On Tuesday, Congressman Stephen F. Lynch (D-Massachusetts), co-chair of the Task Force on Anti-Terrorism & Proliferation Financing, introduced H.R. 5101, the Kleptocracy Asset Recovery Rewards Act. The bipartisan bill would help U.S. authorities combat terrorist financing and foreign government corruption by establishing a rewards program for whistleblowers.
Corrupt foreign officials often use the United States and the international financial system to hide their stolen assets and the proceeds of corruption. As these assets are disguised and moved through financial institutions, bad actors can funnel these funds to terrorist organizations around the world. The rewards program established by the Kleptocracy Asset Recovery Rewards Act would incentivize individuals to notify the U.S. government of assets in U.S. financial institutions that are linked to foreign corruption, allowing authorities to recover and return these assets and prevent further enabling of foreign corruption and terrorist financing.
“The United States must intensify the fight against foreign government corruption and the money laundering that allows terrorist organizations to thrive,” said Congressman Lynch. “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 U.S. government already has a number of programs that reward individuals for information that leads to the identification and conviction of criminals, however this would be the first program designed to help recover stolen assets linked to foreign government corruption. According to the World Bank and United Nations’ Stolen Asset Recovery Initiative (StAR), between $20 and $40 billion is lost annually in developing countries due to corruption. In the last 15 years, only about $5 billion of that has been returned to the country where it originated.
“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,” said Clark Gascoigne, Deputy Director at the Financial Accountability and Corporate Transparency (FACT) Coalition. “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 Kleptocracy Asset Recovery Rewards Act is a sensible tool to safeguard American citizens and businesses from the scourge of corruption.”
The bipartisan Kleptocracy Asset Recovery Rewards Act is co-sponsored by Representatives Keith Rothfus (R-PA), Kyrsten Sinema (D-AZ), James P. McGovern (D-MA), Norma J. Torres (D-CA), Maxine Waters (D-CA), Steve Cohen (D-TN), Ted Budd (R-NC), and Michael Capuano (D-MA).
Congressman Lynch is the Ranking Member of the House National Security Subcommittee, co-chair of the Task Force on Anti-Terrorism & Proliferation Financing, and a member of the House Terrorism and Illicit Finance Subcommittee.