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house Bill H.R. 389

Should the Feds Offer Rewards to Whistleblowers Who Help Recover Assets Stolen by Corrupt Foreign Government Officials?

Argument in favor

The U.S. needs to crack down on money laundering activities by corrupt foreign government officials who can use their stolen assets to finance terrorism. This bill would bolster that effort by providing incentives and protections for whistleblowers to come forward.

05/12/2019
Yes to getting the assets from kleptocratic kakistocracy! I support this. Go after any and every kleptocrat !!!
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Trent's Opinion
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05/13/2019
Yes. Too often they end up dead. If they produce valuable and provable info they should be rewarded and protected. Not dead, jailed or in Russia.
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Roland 's Opinion
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05/13/2019
No brainer unless you have no brain, much like scarecrow or gop/trumplikkklans as evidenced by their supporting deplorable racist sexist bigoted xeno islamophobic no nothing charlatan pu**y grabber illegitimate unpopular unpatriotic treasonous potus. Their complicity in TREASON will provide same stain as confederacy. gop/trumplikkklans betray America and democracy, TREASONOUS!
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Argument opposed

This bill is poorly constructed, and shouldn’t be enacted as currently conceived. The reward amounts it would offer are too low to compel whistleblowers to come forward, and the protections it offers are insufficient to ensure whistleblowers’ safety.

BeStrong's Opinion
···
05/13/2019
My position is not Dem vs Rep. We would do well to shut off the partisan rhetoric and ask ourselves, what should we do in a matter like this. Why do we have to ENTICE federal employees to report crime and corruption. NO. If an employee has evidence of corruption and/or crimes report it. Have we reached a point, that we must at financially coax ethical behavior in ourselves? Are we that far down the rabbit hole Alice?
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Kodiwodi's Opinion
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05/13/2019
This is a poor excuse for a bill. It does not insure safety for whistle blowers nor provide enough incentives. Any bill such as this one must target not only foreign governments and individuals but our own as well. In the climate of jailing whistle blowers who tell on the US; this would be an ineffective bill. A waste of time and $$$. This isn’t dems vs repubs. This is a poorly written bill.
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Caren's Opinion
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05/13/2019
No, since the reward and especially the protections of whistleblowers are not adequate ones life may be in jeopardy. Better protections are imperative for the life of whistleblowers and their families. For now, more detailed investigations are likely in order to discern wrongdoing without testimony.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house has not voted
      house Committees
      Committee on Financial Services
    IntroducedJanuary 9th, 2019

What is House Bill H.R. 389?

This bill — the Kleptocracy Asset Recovery Rewards Act — would establish a Kleptocracy Asset Recovery Rewards Program at the Treasury Dept. This program would provide rewards to individuals in exchange for information leading to the  restraining, seizure, forfeiture, or repatriation of stolen assets linked to foreign government corruption.

Specifically, this bill would:

  • Authorize the use of up to $25 million “to reward individuals who provide valuable information that assist in the identification, arrest, and conviction of criminal actors and their associates” at the discretion of the Treasury Secretary;
  • Appropriate $450,000 for fiscal year 2020 to be used toward paying the rewards, while allowing Treasury to make up the remainder of any payments from recovered stolen assets;
  • Cap payments to individual participants at $5 million unless otherwise authorized by the Treasury Secretary;
  • Empower the Treasury Secretary to take additional, unspecified steps to protect the identities of participants and their immediate family; and
  • Mandate that the Treasury Secretary submit a report “detailing to the greatest extent possible” beneficial ownership and other information related to stolen assets, including efforts undertaken to identify such assets.

Impact

Whistleblowers; Treasury Dept.; Treasury Secretary; foreign governments; foreign governments’ stolen assets; kleptocrats; and kleptocrats in the U.S.

Cost of House Bill H.R. 389

The CBO estimates that because most of the bill’s provisions would codify existing policy and practice, implementing this bill would cost less than $500,000.

More Information

In-DepthSponsoring Rep. Stephen Lynch (D-MA) reintroduced this bill from the 115th Congress to establish a rewards program for whistleblowers who help U.S. authorities combat terrorist financing and foreign government corruption. When he introduced this bill in the previous Congress, Rep. Lynch said:

“The United States must intensify the fight against foreign government corruption and the money laundering that allows terrorist organizations to thrive. Foreign governments that are weakened by corrupt leaders do not have the financial or legal resources to combat terrorist financing, and the U.S. government should be doing everything we can to stop our financial institutions from unwittingly aiding corrupt officials and terrorist organizations.”

The Financial Accountability and Corporate Transparency (FACT) Coalition supports this bill. In a letter to the House Financial Services Committee’s leadership, FACT wrote:

“Foreign corruption is a major economic and national security threat to the United States. Corruption undermines the rule of law, provides the lifeblood of authoritarian regimes and enables transnational organized crime to flourish. It diverts precious resources away from those who most need them, and fosters disillusionment with government — sometimes leading to the rise of terrorist networks. The bipartisan Kleptocracy Asset Recovery Rewards Act is a sensible tool to safeguard American citizens and businesses from the scourge of corruption.”

The protection this bill offers is the type that was called for by the anonymous whistleblower who leaked the Panama Papers to German newspaper Süddeutsche Zeitung instead of the government. At that time, the whistleblower argued that governments need to provide better protections for whistleblowers before such people will come forth to government authorities:

“I have watched as one after another, whistleblowers and activists in the United States and Europe have had their lives destroyed by the circumstances they find themselves in after shining a light on obvious wrongdoing. Edward Snowden is stranded in Moscow, exiled due to the Obama administration’s decision to prosecute him under the Espionage Act. For his revelations about the NSA, he deserves a hero’s welcome and a substantial prize, not banishment. Bradley Birkenfeld was awarded millions for his information concerning Swiss bank UBS—and was still given a prison sentence by the Justice Department. Antoine Deltour is presently on trial for providing journalists with information about how Luxembourg granted secret “sweetheart” tax deals to multi-national corporations, effectively stealing billions in tax revenues from its neighbour countries. And there are plenty more examples. Legitimate whistleblowers who expose unquestionable wrongdoing, whether insiders or outsiders, deserve immunity from government retribution, full stop. Until governments codify legal protections for whistleblowers into law, enforcement agencies will simply have to depend on their own resources or on-going global media coverage for documents.”

In a post on KYC360, Michael Carter, a consultant and thought leader in the area of financial crimes, argues that this bill has some potential efficacy gaps:

“While this bill attempts to add another tool to the arsenal for fighting financial crime arising from corrupt foreign regimes, we can benchmark this bill against other whistleblower programs and identify some potential gaps in efficacy. With regards to the annual rewards budget, the limit of $25 million is likely to hinder the scope and ability to entice whistleblowers to come forward once that money is exhausted. For comparison, the SEC’s rewards fund ended 2018 with a balance of about 12 times that amount. In that same year, the SEC ordered whistleblower awards to 13 individuals totaling approximately $168 million, far exceeding the proposed individual reward limit of $5 million on average. As a result of strong financial rewards, the Commission received over 5,200 whistleblower tips in fiscal year 2018 and has seen its reporting volumes rise every year since 2012. Another potential pitfall with H.R. 389 resides within the vagueness of protections identified for individuals that come forward. The non-detailed protections lie in stark contrast to the SEC’s program, most notably in that the Dodd-Frank Act specifically states that employers may not retaliate against an individual who provides information to or assists the SEC. The SEC also applies strong confidentiality measures for whistleblowers, including information protection measures internal to the regulatory body itself. Reward numerations and protections are most important to effective whistleblower programs because the persons that come forward often face severe personal and professional risk of doing so. The financial benefit and freedom from harassment and retaliation must be substantial enough to incentivize persons with information regarding criminal and corrupt activity to report it. Unfortunately, the Kleptocracy Asset Recovery Rewards Act in its current form may be severely limited in its intended effectiveness and reach.”

This bill has passed the House Financial Services Committee by a unanimous vote with the support of three bipartisan cosponsors, including two Democrats and one Republican in the current Congress. Last Congress, this bill had eight bipartisan cosponsors, including six Democrats and two Republicans, and didn’t receive a committee vote.

The Financial Accountability and Corporate Transparency (FACT) Coalition and Global Witness support this bill.


Of NoteAccording to Rep. Lynch’s office, corrupt foreign officials often use the U.S. and the international financial system to hide their stolen assets and corrupt proceeds. The Tax Justice Network, an anti-corruption NGO, ranks the U.S. second on a world list of secrecy jurisdictions, which qualifies it as a “haven” for laundered money from foreign countries.

As assets are disguised and moved through financial institutions, bad actors can funnel funds to terrorist organizations around the world. In a post on The Global Anticorruption Blog (GAB), Matthew Stephenson, a professor at Harvard Law School, claims that “there is widespread agreement in the anticorruption community that the United States has not done nearly enough to address the flow of dirty money, much of it stolen by kleptocrats and their cronies, to and through the United States.”

Quartz reports that weak anti-money laundering (AML) protections in the U.S. are the reason why Russian trolls were able to buy social media ads via Paypal in their 2016 election disinformation campaign and the Iranian government was able to “rake in millions in rent” on a Manhattan skyscraper it secretly owned. Weak AML protections also allow the human trafficking industry, which sells children for sex, to operate through anonymous websites in U.S. tax havens, such as Delaware, which is home to a $2.5 billion human trafficking industry.

The U.S. government already has a number of programs rewarding individuals for information that leads to criminals’ identification and conviction. However, this would be the first program designed to help recover stolen assets linked to foreign government corruption.

The World Bank and the United Nations’ Stolen Asset Recovery Initiative (StAR) report that $20-40 billion is lost annually to corruption in developing countries. Over the past 15 years, only $5 billion of that money has been returned to their countries of origin.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / MachineHeadz)

AKA

Kleptocracy Asset Recovery Rewards Act

Official Title

To authorize the Secretary of the Treasury to pay rewards under an asset recovery rewards program to help identify and recover stolen assets linked to foreign government corruption and the proceeds of such corruption hidden behind complex financial structures in the United States and abroad.

    Yes to getting the assets from kleptocratic kakistocracy! I support this. Go after any and every kleptocrat !!!
    Like (29)
    Follow
    Share
    My position is not Dem vs Rep. We would do well to shut off the partisan rhetoric and ask ourselves, what should we do in a matter like this. Why do we have to ENTICE federal employees to report crime and corruption. NO. If an employee has evidence of corruption and/or crimes report it. Have we reached a point, that we must at financially coax ethical behavior in ourselves? Are we that far down the rabbit hole Alice?
    Like (22)
    Follow
    Share
    How about foreign and domestic?
    Like (26)
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    Yes. Too often they end up dead. If they produce valuable and provable info they should be rewarded and protected. Not dead, jailed or in Russia.
    Like (13)
    Follow
    Share
    This is a poor excuse for a bill. It does not insure safety for whistle blowers nor provide enough incentives. Any bill such as this one must target not only foreign governments and individuals but our own as well. In the climate of jailing whistle blowers who tell on the US; this would be an ineffective bill. A waste of time and $$$. This isn’t dems vs repubs. This is a poorly written bill.
    Like (12)
    Follow
    Share
    No brainer unless you have no brain, much like scarecrow or gop/trumplikkklans as evidenced by their supporting deplorable racist sexist bigoted xeno islamophobic no nothing charlatan pu**y grabber illegitimate unpopular unpatriotic treasonous potus. Their complicity in TREASON will provide same stain as confederacy. gop/trumplikkklans betray America and democracy, TREASONOUS!
    Like (12)
    Follow
    Share
    Absolutely!
    Like (10)
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    You get a reward for helping the capture of a criminal. You should get a reward for helping find stolen assets.
    Like (10)
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    YES! ABSOLUTELY! THESE ARE BRAVE AMERICAN PATRIOTS THAT WOULD TAKE SUCH GREAT RISKS TO GET THE #TRUTH TO THE AMERICAN PEOPLE. WE HAVE BEEN LIED TO FOR TOO LONG.
    Like (6)
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    We need to do something to protect whistleblowers and this seems to be a good start.
    Like (6)
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    No, since the reward and especially the protections of whistleblowers are not adequate ones life may be in jeopardy. Better protections are imperative for the life of whistleblowers and their families. For now, more detailed investigations are likely in order to discern wrongdoing without testimony.
    Like (5)
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    What ever happened to doing the right thing,loyalty,
    Like (5)
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    Why stop there? We have plenty of corrupt government officials in our own country Who launder money Go after them too.
    Like (5)
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    For those who are willing to literally stick their necks out, after all Intel has been verified, a reward seems fitting.
    Like (5)
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    I fully support whistleblowers and feel they should be rewarded. Stop government corruption now.
    Like (5)
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    Since when did it become necessary to add incentives to make sure people did their jobs? Why do I have to pay bonuses for fighting corruption by foreign powers? Is it so rampant that it requires these measures. If so why aren’t people assigned jobs to fight this corruption? What happened to doing the right thing? I guess when you look around you realize being honest and good isn’t in fashion anymore😫. Silly naive me.
    Like (4)
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    It's only COMMON SENSE that there should be a policy like this, to CONSERVE government assets!!
    Like (4)
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    Be proactive on helping to eliminate corruption!
    Like (4)
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    Yes! Maybe then, there'll be more whistleblowing!
    Like (4)
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    I agree with other comments. Why should we be paying to do the right thing.
    Like (3)
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