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Mission & History


OUR MISSION

Global Financial Integrity (GFI) promotes national and multilateral policies, safeguards, and agreements aimed at curtailing the cross-border flow of illegal money.  In putting forward solutions, facilitating strategic partnerships, and conducting groundbreaking research, GFI is leading the way in efforts to curtail illicit financial flows and enhance global development and security.



CHALLENGE

Our mission stems from the estimate that $1 trillion in funds which are illegally earned, transferred or utilized are spirited out of developing countries annually. Of this, $500 billion a year ends up in western accounts. This constitutes the most damaging economic condition hurting the poor. Illicit capital flows enable drug cartels, terrorist organizations and tax evaders to move cash around the globe, undermines the goals of the World Bank and other lending institutions, strips developing nations of critical resources, and contributes to failed states.

BACKGROUND

Global Financial Integrity was launched in September 2006 following the publication of Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System, (John Wiley & Sons 2005), written by Center for International Policy Senior Fellow Raymond Baker. The book demonstrates that the problem of illicit financial flows, and the financial infrastructure supporting it, is enormous. For example, some 70 tax havens and secrecy jurisdictions are in operation across the globe and millions of dummy corporations shield owner’s identities. And the scourge of dirty money is getting worse. Indeed, global corruption has not diminished despite ten years of effort, assets now stashed in tax havens around the globe are estimated at $11.5 trillion, and non-bank cash deposits outside the country of origin are rising.

Additionally, despite massive amounts of foreign aid streaming into transitional economies, many countries fail to develop to the point that they no longer need aid. Baker’s book argues that one reason for this is that illicit capital flows inhibit a country’s ability to grow out of poverty. For every $1 poor nations receive in foreign aid, an estimated $10 in dirty money flows illicitly abroad. With such great amounts of capital draining from weak economies there is little hope of significant development or of curtailing poverty. Without mechanisms to curtail illicit cash flows, the benefits of foreign aid are undermined and the potential for drug cartels and terrorist groups using the banking system to their advantage is greatly increased.

 

 


 
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