News & Events

Just the FACTs: February 22, 2017

Welcome to our “Just the FACTs” newsletter, which aims to highlight pertinent news stories and information related to our goals of curtailing offshore tax haven abuses, increasing the transparency of company ownership, and curbing the laundering of illicit money through the financial system.

Send feedback or items for future newsletters to Jacob Wills at

State of Play

Somewhere on a long list of plagues caused by corruption is terrorism.  Yet, congress and the president just used a controversial resolution to void an important bi-partisan anti-corruption safeguard, known as Cardin-Lugar. The provision—sponsored by former Sen. Richard Lugar (R-IN) and Sen. Ben Cardin (D-MD)—protects U.S. national security and combats corruption in developing countries (particularly those plagued by extremist violence and conflict) by requiring oil, gas, and mining companies which report to the Securities and Exchange Commission to publicly report all payments made to host-governments.  Nullifying the safeguard has been met with bipartisan opposition from anti-corruption experts.

FACT, issued a statements and blog posts defending the landmark anti-corruption measure, which included a letter sent to members of Congress. The letter targeted one of the major arguments for repeal—the suggestions that it disadvantages U.S. companies—by explaining that 30 other countries—including Norway, Canada, and all 28 members of the European Union—have instituted the same disclosure requirements on extractive companies.  This means that over 90 percent of internationally operating companies in the extractives sector are covered by these transparency measures.

FACT member Global Witness, also issued a press release and included a report on an investigation into payments made by Exxon to the Nigerian government.  The report sheds light on ExxonMobil’s questionable dealings in Nigeria highlighting the corrosion these types of deals can have on a country or region.  Jubilee, Global Financial Integrity, Oxfam, POGO, Public Citizen, and many other FACT members also worked valiantly on this effort.

Criticism to the repeal of the rule has been stark and come from across the ideological perspective.  Conservative writers at Judicial Watch explained the importance of Cardin-Lugar in an alert to their members.  Right-of-center scholars at the Hudson Institute’s Kleptocracy Initiative questioned whether the resolution might “blind the U.S. Government” to the role it’s own citizens were playing in the growth of instability and terrorism around the world. The instability they argue, also hurts the U.S. financially through “global economic and market disruption, lost trading opportunities, and the cost of development and humanitarian assistance.”  Finally, they make a key point. Corruption would not work were it not that foreign elites are able to use a network of anonymous shell companies in countries like the U.S to hide assets offshore.

It’s certainly not just foreign corruption that is enabled by anonymous companies.  The abuse of tax havens was brought to the foreground when it was revealed that Treasury Secretary-designate Steven Mnuchin failed to disclose companies he managed with assets in Anguilla and the Cayman Islands, both widely recognized as tax havens.  In a statement on the hearings, FACT’s deputy director called this a reminder of “how the loopholes in the tax code allow the wealthy and well-connected to game the system—shifting money around to escape taxes that the rest of us have to pay.”  The statement also outlined four key principles for effective tax reform.

From the FACT Coalition and Its Partners

Incorporation Transparency

Congress Votes to Kill Anti-Corruption Safeguard

FACT Coalition, February 3, 2017

By FACT Coalition

Rolling Back Extractives Transparency Measure Will Hamper National Security

In one of the first substantive votes of the new Congress, the U.S. Senate utilized a controversial procedure and voted this morning (52-47) to kill a landmark anti-corruption measure, known as Cardin-Lugar (or Section 1504 of the Wall Street Reform and Consumer Protection Act of 2010)—in a move panned by non-partisan anti-corruption experts.

The vote follows a similar outcome Wednesday in the House of Representatives. The measure now moves to the White House, where President Trump has indicated that he will sign it.

Originally sponsored by former Sen. Richard Lugar (R-IN) and Sen. Ben Cardin (D-MD), Section 1504 combats corruption and protects national security by requiring oil, gas, or mining companies that file an annual report with the Securities and Exchange Commission (SEC) to disclose their country and project-level payments to host governments each year.

Read the full press release

Update from FACT, February 14, 2017: “Trump Voids Anti-Corruption Safeguard: President’s Action Likely to Raise Costs on American Businesses, Undermine National Security

US Consumers at Risk of Funding Hezbollah

Global Witness, February 13, 2017

By Global Witness

US consumers who are furnishing their homes with luxury-grade timber may be lining the pockets of a family that’s accused of financing Hezbollah.

Our new investigation, Unsanctioned Trade, reveals that since 2010, US companies have purchased timber worth over $5.5 million from a logging company called Cotrefor.

Evidence indicates that Cotrefor is owned by a conglomerate that’s controlled by members of the Lebanese Tajideen family. These men are named on a US sanctions list for alleged links to Hezbollah, which is listed as a terrorist organisation.

This isn’t the only mark against Cotrefor’s name. The logging giant, which exports more rainforest timber from the Democratic Republic of Congo (DRC) than any other company, also stands accused of logging far beyond legal limits, dodging taxes and subjecting its workers to conditions akin to modern-day slavery.

Read the report summary
Read the full report  

Why Republican Plans to End Anti-Corruption Regulations Can Put Our Troops Serving Overseas in Greater Danger

Global Witness, February 1, 2017

By Jodi Vittori

By Lt Col (Ret) Jodi Vittori, PhD, Adjunct Professor, Georgetown University

Do Republican leaders know that their plans to overturn counter-corruption regulations on Monday ultimately hurts American national security overall, and could put troops serving overseas in places like Iraq and Afghanistan at greater risk?

As a retired Air Force veteran who has served in Afghanistan and Iraq and as an expert in terrorist finance, I’ve witnessed firsthand the damage that corruption can do to American national security and troops in the field.

Read the full blog

End the Travel Ban: An Alternative Proposal to Combating Terror

FACT Coalition, January 31, 2017

By Gary Kalman

Ending Anonymously-Owned Companies Would Be Widely Seen as an Effective Strategy in Crippling Those Who Pose a Real Danger to the U.S.

The President’s executive order banning refugees and legal immigrants from seven Muslim-majority nations has led to large protests in the U.S. In a conversation yesterday with anti-corruption advocates based in Canada and Belgium, I listened as they discussed the outrage this order has generated around the globe.  The action, it appears, only reinforces the worst fears they held about the new administration.

The order is unconscionable, likely unlawful and—according to a growing list of security experts— unhelpful in protecting the nation against acts of terror. Just a few days in and the stories of harm and disruption are piling up.

Read the full blog

House Attempts to Repeal Bipartisan Anti-Corruption Safeguard in Controversial Move

FACT Coalition, January 26, 2017

By Clark Gascoigne

Lawmakers in the House of Representatives are expected to introduce a controversial resolution to repeal a bipartisan anti-corruption safeguard, in a move panned by non-partisan anti-corruption experts.

Read the full blog
Read Jubilee USA’s press release

Civil Society Experts Issue Accelerated Agenda for Addressing Illicit Financial Flows in Africa

Global Financial Integrity, January 26, 2017

By Heather Lowe and Liz Confalone

As national leaders meet at the African Union Summit in Addis Ababa this week, a group of civil society experts has issued a set of recommendations to address illicit financial flows (IFFs), an issue of critical importance to regional development. Titled Accelerating the IFF Agenda for African Countries (the Accelerated IFF Agenda), the purpose of the document is to highlight for African leaders fourteen steps that can be taken to jumpstart efforts to address IFFs. Among the recommendations are suggestions to establish a multi-agency approach to fight IFFs, to collect information to identify corporate ownership, and certain tax-related measures.

Read the full press release

Trump and Republicans Use First Days in Power to Try to Roll Back Historic Measures to Clean Up the Corrupt Oil Sector and Green Light Keystone XL and Dakota Access Pipelines

Global Witness, January 25, 2017

By Global Witness

The resolution would roll back a landmark anti-corruption law, known as the bipartisan Cardin-Lugar anti-corruption provision, which requires oil, gas and mining companies to disclose details of the hundreds of billions of dollars they pay to governments across the world in return for rights to natural resources. The rule is a key part of U.S. efforts to curb the corruption that keeps poor countries poor and threatens U.S. national interests and global security around the world.

Read the full press release

Fueling Kleptocracy: Transparency in the Extractives Industry

Kleptocracy Initiative, January 24, 2017

By Nate Sibley

The new administration’s commitment to reducing unnecessary regulation should be welcomed not only by Americans, but anyone who wants to do business with a more competitive United States. However, efforts reportedly underway to remove the legal requirement for American oil, gas, and mining firms to disclose payments made to foreign governments may have serious unintended consequences.

Read the full blog

The Year in Financial Transparency: 2016

Financial Transparency Coalition, January 10, 2017

By Financial Transparency Coalition

The Panama Papers were the financial transparency story of 2016. From the unprecedented size of the leak to the reactions of everyday citizens, the scale of public attention was new. Perhaps more important than the jaw-dropping headlines about politicians, wealthy business people and celebrities hiding assets, is how governments will respond to the systematic loopholes laid bare by the revelations. In the wake of the leaks, a number of governments made new commitments on financial transparency, from pledging to introduce public registers of company ownership to supporting the disclosure of country by country financial reports for multinational companies.

Read the full blog


Lawmakers Should Oppose Delaney’s Two Tax Giveaways

FACT Coalition, February 8, 2017

By Clark Gascoigne

Titled the “Partnership to Build America Act” and the “Infrastructure 2.0 Act”, both measures seek to offer multinational tax avoiders a reward under the premise that the measures might raise some revenue for infrastructure funding.  The question is: at what cost?

Read the full blog

Trusts: Weapons of Mass Injustice?

Tax Justice Network, February 13, 2017

Trusts are usually described as a legal arrangements involving private family matters (such as caring for sick or vulnerable people, or arranging family affairs for tax and estate purposes.) A simple trust arrangement typically involves three parties: a settlor (such as a parent) transfers assets to a trustee (such as a trusted lawyer) who must hold and manage those assets according to the settlor’s instructions, and for the benefit of beneficiaries (such as the parent’s sick child).

This paper deals with the other side of trusts: the abuses and risks that they create and facilitate.

Read the full report
Read Financial Transparency Coalition’s blog

Nathan Proctor: Neal on Front Lines of Corporate Tax Fight

The Berkshire Eagle (MSA), February 13, 2017

By Nathan Proctor

Western Massachusetts has a critical role to play in the Trump era. Our own Rep. Richard Neal has risen to the top Democratic post in arguably the most powerful committee in Washington — the one that controls the purse strings, House Ways and Means.

Read the full op-ed

Mnuchin’s Offshore Companies Underscore Need to Tackle Tax Havens in Tax Reform

FACT Coalition, January 26, 2017

By FACT Coalition

The offshore companies controlled by Treasury Secretary-designate Steven Mnuchin featured prominently in his Senate confirmation hearings held last week in Washington.  It was revealed that the former investment banker managed companies with assets in Anguilla and the Cayman Islands, both widely recognized as tax havens.

Read the full news release
Common Dreams article

Dear Republican Congress: Forget Border Adjustments, Fix the Worldwide System

Oxfam, December 22, 2016

By Didier Jacobs

Fixing the worldwide system of corporate taxation is a better way to boost America’s competitiveness than border adjustments, without the economic destruction involved in the latter.

Here is a rare bipartisan consensus in Washington: the current way Uncle Sam taxes the international income of corporations is a mess. It fosters tax dodging.

Of course the consensus ends there.

Read the full blog

Issues in the News

Incorporation Transparency

Western Union Admits to Aiding Wire Fraud, to Pay $586 Million

Reuters, January 20, 2017

By Joel Schectman and Diane Bartz

Western Union Co (WU.N), the world’s biggest money-transfer company, agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud, U.S. authorities said on Thursday.

Western Union, which has over half a million locations in more than 200 countries, admitted “to aiding and abetting wire fraud” by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection, the U.S. Department of Justice and the Federal Trade Commission said in statements.

Read the full article

State Orders Banks to Step Up Monitoring for Money Laundering

Corporate Counsel, January 6, 2017

By Joel Stashenko

State regulators have imposed new requirements on banks operating in New York that they say are needed to ensure the institutions are adequately monitoring transactions for possible money laundering.

The state Department of Financial Services (DFS) said its investigations and enforcement activities indicate that gaps exist in the monitoring and filtering capabilities banks use to prevent activities linked to terrorism and crime.

Read the full article

Brexit Could Derail UK’s Anti-Corruption Push

Reuters, January 6, 2017

By George Hay

Britain’s war on graft is in danger of falling at the first hurdle. At last May’s landmark anti-corruption summit in London, the government headed by then-Prime Minister David Cameron said it would present an anti-corruption strategy by the end of the year. But it didn’t. The missed deadline potentially says something unsettling about Britain’s post-Brexit priorities.

The idea that Britain has a graft problem may come as a surprise. In the global Corruption Perceptions Index compiled by Transparency International, the UK came a creditable tenth out of 160-plus in 2015 in terms of perceived cleanliness. Britain’s judiciary and civil service are the envy of the world, and its 2010 Bribery Act acts as a check on its companies paying bungs for business abroad.

Read the full article


Trump and Ryan are Right to Tackle Corporate Taxes. But Their Approach Would do Harm

The Washington Post, January 6, 2017

By Lawrence Summers

Lawrence Summers is a professor at and past president of Harvard University. He was treasury secretary from 1999 to 2001 and an economic adviser to President Obama from 2009 through 2010.

Corporate tax reform has rightly been identified by the president-elect and congressional majority as an immediate priority. There is no question that the status quo — with the United States having the highest statutory corporate-tax rate among major countries and companies holding huge cash hoards abroad while awaiting a break on repatriation — can be improved. Unfortunately, the potential reforms identified by House Speaker Paul D. Ryan (R-Wis.) and President-elect Donald Trump appear likely to do significant damage to the tax base and to the U.S. and global economies.

Read the full article

New Developing Nations Leader Has Big Plans To Crack Down On Global Tax Dodging

The Huffington Post, January 12, 2017

By Daniel Marans

Eight months after the Panama Papers shed new light on the scale of tax avoidance by the global elite, Ecuador plans to make cracking down on tax havens the centerpiece of its leadership of the G-77 bloc of developing countries at the United Nations.

Tax dodging “is one of the great scourges of the 21st century and we need to put an end to it,” Guillaume Long, Ecuador’s minister of foreign affairs and human mobility, told The Huffington Post on Thursday.

Read the full article

Repatriation Didn’t Work in 2004, and it Won’t Work in 2017

Salon, January 1, 2017

By Matthew Rozsa

Although not widely discussed, President-elect Donald Trump’s economic plan includes an estimated $2.6 trillion repatriation proposal very similar to the one that was passed by President George W. Bush in 2004 — and which didn’t do what it was supposed to do.

On his campaign website, Trump has promised to “provide a deemed repatriation of corporate profits held offshore at a one-time tax rate of 10 percent.” He has characterized this as a “tax holiday” that will encourage American companies to create jobs. American corporations are currently required to pay up to 35 percent of their earnings to the government and get credited for taxes they already paid overseas.

Read the full article

Malta Accused of Being Tax Haven as it Takes EU Presidency

The Guardian, January 11, 2017

By Jennifer Rankin

Malta has been accused of being a tax haven, just as it takes the helm of the European Union in a critical year for the bloc’s crackdown on tax avoidance.

Read the full article