The Financial Accountability and Corporate Transparency Coalition (FACT Coalition) sent a letter to House lawmakers Tuesday urging them to oppose H.R. 2054/S. 869 and defend the Foreign Account Tax Compliance Act (FATCA).
Every year, your employer, bank, the Social Security Administration, and anyone holding or investing your savings, sends you and the Internal Revenue Service (IRS) information about your accounts. This is a long-standing U.S. practice that combines patriotism and accountability and has created a culture of tax compliance.
However, for U.S. citizens living abroad and wealthy individuals with accounts in foreign banks, there was little accountability. While most Americans with foreign bank accounts paid the taxes they owed, some did not. For those, FATCA was passed.
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.
2016 is coming to an end. This year has certainly been an eventful one—we have witnessed several document leaks revealing the closely guarded secrets of the offshore world, and a divisive election where the issue of tax avoidance and offshore loopholes were highlighted by both campaigns.
In April, the Panama Papers gave us 14.5 million documents exposing the offshore dealings of the ultra-wealthy, transnational criminals, multinational companies, and even world leaders. One question often asked when the documents were released “where are the Americans?” the answer simply is that Americans don’t need to go abroad to set up anonymous shell companies. It is, unfortunately, much easier for Americans to set them up onshore—in states like Nevada, Wyoming, and Delaware.
The FACT Coalition sent this memo to the Trump-Pence Presidential Transition Team regarding actions to combat terror financing; criminal money laundering; and waste, fraud, and abuse in government contracting.
Conservative Think Tank Scholars Note “Ending Criminal Secrecy Might become that Rarest of Political Beasts: a Truly Non-Partisan Issue.”
Scholars at the Hudson Institute recently announced in an article their support for action to curtail the abuse of anonymous shell companies. The conservative think tank’s Kleptocracy Initiative argues that the U.S. efforts around the world to stabilize governments and root out corruption are being undermined by an irrational contradiction where U.S. laws are at the same time providing a “safe haven to their dirty cash.”
