Port Louis, Mauritius - Reject your "idolatrous economic model," were the words Pope Francis addressed Mauritius' political leaders with on Monday. Dubbed the "Mauritius Leaks," the island is the center of a tax avoidance scandal where companies pay a lower tax rate in Mauritius to avoid billions of dollars in taxes in the African countries where they actually do business.
"Poor African countries are losing billions of revenue needed to build infrastructure and fight poverty because of the Mauritius tax haven," stated Jubilee USA Director and United Nations finance expert, Eric LeCompte. "Pope Francis calls corruption a plague and it was the common theme for each of the three African countries he visited."
Francis is at the end of a three nation Africa tour that began on September 4th in Mozambique and continued in Madagascar before visiting Mauritius.
In Mozambique during the Catholic leader's sermon at a religious service attended by more than 60,000, Francis exclaimed, "Mozambique is a land of abundant natural and cultural riches, yet paradoxically, great numbers of its people live below the poverty level. And at times it seems that those who approach with the alleged desire to help have other interests. Sadly, this happens with brothers and sisters of the same land, who let themselves be corrupted. It is very dangerous to think that this is the price to be paid for foreign aid."
Mozambique wrestles with a $2 billion debt scandal because loans from Credit Suisse and a Russian bank intended to support the Mozambique ports and fishing industry were used to secretly outfit military boats.
"In Mozambique, the Pope is deeply concerned with corrupt officials and some global banks that benefit from and created these secret loans," said LeCompte. "The Pope is concerned by the high poverty rates, corruption and the debt crisis in Mozambique. The Holy Father asserts that debt is a tool of the rich to control poor countries."
Mozambique is recovering from two cyclones this year and data from the World Bank ranks the southeast African country as the 7th poorest in the world.
At a Catholic Mass of more than a million participants over the weekend in Madagascar, Francis took aim at allegations that more than half of Madagascar's elected leaders are involved in corrupt activities. "When 'family' becomes the decisive criterion for what we consider right and good, we end up justifying and even 'consecrating' practices that lead to...privilege and exclusion: favouritism, patronage and, as a consequence, corruption," he said.
Francis was referring to the family clan system in Madagascar and the challenge that natural resources are lost in Madagascar because of consumption of wealthy countries.
"The Pope's message for Madagascar is protect your environment and your natural resources from all forms of theft and corruption," noted LeCompte. "Madagascar's deforestation and resource theft is fueled by corruption."
In the last 6 decades nearly 45% of forests in Madagascar were lost to illicit logging and subsistence farming. In addition to corruption, Pope Francis expressed concern for climate vulnerabilities that each of the three African countries share.
“The Pope's visit to Africa spreads the message of his 2015 writings, the encyclical Laudato Si. Pope Francis in several speeches in Africa highlighted a concept from his encyclical, ecological debt or climate debt,” shared LeCompte who advises Vatican leaders on economic issues. “The rich world owes a debt to the poor world for taking their natural resources and driving climate change and poverty. Wealthy countries must return resources to poor countries so they can deal with more powerful natural disasters and extreme weather events spurred by climate change. ”
Jubilee USA Executive Director was cited by the National Catholic Reporter on Pope Francis's visit to Mauritius. Read an excerpt below, and click here for the full story.
Pope urges Mauritius, island tax haven, to reject 'idolatrous economic model'
Eric LeCompte, the leader of Jubilee USA, a network of religious and development groups that argue for international debt relief, cited figures showing that sixty percent of the people of Mauritius see corruption as on the rise in their country. He called the island nation "the premier tax haven in the region draining revenue from many poor countries in Africa."
Read more here.
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
During United Nations Human Rights Council meetings last week, Archbishop Ivan Jurkovič, the Geneva based Vatican representative stated, “We can no longer frame the debt crisis as an exclusively economic problem. It affects future generations, as well as the social conditions that allow the enjoyment of human rights of vast numbers of people entitled to the solidarity of the whole human family.”
Jurkovič’s intervention during the UN Meetings called for, “stronger policies around public budget transparency, responsible lending and borrowing, securing greater development protections, stronger debt restructuring policies and fiscal strategies that curb tax evasion and corruption.”
“Archbishop Jurkovič’s speech is incredibly timely and expresses urgency to improve debt, tax and transparency policies to protect vulnerable people,” expressed Eric LeCompte who leads the interfaith religious development group, Jubilee USA. The organization counts the Catholic Church among its founders working with Jubilee USA for over 20 years on economic issues. “The speech is important because it calls for world leaders to promote development measures that tackle inequality and prevent financial crisis.”
The speech was made during The 37th Session of the Human Rights Council on Report of the Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of human rights. The report that the Vatican and world governments discussed at the United Nations session was prepared by UN Independent Expert, Juan Pablo Bohoslavsky.
“The Holy See recognizes that severe human rights impacts resulting from the recent financial crisis have been widely and well documented. Policy responses to the crisis have revealed a deep-seated structural neglect of human rights in economic policy formulation, insufficient protection of the most disadvantaged and a lack of attention to participation, consultation, transparency and accountability,” stated Jurkovič whose official title is the Permanent Observer of the Holy See to the United Nations.
During the address, Jurkovič reiterated concerns around “predatory firms that take advantage of economies in distress,” or groups popularly known as “vulture funds.” The statement endorsed a United Nations “bankruptcy” process for countries that is supported by Pope Francis. Setting targets to curb global corruption and tax evasion were also encouraged during the Vatican diplomat’s remarks.
“The developing world loses more than a trillion dollar a year because of tax evasion, corruption, bad debt policies and vulture funds,” said LeCompte who serves on UN expert finance groups. “From Puerto Rico to Mozambique, people are suffering because of a lack of transparency in the financial system. We have the ability to dramatically reduce poverty, if we can improve accountability in global economic policies.”
Read Archbishop Jurkovič’s United Nation Holy See Speech
Read the Juan Pablo Bohoslavsky UN Independent Debt and Human Rights Expert Report
Jubilee USA Network is an alliance of more than 75 US organizations, 650 faith communities and 50 Jubilee global partners. Jubilee is building an economy that serves, protects and promotes participation of the most vulnerable. Jubilee has won critical global financial reforms and more than $130 billion in debt relief for the world's poorest people.
Our efforts build the political support needed to influence world-wide decision makers, the White House, Congress, the G20, International Financial Institutions and the United Nations to promote poverty reduction and move solutions to the international debt crisis. Ultimately, we work to create an international financial system that protects and ensures participation of the most vulnerable within the context of human rights. Our advocacy promotes responsible lending and borrowing, increasing debt relief for poor countries, curbing illicit financial flows and corporate tax avoidance, moving forward an international debt resolution process, pushing reforms in international financial institutions and protecting poor people from predatory financial behavior.
Our efforts focus on the following areas. Click below to learn more.
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