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For Immediate Release
July, 11 2019, 12:00am EDT
Contact:
David Rosen, drosen@citizen.org, (202) 588-7742
Don Owens, dowens@citizen.org, (202) 588-7767
Congress Must Do More to Address Conflicts of Interest After Insider Trading Scandal
Statement of Craig Holman, Government Affairs Lobbyist, Public Citizen
WASHINGTON
Note: In January 2017, Public Citizen filed a complaint against U.S. Rep. Chris Collins (R-N.Y.) alleging congressional insider trading. The 116th Congress amended its ethics rules to prohibit members from sitting on the boards of public corporations and directed the U.S. House Ethics Committee to address other potential conflicts of interest related to outside service or positions. Today, Public Citizen submitted recommendations to the committee calling for further reforms.
In the wake of Collins' insider trading scandal, the nation was stunned to discover that congressional ethics rules allowed a lawmaker to sit on the board of directors of a corporation, buy and sell stock of that company and promote legislation that could benefit the bottom line of the company and its stock holders.
Congress promptly changed its rules to prohibit members from sitting on boards of public companies, but that is not enough. The same conflicts of interest arise when a lawmaker sits on the board of a private company or a non-profit organization that employs family members of the lawmaker, or when the lawmaker owns stock in a company their committee oversees and regulates.
Congress must strengthen its ethics rules by extending the ban on serving on a board of directors of a public company to LLCs and private corporations, establishing recusal requirements for members who serve as an officer or director of a non-profit organization and requiring that members and senior staff avoid individual stock ownership in entities they oversee from their official committee positions.
Public Citizen is a nonprofit consumer advocacy organization that champions the public interest in the halls of power. We defend democracy, resist corporate power and work to ensure that government works for the people - not for big corporations. Founded in 1971, we now have 500,000 members and supporters throughout the country.
(202) 588-1000LATEST NEWS
Tens of Thousands March for Indigenous Rights at New Zealand Parliament
The Māori Party co-leader called Parliament's consideration of a bill that would reinterpret a key treaty "the deepest betrayal that we've ever had from a National government."
Nov 19, 2024
An estimated 55,000 people marched outside New Zealand's Parliament in Wellington on Tuesday to protest legislation that critics argue would dilute Indigenous rights by reinterpreting a treaty signed in 1840 by the British Crown and more than 500 Māori chiefs.
The peaceful demonstration was the culmination of a nine-day march, or hīkoi, that began at Cape Reinga, the northernmost point of New Zealand and the most spiritually significant place in the country for Māori, who are about 20% of the 5.3 million-person population.
Reutersreported that some "dressed in traditional attire with feathered headgear and cloaks and carried traditional Māori weapons, while others wore T-shirts emblazoned with Toitu te Tiriti (Honor the Treaty). Hundreds carried the Māori national flag."
"We have gathered in our tens of thousands, not just Māori, but others who support an inclusive, diverse, equal partnership that our country has been a world leader in pioneering."
The Treaty Principles Bill targeting the Treaty of Waitangi, or Te Tiriti o Waitangi, is being pushed by the ACT New Zealand party, a junior partner in the center-right coalition government, which also includes the National Party and New Zealand First (NZF).
Although the National and NZF have said that they are only supporting the legislation for the first of the three readings—meaning it is highly unlikely to pass—Debbie Ngarewa-Packer, co-leader of the Māori Party, or Te Pāti Māori, told the podcastThe Front Page that even allowing it to be tabled is a "deep shame."
"We deserve better than to be used as political pawns," Ngarewa-Packer argued. "The fact that National has decided that we were tradeable and the mana of the coalition agreement was so much more important than the mana of Te Tiriti and tāngata is the deepest betrayal that we've ever had from a National government."
Pointing to U.S. President-elect Donald Trump, who won earlier this month after being ousted in the previous cycle, Ngarewa-Packer added, "We're a country that had the first women's vote, we have always punched above our weight in the anti-nuclear space, the anti-discrimination space, and here we are in 2024 with the sort of Trump-like culture coming into our politics."
The New York Timesnoted Tuesday that "a year before American voters' anger over the cost of living helped Donald J. Trump win the presidency, similar sentiments in New Zealand thrust in the nation's most conservative government in decades. Now, New Zealand bears little resemblance to the country recently led by Jacinda Ardern, whose brand of compassionate, progressive politics made her a global symbol of anti-Trump liberalism."
As the newspaper detailed:
The new government—a coalition of the main center-right party and two smaller, more populist ones—has reversed many of Ms. Ardern's policies. It has rescinded a world-leading ban on smoking for future generations, repealed rules designed to address climate change, and put a former arms industry lobbyist in charge of overhauling the nation's strict gun laws.
And in a country that has been celebrated for elevating the status of Māori, its Indigenous people, it has challenged their rights and the prominence of their culture and language in public life, driving a wedge into New Zealand society and setting off waves of protests.
Parliament was briefly suspended last Thursday after Maori members staged a traditional dance called a haka to disrupt the first reading. The haka—which garnered global attention—was started by Member of Parliament Hana-Rawhiti Maipi-Clarke, who tore up a copy of the bill.
Speaking to the Wellington crowd on Tuesday, Maipi-Clarke—who at 22 is the country's youngest MP—said, "We are the sovereign people of this land and the world is watching us here, not because of the system, not because of the rules, but because we haka."
Other participants in the Tuesday action included the Māori Queen, Ngā Wai Hono i te Pō, and Te Pāti Māori Co-Leader Rawiri Waititi, who led the crowd in a chant to "kill the bill."
According toThe Northern Advocate, ACT Leader David Seymour, "the architect of the Treaty Principles Bill, was booed back inside the Beehive today by the tens of thousands protesting against his controversial bill."
While Seymour has framed the bill as an effort to end division and ensure equal rights for all, critics like Ella Henry, professor of Māori Entrepreneurship at Auckland University of Technology, warn that it is an effort to roll back New Zealand's previous progress in terms of relations with Indigenous people.
"So we have gathered in our tens of thousands, not just Māori, but others who support an inclusive, diverse, equal partnership that our country has been a world leader in pioneering," Henry toldSBS News. "Those are the people who are marching."
Hayley Komene, who is from the Ngāti Kauwhata tribe, similarly toldThe Guardian that there was a "real strength and pride" at the march, and "there are people from lots of different backgrounds here for the same reason—it's beautiful."
Komene also slammed the government's Māori policies as "absolutely ridiculous" and stressed that "Te Tiriti is a constitutional document of our country."
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G20 Leaders Reach 'Landmark Commitment' for Global Tax on Ultrarich
"Now is the time to turn words into action and launch an inclusive international negotiation, extending beyond G20 countries, on the reform of the taxation of the superrich," said economist Gabriel Zucman.
Nov 19, 2024
Acknowledging that "the era of the billionaire" is still in full swing across the globe, economic justice advocates on Tuesday applauded a "landmark commitment" by G20 leaders at the group's annual summit in Rio de Janeiro, where delegates agreed to cooperate on efforts to ensure the richest households in the world are taxed fairly.
The final communiqué out of the G20 Summit includes a commitment from 19 countries, the European Union, and the African Union, to "engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed."
"Cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices," reads the communiqué. "We look forward to continuing to discuss these issues in the G20 and other relevant forums, counting on the technical inputs of relevant international organizations, academia, and experts."
The final text was brokered by Brazilian President Luiz Inácio Lula da Silva, commonly known as Lula, and the E.U. Tax Observatory noted that Argentina's right-wing president, Javier Milei, "failed to convince other G20 countries to block the communiqué."
The meeting took place less than a year after economist Gabriel Zucman, director of the E.U. Tax Observatory, published a report titledA Blueprint for a Coordinated Minimum Effective Taxation Standard for Ultra-High-Net-Worth Individuals, which informed G20 finance discussions leading up to the summit.
"A minimum tax on billionaires equal to 2% of their wealth would raise $200-$250 billion per year globally from about 3,000 taxpayers; extending the tax to centimillionaires would add $100-$140 billion," said Zucman, a leading expert on tax avoidance and reducing inequality, in the report.
Billionaires' effective tax rate is currently equivalent to 0.3% of their wealth, requiring them to pay a far lower rate than middle-class taxpayers.
Zucman hailed the agreement out of the summit in Rio de Janeiro as a "historic decision" and said concrete action by the world's governments must follow.
"Now is the time to turn words into action and launch an inclusive international negotiation, extending beyond G20 countries, on the reform of the taxation of the superrich," said Zucman.
Along with Milei, the Biden administration pushed back this year as the G20 weighed Zucman's tax proposal. Treasury Secretary Janet Yellen toldThe Wall Street Journal in May that the "notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way—we're not supportive of a process to try to achieve that. That's something we can't sign on to."
As Common Dreamsreported Tuesday, the U.S. is one of eight countries that are contributing to an international loss of $492 billion in taxes each year as multinational corporations and ultrawealthy individuals underpay. The eight countries—which also include Australia, Canada, Israel, Japan, New Zealand, South Korea, and the U.K.—oppose a United Nations tax convention.
Jenny Ricks, general secretary of the Fight Inequality Alliance, said that particularly with U.S. President-elect Donald Trump set to take office in January, "we live in the era of the billionaire."
"We need to move to the era of the 99%," said Ricks. "This shift won't come easily. The U.S. elections have shown how the superrich can use their wealth and power to influence policies and shape the outcomes of elections. Leaders like Trump in the U.S. and Javier Milei in Argentina are actively working to derail international cooperation, while politicians around the world fail to oppose the vested interests that continue to benefit from such unequal societies."
"We will fight harder than ever before to transform the rhetoric on taxing the rich into a global reality," she added. "We need more equal societies in which the richest no longer hold all the power and wealth, with devastating consequences. We need to redistribute the wealth of the superrich to fund vital public services and the response to climate change. Such a transformation is essential to creating the alternative we seek to today's broken system."
Viviana Santiago, executive director of Oxfam Brazil, applauded Lula's government and the G20 leaders for responding "to people's demands worldwide to tackle extreme inequality, hunger, and climate breakdown, and particularly for rallying action on taxing the superrich."
"G20 governments deserve praise for their groundbreaking commitment to cooperate on taxing the world's superrich. But we won't rest until this delivers real change for people and planet," said Santiago, adding that governments now ostensibly supporting a tax on billionaires' wealth should also "be championing a $5 trillion climate finance goal at COP29," the U.N. summit set to wrap up in Baku, Azerbaijan this week.
"How can they argue that climate justice is unaffordable with a deal to raise trillions of dollars by taxing the superrich on the table?" she asked.
Quentin Parrinello, policy director at the E.U. Tax Observatory, asserted that negotiations on the tax proposal "must now extend to a much more inclusive space than the G20."
"Such reforms don't happen overnight, but time is pressing," said Parrinello. "This agenda is even more important today, with the risk of geopolitical fragmentation and looming wealth concentration fueling inequality and undermining democracy."
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Tax Dodging by Super-Rich, Big Corporations Costs Nations Half a Trillion Per Year: Study
"The U.K. and the U.S. are both among the biggest enablers and the biggest losers of this lose-lose tax system," said the chief executive of the Tax Justice Network.
Nov 19, 2024
A study published Tuesday estimates that tax dodging enabled by the United States, the United Kingdom, and other wealthy nations is costing countries around the world nearly half a trillion dollars in revenue each year, underscoring the urgent need for global reforms to prevent rich individuals and large corporations from shirking their obligations.
The new study, conducted by the Tax Justice Network (TJN), finds that "the combined costs of cross-border tax abuse by multinational companies and by individuals with undeclared assets offshore stands at an estimated $492 billion." Of that total in lost revenue, corporate tax dodging is responsible for more than $347 billion, according to TJN's calculations.
"For people everywhere, the losses translate into foregone public services, and weakened states at greater risk of falling prey to political extremism," the study reads. "And in the same way, there is scope for all to benefit from moving tax rule-setting out of the OECD and into a globally inclusive and fully transparent process at the United Nations."
The analysis estimates that just eight countries—the U.S., Canada, the U.K., Japan, Israel, South Korea, Australia, and New Zealand—are enabling large-scale tax avoidance by opposing popular global reform efforts. Late last year, those same eight countries were the lonely opponents of the United Nations General Assembly's vote to set in motion the process of establishing a U.N. tax convention.
According to the new TJN study, those eight countries are responsible for roughly half of the $492 billion lost per year globally to tax avoidance by the rich and large multinational corporations, despite being home to just 8% of the world's population.
"The hurtful eight voted for a world where we all keep losing half a trillion a year to tax-cheating multinational corporations and the super-rich," Alex Cobham, chief executive of the Tax Justice Network, said in a statement Tuesday. "The U.K. and the U.S. are both among the biggest enablers and the biggest losers of this lose-lose tax system, and their people consistently demand an end to tax abuse, so it's absurd that the U.S. and U.K. are seeking to preserve it."
"It's perhaps harder to understand why the other handful of blockers, like Australia, Canada, and Japan, who don't play anything like such a damaging role, would be willing to go along with this," Cobham added.
TJN released its study as G20 nations—a group that includes most of the "hurtful eight"—issued a communiqué pledging to "engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed." Brazil, which hosted the G20 summit, led the push for language calling for taxation of the global super-rich.
The document drew praise from advocacy groups including the Fight Inequality Alliance, which stressed the need to "transform the rhetoric on taxing the rich into global reality."
The communiqué was released amid concerns that the election of far-right billionaire Donald Trump in the U.S. could derail progress toward a global solution to pervasive and costly tax avoidance.
The new TJN study cites Trump's pledge to cut the statutory U.S. corporate tax rate from 21% to 15% and warns such a move would accelerate the global "race to the bottom" on corporate taxation.
"People in countries around the world are calling in large majorities on their governments to tax multinational corporations properly," Liz Nelson, TJN's director of advocacy and research, said Tuesday. "But governments continue to exercise a policy of appeasement on corporate tax."
"We now have data from these governments showing that when they asked multinational corporations to pay less tax, the corporations cheated even more," Nelson added. "It's time governments found the spines their people deserve from their leaders."
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