Written testimony by Anthea Lawson of Global Witness for the hearing by the U.S. House of Representatives Committee on Financial Services, on ‘Capital Loss, Corruption, and the Role of Western Financial Institutions’
May 19, 2009
Mr Chairman,
My name is Anthea Lawson. I work for Global Witness, a non-governmental organisation with offices in London and Washington DC that investigates the links between natural resources, corruption and conflict. I lead our investigations on how banks facilitate corruption.
For a decade and a half, our investigations into conflict diamonds, illegal logging and corruption in oil, gas and mining have been the catalyst for international initiatives and policies to promote transparency and ensure that natural resources do not fuel conflict. Our work has been a key driving factor behind the Kimberley Process, to control the trade in conflict diamonds, and the Extractive Industries Transparency Initiative, to encourage disclosure of payments made by extractive companies and received by governments.
But with all of these investigations into various natural resource trades, there was a missing link: the route for the money behind these corrupt or conflict-fuelling transactions. So we started to look into it. And in each of these cases of corruption, there was inevitably a bank involved.
Banks are not permitted to accept corrupt funds under existing international standards, but too often they do not take this obligation seriously.
By accepting these customers, banks are fuelling corruption and therefore poverty. Countries such as Equatorial Guinea, Republic of Congo, Angola, Turkmenistan and Liberia are stark demonstrations of how banks are facilitating the looting of state assets. They are rich in natural resources, but these resources have been captured by a small minority for their own benefit, robbing these countries of crucial resources needed for development and poverty alleviation. Ultimately this creates autocracy, conflict, instability and sometimes state failure, that may require international intervention in order to protect regional security, such as occurred in Liberia. Misappropriation of natural resource revenues also affects U.S. energy and national security interests.
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Six of the U.S. top ten oil importing countries rank at the bottom third of the world’s most corrupt countries, according to Transparency International. An increasing amount of U.S. oil imports –now 23% of the total – come from Africa, according to Energy Information Administration statistics.
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