By Michele Fletcher, June 10, 2014
On Wednesday, representatives from the Senate, European Embassies of Luxembourg, the Netherlands, and anti-corruption NGOs, including GFI’s Tom Cardamone, gathered in the U.S. Senate’s Kennedy Caucus Room to discuss the growing dangers of illicit financial flows in Europe as major contributors to the European financial crisis.
U.S. Senator Jeff Sessions (R-AL) spoke about his experience with Russia’s systematic aggression in the Balkan areas, and advised they take a stronger stance against Russian encroachment. Dependence on American financial and military hegemony in the region is not a sustainable security solution, he added. Sessions, who also served as Attorney General of Alabama, urged that Central and Eastern Europe push for anti-corruption and transparency laws.
I am convinced that prosperous and open societies make the world better. The values of financial integrity are exactly what we need.
All agreed that financial integrity is the linchpin of stability and security. Hon. Becky Norton Dunlop, Vice President of the Heritage Foundation, said:
Ensuring transparency is key to dealing with corruption.
This is not just a Republican issue. This is not just a Democratic issue; this is an issue for all Americans.
The crisis in Crimea was preventable, argued Natasha Srdoc, Chairman of the Adriatic Institute for Public Policy. Regional stability is greatly undermined by Western European banks promoting fraudulent transactions in the Balkans. Had Ukraine formally broken its ties to Russia and joined the EU, it could have deterred Russia from annexing Crimea. Yet joining the EU may also have exposed the corruption schemes of Ukrainian elites, including that of former President Viktor Yanukovych and former PM Pavlo Lazarenko, whose own anonymous shell company was based in Wyoming.
By Grace Zhao, June 6, 2014
Offshore tax havens impact everybody in the United States, raising the individual tax bills of each American citizen. In fact, every U.S. taxpayer had to pay approximately $1,259 extra on their tax bill this year due to lost...
By E.J. Fagan, May 29, 2014
In his official first act after winning the biggest democratic election in world history, Indian Prime Minister Narendra Modi announced the formation of a Special Investigative Team (SIT) to probe illicit financial flows, or ‘black money’ as they are commonly referred to in India.
Illicit financial outflows are a massive problem for India. GFI research finds that India lost $343.9 billion to illicit outflows from 2002-2011:
By Brian LeBlanc, May 29, 2014
According to data provided by the U.S. Treasury, approximately $13.5 billion in bank deposits held by Russians left U.S. banks in March:
What happened between February and March? On February 26th, Russian military forces began to invade Crimea, setting off the international crisis in the region. Within a few weeks, Western nations imposed sanctions on some Russian individuals.
By Koen Roovers, Global Financial Integrity, May 27, 2014
By Koen Roovers
Originally posted on the Financial Transparency Coalition blog
Last week, Credit Suisse, a staple of the Swiss banking industry, pleaded guilty to conspiring to help US citizens “hide their wealth” for decades, in order to avoid taxes. The debate that has emerged in the wake of US Attorney General Eric Holder’s announcement seems to focus on whether or not the fine—roughly US$2.6 billion—is fair. Is it high enough?
It might not be much more than a couple of month’s earnings for this major bank. In the wake of the guilty plea, does this settlement prove the suspicion of many that ‘banks are too big too jail’?
Even so, the punishment might be some conciliation to the US. But is it naïve to think that the bank was only involved in this practice in the US? While the US might have the capacity and power to bring a powerful bank like Credit Suisse “to justice”, other countries might not be in that position.
The official website of Credit Suisse makes mention of 55 other countries of operation, besides the US and Switzerland. Among this list are a number of South American, Asian and African nations. Some of these very countries are at the center of the problem of illicit financial flows – money leaving a country undetected, untaxed, and unaccounted.
By Brian LeBlanc, May 2, 2014
There has been a lot of talk in recent years regarding the extent of China’s investment in the United States. Most of this has been centered on China’s admittedly large holdings of U.S. debt, but the fear has spilled over to other forms of investment as well. A 2012 report filed by the US-China Economic and Security Review Commission, an entity created by Congress in 2000, went as far as recommending that the Committee on Foreign Investment in the US be amended to add a required litmus test for Chinese investment, specifically. This test would make it mandatory to analyze the “net economic benefit” of all proposed Chinese investment in the United States before it is approved.
Being fair, a lot of this has to do with national security, with the rational that Chinese acquisitions of telecommunication companies (for example) might pose a threat to the “cyber and physical infrastructure services critical to maintaining the national defense, continuity of government, economic prosperity, and quality of life in the United States.” How much of this is legitimate I’m not sure of.
Still, does China own an outsized portion of US assets compared to the rest of the world? The short answer is no, not even close.
By Dev Kar, April 30, 2012
This morning, Larry Summers, former U.S. Treasury Secretary under President Clinton and former top economic advisor to President Obama, wrote that European austerity is holding back economic growth, which is making their sovereign debt problem worse, both in individual countries passing austerity budgets and on a continent-wide basis.
