Calls for Financial Transparency Reforms, Funding Financial Intelligence Agency to Crack Down On Money Laundering From Environmental Crimes

Video (YouTube)

WASHINGTON — Today, in a House Financial Services Committee hearing, Congresswoman Ayanna Pressley (MA-07) highlighted the intersection of environmental crimes and illicit financial activity, both of which contribute to the climate crisis, endanger public safety, and threaten democracy. Congresswoman Pressley called for financial transparency reforms and adequately funding the Financial Crimes Enforcement Network (FinCEN), the nation’s financial intelligence unit, to crack down on money laundering from environmental crimes.

A full transcript of her exchange with FinCEN Director Andrea Gacki and Treasury Under Secretary for Terrorism and Financial Intelligence is below, and full video is available here.

Transcript: At Hearing, Pressley Spotlights Intersection of Environmental Crime and Illicit Finance
U.S. House Financial Services Committee
February 14, 2024

REP. PRESSLEY: Thank you for joining us Under Secretary Nelson and Director Gacki.

In recent years, environmental crimes have been on the rise. From wildlife trafficking to illegal logging, mining, and fishing, global environmental crime is estimated to generate hundreds of billions in illicit proceeds every year, making it the third most profitable crime in the world.

These crimes perpetuate and contribute to the climate crisis. 

I think about those devastating images of the Amazon rainforest burning. In 2022, the Amazon lost more than ten football fields every minute.

That was not a naturally occurring phenomenon; illegal mining and illegal forestry contributed to the problem.

The nonpartisan FACT Coalition released a report last October titled: Dirty Money and the Destruction of the Amazon. It highlights how profits from environmental crimes in the Amazon rainforest makes its way into the U.S. financial system. I’d like to submit this report for the record. 

REP. KIM: Without objection.

REP. PRESSLEY: While environmental crimes are damaging in their own right, they are also associated with other convergent crimes such as drug trafficking, corruption, and money laundering, which endanger public safety and corrode democracy.

Financial transparency reforms are critical.

Director Gacki, can you speak to what FinCEN is doing to tackle environmental crimes and their links to the U.S. financial system?

DIRECTOR GACKI: Thank you, Congresswoman Pressley. We agree that this is an incredibly important concern for us. And I can highlight a couple of things that we are working on. We are bringing together public private partnerships and exchanges between law enforcement and financial institutions to highlight the risk of environmental crime. 

A few weeks ago, we did a FinCEN exchange specifically focused on illegal wildlife trafficking. And then a few weeks ago, I had the opportunity to meet with financial intelligence units from around the world as part of the Egmont group of which FinCEN is a leading member, and had the opportunity to meet with the heads of the financial intelligence units of South Africa and of Brazil. 

In Brazil, we specifically focused on how we can partner to ensure that our systems are highlighting, reporting, involving, as you note, illegal binding, illegal, forestry, et cetera. And in South Africa, building on Secretary Yellen’s trip there in the last, I think it was last year, we are trying to strengthen the partnership with the financial intelligence unit of South Africa, both to highlight reporting that we can get from destination points, transit points in origin points when it comes to illegal wildlife trafficking. 

In short, this is a high priority for us, and we are trying our best to contribute.

REP. PRESSLEY: Thank you. Thank you, Director. The Republican majority is trying to defund our nation’s financial intelligence unit by cutting the budget of FinCEN.

Director Gacki, if the Republican majority succeeds in making these cuts to your funding, what are the possible consequences for FinCEN’s ability to fight financial crimes and finalize rules that will close money laundering loopholes?

DIRECTOR GACKI: Thank you, Congresswoman. I want to express my appreciation for all of the funding support we have had at FinCEN over the years. But I do want to point out that in the last two budget cycles, we, FinCEN has been funded under the President’s budget by 20 and 30 million dollars, respectively. We will of course, meet our congressional obligations in terms of implementation. But what I worry about is actually our ability to dedicate resources to important things like the FinCEN exchange. You know, we have record requests to do more and more exchanges focused around fentanyl, around illegal wildlife trafficking around you know, environmental crimes. These things I think will suffer for lack of funding.

REP. PRESSLEY: Thank you. And with environmental crimes devastating Indigenous communities and contributing to climate change, I urge you, Under Secretary Nelson, to encourage Treasury to lead the development of a whole-of-government strategy to curb illicit finance associated with environmental crimes in the coming months.

In your opinion, Under Secretary, is that something Congress and Treasury can partner on?

UNDER SECRETARY NELSON: I think it is. We did a report maybe a year and a half ago, looking at illicit finance risk and how it sort of fuels these nature crimes. And I had the opportunity in this job to go to Brazil and South Africa and Kenya, most recently, to talk about exactly these issues. And particularly in Kenya, you hear things that were a little surprising, at least to me about how they have a big population of sandalwood trees that are being deforested and may go extinct as a result of exactly this issue. 

So it is, as Director Gacki noted, a very high priority of the Treasury Department.

REP. PRESSLEY: Thank you.

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