(Bloomberg) — Treasury Secretary Janet Yellen said the U.S. must fight money-laundering and tax evasion at home if it wants to promote anti-corruption efforts throughout the world.
“The United States cannot be a credible voice for free and fair government abroad if, at the same time, we allow the wealthy to break our laws with impunity,” Yellen said in the text of remarks she’s scheduled to deliver Thursday. “If we want free institutions to thrive the world over, then first, we must model what they look like at home.”
Yellen is set to speak at the White House during a so-called Summit for Democracy, a two-day event with attendees from more than 100 governments, along with activists, private sector leaders and journalists.
The Treasury chief said the dominance of the U.S. financial system in international markets and lax laws mean “there’s a good argument that, right now, the best place to hide and launder ill-gotten gains is actually the United States.”
That, she said, is why the Treasury this week announced new rules requiring domestic and foreign-owned U.S. firms to provide new information about the persons who actually own and control them.
The department also said this week it would seek public comment on proposed rules requiring all-cash buyers of U.S. real estate to reveal their identity.
“Sometimes the only thing these luxury properties are home to are ill-gotten gains — they’re money laundromats on the 81st floor,” Yellen said.
Anti-corruption efforts also included the administration’s new push to enforce existing tax laws in the U.S., Yellen said.
“It’s not only foreign actors who abuse our financial system,” she said. “There is corruption here at home. Especially when it comes to how people pay taxes — or rather, how they don’t.”
The Treasury has estimated that tax evasion, mostly by high-income households and corporations, cost the government $600 billion in lost revenue last year. The Biden administration has asked Congress for extra funding to help beef up enforcement in the so-called Build Back Better legislation now pending before lawmakers.
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