The Biden administration gets serious on fighting corruption

A favorite promise of presidential administrations here and elsewhere has been to fight corruption, within their own ranks and around the world. Somehow, though, corruption always seems to win. President Joe Biden insists this time will be different.

The White House beat a 200day deadline it imposed on itself this summer for a study on how the United States and its allies might go after global kleptocracy — delivering a report in advance of last week’s democracy summit. Past efforts to stymie self-dealing and other forms of malign finance in this country have mostly followed headline-making scandals and come from the legislature. Think, for instance, of the post-watergate era that ushered in the Foreign Corrupt Practices Act, FISA, dramatic improvements to FOIA, and more. Yet the salvos have proved inadequate to stop the flow of illicit wealth. Anyone unconvinced need only look at the leaked Pandora Papers cataloguing elected officials buying secret villas with funds hidden in secret offshore accounts, or human rights violators stashing their earnings untaxed in South Dakota trusts.

Anticorruption was a theme of Biden’s presidential campaign, and the document released by his administration is not just rhetoric but already has some teeth. The White House identified underused authorities possessed by executive agencies and directed those agencies to start using them, right away. Some have begun: The Treasury Department, for instance, has initiated a regulatory process on title insurance reporting obligations that would challenge anonymity in real estate, as well as proposed identification rules that would strip shell companies of their cover. The U.S. Agency for International Development has launched a global challenge to combat transnational corruption, as well as a defense fund for defamed international journalists. These are only the start of what should be a bevy of interventions. The strategy, if it succeeds, will do so because it not only holds kleptocrats abroad to account, and kleptocrats here to account, but also holds the rest of the United States to account for enabling the kleptocrats. Commitments to pursue increased domestic enforcement are paired with vows to help partner nations bolster their own regimes. Initiatives to impose economic sanctions and visa restrictions on violators are coupled with the desire to scrutinize gatekeepers at home, from lawyers to accountants to corporate service providers, who facilitate illegal activity.

There is, of course, more to do. The processes initiated must be funded and completed. Other steps need to be taken such as working with Congress to extend money-laundering safeguards as proposed in the Enablers Act, with a focus on familiarly opaque areas such as art and antiquities as well as on uncharted territory such as digital assets. Yet the very existence of a plan distinguishes this administration from so many of its predecessors. That offers some hope that, even if the U.S. government can’t beat corruption everywhere and forever, it can at least strike a heavy blow.