February, 17 2016, 11:15am EDT
Former South African President Visits US to Stop "Illicit Financial Flows"
Congress Debates Anti-Corruption Legislation
WASHINGTON
Former South African President Thabo Mbeki visits the United States February 16-19 to raise awareness on how the developing world loses money to corruption. Mbeki will focus specifically on the flow of illicit money out of Africa through crime, corruption and tax evasion. The developing world loses approximately $1 trillion annually through these "illicit financial flows," with Sub-Saharan Africa losing the most of any region relative to the size of its economy. Mbeki chaired an African Union (AU) panel on illicit flows and its report on the issue was adopted by the AU in January 2015. In the US, Mbeki will meet with the World Bank, International Monetary Fund, US government officials and the United Nations.
"President Mbeki's visit couldn't be more timely," said Eric LeCompte, executive director of the religious anti-poverty coalition Jubilee USA. LeCompte serves on UN expert groups on global finance. "Far too much international money laundering flows through the US financial system."
One vehicle for transferring illicit money out of the developing world is through "anonymous shell companies," corporate entities set up to launder funds that don't disclose their true owner. According to a 2012 study by academics at Griffith University, the United States is the second easiest country in the world to set up fake companies, behind only Kenya. Terrorists, drug traffickers, human traffickers and weapons traffickers also use shell companies to hide their activities.
On January 31, the news program 60 Minutes aired an investigation showing US lawyers advising an undercover investigator on how to set up fake companies in the United States to launder questionable funds from Africa. On February 3, Representatives Carolyn Maloney (D-NY) and Peter King (R-NY) introduced the Incorporation Transparency and Law Enforcement Assistance Act (HR 4450). The bill gives law enforcement access to the identity of these companies' true owners. Senators Sheldon Whitehouse (D-RI) and Dianne Feinstein (D-CA) introduced similar legislation in the Senate (S 2489).
"Passing transparency legislation is an immediate action that Congress can take to address corruption and crime," noted LeCompte. LeCompte worked with former UN Secretary General Kofi Annan to address illicit financial flows during the 2015 UN Financing for Development process. "This is an issue where Republicans and Democrats should be able to get together and do the right thing even during a contentious election year."
Read more about President Mbeki's visit
Read more about the Incorporation Transparency and Law Enforcement Assistance Act
Read the Incorporation Transparency and Law Enforcement Assistance Act:
Jubilee USA Network is an interfaith, non-profit alliance of religious, development and advocacy organizations. We are 75 U.S. institutions and more than 750 faith groups working across the United States and around the globe. We address the structural causes of poverty and inequality in our communities and countries around the world.
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