Via Teleconference
8:47 A.M. EDT
MODERATOR: Good morning, everyone, from the National Security Council at the White House. I would like to welcome our participants to an on-background conference call to discuss a forthcoming announcement by the White House related to the fight against corruption.
Today we are joined by [senior administration official], as well as [senior administration official]. We will begin with remarks from [senior administration official], and then we’ll open it up for a question-and-answer session.
As a reminder, today’s briefing is on background, attributable to “senior administration officials.” And the call content and the factsheet that we have not circulated yet but we will circulate at the conclusion of the call will be embargoed until they’re released by the White House later today.
And with that, I will turn it over to our senior administration official for introductory remarks.
SENIOR ADMINISTRATION OFFICIAL: Great. Thanks. Hi, everybody. Good morning and thanks for joining the call today. I am really excited to be speaking to all of you about the President’s anti-corruption agenda in advance of our rollout later this morning of a national security study memorandum — that’s NSSM — on the fight against corruption.
It’s worth noting that this is the first national security study memorandum of the administration, so it’ll come out as “NSM-1.” I don’t want to get hung up on the bureaucratic language of all of that, but the point is the memorandum is important because it’ll serve as formal and public direction from President Biden that he expects all relevant federal departments and agencies to up their anti-corruption game in very specific ways. And when you see the NSSM yourselves, you’ll see the specificity in the document itself.
So, with the memorandum, President Biden is formally establishing the fight against corruption as a core national security interest of the United States. That was a commitment that he made during the campaign. And his pledge was that he would prioritize anti-corruption efforts and bring additional transparency to the U.S. and international financial systems.
So that’s what we are embarked on, and the memorandum also speaks to our focus on delivering a foreign policy that benefits the American people, and particularly the middle class.
So what the NSSM does is it directs the U.S. government to review and send to President Biden a report and recommendations in 200 days on how the government and its partners can modernize, coordinate, and further resource efforts to better fight corruption, tackle illicit finance, hold corrupt actors accountable, and build international partnerships. So it’s really the broadest span of what each of our federal departments and agencies does on anti-corruption.
We’re really confident that implementation of this directive is going to lead to new and bold and decisive actions to combat corruption around the world. It, of course, builds upon much that we’re already doing — and I’m happy to speak to some of that agenda right now — but this is very much going to accelerate and prioritize that agenda.
So, with that, why don’t I leave it there and we’ll take a few questions.
Q Hi, guys. Thank you for doing this. I just — my first question is simply, you know, can you talk a little bit about some of the existing efforts under the Biden administration at the various agencies to make corruption a priority? Because I know this has sort of been in the works for a while, so it’s not like they’re starting from scratch.
SENIOR ADMINISTRATION OFFICIAL: Yeah, thanks for that. So, that’s exactly right. We are very much hitting the ground running on this agenda, so let me just kind of give a few wave tops in terms what different departments and agencies are already doing that we expect to elevate with the NSSM today.
So, some on the line may be familiar with the Corporate Transparency Act — that’s the law that Congress passed in last year’s National Defense Authorization Act that directs the Treasury Department to establish what’s called a “beneficial ownership registry” that effectively bars illicit assets from hiding the proceedings of corruption behind anonymous shell companies. So, Treasury is moving out on making that registry a reality. It’s a massive undertaking.
And among other things, in his budget request, the President asked Congress to increase funding for this work by roughly 50 percent — 60-odd million dollars above what was enacted last year. So that really gave an early preview of how we’re looking to transform what Treasury does in terms of making sure that law enforcement is able to view the proceeds of corruption such that illicit actors can’t hide behind anonymity.
Likewise, Treasury is building off of what’s already been done to limit the ability of illicit actors to hide behind anonymity. In terms of residential real estate, we have seen several instances over past years in which the proceeds of corruption have been funneled through shell companies and wound up in major metropolitan areas in the United States to offshore those ill-gotten gains, and so we’re going to be taking additional steps to make sure that that doesn’t happen in the future.
And across the board, we’re looking at analyzing the need for additional reforms to close loopholes in the entire regulatory regime that deals with corruption and illicit finance.
On the Department of Justice side, some may be familiar with their Kleptocracy Asset Recovery Initiative. This initiative has really helped to make the United States a global leader in terms of recovery and return of stolen assets. In the — in the past two years, since 2019 alone, these asset recovery efforts have led to the transfer of more than $1.5 billion to countries that have been harmed by corruption.
And then, on the State and USAID side, I think you’ve already seen significant statements by Secretary Blinken and Administrator Power on increasing their anti-corruption work. Stay tuned. I think there are going to be more announcements out of USAID soon, but we’re looking across the board to elevate our anti-corruption work in all of our bilateral context, as well as in multilateral fora, such as the G7 and United Nations.
So that’s a little taste of, across departments, what we expect to be working on or accelerating ongoing work in the months to come.
Q Thank you for taking the time. You know, the previous administration took something of a hands-off approach with corruption or with — would have them — you know, a transactional relationship, where they would essentially say, “We won’t worry about what’s going on in your country if you will work with us on these things that we need to work on.” And I’m wondering if, in any sense, this is meant to send a signal to the world that the U.S. does care about corruption again. Is there any, sort of, like, response to the past in this?
Also, ahead of Vice President Harris’s trip to Latin America, are there any corruption measures associated with that, or any, sort of, additional push related to that?
SENIOR ADMINISTRATION OFFICIAL: I’m not going to characterize the views of the prior administration, but I would say, to your point: The essence of the memorandum we’re going to release today is that the U.S. government is placing the anti-corruption plight at the center of its foreign policy, so we very much want to prioritize this work across the board.
In terms of the Vice President’s trip, I don’t want to get ahead of any announcements that are going to be made on the trip, but I can say that anti-corruption in the region is a major focus for the administration and will be a focus of all of her conversations while she’s traveling.
Q Thank you.
Q Thank you for doing this. As you know, anti-corruption activists periodically urge the U.S. government to use its various assets and capabilities, including the intelligence community, to expose specific cases of corruption overseas, to name and shame corrupt officials — and the arguments they make are familiar — but also include not only, you know, a deterrent to corruption, but also a possible contribution to the promotion of democracy.
Does the does the memorandum — does the program include any component that connects with that?
SENIOR ADMINISTRATION OFFICIAL: What I can say on that front is that the memorandum includes components of the intelligence community. So, the work on that front, in part, remains to be seen, but they are included — the Director of National Intelligence and Central Intelligence Agency.
And so we’re just going to be looking at all of the tools in our disposal to make sure that we identify corruption where it’s happening and take appropriate policy responses.
And I’ll take the opportunity to mention that we’re also going to be using this effort to think about what more we can do to bolster other actors that are out in the world exposing corruption and bringing it to light.
So, of course, the U.S. government has its own internal methods, but, largely, the way that corruption is exposed is through the work of investigative journalists and investigative NGOs.
The U.S. government — to my point earlier, in terms of the support we’re already providing — in some instances provides support to these actors. And we’ll be looking at what more we can do on that front as well.
Q What does the word “support” mean in that context?
SENIOR ADMINISTRATION OFFICIAL: Well, sometimes it boils down to foreign assistance. There are lines of assistance that have jumpstarted investigatory journalism organizations. What comes to my mind most immediately is OCCRP, as well as foreign assistance that goes to NGOs, ultimately, that do investigative work on anti-corruption, as well.
Q Thank you.
Q Hi, good morning. Thank you for doing this. My question is to ask you: How are you going to engage with international allies to combat the impact of corruption coming from Latin American countries into the United States? For example, Venezuela or the Northern Triangle, as my colleague mentioned before. Thank you.
SENIOR ADMINISTRATION OFFICIAL: So, as I mentioned earlier, the anti-corruption agenda will be front and center in the Vice President’s upcoming trip. And, across the board, we are engaging through every relevant multilateral body on this agenda.
And much of that — again, we’re not we’re not necessarily creating any of that work from scratch, but we are hoping to accelerate and elevate it, and that includes in the Western Hemisphere. But maybe [senior administration official] wants to jump in and say a little bit more on that front.
SENIOR ADMINISTRATION OFFICIAL: Thanks. You know, I think the general — underscoring what [senior administration official] just said — you know, working closely with our allies and partners includes engaging with civil society and investigative journalists, but also through our multinational and multilateral partnerships in the G7 and G20.
This has been a big focus as well for the UK during their G7 presidency, to focus on working together on combating corruption. And so we have started those processes already, and I think you will see a lot more, particularly in our own backyard in the Western Hemisphere.
A big indication is the Vice President’s trip — you know, it’s her first international trip. She’ll be going out there and discussing these issues. And as [senior administration official] mentioned earlier, anticorruption will be a key part of her trip there.
Q Hi. So, [senior administration official], in your intro and in a couple of answers, you’ve referred to “illicit finance” and the danger of people profiting from corruption and being able to hide those profits through anonymity. Are you talking here about cryptocurrency? And if so, is this part of a larger discussion?
Obviously, we’ve seen the use of cryptocurrency, the risk of cryptocurrency for illicit purposes in the ransomware attacks, for example. And there are certainly growing calls now for the administration to crack down on cryptocurrency and its use in illegal means. Is that what you meant to refer to, and is that where this is going?
SENIOR ADMINISTRATION OFFICIAL: Yeah, thanks. We’ll certainly be looking at the impact of cryptocurrency as a means of illicit finance, but by no means was — were my remarks limited to crypto. We’ve seen, over many years, how corruption oversea- — the proceeds of corruption overseas make their way into the U.S. and international financial systems through anonymity.
So, this isn’t in any way limited to new technologies like crypto, but certainly as we think about the regulatory regime — the Bank Secrecy Act that governs much of this agenda, in terms of illicit finance — we will be asking for ideas around how we might want to modernize that regime to deal with issues like crypto, certainly.
Q Good morning and thanks for doing this. I want –- I think, as you mentioned, this is the first memorandum that we saw before sanctions against corruption yesterday. And there were sanctions against Bulgarian individuals. But also, we know that bad actors were able to survive despite sanctions everywhere, whether they are U.S. sanctions or, let’s say, international sanctions. Now, what tools are you planning to use? And let’s say you are using sanctions again — how you would use the sanctions as a tool without affecting an entire (inaudible) population? Let’s say, I give you an example here: Lebanon, let’s say.
SENIOR ADMINISTRATION OFFICIAL: Sure, thanks for that. So, this effort is really going to be across the board. And so, thinking about how we can better use sanctions to address corruption is definitely going to be part of the toolkit that we seek to emphasize. But sanctions are not the only tool in our toolkit.
As I’ve been speaking to, we’re looking to make significant systemic changes to the regulatory structure that governs illicit finance. We’re looking to increase the use of law enforcement tools to go after corrupt actors. We’re looking to improve upon U.S. foreign assistance as a tool and increase the role that anticorruption plays in our day-to-day diplomatic work in bilateral engagements, in multilateral fora.
So, thinking about how sanctions are going to impact our anti-corruption agenda will be part of this conversation, but in no way will it be limited to sanctions.
9:07 A.M. EDT
