, and Safety. Let me address each in turn.
Fairness
When we talk about fairness, we mean that each person, each family, or each business has the opportunity to compete and prosper. That requires economic rules of the road that apply regardless of who you are, and that can be enforced just as effectively on the wealthy and established as on someone of more modest means. That’s why a major part of the President’s domestic agenda is focused on improving our ability to equitably enforce our laws, including through a tax system that ensures the wealthy pay what they owe. Today in America, we know that the top 1 percent underpay their taxes by more than $160 billion each year. Those that use corrupt means to avoid paying their fair share starve our country of resources and further the notion there is one set of laws for the wealthy and another for everyone else.
Corruption turns the principle of fairness on its head. It allows those with entrenched advantages or who hold the levers of power to hoard resources and privileges. It allows them to direct business opportunities to themselves and their cronies, to pilfer public resources to line their own pockets, or to build criminal enterprises that infiltrate government and business institutions.
We are already taking concrete steps to fight these forms of corruption and make the US economy and the global economy more fair. Among the most crucial of these steps is our work on beneficial ownership reporting. Kleptocrats, human rights abusers, and other corrupt actors often exploit complex and opaque corporate structures to hide and launder the proceeds of their corrupt activities. They use these shell companies to hide their true identities and the illicit sources of their funds.
By requiring beneficial owners that is, the people who actually own or control a company to disclose their ownership, we can much better identify funds that come from corrupt sources or abusive means. Until recently, US law did not require these disclosures and or enable us to build a central registry of this information. Thanks to the help of our partners in Congress, Treasury led by FinCEN is in the process of implementing the Corporate Transparency Act to require exactly this kind of reporting. We are also working closely at the FATF on refining international standards for beneficial ownership transparency. This will advance crucial efforts with our foreign allies and partners to address a major vulnerability that facilitates corruption worldwide.
Integrity
The second value animating our work here is integrity. US financial institutions and the dollar form the foundation of the global financial system. Our currency and our markets are trusted around the world as way to safely and reliably make payments and store value. The US’s central role in the international economy is rooted in trust. Around the world, governments, businesses, and other organizations trust the integrity of our financial system.
An essential part of that integrity is working to ensure that our financial system is secure, and not used to facilitate corruption and abuse. Corruption undermines integrity by allowing ill-gotten gains from trafficking in drugs, weapons, and humans and from other sources to seep into the system and be laundered and disguised.
The integrity of our government payments is also of paramount importance. When Treasury implements federal programs that deliver funds to the American people, Americans expect those funds to reach those in need, as required under law. And they expect those payments to be free from fraud and abuse that diverts public money into the hands of criminals.
That’s why, as we have delivered hundreds of billions of dollars in pandemic relief to the American people, we have been laser-focused on rooting out fraud. From economic impact payments to advance Child Tax Credit payments, we have implemented rigorous systems to prevent abuse and ensure these critical relief payments reach those in need.
Safety
Finally, our anti-corruption work advances the safety of people at home and abroad. Many forms of corruption rely on human rights abuses as a way to extract profit through human trafficking, child labor, and violence against vulnerable populations. When corruption is allowed to flourish, the safety of people exposed to it is compromised.
One of our best ways to combat this threat is Treasury’s sanctions and enforcement tools. Sanctions allow us to expose and impose significant costs on those pursuing corrupt activities or abusing human rights by cutting off their access to the U.S. market and financial system. Given the US.’s leading global economic role, this can be devastating.
For example, last year OFAC designated several individuals in Haiti who were involved in repressing political dissent and fomenting instability that led to widespread violence, including the La Saline attack in which at least 71 people were killed. These sanctions have cut these individuals off from the US economic and financial system, impeding their ability to conduct these abuses going forward.
At its core, corruption and human rights abuses are a threat to the safety of people who lack the resources to protect themselves. We need to work to ensure our supply chains reflect our values. We are committed to using the full scope of our tools to fight for the safety and security of those in need.
Partnership
We know addressing these issues is only possible if government works in partnership with other stakeholders. We rely on our partners in industry to report suspicious activity, to conduct appropriate due diligence of their supply chains and counterparties, and to share with us actionable information to root out corrupt and abusive actions. Cooperation with the private sector and civil society is a force multiplier that makes our anti-corruption work go that much further.
Our allies and partners abroad also play a key role. As many of you know, Treasury recently concluded a comprehensive review of our sanctions policy and operations. One recommendation we made is to pursue multilateralism wherever possible. This includes complementary sanctions actions, cooperation between security and law enforcement teams, and intelligence sharing. Taking joint sanctions actions to address corruption and human rights abuses is an area where we can do a great deal together with our partners, and I have asked my team to expand and refine our efforts in this domain.
