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tv   Election Interference from Shell Companies Virtual Currency  CSPAN  June 30, 2018 7:01pm-8:01pm EDT

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cable or satellite provider. >> c-span's "washington journal," live every day with news and policy issues that impact you. weeklyup sunday morning, standard reporter and syndicated columnist discussed political news of the day. then, corporation laurel miller talks about the u.s. role in afghanistan and the military and political stability of that country. be sure to watch c-span's "washington journal" live at 7:00 a.m. eastern on sunday morning. join the discussion. >> next, a hearing examines the use of shell companies and virtual currencies as ways foreign countries are influencing u.s. elections. witnesses discuss their recommendations involving greater financial transparency and disclosure provision at this event held by a senate judiciary
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subcommittee. it is an hour. subcommittee will come to order. appreciate the senator coming within less ideas. i have learned a lot about crypto currency. how easy it would be to funnel foreign money through to affect our democracy and how these virtual currencies, bit coin and others, how that can manipulate form powers or other groups to
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influence our democracy. ist i would like to do introduce our panel and turn it over to senator whitehouse who will lay out the case better than i. that chairman,, i appreciate his attendance. we are not talking about this problem enough. it is going to happen, probably already has happened. the good news is, there is enact prettye can quickly if we chose to stop this. senator grassley has been terrific and i appreciate that. i will turn it over to senator whitehouse. whitehouse: i appreciate you holding this hearing. this is one of a series of firsts that we have accomplished in the subcommittee under your leadership. . am grateful for it
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some are not publicly known, but are significant. i just want to open with the word of appreciation to you. judiciary ining in april of facebook ceo mark zuckerberg testified before the judiciary committee about the new measure facebook was implementing to make sure foreign actors cannot buy political ads on facebook and interfere in u.s. elections. facebook, mr. zuckerberg told us, was going to require valid government identification and verify political ad purchaser. mr. zuckerberg conceded that facebook would not look kind a shell corporation. -- corporation to determine the actual identity of the actual buyer. actor merely funnels money into a domestic show corporation, which then purchases the ad, facebook would be none the wiser. federalately, the election commission and other finance campaign regulators are
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no better equipped to detect foreign identity laundering in u.s. elections. while foreign corporations and foreign nationals are prohibited from spending money in elections, our lack of affect the disclosure laws would allow upeign interests to set shell companies, hide their identities and engage in illegal and political spending. we would never know it. quite simply, vladimir putin and his oligarchs can use the exact same tactics american special interest used to spend anonymous money in our elections and secure influence. criminals have long used shell companies to obscure ownership and hide assets. have we have learned more and more about russian interference in our own elections and about their playbook abroad, much thanks to previous subcommittee hearings, we now see how the same devices can be used to hide foreign meddling in our elections. last year at a judiciary
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committee hearing on russian interference, homeland security advisor to george w. bush noted, "it is critical that we effectively enforce the campaign-finance laws that would prevent this type of financial influence by foreign actors." i could not agree with him more, but we do not, and part of it is because we do not look through shell corporations to see who is really there. the first step to help address this problem, i am pleased up work with seminole -- senator graham and senator grassley to introduce the bill. it targets the cabaret of professionals who help establish the shell companies. it would make it a felony for an owner, officer attorney or or use ato establish corporation company or business entity to conceal illegal political activity by a foreign national. separately, senator lumen and
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german thought introduced this election back. that bill would require senior executive and financial officers spending money in elections to certify that they have done their due diligence that no for money has been accepted and that they have not spent any foreign money on campaign related disbursements. that bill has been referred to to the finance committee. i raised it as another example of the type of legislation congress should consider to defend against a clearly predicted threat of foreign interference in our elections. examine whether crypto currency can be used to launder foreign money in the u.s. elections. the virtual currency and crypto krantz he raises a host of challenges for congress and regulators. i'm glad our subcommittee is examining it and give a better understanding of how this emerging technology works. i am looking forward to learning more about how anonymous virtual
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currencies are. and about the risks, the anonymity of those crypto currencies poses in our political system. alexander hamilton advised way from the corruption desire in foreign powers to gain in improper ascendant in our councils is one of the most deadly adversaries of republican government. this adversary is no less deadly today. hyperampaign finance is a partisan affair, we can all agree that hamilton was right and that we have a compelling interest in making sure that foreign governments and foreign americannnot stop elections and infiltrate our political arena. i look for to hearing from our
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witnesses and i hope this is a sign of good future work to protect our elections. another presence of the committee chairman. would you like to say anything? number one, to explain that i will not be here. number two, to thank our witnesses. this committee has to do a lot of work. thank you for that and thank you for the on errands -- thank you for the audience for being interested. thank you for the ranking member and congress continues to confront the election interference issue and find all the ways that we can to try to prevent it in future elections. this is the seventh hearing that we have had on this single copy over the past 19 months. we have heard from a number of witnesses on this topic that
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made a wide range of recommendations on how to deal with the election interference as we approach 2018 midterms. i am pleased that the witnesses here at today have offered to lend their expertise and offer their own perspective. cosponsored the shell company abuse act along with senators white house, senator graham, senator derman and senator blumenthal. it incorporates recommendations we have heard from experts on both sides of the aisle. this bipartisan bill shows that we can work together across party lines, put politics aside for the it of the country and help secure our election infrastructure. i look forward to the hearing fromd as we will hear today's witnesses about the additional steps that can be taken to protect our elections. and also omits some questions from response if you would respond to them in writing. i overlooked expressing my
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appreciation to chairman grassley for his work on the title corporation, which is probably the broadest shell corporation disclosure measure in congress right now focused on foreign election spending, but also on not having america become that haven for criminals around the world. i appreciate the chairman's support on that legislation. i should have mentioned that. our panel today is mr. david murray. financial integrity network vice president for product development and services. before joining last year he was involved in all aspects of financial integrity policy of the treasury department, serving as director of office, illicit finance and senior advisor to andsecretary for terrorism intelligence. is the director of
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secure transactions at heart tower at global advisory firm focused on cyber engineering solutions. he is advising senior leadership of financial institution for the united states government. international law enforcement evolving crypto currency in the application of block chain to the financial health care supply chain and other industries. raster's miss sheila. she is the executive director for the center for responsive policies, a nonpartisan watchdog that tracks money into u.s. on its website, open secrets.org. she serves as a research director supervising data analysis for open secrets. board . will you all please stand and be sworn. raise your right hand police.
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give tomnly swear it to the whole truth, and nothing but the truth so help you god. you can lead us off. thank you chairman house and ranking white to discuss protecting our elections from foreign interference. thank you for the invitation to be here today. it is an honor. for interference in our democratic process is it democratic threat. american people are fortunate for your diligence in addressing it. the concern about foreign interference in our election predates the ratification of the constitution. since then, congress has acted to protect our elections from foreign interference. the united states remains wonderful to foreign interference. in part because of critical gap in our financial transparency regime. andrsaries have a low-tech high-tech options for funding interference operations that
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undermine democratic prophecies. anonymous companies are the leading threat. options, virtual currencies are in emerging one. today we will discuss how foreign actors have exploited these gaps to innovate finance campaign laws. i will conclude that providing this for strengthening transparency. in 2016 russia unleased the boldest yet that would affect the u.s. campaign. it represented a significant escalation of directness, level of activity and scope of effort compared to previous operations in the u.s. elections. inrequires dark funding order to remain covert. if the funding trail led back to the kremlin, this component of the active measures campaign would have unraveled. their trackscover by funneling money through shell companies and financial accounts. the russians 2016 covert
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influence campaign was not the only attempt by a foreign actor to intervene in that u.s. election. there is the case of the wealthy mexican businessman. tried toin 2000 11 he buy influence in san diego through campaign spending. u.s.nneled money through shell companies to an independent expenditure committee. he was convicted along with the u.s. co-conspirators in 2017. shell companies are well-established threat to financial transparency. a threat to the transparency campaign finance. currencies are an emerging threat. despite efforts, increase regulations and supervision of currency exchangers, they remain vulnerable to finance. they also could be used by a foreign adversary to support u.s. campaign finance laws. some virtual currencies promote anonymity in settlement. two traits that are attractive to criminals. transactions,tate
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meaning that there is financial institution between the sender and receiver of funds. easier for a foreign adversary to conceal its location outside the united states. it is vital that we build a financial transparency regime that enables the exposure of foreign covert campaigns in near real time, not merely a regime after the fact. as much a successful prosecution can satisfy our sense of justice, convictions are poor remedy. our goal should be interdiction. i recommend transparency measures to support it. we should ban anonymous companies. second, we should knock away customer duef the diligence rule. third, we should required cross-border fund transfers to be reported. each of these recommendations would protect our elections from interference. implemented together, each would strengthen the others. thank you for having me here
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today. i look forward to answering any questions you may have. >> members of the senate judiciary committee, i am honored to testify today on the topic to protect our elections from foreign interference through the use of foreign it currency -- foreign currency. for troll is there frequent usage in an attempt to shield the identity of those using them as was just described. for party state actors and others interested in affecting u.s. political processes need anonymity to appear to be valid members of this community. virtual currencies are tailor-made. it is important to acknowledge that virtual currencies are about much more than crypto currencies, such as bit coin. virtual currencies do include the centralized system such as crypto currencies like the coin, as well as centralized system such as the russian key we web money, the chinese pay and many
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others. there are thousands of the systems but less than 100 are relevant due to lack of liquidity. the systems are part of a thriving ecosystem of not only virtual currencies but also other digital mobile and stored value systems that cumulatively measure in the thousands. russia has been able to leverage these virtual currencies and has not needed for -- crypto currencies to influence our elections. facebook disclosed in september of 2017 that it had discovered more than 3000 apps brought my more than 470 accounts run by a russian troll farm reaching more than 11.4 million people that saw the ads. how are they paid for? many of the ads placed by the russians aimed at influencing u.s. election were paid for through the u.s. centralized virtual currency kiwi. these are partnered with them unable to rule wallet -- virtual wallet in 2011.
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eric 8.5 virtual accounts and they are relatively easy ways for russians to send money. without attribution and understanding of the digital this willcosystem, continue. another major centralized virtual currency to be aware of is a web money. using well protected servers, not a public lock chain might bit coin, this service is cheap among channels for russian funds to flow to their patriotic hackers or other cooperating actors. in the past several years web money has become not only a pick u.s. in russian countries, but from vietnam to mexico. these russian speaker managed currencies meet not only legitimate needs, but are a lifeblood of global organized crime. these and other systems are being used to buy the services of hackers who are advertising their ability to influence elections. one of my fellow private sector cyber warriors told me, we have
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identified two espionage agents messages thatrt last one to two hours and are deleted. they are calling for cut out hackers from anonymous, the organization circles, to work as contract hackers for elections. some interesting posts inquiring on whether u.s. election systems are open or close. there are nasty folks out there that are eyeballing these elections currently. many are advertising their abilities to target candidates and their ability to sabotage them. for crypto currencies, the greatest emerging threat of foreign funds are to be used to fund other influence operators of increasing numbers of liquidity. these are crypto currencies that seek to evade efforts to identify the users do the block train -- block chains and criminals are using them. iny do not need to stay their virtual currency of
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origins. digital money can move through a huge matrix of exchanges. around thef them world that are interconnected and do not necessarily meet any type of ky seat. k -- kyc. is impossible to follow them through this matrix of exchanges. at the identities and payments association, not proof off it -- not for profit providing not only education but a platform to enable self-regulation, we are looking at how this can be used as a critically important way of and managingroblem security risks. it is essential that whatever approaches are made based on a public/private partnership rather than a government only approach to the problem. my recommendations revolver on identity. identity is the key.
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international cooperation is critical. providing a cooperative environment rather through in her pool or other law-enforcement body, regulatory organization, or through a public/private partnership, focused on seizing criminal virtual currency assets, this is how we will protect our institutions and industries from virtual currencies. honestement the proposed ad back. knowing your customer should be required of advertisers. that does not exist. understanding where the money is coming from should be another requirement. to managing answer these opportunities and risks associated with the use of virtual currency, or as funding mechanisms for operations can be answered to the reporting of identity. the approach cannot be limited a bit coin as her as financial system thriving outside of our control, reaching every country and using systems that range from the requirements
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and we need to take strong stat to understand and encourage the ofwth of currency systems our government by the rule of law. the world is changing and we must change with it. identity is key. mr. chairman and ranking member white house and members of the committee, thank you for the opportunities to testify. in nonpartisan nonprofit research group. my testimony focuses on shell corporations and the concerns a u.s.-- raise about election. the concept of one person one of our bedrock democracy. individuals and entities that contribute large sums of money to candidates, super pac's and nonprofits game priority access and influence elected officials. disproportionate influence and more thanmpaign act
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40 years ago. , includingn limits prohibitions and donations by foreign nationals established to deter the use of money to unduly influence or corrupt government. insurance democratic influence or the of its voters trust and confidence. that trust has been shaken today. that campaign finance limits have been undermined by decisions that now allow nominally independent super pac's and politically active nonprofits to raise and spend unlimited funds from unlimited sources and if they chose -- and if they choose to do so in secret. non-disclosing nonprofits, llcs and super pac's that received donations from non-disclosing entities. voters may not know who is bombarding them with attack ads and political spending. since the structure of companies requires the entities to disclose minimal information, llc's has become attractive to
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move funds through different shell companies and other groups spending on u.s. elections without ever disclosing the story behind the money. this leaves open the opportunity that they mean funneling money, enabling them to act as proxies for foreign actors whose influence on u.s. elections is under federal law, prohibited. history is littered with examples of legal donations by foreign nationals laundering money through those who are legally eligible to contribute. those serving in congress during themid-1990's recall scandals associated with attempts by foreign interest to ingest funds into foreign interest. eight years after citizens united unleashed a flood of secret money, influencing the national election, the potential for for money filtering into the political system has grown larger and given attempts to
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metal more serious. unlimited contributions from a larger range of sources, individuals and institutions are much more important. regulatory and action has led to much less transparency in terms of sources of these funds. to thinkbe foolish that the same types of outside sources that thought to undermine the integrity and independence of our electoral system two decades ago when not be interested and more confident in the ability to favor their own interests at a. 2012, they begin using form 990 tax forms to track the financial activities that act as nonprofit. even though politically active nonprofit did not have to fec,ose its donors to the it's nonprofit donors, if it had any had to disclose grants to the group on schedule i of their own 990.
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in out for that soup of untraceable llcs prevent -- present one robot. identity number -- and eight organization listed them as a disregarded entity. that is the subsidiary of the group. tied closely to a network of wealthy donors have used a disregarded entities of the further obstacle of transparency. without their mistake we would not have been able to track any money coming into the nonprofits. that was spending tens of millions of dollars in elections, or house the nonprofits were going out money to other notes in their network. that very little information would be public. it is noticeable that there is still a $1 million contribution to president trump's inaugural committee that is essentially anonymous. the llc made the contribution made the contribution and was
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formed for months before it made the seven figure donation to the inauguration. the address listed is in virginia is a virtual office and the only name on the document appears to be a paralegal at a law firm well-known for helping political donors cover their tracks. the sources of money in politics and the many paths that money can take are now numerous and frequently unknown and unknowable. short of any inadvertent disclosure, a signed confession or a leaked document. given that anonymous money now flows through campaign funds, there is no way to know how much might be coming from foreign services -- foreign sources. that is the point about dark money. he keeps all of us in the dark, uncertain of who is paying for the elections, what their motivation might be and whether they are foreign or domestic, friend or foe to our democratic government.
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it is not a partisan issue, but foundational to american sovereignty. i appreciate the opportunity to speak today and i am happy to answer any questions. thank you. sen. graham: that was excellent. it seems to me that who is giving the money and what money is is the challenge. canhe two talented think we pass laws to make it more howous to the public corporations get its money. to the money itself, this is something that is new to me. how easy would it be for a foreign entity government to into avirtual money shell corporation if russia never cooperated with us in terms of the transparency that you are looking for, or china?
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do need russia and china to make this work? do murray: no chairman, you not need russia or chime in, you would not even need a virtual money, you may just need the shell company. is a sizable vulnerability and our transparency regime that the anonymous companies, and it is one that needs to be closed off not just for finance campaign purposes, but for general finance purposes. this is a vulnerability that undermines our sanctions implementations. sen. graham: but you don't need that corporation of a foreign government to have the ?ransparency that he spoke of you do not need the cooperation of a foreign government to use the system, whether to funnel money into a shell company, which you can do with other funds as well, or
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from one individual to another. the aspect that is interesting is the degree to which which has been almost exclusively criminal systems such as web money that existed in russia. hearing, a conference six or seven years ago before crimea. the russian fsb was participating. there version of the dea. web went on to describe how money was considered by them to the primary money movement mechanism globally for russian organized crime. is.ea suddenly, web money is almost a defect in part of their core
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financial system. in the light now, it is brought in. ,hat points to a fundamental almost development of a shadow economy. swift system for money movement that has been embraced by the russian government and the banks. sen. graham: what can we in the united states do about a system created in russia? mr. dueweke: it is very difficult to do much about it directly because they will not cooperate. however, way you can do is what i have described in my testimony, which is focus on identity, focus on these exchange points. sen. graham: houdini cooperation from to get that? -- who do you need cooperation from to get that? mr. dueweke: exchangers. you probably own a significant bit coin investment yourself.
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sen. graham: idol. -- i don't. mr. dueweke: good. if you were to buy bit coin in the u.s., chances are you would use a very reputable company called coin maze. they do very strong know your customer betting they are not the problem. --ever, there are exchangers exchangers like them around the rolled that don't require any type of know your customer. sen. graham: huddy get them into the fold? -- how do you get them into the full? mr. dueweke: that is the difficulty. operation for it a not per far-off -- not for profit. sen. graham: you need russia's help to make that work? create ane: you can approach that there will be those who want to be part -- sen. graham: but if you're not in it you can beat published.
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mr. dueweke: you could be excluded. it have those included and those excluded. you think the european union would sign up for this? the european union has issued regulations and strengthened regulations covering virtual currencies. there is also a problem that the united states is taken seriously. our regulatory reach for virtual currency exchange that serves u.s. customers extends beyond our borders. if you have a virtual currency exchanger based in russia, they are subject to the bank secrecy act because of financial crimes enforcement network has given itself that jurisdiction. it has gotten that from congress and brought an action from any exchanger brought and out of the united states.
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underis currently someone arrest for running a virtual currency exchange that did not adhere to the banks secrecy act. thank you tose: all the witnesses. i was a boy, john dean famously said there is a cancer on the presidency. i think there is a cancer on our democracy and it is dark money and the forces who manipulate government through dark money. i am adamant that we need to clean that up and passed disclosure legislation. i want to make that point on the record. this is not that bill. we are trying to focus on not eliminating dirty special interest influence in politics, but at least eliminate dirty foreign special interest influence in our politics. that really ought not to be too much to ask.
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forn remember when i was managing the disclosed bill several years back. as we were on the floor, a story emerged in the news about a been set upthat had out of no place, given $5 million, and dumped the $5 million into a political by in a campaign, closed up shop, leaving only a lawyer behind who asserted attorney-client privilege and would not talk about what happened. day, nobody knows who's $5 million it was that god dumped into that election. to this day, nobody knows what , theuick pro-quote was understanding or the deal behind such a $5 million transaction. behind do know is that that darkness could lurk a foreigner. could just as easily be vladimir putin's $5 million as
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any american special interests $5 million. until we have cleaned that up, we will have a real problem on our hands. we have two bills. one is the one on the subcommittee that is bipartisan that would make it a felony for that lawyer who asserted attorney-client privilege to knowingly have facilitated a foreign influence spend through that corporation. you probably would not disclose it, you would say attorney-client privilege, but at least he would be a notice that it is not just a black mark on his character, but a potential handcuffs moment for him. that is one thing we are looking at and that is the bill specifically before this committee. over in finance we would be requiring that individual to certify that whoever gave that $5 million was not a foreign
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influence. to look behind the first show corporation in the second show corporation because people who play in this game can easily's back shell corporations like where youian dolls open the first one and there is another one, you open the second one and there is another one. the easiest solution for the lawyer and that situation is if it looks too smelly, don't take the money. i think the combination would be a powerful combination. , ist of all, mr. murray appreciate your very simple recommendation behind anonymous companies. i cannot agree to more with the direction the world is going. asshould not be a laggard the city on the hill as the united states, but we are. of the about the size industry of dirty show corporation activities around the world as a revealed by the
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panama and paradise papers. we will not know exactly because it is pretty dark itself, but just general sense of scale. sen. graham: senator -- mr. murray: senator, it is a massive industry. virtuallyhouse: entirely up to no good. not entirely, but there is a lot of no good there. some important indicators, look at the entities related to north korea, you will cease shell companies all over the world. that is no good. somebody had to settle all of those up. you look at the designated -- designators related to iran. you will cease shell companies all over the world and those are people up to no good. it is a very big industry. if you want to hide money somewhere in the world, there are a lot of options for you.
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you could use the overseas british territories, panama, london. sen. whitehouse: this industry is very capable of using those shell corporations to funnel money into american political influence. mr. murray: certainly. the people who create them may not know what they will be used for. that is really one of the issues here. that they do not know. my time has run out, but with your permission i will ask one more question. these crypto currencies you mention create the possibility for providing an anonymous means of payment by, for instance, russia, to people who are hackers or trolls think agent election influence and manipulation in the united states and to try to hide the connection back to russia because the money connection is harder to prove. is that correct? mr. dueweke: that is correct. sen. whitehouse: would it be
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possible for crypto currency to facilitate actual spending through shell corporations or through other means were people actually put money into federal elections? into aput a bit coin federal account, but you can wash it through an intermediary and use the coin and by land or the true loner. mr. dueweke: that is true. there is a global shell game being played now. them all over the world, many are completely anonymous, they do not ask questions. makes change at one form of virtual currency to another. currency for bit coin, in, currency out. in between you will have multiple layers of these different full true -- virtual corn -- virtual currencies that will be impossible to track if you know what you are doing.
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>> you have been doing terrific work i want to commend senator whitehouse for his persistent and good work on this act and for the show company abuse act he just reference. you noted how anonymous companies are the most in critical threat to financial transparency and you highlight illicit finance act is being discussed in the house. i would specifically state this, proposal is the most direct to companies to circumvent campaign finance laws. this proposal is supported by delaware secretary of state. why do you believe this is the most direct approach for improving transparency? it prohibits a problem. it is a direct attack on the money laundering vulnerability.
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it would do more than any other single proposal to shore up their anti-money laundering regime. let me ask you questions about what we know has happened is one of the areas of focus. know three senior trump campaign officials accepted money for foreign interests without registering activities. national security adviser michael flynn, paul manafort and rick gates, wise a problematic for a former agent to be working on a u.s. presidential campaign and be getting paid by foreign entities without disclosing those foreign interests? i think the key is the lack of disclosure and lack of candor. coming from the government, not having been in government too that one of the
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concerns with respect to security was lack of candor. if someone discloses, and you can see what they were up to in the past and what they may be up to now, you can take steps to mitigate that risk. it is really the lack of candor that i think is important. special counsel molars indictment of 13 russian individuals on three companies asserts the russian engagement in warfare against the united states through fictitious u.s. personas and social media platforms. we have had hearings on this topic per one american has had -- one american has pled guilty because he sold inc. accounts to russians. how can stolen bank accounts be used to allow foreign nationals to interfere in our presidential were other elections? stolen bank andunts are one more layer in big you asian that can be inserted into the process to
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hide the tracks of those moving money from one point to another. that additional note makes it that much more difficult to follow the money as it follows through. >> senator whitehouse and i, in august of 2016, sent a letter to then chair senator of the oversight committee. expressing our concern for interference in our election p are we were shocked that candidate drop would ask them to hack his opposing candidates emails. it poses a threat to our elections. do believe our existing laws are sufficient to protect our elections from a tax financed by foreign governments? mr. murray: no i do not. i think there are structural gaps in our laws, which i have covered in my written testimony.
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i think that there are also gaps in the criminal statute and i think that the legislation that senator whitehouse mentioned would be an important steps to assuring up -- shoring up our system. >> just last month they were reported on in august 2016 meaning that donald trump junior with istrump tower social media specialists. heording to the report, proposed a multimillion dollar social media plan. didn'toubled mr. trump -- mr. trump junior did not provide any of this ring his interview despite his being specifically asked about any foreign governments or foreign national offers to assist the trump campaign. i have asked the chairman to call mr. trump junior to testify. we are still learning about
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previously undisclosed meetings between the trump campaign and foreign entities. would it be lawful for a foreign government like the uae, or foreign national to provide services to -- to support a u.s. presidential campaign? not anmholz: i am election lawyer or lawyer at all so i should try not to practice law without a license. i would point back to comments made by my colleagues here at the table saying, we are lacking in interest in being forthright and candid about obvious conflicts of interest that could andril our independence sovereignty and integrity of our democratic process. very least, the unwise, if not, you legal for them not to diebold's that information. >> thank you for that careful
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answer. -- two diebold that information. e that information. >> thank you for that careful answer. >> thank you for being here. is, i startedion my morning today with former director talking about russia and what he thought would happen in the election to come and in 2020. i just wonder if you agree with director coats, who testified under oats here, president trump's national security director, national director of intelligence, he said we expect russia will be bolder and more disruptive in their cyber operations during the next year. do you believe you're going to see continuous attempts of foreign interference in our elections?
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i think there is no question. one is the judgment of the intelligence committee presented by the director. that is a key issue and i think we should trust our intelligence committee on that issue. i think that we can see the evidence. i think we can see the troll farms at work. see sociale all media. i have to think the russians were pretty happy with the outcome. covert influence is not necessarily about pushing an election in a particular way. it can be more modest than that. a campaign can be successful. i think the russians know that their system is flawed and it will never be as good as ours. really, the only way that they ourcatch up is to make system morris because they know there's is not going to get much better. do a lot of studying to
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tracking money in politics. how is the supreme court's decision in citizens united impacted the ability to influence elections? thatrumholz: my sense is the citizens united decision, which upheld disclosure by a without8-1, was made first guaranteeing that the regiment and infrastructure was there to guarantee its implementation. i think that was unfortunate, now it falls to our electiony body federal commission, as well as congress. how would you assess the job that congress is doing in changing the laws to meet this threat? ms. krumholz: i regret that -- because of the seriousness of the discussion today and its import for the health of our
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democracy, i regret that it is not speedy enough to protect us from foreign interference. >> do think the rest of the world notices that, when we are not doing much? ms. krumholz: i think they never stop noticing the weaknesses that have at various times cropped up. it has been a bit of a two steps toward, one step back chase fill up the gaps in the ability to undermine the system. have gotten so many out for our state elections, which is good, a couple hundred million dollars, that is great and that is going out now. whatconcerns me is that you have raised in some of the topics and how many can be hidden and senator blatt and i have -- senator blunt and i have a bill.
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i will ask you some questions on the record about the shell corporations purchasing real estate. that is a big concern for me. i will ask you that mr. murray, but later. we have nearly half of all homes in the u.s. with at least $5 million are purchased using shell companies. event i was are, someone came up and said they were concerned that that was a way of funneling money through your would you agree with that without answering in depth? be murray: yes we should concerned about shell companies purchasing real estate. >> you think it could be a way to funnel money? mr. murray: it could be. i think there are better methods. >> my last question i want to ask because you raise the honest ads act, we know that in addition to the 21 states that russia attempted to hack into,
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getting into the voter registration. we know they hack into one presidential campaign. as we learn more more, played around in the republican primary, which i think is important for our republican colleagues. thisor graham understands having been in the race himself with a front row seat. they were messing around in that as well. i think it shows that it is not just a one party versus the other. as we go into this next year with one point 4 billion having been spent online in political ads in 2016, and a project did three to 4 billion in 2020, we have to change the rules of the road for social media. stuff.es are doing facebook is putting up the ads. twitter is doing more. those companies have now come around to support the honest ads act. could you briefly comment on why
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that is important to have national rules of the road in place? national rules of the road are needed. i worked in republican presidential primaries back in the 1980's. it was hard. there were a lot of rules of the road. net -- now it seems like they have eroded or become irrelevant. of the rules that are needed need to extend further because of the degree of the information, campaigns that have been waged against the american people, not directly through political ads but through other influence operations that are passions, juste like the federalist papers pointed to the dangers to the democracy at the time. allersistent they become the more relevant and evident. again, i think this has to get
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down to identity. we have to be able to identify the people that are fanning the flames. adsher it be through direct might be honest ads act. you'll need to identify the advertisers that are buying these ads. of way as have some kind to identify those who are fanning the flames. it are doing these, call fake news, call it what you want, but there are a lot of levers that are being played in american society right now and is being doned it under misattribution, under and and anonymity should always be there for people who want to use it. there has to be consequences. it, youre going to use cannot use anonymity when you are buying a house. so you can i it for an election.
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i just want to: ask if you wrap up questions. based on our conversation, the answer to all of these questions to the witnesses will be yes, but i don't want to take anything for granted. is au all agree that there national security dimension to this problem? reflect three yeses. do you all agree that the anonymity of shell corporations is a channel for mischief by bad actors? yes, yes, yes. all agree that foreign entities are ready, willing and able to abuse those channels to accomplish their missions? yes, yes, yes. do you conclude from that that that gives us in congress a responsibility to try to bring a remedy to this problem. all right, that about does it.
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let me close my time by thinking -- thanking our chairman for doing this. hearings with a expertof some of the understanding of the russian foreign influence playbook. we have considered the kremlin playbook report. we have considered that kremlin trojan horse report. we have seen that groups across the ideological spectrum from the center for american progress to the hudson institute and its alltocracy initiative have flag this is a really important national security problem. i think that having brought attention to it through this committee, we are in a position to have a recommendation to our colleagues to begin doing things about it.
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with any luck to return them -- in thehe misconduct upcoming election. i appreciate how chairman graham has led this subcommittee. i think it is real progress and i appreciate it very much. sen. graham: i return the compliment. you have been terrific. you have done your homework. the combination of bad things are almost endless. it seems to me that we need to up our game. with that in mind we will try to up our game. the record will remain open for one week. the hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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>> next, today's rally in washington dc, protesting the trump administration's immigration policies. then, a review of the files of osama bin laden. , a discussion on the state of the u.s. construction industry. hundreds of rallies were held around the country today under the banner families belong together to protest the trump administration's immigration policies. rallies was in lafayette square across the street from the white house, while at the president is in new jersey for the weekend. this portion is one hour and 15 minutes.

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