Leaked “Pandora Papers” Spark New Bill To Require Lawyers, Accountants, Realtors, Advisors To Scrutinize Certain Foreign Client Investments

Pandora Papers
In October 2021, the International Consortium of Investigative Journalists (ICIJ) released the Pandora Papers to the media and general public, consisting of nearly 12 million files filling almost three terabytes of data exposing the secret wealth and dealings of world leaders and billionaires who hide their assets to minimize their tax burdens. File photo: Dennizn, Shutter Stock, licensed.

WASHINGTON, D.C. – A bi-partisan group of Congress members have reacted to the release of the Pandora Papers by introducing a bill that would close legal loopholes that allow so-called kleptocrats from around the world from stashing or laundering money in the US. A kleptocrat is the ruler or leader of a country who uses their political power to steal his or her country’s resources.

Released on October 3 by the International Consortium of Investigative Journalists – ICIJ US-based non-profit consortium of journalists who investigate major financial and other stories around the world, the Pandora Papers represent documents leaked to that organization which shed light on the financial dealings of 35 current and former country leaders, including former UK Prime Minister Tony Blair and King Abdullah II of Jordan as well as celebrities and corporate leaders.

According to the US office of Transparency International five US states including South Dakota, Nevada, Delaware, Florida, and New Hampshire are named as favored locations for those seeking to hide their assets and minimize their tax burdens. The office focuses on combating illicit finance, strengthening political integrity, and promoting a positive U.S. role in global anti-corruption initiatives.

In response to the Pandora Papers release, Representatives Tom Malinowski (D-NJ), Maria Elvira Salazar (R-FL), Steve Cohen (D-TN), and Joe Wilson (R-SC) introduced on October 6 the Establishing New Authorities for Business Laundering and Enabling Risks to Security (ENABLERS) Act. Malinowski, Salazar, Cohen, and Wilson are founding members of the bipartisan Caucus Against Foreign Corruption and Kleptocracy. The group recently led the successful passage of several pieces of anti-corruption legislation into the House’s national defense bill.

Under the Act, investment advisers, art dealers, trust and corporate services providers, accountants, payment processors, and public relations and marketing firms would be required to more closely investigate foreign clients seeking to move money and assets into the American financial system.

“If we make banks report dirty money but allow law, real estate, and accounting firms to look the other way, that creates a loophole that crooks and kleptocrats can sail a yacht through,” Malinowski said. “Our bill closes that loophole and encourages the administration to move in the same direction.”

Meanwhile Cohen (D-TN) said that the the measure is necessary to prevent corruption from undermining democracy

“All around the world, countries are being looted and the most vulnerable people victimized by their elites. These kleptocrats then launder that money to the West where they enjoy the high life – spending the money on luxury cars, penthouses, jets, and opulent parties, Cohen said. “ In order to fight corruption, we must curb the enablers.”

The legislation is pending.

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