“Just the FACTs” is a round-up of news stories and information regarding efforts to combat corrupt financial practices, including offshore tax haven abuses, corporate secrecy, and the laundering of money through the financial system.
Send feedback or items for future newsletters to Patricia Ainembabazi at painembabazi@thefactcoalition.org
Here’s the State of Play
Treasury Department’s Financial Crimes Enforcement Network (FinCEN) Needs Increased Budgetary Resources to Hit Important Deadlines
On April 28th, Himamauli Das, Acting Director of FinCEN, appeared before the House Committee on Financial Services in an important oversight hearing to provide an update on FinCEN’s implementation of the Anti-Money Laundering Act of 2020 (AML Act), including the Corporate Transparency Act (CTA).
In his remarks, Das stressed the agency’s dire need for more funding to overcome severe budgetary constraints. He called for Congressional support for FinCen’s FY 2023 budget request to carry out FinCEN’s key missions, including to stand up all rulemakings and infrastructure necessary to implement the CTA, to support targeted sanctions against Russian oligarchs in light of the unprovoked invasion of Ukraine, and advance other transparency reforms called for in the White House’s anti-corruption agenda relating to U.S. real estate markets, the private investment industry and other key areas.
In our statement for the record, the FACT Coalition shone a light on the challenges of financial secrecy and how it undermines public safety and national security, with the Treasury Department estimating that illicit financial flows in the U.S. are equal to an eye-popping two per cent of U.S. gross domestic product. To give it the resources to rise to this challenge, the White House has requested $210.3 million for FinCEN in its 2023 proposed budget. While Congress did previously increase FinCEN’s budget in 2022, lawmakers fell short of meeting the agency’s full needs, leaving a $30 million dollar gap. Calling out FinCen’s role to address financial secrecy, FACT’s statement identified priorities for Congress to address in its oversight and appropriations capacities, including fully funding FinCEN to support the agency’s crucial role in safeguarding the U.S. financial system effectively and efficiently.
Congressional appropriators are seeking input on how they should prioritize items in the FY2023budget. The subcommittee overseeing FinCEN’s budget is seeking public input on budget priorities by May 30th. Consider submitting letters of support for a total FinCEN budget of at least $210.3 million.
Using the LLC Transparency Act, New York Can Help Reverse the U.S. position as One of the Most Secretive Financial Jurisdictions in the World
On May 3rd, Ryan Gurule, FACT’s policy director, and Gary Kalman, executive director of FACT member Transparency International-US, appeared in a legislative briefing for New York’s legislature on the importance of implementing transparency reforms like those included in the LLC Transparency Act. In their written and oral presentations, the duo supported efforts New York lawmakers are taking to address financial secrecy in its financial, business, and real estate markets.
As described in Gurule’s statement, the LLC Transparency Act presents an opportunity for the state of New York to leverage and improve upon transparency reforms occurring at the federal level, such as the CTA. The LLC Transparency Act requires disclosure of beneficial owners of limited liability companies formed, operating, or transacting in New York, and one separate component of the legislation would create the first public beneficial ownership registry of its kind in the U.S. Gurule urged the committee to consider advancing the important legislation, and identified the ways that the bill could be improved to avoid unintended loopholes, including to identify the beneficial owners of all legal entities or similar arrangements formed, operating or transacting business in New York. The New York briefing follows hearings in Wyoming and Alaska where FACT has advocated for shining a spotlight on financial secrecy and improving state-level legislative and regulatory frameworks.
Latest from FACT
 | VIDEO RECORDING: FACT Supports Corporate Transparency Legislation in Briefing for New York Legislature May 3: Watch FACT’s Policy Director Ryan Gurule and Gary Kalman of Transparency International in a legislative briefing for New York’s Legislature on the Importance of Implementing Corporate Transparency Reforms through New York’s LLC Transparency Act. |
 | BLOG POST: Cracking Down on Financial Crime: Six Issues to Watch in Thursday’s House Hearing with the FinCEN Acting Director April 26: As the United States’ financial intelligence unit, FinCEN sets U.S. anti-money laundering policy; works with financial institutions to safeguard inroads to the U.S. economy; and analyzes financial data used by other agencies in sanctions enforcement, criminal prosecutions, and civil cases. FinCEN will also play a leading role in the implementation of the Biden Administration’s inaugural Strategy on Countering Corruption. |
FACT in the News
 | QUOTED IN: Committee holds off on changes to trust and LLC laws for now May 4: Wyoming Public Radio quoted FACT’s Ryan Gurule in discussing the need for Wyoming to adopt critical corporate and trust transparency measures. |
 | QUOTED IN: Pandora Papers: Legislators Debate Strengthening Wyo Laws To Prevent Stashing of Foreign Billions April 29: Cowboy State Daily quotes FACT’s Ryan Gurule on his testimony before Wyoming’s legislature on the need to strengthen defenses against illicit funds. |
Recent and Upcoming Events
 | (UPCOMING) Launch of the Financial Secrecy Index Launch May 17: Join FACT, the Tax Justice Network, policymakers and experts for the launch of the Financial Secrecy Index, the most comprehensive ranking of jurisdictions according to “their secrecy and the scale of their offshore financial activities.” The White House prioritized a variety of financial transparency measures in the first ever U.S. Strategy on Countering Corruption meant to shore up U.S. markets against money-laundering, tax evasion and other risks, and the recent targeted sanctions of Russian oligarchs in light of the invasion of Ukraine have highlighted the need for the U.S. to make sure its own house is clean in the global fight for democracy. The last edition ranked the U.S. as the second-most secret jurisdiction. How will it rank this year? Stay tuned for details of the launch event. |
| (UPCOMING) Amazon Annual General Meeting (AGM) May 25: PIRC, along with lead filer OIP Trust and co-filer Greater Manchester Pension Fund, is urging Amazon shareholders to vote for Proposal #12 supporting tax transparency at the company’s annual meeting on May 25th, 2022. This proposal recommends that Amazon adopt the voluntary Global Reporting Initiative (GRI) Tax Standard in order to publicly disclose tax, revenue, and operations information on a country-by-country basis. The GRI is the most commonly adopted voluntary reporting standard for sustainability worldwide. Currently, Amazon sends country-by-country reporting (CbCR) to the IRS and OECD tax authorities, so any additional reporting burden will be small. However, this information is not publicly available, leaving investors, policy makers and the public in the dark about how one of the world’s largest and most profitable international companies generates revenue and operates worldwide. |
| (SAVE THE DATE) June 22 Book Launch of “The Butler to the World:” June 22: The FACT coalition will host Oliver Bullough as he launches his latest book “The Butler to the World” here in the U.S. In this book, Oliver explains how the UK has developed a system of bankers, lawyers, accountants and PR professionals, who work to help Russian kleptocrats hide their wealth. |
Social Media Shoutouts
@SenWhitehouse: International thugs shouldn’t be able to park their cash in American hedge funds or private equity firms. I’m pushing for some basic anti-money laundering safeguards to protect our financial system & give our sanctions more bite.
@EmilyAssembly: Thrilled to report the (LLC Transparency Act) bill passed the Assembly Corporations committee today. It amends New York State’s LLC law to create a robust definition of beneficial ownership, ending the status quo of anonymous shell corporations that are routinely used for facilitating crime and money laundering in New York.
@RepSpangberger: The @USTreasury’s Financial Crimes Enforcement Network plays a critical role in preventing Russian oligarchs, hackers, and criminals from laundering money in the United States. That’s why I led a letter with 27 Democrats and Republicans urging increased investment in FinCEN.
About the FACT Coalition