North-JerseyNews.com

Rep. Tom Malinowski Calls on Biden to Act Against International Corruption

Rep. Tom Malinowski (D-NJ) was joined by Sen. Sheldon Whitehouse (D-RI) in penning a letter to Treasury Secretary Janet Yellen asking the Treasury Department to combat international corruption and kleptocracy.

The legislators urged the secretary to expand anti-money laundering reporting obligations for both private equity and hedge fund advisors, and recommended additional actions to prevent foreign kleptocrats from using U.S. and global financial systems as a way to launder money.

In 2020, Congress enacted the Corporate Transparency Act, which bans the registration of anonymously-owned shell companies in the U.S. The Biden Administration had pledged to build on this achievement and to bolster the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Protecting the Middle Class

In the letter to Yellen, Malinowski positioned the request as a way of promoting civil security and quelling rising questions from the middle class.

Malinowski and Whitehouse noted middle-class Americans were “frustrated by perceptions of corruption at home, while authoritarian oligarchies are weaponizing corruption around the world.”

Although the trend was popular among those in the middle class, the lawmakers argued more had to be done at the federal level.

“While these foreign and domestic trends have fueled passionate political discourse in recent years, a legacy of the Biden Administration should be achieving actual results by institutionalizing anti-corruption reforms throughout U.S. and international financial, diplomatic, and legal systems,” stated the New Jersey congressman.

Giving the Treasury the Tools It Needs

The pair of lawmakers contended the U.S. could not properly fight corruption without the Treasury Department identifying it as a top priority. Josh Rudolph, Fellow for Malign Finance, Alliance for Securing Democracy at the German Marshall Fund, agreed.

“Financial regulation and economic diplomacy are the most powerful tools within the American arsenal to root out dirty money and take on kleptocrats,” Rudolph said.

The lawmakers also looked at international finacial secrecy and tax havens, and provided guidance for how they should be handled.

“Internationally, Treasury should lead a landmark international agreement to end offshore financial secrecy and illicit tax havens once and for all,” wrote Malinowski. “In addition to an international agreement on the taxation of multinational companies, a deal to end offshore secrecy would need to be backed up by concrete commitments around an array of reporting mechanisms.”

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