Whitehouse Chairs Judiciary Committee Hearing on Seizing Russian Oligarchs' Illicit Assets to Aid Ukraine

Hearing

Today, Senator Sheldon Whitehouse (D-RI) chaired a hearing of the full Senate Judiciary Committee entitled, "KleptoCapture: Aiding Ukraine through Forfeiture of Russian Oligarchs' Illicit Assets." The hearing explored the national security threat posed by kleptocracy and the dark economy, and the Department of Justice's Task Force KleptoCapture's role in recovering illicit assets linked to foreign corruption. In the hearing, the Committee examined the bipartisan asset seizure framework Whitehouse is developing with Senators Lindsey Graham (R-SC) and Michael Bennet (D-CO), which would level a massive financial blow to Vladimir Putin and his corrupt oligarchs while funding aid to Ukraine without appropriating additional taxpayer dollars.

In March, the Biden administration released a proposal to boost the federal government's authority to hold Vladimir Putin, the Russian government, and Russian oligarchs accountable for the unprovoked war against Ukraine. A central component of the administration's proposal was Whitehouse's bipartisan asset seizure framework, which would grant the administration limited in rem administrative forfeiture authority for the seizure of ill-gotten oligarch assets and the ability to use proceeds from the sale of those assets to help Ukraine.

The asset seizure framework discussed at today's hearing would allow the administration to move quickly against highly mobile assets like yachts and jets, all within a sound constitutional framework.

"I am proud of this bill, and I hope we can see it through to provide our government the tools it needs to go after oligarchs' ill-gotten assets and use the proceeds to help the Ukrainian people," said Whitehouse today.

Whitehouse is a recognized leader in the fight against kleptocracy and international corruption. He is the Chair of the Senate Caucus on International Narcotics Control, a senior member of the Senate Judiciary Committee, and a member of the Commission on Security and Cooperation in Europe (or the Helsinki Commission). He was a lead author of the groundbreaking 2020 law to collect beneficial ownership information to aid U.S. law enforcement in cracking down on money laundering.

Whitehouse and Graham are the co-leaders of the annual Munich Security Conference Congressional Delegation, where support for congressional efforts to hold Putin and his corrupt oligarchs accountable for their brutal war was first forged.

Below is the text of Whitehouse's as-delivered opening remarks.

I'd like to start by thanking Chair Durbin for his invaluable support for today's hearing on how we can use asset forfeiture of Russian oligarchs' assets to aid Ukraine, and for his efforts to hold Russia accountable for its crimes against Ukraine and humanity. Thank you also to Ranking Member Grassley for your leadership and efforts to root out corruption, fraud, and abuse at home and abroad. And I've been honored to work with Senator Graham and Senator Bennet on this draft bill that we're working on. So, Lindsey in particular, thank you for your tireless efforts and insights. A lot of this began during CODEL McCain when we were in Munich as we were briefed that the decision to cross the border into Ukraine had been made by Vladimir Putin, so there is a legacy effect of our friend John in all of this as well. I hope we can get this bill across the finish line soon.

The situation we're in is that America is engaged in a growing clash of civilizations. That clash is between democracy and rule of law on one side, and kleptocracy and corruption on the other. Freedom House recently marked the 15th consecutive year of decline in global freedom. That decline is hastened by corruption.

The dark economy that enables international corruption is a national security threat to the United States of America. From drug trafficking to the arms trade to terrorism, the international dark economy supports it all.

Vladimir Putin's brutal, unjustified, and illegal invasion of Ukraine launched a campaign of destruction, subjecting civilians in once-vibrant cities to hellish shelling and war crimes like rape and extrajudicial killing.

Democracies across the world are answering Ukraine's call for aid. Arms are pouring into the country to help Ukraine force out the invaders, and later rebuild. Congress has passed over $50 billion in defense assistance and humanitarian aid. But in this era of hybrid threats -- where state and non-state actors merge, and enemies deploy armies of lawyers and shell companies in addition to guns and bombs -- traditional tools of deterrence are no longer enough.

Key to this deterrence effort is sanctions to punish those who give aid and comfort to the Putin regime.

Russia's policies are inextricably linked to the interests of its corrupt billionaire oligarchs. Vladimir Putin -- much like a mob boss -- props up these criminals in exchange for support and legitimacy, and vice versa. As in many criminal enterprises, these oligarchs launder their dirty money through legitimate businesses and assets. Recognizing this, the Biden administration and its international partners have created new, agile task forces to target corrupt oligarchs.

One of those bodies, Task Force KleptoCapture, is run by veteran organized-crime prosecutor Andrew Adams, who's with us today. KleptoCapture is dedicated to enforcing sanctions and economic countermeasures, and has already made a number of stunning seizures.

Yet the unprecedented scale of looting and secrecy demands ever nimbler and more creative responses. Congress has work to do. In April, the Biden Administration transmitted to Congress a request for a streamlined in rem forfeiture authority that will allow the United States to target high-value assets from Putin's criminals and repurpose oligarchs' playthings into humanitarian aid for the Ukrainian people.

Current law isn't flexible enough to allow us to respond effectively to the crisis in Ukraine. For instance, we have no dedicated mechanism to transfer the proceeds of seized oligarch assets to the Ukrainian people. Administrative forfeiture is limited to assets valued at $500,000 or less. Sanctions authorities like the International Emergency Economic Powers Act allow the government only to freeze, and not seize, assets unless the U.S. is engaged in armed conflict.

So we're working on a bipartisan basis to grant the Justice Department needed in rem administrative forfeiture authorities, and the ability to transfer assets into a Ukrainian Relief Fund, all within a sound constitutional and legal framework.

As a former U.S. Attorney, I get that due process protections are important but they exist on a spectrum -- on one end, foreign enemy combatants during wartime have few rights, and on the other end, American criminal defendants in U.S. courts have robust rights. Our framework lands in a responsible place between the two, putting the onus on criminal foreign oligarchs to show up in court to challenge administrative forfeitures, but providing innocent owners a defense and due process protections that the Supreme Court has long held pass muster even in purely domestic applications. And it sunsets after three years, to provide a trial period.

I am proud of this bill and I hope we can see it through to provide our government the tools it needs to go after oligarchs' ill-gotten assets and use the proceeds to help the Ukrainian people.

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