House Hearing Reviews Financial Transparency Legislation

Washington DC - The House of Representatives is holding hearings on legislative initiatives to deter corruption and secrecy in the global financial system. The Financial Services Subcommittee on National Security, International Development and Monetary Policy convenes a March 13th hearing on "Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime."

The Congressional Hearing explores the role that shell corporations play in hiding the true owner or actual person who benefits from a business.

"Some anonymous shell companies facilitate the theft of development aid and debt relief, the exploitation of vulnerable communities and the support of corrupt regimes in the developing world," wrote Jubilee USA Director Eric LeCompte in a letter to Congress ahead of the hearing. The letter from the head of the religious development group continues, "Shell companies contribute to an estimated one trillion dollars leaving the developing world annually through tax evasion and corruption. In the United States, anonymous shell companies contribute to Medicare fraud, thefts from vulnerable communities and human trafficking."

The House Committee is reviewing a discussion draft of the "Corporate Transparency Act of 2019," which makes the real identity of the owner of a shell company available to law enforcement and financial institutions.

Additional legislative solutions are under review during the House Hearing. The hearing docket examines draft legislation on hidden illegal monies and a Bill introduced in January to expose foreign corruption, the "Kleptocracy Asset Recovery Rewards Act."

"In the US and around the world, poor people are too often exploited by financial secrecy," stated LeCompte. "Action by Congress can increase global transparency and provide resources for development."

Read Jubilee USA's full letter to Congress on the hearing, “Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime"

Visit the House Financial Services Committee to watch and review information on the hearing

Read More

Congress Letter: House Corporate Transparency Hearing

The Honorable Maxine Waters
Chairwoman
U.S. House Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Patrick McHenry
Ranking Member
U.S. House Committee on Financial Services
4340 O'Neill House Office Building
Washington, D.C. 20002

Re: March 13th Transparency Hearing and the Corporate Transparency Act of 2019

Dear Chairwoman Waters and Ranking Member McHenry:

On behalf of Jubilee USA, I want to thank-you for your support of our bipartisan initiatives to promote transparency, accountability and protections for the vulnerable in our financial system. Jubilee USA supports your March 13th, 2019 hearing on “Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime.”

As you know from our work together in the past, Jubilee USA’s religious institutions, members and founders include more than 700 Christian, Jewish and Muslim faith communities and the US Episcopalian, Presbyterian, Methodist, Evangelical Lutheran, Catholic and United Church of Christ Churches. On behalf of our network, we are concerned with how financial secrecy, corruption and tax evasion impact vulnerable communities in the United States and around our world.

Some anonymous shell companies facilitate the theft of development aid and debt relief, the exploitation of vulnerable communities and the support of corrupt regimes in the developing world. Shell companies contribute to an estimated one trillion dollars leaving the developing world annually through tax evasion and corruption. In the United States, anonymous shell companies contribute to Medicare fraud, thefts from vulnerable communities and human trafficking.

The draft of the 2019 Corporate Transparency Act takes important steps toward ending abuses of anonymous companies. Increasing corporate transparency reduces corrupt behavior and can provide resources for US and global development. By identifying the owner who benefits from the existence of a corporation or collecting “beneficial ownership” data, law enforcement has tools to find criminals, corrupt public officials and deter enterprises that exploit the poor. Legislation that offers a clear and comprehensive definition of beneficial ownership avoids the pitfalls of inadequate definitions that only identify managers, directors or other stand-ins for the true owner(s).

The 2016 release of the “Panama Papers” was instructive in this regard. Due to lax rules around corporate ownership information, a single employee at the Panamanian law firm, Mossack Fonseca, served as the named entity for approximately 20,000 companies. She had little-to-no knowledge of the beneficial owners of those 20,000 companies.

Another crucial area in the draft is the provision governing access to information gathered. State and local law enforcement must have access because most investigations into illegal activity are performed by state and local officials in the United States. Financial institutions, which have anti-money laundering responsibilities, should have appropriate access to beneficial ownership by simple request.

On behalf of all at Jubilee USA we hold you in prayer as you work to ensure that our financial system protects the poor and fights corruption.

Sincerely,

Eric LeCompte
Executive Director

CC: Members of the House Financial Services Committee

 

PDF Version available here.

Read More

Puerto Rico, NAFTA - We need your help

Friends,

Our Congress calls and messages are positively impacting our Puerto Rico efforts for debt relief, disaster aid and child poverty reduction.

Because of your pressure and Jubilee USA meetings with the White House and with Congress, we moved the White House to now support the Nutrition Assistance Program for Puerto Rico. Because of our work together, Republican Senate legislation is now including our $600 million request for disaster food assistance for more than a million vulnerable people in Puerto Rico.

We need your support to pass the Senate legislation as soon as possible. Over a week ago, more than a million fellow Americans in Puerto Rico saw disaster food benefits cut. Your tax-deductible gift to Jubilee USA today will be doubled and double our impacts on winning disaster and debt relief for Puerto Rico. Your gift is vital now to win a new NAFTA deal that protects the vulnerable and win our current campaigns for financial transparency.

When we found out that a firm advising Puerto Rico's debt restructuring had a subsidiary firm that owned Puerto Rico debt, our messages to Congress successfully pushed the advisers of Puerto Rico's debt restructuring to disclose conflicts of interest.

Your gift really matters now as we push Congress and the White House to ensure that a new NAFTA deal protects the vulnerable and ensures that vulnerable people can get the medicine they need. Already, our trade campaign efforts secured commitments to stop "vulture funds" from using trade deals to collect on old bad debt.

When you join me and contribute to support Jubilee USA's vital 2019 campaigns, your gift will be matched and doubled. In a tough political environment, your gift makes it possible for us to move forward trade deals, debt deals and corporate transparency legislation that lifts and protects the vulnerable.

Over the last year, we won more than $50 billion in disaster aid for Puerto Rico and the US Virgin Islands. Working with Republican and Democratic leadership we secured the first ever "better building" provisions so the islands can rebuild to withstand future storms. Because of your multi-year support for debt relief for Puerto Rico, we stopped $8 billion dollars from reaching the hands of creditors and now the courts are reviewing a plan to cancel another $6 billion in debt. We stopped new vulture funds from sweeping in and buying debt cheap. We won the first super bankruptcy process that has the potential to deal with all of Puerto Rico's debt. We won a Puerto Rico process to reduce the 60% child poverty rate and audit the debt.

Unfortunately, some of the processes we won failed to move forward and we need to urgently move them forward.

We need to win another $70 billion in disaster aid and we need to be sure that Puerto Rico's quick moving bankruptcy process cuts enough debt and stops austerity. Predatory hedge funds and creditors are trying to stop Puerto Rico's bankruptcy process and legal challenges are heading to the Supreme Court.

Your tax-deductible donation is needed now for our efforts to move forward. Whether you donate $25, $100, $7, $500 or $250, your gift now is matched and doubles our impact.

I am so grateful for your partnership and support.

Eric LeCompte
Executive Director

Read More

Puerto Rico Debt, Disaster Relief - Calls are Working

Friends, 

Thanks to your partnership, we've generated tens of thousands of messages to Congress on Puerto Rico. Because of our campaign efforts, we are moving forward debt relief, transparency and disaster aid for the US Territory.

A lot is happening and we need you to take action right away.

Because of our work together, we ensured that Puerto Rico's debt advisors need to disclose conflicts of interest. Because of our phone calls to Congress since December, the Senate is now including $600 million in Nutritional Assistance Program benefits for over million vulnerable people in Puerto Rico.

Now we need to move Congress to pass this vital disaster food assistance. On March 1, over a million fellow Americans in Puerto Rico saw their disaster food assistance cut. While we moved Republican Senate leadership to include the assistance in a new package - the Senate must hear from you right away to pass this emergency food assistance. Call the Senate now and tell them that Puerto Rico needs emergency food assistance funding and comprehensive and transparent debt relief.

You made this moment possible with your calls and messages to Congress. Your actions made a big difference and if we can continue to act, we will move Republicans and Democrats to create a Jubilee for Puerto Rico. If you've already made a call to Congress, it's urgent that you call and leave a message again.

Together, we won more than $50 billion in disaster aid for Puerto Rico and the US Virgin Islands. Working with Republican and Democratic leadership we secured the first ever "better building" provisions so the islands can rebuild to withstand the next storm. Because of your support for debt relief for Puerto Rico, we stopped $8 billion dollars from reaching the hands of creditors. We stopped new vulture funds from sweeping in and buying debt cheap. We won the first super bankruptcy process to deal with all debt since the 1953 process when Germany's debt was relieved. We won a process to reduce the 60% child poverty rate and audit the debt.

The progress only happened because of our partnership together and our push to Congress and the White House.

While we won a lot, we still have a lot to do. Some of the processes we won failed to move forward. We need to win another $70 billion in disaster aid and we need to be sure that Puerto Rico's bankruptcy process cuts enough debt and prevents austerity.

Please call your Senator now and ask them to pass disaster food assistance and support processes for transparent and sustainable debt cuts.

In recent weeks, Jubilee USA's Executive Director, Eric LeCompte, met with the White House and Republican and Democratic leadership to move forward our Puerto Rico efforts. Eric briefed leaders of Congress on the processes for disaster aid and debt relief. At every meeting, Republican and Democratic leaders told Eric we've only gotten this far because of Jubilee USA's efforts.

Republican and Democratic leaders also noted we can only win further debt and disaster relief for Puerto Rico with Jubilee USA's continued action.

Please take a moment and call your Senator so urgent food assistance can be passed and Puerto Rico's debt is cut to protect the vulnerable. You can leave a message 7 days a week and 24 hours a day. At this point, every call counts and makes a difference. 

Gratefully,

Kate Zeller
Campaigns Director

Read More

Puerto Rico Debt Advisors Subject to Conflict Disclosure

Washington DC - After an investigation into potential conflicts of interest in Puerto Rico's debt restructuring, the island's oversight board notes it will increase disclosure requirements for advisors. The investigation began in response to a debt consultant whose affiliate company holds Puerto Rico debt.

"It's critical that any groups who are hired to advise on Puerto Rico's debt crisis disclose if they also own debt or have a conflict of interest," noted Jubilee USA Executive Director Eric LeCompte. LeCompte serves on United Nation debt expert groups and monitored Puerto Rico's debt crisis for the last 4 years. "US bankruptcy law already requires this type of disclosure and it should also be required for the Puerto Rico debt restructuring."

The 100-page investigation focused on the case of McKinsey and Company, hired to advise Puerto Rico's financial oversight board on the island's debt. The advisor's affiliate company MIO Partners owns Puerto Rico debt.

 

Read More

Eric LeCompte's Thoughts Featured in Latin America Advisor

Eric LeCompte, Executive Director of Jubilee USA, recently spoke with the Latin America Advisor about the recent COFINA debt deal on Puerto Rico debt. Read an excerpt below and follow this link to the full article.

Does Puerto Rico’s Bond Restructuring Offer a Fresh Start?

Eric LeCompte, executive director of Jubilee USA Network: “Before Puerto Rico was hit by two hurricanes in 2017, the oversight board and the governor were reviewing plans to cut total debt payments by as much as 80 percent. After the hurricanes, Puerto Rico saw temporary economic growth due to disaster aid and rebuilding efforts. Part of the problem with the Cofina deal is that it seems to be based on rosy economic estimates from temporary post-hurricane growth. They are also basing Puerto Rico’s ability to repay on the assumption that Congress and the White House will approve more significant disaster aid. This is in doubt. We are worried that not enough debt is being cut and that Puerto Rico’s people are carrying heavy austerity burdens. Nearly six out of 10 kids live in poverty in Puerto Rico. The math isn’t adding up. If plans to restructure the remaining debt fail to cut the majority of the island’s debt load, Puerto Rico won’t see sustained economic recovery
and growth. If future debt deals don’t cut enough debt, the economy will not be able to recover and will continue to contract until another debt restructuring has to take place. I am worried that this type of plan will mean Puerto Rico will be trapped in an endless cycle of debt.”

Read more here

Read More

Nonprofit Quarterly Cites Eric LeCompte on Puerto Rico Debt

Eric LeCompte, Executive Director of Jubilee USA, recently spoke with the Nonprofit Quarterly about the recent COFINA debt deal on Puerto Rico debt. Read an excerpt below and follow this link to the full article.

Puerto Rico Finalizes First Debt Restructuring, but at a High Cost

Still, debt remains a major obstacle to recovery. Eric LeCompte, who directs Jubilee USA, a network of community and faith-based organizations, tells Bradford that, “The math isn’t adding up. If plans to restructure the remaining debt fail to cut the majority of the island’s debt load, Puerto Rico can’t see sustained economic recovery and growth.”

Read more here

Read More

Pensions & Investments Quotes Jubilee USA Director on Puerto Rico Debt Deal

Eric LeCompte, Executive Director of Jubilee USA, recently spoke with the Pensions & Investments about the recent COFINA debt deal on Puerto Rico debt. Read an excerpt below and follow this link to the full article.

First Puerto Rico debt restructuring deal approved for COFINA

Civil rights, faith-based, labor and advocacy organizations are pressing for more debt-reduction agreements. "The math isn't adding up. If plans to restructure the remaining debt fail to cut the majority of the island's debt load, Puerto Rico can't see sustained economic recovery and growth," said Eric LeCompte, executive director of Jubilee USA, a network of community organizations and faith communities.

Read more here

Read More

Puerto Rico Debt Deal Receives Court Approval

Washington DC - Judge Laura Taylor Swain approved a deal to restructure $17 billion of Puerto Rico's $72 billion debt on Monday. Court approval was the last hurdle creditors and the island's oversight board needed for a plan to address sales tax backed debt or "COFINA" debt.

"We are worried that not enough debt is being cut and that Puerto Rico's people are carrying heavy austerity burdens," said Jubilee USA Executive Director Eric LeCompte, who monitors Puerto Rico's debt. "The math isn't adding up. If plans to restructure the remaining debt fail to cut the majority of the island's debt load, Puerto Rico can't see sustained economic recovery and growth."

The ruling followed two days of hearings and weeks of deliberation. In Swain's "COFINA" ruling, she notes objections to the debt plan, such as sustainability and the lack of a complete debt audit.

"Nearly six out of ten kids live in poverty in Puerto Rico and if future debt deals don't cut enough debt, we won't address the child poverty epidemic on the island," noted LeCompte, who serves on United Nation finance expert groups.

 

Read More

Eric LeCompte Talks to El Nuevo Dia about Puerto Rico

Eric LeCompte, Executive Director of Jubilee USA, recently spoke with the El Nuevo Dia about the recent COFINA debt deal on Puerto Rico debt. Read an excerpt below and follow this link to the full article.

Grupos cívicos alarmados con la aprobación del acuerdo de Cofina

"Nos preocupa que no se reduzca suficiente dueda y que la gente de Puerto Rico, como consecuencia, cargue con un alto peso de austeridad", indicó el director ejectivo de Jubilee USA, Eric LeCompte. 

Para Jubilee USA, una coalición religiosa que ha estudiado el tema de la deuda pública puertorriqueña y otros países, si no se logra reducir "la mayor parte de la carga de la deuda de la isla, Puerto Rico no puede ver una recuperación económica sostenida."

Read more here

Read More