Global Financial Integrity

 

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Global Financial Integrity Applauds World Bank Study on Illicit Financial Flows

Tom Cardamone, Jr.

WASHINGTON, DC – Global Financial Integrity (GFI) welcomes the World Bank’s pending study on illicit financial flows out of developing countries and thanks the Norwegian government for its important contributions to this research.  GFI has been the leading organization calling for such a study, most recently at a conference titled “Illicit Financial Flows: The Missing Link in Development” held on June 28.

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GFI Launches Nationwide Campaign to Curb Illicit Funds at U.S. Banks

Tom Cardamone, Jr.

One-Half Trillion Dollars in Illicit Funds Exit Developing World Annually, Research Shows

An Estimated $250 Billion Lands in the United States

WASHINGTON, DC – Global Financial Integrity (GFI) announced today that it will lead a nationwide campaign to limit the ability of U.S. financial institutions to accept illicit funds for deposit from overseas clients. An estimated $1 trillion, which are illegally earned, transferred or utilized, are spirited across borders annually. Of this, $500 billion exits developing economies and up to half that amount ends up in American banks or other dollar denominated accounts. “This outflow of capital from developing nations constitutes the most damaging economic condition hurting the poor today,” said GFI Director Raymond Baker.

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Take Dirty Money off the Table

Jennifer Nordin
Raymond Baker

Last month, we marked the fourth anniversary of the Sept. 11 terrorist attacks, which jolted the United States to a new understanding of the terrorist threat. After the smoke cleared, a second alarm went off: How did the terrorists pay for the crime? With newfound resolve, the U.S. government has made headway in choking off the flow of terrorist money, freezing and seizing some $200 million worldwide, according to the U.S. Treasury Department.

For all the new attention to terrorist financing, the United States has come late to the game. The channels through which terrorists’ money flows have existed for years. Drug cartels, dictators and corporate directors long ago perfected the artful dodge. Terrorist financing is just one aspect of the larger problem of dirty money.

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How Dirty Money Thwarts Capitalism’s True Course

Jennifer Nordin
Raymond Baker

If smuggling drugs across borders is bad, is smuggling profits across borders through abusive transfer pricing also bad? If tax evasion out of one country is harmful, is the inflow of tax-evading money into another also harmful? If money laundering by terrorists is dangerous, is the use of similar techniques by companies also dangerous?

More than at any time in capitalism’s history, our economic system is beset by the tension between what is legal, what is ethical and what serves the common good. This tension points to a fundamental question: which should come first for the global capitalist – maximising profits or pursuing lawful and just business transactions?

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How Dirty Money Binds the Poor

Jennifer Nordin
Raymond Baker

The World Bank in its 2005 World Development Report issued last month calls for governments to promote a “better investment climate” in the developing world and implores the international community to remove trade barriers and offer more aid. “A good investment climate”, it declares, “plays a central role in growth and poverty reduction.” All nice words, but the bank overlooks the shadowy underside of the global economy that conspires to keep poor countries in their place.

For more than 50 years, the World Bank has committed billions of dollars and the brain power of some of the brightest economists to fighting poverty, and yet outright success has been elusive. Even among World Bank staffers, there is a sense that something is missing that might explain the mystery of why so much development aid has done so little good.

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