Financial Transparency Coalition

Global Financial Integrity Applauds Shareholder Initiative

WASHINGTON, DC–Global Financial Integrity (GFI) applauds Harrington Investments, Inc.’s decision to file shareholder resolutions with Citigroup, Bank of American and JPMorgan Chase, calling for the adoption of a policy position addressing the systemic use of the U.S. financial system to both shelter illicit funds and transfer them internationally.

The shareholder resolution follows a difficult year in which we saw Wachovia Bank sanctioned for laundering millions of dollars for South American drug cartels, HSBC agreeing to sanctions from the U.S. Comptroller of the Currency for failure to maintain adequate anti-money laundering programs, and the release of a scathing report by the Senate Permanent Subcommittee on Investigations on the use of the U.S. financial system by corrupt leaders and known criminals. Even the Vatican Bank came under investigation for money laundering this year.

GFI works to curtail the flow of illicit funds around the world and promote transparency in the international financial system in order to reduce the amount of capital flight out of developing countries. This goal cannot be achieved without the active participation of the financial actors in the world’s largest financial centers, and positive shareholder involvement in these issues is critical to securing that participation.

GFI spokespersons are available for comment. Contact Monique Perry Danziger at mdanziger@gfip.org or (202) 293-0740 ext. 222 to set up an interview.

Click here to download the full text of the shareholder resolutions.

Please find Harrington Investments’ press release as well as a link to the full text of the resolution below.

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FOR IMMEDIATE RELEASE

November 15, 2010
Contact: Dale Wannen
(707) 257-7923 Fax
(707) 252-6166 Voice
www.harringtoninvestments.com

Investment Firm Files Resolution At Major Banks

Calling For The Adoption Of Principles On Global Illicit Financial Flows And Transparency

Napa, CA – Harrington Investments, Inc. (HII), a socially responsible investment advisory firm has filed shareholder resolutions at Citigroup, Bank of America and JP Morgan Chase, calling for the adoption of principles to stem illicit financial transactions which are the result of government corruption and bribery, tax evasion, money laundering, illegal arms deals and the movement of money by drug cartels.

The resolutions also request that the banks support broad public policies aimed at creating greater accountability for the identification of criminal money by significant non-bank actors in the financial system.

“According to Global Financial Integrity (GFI), the U.S. financial sector, especially international bankers, are under increasing pressure from government regulators to respond to the growing illicit movement of money throughout the financial system,” said John Harrington, President/CEO of Harrington Investments, Inc.  “Shareholders, as principals, need to make sure that our agents, corporate executives and bank boards of directors, respond as responsible fiduciaries to protect our banks’ integrity and reputation by developing industry-wide standards.”

Heather Lowe, Legal Counsel and Director of Government Affairs for Washington, D.C. non-profit advocacy group Global Financial Integrity, commented that “These resolutions are all about reducing the risk that illicit funds even get to the banks, and if they do, making it easier for banks to identify the bad actors.  They are based on recommendations put forward by the Senate Permanent Subcommittee on Investigations earlier this year and recognize that banks need support in their efforts to root out illicit money.  We hope that shareholders also recognize the value of making a bank’s partners part of the solution to this global problem.”

Harrington and his corporate counsel have been working with GFI and the Task Force on Financial Integrity and Economic Development in an effort to evaluate policies of banks owned by HII to prevent illicit financial flows.  This resulted in the introduction of shareholder resolutions at the banks to encourage management to adopt principles for national and international reforms to prevent illicit financial flows based upon the following four principles:

• That there should be established by governments or other third parties an international, publicly administered database  of politically exposed persons so that all financial institutions can access it, and be privy to the same information,  to  enable consistently rigorous due diligence across the industry.
• That other actors in financial market transactions, such as realtors and escrow agents, attorneys and their client accounts, should be subject by public policy to strict anti-money laundering safeguards.
• That all privately held corporations that seek access to US financial markets should be obliged by public policy to disclose the names of natural persons having a substantial economic interest in such entity or exercising de facto control over its policies or operations.
• That the United States government should implement these principles through its policies, and by advocating for appropriate international mechanisms.

In December 2009, Harrington Investments became a signatory on the New Haven Declaration on Human Rights and Financial Integrity following a two-day conference at Yale University focusing on how illicit financial flows and the shadow banking system increase global poverty.  The declaration was delivered to the G8 and G20 diplomats, international financial institutions and NGOs around the world (see http://www.gfip.org/index.php?option=content&task=view&id=287).

Click here to download the full text of the shareholder resolutions.