The fight to rebuild America’s anti-corruption laws took a major step forward last Thursday, when the House passed the bipartisan Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act as part of the fiscal year 2023 National Defense Authorization Act (NDAA). The ENABLERS Act, the second major anti-corruption bill moving through Congress in as many years, would represent the most substantial expansion of the nation’s ability to fight financial corruption in more than twenty years.
Picking up where the 2020 Corporate Transparency Act (CTA) left off, the Act would require professional service providers like lawyers, accountants and investment advisers who serve as key gatekeepers to the U.S. financial system to adopt basic anti-corruption practices. Right now, bad actors are sheltering billions of dollars of corruptly-sourced foreign cash in U.S. corporations, trusts, and other similar legal entities. Just a few weeks ago, the Treasury Department blocked off a billion dollar Delaware-based trust company, Heritage Trust, that was connected to a sanctioned Russian oligarch with close ties to Vladimir Putin. Since Russia invaded Ukraine earlier this year, the Treasury Department, in concert with global allies, blocked off or froze more than $30 billion in assets tied to Russian oligarchs, as well as over $300 billion in Russian central bank assets. A lot of that money can and has made its way into our communities—and even our elections, with foreign dark money trying to buy influence and exact favorable policy.
“ENABLERS is the crucial next piece in that puzzle: while the CTA gives law enforcement the tools to find and respond to corrupt cash stored in American corporations, ENABLERS would ensure that that money doesn’t make it here in the first place.”
That’s where the ENABLERS Act would step in. Corrupt actors need to hire U.S. professionals to access the US financial system to hide their ill-gotten funds. Right now, none of these professionals are required to conduct even basic know-your-customer or cursory anti-money laundering procedures, such as identifying the true owners of their corporate clients, keeping basic records of the sources of funds that they’re being asked to transfer or deposit, and reporting suspicious transactions to the Treasury Department, which would help detect the influx of corrupt cash before it could even make it into our country. The ENABLERS Act would fix this, imposing reasonable restrictions on how these professionals do their job.
The corrupt and illicitly sourced cash that’s floating around the U.S. financial system is a global problem: oligarchs, arms dealers, and autocrats have used and abused our system to loot their countries and evade justice. The U.S. remains the world’s worst jurisdiction for financial secrets—ahead of even the Cayman Islands. We are in desperate need of a systemic, top-to-bottom rethinking of our financial corruption laws.
Thankfully, that seems like that’s finally happening. Over the last two years, Congress and the Biden administration have quietly taken major steps to fight financial corruption. With the passage of the CTA over President Trump’s veto in 2020, Congress laid the foundation for a complete overhaul of our country’s ability to fight corruption. Since then, President Biden has labeled fighting corruption a core national security interest, and his Treasury Department has proposed powerful new rules to crack down on corrupt financial practices. ENABLERS is the crucial next piece in that puzzle: while the CTA gives law enforcement the tools to find and respond to corrupt cash after it has been stored in American corporations, ENABLERS would ensure that that money doesn’t make it here in the first place. Taken together, these bills would transform the United States from the center of global financial corruption into the center of the global response to financial corruption.