Fetterman, Grassley Urge Implementation of Whistleblower Program to Fight Money Laundering

WASHINGTON, D.C. - Today, U.S. Senators John Fetterman (D-PA) and Chuck Grassley (R-IA) sent a letter to Department of Treasury Secretary Scott Bessent and Financial Crimes Enforcement Network (FinCEN) Director Andrea Gacki, urging them to finalize rules implementing FinCEN's whistleblower program to fight money laundering, terror-financing, and sanctions evasion.

"An effective FinCEN whistleblower program is a critical tool for America's on-going fight against terrorists, drug-traffickers, and sanctioned state actors who are threats to our national security," wrote the senators. "Congress created the whistleblower program over five years ago. Yet, FinCEN has not finalized regulations that will make the program fully operational in the fight against America's enemies or even create a dedicated webpage for whistleblowers to learn about the program or submit tips."

Whistleblowers assist law enforcement by exposing money laundering, sanctions evasion, and terror-financing. While FinCEN's whistleblower program has received hundreds of tips that have helped law enforcement, the program's rules have yet to be finalized. As a result, FinCEN has not paid out any awards to courageous whistleblowers who have risked their livelihoods and, sometimes, their lives to expose lawbreaking. Swift implementation of final regulations and prompt payment of awards is critical to making the whistleblower program effective.

While this whistleblower program remains unimplemented, adversaries are finding new and creative ways to launder money. Chinese Money Laundering Organizations help criminal cartels launder the proceeds of opiate trafficking. Hezbollah has used art and diamonds to move $160 million to fund terrorism. Criminal cartels in South and Central America have raised and transferred money using looted antiquities. Kremlin cronies, North Korea, and Iran continue to find loopholes in the U.S. financial system. Whistleblowers help law enforcement uncover complex schemes to launder illicit funds.

Senator Fetterman and Senator Grassley previously worked together to introduce the bipartisan Art Market Integrity Act, which requires art dealers and auction houses to comply with existing anti-money laundering and counter-terrorism financing regulations. The legislation would require art dealers and auction houses to maintain records and report on high-value art market transactions, aligning the United States with international standards adopted by the United Kingdom, European Union, and Switzerland. The bill would protect the United States' national security and the multibillion-dollar art market from criminals, terrorists, cartels, and other bad actors.

"It is imperative that FinCEN finalize its rules and expeditiously pay out awards to incentivize future whistleblowers who put their livelihoods and often lives on the line to help law enforcement find and stop the flow of illicit funds to criminal cartels, terrorists, and sanctioned state actors," continued the senators.

Read the full text of the letter below and here.

-

Dear Secretary Bessent and Director Gacki:

We write to urge you to finalize rules implementing the Anti-Money Laundering Whistleblower Improvement Act whistleblower program. We agree completely with Director Gacki's May 2024 statement that the whistleblower program "holds tremendous potential as an enforcement force-multiplier" and is a vital tool to "increase enforcement by strategically deploying [FinCEN's] limited resources." Indeed, Congress also recognized this observation and created the whistleblower program on a bipartisan basis in 2020 and strengthened it in 2022. An effective FinCEN whistleblower program is a critical tool for America's on-going fight against terrorists, drug-traffickers, and sanctioned state actors who are threats to our national security. Congress created the whistleblower program over five years ago. Yet, FinCEN has not finalized regulations that will make the program fully operational in the fight against America's enemies or even create a dedicated webpage for whistleblowers to learn about the program or submit tips. We urge you to do so.

One of our concerns is that whistleblowers are apparently unable to receive awards until the program rules have been finalized even though FinCEN has publicly acknowledged it already established its Financial Integrity Fund to pay out awards. According to Director Gacki's May 2024 remarks, hundreds of whistleblowers have already submitted unique tips to FinCEN. If these tips led to successful enforcement actions, then these whistleblowers ought to receive the award they're entitled to without delay. It is imperative that FinCEN finalize its rules and expeditiously pay out awards to incentivize future whistleblowers who put their livelihoods and often lives on the line to help law enforcement find and stop the flow of illicit funds to criminal cartels, terrorists, and sanctioned state actors.

America's enemies continue to find new and innovative ways to skirt our laws to launder money, fund terrorism, and evade sanctions. FinCEN recently raised the alarm on the danger posed by Chinese Money Laundering Organizations, including helping criminal cartels launder the proceeds of opiate trafficking into the United States. Nazem Ahmad used art and diamonds to launder $160 million to fund Hezbollah terrorism. Terrorists like ISIS and the Houthis, as well as criminal cartels in South and Central America, have used looted antiquities to launder money. Kremlin cronies, North Korea, and Iran continue to find loopholes in our sanctions and money-laundering compliance system. This summer we introduced the bipartisan Art Market Integrity Act to require money-laundering compliance by art dealers and auction houses. This bill would close a loophole that allows illicit funds to flow through the over $25 billion domestic art market. Whistleblowers are a critical and effective tool that can be used to help law enforcement uncover these and other sophisticated schemes to launder money and fund terrorism.

We urge FinCEN to finalize its rules, consistent with best whistleblower practices, that would allow the whistleblower program to operate effectively and swiftly pay out awards to successful whistleblowers. A fully operational whistleblower program is the enforcement force-multiplier FinCEN needs to find and stop the sophisticated schemes that criminal cartels, terrorists, and sanctioned actors use to funnel money through our financial system. Accordingly, we request that you keep our offices fully updated on the status of FinCEN's proposed rulemaking for its whistleblower program.

Thank you for your prompt review and responses. If you have any questions, please contact Brian Randolph on Senator Grassley's Committee staff at (202) 224-5225 and Devin Gould on Senator Fetterman's staff at (202) 224-4254.

Sincerely,