FASB: Corporate Transparency Curbs Corruption, Poverty

Washington DC - Jubilee USA, a religious development group, asked the Financial Accounting Standards Board (FASB) to require greater disclosure of what payments corporations make to governments where they operate. The Securities‎ and Exchange Commission designates the FASB as the body that sets accounting standards for public corporations in the United States.

In a letter to the FASB, Jubilee USA's Executive Director Eric LeCompte wrote, "The developing world loses more than a trillion dollars a year because of tax evasion, tax avoidance and corruption. The problem is difficult to address because of a lack of public data.‎"

Development groups like Jubilee USA view stronger reporting standards as a vehicle to raise revenue for human needs in the United States and around the world.

"It's critical that large companies report their income, assets and numbers of employees for every country where they do business," said LeCompte regarding the letter. "This basic reporting can stop corruption and raise money to address poverty."

Read Jubilee USA's full letter to FASB click here.

Jubilee USA Network is an alliance of more than 75 US organizations and 650 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA wins critical global financial reforms and won more than $130 billion in debt relief to benefit the world's poorest people.
www.jubileeusa.org

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Available for interview: Eric LeCompte, Executive Director
Contact: Lydia C. Andrews, Deputy Director
lydia@jubileeusa.org | office:(202)783-3566 x109 | mobile:(847) 72-2305

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Have a Blessed Thanksgiving from Jubilee USA!

Friends,

I want to wish you and your loved ones a Blessed Thanksgiving.

We give thanks for the abundance that God gives us. In community we work so that abundance is shared among all people. We remember so many in our global community struggling this Thanksgiving in Puerto Rico, the US Virgin Islands, California, Texas, Barbuda, Dominica, Florida and famine-hit Africa. We remember and we continue our work so that all have enough in the face of crisis.

We also give thanks as our partners celebrate new possibilities in Zimbabwe.

In this time of challenge and hope, I'm most grateful that we continue this journey together.

So very grateful for you,

Eric_Signature.transparent.jpg


Eric LeCompte
Executive Director
Jubilee USA Network
(202)783-3566
Twitter: @Eric_LeCompte
www.jubileeusa.org/support-us

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Eric LeCompte Speaks at United Nations on Debt, Development and Resilience

Jubilee USA's Director Eric LeCompte spoke at the United Nations in Geneva, Switzerland for the UN Conference on Trade and Development ‎11th Debt Management Conference. Read his remarks on debt, tax and transparency policies that address the root causes of poverty. Read the speech below or attached here

 

11th United Nations Conference on Trade and Development Debt Management Conference
‘Development Finance at the Cross Roads: What Role for Public Debt Management?’ 

Panel 6: When is debt sustainable?
United Nations
Geneva, Switzerland 

“Ensuring Sustainable Debt, Development and Protections from Economic Shocks”

Eric LeCompte, Executive Director of Jubilee USA
November 14th, 2017
Remarks As Prepared for Delivery

 

I want to extend my gratitude to all of the organizers and the UNCTAD for this conference and for their continuing and essential convening role on these vital issues.

My organization, Jubilee USA is part of the broader community of global organizations that coalesced around resolving debt crisis in the poorest countries of the world over 20 years ago. Jubilee USA moves forward global policies that address the root causes of poverty and inequality related to debt, tax, trade and transparency issues. In the United States, Jubilee USA’s founders and members include the US Conference of Catholic Bishops, American Jewish World Service, Islamic Relief, the United Church of Christ and most mainline national Christian Churches.

In the 1990’s we began our work to address inequality and finance development by addressing the global debt crisis. Together we won two great debt relief and financing initiatives to address global poverty and promote children’s education and health: The Heavily Indebted Poor Country Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI). Because of these initiatives, over $115 billion was won in debt relief to benefit some of the world’s poorest countries. Because of that debt relief we know in sub-Saharan Africa that more than 52 million kids went to school who never would have seen the inside of a classroom. We know that school fees were cancelled, hospitals were opened, because of this historic initiative, because of this relief and the international accountability laws that we won, all of this money had to go into building social infrastructure. World Bank President Jim Kim cites debt relief as one of the two reasons we see sustained economic growth in some countries across Africa.

It was out of these initiatives that concepts around achieving debt sustainability were born. 

Unfortunately, as successful and important as HIPC and MDRI were, we now realize that those solutions were not enough to entirely grasp the problem. Out of the 38 very poor countries that benefitted from the HIPC and MDRI initiatives, 31 again face debt distress, financial crisis or unsustainable debts. 31 out of 38.

But not only has that crisis impacted and returned to some of the world’s poorest countries, we have also seen it impacting middle-income and even developed countries. From 2009 to 2014, debt service in Africa nearly doubled. While at the same time in the same countries in Africa, we saw spending on health care decline. We are currently seeing a tragic situation on Small Island Developing States or SIDS across the world, many of these islands with poverty rates that range from 30% to 50%. These so called Middle-Income Small Islands are now facing crisis, just as so-called middle-income countries in Africa are facing similar crises.

These new crises have become more complicated. Debt itself has changed and the instruments of debt have changed. Where 20 years ago, debt was relatively quarantined to a rather small group of lending facilities, international financial institutions, governments and bonds - now we see more complicated instruments and a broader array of types of credit and debt.

With this new reality and this lack of debt sustainability there is a small group of exploitative hedge funds that are trying to benefit from countries wrestling with financial crisis. These so called “vulture funds” are responsible for predatory behavior in Detroit, in Greece, in Argentina and were recently stopped in Puerto Rico by an act of the US Congress. So called “vulture funds” buy debt for pennies on the dollar and then sue in full using aggressive litigation tactics to collect the full amount. These types of funds have successfully collected aid monies that were intended to provide development financing in the developing world. Some of the victims of this behavior sit here in this room.

In 2016 and 2017 the IMF and World Bank reviewed their sustainability framework. The current framework offers a lot of valuable information and pulls together much needed analytical data. As my co-panelist Martin Guzman raised in his remarks, debt sustainability frameworks need to be discussed in relation to strengthening global policies on debt restructuring and responsible lending and borrowing. Further debt sustainability analysis could be strengthened by ensuring they take into account issues such as development, improving flexibility to reevaluate after external shocks and reviewing fiscal targets to ensure that tax evasion and corruption are curbed.

We and the religious organizations that we represent and work with around the world, believe very much that debt sustainability works hand in hand with public budget transparency and responsible lending and borrowing. Beyond preventing predatory financial behavior, public budget transparency and responsible lending and borrowing can provide financing of billions of dollars annually for the developing world. Both in the monitoring of debt levels and in the financing for development, these issues cannot be separated from debt sustainability.

These concepts are reiterated in the very promising recent work of the G20 which the US Government and G20 endorsed over the summer: the Operational Guidelines for Sustainable Development. This also compliments the strong consensus building work over the last 6 years with UNCTAD’s efforts on responsible lending and borrowing. 

These conservative stewardship policies cost nothing and can raise billions in the developing world.

Further it’s why we support improved debt restructuring at the International Monetary Fund. It is why we supported the United Nations General Assembly process to create a legal global bankruptcy framework. Similar to Chapter 9 or Chapter 11 in the United States, global bankruptcy can provide the same kind of stability we rely on in domestic economies into the global financial system. Pope Francis supports such a system to provide financing to end poverty. Adam Smith the father of modern economics believed global bankruptcy is critical for global stability. We believe that a country’s debt can be called sustainable after the debt is adequately restructured.

For debt sustainability frame works to be effective, they must work alongside public budget transparency, responsible lending and borrowing and stronger restructuring regimes.

I would offer that debt sustainability frame works to be effective must also take into account development, external shocks and fiscal policy.

In terms of issues around development, debt sustainability frameworks must take into account the reality that poor populations and vulnerable communities often do not have their needs met when “sustainable” debts are paid. There needs to be a greater efforts in analyzing the sustainability of a debt when the basic needs and economic rights of people are not met.

Next, external shocks can immediately change the debt dynamics of an economy. Antigua and Barbuda, Dominica and so many Caribbean islands have been decimated by hurricanes. Our partners in Dominica can testify to this reality. Bishop Gabriel Malzaire who leads the Catholic Church on the island and is the President of the Caribbean Catholic Antilles Episcopal Conference, sent a letter to the International Monetary Fund. His letter on behalf of Caribbean Catholics, called on the IMF and other creditors to temporarily delay debt payments for islands like Antigua and Barbuda recently ravaged by Hurricane Irma. Debt sustainability frame works must have the flexibility to adjust to external shocks.

When disaster strikes, when famine spreads and when economic crisis impacts the poor, we need to be able to reevaluate these situations. In line with our previous thoughts on improving debt restructuring and looking at Chapter 9/11 styles of bankruptcy – it seems the Caribbean would be a perfect candidate for a regional Caribbean initiative. This post HIPC initiative, could be a regional initiative with the high debt distress many Caribbean countries are experiencing. It can utilize the principles of bankruptcy for a regional Caribbean mechanism.

Finally, debt sustainability also must rely on improved fiscal policies that curb tax evasion and corruption. Standards can be set in debt sustainability frameworks that provide targets to governments to curb illicit financial flows, tax evasion, corruption and corporate and professional tax avoidance. We also acknowledge the growing issues around tax evasion, illicit financial flows, anonymous shell companies and corporate tax avoidance. As the President Mbeki report noted, one of the greatest diversions of financing for human needs is because of tax evasion and corruption. Last year the UN Conference on Trade and Development (UNCTAD) released a study on five countries that showed how much money they were losing because of “trade mis-invoicing.” Currently we believe that 80% of all illicit financial flows are because of trade mis-invoicing at borders and port authorities. This is actually a relatively easy problem to tackle, and this particular problem if tackled could secure more than $1 trillion a year to provide financing and support economic growth in the developing world. Addressing corruption, tax evasion, corporate tax avoidance, anonymous shell companies and related issues should be addressed.

In closing, to achieve true debt sustainability and ensure effective frame works, we need to include a number of particular issues and promote stronger policies around public budget transparency, responsible lending and borrowing, securing greater development protections, stronger debt restructuring policies and fiscal policies that curb tax evasion and corruption. 

Thank you.

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Faith and Development Groups Urge Congressional Action for Hurricane-Affected Islands‎

Washington DC - Religious and anti-poverty groups wrote to Congress this week‎ for expedited support for hurricane-hit US Territories and Caribbean nations.

“The situation remains critical for hundreds of thousands of people across the Caribbean, for whom U.S. support—either through federal assistance or bilateral foreign assistance—constitutes critical support to meet both immediate and longer term needs,” said the Rev. John L.McCullough, President and CEO of Church World Service.

“Recent hurricane activity strongly suggests that scientific predictions about climate change were – tragically – correct. If this is the ‘new normal’ as many now suggest, then we must all scale up our strategies. As faith agencies, we are called upon be in solidarity with our neighbors, with the vulnerable, at risk, impoverished and displaced. And how we show up to help our broader family is also a litmus test for how we will treat our own. In recent weeks, my organization has delivered tens of thousands of needed supplies to hurricane-affected communities in the U.S and Caribbean, including Puerto Rico. Congress must now also ensure that adequate assistance is provided to the Caribbean islands to get back on their feet.

"Seeing the devastation in Puerto Rico and the U.S. Virgin Islands so long after the hurricanes struck is‎ incredibly sad," stated Eric LeCompte, the Executive Director of the religious development group, Jubilee USA Network. LeCompte just completed a tour of Puerto Rico and the U.S. Virgin Islands analyzing the recovery efforts. "It's important that the affected Caribbean islands get adequate relief to rebuild to withstand stronger storms."

These Caribbean islands – like other small islands worldwide – share a common and extreme vulnerability to climate change: Warming oceans, rising sea levels, higher frequency and intensity of Category 4 and 5 storms and flooding caused by extreme rainfall and drought already affect the livelihoods, homes, agricultural production, food security and very existence of several million people. In 1992, the United Nations recognized the Small Island Developing States, a special country grouping with distinct developmental challenges that require targeted responses. The upcoming UN Climate Conference, which started today in Bonn and will go on to the November 17, will be the first one to be presided over by a Pacific Ocean state. In recognition of the urgent need for action and adaptation, mitigation and finance by these states, Fiji will preside over the conference.

The wave of hurricanes in the Caribbean underline the need for better systems to deal with natural disasters of this magnitude. Religious groups are currently petitioning the International Monetary Fund and World Bank to stay debt payments for these countries, as well as to create the processes for moratoria on debt to be implemented automatically after similar disasters in the future. They are also petitioning sources of aid, like the U.S. government, to offer grants and not loans to struggling economies like Puerto Rico and the U.S. Virgin Islands.

 

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Available for interview: Eric LeCompte, Executive Director

Contact: Lydia C. Andrews, Deputy Director

lydia@jubileeusa.org / (o) (202) 783-3566 x109 (m) (847) 772-2305

 

 

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Newsweek Talks with Eric LeCompte about Puerto Rico's Debt Crisis

Eric LeCompte, Executive Director of Jubilee USA was recently cited in Newsweek speaking on Puerto Rico's debt crisis. Read excerpt below and follow link to full article.

The Pentagon Spends $250 Million on War Every Day—What Else Could We Do with That Money?

By: Carlos Ballesteros

"In the aftermath of Maria, Puerto Rico’s debt crisis stands in the way of recovery. As Eric LeCompte, executive director of Jubilee USA Network, a religious coalition that's fighting for Puerto Rico debt relief , told USA Today last month, 'There’s no way for Puerto Rico to be able to rebuild, let alone recover, unless the debt is canceled.'"

Read more here.

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Public Finance International Cites Jubilee USA's Work on Tax Avoidance

Eric LeCompte, Executive Director of Jubilee USA was recently cited in Public Finance International speaking on corrupt tax avoidance and the release of the Paradise Papers. Read excerpt below and follow link to full article.

Global Governments Called on to Tighten Up Tax Avoidance Laws

 

By: Simone Rensch

"Campaigning groups Jubilee USA and Transparency International have called for stronger international laws and for governments to introduce stricture measures to prevent corrupt tax avoidance. 

Eric LeCompte, executive director of Jubilee USA, said: 'Over $‎500bn a year is lost by governments around the world because of the tax avoidance revealed in the Paradise Papers.

'Unfortunately, many of these tax avoidance ‎schemes are legal and we need stronger international laws to prevent this activity.'”

Read more here.

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Paradise Papers Jubilee Statement

Washington DC - The International Consortium of Investigative Journalists (ICIJ) released its latest research into how individuals and institutions avoid taxes and hide corruption. Previously, the ICIJ released the "Panama Papers" which showed how government officials and individuals evaded laws to hide money and facilitate corruption.

Eric LeCompte Executive Director of the religious development group Jubilee USA releases the following statement:

"Over $‎500 billion a year is lost by governments around the world because of the tax avoidance revealed in the paradise papers.

"Unfortunately, many of these tax avoidance ‎schemes are legal and we need stronger international laws to prevent this activity."

 

Available for interview: Eric LeCompte, Executive Director

Contact: Lydia C. Andrews, Deputy Director

lydia@jubileeusa.org / (o) (202) 783-3566 x109 (m) (847) 772-2305

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Eric LeCompte Featured in Public Finance International

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Public Finance International speaking on Puerto Rico. Read excerpt below and follow link to full article.

US lawmakers urged to extended federal health access to Puerto Rico

By: Mark Smulian

"'...Puerto Rico needs equitable access to federal healthcare programs and tax credits,' the letter from Jubilee USA executive director Eric LeCompte said.

'These recommendations are essential for reducing poverty for nearly 60% of kids who live in poverty on the island.'"

Read more here.

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Catholic News Service Interviews Eric LeCompte on Caribbean Debt Relief

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Catholic News Service and Catholic Philly speaking on Caribbean debt relief in the midst of hurricane recovery. Read excerpt below and follow link to full article. 

Caribbean Church Leaders Campaign for Debt Relief After Hurricanes

By: Staff

"Eric LeCompte, executive director of Jubilee USA, a Washington-based charity working with religious organizations to push for debt relief, said the additional costs of rebuilding more safely put governments in a bind: If they miss debt payments, their credit scores could be negatively affected, making it more difficult and costly to borrow in the future. Alternatively, they could be forced to borrow more from private lenders.

'Putting these governments further into debt is the last thing we want to happen,' LeCompte told Catholic News Service. Under the debt relief plans that have been promoted, the countries would not be penalized for missing payments. Islands could also be made eligible for low-interest loans, LeCompte said.

'Debt relief is the most direct and efficient way of freeing funds for these governments to respond to the human needs on the ground,' he said."

Read more here.

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