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The White House announcement comes ahead of a congressional hearing to probe the role of South Dakota and other states as international tax havens.

An aerial view of a building in the heart of downtown that houses Trident Trust Co. in Sioux Falls, South Dakota, Wednesday, June 16, 2021. (Photo by Salwan Georges/The Washington Post)

U.S. President Joe Biden has introduced sweeping new strategies to fight financial corruption, pledging a government-wide campaign to identify and punish bad actors who move illicit wealth in the United States and around the world.

Calling the effort a core national security interest, the administration said it would work with Congress to bring more scrutiny to trust companieslawyers and other financial gatekeepers,  seek to identify owners “hiding behind opaque” corporations and target those involved in real estate transactions used to hide or launder money.

The administration has also promised to ramp up anti-corruption investigations at the Treasury Department and other federal agencies and elevate U.S. efforts to partner with anti-money laundering regimes in other countries. The plan includes a call for greater diplomatic efforts to defend investigative journalists who expose corruption.

The so-called United States Strategy on Countering Corruption, announced by the White House Monday, represents the “most sweeping anti-corruption reform drive in American history,” said Josh Rudolph, a member of the National Security Council staff in the Obama and Trump administrations.

“Spanning dirty money, diplomacy, foreign aid, accountability, and more … the only historic comparison is all the legislation enacted after Watergate, but with that not possible in today’s Senate and the threat now transnational, Biden is combating corruption even more sweepingly through executive action as a national security imperative,” he said.

The plan, if properly backed by money and other resources, would bring badly needed reforms to industries open to exploitation, including the growing U.S. trust industry, said Ian Gary, executive director of the nonpartisan Financial Accountability and Corporate Transparency Coalition.

“The U.S. has become the largest destination for parking wealth funded by corruption and criminal activity because current law encourages the U.S. trust industry to compete on the basis of providing anonymity and shirking public accountability,” he said. “This effectively weaponizes our otherwise strong rule-of-law financial systems against us, undermining our national security and our democratic institutions domestically and internationally.”

The announcement from the White House came ahead of a scheduled congressional hearing to probe the rise of the United States as a global tax haven. The House Ways and Means Subcommittee on Oversight, citing the Pandora Papers, plans on Wednesday to focus on why South Dakota and other states enacted customer-friendly laws that have allowed the wealthy to move and hide assets in the United States.

By Will Fitzgibbon and Debbie CenziperImage: Salwan Georges/The Washington
Post December 7, 2021

Original article source: ICIJ