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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