Toomey’s team on the banking committee, one senior GOP aide told NR, is ‘the last bastion for weak China policy on the Hill.’
An early version of Congress’s annual defense-policy package had included a bill requiring financial advisers, accountants, lawyers, art dealers, and various other professionals who serve foreign elites to ensure that their services do not enable corrupt regimes’ money-laundering practices. But that provision was blocked from the latest version of the legislation, introduced last night, after Senator Pat Toomey (R., Pa.) opposed it.
Multiple congressional sources told National Review that the so-called Establishing New Authorities for Business Laundering and Enabling Risks to Security—or ENABLERS—Act was excluded from the latest version of the defense bill at the behest of Toomey, who is the top Republican on the Senate banking committee, despite its inclusion in a previous text passed earlier this year by the House. Washington Post columnist Josh Rogin first reported on Toomey’s move last month, during the negotiations about the new text.
The premise behind ENABLERS is simple. U.S. banks are already required to flag suspicious transactions involving foreign funds that might have been generated through illegal activities; this update to money-laundering laws would have put similarly rigorous controls in place for the sort of U.S. professionals who might otherwise serve wealthy and well-connected figures from foreign authoritarian regimes. Verifying that certain foreign actors’ money does not come from illegal activities is extremely difficult, and therefore the American lawyers and accountants who would otherwise work for them would not be able to do so.
It’s an overhaul that would have taken further steps to prevent Russian oligarchs and elites connected to the Chinese regime, among other corrupt foreign actors, from using Americans to protect their wealth.
Although the invasion of Ukraine, and the subsequent U.S. crackdown on pro-Kremlin oligarchs, has placed even more emphasis on Russian elites’ activities, the bill that was introduced last October had elites from several other regimes in its sights. “American adversaries ranging from China to Iran to Russia have taken advantage of the U.S. enablers of kleptocracy — unscrupulous lawyers, accountants, and others, to push their dirty money into our system, attempting to undermine our republic from within,” said Representative Joe Wilson, one of the bill’s original sponsors, in a statement last year introducing the bill in the House. The bill has earned support from lawmakers on both sides of the aisle, law-enforcement associations, and a raft of nonprofits dedicated to countering foreign corruption.
Conservative supporters of the bill, such as Mike Pompeo, have specifically homed in on the U.S. lawyers who work for Chinese Communist Party–connected individuals. “China’s fentanyl traffickers are fueling an opioid epidemic that kills tens of thousands of Americans each year,” wrote a group that included several former Trump-era foreign-policy officials, in a letter backing ENABLERS that Rogin reported on. “It is profitable for them to do so because, working with Latin American cartels, they can exploit U.S. lawyers, front companies, and real estate to launder funds.”
A senior Republican aide tied Toomey’s opposition to the bill to a broader reluctance to take a forward-leaning approach to countering the Chinese Communist Party.
“It’s unsurprising that Toomey’s banking staff killed Enablers,” this person told NR, since, “sadly they’ve killed almost every conservative initiative getting tough on China for the past few years.” The aide called Toomey’s team at the committee “the last bastion for weak China policy on the Hill,” while expressing hope that Senator Tim Scott, who will become the committee’s ranking member in the next Congress, could take a different approach.
Nevertheless, Toomey has still built up a record as an opponent of the Chinese Communist Party on Capitol Hill. In 2020, Beijing slapped the senator with sanctions over his outspoken support of democracy in Hong Kong, and more recently he has joined efforts to warn about China’s adoption of a digital currency. But Toomey has opposed just the sort of regulatory overhauls that many conservative China hawks have pushed to equip Washington with new tools to counter the Chinese regime’s malign activities, and those Americans who enable it. For example: Earlier this year, Toomey played a key role in shooting down a different proposal that would have put in place stringent safeguards to prohibit U.S. investment in certain Chinese firms.
When NR approached Toomey’s office, a Senate banking committee aide would not confirm that the senator was the person who blocked ENABLERS from the defense-policy bill, only issuing a comment expressing some procedural concerns about the legislation.
“The ENABLERS Act should not be jammed into the NDAA without first being thoroughly vetted by lawmakers. This means Congress should at least hold a hearing and markup before expanding” the powers of the Treasury Department’s Financial Crimes Enforcement Network.
The Senate banking committee aide added that Congress first needs to understand the implications of the Anti-Money Laundering Act and Corporate Transparency Act because they “gave regulators immense new powers to monitor individuals’ and businesses’ financial activities.”
But a different congressional source told NR that “the ‘process’ argument doesn’t hold water” because there was a committee hearing on the bill this year and because the bill was introduced more than a year ago. “As for the Corporate Transparency Act, that’s an issue separate from this highly tailored and targeted authority.”