Politics of Poverty

A partisan vote looms in the House Financial Services Committee

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This is no way to deal with corruption.

For several years Oxfam and an unlikely group of allies including law enforcement groups, community banks, and human rights organizations have been working with leaders from both parties on the House Financial Services Committee to pursue legislation known as the Corporate Transparency Act. The bill would help crackdown on corruption and tax evasion by getting rid of anonymous shell companies in the United States. After substantial negotiation to pursue a bipartisan approach it appears we are at an impasse.

Instead of calling a vote on this bipartisan bill, the Republican leaders on the committee plan to mark-up a different bill that would actually loosen rules set up to prevent money laundering. This bill will make it harder to address corruption and tax evasion while doing nothing to address anonymous shell companies. Sadly this may lead to a party-line vote that could doom the chances of passing new rules to fight corruption through Congress altogether.

Along with our partners in the FACT coalition we are pushing for last-minute changes that would help salvage the bipartisan agreement. Below is a statement Oxfam has just sent to Members of the House Financial Services Committee urging them to fight for the Corporate Transparency Act. We hope they will heed this call:

Playing politics with money laundering

Anonymous shell companies are a scourge to economic development around the world. These secretive structures help criminals launder money from tax evasion, grand corruption, human trafficking, and arms trafficking. They also serve terror financing and undermine US national security. When investigators’ trail ends with an anonymous shell company, it is regular people and especially those living in poverty who pay a terrible price.

Oxfam supports the Corporate Transparency Act, a bipartisan bill that would end the practice of anonymous shell companies in the United States. This bill is also supported by a wide coalition of banks, law enforcement, national security, human rights and public interest groups. We welcome the letter from Delaware Secretary of State Jeffrey Bullock in favor of incorporation transparency, as well as recent initiatives to end anonymous shell companies in Europe and in Britain’s overseas territories including notorious tax havens like the British Virgin Islands.

The House Financial Services Committee is planning to move an alternative bill this week that will weaken existing anti-money laundering legislation without addressing anonymous shell companies. This is a partisan legislation that would make it harder for law enforcement to crack down on corruption, terror finance and tax evasion. Congress should not play politics with fighting terror, tax evasion and corruption. Members of the House Financial Services should vote against this bill until it incorporates the strong bipartisan measures included in the Corporate Transparency Act.

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