[Congressional Record Volume 167, Number 213 (Thursday, December 9, 2021)]
[Senate]
[Pages S9088-S9090]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            DEMOCRACY SUMMIT

  Mr. CARDIN. Mr. President, I rise today--on International Anti-
Corruption Day, as declared by the United Nations--to speak about the 
Democracy Summit that President Biden is convening today and tomorrow, 
to which government leaders from 110 countries have been invited. It 
will also include a range of leading civil society actors, business and 
labor leaders, civic educators and investigative journalists, 
philanthropists, and nonprofit leaders as speakers and participants.
  Undeterred by the Coronavirus pandemic, the Biden administration has 
organized a global virtual gathering with participants tuning in from 
six continents. It is an ambitious, even audacious, undertaking.
  And it comes at a critical time, as the world is now 15 years into a 
global democratic recession, according to the well-respected watchdog 
organization Freedom House. In its widely cited annual survey of 
freedom, it has reported that, in each of the past 15 years, more 
countries have seen their democracy scores decline than the number of 
countries whose scores have improved. And last year, during the height 
of the global pandemic, nearly 75 percent of the world's population 
lived in a country that saw its democracy score deteriorate last year.
  For a President who has pledged to put democratic values at the heart 
of American foreign policy, it is fitting and proper that he should 
convene the democratic leaders of the world and other relevant parties 
to plan the revitalization of global democracy.
  Of course, readers of the annual Freedom House assessment will know 
that there are not 110 well-functioning, effective democracies in the 
world and that way too many poorly performing nominal democracies have 
been invited to this gathering, thus diluting its character.
  While some conspicuously back-sliding countries, like Hungary and 
Turkey, have not been invited, there are numerous back-sliding pseudo-
democracies, including the current governments of the Philippines and 
Pakistan, the Democratic Republic of the Congo and Zambia, Bolsinaro's 
Brazil among others, that unfortunately have been included.
  Then there is India, which dropped from Free to Partly Free status in 
Freedom in the World 2021, which contributes significantly to the fact 
that 75 percent of the world's people last year resided in countries 
moving away from democracy. Yet the government of Prime Minister 
Narendra Modi, after its sustained crack down on critics during the 
past 2 years and the atrocious scapegoating of Muslims, who were 
disproportionately blamed for the spread of the virus and faced attacks 
by vigilante mobs, has been invited to the Democracy Summit.
  Members of the Senate will also know that there has been precious 
little information sharing with this body about the contours of the 
summit. There has been no discussion with us about the invitation list 
or the way forward from this week's summit, which I see as a missed 
opportunity for the Biden administration.
  On the other hand, I was proud to be able to participate in a side 
event convened last Friday morning by the House Democracy Partnership 
for a discussion with legislators from other countries about the 
important role that parliaments can and do play in leading their 
governments to address the enduring and universal problem of 
corruption. I want to congratulate Representative   David Price of 
North Carolina for his leadership of that important initiative and for 
convening a productive international exchange of views last week in the 
run up to the President's gathering. One of the main take-aways from 
that webinar was that it is always incumbent on the legislatures of the 
world to press forward with laws that instruct and enable executive 
branch officials to elevate their work to combat corruption.
  This is the main topic of my intervention today, to discuss one of 
the hopeful aspects of the President's Democracy Summit, which is the 
central role that the battle against corruption is playing in the 
proceedings and to underscore the leading role that we in the Congress 
must take to compel further action from our colleagues in the executive 
branch.
  History tells us that they will likely not do so on their own. In 
fact, the history of anti-corruption laws in the United States is 
replete with fervent opposition from the executive branch, whether 
during Democratic administrations or Republican, to virtually every 
measure proposed in the Congress. This was true of the Foreign Corrupt 
Practices Act of 1977, which barred U.S. companies and their officials 
from paying bribes in foreign countries. The executive and the business 
community declared that this would end the ability of American 
corporations to do business around the world, which turned out not to 
be true, of course.
  Indeed, it became in due course a foundational element in the United 
Nations Convention Against Corruption--UNCAC--and other elements of the 
international architecture of the battle against corruption.
  Yet the executive has continued to oppose every measure introduced in 
Congress to address kleptocrats and human rights abusers, including the 
original Sergei Magnitsky Rule of Law Accountability Act of 2012 and 
its successor, the Global Magnitsky Human Rights Accountability Act of 
2016.
  This is especially ironic because, since the enactment of the 2016 
law, both Republican and Democratic administrations have been utilizing 
the law frequently and to good effect. Indeed, today, Secretary of 
State Tony Blinken announced that--on the occasion of International 
anti-Corruption

[[Page S9089]]

Day--the Department of State has designated 12 individuals from 7 
countries for significant corruption and also named another 18 family 
members. In five of the designations, the Treasury Department has 
invoked Global Magnitsky sanctions for their roles in corruption.
  The Democracy Summit is being built around three principal themes: 
defending against authoritarianism, promoting respect for human rights, 
and fighting corruption. Corruption is the means and the method for 
kleptocratic rulers around the world to steal from their own people and 
to stash their wealth in safe havens, most often in the democratic 
Western world. This is directly and intimately connected to the 
undermining of the rule of law and the repression of human rights in 
these same countries--which is why I was so pleased to see that, on 
June 3 of this year, President Biden declared the fight against 
corruption to be ``a core national security interest.'' And he directed 
his National Security Advisor to develop a comprehensive strategy to 
address the problem.
  Accordingly, earlier this week, in the run-up to the Democracy 
Summit, the White House published the first ``United States Strategy on 
Countering Corruption.''
  The strategy is a 38-page document that describes several major lines 
of effort in the new strategy. Among the document's commitments are 
pledges to crack down on dirty money in U.S. real estate, to require 
certain gatekeepers to the U.S. financial system such as attorneys, 
accountants, and investment advisers to perform greater due diligence 
on their prospective clients, and to make it a crime for foreign 
officials to solicit or accept bribes from U.S. companies.
  If this strategy is matched with appropriate resources, it has the 
power to fundamentally change the calculus for kleptocrats and redirect 
stolen funds back to the original problems they were meant to fund such 
as fighting the pandemic, countering the effects of climate change, 
funding economic development and opportunity.
  We in the Congress can do our part by passing pending legislation 
that would further strengthen the hand of the U.S. Government in this 
effort. While there are a number of valuable proposals pending, there 
are two that I suggest would be the most impactful and necessary.
  The first is the Combating Global Corruption Act, S. 14, which I 
introduced and was cosponsored by my Republican friend from Indiana, 
Mr. Young, which would create an annual global report, modeled in some 
ways on the Trafficking-in-Persons report, in which the State 
Department would assess how earnestly and effectively the governments 
of the world are living up to the commitments they have made in 
international treaties and covenants. The report would also place the 
countries of the world in 3 tiers, according to how well they are 
doing. And for those in the lowest performing tier, likely the 
governments that are actually kleptocracies, the bill asks that the 
executive branch assess government officials in those places for 
possible designation for Global Magnitsky sanctions.
  The second is the Global Magnitsky Human Rights Accountability Act, 
S. 93, which I introduced and was cosponsored by my Republican friend 
from Mississippi, Mr. Wicker, which would permanently reauthorize the 
existing Global Magnitsky framework and to widen the aperture of the 
law to encompass more bad actors and actions.
  Both these measures have been reported favorably and unanimously by 
the Senate Committee on Foreign Relations, and both are ready for final 
action by the Senate. As President Biden convenes the Democracy Summit 
today, with its major focus on the battle against corruption, it would 
be timely for the Senate to demonstrate our resolve as well.
  So I hope that my colleagues here in the Senate will agree in the 
coming days to adopt these two bills, so that we may take them to the 
House of Representatives, where they also enjoy bipartisan support, and 
get them onto the desk of President Biden during the coming year. 
Participating governments in the Democracy Summit, including the United 
States, are making commitments to strengthen their own democracies in 
the next 12 months, in advance of a second summit that is envisioned 
for next December.
  The American position will be enhanced if we have enacted these laws 
before then.
  Mr. President, I ask unanimous consent that selected excerpts of the 
``United States Strategy on Countering Corruption'' be printed in the 
Congressional Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            United States Strategy on Countering Corruption


Pursuant to the National security Study Memorandum on Establishing the 
  fight against corruption as a core united States National Security 
                        Interest--December 2021

     Introduction
       When government officials abuse public power for private 
     gain, they do more than simply appropriate illicit wealth. 
     Corruption robs citizens of equal access to vital services, 
     denying the right to quality healthcare, public safety, and 
     education. It degrades the business environment, subverts 
     economic opportunity, and exacerbates inequality. It often 
     contributes to human rights violations and abuses, and can 
     drive migration. As a fundamental threat to the rule of law, 
     corruption hollows out institutions, corrodes public trust, 
     and fuels popular cynicism toward effective, accountable 
     governance.
       Moreover, the impacts of corruption frequently reverberate 
     far beyond the immediate environment in which the acts take 
     place. In today's globalized world, corrupt actors bribe 
     across borders, harness the international financial system to 
     stash illicit wealth abroad, and abuse democratic 
     institutions to advance anti-democratic aims. Emerging 
     research and major journalistic exposes have documented the 
     extent to which legal and regulatory deficiencies in the 
     developed world offer corrupt actors the means to offshore 
     and launder illicit wealth. This dynamic in turn strengthens 
     the hand of those autocratic leaders whose rule is predicated 
     on the ability to co-opt and reward elites.
       On June 3, 2021, President Biden established the fight 
     against corruption as a core national security interest of 
     the United States. As he wrote in National Security Study 
     Memorandum-I (NSSM-1), ``corruption threatens United States 
     national security, economic equity, global antipoverty and 
     development efforts, and democracy itself. . . . [B]y 
     effectively preventing and countering corruption and 
     demonstrating the advantages of transparent and accountable 
     governance, we can secure a critical advantage for the United 
     States and other democracies.''
       Pursuant to NSSM-1, Federal departments and agencies have 
     conducted an interagency review to take stock of existing 
     U.S. Government anti-corruption efforts and to identify and 
     seek to rectify persistent gaps in the fight against 
     corruption. In parallel with this review, departments and 
     agencies have begun to accelerate and amplify their efforts 
     to prevent and combat corruption at home and abroad; bring 
     transparency to the United States' and international 
     financial systems; and make it increasingly difficult for 
     corrupt actors to shield their activities.
       This first United States Strategy on Countering Corruption 
     builds on the findings of the review and lays out a 
     comprehensive approach for how the United States will work 
     domestically and internationally, with governmental and non-
     governmental partners, to prevent, limit, and respond to 
     corruption and related crimes. The Strategy places special 
     emphasis on the transnational dimensions of the challenges 
     posed by corruption, including by recognizing the ways in 
     which corrupt actors have used the U.S. financial system and 
     other rule-of-law based systems to launder their ill-gotten 
     gains.
       To curb corruption and its deleterious effects, the U.S. 
     Government will organize its efforts around five mutually 
     reinforcing pillars of work:
       Modernizing, coordinating, and resourcing U.S. Government 
     efforts to fight corruption;
       Curbing illicit finance;
       Holding corrupt actors accountable;
       Preserving and strengthening the multilateral anti-
     corruption architecture; and,
       Improving diplomatic engagement and leveraging foreign 
     assistance resources to advance policy goals.
       By pursuing concrete lines of effort that advance strategic 
     objectives under each of these pillars, and integrating anti-
     corruption efforts into relevant policy-making processes, the 
     United States intends to lead in promoting prosperity and 
     security for the American people and people around the world.
     The Impacts of Corruption
       From the small-town hospital administrator who demands 
     bribes in exchange for life-saving services, to the globe-
     trotting kleptocrat who offshores an embezzled fortune, 
     corruption harms both individuals and societies. The effects 
     of corrupt acts are frequently both direct and indirect. When 
     government officials steal from public coffers or fix a 
     contract to reward a political crony, these actors directly 
     transfer funding from essential services to private 
     interests. Corruption also indirectly contributes to reduced 
     public trust in state institutions, which in turn can add to 
     the appeal of

[[Page S9090]]

     illiberal actors who exploit popular grievances for political 
     advantage.
       Whether grand corruption perpetrated by powerful elites, or 
     administrative corruption carried out by lower-level 
     officials interacting directly with the public, corrupt acts 
     harm the public interest, hamper countries' development, and 
     diminish state capacity. Corruption has been shown to 
     significantly curtail the ability of states to respond 
     effectively to public health crises and to address climate 
     change, migration, and inequities of all forms, while 
     contributing to state fragility. Countries with high levels 
     of corruption are more likely to have populations that suffer 
     from human rights abuses, and are less likely to address 
     those abuses. And states with endemic corruption are more 
     vulnerable to terrorist networks, transnational organized and 
     gang-related criminals, and human traffickers.
       Corruption's increasingly globalized nature--fueled in part 
     by transnational illicit finance and criminal networks, as 
     well as exploitation of the licit financial system--imposes 
     steep costs on ordinary citizens and good governance alike. 
     In particular, transnational corruption driven by political 
     and economic elites with the aid of complicit financial and 
     legal service providers undermines lower income countries' 
     ability to advance the welfare of their citizens and 
     perpetuates aid dependency. According to the United Nations 
     Conference on Trade and Development's Economic Development in 
     Africa Report 2020, for example, every year an estimated 
     $88.6 billion--equivalent to 3.7 percent of Africa's GDP--
     leaves the continent in the form of illicit capital flight.
       Corrupt actors exploit deficiencies in anti-money 
     laundering and countering the financing of terrorism (AML/
     CFT) systems and processes--as well as in other critical 
     transparency, reporting, business, real estate, and tax 
     regimes--to use public contracting, concessions, and 
     procurement processes for personal enrichment. Corrupt elites 
     and non-state armed groups enrich themselves through illicit 
     proceeds and trade of high-value commodities, including gold, 
     wildlife, timber, petroleum, and other natural resources. 
     Across an ever-more connected and digital world, corrupt 
     actors exploit oversight and regulatory weaknesses in 
     jurisdictions around the world to divert and hide the 
     proceeds of their acts. And by leaving their financial 
     systems vulnerable to illicit assets--through anonymous shell 
     companies, opaque transactions, and under-regulated 
     professional service providers--rule-of-law-based societies 
     continue to provide entry points for corrupt actors to 
     launder their funds and their reputations. Such activity 
     negatively impacts average citizens in the United States, 
     tilting the economic playing field against working Americans, 
     enabling criminals to flourish and foreign adversaries to 
     subversively peddle their influence, perpetuating growth-
     dampening inequality, and contributing to pricing out 
     families from home ownership through real estate purchases.
       In parallel, authoritarian regimes and their proxies have 
     been shown to engage in bribery and other corrupt acts as a 
     means to advance their strategic goals, while exploiting the 
     international financial system to offshore illicit gains, and 
     influence elections and policies in democratic states. 
     Corruption in the form of state-directed cross-border 
     investments from authoritarian states, for example, has had a 
     corrosive effect on institutions in developing countries. 
     Such practices harm the competitive landscape of financial 
     markets, and often have long-term corrosive impacts on 
     governance and human rights standards. The U.S. Government 
     will continue to study the weaponization of corruption to 
     understand its use and impacts on the United States, other 
     democracies, and countries around the world, as well as how 
     to thwart and build resilience against this evolving threat.
       While the U.S. Government has long recognized countering 
     corruption as an important foreign policy goal, a growing 
     understanding of corruption's strategic impact and the 
     increasing interconnectedness of the global economy 
     underscores the need for a new approach. For the U.S. 
     Government to effectively counter contemporary corruption, we 
     must recognize the transnational dimensions of the challenge, 
     and respond in a manner that is both systemic and tailored to 
     local conditions. Doing so will require addressing 
     vulnerabilities in the U.S. and international financial 
     systems; bolstering international best practices, 
     regulations, and enforcement efforts; supporting the role of 
     non-governmental actors; building political will and 
     recognizing when it is absent; and consistently pursuing 
     accountability through a combination of diplomatic 
     engagement, foreign assistance, and enforcement actions.
       The United States will continue to evaluate and implement 
     measures as needed to further safeguard our financial system, 
     and will work with like-minded partners and relevant 
     multilateral institutions to do the same. We will make it 
     harder to hide the proceeds of ill-gotten wealth in opaque 
     corporate structures, reduce the ability of individuals 
     involved in corrupt acts to launder funds through anonymous 
     purchases of U.S. real estate, and bolster asset recovery and 
     seizure activities. We will innovate, adapt, partner, and 
     learn, so as to maximize the potential for diplomatic tools, 
     including foreign assistance and targeted sanctions, to stem 
     corruption and to hold corrupt actors accountable, while 
     expanding efforts to ensure that foreign assistance and 
     engagement do not inadvertently contribute to corrupt 
     practices. And we will continue to vigorously enforce the 
     Foreign Corrupt Practices Act (FCPA) and other statutory and 
     regulatory regimes via criminal and civil enforcement 
     actions.
       Countering corruption is not a simple task. Changing 
     embedded cultures of corruption requires significant 
     political will, and achieving sustained progress can take 
     decades. Positive change requires consistent leadership, 
     public accountability, an empowered and impartial judiciary, 
     and a diverse and independent media. Mindful of these 
     realities, the United States will increase support to state 
     and non-state partners committed to reform, boost the 
     capacity of other governments to tackle corruption, and 
     empower those, including activists, investigative 
     journalists, and law enforcement on the front lines of 
     exposing corrupt acts. We will bolster and promote public-
     private partnerships to more consistently bring in the 
     private sector as critical actors in the fight against 
     corruption, help level the playing field and improve the 
     international business climate, and lead in international 
     fora as we work to curb the ability of actors to hide ill-
     gotten wealth behind anonymity. Our closest engagement will 
     be with our most committed allies and partners, including 
     with respect to the influence of strategic corruption 
     deliberately employed by authoritarian governments.
     Illustrative Types of Corruption
       Corruption takes on many forms and is used to further 
     various illicit behaviors. Illustrative types of corruption 
     include, but are not limited to:
       Grand corruption: when political elites steal large sums of 
     public funds or otherwise abuse power for personal or 
     political advantage.
       Administrative corruption: the abuse of entrusted power for 
     private gain--usually by low to mid-level government 
     officials--in interactions with citizens and the private 
     sector, including to skirt official regulations and extort 
     citizens in exchange for their basic services.
       Kleptocracy: a government controlled by officials who use 
     political power to appropriate the wealth of their nation. 
     Can include state capture.
       State capture: when private entities improperly and 
     corruptly influence a country's decision-making process for 
     their own benefit.
       Strategic corruption: when a government weaponizes corrupt 
     practices as a tenet of its foreign policy.

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