An introduction to the US office of Transparency International

In 2017, Transparency International withdrew official accreditation from the former US-Chapter due to serious differences in philosophy, strategy and priorities. In early 2020, the international secretariat opened a new office in Washington. We talked with the Director of the office, Gary Kalman.

Questions by Jonathan Peters

What are your current advocacy priorities?

The US office focuses on the US role in global anticorruption efforts. That involves several things, including changing our own US laws. For example, we are working very intensely on legislation to require transparency of beneficial ownership information, because the US is one of the easiest places to set up an anonymous company in the world. We also encourage US delegations at multilateral fora to be more pro anti-corruption at events such as the G7 or G20 summits.

The United States has long been viewed as one of the easiest places for criminals to anonymously park their assets, ranking second in the world on the Tax Justice Network´s 2020 Financial Secrecy Index. How do you assess the role of the US regarding international illicit financial flows and money laundering?

The US is a top destination for illicit financial flows. It´s a huge problem. At a study out of the University of Texas found this to be true.  They sent thousands of phony solicitations to corporate formation agents in countries around the world.  In one example, a corporate formation agent in Florida received the fictitious offer to set up an anonymous company with dirty money and he responded that he doesn´t have to know where the money comes from, but the request does sound risky.  He then wrote in an email that he would do it for no less than US $5,000 per month. This shows how easily the current rules can be ignored. The formation agents have no responsibility for their role in facilitating illegal activity. We need new rules.  For the first time in several years, there is real momentum behind legislation requiring beneficial ownership transparency and for updating our money laundering rules.

Do you work together with others on topics like that?

We are involved in a number of coalition efforts. The US-Office of TI is a member of the Financial Accountability and Corporate Transparency (FACT) coalition which, in addition to beneficial ownership transparency, works to end the secrecy that enables offshore finance to hide tax dodging, sanctions evasion and a variety of financial crimes. We are also part of the “Make it safe” coalition, which is an alliance of groups, working to strengthen whistle-blower protections. We are involved in the “Corporate Reform Coalition”, which is looking for greater disclosure from multinational companies to improve business integrity and ensure business cooperation in furthering the UN’s sustainable development goals.

Elisabeth Warren speaks of government-sanctioned profiteering & corruption from COVID-19 and has brought forward the CORE ACT. We have seen that you are supporting that proposed bill. What are the key lessons from an anti-corruption and transparency perspective regarding the current crises?

In several ways, the proposed CORE ACT reflects our work priorities. We´ve already seen numerous examples here in the United States and around the world where leaders are misusing funds appropriated to fight the pandemic. Money that ends up in the hands of either favored contractors or scammers who receive money for goods or services they subsequently fail to deliver. For example, we know about a US$55 million contract for masks and other equipment for healthcare-workers that went to a company that never has manufactured anything in its life, it has no employees and it filed for bankruptcy in 2018. How they got the contract is beyond us, but those are the kind of things that actually cost lives.

If we talk about corruption and the US, Donald Trump is the inevitable elephant in the room. The traditional system of checks and balances is facing a stern test. What’s your opinion on the impeachment process and the numerous alleged cases of corruption and abuse of power under the current administration?

I think that the abuses in the administrations are a concern, there is no doubt. Some of what we have seen is extremely alarming. There are also gaps in our laws, that allow officials and private actors to do things in the US that are not appropriate. We need reforms to ensure that checks and balances are in place. We don´t want to lose sight of structural changes that we need to make, that go beyond this president. The current administration occasionally says, they did the same under the Obama administration and nobody said anything. Some of these allegations are exaggerated, but not all of it and the question is: If that did happen under previous administrations, why did it happen and what changes do we need to make to ensure that it doesn´t happen again? In my opinion, Donald Trump is a symptom of a larger defect in our anti-corruption framework.

November is the month of the election in the USA, how do you assess the role of ever more advanced digitalization for the outcome of the election, especially considering the influence of the events in the last election?

I think that there are measures republicans and democrats agree on, to protect the integrity of our elections. Obviously, the interference in the 2016 election is well documented. Despite an ongoing debate, most people agree that it happened. Whether or not you believe that the current administration was actively engaged in promoting it, the interference exposed vulnerabilities in our system and our elections that needs to be addressed. Obviously, it´s a big concern, we saw what could happen if we are not vigilant.